Document:

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                                                                    EXHIBIT 10.4

                               THE PROVIDENT BANK

                          EMPLOYEE STOCK OWNERSHIP PLAN

                       (adopted effective January 1, 2002)

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                               THE PROVIDENT BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN

         This Employee Stock Ownership Plan, executed on the ________ day of
______________, 2002, by The Provident Bank, a New Jersey-chartered stock
savings bank (the "Bank"),

                           W I T N E S S E T H  T H A T

         WHEREAS, the board of directors of the Bank has resolved to adopt an
employee stock ownership plan for eligible employees of the Bank and
subsidiaries of the Bank, in accordance with the terms and conditions presented
set forth herein;

         NOW, THEREFORE, the Bank hereby adopts the following Plan setting forth
the terms and conditions pertaining to contributions by the Employer and the
payment of benefits to Participants and Beneficiaries.

         IN WITNESS WHEREOF, the Bank has adopted this Plan and caused this
instrument to be executed by its duly authorized officers as of the above date.

ATTEST:

                                  By:
-------------------------            ---------
Secretary                            President

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                                    CONTENTS

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Section 1.        Plan Identity................................................................    1
        1.1       Name.........................................................................    1
        1.2       Purpose......................................................................    1
        1.3       Effective Date...............................................................    1
        1.4       Fiscal Period................................................................    1
        1.5       Single Plan for All Employers................................................    1
        1.6       Interpretation of Provisions.................................................    1
Section 2.        Definitions..................................................................    1
Section 3.        Eligibility for Participation................................................    7
        3.1       Initial Eligibility..........................................................    7
        3.2       Definition of Eligibility Year...............................................    7
        3.3       Terminated Employees.........................................................    8
        3.4       Certain Employees Ineligible.................................................    8
        3.5       Participation and Reparticipation............................................    8
        3.6       Omission of Eligible Employee................................................    8
Section 4.        Contributions and Credits....................................................    8
        4.1       Discretionary Contributions..................................................    8
        4.2       Contributions for Stock Obligations..........................................    9
        4.3       Conditions as to Contributions...............................................    9
        4.4       Rollover Contributions.......................................................    9
Section 5.        Limitations on Contributions and Allocations.................................   10
        5.1       Limitation on Annual Additions...............................................   10
        5.2       Effect of Limitations........................................................   11
        5.3       Limitations as to Certain Participants.......................................   11
Section 6.        Trust Fund and Its Investment................................................   12
        6.1       Creation of Trust Fund.......................................................   12
        6.2       Stock Fund and Investment Fund...............................................   12
        6.3       Acquisition of Stock.........................................................   13
        6.4       Participants' Option to Diversify............................................   14
Section 7.        Voting Rights and Dividends on Stock.........................................   14
        7.1       Voting and Tendering of Stock................................................   14
        7.2       Dividends on Stock...........................................................   15
Section 8.        Adjustments to Accounts......................................................   16
        8.1       Adjustments for Transactions.................................................   16
        8.2       Valuation of Investment Fund.................................................   16
        8.3       Adjustments for Investment Experience........................................   16
Section 9.        Vesting of Participants' Interests...........................................   16
        9.1       Deferred Vesting in Accounts.................................................   16
        9.2       Computation of Vesting Years.................................................   17
        9.3       Full Vesting Upon Certain Events.............................................   17
        9.4       Full Vesting Upon Plan Termination...........................................   18
        9.5       Forfeiture, Repayment, and Restoral..........................................   18
        9.6       Accounting for Forfeitures...................................................   19
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                                       (i)

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<TABLE>
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        9.7       Vesting and Nonforfeitability................................................   19
Section 10.       Payment of Benefits..........................................................   19
        10.1      Benefits for Participants....................................................   19
        10.2      Time for Distribution........................................................   20
        10.3      Marital Status...............................................................   21
        10.4      Delay in Benefit Determination...............................................   21
        10.5      Accounting for Benefit Payments..............................................   21
        10.6      Options to Receive and Sell Stock............................................   21
        10.7      Restrictions on Disposition of Stock.........................................   22
        10.8      Continuing Loan Provisions; Creations of Protections and Rights..............   22
        10.9      Direct Rollover of Eligible Distribution.....................................   23
        10.10     Waiver of 30-Day Period After Notice of Distribution.........................   23
Section 11.       Rules Governing Benefit Claims and Review of Appeals.........................   24
        11.1      Claim for Benefits...........................................................   24
        11.2      Notification by Committee....................................................   24
        11.3      Claims Review Procedure......................................................   24
Section 12.       The Committee and its Functions..............................................   25
        12.1      Authority of Committee.......................................................   25
        12.2      Identity of Committee........................................................   25
        12.3      Duties of Committee..........................................................   25
        12.4      Valuation of Stock...........................................................   25
        12.5      Compliance with ERISA........................................................   26
        12.6      Action by Committee..........................................................   26
        12.7      Execution of Documents.......................................................   26
        12.8      Adoption of Rules............................................................   26
        12.9      Responsibilities to Participants.............................................   26
        12.10     Alternative Payees in Event of Incapacity....................................   26
        12.11     Indemnification by Employers.................................................   26
        12.12     Nonparticipation by Interested Member........................................   27
Section 13.       Adoption, Amendment, or Termination of the Plan..............................   27
        13.1      Adoption of Plan by Other Employers..........................................   27
        13.2      Plan Adoption Subject to Qualification.......................................   27
        13.3      Right to Amend or Terminate..................................................   27
Section 14.       Miscellaneous Provisions.....................................................   27
        14.1      Plan Creates No Employment Rights............................................   28
        14.2      Nonassignability of Benefits.................................................   28
        14.3      Limit of Employer Liability..................................................   28
        14.4      Treatment of Expenses........................................................   28
        14.5      Number and Gender............................................................   29
        14.6      Nondiversion of Assets.......................................................   28
        14.7      Separability of Provisions...................................................   28
        14.8      Service of Process...........................................................   28
        14.9      Governing State Law..........................................................   28
        14.10     Employer Contributions Conditioned on Deductibility..........................   28
        14.11     Unclaimed Accounts...........................................................   29
        14.12     Qualified Domestic Relations Order...........................................   29
Section 15.       Top-Heavy Provisions.........................................................   30
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                                      (ii)

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<S>                                                                                               <C>
        15.1      Top-Heavy Plan...............................................................   30
        15.2      Super Top-Heavy Plan.........................................................   30
        15.3      Definitions..................................................................   30
        15.4      Top-Heavy Rules of Application...............................................   31
        15.5      Minimum Contributions........................................................   33
        15.6      Minimum Vesting..............................................................   33
        15.7      Top-Heavy Provisions Control in Top-Heavy Plan...............................   33
</TABLE>

                                      (iii)

<PAGE>

                               THE PROVIDENT BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN

SECTION 1.     PLAN IDENTITY.

         1.1   Name. The name of this Plan is "The Provident Bank Employee Stock
Ownership Plan."

         1.2   Purpose. The purpose of this Plan is to describe the terms and
conditions under which contributions made pursuant to the Plan will be credited
and paid to the Participants and their Beneficiaries.

         1.3   Effective Date. The Effective Date of this Plan is January 1,
2002.

         1.4   Fiscal Period. This Plan shall be operated on the basis of a
January 1 to December 31 fiscal year for the purpose of keeping the Plan's books
and records and distributing or filing any reports or returns required by law.

         1.5   Single Plan for All Employers. This Plan shall be treated as a
single plan with respect to all participating Employers for the purpose of
crediting contributions and forfeitures and distributing benefits, determining
whether there has been any termination of Service, and applying the limitations
set forth in Section 5.

         1.6   Interpretation of Provisions. The Employers intend this Plan and
the Trust to be a qualified stock bonus plan under Section 401(a) of the Code
and an employee stock ownership plan within the meaning of Section 407(d)(6) of
ERISA and Section 4975(e)(7) of the Code. The Plan is intended to have its
assets invested primarily in qualifying employer securities of one or more
Employers within the meaning of Section 407(d)(3) of ERISA, and to satisfy any
requirement under ERISA or the Code applicable to such a plan.

         Accordingly, the Plan and Trust Agreement shall be interpreted and
applied in a manner consistent with this intent and shall be administered at all
times and in all respects in a nondiscriminatory manner.

SECTION 2.     DEFINITIONS.

         The following capitalized words and phrases shall have the meanings
specified when used in this Plan and in the Trust Agreement, unless the context
clearly indicates otherwise:

         "Account" means a Participant's interest in the assets accumulated
under this Plan as expressed in terms of a separate account balance which is
periodically adjusted to reflect his Employer's contributions, the Plan's
investment experience, and distributions and forfeitures.

         "Active Participant" means a Participant who has satisfied the
eligibility requirements under Section 3 and who has at least 1,000 Hours of
Service during the current Plan Year. However, a Participant shall not qualify
as an Active Participant unless (i) he is in active Service with an Employer as
of the last day of the Plan Year, or (ii) he is on a Recognized Absence as of
that date, or (iii) his Service terminated during the Plan Year by reason of
Disability, death, Early Retirement or Normal Retirement.

         "Bank" means The Provident Bank and any entity which succeeds to the
business of The Provident Bank and adopts this Plan as its own pursuant to
Section 13.1 of the Plan.

<PAGE>

         "Beneficiary" means the person or persons who are designated by a
Participant to receive benefits payable under the Plan on the Participant's
death. In the absence of any designation or if all the designated Beneficiaries
shall die before the Participant dies or shall die before all benefits have been
paid, the Participant's Beneficiary shall be his surviving Spouse, if any, or
his estate if he is not survived by a Spouse. The Committee may rely upon the
advice of the Participant's executor or administrator as to the identity of the
Participant's Spouse.

         "Break in Service" means any Plan Year, or, for the initial eligibility
computation period under Section 3.2, the 12-consecutive month period beginning
on the first day of which an Employee has an Hour of Service, in which an
Employee has 500 or fewer Hours of Service. Solely for this purpose, an Employee
shall be considered employed for his normal hours of paid employment during a
Recognized Absence (said Employee shall not be credited with more than 501 Hours
of Service to avoid a Break in Service), unless he does not resume his Service
at the end of the Recognized Absence. Further, if an Employee is absent for any
period (i) by reason of the Employee's pregnancy, (ii) by reason of the birth of
the Employee's child, (iii) by reason of the placement of a child with the
Employee in connection with the Employee's adoption of the child, or (iv) for
purposes of caring for such child for a period beginning immediately after such
birth or placement, the Employee shall be credited with the Hours of Service
which would normally have been credited but for such absence, up to a maximum of
501 Hours of Service.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Committee" means the committee responsible for the administration of
this Plan in accordance with Section 12.

         "Company" means Provident Financial Services, Inc., the holding company
of the Bank, and any successor entity which succeeds to the business of the
Company.

         "Compensation" (a) means such Participant's wages as defined in Code
Section 3401(a) and all other payments of compensation by the Employer (in the
course of the Employer's trade or business) for a Plan Year for which the
Employer is required to furnish the Participant a written statement under Code
Sections 6041(d), 6051(a)(3) and 6052. Compensation must be determined without
regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Code Section
3401(a)(2)).

         (b)   For purposes of this definition and notwithstanding the above,
Compensation shall be determined by:

               (i)    excluding commissions, except that commissions shall be
                      included for dedicated salespeople but not in excess of
                      the highest dollar amount of commissions that could be
                      received which, when added to other includible wages and
                      payments, is one dollar ($1) less than the Highly Paid
                      Employee dollar limit for the determination year (and not
                      for the preceding year), as determined under Code Section
                      414(q)(1) (e.g., the Highly Paid Employee dollar limit for
                      the determination year 2001 is $85,000 and for 2002 is
                      $90,000).

               (ii)   excluding bonuses.

                                       -2-

<PAGE>

               (iii)  including amounts which are contributed by the Employer
                      pursuant to a salary reduction agreement and which are not
                      includible in the gross income of the Participant under
                      Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B),
                      403(B) or 457(b), and Employee contributions described in
                      Code Section 414(h)(2) that are treated as Employer
                      contributions.

         (c)   Compensation in excess of $200,000 (as indexed) shall be
disregarded for all Participants. For purposes of this sub-section, the $200,000
limit shall be referred to as the "applicable limit" for the Plan Year in
question. The $200,000 limit shall be adjusted for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code, effective for the
Plan Year that begins within the applicable calendar year. For purposes of the
applicable limit, 415 Compensation shall be prorated over short Plan Years.

         "Disability" means the inability to do any substantial amount of work
of any sort because of a physical or mental condition which can be medically
determined and which can be expected to last more than a year. The Committee may
require a medical examination by a physician chosen by the Committee. However,
if the disabled individual is eligible for Social Security disability benefits,
he will automatically satisfy the requirements for Disability under the Plan.

         "Early Retirement" means retirement on or after a Participant's
attainment of age 55 and the completion of ten (10) years of credited Service
with an Employer.

         "Effective Date" means January 1, 2002.

