Document:

FIRST SAVINGS BANK

                      NON-EMPLOYEE DIRECTOR RETIREMENT PLAN

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                                    ARTICLE I
                                     PURPOSE

SECTION 1.01  PURPOSE.

The purpose of this plan is to recognize the valuable services provided to First
Savings Bank by its non-employee directors and to assist it in retaining present
non-employee  directors  and in  attracting  new  non-employee  directors in the
future by providing such  individuals  with retirement  benefits under the terms
and conditions set forth in this document.

                                   ARTICLE II
                                   DEFINITIONS

SECTION 2.01  DEFINITIONS.

In this document,  whenever the context so indicates, the singular or the plural
number and the  masculine  or  feminine  gender  shall be deemed to include  the
other,  the terms  "he,"  "his," and "him,"  shall refer to a  Participant  or a
beneficiary  of a  Participant,  as the case may be,  and,  except as  otherwise
provided, or unless the context otherwise requires,  the capitalized terms shall
have the following meanings:

(a)   "Annual  Director  Compensation"  means  the  annual  retainer  paid  to a
      Non-Employee  Director  for service as a member of the Board of  Directors
      for  the  calendar  year  immediately  preceding  the  year in  which  the
      Non-Employee Director's Retirement Date occurs.

(b)   "Bank" means First Savings Bank, Woodbridge, New Jersey.

(c)   "Board of Directors" means the Board of Directors of the Bank.

(d)   "Change in Control"  of the Bank or the  Company  shall mean an event of a
      nature that: (i) would be required to be reported in response to Item 1(a)
      of the  current  report  on Form 8-K,  as in  effect  on the date  hereof,
      pursuant  to Section 13 or 15(d) of the  Securities  Exchange  Act of 1934
      (the "Exchange  Act");  or (ii) results in a Change in Control of the Bank
      or the Company  within the  meaning of the Change in Bank  Control Act and
      the Rules and  Regulations  promulgated by the Federal  Deposit  Insurance
      Corporation ("FDIC") at 12 C.F.R. SS. 303.4(a),  with respect to the Bank,
      and  the  Rules  and  Regulations  promulgated  by the  Office  of  Thrift
      Supervision  ("OTS")  (or its  predecessor  agency),  with  respect to the
      Company,  as in effect  on the date of this  Agreement;  or (iii)  without
      limitation  such a Change in Control  shall be deemed to have  occurred at
      such time as (A) any "person"  (as the term is used in Sections  13(d) and
      14(d) of the  Exchange  Act) is or  becomes  the  "beneficial  owner"  (as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly,  of
      voting  securities of the Bank or the Company  representing 20% or more of
      the Bank's or the  Company's  outstanding  voting  securities  or right to

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      acquire  such  securities  except  for any voting  securities  of the Bank
      purchased  by the  Company  and any  voting  securities  purchased  by any
      employee  benefit  plan  of  the  Company  or  its  Subsidiaries,  or  (B)
      individuals  who constitute  the Board on the date hereof (the  "Incumbent
      Board") cease for any reason to  constitute  at least a majority  thereof,
      provided that any person becoming a director subsequent to the date hereof
      whose  election was approved by a vote of at least  three-quarters  of the
      directors comprising the Incumbent Board, or whose nomination for election
      by the  Company's  stockholders  was  approved by a  Nominating  Committee
      solely  composed of members which are Incumbent  Board members,  shall be,
      for purposes of this clause (B),  considered as though he were a member of
      the  Incumbent   Board,   or  (C)  a  plan  of   reorganization,   merger,
      consolidation,  sale of all or substantially all the assets of the Bank or
      the Company or similar  transaction  occurs or is effectuated in which the
      Bank or Company is not the resulting  entity, or (D) a proxy statement has
      been distributed  soliciting proxies from stockholders of the Company,  by
      someone  other  than  the  current  management  of  the  Company,  seeking
      stockholder approval of a plan of reorganization,  merger or consolidation
      of the Company or Bank with one or more  corporations as a result of which
      the  outstanding  shares of the class of  securities  then subject to such
      plan or  transaction  are exchanged for or converted into cash or property
      or securities not issued by the Bank or the Company shall be  distributed,
      or (E) a tender offer is made for 20% or more of the voting  securities of
      the Bank or Company then outstanding.

(e)   "Company" means First Sentinel Bancorp, Inc.

(f)   "Non-Employee  Director"  means a  non-employee  member  of the  Board  of
      Directors.

(g)   "Plan" means this First  Savings  Bank  Non-Employee  Director  Retirement
      Plan.

(h)   "Retirement Date" means the date on which a Non-Employee  Director retires
      from the Board of Directors.  For this purpose,  a  Non-Employee  Director
      shall be considered  to have retired from the Board of Directors  upon his
      termination   of  service  with  the  Board  of  Directors,   unless  such
      termination  of  service is as a result of the Board of  Directors  having
      "just  cause,"  which shall include  fraud,  misappropriation  of or other
      intentional  misconduct  damaging to the property or business of the Bank,
      its holding  company or any  subsidiary  of the Bank,  or  commission of a
      crime.

                                   ARTICLE III
                            ELIGIBILITY AND BENEFITS

SECTION 3.01  ELIGIBILITY.

(a)   All  Non-Employee  Directors who have served on the Board of Directors for
      at least five (5)  continuous  years shall be eligible to  participate  in
      this Plan.  Service  with the board of  directors of any entity other than
      the Bank shall not be credited for any purpose under this Plan.

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(b)   A Non-Employee  Director's  participation in the Plan shall terminate upon
      his death or upon his  ceasing  to be a member of the Board of  Directors,
      unless a benefit is payable pursuant to Section 3.02(c) of the Plan.

SECTION 3.02  DETERMINATION OF BENEFITS.

(a)   If a Non-Employee Director retires at or after age 70 and has completed at
      least ten (10) years of  continuous  service with the Board of  Directors,
      then  upon  that  Non-Employee  Director's  Retirement  Date he  shall  be
      entitled to receive an annual  retirement  benefit,  payable in accordance
      with Section 3.03 of the Plan, equal to his Annual Director Compensation.

(b)   If a Non-Employee Director retires prior to age 70, but not before age 55,
      then  upon  that  Non-Employee  Director's  Retirement  Date he  shall  be
      entitled to receive an annual  retirement  benefit,  payable in accordance
      with Section 3.03 of the Plan, equal to the sum of the following:

            (i)   50% of his Annual Director Compensation, plus

            (ii)  5% of  his  Annual  Director  Compensation  multiplied  by the
            Non-Employee  Director's number of years of continuous  service with
            the Board of  Directors  in excess  of five  years,  up to a maximum
            factor of ten. Notwithstanding Section 3.01(a), for purposes of this
            Section  3.02(b)(ii),  partial  years of  service  with the Board of
            Directors  shall be used in  determining  a fractional  portion of a
            full year's credit.

(c)   If a Non-Employee  Director  incurs a Disability,  he shall be entitled to
      the  annual  retirement  benefit  provided  for in  paragraph  (b) of this
      Section 3.02 upon his  termination of service with the Board of Directors.
      For  this  purpose,  "Disability"  shall  mean a  Non-Employee  Director's
      inability  to serve as a member  of the  Board of  Directors  by reason of
      physical or mental illness or condition.

SECTION 3.03  TIME AND MANNER OF PAYMENT.

(a)   One-twelfth of the annual  retirement  benefits provided for under Section
      3.02 of the  Plan  shall  be paid to the  eligible  Non-Employee  Director
      commencing  upon  the  first  business  day of  the  month  following  the
      Non-Employee  Director's  Retirement Date and ending on the first business
      day of the month following the death of the Non-Employee Director.

(b)   If an individual who is receiving  benefits under the Plan again becomes a
      Non-Employee Director, all benefit payments to such individual shall cease
      during  the  period of  service  as a member  of the  Board of  Directors.
      Payments  shall resume upon  subsequent  termination  of membership on the
      Board  of  Directors,  without  adjustment  for the  period  during  which
      payments were not made.

