FEDERAL TRUST BANK

ARTICLE 5

GENERAL LIMITATIONS

Notwithstanding any provision of this Agreement to the contrary, the Bank shall not pay any benefit under this Agreement for the following reasons:

5.1

Termination for Cause.  If the Bank terminates the Executive’s employment for:

5.1.1

Gross negligence or gross neglect of duties;

5.1.2

Commission of a felony; or

5.1.3

Fraud, disloyalty, dishonesty or willful violation of any law or material Bank policy in connection with the Executive’s employment.

5.2

Suicide.  No benefits shall be payable if the Executive commits suicide prior to August 31, 2005, or if the Executive has made any material misstatement of fact on any application for life insurance purchased by the Bank.

ARTICLE 6

CLAIMS AND REVIEW PROCEDURES

6.1

Claims Procedure. The Bank shall notify the Executive or his successor in interest (“Claimant”) in writing, within 90 days of the Claimant’s written application for benefits, of eligibility or non eligibility for benefits under the Agreement. If the Bank determines that the Claimant is not eligible for benefits or full benefits, the notice shall set forth: (i) the specific reasons for such denial, (ii) a specific reference to the provisions of the Agreement on which the denial is based, (iii) a description of any additional information or material necessary for the Claimant to perfect Claimant’s claim, and a description of why it is needed, and (iv) an explanation of the Agreement’s claims review procedure and other appropriate information as to the steps to be taken if the Claimant wishes to have the claim reviewed. If the Bank determines that there are special circumstances requiring additional time to make a decision, the Bank shall notify the Claimant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90 day period.

6.2

Review Procedure.  If the Claimant is determined by the Bank not to be eligible for benefits, or if the Claimant believes that Claimant is entitled to greater or different benefits, the Claimant shall have the opportunity to have such claim reviewed by the Bank by filing a petition for review with the Bank within 60 days after receipt of the notice issued by the Bank. Said petition shall state the specific reasons, which the Claimant believes entitles Claimant to benefits or to greater or different benefits. Within 60 days after receipt by the Bank of the petition, the Bank shall afford the Claimant (and counsel, if any) an opportunity to present Claimant’s position to the Bank orally, or in writing, and the Claimant (or counsel) shall have the right to review the pertinent documents. The Bank shall notify the Claimant of its decision in writing within the 60-day period, stating specifically the basis of its decision, written in a manner calculated to be understood by the Claimant and the specific provisions of the Agreement on which the decision is based. If, because of the need for a hearing, the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Bank, but notice of this deferral shall be given to the Claimant.

ARTICLE 7

AMENDMENTS AND TERMINATION

The Bank reserves the right to amend or terminate this Agreement at any time. In the event of termination of this Agreement, the benefit to the Executive shall be based on the Annual Benefit determined as of the date of termination of this Agreement. The Bank shall pay the benefit to the Executive, at the Bank’s discretion, in either a present value lump sum payment within 60 days of Executive’s Termination of Employment based on a discount rate of eight percent (8%) and a life expectancy of age 82, computed by reference to the Annual Benefit, or in equal consecutive quarterly payments based on one-quarter (1/4) of the Annual Benefit, on the first day of each quarter commencing with the month following the Executive’s Termination of Employment and continuing for the remainder of his life. In the event of amendment, the nonforfeitable benefit accrued as of the effective date of the amendment shall not be reduced by the amendment.