10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-31566

PROVIDENT FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware	42-1547151
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

830 Bergen Avenue, Jersey City, New Jersey	07306-4599
(Address of principal executive offices)	(Zip Code)

(201) 333-1000

(Registrant’s telephone number including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    YES  x    NO  ¨

As of August 2, 2004 there were 80,078,962 shares issued and 78,605,262 shares outstanding of the Registrant’s Common Stock, par value $0.01 per share.

PROVIDENT FINANCIAL SERVICES, INC.

INDEX TO FORM 10-Q

Item Number		Page Number
	PART I— FINANCIAL INFORMATION
1.	Financial Statements:
	Consolidated Statements of Financial Condition as of June 30, 2004 (unaudited) and December 31, 2003	3
	Consolidated Statements of Income for the three months and six months ended June 30, 2004 and 2003 (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2004 and 2003 (unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2004 and 2003 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
3.	Quantitative and Qualitative Disclosures About Market Risk	15
4.	Controls and Procedures	17
	PART II— OTHER INFORMATION
1.	Legal Proceedings	17
2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	18
3.	Defaults Upon Senior Securities	18
4.	Submission of Matters to a Vote of Security Holders	18
5.	Other Information	19
6.	Exhibits and Reports on Form 8-K	19
Signatures		21

2

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Financial Condition

June 30, 2004 (Unaudited) and December 31, 2003

(Dollars in Thousands, except per share data)

	June 30, 2004			December 31, 2003
ASSETS
Cash and due from banks	$	90,655		$	106,228
Federal funds sold		66,000			—
Short-term investments		51,392			69,624
Total cash and cash equivalents		208,047			175,852
Investment securities (market value of $467,694 (unaudited) and $524,429 at June 30, 2004 and December 31, 2003, respectively)		471,471			517,789
Securities available for sale, at fair value		1,025,938			1,151,829
Federal Home Loan Bank Stock		31,955			34,585
Loans		2,381,702			2,237,367
Less allowance for loan losses		20,920			20,631
Net loans		2,360,782			2,216,736
Other real estate owned, net		32			41
Banking premises and equipment, net		47,297			46,741
Accrued interest receivable		16,187			16,842
Intangible assets		23,575			23,938
Bank owned life insurance		73,444			71,506
Other assets		37,666			29,019
Total assets	$	4,296,394		$	4,284,878
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Demand deposits	$	815,564		$	774,988
Savings deposits		997,373			987,877
Certificates of deposit of $100,000 or more		161,181			148,306
Other time deposits		769,801			784,805
Total deposits		2,743,919			2,695,976
Mortgage escrow deposits		12,591			11,061
Borrowed funds		694,256			736,328
Other liabilities		29,375			24,394
Total liabilities		3,480,141			3,467,759
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued		—			—
Common stock, $0.01 par value, 200,000,000 shares authorized, 61,538,300 shares issued and 60,064,600 shares outstanding at June 30, 2004 and 61,538,300 shares issued and 60,600,100 outstanding at December 31, 2003, respectively.		615			615
Additional paid-in capital		608,281			606,541
Retained earnings		336,418			324,250
Accumulated other comprehensive (loss) income		(2,154	)		6,416
Less: Treasury Stock, at cost (348,968 shares at June 30, 2004)		(6,706	)		—
Less: Unallocated common stock held by Employee Stock Ownership Plan		(77,257	)		(78,816	)
Less: Common Stock acquired by the Stock Award Plan		(42,944	)		(41,887	)
Total Stockholders’ Equity		816,253			817,119
Total Liabilities and Stockholders’ Equity	$	4,296,394		$	4,284,878

See accompanying notes to unaudited consolidated financial statements.