         "Employee" means any individual who is or has been employed or
self-employed by an Employer. "Employee" also means an individual employed by a
leasing organization who, pursuant to an agreement between an Employer and the
leasing organization, has performed services for the Employer and any related
persons (within the meaning of Section 414(n)(6) of the Code) on a substantially
full-time basis for more than one year, if such services are performed under the
primary direction or control of the Employer. However, such a "leased employee"
shall not be considered an Employee if (i) he participates in a money purchase
pension plan sponsored by the leasing organization which provides for immediate
participation, immediate full vesting, and an annual contribution of at least 10
percent of the Employee's 415 Compensation, and (ii) leased employees do not
constitute more than 20 percent of the Employer's total work force (including
leased employees, but excluding Highly Paid Employees and any other Employees
who have not performed services for the Employer on a substantially full-time
basis for at least one year).

         "Employer" means the Bank, Provident Investment Services, Inc., or any
affiliate within the purview of section 414(b), (c) or (m) and 415(h) of the
Code, or any other corporation, partnership, or proprietorship that adopts this
Plan with the Bank's consent pursuant to Section 13.1, and any entity which
succeeds to the business of any Employer and adopts the Plan pursuant to Section
13.2.

         "Entry Date" means the Effective Date of the Plan and each January 1
and July 1 of each Plan Year after the Effective Date.

         "ERISA" means the Employee Retirement Income Security Act of 1974 (P.L.
93-406, as amended).

         "415 Compensation"

                                       -3-

<PAGE>

               (a)    shall mean wages, as defined in Code Section 3401(a) for
         purposes of income tax withholding at the source.

               (b)    Any elective deferral as defined in Code Section 402(g)(3)
         (any Employer contributions made on behalf of a Participant to the
         extent not includible in gross income and any Employer contributions to
         purchase an annuity contract under Code Section 403(b) under a salary
         reduction agreement) and any amount which is contributed or deferred by
         the Employer at the election of the Participant and which is not
         includible in gross income of the Participant by reason of Code Section
         125 (Cafeteria Plan), Code Section 457 or 132(f)(4) shall also be
         included in the definition of 415 Compensation.

               (c)    415 Compensation in excess of $200,000 (as indexed) shall
         be disregarded for all Participants. For purposes of this sub-section,
         the $200,000 limit shall be referred to as the "applicable limit" for
         the Plan Year in question. The $200,000 limit shall be adjusted for
         increases in the cost of living in accordance with Section
         401(a)(17)(B) of the Code, effective for the Plan Year which begins
         within the applicable calendar year. For purposes of the applicable
         limit, 415 Compensation shall be prorated over short Plan Years.

         "Highly Paid Employee" for any Plan Year means an Employee who, during
either that or the immediately preceding Plan Year was at any time a five
percent owner of the Employer (as defined in Code Section 416(i)(1)) or, during
the immediately preceding Plan Year, had 415 Compensation exceeding $90,000 and
was among the most highly compensated one-fifth of all Employees (the $90,000
amount is adjusted at the same time and in the same manner as under Code Section
415(d), provided, however, the base period is the calendar quarter ending
September 30, 1996). For these purposes, "the most highly compensated one-fifth
of all Employees" shall be determined by taking into account all individuals
working for all related Employer entities described in the definition of
"Service", but excluding any individual who has not completed six months of
Service, who normally works fewer than 17 1/2 hours per week or in fewer than
six months per year, who has not reached age 21, whose employment is covered by
a collective bargaining agreement, or who is a nonresident alien who receives no
earned income from United States sources. The applicable year for which a
determination is being made is called a "determination year" and the preceding
12 month period is called a look back year.

         "Hours of Service" means hours to be credited to an Employee under the
following rules:

               (a)    Each hour for which an Employee is paid or is entitled to
         be paid for services to an Employer is an Hour of Service.

               (b)    Each hour for which an Employee is directly or indirectly
         paid or is entitled to be paid for a period of vacation, holidays,
         illness, disability, lay-off, jury duty, temporary military duty, or
         leave of absence is an Hour of Service. However, except as otherwise
         specifically provided, no more than 501 Hours of Service shall be
         credited for any single continuous period which an Employee performs no
         duties. No more than 501 Hours of Service will be credited under this
         paragraph for any single continuous period (whether or not such period
         occurs in a single computation period). Further, no Hours of Service
         shall be credited on account of payments made solely under a plan
         maintained to comply with worker's compensation, unemployment
         compensation, or disability insurance laws, or to reimburse an Employee
         for medical expenses.

                                       -4-

<PAGE>

               (c)    Each hour for which back pay (ignoring any mitigation of
         damages) is either awarded or agreed to by an Employer is an Hour of
         Service. However, no more than 501 Hours of Service shall be credited
         for any single continuous period during which an Employee would not
         have performed any duties. The same Hours of Service will not be
         credited both under paragraph (a) or (b) as the case may be, and under
         this paragraph (c). These hours will be credited to the employee for
         the computation period or periods to which the award or agreement
         pertains rather than the computation period in which the award
         agreement or payment is made.

               (d)    Hours of Service shall be credited in any one period only
         under one of the foregoing paragraphs (a), (b) and (c); an Employee may
         not get double credit for the same period.

               (e)    If an Employer finds it impractical to count the actual
         Hours of Service for any class or group of non-hourly Employees, each
         Employee in that class or group shall be credited with 45 Hours of
         Service for each weekly pay period in which he has at least one Hour of
         Service. However, an Employee shall be credited only for his normal
         working hours during a paid absence.

               (f)    Hours of Service to be credited on account of a payment to
         an Employee (including back pay) shall be recorded in the period of
         Service for which the payment was made. If the period overlaps two or
         more Plan Years, the Hours of Service credit shall be allocated in
         proportion to the respective portions of the period included in the
         several Plan Years. However, in the case of periods of 31 days or less,
         the Administrator may apply a uniform policy of crediting the Hours of
         Service to either the first Plan Year or the second.

               (g)    In all respects an Employee's Hours of Service shall be
         counted as required by Section 2530.200b-2(b) and (c) of the Department
         of Labor's regulations under Title I of ERISA.

         "Investment Fund" means that portion of the Trust Fund consisting of
assets other than Stock. Notwithstanding the above, assets from the Investment
Fund may be used to purchase Stock in the open market or otherwise, or used to
pay on the Stock Obligation, and shares so purchased will be allocated to a
Participant's Stock Fund.

         "Normal Retirement" means retirement on or after the Participant's
Normal Retirement Date.

         "Normal Retirement Date" means the later of (i) the date on which a
Participant attains age 65 and (ii) the Participant's fifth year of credited
Service.

         "Participant" means any Employee who is an Active Participant
participating in the Plan, or Employee or former Employee who was previously an
Active Participant and still has a balance credited to his Account.

         "Plan Year" means the twelve-month period commencing January 1 and
ending December 31, 2002 and each period of 12 consecutive months beginning on
January 1 of each succeeding year.

         "Recognized Absence" means a period for which --

                                       -5-

<PAGE>

               (a)    an Employer grants an Employee a leave of absence for a
         limited period, but only if an Employer grants such leave on a
         nondiscriminatory basis; or

               (b)    an Employee is temporarily laid off by an Employer because
         of a change in business conditions; or

               (c)    an Employee is on active military duty, but only to the
         extent that his employment rights are protected by the Military
         Selective Service Act of 1967 (38 U.S.C. Sec. 2021).

         "Service" means an Employee's period(s) of employment or
self-employment with an Employer, excluding for initial eligibility purposes any
period in which the individual was a nonresident alien and did not receive from
an Employer any earned income which constituted income from sources within the
United States. An Employee's Service shall include any Service which constitutes
Service with a predecessor Employer within the meaning of Section 414(a) of the
Code, provided, however, that Service with an acquired entity shall not be
considered Service under the Plan unless required by applicable law or agreed to
by the parties to such transaction. An Employee's Service shall also include any
Service with an entity which is not an Employer, but only either (i) for a
period after 1975 in which the other entity is a member of a controlled group of
corporations or is under common control with other trades and businesses within
the meaning of Section 414(b) or 414(c) of the Code, and a member of the
controlled group or one of the trades and businesses is an Employer, (ii) for a
period after 1979 in which the other entity is a member of an affiliated service
group within the meaning of Section 414(m) of the Code, and a member of the
affiliated service group is an Employer, or (iii) all Employers aggregated with
the Employer under Section 414(o) of the Code (but not until the Proposed
Regulations under Section 414(o) become effective). Notwithstanding any
provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Section 414(u) of the Code.

         "Spouse" means the individual, if any, to whom a Participant is
lawfully married on the date benefit payments to the Participant are to begin,
or on the date of the Participant's death, if earlier. A former Spouse shall be
treated as the Spouse or surviving Spouse to the extent provided under a
qualified domestic relations order as described in section 414(p) of the Code.

         "Stock" means shares of the Company's voting common stock or preferred
stock meeting the requirements of Section 409(e)(3) of the Code issued by an
Employer which is a member of the same controlled group of corporations within
the meaning of Code Section 414(b).

         "Stock Fund" means that portion of the Trust Fund consisting of Stock.

         "Stock Obligation" means an indebtedness arising from any extension of
credit to the Plan or the Trust which satisfies the requirements set forth in
Section 6.3 and which was obtained for any or all of the following purposes:

               (i)    to acquire qualifying Employer securities as defined in
                      Treasury Regulationsss.54.4975-12;

               (ii)   to repay such Stock Obligation; or

               (iii)  to repay a prior exempt loan.

                                       -6-

<PAGE>

         "Trust" or "Trust Fund" means the trust fund created under this Plan.

         "Trust Agreement" means the agreement between the Bank and the Trustee
concerning the Trust Fund. If any assets of the Trust Fund are held in a
co-mingled trust fund with assets of other qualified retirement plans, "Trust
Agreement" shall be deemed to include the trust agreement governing that
co-mingled trust fund. With respect to the allocation of investment
responsibility for the assets of the Trust Fund, the provisions of Article II of
the Trust Agreement are incorporated herein by reference.

         "Trustee" means one or more corporate persons or individuals selected
from time to time by the Bank to serve as trustee or co-trustees of the Trust
Fund.

         "Unallocated Stock Fund" means that portion of the Stock Fund
consisting of the Plan's holding of Stock which have been acquired in exchange
for one or more Stock obligations and which have not yet been allocated to the
Participant's Accounts in accordance with Section 4.2.

         "Valuation Date" means the last day of the Plan Year and each other
date as of which the Committee shall determine the investment experience of the
Investment Fund and adjust the Participants' Accounts accordingly.

         "Valuation Period" means the period following a Valuation Date and
ending with the next Valuation Date.

         "Vesting Year" means a unit of Service credited to a Participant
pursuant to Section 9.2 for purposes of determining his vested interest in his
Account.

SECTION 3.     ELIGIBILITY FOR PARTICIPATION.

         3.1   Initial Eligibility. An Employee shall enter the Plan as of the
Entry Date coincident with or next following the later of the following dates:

               (a) the last day of the Employee's first Eligibility Year, and

               (b) the Employee's 21st birthday. However, if an Employee is not
         in active Service with an Employer on the date he would otherwise first
         enter the Plan, his entry shall be deferred until the next day he is in
         Service.

         3.2   Definition of Eligibility Year. An "Eligibility Year" means an
applicable eligibility period (as defined below) in which the Employee has
completed 1,000 Hours of Service for the Employer. For this purpose:

               (a) an Employee's first "eligibility period" is the
         12-consecutive month period beginning on the first day on which he has
         an Hour of Service, and

               (b) his subsequent eligibility periods will be 12-consecutive
         month periods beginning on each January 1 after that first day of
         Service.

                                       -7-

<PAGE>

         3.3   Terminated Employees. No Employee shall have any interest or
rights under this Plan if he is never in active Service with an Employer on or
after the Effective Date.

         3.4   Certain Employees Ineligible.

               (a) No Employee shall participate in the Plan while his Service
         is covered by a collective bargaining agreement between an Employer and
         the Employee's collective bargaining representative if (i) retirement
         benefits have been the subject of good faith bargaining between the
         Employer and the representative and (ii) the collective bargaining
         agreement does not provide for the Employee's participation in the
         Plan.

               (b) Leased Employees are not eligible to participate in the Plan.

               (c) An eligible Employee may elect not to participate in the
         Plan, provided, however, such election is made solely to meet the
         requirements of Code Section 409(n). For an election to be effective
         for a particular Plan Year, the Employee or Participant must file the
         election in writing with the Plan Administrator no later than the last
         day of the Plan Year for which the election is to be effective. The
         Employer may not make a contribution under the Plan for the Employee or
         for the Participant for the Plan Year for which the election is
         effective, nor for any succeeding Plan Year, unless the Employee or
         Participant re-elects to participate in the Plan. The Employee or
         Participant may elect again not to participate, but not earlier than
         the first Plan Year following the Plan Year in which the re-election
         was first effective.

         3.5   Participation and Reparticipation. Subject to the satisfaction of
the foregoing requirements, an Employee shall participate in the Plan during
each period of his Service from the date on which he first becomes eligible
until his termination. For this purpose, an Employee who returns before five (5)
consecutive Breaks in Service who previously satisfied the initial eligibility
requirements or who returns after five (5) consecutive one year Breaks in
Service with a vested Account balance in the Plan shall re-enter the Plan as of
the date of his return to Service with an Employer.