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                                   ARTICLE IV
                                CHANGE IN CONTROL

SECTION 4.01  CHANGE IN CONTROL.

(a)   Notwithstanding  any other provision in this Plan to the contrary,  in the
      event of a Change in Control,  each  Non-Employee  Director  who would not
      otherwise have satisfied the requirements  for a retirement  benefit under
      this Plan shall be treated as having met all of the  requirements  for the
      minimum  retirement  benefit  provided for in Section 3.02(b) of the Plan,
      regardless  of his age and the  number of years of service he has with the
      Board of Directors at the time of the Change in Control.

(b)   Notwithstanding  any other provision in this Plan to the contrary,  in the
      event of a Change in Control,  each Non-Employee  Director who has not yet
      begun to collect retirement  benefits under this Plan shall be entitled to
      receive a benefit in the time and  manner  selected  on a form  similar to
      that  attached  to this Plan as  Appendix  A;  provided  that such form is
      delivered to the Bank within 30 days of the  effective  time of the Change
      in  Control.  If the form is not  returned  to the Bank  within  this time
      frame, the Non-Employee  Director shall receive,  at the effective time of
      the Change in Control,  a lump sum payment equal to the actuarial value of
      the benefits due him under the Plan, determined by an actuary and based on
      actuarial factors provided for in paragraph (d) of this Section 4.01.

(c)   Notwithstanding  any other provision in this Plan to the contrary,  in the
      event of a Change  in  Control,  each  Non-Employee  Director  who is then
      collecting  retirement  benefits  under  this Plan  shall be  entitled  to
      receive his remaining  benefits in the time and manner  selected on a form
      similar to that  attached to this Plan as Appendix B;  provided  that such
      form is delivered to the Bank within 30 days of the effective  time of the
      Change in  Control.  If the form is not  returned  to the Bank within this
      time frame, the Non-Employee Director shall receive, at the effective time
      of the Change in Control,  a lump sum payment equal to the actuarial value
      of the benefits due him under the Plan, determined by an actuary and based
      on actuarial factors provided for in paragraph (d) of this Section 4.01.

(d)   Within thirty days following a Change in Control, the Bank shall establish
      a  grantor  trust,  as  described  in  Section  6.01(b).  The  Bank  shall
      contribute to such trust the amount  necessary in cash or cash equivalents
      to fund all benefits accrued as of the Change in Control, determined using
      actuarial  factors as determined by an actuary appointed by the Bank prior
      to the Change in Control,  using reasonable actuarial factors based on the
      actuarial  standards set forth in Section  417(e) of the Internal  Revenue
      Code of 1986, as amended, or any successor thereto.  Following a Change in
      Control a change in the actuary  may only take  effect with the  unanimous
      written consent of all Non-Employee Directors in the Plan.

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(e)   No  remuneration  paid  to a  Non-Employee  Director  by the  Bank  or its
      successor  following a Change in Control shall reduce the benefits payable
      under this Plan.

                                    ARTICLE V
                            ADMINISTRATION AND CLAIM

SECTION 5.01  ADMINISTRATION.

The  administration  of the Plan,  the exclusive  power to interpret it, and the
responsibility  for  carrying out its  provisions  are vested in the Bank or its
designee.  The Bank or its  designee  shall have the  authority  to resolve  any
question under the Plan. The determination of the Bank or its designee as to the
interpretation  of the Plan or any disputed  question  shall be  conclusive  and
final to the extent permitted by applicable law.

SECTION 5.02  CLAIMS PROCEDURES.

(a)   Claims for  benefits  under the Plan shall be  submitted in writing to the
      Bank or to an individual designated by the Bank for this purpose.

(b)   If any claim for  benefits is wholly or  partially  denied,  the  claimant
      shall be given  written  notice within a reasonable  period  following the
      date on which the claim is filed, which notice shall set forth:

      (i)   the specific reason or reasons for the denial;

      (ii)  specific  reference to pertinent Plan provisions on which the denial
      is based;

      (iii) a description  of any additional  material or information  necessary
      for the  claimant  to  perfect  the claim and an  explanation  of why such
      material or information is necessary; and

      (iv)  an  explanation of the Plan's claim review  procedure.  If the claim
      has not been granted and written  notice of the denial of the claim is not
      furnished  in a timely  manner  following  the date on which  the claim is
      filed,  the claim shall be deemed  denied for the purpose of proceeding to
      the claim review procedure.

(c)   The  claimant or his  authorized  representative  shall have 30 days after
      receipt of written  notification  of denial of a claim to request a review
      of  the  denial by making  written  request  to the Bank,  and may  review
      pertinent  documents and submit issues and comments in writing within such
      30-day period.

      After receipt of the request for review,  the Bank or its designee  shall,
      in a timely manner, render and furnish to the claimant a written decision,
      which  shall  include  specific  reasons for the  decision  and shall make
      specific  references  to pertinent  Plan  provisions on which it is based.
      Such  decision  by the Bank shall not be subject to further  review.  If a
      decision

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      on review is not  furnished  to a  claimant,  the claim shall be deemed to
      have been denied on review.

(d)   No  claimant  shall  institute  any action or  proceeding  in any state or
      federal  court of law or equity or before any  administrative  tribunal or
      arbitrator  for a claim for benefits under the Plan until the claimant has
      first exhausted the provisions set forth in this section.

SECTION 5.03  EXPENSES.

Expenses  attributable to the  administration of the Plan shall be paid directly
by the Bank.

                                   ARTICLE VI
                               GENERAL PROVISIONS

SECTION 6.01  NO FUNDING.

(a)   All amounts payable in accordance with the Plan shall constitute a general
      unsecured   obligation  of  the  Bank.  Such  amounts,   as  well  as  any
      administrative  costs  relating  to the  Plan,  shall  be paid  out of the
      general  assets of the Bank,  to the extent not paid from the asset of any
      trust established pursuant to paragraph (b) of this Section 6.01.

(b)   The Bank may, for administrative  reasons,  establish a grantor trust with
      an independent  trustee for the benefit of  Participants  in the Plan. The
      assets  placed in said trust shall be held  separate  and apart from other
      Bank funds and shall be used exclusively for the purposes set forth in the
      Plan  and  the  applicable  trust  agreement,  subject  to  the  following
      conditions:

      (i)   the Bank shall be treated as "grantor" of said trust for purposes of
            Section 677 of the Code; and

      (ii)  the  agreement  of said trust shall  provide  that its assets may be
            used upon the insolvency or bankruptcy of the Bank to satisfy claims
            of the Bank's general  creditors and that the rights of such general
            creditor are enforceable by them under federal and state law.

SECTION 6.02  AMENDMENT OF THE PLAN.

The Bank reserves the right to modify or amend the Plan, in whole or in part, at
any time, and from time to time.  However,  no  modification  or amendment shall
adversely  affect the right of any  Participant  to receive the vested  benefits
accrued as of the date of such modification, amendment or discontinuance without
their unanimous written consent.

Notwithstanding  the foregoing,  no amendment or modification to the Plan may be
made in  connection  with, or after,  a Change in Control  without the unanimous
written consent of the Non-Employee Directors who are entitled to benefits under
the Plan.

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SECTION 6.03      TERMINATION OF THE PLAN.

The Bank  reserves  the  right to  terminate  the  Plan at any  time,  provided,
however,  that  no  termination  shall  be  effective  retroactively.  As of the
effective date of termination of the Plan:

(a)   the benefits of any  Participant  whose benefit  payments  have  commenced
      shall continue to be paid, and

(b)   any  Participant  whose benefit is vested in accordance  with Section 2.02
      shall be entitled to receive such benefit in accordance  with the terms of
      the Plan.