3

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Income

Three Months and Six Months ended June 30, 2004 and 2003 (Unaudited)

(Dollars in Thousands, except per share data)

	Three months ended June 30,				Six months ended June 30,
	2004		2003		2004		2003
Interest income:
Real estate secured loans	$	23,539	$	20,815	$	47,305	$	42,192
Commercial loans		3,728		5,504		7,026		11,058
Consumer loans		4,761		4,577		9,396		9,389
Investment securities		4,581		4,862		9,723		8,530
Securities available for sale		8,344		10,731		18,180		22,116
Other short-term investments		130		176		300		244
Federal funds		234		379		374		693
Total interest income		45,317		47,044		92,304		94,222
Interest expense:
Deposits		7,936		10,019		15,802		22,170
Borrowed funds		4,885		4,044		9,604		6,812
Total interest expense		12,821		14,063		25,406		28,982
Net interest income		32,496		32,981		66,898		65,240
Provision for loan losses		1,050		300		1,650		900
Net interest income after provision for loan losses		31,446		32,681		65,248		64,340
Non-interest income:
Fees		4,812		3,657		9,437		7,710
Net gain (loss) on securities transactions		308		—		735		(4	)
Commissions		136		87		246		158
Bank owned life insurance		951		992		1,938		1,794
Other income		509		394		2,016		949
Total non-interest income		6,716		5,130		14,372		10,607
Non-interest expense:
Salaries and employee benefits		14,074		12,621		28,482		24,646
Net occupancy expense		3,720		3,425		7,518		6,835
Federal deposit insurance		103		126		206		234
Data processing expense		1,824		1,655		3,664		3,273
Advertising and promotion expense		1,641		835		3,044		1,492
Amortization of intangibles		573		939		1,095		2,134
Other operating expenses		4,142		5,096		8,734		9,612
Contribution to The Provident Bank Foundation		—		—		—		24,000
Total non-interest expense		26,077		24,697		52,743		72,226
Income before income tax expense		12,085		13,114		26,877		2,721
Income tax expense		3,504		4,276		8,002		326
Net income	$	8,581	$	8,838	$	18,875	$	2,395
Basic earnings per share	$	0.16	$	0.15	$	0.34	$	0.02
Average basic shares outstanding		54,924,643		59,655,159		54,791,399		59,655,159
Diluted earnings per share	$	0.16			$	0.34
Average diluted shares outstanding		54,924,725				54,791,440

See accompanying notes to unaudited consolidated financial statements.

4

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2004 and 2003 (Unaudited)

(Dollars in Thousands)

	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL			UNALLOCATED ESOP SHARES			COMMON STOCK AWARDS UNDER SAP			TREASURY STOCK			RETAINED EARNINGS			ACCUMULATED
																		OTHER COMPREHENSIVE INCOME			TOTAL STOCKHOLDERS’ EQUITY
Balance at December 31, 2002	$	—	$	—		$	—		$	—		$	—		$	314,111		$	11,898		$	326,009
Comprehensive Income:
Net Income																2,395						2,395
Other comprehensive income:
Unrealized holding loss on securities arising during the period (net of tax of ($2,231))																			(3,158	)		(3,158	)
Total Comprehensive Income																						(763	)
Sale of Common Stock @ $0.01 par		615		606,032																		606,696
Cash Dividends Paid																(2,462	)					(2,462	)
Purchase of ESOP shares							(57,389	)														(57,389	)
Allocation of ESOP shares				49			1,226															1,275
Balance at June 30, 2003	$	615	$	606,081		$	(56,163	)	$	—		$	—		$	314,044		$	8,740		$	873,317
Balance at December 31, 2003	$	615	$	606,541		$	(78,816	)	$	(41,887	)	$	—		$	324,250		$	6,416		$	817,119
Comprehensive Income:
Net Income																18,875						18,875
Other comprehensive income:
Unrealized holding loss on securities arising during the period (net of tax of ($5,881))																			(9,048	)		(9,048	)
Reclassification adjustment for gains included in net income (net of tax of $257)																			478			478
Total Comprehensive Income																						10,305
Cash Dividends Paid																(6,707	)					(6,707	)
Purchases of Treasury Stock													(6,706	)								(6,706	)
Allocation of ESOP shares				(103	)		1,559															1,456
Purchase of Stock Awards Plan shares										(3,565	)											(3,565	)
Allocation of Stock Awards Plan shares				51						2,508												2,559
Allocation of stock options				1,792																		1,792
Balance at June 30, 2004	$	615	$	608,281		$	(77,257	)	$	(42,944	)	$	(6,706	)	$	336,418		$	(2,154	)	$	816,253

See accompanying notes to unaudited consolidated financial statements.