         3.6   Omission of Eligible Employee. If, in any Plan Year, any Employee
who should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution by his
Employer for the year has been made, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount which the said
Employer would have contributed regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.

SECTION 4.     CONTRIBUTIONS AND CREDITS.

         4.1   Discretionary Contributions. The Employer shall from time to time
contribute, with respect to a Plan Year, such amounts as it may determine from
time to time. The Employer shall have no obligation to contribute any amount
under this Plan except as so determined in its sole discretion. The Employer's
contributions and available forfeitures for a Plan Year shall be credited as of
the last day of the year to the Accounts of the Active Participants in
proportion to their amounts of Compensation earned during that portion of the
Plan Year that such persons are Participants in the Plan.

                                       -8-

<PAGE>

         4.2   Contributions for Stock Obligations. If the Trustee, upon
instructions from the Committee, incurs any Stock Obligation upon the purchase
of Stock, the Employer may contribute for each Plan Year an amount sufficient to
cover all payments of principal and interest as they come due under the terms of
the Stock Obligation. If there is more than one Stock Obligation, the Employer
shall designate the one to which any contribution is to be applied. Investment
earnings realized on Employer contributions and any dividends paid by the
Employer on Stock held in the Unallocated Stock Account, shall be applied to the
Stock Obligation related to that Stock, subject to Section 7.2.

         In each Plan Year in which Employer contributions, earnings on
contributions, or dividends on unallocated Stock are used as payments under a
Stock Obligation, a certain number of shares of the Stock acquired with that
Stock Obligation which is then held in the Unallocated Stock Fund shall be
released for allocation among the Participants. The number of shares released
shall bear the same ratio to the total number of those shares then held in the
Unallocated Stock Fund (prior to the release) as (i) the principal and interest
payments made on the Stock Obligation in the current Plan Year bears to (ii) the
sum of (i) above, and the remaining principal and interest payments required (or
projected to be required on the basis of the interest rate in effect at the end
of the Plan Year) to satisfy the Stock Obligation.

         At the direction of the Committee, the current and projected payments
of interest under a Stock Obligation may be ignored in calculating the number of
shares to be released in each year if (i) the Stock Obligation provides for
annual payments of principal and interest at a cumulative rate that is not less
rapid at any time than level annual payments of such amounts for 10 years, (ii)
the interest included in any payment is ignored only to the extent that it would
be determined to be interest under standard loan amortization tables, and (iii)
the term of the Stock Obligation, by reason of renewal, extension, or
refinancing, has not exceeded 10 years from the original acquisition of the
Stock.

         4.3   Conditions as to Contributions. Employers' contributions shall in
all events be subject to the limitations set forth in Section 5. Contributions
may be made in the form of cash, or securities and other property to the extent
permissible under ERISA, including Stock, and shall be held by the Trustee in
accordance with the Trust Agreement. In addition to the provisions of Section
13.3 for the return of an Employer's contributions in connection with a failure
of the Plan to qualify initially under the Code, any amount contributed by an
Employer due to a good faith mistake of fact, or based upon a good faith but
erroneous determination of its deductibility under Section 404 of the Code,
shall be returned to the Employer within one year after the date on which the
contribution was originally made, or within one year after its nondeductibility
has been finally determined. However, the amount to be returned shall be reduced
to take account of any adverse investment experience within the Trust Fund in
order that the balance credited to each Participant's Account is not less that
it would have been if the contribution had never been made.

         4.4   Rollover Contributions. This Plan shall not accept a direct
rollover or rollover contribution of an "eligible rollover distribution" as such
term is defined in Section 10.9-1 of the Plan.

                                       -9-

<PAGE>

SECTION 5.     LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS.

         5.1   Limitation on Annual Additions. Notwithstanding anything herein
to the contrary, allocation of Employer contributions for any Plan Year shall be
subject to the following:

               5.1-1  If allocation of Employer contributions in accordance with
         Section 4.1 will result in an allocation of more than one-third the
         total contributions for a Plan Year to the Accounts of Highly Paid
         Employees, then allocation of such amount shall be adjusted so that
         such excess will not occur.

               5.1-2  After adjustment, if any, required by the preceding
         paragraph, the annual additions during any Plan Year to any
         Participant's Account under this and any other defined contribution
         plans maintained by the Employer or an affiliate (within the purview of
         Section 414(b), (c) and (m) and Section 415(h) of the Code, which
         affiliate shall be deemed the Employer for this purpose) shall not
         exceed the lesser of $40,000 (or such other dollar amount which results
         from cost-of-living adjustments under Section 415(d) of the Code) (the
         "dollar limitation") or 100 percent of the Participant's 415
         Compensation for such limitation year (the "percentage limitation").
         The percentage limitation shall not apply to any contribution for
         medical benefits after separation from service (within the meaning of
         Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise
         treated as an annual addition. In the event that annual additions
         exceed the aforesaid limitations, they shall be reduced in the
         following priority:

               (i)    Any excess amount at the end of the Plan Year that cannot
         be allocated to the Participant's Account shall be reallocated to the
         remaining Participants who are eligible for an allocation of Employer
         contributions for the Plan Year. The reallocation shall be made in
         accordance with Section 4.1 of the Plan as if the Participant whose
         Account otherwise would receive the excess amount is not eligible for
         an allocation of Employer contributions.

               (ii)   If the allocation or reallocation of the excess amounts
         causes the limitations of Code section 415 to be exceeded with respect
         to each Participant for the limitation year, then the excess amount
         will be held unallocated in a suspense account. The suspense account
         will be applied to reduce future Employer contributions for all
         remaining Participants in the next limitation year and each succeeding
         limitation year if necessary.

               (iii)  If a suspense account is in existence at any time during a
         limitation year, it will not participate in any allocation of
         investment gains and losses. All amounts held in suspense accounts must
         be allocated to Participants' Accounts before any contributions may be
         made to the Plan for the limitation year.

               (iv)   If a suspense account exists at the time of Plan
         termination, amounts held in the suspense account that cannot be
         allocated shall revert to the Employer.

               5.1-3  For purposes of this Section 5.1, the "annual addition" to
         a Participant's Accounts means the sum of (i) Employer contributions,
         (ii) Employee contributions, if any, and (iii) forfeitures. Annual
         additions to a defined contribution plan also include amounts
         allocated, after March 31, 1984, to an individual medical account, as
         defined in Section 415(l)(2) of the Internal Revenue Code, which is
         part of a pension or annuity plan maintained by the Employer, amounts
         derived from contributions paid or accrued after December 31, 1985, in
         taxable years ending after such date, which are

                                      -10-

<PAGE>

         attributable to post-retirement medical benefits allocated to the
         separate account of a Key Employee under a welfare benefit fund, as
         defined in Section 419A(d) of the Internal Revenue Code, maintained by
         the Employer. For these purposes, annual additions to a defined
         contribution plan shall not include the allocation of the excess
         amounts remaining in the Unallocated Stock Fund subsequent to a sale of
         stock from such fund in accordance with a transaction described in
         Section 8.1 of the Plan.

               5.1-4  Notwithstanding the foregoing, if no more than one-third
         of the Employer contributions to the Plan for a year which are
         deductible under Section 404(a)(9) of the Code are allocated to Highly
         Paid Employees (within the meaning of Section 414(q) of the Internal
         Revenue Code), the limitations imposed herein shall not apply to:

               (i)    forfeitures of Employer securities (within the meaning of
         Section 409 of the Code) under the Plan if such securities were
         acquired with the proceeds of a loan described in Section 404(a)(9)(A)
         of the Code), or

               (ii)   Employer contributions to the Plan which are deductible
         under Section 404(a)(9)(B) and charged against a Participant's Account.

               5.1-5  If the Employer contributes amounts, on behalf of
         Employees covered by this Plan, to other "defined contribution plans"
         as defined in Section 3(34) of ERISA, the limitation on annual
         additions provided in this Section shall be applied to annual additions
         in the aggregate to this Plan and to such other plans. Reduction of
         annual additions, where required, shall be accomplished first by
         reductions under such other plan pursuant to the directions of the
         named fiduciary for administration of such other plans or under
         priorities, if any, established under the terms of such other plans and
         then by allocating any remaining excess for this Plan in the manner and
         priority set out above with respect to this Plan.

               5.1-6  A limitation year shall mean each 12 consecutive month
         period beginning each January 1.

         5.2   Effect of Limitations. The Committee shall take whatever action
may be necessary from time to time to assure compliance with the limitations set
forth in Section 5.1. Specifically, the Committee shall see that each Employer
restrict its contributions for any Plan Year to an amount which, taking into
account the amount of available forfeitures, may be completely allocated to the
Participants consistent with those limitations. Where the limitations would
otherwise be exceeded by any Participant, further allocations to the Participant
shall be curtailed to the extent necessary to satisfy the limitations. Where an
excessive amount is contributed on account of a mistake as to one or more
Participants' compensation, or there is an amount of forfeitures which may not
be credited in the Plan Year in which it becomes available, the amount shall be
corrected in accordance with Section 5.1-2 of the Plan. If it is determined at
any time that the Committee and/or Trustee has erred in accepting and allocating
any contributions or forfeitures under this Plan, or in allocating net gain or
loss pursuant to Sections 8.2 and 8.3, then the Committee, in a uniform and
nondiscriminatory manner, shall determine the manner in which such error shall
be corrected and shall promptly advise the Trustee in writing of such error and
of the method for correcting such error. The Accounts of any or all Participants
may be revised, if necessary, in order to correct such error.

         5.3   Limitations as to Certain Participants. Aside from the
limitations set forth in Section 5.1, if the Plan acquires any Stock in a
transaction as to which a selling shareholder or the estate of a deceased

                                      -11-

<PAGE>

shareholder is claiming the benefit of Section 1042 of the Code, the Committee
shall see that none of such Stock, and no other assets in lieu of such Stock,
are allocated to the Accounts of certain Participants in order to comply with
Section 409(n) of the Code.

         This restriction shall apply at all times to a Participant who owns
(taking into account the attribution rules under Section 318(a) of the Code,
without regard to the exception for employee plan trusts in Section
318(a)(2)(B)(i) more than 25 percent of any class of stock of a corporation
which issued the Stock acquired by the Plan, or another corporation within the
same controlled group, as defined in Section 409(l)(4) of the Code (any such
class of stock hereafter called a "Related Class"). For this purpose, a
Participant who owns more than 25 percent of any Related Class at any time
within the one year preceding the Plan's purchase of the Stock shall be subject
to the restriction as to all allocations of the Stock, but any other Participant
shall be subject to the restriction only as to allocations which occur at a time
when he owns more than 25 percent of any Related Class.

         Further, this restriction shall apply to the selling shareholder
claiming the benefit of Section 1042 and any other Participant who is related to
such a shareholder within the meaning of Section 267(b) of the Code, during the
period beginning on the date of sale and ending on the later of (1) the date
that is ten years after the date of sale, or (2) the date of the Plan allocation
attributable to the final payment of acquisition indebtedness incurred in
connection with the sale.

         This restriction shall not apply to any Participant who is a lineal
descendant of a selling shareholder if the aggregate amounts allocated under the
Plan for the benefit of all such descendants do not exceed five percent of the
Stock acquired from the shareholder.

         5.4   Erroneous Allocations. No Participant shall be entitled to any
annual additions or other allocations to his Account in excess of those
permitted under Section 5. If it is determined at any time that the
administrator and/or Trustee have erred in accepting and allocating any
contributions or forfeitures under this Plan, or in allocating investment
adjustments, or in excluding or including any person as a Participant, then the
administrator, in a uniform and nondiscriminatory manner, shall determine the
manner in which such error shall be corrected and shall promptly advise the
Trustee in writing of such error and of the method for correcting such error.
The Accounts of any or all Participants may be revised, if necessary, in order
to correct such error.

SECTION 6.     TRUST FUND AND ITS INVESTMENT.

         6.1   Creation of Trust Fund. All amounts received under the Plan from
Employers and investments shall be held as the Trust Fund pursuant to the terms
of this Plan and of the Trust Agreement between the Bank and the Trustee. The
benefits described in this Plan shall be payable only from the assets of the
Trust Fund, and none of the Bank, any other Employer, its board of directors or
trustees, its stockholders, its officers, its employees, the Committee, and the
Trustee shall be liable for payment of any benefit under this Plan except from
the Trust Fund.

         6.2   Stock Fund and Investment Fund. The Trust Fund held by the
Trustee shall be divided into the Stock Fund, consisting entirely of Stock, and
the Investment Fund, consisting of all assets of the Trust other than Stock. The
Trustee shall have no investment responsibility for the Stock Fund, but shall
accept any Employer contributions made in the form of Stock, and shall acquire,
sell, exchange, distribute, and otherwise deal with and dispose of Stock in
accordance with the instructions of the Committee. The Trustee shall have

                                      -12-

<PAGE>

full responsibility for the investment of the Investment Fund, except to the
extent such responsibility may be delegated from time to time to one or more
investment managers pursuant to Section 2.3 of the Trust Agreement, or to the
extent the Committee directs the Trustee to purchase Stock with the assets in
the Investment Fund.