Notwithstanding  the  foregoing,  the Plan may not be  terminated  in connection
with, or after, a Change in Control  without the unanimous,  written  consent of
the Participants who are entitled to benefits under the Plan.

SECTION 6.04  PLAN NOT A DIRECTORSHIP AGREEMENT.

The Plan is not a directorship  agreement,  and the  Participant's  service as a
Non-Employee  Director  shall not be  affected in any way by the Plan or related
instruments,  except as specifically  provided therein. The establishment of the
Plan shall not be construed as conferring any legal rights upon any person for a
continuation  of service as a Non-Employee  Director.  Each  Participant and all
persons who may have or claim any right by reason of his participation  shall be
bound by the terms of the Plan and all agreements entered into pursuant thereto.

SECTION 6.05  FACILITY OF PAYMENT.

In the event that the Bank shall find that a  Participant  is unable to care for
his affairs  because of illness or accident,  the Bank may, unless a claim shall
have been made therefor by a duly appointed  legal  representative,  direct that
any  benefit  payment due him be paid on his behalf to his  spouse,  a child,  a
parent or other blood  relative,  or to a person  with whom he resides,  and any
such  payment so made shall be a complete  discharge of the  liabilities  of the
Bank and the Plan therefor.

SECTION 6.06  WITHHOLDING TAXES.

The Bank shall have the right to deduct  from each  payment to be made under the
Plan any required withholding taxes.

SECTION 6.07  NONALIENATION.

Subject to any applicable law, no benefit under the Plan shall be subject in any
manner  to  anticipation,   alienation,  sale,  transfer,   assignment,  pledge,
encumbrance  or charge,  and any  attempt to do so shall be void.  Nor shall any
such benefit be in any manner liable for or subject to garnishment,  attachment,
execution  or  levy,  or  liable  for  or  subject  to  the  debts,   contracts,
liabilities, engagements or torts of the person entitled to such benefits.

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SECTION 6.08  FORFEITURE FOR CAUSE.

In the event that the Non-Employee Director's service as a Non-Employee director
is involuntarily  terminated for reason of serious misconduct,  including by way
of  example,  dishonesty  or  fraud  on the  part  of  such  Participant  in his
relationship  with the Bank, all benefits that would otherwise be payable to him
under the Plan shall be forfeited.  Notwithstanding the foregoing, no forfeiture
shall  take  place  following  a Change in Control  unless  the  Participant  is
convicted  of a  felony  involving  dishonesty  or  fraud  on the  part  of such
Participant in his relationship with the Bank.

SECTION 6.09  CONSTRUCTION.

(a)   The Plan shall be construed,  regulated and enforced under the laws of the
      State of New Jersey.

(b)   The masculine pronoun shall mean the feminine wherever appropriate.

(c)   The  illegality of any  particular  provision of this  document  shall not
      affect the other  provisions  and the  document  shall be construed in all
      respects as if such invalid provision were omitted.

(d)   The  headings  and   subheadings  in  the  Plan  have  been  inserted  for
      convenience of reference  only, and are to be ignored in any  construction
      of the provisions thereof.

SECTION 6.10  EFFECTIVE DATE.

The  effective  date of the Plan is August 1,  1989.  The Plan was  amended  and
restated in its entirety as of November 15, 2000.

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                                    EXHIBIT A

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                                                                     EXHIBIT "A"

                                     SAMPLE
                               FIRST SAVINGS BANK
                      NON-EMPLOYEE DIRECTOR RETIREMENT PLAN
                           --------------------------

                           ELECTION OF PAYMENT METHOD
                            AFTER A CHANGE IN CONTROL
                           --------------------------

      AGREEMENT,  made  this  ______  day of  _________,  ____,  by and  between
__________________  (the  "Non-Employee  Director")  and First Savings Bank (the
"Bank"), with respect to distribution of the Non-Employee  Director's retirement
benefits ("Retirement  Benefits") that have accrued under the First Savings Bank
Non-Employee Director Retirement Plan and have or become payable due to a change
in control.

      NOW THEREFORE, it is mutually agreed as follows:

      1.    FORM OF PAYMENT.  The Employee shall receive his Retirement Benefits
            in cash that is paid--

            [_]   in one lump sum equal to the present  value of his accrued but
                  unpaid Retirement Benefits.

            [_]   in  substantially  equal  annual  payments  over a  period  of
                  _______  years (no more than 10), on the unpaid  present value
                  of his Retirement Benefits.

            [_]   for the remainder of his life.

      2.    TIME OF PAYMENT.  The  Employee  shall  begin to receive  Retirement
            Benefits as soon as practicable after--

            [_]   A change in control closes.

            [_]   the January 1st after a change in control closes.

            [_]   the _____________  annual anniversary of the January 1st after
                  a change in control closes.

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      3.    FREQUENCY  OF  PAYMENT.  Unless paid in a lump sum,  the  Retirement
            Benefits  shall be paid on a  _____________  monthly,  _____________
            quarterly, _____________ semi-annual, or _____________ annual basis.

      4.    EFFECT OF ELECTION.  The  elections  made in  paragraphs 1, 2, and 3
            hereof  shall  become  irrevocable  on the date 90 days  before  the
            closing of a change in control. The Non-Employee Director may at any
            time and from time to time change his  designation of, and manner of
            payment to, a  beneficiary.  Such election  shall,  however,  become
            irrevocable upon the Non-Employee Director's death.

      5.    MUTUAL  COMMITMENTS.  The Bank agrees to make payment of all amounts
            due the  Non-Employee  Director in accordance  with the terms of the
            plan and the elections made by the Non-Employee Director herein. The
            Non-Employee  Director  agrees to be bound by the terms of the plan,
            as in effect on the date hereof and as properly  amended  hereafter.
            The parties  recognize and agree that this Agreement  supersedes and
            nullifies  any  prior  distribution  election  to the  extent  it is
            inconsistent herewith.

      IN WITNESS  WHEREOF,  the parties hereto have hereunto set their hands the
day and year first above-written.

                                                 Witnessed by:
                                                 NON-EMPLOYEE DIRECTOR

                                                 -------------------------------

                                                 Witnessed by:
                                                 FIRST SAVINGS BANK

                                                 By:
                                                    ----------------------------
                                                       Chairman of the Board

                                       11FIRST SENTINEL BANCORP, INC.
                              EMPLOYMENT AGREEMENT

      This  AGREEMENT  ("Agreement"),  originally  entered  into on November 18,
1998, is amended and restated, effective as of November 15, 2000 (the "Effective
Date"), by and between First Sentinel Bancorp,  Inc. (the "Holding Company"),  a
corporation   organized   under  the  laws  of  Delaware,   with  its  principal
administrative offices at 1000 Woodbridge Center Drive,  Woodbridge,  New Jersey
07095, and John P. Mulkerin ("Executive"). Any reference to the "Institution" in
this  Agreement  shall mean First Savings Bank or any successor to First Savings
Bank.

      WHEREAS,  the Holding  Company  wishes to continue to assure itself of the
services of Executive for the period provided in this Agreement; and

      WHEREAS,  Executive  is willing to  continue to serve in the employ of the
Holding  Company and its  subsidiaries on a full-time basis for the term of this
Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.    POSITION AND RESPONSIBILITIES.

      During  the  period  of  Executive's   employment  under  this  Agreement,
Executive  agrees to serve as  President  and  Chief  Executive  Officer  of the
Holding Company.  Executive shall render  administrative and management services
to the Holding Company such as are customarily performed by persons in a similar
executive capacity. During the term of this Agreement,  Executive also agrees to
serve as a director and officer of the Institution, as well as a director of the
Holding Company.