5

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

Six Months ended June 30, 2004 and 2003 (Unaudited)

(Dollars in Thousands)

	Six months ended June 30,
	2004			2003
Cash flows from operating activities:
Net income	$	18,875		$	2,395
Adjustments to reconcile net income to net cash provided by operating activities:
Cash contributed to The Provident Bank Foundation		—			4,800
Depreciation and amortization of intangibles		4,359			5,063
Provision for loan losses		1,650			900
Deferred tax benefit		(1,135	)		(10,023	)
Increase in cash surrender value of Bank Owned Life Insurance		(1,938	)		(1,794	)
Net amortization of premiums and discount on securities		5,430			5,146
Accretion of net deferred loan fees		(690	)		(516	)
Amortization of premiums on purchased loans, net		1,752			444
Proceeds from sales of other real estate owned, net		108			—
Allocation of ESOP shares		1,456			1,226
Allocation of Stock Award Plan Shares		2,559			—
Allocation of Stock Options		1,792			—
Net gain on sale of loans		(1,312	)		(577	)
Proceeds from sale of loans		74,620			2,189
Net (gain) loss on securities available for sale		(735	)		4
Decrease (increase) in accrued interest receivable		655			(1,263	)
Decrease (increase) in other assets		461			(1,888	)
Increase in mortgage escrow deposits		1,530			823
Increase in other liabilities		4,981			12
Net cash provided by operating activities		114,418			6,941
Cash flows from investing activities:
Proceeds from maturities, calls and paydown of investment securities		52,914			39,207
Purchases of investment securities		(7,525	)		(347,880	)
Proceeds from sales of securities available for sale		84,781			22,253
Proceeds from maturities and paydowns of securities available for sale		255,245			781,519
Purchases of securities available for sale		(232,549	)		(761,630	)
Purchase of Bank Owned Life Insurance		—			(20,000	)
Net (increase) decrease in loans		(220,187	)		24,853
Purchases of premises and equipment, net		(3,795	)		(3,891	)
Net cash used in investing activities		(71,116	)		(265,569	)
Cash flows from financing activities:
Net increase (decrease) in deposits		47,943			(571,735	)
Proceeds from sale of stock, net		—			586,414
Purchase of ESOP shares, net		—			(56,163	)
Purchase of Stock Award shares, net		(3,565	)		—
Purchase of Treasury Stock		(6,706	)		—
Cash dividends paid to stockholders		(6,707	)		(2,462	)
Proceeds from FHLB Advances		75,800			323,600
Payments on FHLB Advances		(129,308	)		(27,785	)
Net increase (decrease) in Retail Repurchase Agreements		11,436			(6,256	)
Net cash (used) provided by financing activities		(11,107	)		245,613
Net increase (decrease) in cash and cash equivalents		32,195			(13,015	)
Cash and cash equivalents at beginning of period		175,852			264,855
Cash and cash equivalents at end of period	$	208,047		$	251,840
Cash paid during the period for:
Interest on deposits and borrowings	$	25,030		$	29,005
Income taxes	$	9,636		$	10,861
Non cash investing activities:
Transfer of loans receivable to other real estate owned	$	121		$	1,834
Common stock contributed to The Provident Bank Foundation	$	—		$	19,200

See accompanying notes to unaudited consolidated financial statements.