         6.3   Acquisition of Stock. From time to time the Committee may, in its
sole discretion, direct the Trustee to acquire Stock from the issuing Employer
or from shareholders, including shareholders who are or have been Employees,
Participants, or fiduciaries with respect to the Plan. The Trustee shall pay for
such Stock no more than its fair market value, which shall be determined
conclusively by the Committee pursuant to Section 12.4. The Committee may direct
the Trustee to finance the acquisition of Stock by incurring or assuming
indebtedness to the seller or another party which indebtedness shall be called a
"Stock Obligation". The term "Stock Obligation" shall refer to a loan made to
the Plan by a disqualified person within the meaning of Section 4975(e)(2) of
the Code, or a loan to the Plan which is guaranteed by a disqualified person. A
Stock Obligation includes a direct loan of cash, a purchase-money transaction,
and an assumption of an obligation of a tax-qualified employee stock ownership
plan under Section 4975(e)(7) of the Code ("ESOP"). For these purposes, the term
"guarantee" shall include an unsecured guarantee and the use of assets of a
disqualified person as collateral for a loan, even though the use of assets may
not be a guarantee under applicable state law. An amendment of a Stock
Obligation in order to qualify as an "exempt loan" is not a refinancing of the
Stock Obligation or the making of another Stock Obligation. The term "exempt
loan" refers to a loan that satisfies the provisions of this paragraph. A
"non-exempt loan" fails to satisfy this paragraph. Any Stock Obligation shall be
subject to the following conditions and limitations:

               6.3-1  A Stock Obligation shall be for a specific term, shall not
         be payable on demand except in the event of default, and shall bear a
         reasonable rate of interest.

               6.3-2  A Stock Obligation may, but need not, be secured by a
         collateral pledge of either the Stock acquired in exchange for the
         Stock Obligation, or the Stock previously pledged in connection with a
         prior Stock Obligation which is being repaid with the proceeds of the
         current Stock Obligation. No other assets of the Plan and Trust may be
         used as collateral for a Stock Obligation, and no creditor under a
         Stock Obligation shall have any right or recourse to any Plan and Trust
         assets other than Stock remaining subject to a collateral pledge.

               6.3-3  Any pledge of Stock to secure a Stock Obligation must
         provide for the release of pledged Stock in connection with payments on
         the Stock obligations in the ratio prescribed in Section 4.2.

               6.3-4  Repayments of principal and interest on any Stock
         Obligation shall be made by the Trustee only from Employer cash
         contributions designated for such payments, from earnings on such
         contributions, and from cash dividends received on Stock, in the last
         case, however, subject to the further requirements of Section 7.2.

               6.3-5  In the event of default of a Stock Obligation, the value
         of Plan assets transferred in satisfaction of the Stock Obligation must
         not exceed the amount of the default. If the lender is a disqualified
         person within the meaning of Section 4975 of the Code, a Stock
         Obligation must provide for a transfer of Plan assets upon default only
         upon and to the extent of the failure of the Plan to meet the payment
         schedule of said Stock Obligation. For purposes of this paragraph, the
         making of a guarantee does not make a person a lender.

                                      -13-

<PAGE>

         6.4   Participants' Option to Diversify. The Committee shall provide
for a procedure under which each Participant may, during the qualified election
period, elect to "diversify" a portion of the Employer Stock allocated to his
Account, as provided in Section 401(a)(28)(B) of the Code. An election to
diversity must be made on the prescribed form and filed with the Committee
within the period specified herein. For each of the first five (5) Plan years in
the qualified election period, the Participant may elect to diversify an amount
which does not exceed 25% of the number of shares allocated to his Account since
the inception of the Plan, less all shares with respect to which an election
under this Section has already been made. For the last year of the qualified
election period, the Participant may elect to have up to 50 percent of the value
of his Account committed to other investments, less all shares with respect to
which an election under this Section has already been made. The term "qualified
election period" shall mean the six (6) Plan Year period beginning with the
first Plan Year in which a Participant has both attained age 55 and completed 10
years of participation in the Plan. A Participant's election to diversify his
Account may be made within each year of the qualified election period and shall
continue for the 90-day period immediately following the last day of each year
in the qualified election period. Once a Participant makes such election, the
Plan must complete diversification in accordance with such election within 90
days after the end of the period during which the election could be made for the
Plan Year. In the discretion of the Committee, the Plan may satisfy the
diversification requirement by any of the following methods:

               6.4-1  The Plan may distribute all or part of the amount subject
         to the diversification election.

               6.4-2  The Plan may offer the Participant at least three other
         distinct investment options, if available under the Plan. The other
         investment options shall satisfy the requirements of Regulations under
         Section 404(c) of the Employee Retirement Income Security Act of 1974,
         as amended ("ERISA").

               6.4-3  The Plan may transfer the portion of the Participant's
         Account subject to the diversification election to another qualified
         defined contribution plan of the Employer that offers at least three
         investment options satisfying the requirements of the Regulations under
         Section 404(c) of ERISA.

SECTION 7.     VOTING RIGHTS AND DIVIDENDS ON STOCK.

         7.1   Voting and Tendering of Stock. The Trustee generally shall vote
all shares of Stock held under the Plan in accordance with the written
instructions of the Committee. However, if any Employer has registration-type
class of securities within the meaning of Section 409(e)(4) of the Code, or if a
matter submitted to the holders of the Stock involves a merger, consolidation,
recapitalization, reclassification, liquidation, dissolution, or sale of
substantially all assets of an entity, then (i) the shares of Stock which have
been allocated to Participants' Accounts shall be voted by the Trustee in
accordance with the Participants' written instructions, and (ii) the Trustee
shall vote any unallocated Stock and allocated Stock for which it has received
no voting instructions in the same proportions as it votes the allocated Stock
for which it has received instructions from Participants; provided, however,
that if an exempt loan, as defined in Section 4975(d) of the Code, is
outstanding and the Plan is in default on such exempt loan, as default is
defined in the loan documents, then to the extent that such loan documents
require the lender to exercise voting rights with respect

                                      -14-

<PAGE>

to the unallocated shares, the loan documents will prevail. In the event no
shares of Stock have been allocated to Participants' Accounts at the time Stock
is to be voted and any exempt loan which may be outstanding is not in default,
each Participant shall be deemed to have one share of Stock allocated to his or
her Account for the sole purpose of providing the Trustee with voting
instructions.

         Notwithstanding any provision hereunder to the contrary, all
unallocated shares of Stock must be voted by the Trustee in a manner determined
by the Trustee to be for the exclusive benefit of the Participants and
Beneficiaries. Whenever such voting rights are to be exercised, the Employers
shall provide the Trustee, in a timely manner, with the same notices and other
materials as are provided to other holders of the Stock, which the Trustee shall
distribute to the Participants. The Participants shall be provided with adequate
opportunity to deliver their instructions to the Trustee regarding the voting of
Stock allocated to their Accounts. The instructions of the Participants' with
respect to the voting of allocated shares hereunder shall be confidential.

               7.1-1  In the event of a tender offer, Stock shall be tendered by
         the Trustee in the same manner as set forth above with respect to the
         voting of Stock. Notwithstanding any provision hereunder to the
         contrary, Stock must be tendered by the Trustee in a manner determined
         by the Trustee to be for the exclusive benefit of the Participants and
         Beneficiaries.

         7.2   Dividends on Stock. Dividends on Stock which are received by the
Trustee in the form of additional Stock shall be retained in the Stock Fund, and
shall be allocated among the Participant's Accounts and the Unallocated Stock
Fund in accordance with their holdings of the Stock on which the dividends have
been paid. Dividends on Stock credited to Participants' Accounts which are
received by the Trustee in the form of cash shall, at the direction of the
Employer paying the dividends, either (i) be credited to the Accounts in
accordance with Section 8.3 and invested as part of the Investment Fund, (ii) be
distributed immediately to the Participants in proportion with the Participants'
Stock Fund Account balance (iii) be distributed to the Participants within 90
days of the close of the Plan Year in which paid in proportion with the
Participants' Stock Fund Account balance or (iv) be used to make payments on the
Stock Obligation. If dividends on Stock allocated to a Participant's Account are
used to repay the Stock Obligation, Stock with a fair market value equal to the
dividends so used must be allocated to such Participant's Account in lieu of the
dividends. Dividends on Stock held in the Unallocated Stock Fund which are
received by the Trustee in the form of cash shall be allocated to Participants'
Investment Fund Accounts (pro rata based on the Participant's Account balance in
relation to all Participants' Account balances) and shall be applied as soon as
practicable to payments of principal and interest under the Stock Obligation
incurred with the purchase of the Stock.

                                      -15-

<PAGE>

SECTION 8.     ADJUSTMENTS TO ACCOUNTS.

         8.1   Adjustments for Transactions. An Employer contribution pursuant
to Section 4.1 shall be credited to the Participants' Accounts as of the last
day of the Plan Year for which it is contributed, in accordance with Section
4.1. Stock released from the Unallocated Stock Fund upon the Trust's repayment
of a Stock Obligation pursuant to Section 4.2 shall be credited to the
Participants' Accounts as of the last day of the Plan Year in which the
repayment occurred, pro rata based on the cash applied from such Participant's
Account relative to the cash applied from all Participants' Accounts. Any excess
amounts remaining in the suspense account following a sale of Stock from the
Unallocated Stock Fund to repay a Stock Obligation shall be allocated as of the
last day of the Plan Year in which the repayment occurred among the
Participants' Accounts in proportion to 415 Compensation. Any benefit which is
paid to a Participant or Beneficiary pursuant to Section 10 shall be charged to
the Participant's Account as of the first day of the Valuation Period in which
it is paid. Any forfeiture or restoral shall be charged or credited to the
Participant's Account as of the first day of the Valuation Period in which the
forfeiture or restoral occurs pursuant to Section 9.6.

         8.2   Valuation of Investment Fund. As of each Valuation Date, the
Trustee shall prepare a balance sheet of the Investment Fund, recording each
asset (including any contribution receivable from an Employer) and liability at
its fair market value. Any liability with respect to short positions or options
and any item of accrued income or expense and unrealized appreciation or
depreciation shall be included; provided, however, that such an item may be
estimated or excluded if it is not readily ascertainable unless estimating or
excluding it would result in a material distortion. The Committee shall then
determine the net gain or loss of the Investment Fund since the preceding
Valuation Date, which shall mean the entire income of the Investment Fund,
including realized and unrealized capital gains and losses, net of any expenses
to be charged to the general Investment Fund and excluding any contributions by
the Employer. The determination of gain or loss shall be consistent with the
balance sheets of the Investment Fund for the current and preceding Valuation
Dates.

         8.3   Adjustments for Investment Experience. Any net gain or loss of
the Investment Fund during a Valuation Period, as determined pursuant to Section
8.2, shall be allocated as of the last day of the Valuation Period among the
Participants' Accounts in proportion to the opening balance in each Account, as
adjusted for benefit payments and forfeitures during the Valuation Period,
without regard to whatever Stock may be credited to an Account. Any cash
dividends received on Stock credited to Participant's Accounts shall be
allocated as of the last day of the Valuation Period among the Participants'
Accounts based on the opening balance in each Participant's Stock Fund Account.

SECTION 9.     VESTING OF PARTICIPANTS' INTERESTS.

         9.1   Deferred Vesting in Accounts. A Participant's vested interest in
his Account shall be based on his Vesting Years in accordance with the following
table, subject to the balance of this Section 9:

                     Vesting                       Percentage of
                     Years.....                   Interest Vested
                     -----                        ---------------

                     Fewer than 5                        0%
                     5 or more                         100%

                                      -16-

<PAGE>

         9.2   Computation of Vesting Years. For purposes of this Plan, a
"Vesting Year" means generally a Plan Year in which an Employee has at least
1,000 Hours of Service, beginning with the first Plan Year in which the Employee
has completed an Hour of Service with the Employer, and including Service with
other Employers as provided in the definition of "Service." Notwithstanding the
above, an Employee who was employed with the Bank in its pre-conversion mutual
form (the "Mutual Bank") shall receive credit for vesting purposes for each
calendar year of continuous employment with the Mutual Bank in which such
Employee completed 1,000 Hours of Service, up to a maximum of five years (such
years shall also be referred to as "Vesting Years"). An Employee who was
employed with Provident Investment Services shall receive credit for vesting
purposes for each calendar year of continuous employment with the Provident
Investment Services in which such Employee completed 1,000 Hours of Service, up
to a maximum of five Vesting Years. However, a Participant's Vesting Years shall
be computed subject to the following conditions and qualifications:

               9.2-1  A Participant's Vesting Years shall not include any
         Service prior to the date on which an Employee attains age 18.

               9.2-2  A Participant's vested interest in his Account accumulated
         before five (5) consecutive Breaks in Service shall be determined
         without regard to any Service after such five consecutive Breaks in
         Service. Further, if a Participant has five (5) consecutive Breaks in
         Service before his interest in his Account has become vested to some
         extent, pre-Break years of Service shall not be required to be taken
         into account for purposes of determining his post-Break vested
         percentage.