2.    TERMS.

      (a)   The period of Executive's  employment  under this Agreement shall be
deemed to have  commenced as of the date first written above and shall  continue
for a period of thirty-six  (36) full calendar months from the Effective Date of
this Agreement, as amended and restated.  Commencing on the date of execution of
this  Agreement,  the term of this Agreement  shall be extended for one day each
day, so that a constant  thirty-six  (36)  calendar  month term shall  remain in
effect,  until such time as the Board of Directors  of the Holding  Company (the
"Board") or Executive  elects not to extend the term of the  Agreement by giving
written  notice  to the  other  party  in  accordance  with  Section  8 of  this
Agreement, in which case the term of this Agreement shall be fixed and shall end
on the third anniversary of the date of such written notice.

      (b)   During the period of Executive's  employment  hereunder,  except for
periods of absence occasioned by illness,  vacation, and other reasonable leaves
of absence,  Executive  shall devote  substantially  all of his  business  time,
attention,  skill,

<PAGE>

and efforts to the  faithful  performance  of his duties  under this  Agreement,
including  activities and services  related to the  organization,  operation and
management  of the  Holding  Company  and its  direct or  indirect  subsidiaries
("Subsidiaries")   and   participation   in   industry,   community   and  civic
organizations;   provided,  however,  that,  with  Board  notification  of  said
participation,  from time to time, Executive may serve, or continue to serve, on
the  boards  of  directors  of,  and hold any other  offices  or  positions  in,
companies or organizations, which, in the Board's judgment, will not present any
conflict of interest with the Holding Company or its Subsidiaries, or materially
affect the performance of Executive's duties pursuant to this Agreement.

      (c)   Notwithstanding  anything herein  contained to the contrary,  either
Executive or the Holding Company may terminate  Executive's  employment with the
Holding  Company at any time during the term of this  Agreement,  subject to the
terms and conditions of this Agreement.

3.    COMPENSATION AND REIMBURSEMENT.

      (a)   The  compensation  specified under this Agreement  shall  constitute
consideration  paid by the Holding Company in exchange for the duties  described
in Section 1 of this  Agreement.  The Holding  Company shall pay  Executive,  as
compensation,  a salary of not less than $315,000 ("Base  Salary").  Base Salary
shall  include  any amounts of  compensation  deferred  by  Executive  under any
tax-qualified   retirement  or  welfare  benefit  plan  or  any  other  deferred
compensation  arrangement maintained by the Holding Company or its Subsidiaries.
Base Salary shall be payable in accordance with the normal payroll  practices of
the  Holding  Company.  During the period of this  Agreement,  Executive's  Base
Salary shall be reviewed at least annually;  on or about the first of January of
each year.  Such review shall be conducted by the Board or by a committee of the
Board delegated such responsibility by the Board. The Board or the committee may
increase  Executive's Base Salary at any time. Any increase in Base Salary shall
thereafter become the new "Base Salary" for purposes of this Agreement.

      (b)   Executive  shall be entitled to participate in any employee  benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, as amended and restated, and the
Holding Company and its Subsidiaries will not, without Executive's prior written
consent,  make any changes in such plans,  arrangements  or perquisites  (or any
plans,  arrangements or perquisites  with respect to which  Executive  begins to
participate  at any time  during  the term of this  Agreement,  as  amended  and
restated)  which  would  adversely   affect   Executive's   rights  or  benefits
thereunder,  without  separately  providing  for  an  arrangement  that  ensures
Executive  receives or will  receive the  economic  value that  Executive  would
otherwise lose as a result of such adverse affect, unless such change is general
in nature and applies in a nondiscriminatory  manner to all employees covered by
the plan,  arrangement  or  perquisite.  Without  limiting the generality of the
foregoing  provisions of this  Subsection  (b),  Executive  shall be entitled to
participate in and receive  benefits

                                       2
<PAGE>

under any employee benefit plans including, but not limited to, retirement plans
(such  as  pension,   profit  sharing  and  employee  stock  ownership   plans),
supplemental retirement plans, incentive plans, health and welfare plans and any
other employee benefit plan or arrangement made available by the Holding Company
or its Subsidiaries  now or in the future to full-time  employees of the Holding
Company  or  its  Subsidiaries  and/or  senior  executives  and  key  management
employees of the Holding Company or its Subsidiaries,  subject to and on a basis
consistent with the terms,  conditions and overall  administration of such plans
and arrangements. Nothing paid to Executive under any such plans or arrangements
will be  deemed  to be in lieu of  other  compensation  and  benefits  to  which
Executive is otherwise entitled under this Agreement.

      (c)   The  Holding  Company  shall  pay or  reimburse  Executive  for  all
reasonable  expenses  incurred by Executive in performing his obligations  under
this Agreement.

4.    PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

      (a)   Upon the occurrence of an Event of Termination  (as herein  defined)
during  Executive's  term of employment  under this Agreement,  but prior to the
date Executive  attains age 65, the provisions of this Section 4 shall apply. As
used in this Agreement, an "Event of Termination" shall mean and include any one
or  more of the  following:  (i)  the  termination  by the  Holding  Company  of
Executive's full-time employment hereunder for any reason other than termination
governed by Section 5(a) of this Agreement, or Termination for Cause, as defined
in Section 7 of this  Agreement,  or  Retirement  or  Disability,  as defined in
paragraph  (f) of this  Section  4 or;  (ii)  Executive's  resignation  from the
Holding  Company's  employ,  upon,  any (A) notice to  Executive  by the Holding
Company of non-renewal of the term of this Agreement, (B) failure to re-elect or
re-appoint  Executive as President  and Chief  Executive  Officer of the Holding
Company or a failure to nominate or re-elect Executive to the Board of Directors
of  the  Holding  Company  or of the  Institution,  unless  Executive  otherwise
consents   (C)   material   change   in   Executive's   function,   duties,   or
responsibilities with the Holding Company,  which change would cause Executive's
position to become one of lesser responsibility,  importance,  or scope from the
position and  attributes  thereof  described in Section 1 of this Agreement (and
any  such  material  change  shall  be  deemed  as  continuing  breach  of  this
Agreement),  unless Executive otherwise consents,  (D) relocation of Executive's
principal  place of  employment  by more than 25 miles from its  location at the
effective  date of this  Agreement,  (E)  material  reduction  in the  benefits,
arrangements  or  perquisites  to  Executive  which is not general in nature and
applicable  on a  nondiscriminatory  basis  to all  employees  covered  by  such
benefits,  arrangements,  or  perquisites  or,  pursuant to Section 3(b) of this
Agreement,  to which Executive does not consent or for which Executive is not or
will not be provided the economic benefit, (F) liquidation or dissolution of the
Holding  Company  or the  Institution,  or (G) breach of this  Agreement  by the
Holding Company. Upon the occurrence of any event described in clauses (A), (B),
(C), (D),  (E), (F) or (G),  above,  Executive  shall have the right to elect to
terminate  employment  under this  Agreement by  resignation  upon not less than
sixty

                                       3
<PAGE>

(60) days prior written  notice given within six full calendar  months after the
event giving rise to said right to elect.

      (b)   Upon  the  occurrence  of an Event  of  Termination,  on the Date of
Termination,  as defined in Section 8 of this  Agreement,  the  Holding  Company
shall be obligated to pay Executive,  or, in the event of Executive's subsequent
death, his beneficiary or beneficiaries,  or his estate, as the case may be, the
amount of the remaining  payments and benefits that Executive  would have earned
if he had continued his employment with the Holding Company during the remaining
unexpired  term of this  Agreement,  based on  Executive's  Base  Salary and the
benefits  provided to Executive as of the date of the Event of  Termination,  as
set forth in Sections  3(a) and (b) of this  Agreement,  as the case may be, and
the amount  still due  Executive  under any  paragraph  of Section 3 for service
rendered  through the Date of Termination.  Except as provided for in paragraphs
(c) and (d) of Section 4, the  determination  of Executive's  benefits as of the
date of the  Event of  Termination  shall be made  based on (i) the value of the
allocation  attributable to employer contributions for the most recent plan year
under any defined  contribution  type plan; (ii) the percentage of salary of any
incentive or bonus  payment for the most  recently-completed  fiscal  year;  and
(iii)  the   employer-provided   cost  of  any  other   benefit   for  the  most
recently-completed fiscal year. At the election of Executive,  which election is
to be made within  thirty (30) days of the Date of  Termination,  such  payments
shall be made in a lump sum (without discount for early payment) or paid monthly
during the remaining term of the Agreement following Executive's termination. In
the event that no election is made,  payment to Executive will be made in a lump
sum. Such  payments  shall not be reduced in the event  Executive  obtains other
employment following termination of employment.  Notwithstanding anything to the
contrary  elsewhere in this  Agreement,  to the extent  Executive is entitled to
continued  coverage or benefit  accrual under any retirement or welfare  benefit
plan  during the  remaining  unexpired  term of this  Agreement,  as amended and
restated,  the amount  payable under this Section 4(b) should be adjusted to the
extent necessary to avoid any duplication of such benefits.

