EMPLOYMENT AGREEMENT

a.

The term of this Agreement shall be (i) the initial term, consisting of the period commencing on the date of this Agreement (the “Effective Date”) and ending on the third anniversary of the Effective Date, plus (ii) any and all extensions of the initial term made pursuant to this Section 3.

b.

Commencing on the first year anniversary date of this Agreement, and continuing on each anniversary thereafter, the disinterested members of the boards of directors of the Bank may extend the Agreement for an additional one-year period beyond the then effective expiration date, unless Executive elects not to extend the term of this Agreement by giving written notice in accordance with Section 19 of this Agreement.  The Board of Directors of the Bank (the “Board”) will review Executive’s performance annually for purposes of determining whether to extend the Agreement and the rationale and results thereof shall be included in the minutes of the Board’s meeting.  The Board shall give notice to Executive as soon as possible after such review as to whether the Agreement is to be extended.

a.

The Bank agrees to pay Executive during the term of this Agreement a base salary at the rate of $69,830 per year, payable in accordance with customary payroll practices.

b.

The Board shall review annually the rate of Executive’s base salary based upon factors they deem relevant, and may maintain or increase her salary, provided that no such action shall reduce the rate of salary below the rate in effect on the Effective Date.

c.

In the absence of action by the Board, Executive shall continue to receive salary at the annual rate specified on the Effective Date or, if another rate has been established under the provisions of this Section 4, the rate last properly established by action of the Board under the provisions of this Section 4.

a.

Executive shall be entitled to an annual vacation in accordance with the policies that the Board periodically establishes for senior management employees.

b.

Executive shall accumulate any unused vacation and/or sick leave from one fiscal year to the next, in either case to the extent authorized by the Board, provided that the Board shall not reduce previously accumulated vacation or sick leave.

c.

In addition to the above mentioned paid vacations, Executive shall be entitled, without loss of pay, to absent herself voluntarily from the performance of her employment for such additional periods of time and for such valid and legitimate reasons as the Board may in its discretion determine.  Further, the Board may grant Executive a leave or leaves or absence, with or without pay, at such time or times and upon such terms and conditions as the Board in its discretion may determine.

a.

During the term of this Agreement and except for illnesses, reasonable vacation periods, and reasonable leaves of absence, Executive: (i) shall devote her full business time, attention, skill, and efforts to the faithful performance of her duties hereunder; provided, however, that from time to time, Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations which will not present any conflict of interest with the Bank or any of their subsidiaries or affiliates or unfavorably affect the performance of Executive’s duties pursuant to this Agreement, or violate any applicable statute or regulation and (ii) shall not engage in any business or activity contrary to the business affairs or interests of the Bank. “Full business time” is hereby defined as that amount of time usually devoted to like companies and institutions by similarly situated executive officers.

b.

Nothing contained in this Agreement shall prevent or limit Executive’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank, or, solely as a passive, minority investor, in any business.

c.

Executive agrees to maintain the confidentiality of any and all information concerning the operation or financial status of the Bank; the names or addresses of any of its borrowers, depositors and other customers; any information concerning or obtained from such customers; and any other information concerning the Bank to which she may be exposed during the course of her employment.  Executive further agrees that, unless required by law or specifically permitted by the Board in writing, she will not disclose to any person or entity, either during or subsequent to her employment, any of the above-mentioned information which is not generally known to the public, nor shall she employ such information in any way other than for the benefit of the Bank.

a.

Death .  Executive’s employment under this Agreement shall terminate upon her death during the term of this Agreement, in which event Executive’s estate shall be entitled to receive the compensation due to Executive through the last day of the calendar month in which her death occurred.

b.

Retirement .  This Agreement shall be terminated upon Executive’s retirement under the retirement benefit plan or plans in which she participates pursuant to Section 6 of this Agreement or otherwise.

i.

The Board or Executive may terminate Executive’s employment after having determined Executive has a Disability.  For purposes of this Agreement, “Disability” means a physical or mental infirmity that impairs Executive’s ability to substantially perform her duties under this Agreement and that results in Executive becoming eligible for long-term disability benefits under any long-term disability plans of the Bank (or, if there are no such plans in effect, that impairs Executive’s ability to substantially perform her duties under this Agreement for a period of one hundred eighty (180) consecutive days).  The Board shall determine whether or not Executive is and continues to be permanently disabled for purposes of this Agreement in good faith, based upon competent medical advice and other factors that they reasonably believe to be relevant.  As a condition to any benefits, the Board may require Executive to submit to such physical or mental evaluations and tests as it deems reasonably appropriate.

ii.