               9.2-3  In the case of a Participant who has 5 or more consecutive
         1-year Breaks in Service, the Participant's pre-Break Service will
         count in vesting of the Employer-derived post-break accrued benefit
         only if either:

               (i)    such Participant has any nonforfeitable interest in the
         accrued benefit attributable to Employer contributions at the time of
         separation from Service, or

               (ii)   upon returning to Service the number of consecutive 1-year
         Breaks in Service is less than the number of years of Service.

               9.2-4  Notwithstanding any provision of the Plan to the contrary,
         effective January 1, 1998, calculation of service for determining
         Vesting Years with respect to qualified military service will be
         provided in accordance with Section 414(u) of the Code.

               9.2-5  If any amendment changes the vesting schedule, including
         an automatic change to or from a top-heavy vesting schedule, any
         Participant with three (3) or more Vesting Years may, by filing a
         written request with the Employer, elect to have his vested percentage
         computed under the vesting schedule in effect prior to the amendment.
         The election period must begin not later than the later of sixty (60)
         days after the amendment is adopted, the amendment becomes effective,
         or the Participant is issued written notice of the amendment by the
         Employer or the Committee.

         9.3   Full Vesting Upon Certain Events.

                                      -17-

<PAGE>

               9.3-1  Notwithstanding Section 9.1, a Participant's interest in
         his Account shall fully vest on the Participant's Normal Retirement
         Date. The Participant's interest shall also fully vest in the event
         that his Service is terminated by Early Retirement, Disability or by
         death.

               9.3-2  The Participant's interest in his Account shall also fully
         vest in the event of a "Change in Control" of the Bank, or the Company.
         For these purposes, "Change in Control" shall mean an event of a nature
         that; (i) would be required to be reported in response to Item 1a 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 Bank Holding Company Act
         of 1956, as amended, and applicable rules and regulations promulgated
         thereunder as in effect at the time of the Change in Control
         (collectively, the "BHCA"); 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 securities of
         the Bank or the Company representing 25% or more of the Bank's or the
         Company's outstanding securities except for any securities of the Bank
         purchased by the Company in connection with the conversion of the Bank
         to the stock form and any securities purchased by the Bank's employee
         stock ownership plan and trust; 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, however, that this
         sub-section (b) shall not apply if the Incumbent Board is replaced by
         the appointment by a Federal banking agency of a conservator or
         receiver for the Bank and, provided further that any person becoming a
         director subsequent to the date hereof whose election was approved by a
         vote of at least two-thirds of the directors comprising the Incumbent
         Board or whose nomination for election by the Company's stockholders
         was approved by the same Nominating Committee serving under an
         Incumbent Board, shall be, for purposes of this clause (b), considered
         as though he were a member of the Incumbent Board; or (c) a
         reorganization, merger, consolidation, sale of all or substantially all
         the assets of the Bank or the Company, or similar transaction in which
         the Bank or Company is not the surviving institution occurs.

               9.3-3  Upon a Change in Control described in 9.3-2, the Plan
         shall be terminated and the Plan Administrator shall direct the Trustee
         to sell a sufficient amount of Stock from the Unallocated Stock Fund to
         repay any outstanding Stock Obligation in full. The proceeds of such
         sale shall be used to repay such Stock Obligation. After repayment of
         the Stock Obligation, all remaining shares in the Unallocated Stock
         Fund (or the proceeds thereof, if applicable) shall be deemed to be
         earnings and shall be allocated in accordance with the requirements of
         Section 8.1.

         9.4   Full Vesting Upon Plan Termination. Notwithstanding Section 9.1,
a Participant's interest in his Account shall fully vest upon termination of
this Plan or upon the permanent and complete discontinuance of contributions by
his Employer. In the event of a partial termination, the interest of each
affected Participant shall fully vest with respect to that part of the Plan
which is terminated.

         9.5   Forfeiture, Repayment, and Restoral. If a Participant's Service
terminates before his interest in his Account is fully vested, that portion
which has not vested shall be forfeited if he either (i) receives a distribution
of his entire vested interest pursuant to Section 10.1, or (ii) incurs a
one-year Break in Service. If a Participant's Service terminates prior to having
any portion of his Account become vested, such Participant shall be deemed to
have received a distribution of his vested interest as of the Valuation Date
next following his termination of Service.

                                      -18-

<PAGE>

         If a Participant who has suffered a forfeiture of the nonvested portion
of his Account returns to Service before he has five (5) consecutive Breaks in
Service, the nonvested portion shall be restored, provided that, if the
Participant had received a distribution of his vested Account balance, the
amount distributed shall be repaid prior to such restoral. The Participant may
repay such amount at any time within five years after he has returned to
Service. The amount repaid shall be credited to his Account at the time it is
repaid; an additional amount equal to that portion of his Account which was
previously forfeited shall be restored to his Account at the same time from
other Employees' forfeitures and, if such forfeitures are insufficient, from a
special contribution by his Employer for that year. If the Participant did not
receive a distribution of his vested Account balance, any forfeiture restored
shall include earnings that would have been credited to the Account but for the
forfeiture. A Participant who was deemed to have received a distribution of his
vested interest in the Plan shall have his Account restored as of the first day
on which he performs an Hour of Service after his return.

         9.6   Accounting for Forfeitures. If a portion of a Participant's
Account is forfeited, Stock allocated to said Participant's Account shall be
forfeited only after other assets are forfeited. If interests in more than one
class of Stock have been allocated to a Participant's Account, the Participant
must be treated as forfeiting the same proportion of each class of Stock. A
forfeiture shall be charged to the Participant's Account as of the first day of
the first Valuation Period in which the forfeiture becomes certain pursuant to
Section 9.5. Except as otherwise provided in that Section, a forfeiture shall be
added to the contributions of the terminated Participant's Employer which are to
be credited to other Participants pursuant to Section 4.1 as of the last day of
the Plan Year in which the forfeiture becomes certain.

         9.7   Vesting and Nonforfeitability. A Participant's interest in his
Account which has become vested shall be nonforfeitable for any reason.

SECTION 10.    PAYMENT OF BENEFITS.

         10.1  Benefits for Participants. For a Participant whose Service ends
for any reason, distribution will be made to or for the benefit of the
Participant or, in the case of the Participant's death, his Beneficiary, by
payment in accordance with Section 10.2, either, or a combination of the
following methods:

               10.1.1 By payment in a lump sum, in accordance with Section 10.2;
         or

               10.1.2 By payment in a series of substantially equal annual
         installments over a period not to exceed five (5) years, provided the
         maximum period over which the distribution of a Participant's Account
         may be made shall be extended by 1 year, up to five (5) additional
         years, for each $160,000 (or fraction thereof) by which such
         Participant's Account balance exceeds $800,000 (the aforementioned
         figures are subject to cost-of-living adjustments prescribed by the
         Secretary of the Treasury pursuant to Section 409(o)(2) of the Code).

         The Participant shall elect the manner in which his vested Account
         balance will be distributed to him. If a Participant so desires, he may
         direct how his benefits are to be paid to his Beneficiary. If a
         deceased Participant did not file a direction with the Committee, the
         Participant's benefits shall be distributed to his Beneficiary in a
         lump sum. Notwithstanding any provision to the contrary, if the value
         of a Participant's vested Account balance at the time of any
         distribution, does not equal or exceed $5,000, then such Participant's
         vested Account shall be distributed in a lump sum within 60

                                      -19-

<PAGE>

         days after the end of the Plan Year in which employment terminates. If
         the value of a Participant's vested Account balance is, or has ever
         been, in excess of $5,000, then his benefits shall not be paid prior to
         the later of the time he has attained Normal Retirement or age 62
         unless he elects an early payment date in a written election filed with
         the Committee. A Participant may modify such an election at any time,
         provided any new benefit payment date is at least 30 days after a
         modified election is delivered to the Committee. Failure of a
         Participant to consent to a distribution prior to the later of Normal
         Retirement or age 62 shall be deemed to be an election to defer
         commencement of payment of any benefit under this section.

         10.2  Time for Distribution.

               10.2.1 If the Participant and, if applicable, with the consent of
         the Participant's spouse, elects the distribution of the Participant's
         Account balance in the Plan, distribution shall commence as soon as
         practicable following his termination of Service, but no later than one
         year after the close of the Plan Year:

               (i)    in which the Participant separates from service by reason
         of attainment of Normal Retirement Age under the Plan, Disability, or
         death; or

               (ii)   which is the fifth Plan Year following the year in which
         the Participant resigns or is dismissed, unless he is reemployed before
         such date.

               10.2.2 Unless the Participant elects otherwise, the distribution
         of the balance of a Participant's Account shall commence not later than
         the 60th day after the latest of the close of the Plan Year in which -

               (i)    the Participant attains the age of 65;

               (ii)   occurs the tenth anniversary of the year in which the
         Participant commenced participation in the Plan; or

               (iii)  the Participant terminates his Service with the Employer.

               10.2.3 Notwithstanding anything to the contrary, (1) with respect
         to a 5-percent owner (as defined in Code Section 416), distribution of
         a Participant's Account shall commence (whether or not he remains in
         the employ of the Employer) not later than the April 1 of the calendar
         year next following the calendar year in which the Participant attains
         age 70 1/2, and (2) with respect to all other Participants, payment of
         a Participant's benefit will commence not later than April 1 of the
         calendar year following the calendar year in which the Participant
         attains age 70 1/2, or, if later, the year in which the Participant
         retires. A Participant's benefit from that portion of his Account
         committed to the Investment Fund shall be calculated on the basis of
         the most recent Valuation Date before the date of payment.

               10.2.4 Distribution of a Participant's Account balance after his
         death shall comply with the following requirements:

                                      -20-

<PAGE>

                (i)   If a Participant dies before his distributions have
         commenced, distribution of his Account to his Beneficiary shall
         commence not later than one year after the end of the Plan Year in
         which the Participant died; however, if the Participant's Beneficiary
         is his surviving Spouse, distributions may commence on the date on
         which the Participant would have attained age 70 1/2. In either case,
         distributions shall be completed within five years after they commence.

               (ii)   If the Participant dies after distribution has commenced
         pursuant to Section 10.1.2 but before his entire interest in the Plan
         has been distributed to him, then the remaining portion of that
         interest shall, in accordance with Section 401(a)(9) of the Code, be
         distributed at least as rapidly as under the method of distribution
         being used under Section 10.1.2 at the date of his death.

               (iii)  If a married Participant dies before his benefit
         payments begin, then unless he has specifically elected otherwise the
         Committee shall cause the balance in his Account to be paid to his
         Spouse. No election by a married Participant of a different Beneficiary
         shall be valid unless the election is accompanied by the Spouse's
         written consent, which (i) must acknowledge the effect of the election,
         (ii) must explicitly provide either that the designated Beneficiary may
         not subsequently be changed by the Participant without the Spouse's
         further consent, or that it may be changed without such consent, and
         (iii) must be witnessed by the Committee, its representative, or a
         notary public. (This requirement shall not apply if the Participant
         establishes to the Committee's satisfaction that the Spouse may not be
         located.)

         10.3  Marital Status. The Committee, the Plan, the Trustee, and the
Employers shall be fully protected and discharged from any liability to the
extent of any benefit payments made as a result of the Committee's good faith
and reasonable reliance upon information obtained from a Participant and his
Employer as to his marital status.

         10.4  Delay in Benefit Determination. If the Committee is unable to
determine the benefits payable to a Participant or Beneficiary on or before the
latest date prescribed for payment pursuant to Section 10.1 or 10.2, the
benefits shall in any event be paid within 60 days after they can first be
determined, with whatever makeup payments may be appropriate in view of the
delay.

         10.5  Accounting for Benefit Payments. Any benefit payment shall be
charged to the Participant's Account as of the first day of the Valuation Period
in which the payment is made.

         10.6  Options to Receive and Sell Stock. Unless ownership of virtually
all Stock is restricted to active Employees and qualified retirement plans for
the benefit of Employees pursuant to the certificates of incorporation or
by-laws of the Employers issuing Stock, a terminated Participant or the
Beneficiary of a deceased Participant may instruct the Committee to distribute
the Participant's entire vested interest in his Account in the form of Stock. In
that event, the Committee shall apply the Participant's vested interest in the
Investment Fund to purchase sufficient Stock from the Stock Fund or from any
owner of Stock to make the required distribution. In all other cases, the
Participant's vested interest in the Stock Fund shall be distributed in shares
of Stock, and his vested interest in the Investment Fund shall be distributed in
cash.