      (c)   Upon the  occurrence of an Event of  Termination,  Executive will be
entitled to receive benefits due him under or contributed by the Holding Company
or its Subsidiaries on his behalf pursuant to any retirement,  incentive, profit
sharing,  employee  stock  ownership,  bonus,  performance,  disability or other
employee  benefit plan or arrangement  maintained by the Holding  Company or its
Subsidiaries  to the extent such  benefits are not  otherwise  paid to Executive
under a separate  provision  of this  Agreement.  In  addition,  for purposes of
determining his vested accrued benefit, Executive shall be credited either under
any defined  benefit  pension  plan  maintained  by the  Institution  or, if not
permitted  under such plan,  under a separate  arrangement,  with the additional
"years of service"  that he would have  earned for  vesting and benefit  accrual
purposes  for  the  remaining  term of the  Agreement  had  his  employment  not
terminated.

      (d)   To the extent that the Holding Company or its Subsidiaries  continue
to offer any life,  medical,  health,  disability  or dental  insurance  plan or
arrangement in

                                       4
<PAGE>

which Executive  participates in on the last day of his employment (each being a
"Welfare Plan"),  after an Event of Termination (as herein  defined),  Executive
and his dependents shall continue  participating in such Welfare Plans,  subject
to the same premium  contributions  on the part of  Executive  as were  required
immediately prior to the Event of Termination until the earlier of (i) his death
(ii)  his  employment  by  another  employer  other  than one of which he is the
majority owner or (iii) the end of the remaining term of this Agreement.  If the
Holding Company or its Subsidiaries  does not offer the Welfare Plans (or if for
any reason  Executive's  participation  in said plans is  prohibited)  after the
Event of Termination,  then the Holding  Company shall provide  Executive with a
payment  equal to the  actuarial  value of the provision of such benefit for the
period  which runs until the earlier of (i) his death;  (ii) his  employment  by
another  employer other than one of which he is the majority owner; or (iii) the
end of the remaining term of this Agreement.

      (e)   In the event that Executive is receiving  monthly payments  pursuant
to Section 4(b) of this Agreement, on an annual basis,  thereafter,  between the
dates of January 1 and January 31 of each year,  Executive  shall have the right
to elect whether the balance of the amount  payable under the Agreement for that
year shall be paid in a lump sum or on a pro rata basis.  Such election shall be
irrevocable for the year for which such election is made.

      (f)   Termination of Executive based on Disability  shall mean termination
by  written  notice  from  either  the  Executive,  the  Holding  Company or its
Subsidiaries  upon a determination by a physician chosen by the Holding Company,
who  is   reasonably   acceptable   to   Executive   or   Executive's   personal
representatives,  that the  Executive is not capable of  fulfilling  Executive's
responsibilities  as an officer of the  Holding  Company.  Upon  termination  of
Executive upon Disability, Executive shall be entitled to all benefits under any
disability plan of the Holding Company or its Subsidiaries or any other plans to
which  Executive is a party or a participant in accordance with the terms of the
plan or  arrangement.  Executive  shall  be  entitled  to all  compensation  and
benefits  provided  for in Section 3 of this  Agreement  through the date of his
termination of employment as specified in the written notice.

5.    CHANGE IN CONTROL.

      (a)   Change in Control of the Holding  Company or the  Institution  shall
mean an event of a nature that: (i) would be required to be reported in response
to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant  to Section  13 or 15(d) of the  Securities  Exchange  Act of 1934 (the
"Exchange  Act");  or (ii) results in a Change in Control of the Holding Company
or the Institution  within the meaning of the Change in Bank Control Act and the
Rules and Regulations  promulgated by the Federal Deposit Insurance  Corporation
("FDIC") at 12 C.F.R.  SS. 303.4(a),  with respect to the  Institution,  and the
Rules and Regulations  promulgated by the Office of Thrift  Supervision  ("OTS")
(or its predecessor  agency),  with respect to the Holding Company, as in effect
on the date of this  Agreement;  or (iii)  without  limitation  such a Change in
Control  shall be deemed to have  occurred at such time as (A) any  "person" (as
the term

                                       5
<PAGE>

is used in  Sections  13(d) and 14(d) of the  Exchange  Act) is or  becomes  the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or indirectly,  of voting  securities of the  Institution or the Holding Company
representing  20%  or  more  of  the  Institution's  or  the  Holding  Company's
outstanding voting securities or right to acquire such securities except for any
voting  securities of the  Institution  purchased by the Holding Company and any
voting securities  purchased by any employee benefit plan of the Holding Company
or its  Subsidiaries,  or (B)  individuals  who constitute the Board on the date
hereof (the  "Incumbent  Board")  cease for any reason to  constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of at least  three-quarters of
the directors  comprising the Incumbent  Board, or whose nomination for election
by the Holding  Company's  stockholders  was approved by a Nominating  Committee
solely  composed of members which are  Incumbent  Board  members,  shall be, for
purposes  of this  clause  (B),  considered  as  though  he were a member of the
Incumbent Board, or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Institution or the Holding Company or
similar transaction occurs or is effectuated in which the Institution or Holding
Company  is  not  the  resulting  entity,  or (D) a  proxy  statement  has  been
distributed  soliciting  proxies from  stockholders of the Holding  Company,  by
someone  other than the  current  management  of the  Holding  Company,  seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Holding  Company or  Institution  with one or more  corporations  as a result of
which the  outstanding  shares of the class of  securities  then subject to such
plan or  transaction  are  exchanged  for or converted  into cash or property or
securities  not  issued  by the  Institution  or the  Holding  Company  shall be
distributed,  or (E) a  tender  offer  is made  for  20% or  more of the  voting
securities of the Institution or Holding Company then outstanding.

      (b)   If any of the events  described  in Section  5(a) of this  Agreement
constituting a Change in Control have occurred, or the Board has determined that
a Change in Control has  occurred,  Executive  shall be entitled to the benefits
provided in  paragraphs  (c),  (d), (e), (f), and (g) of this Section 5 upon his
termination  of employment on or after the date the Change in Control occurs due
to (i) Executive's dismissal at any time during the term of this Agreement, (ii)
Executive's  resignation  for any  reason  within  the  sixty  (60)  day  period
following the date that is one-year from the date the Change in Control occurred
or (iii)  Executive's  resignation  during the remaining  term of this Agreement
following  any  demotion,  loss of title,  office or  significant  authority  or
responsibility,  reduction in the annual  compensation or benefits or relocation
of  Executive's  principal  place of  employment  by more than 25 miles from its
location immediately prior to the Change in Control,  unless such termination is
because of Executive's Termination for Cause; provided,  however,  Executive may
consent in writing to any such  demotion,  loss,  reduction or  relocation.  The
effect of any written  consent of the Executive under this Section 5(b) shall be
strictly  limited  to the terms  specified  in such  written  consent.  Under no
circumstances  can a termination of employment during the term of this Agreement
on or after the date of a Change in Control  occurs be  considered a termination
on account of retirement or disability for

                                       6
<PAGE>

purposes of determining  Executive's  rights to the payment of benefits provided
in paragraphs (c), (d), (e), (f), and (g) of this Section 5.