In the event of such Disability, Executive shall be entitled to the compensation and benefits provided for under this Agreement for (1) any period during the term of this Agreement and prior to the establishment of Executive’s Disability during which Executive is unable to work due to the physical or mental infirmity, and (2) any period of Disability which is prior to Executive’s termination of employment pursuant to this Section 11c.; provided, however, that any benefits paid pursuant to the Bank’s long-term disability plan will continue as provided in such plan without reduction for payments made pursuant to this Agreement.  During any period that Executive receives disability benefits and to the extent that Executive shall be physically and mentally able to do so, she shall furnish such information, assistance and documents so as to assist in the continued ongoing business of the Bank and, if able, she shall make herself available to the Bank to undertake reasonable assignments consistent with her prior position and her physical and mental health.  The Bank shall pay all reasonable expenses incident to the performance of any assignment given to Executive during the Disability period.

i.

The Board may, by written notice to Executive in the form and manner specified in this paragraph, immediately terminate her employment at any time, for “Cause.”  Executive shall have no right to receive compensation or other benefits for any period after termination for Cause except for vested benefits.  Termination for Cause shall mean termination because of, in the good faith determination of the Board, Executive’s:

(1)

Personal dishonesty;

(2)

Incompetence;

(3)

Willful misconduct;

(4)

Breach of fiduciary duty involving personal profit;

(5)

Intentional failure to perform stated duties under this Agreement;

(6)

Willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflects adversely on the reputation of the Bank, any felony conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or

(7)

Material breach by Executive of any provision of this Agreement.

ii.

Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of a majority of the entire membership of the Board at a meeting of such Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive to be heard before the Board with counsel), of finding that, in the good faith opinion of the Board, Executive was guilty of the conduct described above and specifying the particulars thereof.

e.

Voluntary Termination by Executive .  In addition to her other rights to terminate under this Agreement, Executive may voluntarily terminate employment during the term of this Agreement upon at least ninety (90) days’ prior written notice to the Board, in which case Executive shall receive only her compensation, vested rights and employee benefits up to the date of her termination.

f.

Without Cause or With Good Reason .

i.

In addition to termination pursuant to Sections 11a. through 11e., the Board may, by written notice to Executive, immediately terminate her employment at any time for a reason other than Cause (a termination “Without  Cause”) and Executive may, by written notice to the Board, immediately terminate this Agreement at any time within ninety (90) days following an event constituting “Good Reason,” as defined below (a termination “With Good Reason”).

ii.

Subject to Section 12 of this Agreement, in the event of termination under this Section 11f., Executive shall be entitled to receive her base salary for the remaining term of the Agreement paid in one lump sum within ten (10) calendar days of such termination.  Also, in such event, Executive shall, for the remaining term of the Agreement, receive the benefits she would have received during the remaining term of the Agreement under any retirement programs (whether tax-qualified or non-qualified) in which Executive participated prior to her termination (with the amount of the benefits determined by reference to the benefits received by Executive or accrued on her behalf under such programs during the twelve (12) months preceding her termination) and continue to participate in any benefit plans of the Bank that provide health (including medical and dental), life or disability insurance, or similar coverage, upon terms no less favorable than the most favorable terms provided to senior executives of the Bank during such period.  In the event that the Bank is unable to provide such coverage by reason of Executive no longer being an employee, the Bank shall provide Executive with comparable coverage on an individual policy basis.

iii.

“Good Reason” shall exist if, without Executive’s express written consent, the Bank materially breach any of their respective obligations under this Agreement.  Without limitation, such a material breach shall be deemed to occur upon any of the following:

(1)

A material reduction in Executive’s responsibilities or authority in connection with her employment with the Bank;

(2)

Assignment to Executive of duties of a non-executive nature or duties for which she is not reasonably equipped by her skills and experience;

(3)

A reduction in salary or benefits contrary to the terms of this Agreement, or, following a Change in Control as defined in Section 12 of this Agreement, any reduction in salary or material reduction in benefits below the amounts to which Executive was entitled prior to the Change in Control;

(4)

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