         Any Participant who receives Stock pursuant to Section 10.1, and any
person who has received Stock from the Plan or from such a Participant by reason
of the Participant's death or incompetency, by reason of divorce or separation
from the Participant, or by reason of a rollover contribution described in
Section 402(a)(5) of the Code, shall have the right to require the Employer
which issued the Stock to purchase the

                                      -21-

<PAGE>

Stock for its current fair market value (hereinafter referred to as the "put
right"). The put right shall be exercisable by written notice to the Committee
during the first 60 days after the Stock is distributed by the Plan, and, if not
exercised in that period, during the first 60 days in the following Plan Year
after the Committee has communicated to the Participant its determination as to
the Stock's current fair market value. However, the put right shall not apply to
the extent that the Stock, at the time the put right would otherwise be
exercisable, may be sold on an established market in accordance with federal and
state securities laws and regulations. Similarly, the put option shall not apply
with respect to the portion of a Participant's Account which the Employee
elected to have reinvested under Code Section 401(a)(28)(B). If the put right is
exercised, the Trustee may, if so directed by the Committee in its sole
discretion, assume the Employer's rights and obligations with respect to
purchasing the Stock. Notwithstanding anything herein to the contrary, in the
case of a plan established by a bank (as defined in Code Section 581), the put
option shall not apply if prohibited by a federal or state law and Participants
are entitled to elect their benefits be distributed in cash.

         If a Participant elects to receive his distribution in the form of a
lump sum pursuant to Section 10.1.1 of the Plan, the Employer or the Trustee, as
the case may be, may elect to pay for the Stock in equal periodic installments,
not less frequently than annually, over a period not longer than five years from
the day after the put right is exercised, with adequate security and interest at
a reasonable rate on the unpaid balance, all such terms to be set forth in a
promissory note delivered to the seller with normal terms as to acceleration
upon any uncured default.

         If a Participant elects to receive his distribution in the form of an
installment payment pursuant to Section 10.1.2 of the Plan, the Employer or the
Trustee, as the case may be, shall pay for the Stock distributed in the
installment distribution over a period which shall not exceed 30 days after the
exercise of the put right.

         Nothing contained herein shall be deemed to obligate any Employer to
register any Stock under any federal or state securities law or to create or
maintain a public market to facilitate the transfer or disposition of any Stock.
The put right described herein may only be exercised by a person described in
the second preceding paragraph, and may not be transferred with any Stock to any
other person. As to all Stock purchased by the Plan in exchange for any Stock
Obligation, the put right shall be nonterminable. The put right for Stock
acquired through a Stock Obligation shall continue with respect to such Stock
after the Stock Obligation is repaid or the Plan ceases to be an employee stock
ownership plan.

         10.7  Restrictions on Disposition of Stock. Except in the case of Stock
which is traded on an established market, a Participant who receives Stock
pursuant to Section 10.1, and any person who has received Stock from the Plan or
from such a Participant by reason of the Participant's death or incompetency, by
reason of divorce or separation from the Participant, or by reason of a rollover
contribution described in Section 402(a)(5) of the Code, shall, prior to any
sale or other transfer of the Stock to any other person, first offer the Stock
to the issuing Employer and to the Plan at the greater of (i) its current fair
market value, or (ii) the purchase price offered in good faith by an independent
third party purchaser. This restriction shall apply to any transfer, whether
voluntary, involuntary, or by operation of law, and whether for consideration or
gratuitous. Either the Employer or the Trustee may accept the offer within 14
days after it is delivered. Any Stock distributed by the Plan shall bear a
conspicuous legend describing the right of first refusal under this Section
10.7, as well as any other restrictions upon the transfer of the Stock imposed
by federal and state securities laws and regulations.

         10.8  Continuing Loan Provisions; Creations of Protections and Rights.
Except as otherwise provided in Sections 10.6 and 10.7 and this Section, no
shares of Employer Stock held or distributed by the

                                      -22-

<PAGE>

Trustee may be subject to a put, call or other option, or buy-sell arrangement.
The provisions of this Section shall continue to be applicable to such Stock
even if the Plan ceases to be an employee stock ownership plan under Section
4975(e)(7) of the Code.

         10.9  Direct Rollover of Eligible Distribution. A Participant or
distributee may elect, at the time and in the manner prescribed by the Trustee
or the Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the Participant or
distributee in a direct rollover.

               10.9-1 An "eligible rollover" is any distribution that does not
         include: any distribution that is one of a series of substantially
         equal periodic payments (not less frequently than annually) made for
         the life (or life expectancy) of the distributee or the joint lives (or
         joint life expectancies) of the Participant and the Participant's
         Beneficiary, or for a specified period of ten years or more; any
         distribution to the extent such distribution is required under Code
         Section 401(a)(9); any hardship distribution described in Section
         401(k)(2)(B)(i)(IV) of the Code; and the portion of any distribution
         that is not included in gross income (determined without regard to the
         exclusion for net unrealized appreciation with respect to employer
         securities). A portion of a distribution shall not fail to be an
         eligible rollover distribution merely because the portion consists of
         after-tax employee contributions which are not includible in gross
         income. However, such portion may be transferred only to an individual
         retirement account or annuity described in section 408(a) or (b) of the
         Code, or to a qualified defined contribution plan described in section
         401(a) or 403(a) of the Code that agrees to separately accounting for
         the portion of such distribution which is includible in gross income
         and the portion of such distribution which is not so includible.

               10.9-2 An "eligible retirement plan" is an individual retirement
         account described in Code Section 408(a), an individual retirement
         annuity described in Code Section 408(b), an annuity plan described in
         Code Section 403(a), or a qualified trust described in Code Section
         401(a), that accepts the distributee's eligible rollover distribution.
         In the case of distributions after December 31, 2001, an eligible
         retirement plan shall also include an annuity contract described in
         Section 403(b) of the Code and an eligible plan under Section 457(b) of
         the Code which is maintained by a state, or any agency or
         instrumentality of a state or political subdivision of a state and
         which agrees to separately account for amounts transferred into such
         plan from this plan. In the case of an eligible rollover distribution
         to a surviving Spouse, an eligible retirement plan is an individual
         retirement account or individual retirement annuity.

               10.9-3 A "direct rollover" is a payment by the Plan to the
         eligible retirement plan specified by the distributee.

               10.9-4 The term "distributee" shall refer to a deceased
         Participant's Spouse or a Participant's former Spouse who is the
         alternate payee under a qualified domestic relations order, as defined
         in Code Section 414(p).

         10.10 Waiver of 30-Day Period After Notice of Distribution. If a
distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:

                                      -23-

<PAGE>

               (i)   the Trustee or Committee, as applicable, clearly informs
         the Participant that the Participant has a right to a period of at
         least 30 days after receiving the notice to consider the decision of
         whether or not to elect a distribution (and, if applicable, a
         particular option), and

               (ii)   the Participant, after receiving the notice, affirmatively
         elects a  distribution.

SECTION 11.    RULES GOVERNING BENEFIT CLAIMS AND REVIEW OF APPEALS.

         11.1  Claim for Benefits. Any Participant or Beneficiary who qualifies
for the payment of benefits shall file a claim for his benefits with the
Committee on a form provided by the Committee. The claim, including any election
of an alternative benefit form, shall be filed at least 30 days before the date
on which the benefits are to begin. If a Participant or Beneficiary fails to
file a claim by the day before the date on which benefits become payable, he
shall be presumed to have filed a claim for payment for the Participant's
benefits in the standard form prescribed by Sections 10.1 or 10.2.

         11.2  Notification by Committee. Within 90 days after receiving a claim
for benefits (or within 180 days, if special circumstances require an extension
of time and written notice of the extension is given to the Participant or
Beneficiary within 90 days after receiving the claim for benefits), the
Committee shall notify the Participant or Beneficiary whether the claim has been
approved or denied. If the Committee denies a claim in any respect, the
Committee shall set forth in a written notice to the Participant or Beneficiary:

               (i)    each specific reason for the denial;

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

               (iii)  a description of any additional material or information
         which could be submitted by the Participant or Beneficiary to support
         his claim, with an explanation of the relevance of such information;
         and

               (iv)   an explanation of the claims review procedures set forth
         in Section 11.3.

         11.3  Claims Review Procedure. Within 60 days after a Participant or
Beneficiary receives notice from the Committee that his claim for benefits has
been denied in any respect, he may file with the Committee a written notice of
appeal setting forth his reasons for disputing the Committee's determination. In
connection with his appeal the Participant or Beneficiary or his representative
may inspect or purchase copies of pertinent documents and records to the extent
not inconsistent with other Participants' and Beneficiaries' rights of privacy.
Within 60 days after receiving a notice of appeal from a prior determination (or
within 120 days, if special circumstances require an extension of time and
written notice of the extension is given to the Participant or Beneficiary and
his representative within 60 days after receiving the notice of appeal), the
Committee shall furnish to the Participant or Beneficiary and his
representative, if any, a written statement of the Committee's final decision
with respect to his claim, including the reasons for such decision and the
particular Plan provisions upon which it is based.

                                      -24-

<PAGE>

SECTION 12.    THE COMMITTEE AND ITS FUNCTIONS.

         12.1  Authority of Committee. The Committee shall be the "plan
administrator" within the meaning of ERISA and shall have exclusive
responsibility and authority to control and manage the operation and
administration of the Plan, including the interpretation and application of its
provisions, except to the extent such responsibility and authority are otherwise
specifically (i) allocated to the Bank, the Employers, or the Trustee under the
Plan and Trust Agreement, (ii) delegated in writing to other persons by the
Bank, the Employers, the Committee, or the Trustee, or (iii) allocated to other
parties by operation of law. The Committee shall have exclusive responsibility
regarding decisions concerning the payment of benefits under the Plan. The
Committee shall have no investment responsibility with respect to the Investment
Fund except to the extent, if any, specifically provided in the Trust Agreement.
In the discharge of its duties, the Committee may employ accountants, actuaries,
legal counsel, and other agents (who also may be employed by an Employer or the
Trustee in the same or some other capacity) and may pay their reasonable
expenses and compensation.

         12.2  Identity of Committee. The Committee shall consists of three or
more individuals selected by the Bank. Any individual, including a director,
trustee, shareholder, officer, or Employee of an Employer, shall be eligible to
serve as a member of the Committee. The Bank shall have the power to remove any
individual serving on the Committee at any time without cause upon 10 days
written notice, and any individual may resign from the Committee at any time
upon 10 days written notice to the Bank. The Bank shall notify the Trustee of
any change in membership of the Committee.

         12.3  Duties of Committee. The Committee shall keep whatever records
may be necessary to implement the Plan and shall furnish whatever reports may be
required from time to time by the Bank. The Committee shall furnish to the
Trustee whatever information may be necessary to properly administer the Trust.
The Committee shall see to the filing with the appropriate government agencies
of all reports and returns required of the Plan under ERISA and other laws.

         Further, the Committee shall have exclusive responsibility and
authority with respect to the Plan's holdings of Stock and shall direct the
Trustee in all respects regarding the purchase, retention, sale, exchange, and
pledge of Stock and the creation and satisfaction of Stock Obligations. The
Committee shall at all times act consistently with the Bank's long-term
intention that the Plan, as an employee stock ownership plan, be invested
primarily in Stock. Subject to the direction of the board as to the application
of Employer contributions to Stock Obligations, and subject to the provisions of
Sections 6.4 and 10.6 as to Participants' rights under certain circumstances to
have their Accounts invested in Stock or in assets other than Stock, the
Committee shall determine in its sole discretion the extent to which assets of
the Trust shall be used to repay Stock Obligations, to purchase Stock, or to
invest in other assets to be selected by the Trustee or an investment manager.
No provision of the Plan relating to the allocation or vesting of any interests
in the Stock Fund or the Investment Fund shall restrict the Committee from
changing any holdings of the Trust, whether the changes involve an increase or a
decrease in the Stock or other assets credited to Participants' Accounts. In
determining the proper extent of the Trust's investment in Stock, the Committee
shall be authorized to employ investment counsel, legal counsel, appraisers, and
other agents and to pay their reasonable expenses and compensation.

         12.4  Valuation of Stock. If the valuation of any Stock is not
established by reported trading on a generally recognized public market, the
Committee shall have the exclusive authority and responsibility to determine its
value for all purposes under the Plan, subject to the requirements of Code
Section 401(a)(28)(c).

                                      -25-

<PAGE>

Such value shall be determined as of each Valuation Date, and on any other date
as of which the Plan purchases or sells such Stock. The Committee shall use
generally accepted methods of valuing stock of similar corporations for purposes
of arm's length business and investment transactions, and in this connection the
Committee shall obtain, and shall be protected in relying upon, the valuation of
such Stock as determined by an independent appraiser experienced in preparing
valuations of similar businesses.

         12.5  Compliance with ERISA. The Committee shall perform all acts
necessary to comply with ERISA. Each individual member or employee of the
Committee shall discharge his duties in good faith and in accordance with the
applicable requirements of ERISA.

         12.6  Action by Committee. All actions of the Committee shall be
governed by the affirmative vote of a number of members which is a majority of
the total number of members currently appointed, including vacancies.

         12.7  Execution of Documents. Any instrument executed by the Committee
shall be signed by any member or employee of the Committee.

         12.8  Adoption of Rules. The Committee shall adopt such rules and
regulations of uniform applicability as it deems necessary or appropriate for
the proper administration and interpretation of the Plan.