      (c)   Upon Executive's  entitlement to payment pursuant to Section 5(b) of
this  Agreement,  the Holding  Company shall pay  Executive,  or in the event of
Executive's  subsequent  death,  Executive's  beneficiary or  beneficiaries,  or
estate, as the case may be, as severance pay or liquidated  damages,  or both, a
sum equal to the greater of: (1) the payments and benefits  that would have been
due  pursuant  to  Section 3 of this  Agreement  for the  remaining  term of the
Agreement;  or (2) three (3) times the Executive's  average annual  compensation
(excluding  compensation  attributable to the exercise of stock options) for the
three most recently completed taxable years of Executive. Except as provided for
in  the  preceding   sentence,   for  purposes  of  this  Section  5(c),  annual
compensation  shall include Base Salary and any other taxable income paid by the
Holding  Company  or its  Subsidiaries,  including  but not  limited  to amounts
related to the granting,  vesting or exercise of restricted stock,  commissions,
bonuses, severance payments, retirement benefits, director or committee fees and
fringe benefits paid or to be paid to Executive or paid for Executive's  benefit
during any such year, as well as profit  sharing,  employee stock ownership plan
and other retirement  contributions or benefits,  including to any tax-qualified
or  non-tax-qualified  plan or  arrangement  (whether  or not  taxable)  made or
accrued on behalf of  Executive  for such year.  At the  election of  Executive,
which  election is to be made prior to or within thirty (30) days of the Date of
Termination  on or following a Change in Control,  such payment may be made in a
lump sum (without  discount for early payment) on or  immediately  following the
Date of Termination  (which may be the date a Change in Control  occurs) or paid
in equal  monthly  installments  during the  thirty-six  (36)  months  following
Executive's  termination.  In the event  that no  election  is made,  payment to
Executive  will be made in a lump sum. Such payments shall not be reduced in the
event Executive obtains other employment following termination of employment.

      (d)   Upon the  occurrence of a Change in Control  followed by Executive's
termination  of employment,  Executive will be entitled to receive  benefits due
him under or  contributed  by the  Holding  Company or its  Subsidiaries  on his
behalf pursuant to any  retirement,  incentive,  profit sharing,  employee stock
ownership,  bonus,  performance,  disability or other  employee  benefit plan or
other  arrangement  maintained  by the  Institution  or the  Holding  Company on
Executive's  behalf  to the  extent  such  benefits  are not  otherwise  paid to
Executive  under a  separate  provision  of this  Agreement.  In  addition,  for
purposes of determining his vested accrued benefit,  Executive shall be credited
either under any defined benefit pension plan and related supplemental executive
retirement  plan  maintained by the  Institution or, if not permitted under such
plans, under a separate arrangement, with the additional "years of service" that
he would have earned for vesting and benefit accrual  purposes for the remaining
term of the Agreement had his employment not terminated.

      (e)   Upon  the  occurrence  of  a  Change  in  Control  and   Executive's
termination  of  employment  pursuant to the  provisions of Section 5(b) of this
Agreement  in  connection  therewith,  the  Holding  Company  will  cause  to be
continued  any  welfare  Plan

                                       7
<PAGE>

benefit (as described in Section 4(d) of this Agreement) substantially identical
to the benefit  coverage  maintained by the Holding Company or its  Subsidiaries
for  Executive and any of his  dependents  covered under such plans prior to the
Change in Control.  Such coverage  shall cease upon the expiration of thirty-six
(36)  full  calendar  months  following  the Date of  Termination.  In the event
Executive's or Executive's dependent's participation in any such plan or program
is barred,  the  Holding  Company  shall  arrange to provide  Executive  and his
dependents with benefits coverage substantially similar to those which Executive
and his  dependents  would  otherwise  have been  entitled to receive under such
plans and  programs by operation of this  provision  or provide  their  economic
equivalent to executive and his dependents.

      (f)   The use or provision of any membership,  license, automobile use, or
other  perquisites shall be continued during the remaining term of the Agreement
on the same financial terms and obligations as were in place  immediately  prior
to the  Change in  Control.  To the  extent  that any item  referred  to in this
paragraph  will at the end of the term of this  Agreement no longer be available
to Executive, Executive will have the option to purchase all rights then held by
the Holding  Company or its  Subsidiaries  to such item for a price equal to the
then fair market value of the item.

      (g)   In the event that Executive is receiving  monthly payments  pursuant
to Section 5(c) hereof,  on an annual  basis,  thereafter,  between the dates of
January 1 and January 31 of each year,  Executive  shall have the right to elect
whether  the balance of the amount  payable  under the  Agreement  for that year
shall be paid in a lump sum pursuant to such  section.  Such  election  shall be
irrevocable for the year for which such election is made.

6.    CHANGE OF CONTROL RELATED PROVISIONS.

      (a)   Notwithstanding  the  preceding  provisions  of  Section  5 of  this
Agreement,  for any  taxable  year in which  Executive  shall be liable  for the
payment of an excise tax under Section 4999 of the Internal Revenue Code (or any
successor provision  thereto),  with respect to any payment in the nature of the
compensation  made by the  Holding  Company or its  Subsidiaries  to (or for the
benefit of)  Executive  pursuant to this  Agreement  or  otherwise,  the Holding
Company (or any successor  thereto) shall pay to Executive an amount  determined
under the following formula:

                                       8
<PAGE>

      An amount equal to: (E x P) + X

WHERE:

      X  =           E x P
            ----------------------
              1 - [(FI x (1 - SLI)) + SLI + E + M]
and

      E  =  the rate at which the excise tax is assessed  under  Section 4999 of
            the Code;

      P  =  the  amount  with  respect to which  such  excise  tax is  assessed,
            determined without regard to this Section 6;

      FI =  the highest marginal rate of federal income,  employment,  and other
            taxes  (other than taxes  imposed  under  Section  4999 of the Code)
            applicable  to  Executive  for the  taxable  year in  question  with
            respect  to  such  payment  (including  any  effective  increase  in
            Executive's tax rate  attributable to the resultant  disallowance of
            any deduction or the phase-out of any personal  exemption or similar
            items);

      SLI = the sum of the  highest  marginal  rates of income and  payroll  tax
            applicable to Executive  under  applicable  state and local laws for
            the taxable year in question  (including  any effective  increase in
            Executive's tax rate  attributable to the resultant  disallowance of
            any deduction or the phase-out of any personal  exemption or similar
            items);

      M  =  highest marginal rate of Medicare tax; and

      With respect to any payment in the nature of compensation  that is made to
(or for the benefit of) Executive under the terms of this Section 6 or otherwise
and on  which  an  excise  tax  under  Section  4999 of the  Code may or will be
assessed, the payment determined under this Section 6 shall be made to Executive
on the earliest of (i) the date the Holding Company is required to withhold such
tax, (ii) the date the tax is required to be paid by Executive,  or (iii) at the
time of termination resulting from the Change in Control. It is the intention of
the parties that the Holding Company provide  Executive with a full tax gross-up
under the  provisions of this Section 6, so that on a net after-tax  basis,  the
result to  Executive  shall be the same as if the excise tax under  Section 4999
(or any successor provisions) of the Code had not been imposed. The tax gross-up
may be adjusted, as appropriate, if alternative minimum tax rules are applicable
to Executive.