         12.9  Responsibilities to Participants. The Committee shall determine
which Employees qualify to enter the Plan. The Committee shall furnish to each
eligible Employee whatever summary plan descriptions, summary annual reports,
and other notices and information may be required under ERISA. The Committee
also shall determine when a Participant or his Beneficiary qualifies for the
payment of benefits under the Plan. The Committee shall furnish to each such
Participant or Beneficiary whatever information is required under ERISA (or is
otherwise appropriate) to enable the Participant or Beneficiary to make whatever
elections may be available pursuant to Sections 6 and 10, and the Committee
shall provide for the payment of benefits in the proper form and amount from the
assets of the Trust Fund. The Committee may decide in its sole discretion to
permit modifications of elections and to defer or accelerate benefits to the
extent consistent with applicable law and the best interests of the individuals
concerned.

         12.10 Alternative Payees in Event of Incapacity. If the Committee finds
at any time that an individual qualifying for benefits under this Plan is a
minor or is incompetent, the Committee may direct the benefits to be paid, in
the case of a minor, to his parents, his legal guardian, or a custodian for him
under the Uniform Gifts to Minors Act, or, in the case of an incompetent, to his
spouse, or his legal guardian, the payments to be used for the individual's
benefit. The Committee and the Trustee shall not be obligated to inquire as to
the actual use of the funds by the person receiving them under this Section
12.10, and any such payment shall completely discharge the obligations of the
Plan, the Trustee, the Committee, and the Employers to the extent of the
payment.

         12.11 Indemnification by Employers. Except as separately agreed in
writing, the Committee, and any member or employee of the Committee, shall be
indemnified and held harmless by the Employer, jointly and severally, to the
fullest extent permitted by ERISA, and subject to and conditioned upon
compliance with 12 C.F.R. Section 545.121, to the extent applicable, against any
and all costs, damages, expenses, and liabilities reasonably incurred by or
imposed upon it or him in connection with any claim made against it or him or in
which it or he may be involved by reason of its or his being, or having been,
the Committee, or a member or employee of the Committee, to the extent such
amounts are not paid by insurance.

                                      -26-

<PAGE>

         12.12 Nonparticipation by Interested Member. Any member of the
Committee who also is a Participant in the Plan shall take no part in any
determination specifically relating to his own participation or benefits, unless
his abstention would leave the Committee incapable of acting on the matter.

SECTION 13.    ADOPTION, AMENDMENT, OR TERMINATION OF THE PLAN.

         13.1  Adoption of Plan by Other Employers. With the consent of the
Bank, any entity may become a participating Employer under the Plan by (i)
taking such action as shall be necessary to adopt the Plan, (ii) becoming a
party to the Trust Agreement establishing the Trust Fund, and (iii) executing
and delivering such instruments and taking such other action as may be necessary
or desirable to put the Plan into effect with respect to the entity's Employees.

         13.2  Plan Adoption Subject to Qualification. Notwithstanding any other
provision of the Plan, the adoption of the Plan and the execution of the Trust
Agreement are conditioned upon their being determined initially by the Internal
Revenue Service to meet the qualification requirements of Section 401(a) of the
Code, so that the Employers may deduct currently for federal income tax purposes
their contributions to the Trust and so that the Participants may exclude the
contributions from their gross income and recognize income only when they
receive benefits. In the event that this Plan is held by the Internal Revenue
Service not to qualify initially under Section 401(a), the Plan may be amended
retroactively to the earliest date permitted by U.S. Treasury Regulations in
order to secure qualification under Section 401(a). If this Plan is held by the
Internal Revenue Service not to qualify initially under Section 401(a) either as
originally adopted or as amended, each Employer's contributions to the Trust
under this Plan (including any earnings thereon) shall be returned to it and
this Plan shall be terminated. In the event that this Plan is amended after its
initial qualification and the Plan as amended is held by the Internal Revenue
Service not to qualify under Section 401(a), the amendment may be modified
retroactively to the earliest date permitted by U.S. Treasury Regulations in
order to secure approval of the amendment under Section 401(a).

         13.3  Right to Amend or Terminate. The Bank intends to continue this
Plan as a permanent program. However, each participating Employer separately
reserves the right to suspend, supersede, or terminate the Plan at any time and
for any reason, as it applies to that Employer's Employees, and the Bank
reserves the right to amend, suspend, supersede, merge, consolidate, or
terminate the Plan at any time and for any reason, as it applies to the
Employees of each Employer. No amendment, suspension, supersession, merger,
consolidation, or termination of the Plan shall (i) reduce any Participant's or
Beneficiary's proportionate interest in the Trust Fund, (ii) reduce or restrict,
either directly or indirectly, the benefit provided any Participant prior to the
amendment, or (iii) divert any portion of the Trust Fund to purposes other than
the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan. Moreover, there shall not be any
transfer of assets to a successor plan or merger or consolidation with another
plan unless, in the event of the termination of the successor plan or the
surviving plan immediately following such transfer, merger, or consolidation,
each participant or beneficiary would be entitled to a benefit equal to or
greater than the benefit he would have been entitled to if the plan in which he
was previously a participant or beneficiary had terminated immediately prior to
such transfer, merger, or consolidation. Following a termination of this Plan by
the Bank, the Trustee shall continue to administer the Trust and pay benefits in
accordance with the Plan as amended from time to time and the Committee's
instructions.

SECTION 14.    MISCELLANEOUS PROVISIONS.

                                      -27-

<PAGE>

         14.1  Plan Creates No Employment Rights. Nothing in this Plan shall be
interpreted as giving any Employee the right to be retained as an Employee by an
Employer, or as limiting or affecting the rights of an Employer to control its
Employees or to terminate the Service of any Employee at any time and for any
reason, subject to any applicable employment or collective bargaining
agreements.

         14.2  Nonassignability of Benefits. No assignment, pledge, or other
anticipation of benefits from the Plan will be permitted or recognized by the
Employer, the Committee, or the Trustee. Moreover, benefits from the Plan shall
not be subject to attachment, garnishment, or other legal process for debts or
liabilities of any Participant or Beneficiary, to the extent permitted by law.
This prohibition on assignment or alienation shall apply to any judgment,
decree, or order (including approval of a property settlement agreement) which
relates to the provision of child support, alimony, or property rights to a
present or former spouse, child or other dependent of a Participant pursuant to
a state domestic relations or community property law, unless the judgment,
decree, or order is determined by the Committee to be a qualified domestic
relations order within the meaning of Section 414(p) of the Code, as more fully
set forth in Section 14.12 hereof.

         14.3  Limit of Employer Liability. The liability of the Employer with
respect to Participants under this Plan shall be limited to making contributions
to the Trust from time to time, in accordance with Section 4.

         14.4  Treatment of Expenses. All expenses incurred by the Committee and
the Trustee in connection with administering this Plan and Trust Fund shall be
paid by the Trustee from the Trust Fund to the extent the expenses have not been
paid or assumed by the Employer or by the Trustee.

         14.5  Number and Gender. Any use of the singular shall be interpreted
to include the plural, and the plural the singular. Any use of the masculine,
feminine, or neuter shall be interpreted to include the masculine, feminine, or
neuter, as the context shall require.

         14.6  Nondiversion of Assets. Except as provided in Sections 5.2 and
14.12, under no circumstances shall any portion of the Trust Fund be diverted to
or used for any purpose other than the exclusive benefit of the Participants and
their Beneficiaries prior to the satisfaction of all liabilities under the Plan.

         14.7  Separability of Provisions. If any provision of this Plan is held
to be invalid or unenforceable, the other provisions of the Plan shall not be
affected but shall be applied as if the invalid or unenforceable provision had
not been included in the Plan.

         14.8  Service of Process. The agent for the service of process upon the
Plan shall be the president of the Bank, or such other person as may be
designated from time to time by the Bank.

         14.9  Governing State Law. This Plan shall be interpreted in accordance
with the laws of the State of New Jersey to the extent those laws are applicable
under the provisions of ERISA.

         14.10 Employer Contributions Conditioned on Deductibility. Employer
Contributions to the Plan are conditioned on deductibility under Code Section
404. In the event that the Internal Revenue Service shall determine that all or
any portion of an Employer Contribution is not deductible under that Section,
the nondeductible portion shall be returned to the Employer within one year of
the disallowance of the deduction.

                                      -28-

<PAGE>

         14.11 Unclaimed Accounts. Neither the Employer nor the Trustees shall
be under any obligation to search for, or ascertain the whereabouts of, any
Participant or Beneficiary. The Employer or the Trustees, by certified or
registered mail addressed to his last known address of record with the Employer,
shall notify any Participant or Beneficiary that he is entitled to a
distribution under this Plan, and the notice shall quote the provisions of this
Section. If the Participant or Beneficiary fails to claim his benefits or make
his whereabouts known in writing to the Employer or the Trustees within seven
(7) calendar years after the date of notification, the benefits of the
Participant or Beneficiary under the Plan will be disposed of as follows:

               (a)    If the whereabouts of the Participant is unknown but the
         whereabouts of the Participant's Beneficiary is known to the Trustees,
         distribution will be made to the Beneficiary.

               (b)    If the whereabouts of the Participant and his Beneficiary
         are unknown to the Trustees, the Plan will forfeit the benefit,
         provided that the benefit is subject to a claim for reinstatement if
         the Participant or Beneficiary make a claim for the forfeited benefit.

         Any payment made pursuant to the power herein conferred upon the
Trustees shall operate as a complete discharge of all obligations of the
Trustees, to the extent of the distributions so made.

         14.12 Qualified Domestic Relations Order. Section 14.2 shall not apply
to a "qualified domestic relations order" defined in Code Section 414(p), and
such other domestic relations orders permitted to be so treated under the
provisions of the Retirement Equity Act of 1984. Further, to the extent provided
under a "qualified domestic relations order," a former Spouse of a Participant
shall be treated as the Spouse or surviving Spouse for all purposes under the
Plan.

In the case of any domestic relations order received by the Plan:

               (a)    The Employer or the Committee shall promptly notify the
         Participant and any other alternate payee of the receipt of such order
         and the Plan's procedures for determining the qualified status of
         domestic relations orders, and

               (b)    Within a reasonable period after receipt of such order,
         the Employer or the Committee shall determine whether such order is a
         qualified domestic relations order and notify the Participant and each
         alternate payee of such determination. The Employer or the Committee
         shall establish reasonable procedures to determine the qualified status
         of domestic relations orders and to administer distributions under such
         qualified orders.

         During any period in which the issue of whether a domestic relations
order is a qualified domestic relations order is being determined (by the
Employer or Committee, by a court of competent jurisdiction, or otherwise), the
Employer or the Committee shall segregate in a separate account in the Plan or
in an escrow account the amounts which would have been payable to the alternate
payee during such period if the order had been determined to be a qualified
domestic relations order. If within eighteen (18) months the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Employer or the Committee shall pay the segregated amounts (plus any
interest thereon) to the person or persons entitled thereto. If within eighteen
(18) months it is determined that the order is not a qualified domestic
relations order, or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Employer or the Committee shall pay
the segregated amounts (plus any interest thereon) to the person or persons who
would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic

                                      -29-

<PAGE>

relations order which is made after the close of the eighteen (18) month period
shall be applied prospectively only. The term "alternate payee" means any
Spouse, former Spouse, child or other dependent of a Participant who is
recognized by a domestic relations order as having a right to receive all, or a
portion of, the benefit payable under a Plan with respect to such Participant.

SECTION 15.    TOP-HEAVY PROVISIONS.

         15.1  Top-Heavy Plan. This Plan is top-heavy if any of the following
conditions exist:

               (a)    If the top-heavy ratio for this Plan exceeds sixty percent
         (60%) and this Plan is not part of any required aggregation group or
         permissive aggregation group;

               (b)    If this Plan is a part of a required aggregation group
         (but is not part of a permissive aggregation group) and the aggregate
         top-heavy ratio for the group of Plans exceeds sixty percent (60%); or

               (c)    If this Plan is a part of a required aggregation group and
         part of a permissive aggregation group and the aggregate top-heavy
         ratio for the permissive aggregation group exceeds sixty percent (60%).

         15.2  Super Top-Heavy Plan This Plan will be a super top-heavy Plan if
any of the following conditions exist:

               (a)    If the top-heavy ratio for this Plan exceeds ninety
         percent (90%) and this Plan is not part of any required aggregation
         group or permissive aggregation group.

               (b)    If this Plan is a part of a required aggregation group
         (but is not part of a permissive aggregation group) and the aggregate
         top-heavy ratio for the group of Plans exceeds ninety percent (90%), or

               (c)    If this Plan is a part of a required aggregation group and
         part of a permissive aggregation group and the aggregate top-heavy
         ratio for the permissive aggregation group exceeds ninety percent
         (90%).

         15.3  Definitions.

In making this determination, the Committee shall use the following definitions
and principles:

               15.3-1 The "Determination Date", with respect to the first
         Plan Year of any plan, means the last day of that Plan Year, and with
         respect to each subsequent Plan Year, means the last day of the
         preceding Plan Year. If any other plan has a Determination Date which
         differs from this Plan's Determination Date, the top-heaviness of this
         Plan shall be determined on the basis of the other plan's Determination
         Date falling within the same calendar years as this Plan's
         Determination Date.