      (b)   Notwithstanding the foregoing,  if it is (i) initially determined by
the Holding  Company's tax advisors that no excise tax under Section 4999 of the
Code is due with  respect  to any  payment  or  benefit  described  in the first
paragraph of Section 6(a) and  thereafter it is  determined in a final  judicial
determination or  administrative  settlement that the Section 4999 excise tax is
due with respect to such  payments or benefits or

                                       9
<PAGE>

subsequently   determined  in  a  final  judicial   determination   or  a  final
administrative  settlement  to which  Executive  is a party  that the excise tax
under  Section 4999 of the Code is due or that the excess  parachute  payment as
defined in Section 4999 of the Code is more than the amount  determined  as "P",
above  (such  revised  determination  under (i) or (ii) above  thereafter  being
referred  to as the  "Determinative  Excess  Parachute  Payment"),  then the tax
advisors of the Holding  Company (or any successor  thereto) shall determine the
amount (the "Adjustment Amount"), the Holding Company (or any successor thereto)
must pay to  Executive,  in  order to put  Executive  in the  same  position  as
Executive  would have been if the amount  determined as "P" above had been equal
to the  Determinative  Excess Parachute  Payment.  In determining the Adjustment
Amount,  the tax advisors  shall take into account any and all taxes  (including
any penalties and interest) paid or payable by Executive in connection with such
final judicial  determination  or final  administrative  settlement.  As soon as
practicable  after the  Adjustment  Amount has been so  determined,  the Holding
Company shall pay the Adjustment Amount to Executive.

      (c)   The Holding  Company (or its  successor)  shall  indemnify  and hold
Executive  harmless  from any and all  losses,  costs  and  expenses  (including
without limitation,  reasonable attorney's fees,  reasonable  accountant's fees,
interest, fines and penalties of any kind) which Executive incurs as a result of
any  administrative  or judicial  review of Executive's  liability under Section
4999 of the Code by the Internal  Revenue Service or any comparable state agency
through and including a final  judicial  determination  or final  administrative
settlement of any dispute  arising out of Executive's  liability for the Section
4999 excise tax or  otherwise  relating to the  classification  for  purposes of
Section 280G of the Code of any payment or benefit in the nature of compensation
made or provided to Executive by the Holding  Company or any successor  thereto.
Executive  shall  promptly  notify  the  Holding  Company  in  writing  whenever
Executive  receives notice of the commencement of any judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under Section
4999 of the Code of any amount paid or payable under this Supplemental Agreement
is being reviewed or is in dispute (including a notice of audit or other inquiry
concerning  the reporting of  Executive's  liability  under Section  4999).  The
Holding  Company (or its  successor)  may assume control at its expense over all
legal and accounting  matters  pertaining to such federal or state tax treatment
(except to the extent necessary or appropriate for Executive to resolve any such
proceeding  with  respect to any  matter  unrelated  to amounts  paid or payable
pursuant to this Agreement) and Executive shall cooperate fully with the Holding
Company in any such proceeding. Executive shall not enter into any compromise or
settlement  or  otherwise  prejudice  any rights  the  Holding  Company  (or its
successor) may have in connection therewith without prior consent to the Holding
Company  (or its  successor).  In the event  that the  Holding  Company  (or any
successor  thereto) elects not to assume control over such matters,  the Holding
Company (or any successor  thereto) shall promptly  reimburse  Executive for all
expenses  related thereto as and when incurred upon  presentation of appropriate
documentation relating thereto.

7.    TERMINATION FOR CAUSE.

                                       10
<PAGE>

      The term  "Termination  for  Cause"  shall  mean  termination  because  of
Executive's  personal  dishonesty,  willful misconduct,  any breach of fiduciary
duty involving  personal profit,  intentional  failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar  offenses),  final  cease and  desist  order or  material  breach of any
provision of this Agreement.  Notwithstanding the foregoing, Executive shall not
be deemed to have been  terminated  for Cause  unless and until there shall have
been delivered to Executive a Notice of  Termination  which shall include a copy
of a  resolution  duly  adopted  by  the  affirmative  vote  of  not  less  than
three-fourths  of the members of the Board at a meeting of the Board  called and
held for that purpose (after  reasonable  notice to Executive and an opportunity
for  Executive,  together with  counsel,  to be heard before the Board and which
such meeting  shall be held not more than 30 days from the date of notice during
which  period  Executive  may be suspended  with pay),  finding that in the good
faith  opinion  of  the  Board,  Executive  was  guilty  of  conduct  justifying
Termination  for  Cause  and  specifying  the  particulars  thereof  in  detail.
Executive shall not have the right to receive compensation or other benefits for
any period  after  Termination  for Cause except for  compensation  and benefits
already  vested.  Any stock  options  and  related  limited  rights  granted  to
Executive  under any stock  option  plan,  or any  unvested  awards  granted  to
Executive under any restricted  stock benefit plan of the Holding Company or its
Subsidiaries,  shall become null and void effective upon Executive's  receipt of
Notice of Termination  for Cause pursuant to Section 8 hereof,  and shall not be
exercisable  by or  delivered  to  Executive  at any  time  subsequent  to  such
Termination  for Cause except all benefits  shall be deemed to have  remained in
effect if Executive is reinstated.

8.    NOTICE.

      (a)   Any  purported  termination  by the Holding  Company or by Executive
shall be  communicated  by Notice of Termination to the other party hereto.  For
purposes  of this  Agreement,  a "Notice  of  Termination"  shall mean a written
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's  employment  under the
provision so indicated.

      (b)   Except  as  otherwise  provided  for in  this  Agreement,  "Date  of
Termination" shall mean the date specified in the Notice of Termination  (which,
in the case of a Termination for Cause,  shall not be less than thirty (30) days
from the date such Notice of Termination is given).

      (c)   If,  within  thirty  (30) days  after any Notice of  Termination  is
given,  the party receiving such Notice of Termination  notifies the other party
that a  reasonable  dispute  exists  concerning  the  termination,  the  Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties,  by a binding  arbitration award, or
by a final judgment,  order or decree of a court of competent  jurisdiction (the
time for appeal  therefrom  having expired and no appeal having been  perfected)
and provided further that the Date of Termination  shall be

                                       11
<PAGE>

extended  by a notice of dispute  only if such notice is given in good faith and
the party  giving  such notice  pursues  the  resolution  of such  dispute  with
reasonable  diligence.  Notwithstanding  the pendency of any such  dispute,  the
Holding  Company will  continue to pay  Executive's  Base Salary and continue to
cover Executive under each Welfare Benefit Plan in which Executive  participated
at the time of such notice in effect when the notice  giving rise to the dispute
was given  until  the  dispute  is  finally  resolved  in  accordance  with this
Agreement.  Amounts  paid under this  Section  8(c) are in addition to all other
amounts due under this  Agreement and shall not be offset  against or reduce any
other amounts due under this Agreement.

9.    POST-TERMINATION OBLIGATIONS.

      All  payments  and benefits to  Executive  under this  Agreement  shall be
subject  to  Executive's  compliance  with this  Section 9 for one (1) full year
after  the  earlier  of the  expiration  of this  Agreement  or  termination  of
Executive's   employment  with  the  Holding  Company.   Executive  shall,  upon
reasonable  notice,  furnish  such  information  and  assistance  to the Holding
Company with regard to matters as to which he has personal  knowledge and as may
reasonably be required by the Holding  Company in connection with any litigation
in which it or any of its Subsidiaries or affiliates is, or may become, a party.
The Holding Company shall  reimburse  Executive for all  out-of-pocket  expenses
incurred  and at an hourly  rate  equivalent  to the  hourly  rate  (based on an
eight-hour work day) of his Base Salary in effect at the time of his termination
from  employment  for any time  incurred in connection  with  services  rendered
pursuant to this Section 9.