               15.3-2 A "Key Employee" means any Employee or former employee
         (including any deceased Employee) who at any time during the Plan Year
         that includes the Determination Date was an officer of the Employer
         having annual 415 Compensation greater than $130,000 (as adjusted under
         section

                                      -30-

<PAGE>

         416(i)(1) of the Code for Plan Years beginning after December 31, 2002,
         a 5-percent owner of the Employer, or a 1-percent owner of the Employer
         having annual 415 Compensation of more than $150,000. The determination
         of who is a Key Employee will be made in accordance with section
         416(i)(1) of the Code and the applicable regulations and other guidance
         of general applicability issued thereunder.

               15.3-3 A "Non-key Employee" means an Employee who at any time
         during the five years ending on the top-heavy Determination Date for
         the Plan Year has received compensation from an Employer and who has
         never been a Key Employee, and the Beneficiary of any such Employee.

               15.3-4 A "required aggregation group" includes (a) each
         qualified Plan of the Employer in which at least one Key Employee
         participates in the Plan Year containing the Determination Date and (b)
         any other qualified Plan of the Employer which enables a Plan described
         in (a) to meet the requirements of Code Sections 401(a)(4) and 410. For
         purposes of the preceding sentence, a qualified Plan of the Employer
         includes a terminated Plan maintained by the Employer within the period
         ending on the Determination Date. In the case of a required aggregation
         group, each Plan in the group will be considered a top-heavy Plan if
         the required aggregation group is a top-heavy group. No Plan in the
         required aggregation group will be considered a top-heavy Plan if the
         required aggregation group is not a top-heavy group. All Employers
         aggregated under Code Sections 414(b), (c) or (m) or (o) (but only
         after the Code Section 414(o) regulations become effective) are
         considered a single Employer.

               15.3-5 A "permissive aggregation group" includes the required
         aggregation group of Plans plus any other qualified Plan(s) of the
         Employer that are not required to be aggregated but which, when
         considered as a group with the required aggregation group, satisfy the
         requirements of Code Sections 401(a)(4) and 410 and are comparable to
         the Plans in the required aggregation group. No Plan in the permissive
         aggregation group will be considered a top-heavy Plan if the permissive
         aggregation group is not a top-heavy group. Only a Plan that is part of
         the required aggregation group will be considered a top-heavy Plan if
         the permissive aggregation group is top-heavy.

         15.4  Top-Heavy Rules of Application.

               For purposes of determining the value of Account balances and
the present value of accrued benefits the following provisions shall apply:

               15.4-1 The value of Account balances and the present value of
         accrued benefits will be determined as of the most recent Valuation
         Date that falls within or ends with the twelve (12) month period ending
         on the Determination Date.

               15.4-2 For purposes of testing whether this Plan is top-heavy,
         the present value of an individual's accrued benefits and an
         individual's Account balances is counted only once each year.

               15.4-3 The Account balances and accrued benefits of a
         Participant who is not presently a Key Employee but who was a Key
         Employee in a Plan Year beginning on or after January 1, 1984 will be
         disregarded.

                                      -31-

<PAGE>

               15.4-4 Employer contributions attributable to a salary
         reduction or similar arrangement will be taken into account. Employer
         matching contributions also shall be taken into account for purposes of
         satisfying the minimum contribution requirements of Section 416(c)(2)
         of the Code and the Plan.

               15.4-5 When aggregating Plans, the value of Account balances
         and accrued benefits will be calculated with reference to the
         Determination Dates that fall within the same calendar year.

               15.4-6 The present values of accrued benefits and the amounts
         of account balances of an Employee as of the Determination Date shall
         be increased by the distributions made with respect to the Employee
         under the Plan and any plan aggregated with the Plan under Section
         416(g)(2) of the Code during the 1-year period ending on the
         Determination Date. The preceding sentence shall also apply to
         distributions under a terminated plan which, had it not been
         terminated, would have been aggregated with the Plan under Section
         416(g)(2)(A)(i) of the Code. In the case of a distribution made for a
         reason other than separation from service, death, or disability, this
         provision shall be applied by substituting "five (5) year period" for
         "one (1) year period."

               15.4-7 Accrued benefits and Account balances of an individual
         shall not be taken into account for purposes of determining the
         top-heavy ratios if the individual has performed no services for the
         Employer during the one (1) year period ending on the applicable
         Determination Date. Compensation for purposes of this subparagraph
         shall not include any payments made to an individual by the Employer
         pursuant to a qualified or non-qualified deferred compensation plan.

               15.4-8 The present value of the accrued benefits or the amount of
                              the Account balances of any Employee participating
                              in this Plan shall not include any rollover
                              contributions or other transfers voluntarily
                              initiated by the Employee except as described
                              below. If this Plan transfers or rolls over funds
                              to another Plan in a transaction voluntarily
                              initiated by the Employee, then this Plan shall
                              count the distribution for purposes of determining
                              Account balances or the present value of accrued
                              benefits. A transfer incident to a merger or
                              consolidation of two or more Plans of the Employer
                              (including Plans of related Employers treated as a
                              single Employer under Code Section 414), or a
                              transfer or rollover between plans of the
                              Employer, shall not be considered as voluntarily
                              initiated by the Employee.

         15.5  Top-Heavy Ratio.

         If the Employer maintains one (1) or more defined contribution plans
(including any simplified Employee pension plan) and the Employer has never
maintained any defined benefit plans which have covered or could cover a
Participant in this Plan, the top-heavy ratio is a fraction, the numerator of
which is the sum of the Account balances of all Key Employees as of the
Determination Date, and the denominator of which is the sum of the Account
balances of all Employees as of the Determination Date. Both the numerator and
denominator of the top-heavy ratio shall be increased to reflect any
contribution which is due but unpaid as of the Determination Date.

         If the Employer maintains one (1) or more defined contribution plans
(including any simplified Employee pension plan) and the Employer maintains or
has maintained one (1) or more defined benefit plans which have covered or could
cover a Participant in this Plan, the top-heavy ratio is a fraction, the

                                      -32-

<PAGE>

numerator of which is the sum of Account balances under the defined contribution
plans for all Key Employees and the present value of accrued benefits under the
defined benefit plans for all Key Employees, and the denominator of which is the
sum of the Account balances under the defined contribution plans for all
Employees and the present value of accrued benefits under the defined benefit
plans for all Employees. For these purposes, the accrued benefit of a
Participant other than a Key Employee in a defined benefit plan shall be
determined under (a) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Section
411(b)(1)(C).

         15.6  Minimum Contributions. For any Top-Heavy Year, each Employer
shall make a special contribution on behalf of each Participant to the extent
that the total allocations to his Account pursuant to Section 4 is less than the
lesser of:

               (i)    three percent of his 415 Compensation for that year, or

               (ii)   the highest ratio of such allocation to 415 Compensation
         received by any Key Employee for that year. For purposes of the special
         contribution of this Section 15.2, a Key Employee's 415 Compensation
         shall include amounts the Key Employee elected to defer under a
         qualified 401(k) arrangement. Such a special contribution shall be made
         on behalf of each Participant who is employed by an Employer on the
         last day of the Plan Year, regardless of the number of his Hours of
         Service, and shall be allocated to his Account.

         If the Employer maintains a qualified plan in addition to this Plan and
more than one such plan is determined to be Top-Heavy, a minimum contribution or
a minimum benefit shall be provided in one of such other plans, including a plan
that consists solely of a cash or deferred arrangement which meets the
requirements of Section 401(k)(12) of the Code and matching contributions with
respect to which the requirements of Section 401(m)(11) of the Code are met. If
the Employer has both a Top-Heavy defined benefit plan and a Top-Heavy defined
contribution plan and a minimum contribution is to be provided only in the
defined contribution plan, then the sum of the Employer contributions and
forfeitures allocated to the Account of each Non-key Employee shall be equal to
at least five percent (5%) of such Non-key Employee's 415 Compensation for that
year.

         15.7  Minimum Vesting. For any Plan Year in which this Plan is
Top-Heavy, a Participant's vested interest in his Account shall be based on the
following "top-heavy table":

                     Vesting                       Percentage of
                      Years                       Interest Vested
                      -----                       ---------------

               Fewer than 3 years                       0%
                    3 or more                         100%

         15.8  Top-Heavy Provisions Control in Top-Heavy Plan. In the event this
Plan becomes top-heavy and a conflict arises between the top-heavy provisions
herein set forth and the remaining provisions set forth in this Plan, the
top-heavy provisions shall control.

                                      -33-<PAGE>

                                                                    Exhibit 10.5

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                       OF

                               The Provident Bank

          WHEREAS, The Provident Bank, a New Jersey savings bank (the "Bank")
has established and presently maintains in effect a retirement plan for its
employees, called The Provident Bank Pension Plan (the "Retirement Plan") which
is qualified under Section 401 of the Internal Revenue Code of 1986, as amended
(the "Code");

          WHEREAS, the Code contains certain limitations in Sections 401(a)(17)
and 415 upon the maximum amount of compensation which may be considered in
computing benefit accruals under defined benefit plans qualified under the Code
and upon the maximum retirement benefits which may be paid from defined benefit
plans qualified under the Code, respectively;

          WHEREAS, under the terms of the Retirement Plan, certain employees of
the Bank covered thereby would be, or might be expected to become, entitled to
retirement benefits which exceed the limitations imposed by Sections 401(a)(17)
and 415 of the Code upon defined benefit plans and which could, if paid pursuant
to the Retirement Plan, cause the plan to cease to be qualified;

<PAGE>

          WHEREAS, under the terms of the Retirement Plan, deferred compensation
is excluded in determining retirement benefits;

          WHEREAS, the Bank desires to provide such excess benefits for
employees affected, and to include deferred compensation in the determination of
such excess benefits, in a manner consistent with both the Code and with the
Bank's present policies with respect to its employees;

          NOW, THEREFORE, the Bank hereby adopts in accordance with resolutions
of its Board of Managers at its meeting of December 21, 1989, the "Supplemental
Executive Retirement Plan of the Provident Bank" (the "Plan"), effective January
1, 1990 with retroactive application to January 1, 1998, as hereinafter set
forth:

     1.   Participation in this Plan shall be limited to a select group of
          management or highly compensated employees of the Bank whose benefits
          under the Retirement Plan are affected by Section 401(a)(17) or
          Section 415 of the Code and who are designated by the Board of
          Managers of the Bank to participate in this Plan (hereinafter
          "Employee").

     2.   The Bank will pay to or in respect of each Employee an

                                        2

<PAGE>

          amount equal to the amount which would have been payable under the
          terms of the Retirement Plan but for the limitations under Sections
          401(a)(17) and 415 of the Code less the amount payable under the terms
          of the Retirement Plan. Such amount, which shall be determined
          including any deferred compensation, shall be paid commencing no later
          than ninety (90) days following termination of employment, but in no
          event before age 60, in the form of a qualified joint and 100%
          survivor annuity for married Employees and a single life annuity for
          single Employees.

     3.   Any benefits payable under this Plan shall become vested under the
          same terms and conditions as the respective benefits provided under
          the Retirement Plan.

     4.   The Bank shall be under no obligation to establish any fund in order
          to provide for the payment of the amounts due under this Plan and any
          amounts payable hereunder shall be made from the general assets of the
          Bank. Appropriate payroll and other taxes shall be withheld from all
          payments made under the terms of this Plan.

     5.   The Board of Managers may amend the Plan at any time and from time to
          time in such manner as it shall determine and any amendment may be
          given retroactive effect, except

                                        3

<PAGE>

          that no amendment may reduce or eliminate any benefit which accrued to
          any Employee under the Plan prior to the date of the amendment without
          the consent of the affected Employee. The Plan shall terminate upon
          the termination of the Retirement Plan, unless sooner terminated by
          the Board of Managers of the Bank.

     6.   Except as otherwise provided by law, the right of any Employee to any
          benefit or payment hereunder is expressly made subject to the
          condition and limitation that it shall not be subject to alienation,
          assignment, attachment, execution, or other process.

     7.   In the event it becomes necessary or appropriate to interpret the
          Plan, the Bank hereby delegates the authority to interpret the
          provisions of the Plan to those persons, who, from time to time, have
          such authority with respect to, and under the Retirement Plan.

     8.   In the event that any claim for benefits, which must initially be
          submitted in writing to the Board of Managers, is denied (in whole or
          in part) hereunder, the claimant shall receive from the Bank notice in
          writing, written in a manner calculated to be understood by the
          claimant, setting forth the specific reasons for the

                                        4

<PAGE>

          denial, with specific reference to pertinent provisions of this Plan.
          The interpretations and construction hereof by the Board of Managers
          shall be binding and conclusive on all persons and for all purposes.
          Any disagreements about such interpretations and construction shall be
          submitted to an arbitrator subject to the rules and procedures
          established by the American Arbitration Association. No member of the
          Board of Managers shall be liable to any person for any action taken
          hereunder except those actions undertaken with lack of good faith.

     9.   The Plan shall be interpreted and construed in accordance with the
          laws of the State of New Jersey.

Approved by:

/s/ Paul M. Pantozzi
-------------------------------------
PAUL M. PANTOZZI, PRESIDENT

DATED :  March 29, 1990

                                        5

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