10.   NON-COMPETITION.

      (a)   Upon any termination of Executive's employment hereunder pursuant to
Section 4 of this  Agreement,  Executive  agrees not to compete with the Holding
Company  or its  Subsidiaries  for a  period  of one  (1)  year  following  such
termination  in the county in which the Holding  Company's  executive  office is
located  as of the  effective  date of such  termination,  except  as  agreed to
pursuant to a resolution duly adopted by the Board. Executive agrees that during
such period and within said  location,  Executive  shall not work for or advise,
consult or  otherwise  serve with,  directly  or  indirectly,  any entity  whose
business  materially  competes with the  depository,  lending or other  business
activities  of the Holding  Company or its  Subsidiaries.  The  parties  hereto,
recognizing  that  irreparable  injury will result to the Holding Company or its
Subsidiaries,  its business and property in the event of  Executive's  breach of
this  Subsection  10(a) agree that in the event of any such breach by Executive,
the Holding Company or its  Subsidiaries,  will be entitled,  in addition to any
other remedies and damages available, to an injunction to restrain the violation
hereof by Executive,  Executive's partners, agents, servants,  employees and all
persons acting for or under the direction of Executive. Executive represents and
admits  that in the  event of the  termination  of his  employment  pursuant  to
Section  4  hereof,  Executive's  experience  and  capabilities  are  such  that
Executive can obtain employment in a business engaged in other lines and/or of a
different  nature than the  Holding  Company or its  Subsidiaries,  and that the
enforcement  of a remedy by way of injunction  will not prevent  Executive

                                       12
<PAGE>

from earning a livelihood.  Nothing herein will be construed as prohibiting  the
Holding Company or its Subsidiaries  from pursuing any other remedies  available
to the Holding Company or its Subsidiaries for such breach or threatened breach,
including the recovery of damages from Executive.

      (b)   Executive  recognizes  and  acknowledges  that the  knowledge of the
business activities and plans for business activities of the Holding Company and
its  Subsidiaries as it may exist from time to time, is a valuable,  special and
unique  asset of the  business  of the  Holding  Company  and its  Subsidiaries.
Executive will not, during or after the term of Executive's employment, disclose
any knowledge of the past, present, planned or considered business activities of
the  Holding  Company  and  its  Subsidiaries   thereof  to  any  person,  firm,
corporation,  or other  entity  for any  reason  or  purpose  whatsoever  unless
expressly   authorized   by  the  Board  of   Directors   or  required  by  law.
Notwithstanding the foregoing,  Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively  derived  from the  business  plans and  activities  of the  Holding
Company.  In the event of a breach or threatened  breach by the Executive of the
provisions  of this  Section  10, the  Holding  Company  will be  entitled to an
injunction  restraining  Executive  from  disclosing,  in whole or in part,  the
knowledge of the past, present, planned or considered business activities of the
Holding  Company or its  Subsidiaries  or from  rendering  any  services  to any
person, firm,  corporation,  or other entity to whom such knowledge, in whole or
in part,  has been  disclosed or is threatened to be disclosed.  Nothing  herein
will be construed as  prohibiting  the Holding  Company from  pursuing any other
remedies  available to the Holding Company for such breach or threatened breach,
including the recovery of damages from Executive.

11.   SOURCE OF PAYMENTS.

      (a)   All  payments  provided  in this  Agreement  shall be timely paid in
cash,  check or other mutually  agreed upon method from the general funds of the
Holding Company subject to Section 11(b) of this Agreement.

      (b)   Notwithstanding any provision herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received by Executive under the Employment Agreement in effect between Executive
and the Institution,  such payments and benefits paid by the Institution will be
subtracted  from any  amount  due  simultaneously  to  Executive  under  similar
provisions  of this  Agreement.  Payments  pursuant  to this  Agreement  and the
Institution  Agreement shall be allocated in proportion to the level of activity
and the time  expended on such  activities  by  Executive as  determined  by the
Holding Company and the  Institution on a quarterly  basis;  provided,  however,
that except for the  reduction  provided by the first  sentence of this  Section
11(b),  the Holding  Company  will be  obligated  to pay 100% of the amounts due
Executive hereunder.

                                       13
<PAGE>

12.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

      This  Agreement  contains  the entire  understanding  between  the parties
hereto and supersedes any prior employment agreement between the Holding Company
or any  predecessor  of the  Holding  Company  and  Executive,  except that this
Agreement  shall not affect or operate  to reduce  any  benefit or  compensation
inuring to the  Executive  of a kind  elsewhere  provided.  No provision of this
Agreement  shall be  interpreted  to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.

13.   NO ATTACHMENT.

      (a)   Except as required by law, no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

      (b)   This  Agreement  shall be binding upon, and inure to the benefit of,
Executive and the Holding Company and their respective successors and assigns.

14.   MODIFICATION AND WAIVER.

      (a)   This  Agreement  may  not  be  modified  or  amended  except  by  an
instrument in writing signed by the parties hereto.

      (b)   No term or condition of this Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.   SEVERABILITY.

      If, for any reason,  any provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

                                       14
<PAGE>

16.   HEADINGS FOR REFERENCE ONLY.

      The headings of sections  and  paragraphs  herein are included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.

17.   GOVERNING LAW.

      This  Agreement  shall be governed  by the laws of the State of  Delaware,
unless otherwise specified herein.

18.   ARBITRATION.

      Any  dispute  or  controversy  arising  under or in  connection  with this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three  arbitrators  sitting in a location  selected by Executive within fifty
(50) miles from the location of the Institution, in accordance with the rules of
the American Arbitration  Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of Executive's right to
be paid until the Date of  Termination  during the  pendency  of any  dispute or
controversy arising under or in connection with this Agreement.

      In the event any dispute or  controversy  arising  under or in  connection
with  Executive's  termination  is  resolved in favor of  Executive,  whether by
judgment, arbitration or settlement,  Executive shall be entitled to the payment
of all  back-pay,  including  salary,  bonuses and any other cash  compensation,
fringe  benefits and any  compensation  and benefits  due  Executive  under this
Agreement.

19.   PAYMENT OF LEGAL FEES.

      All  reasonable  legal fees paid or incurred by Executive  pursuant to any
dispute or question of  interpretation  relating to this Agreement shall be paid
or reimbursed by the Holding Company,  if Executive is successful  pursuant to a
legal judgment, arbitration or settlement.

20.   INDEMNIFICATION.

      The Holding Company shall provide Executive (including  Executive's heirs,
executors and  administrators)  with coverage  under a standard  directors'  and
officers'  liability  insurance  policy  at  its  expense  and  shall  indemnify
Executive (and Executive's heirs,  executors and  administrators) to the fullest
extent  permitted  under  Delaware  law against  all  expenses  and  liabilities
reasonably  incurred  by  Executive  in  connection  with or arising  out of any
action,  suit or  proceeding  in which  Executive  may be  involved by reason of
Executive  having  been a  director  or officer  of the  Holding  Company or its

                                       15
<PAGE>

Subsidiaries  (whether or not Executive continues to be a director or officer at
the  time  of  incurring  such  expenses  or  liabilities),  such  expenses  and
liabilities  to  include,  but not be limited  to,  judgments,  court  costs and
attorneys' fees and the cost of reasonable settlements.

21.   SUCCESSOR TO THE HOLDING COMPANY.

      The Holding  Company  shall  require any  successor or  assignee,  whether
direct or indirect, by purchase,  merger,  consolidation or otherwise, to all or
substantially  all the  business  or assets of the  Institution  or the  Holding
Company,  expressly  and  unconditionally  to assume  and agree to  perform  the
Holding Company's  obligations  under this Agreement,  in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.

                                       16
<PAGE>

                                   SIGNATURES

      IN  WITNESS  WHEREOF,   First  Sentinel  Bancorp,  Inc.  has  caused  this
Agreement,  as amended and  restated,  to be executed and its seal to be affixed
hereunto by its duly  authorized  officer and its  directors,  and Executive has
signed this Agreement, on ____________________________.

ATTEST:                                     FIRST SENTINEL BANCORP, INC.

                                            By:
------------------------------------           ---------------------------------
Secretary                                      For the Entire Board of Directors

                  [SEAL]

WITNESS:                                    EXECUTIVE

                                            By:
------------------------------------           ---------------------------------

                                       17

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