6

PROVIDENT FINANCIAL SERVICES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization

On January 15, 2003, Provident Financial Services, Inc. (the “Company”) became the holding company for The Provident Bank (the “Bank”) in connection with the completion of the conversion of the Bank to a stock-chartered savings bank. The Company issued 59,618,300 shares of its common stock in a subscription offering to the Bank’s eligible depositors and the Bank’s Employee Stock Ownership Plan (“ESOP”). The ESOP acquired 576,634 shares of the Company’s common stock in the conversion and purchased an additional 4,192,830 shares of the Company’s common stock at an average price of $18.02 per share between January 16, 2003 and December 31, 2003.

The Company acquired 100% of the stock of the Bank in exchange for 50% of the net conversion proceeds of $586.4 million and retained the remaining net proceeds ($293.2 million) at the holding company level. Concurrent with the completion of the conversion, $4.8 million in cash and 1.92 million shares of common stock were contributed by the Company to The Provident Bank Foundation. This stock and cash contribution was recorded as a one-time $24.0 million expense in the first quarter of 2003 operating results, and an increase to capital stock and paid in capital was recorded for $19.2 million. The Company recorded a tax benefit of $8.4 million related to the contribution expense and a corresponding increase to its deferred tax assets in the first quarter of 2003.

The contribution of cash and common stock to The Provident Bank Foundation is tax deductible, subject to a limitation based on 10% of the Company’s annual taxable income. The Company is able to carry forward any unused portion of the deduction for five years following the year in which the contribution is made.

The Board of Directors declared a quarterly cash dividend of $0.06 per common share on July 22, 2004. The dividend is payable on August 31, 2004 to shareholders of record as of August 13, 2004.

On July 22, 2004, the Company’s Board of Directors authorized the expansion of the Company’s stock repurchase program through the purchase of up to an additional 927,033 shares for a total stock repurchase program of 3,966,663 shares, or approximately 5% of the Company’s outstanding shares of common stock. This additional authorization is in recognition of the issuance of additional shares in conjunction with the Company’s acquisition of First Sentinel Bancorp, Inc. (“First Sentinel”).

Note 2. Acquisitions

The Company completed the acquisition of First Sentinel and the merger of its wholly owned subsidiary, First Savings Bank, with and into the Bank, as of the close of business July 14, 2004. None of the financial information contained in this Quarterly Report on Form 10-Q contains any financial data of First Sentinel since the merger was completed subsequent to June 30, 2004. The Company will file updated Pro Forma Financial Statements as of June 30, 2004, within 75 days of the closing date of the merger.

Pursuant to the terms of the Agreement and Plan of Merger, 60% of First Sentinel’s common stock was converted into Provident common stock at an exchange rate of 1.092 Provident shares per each First Sentinel share and 40% was converted into $22.25 in cash for each First Sentinel share. The aggregate consideration paid in the merger consisted of $251.9 million in cash and 18,540,662 shares of the Company’s common stock. Shares of the Company’s common stock amounting to 199,945 shares issued in exchange for shares of First Sentinel common stock owned by the Company at the time of the merger were retired upon issuance.

First Sentinel stockholders who made a stock election for all or a portion of their shares of First Sentinel common stock received 1.092 shares of Provident common stock for each of their stock election shares. The cash consideration was oversubscribed. First Sentinel stockholders who made a cash election for all or a portion of their shares received the cash consideration of $22.25 per share for 63.4789465% of their cash election shares and 1.092 shares of Provident common stock for the remaining 36.5210535% of their cash election shares. First Sentinel stockholders who elected “No Preference” or who did not make a valid election received 1.092 shares of Provident common stock for each of their First Sentinel shares. No fractional shares of Provident common stock were issued. In lieu of such fractional shares, Provident paid cash at the rate of $17.01 per whole share.

7

Note 3. Summary of Significant Accounting Policies

A. Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Provident Financial Services, Inc. (the “Company”) and its wholly-owned subsidiary, The Provident Bank (the “Bank”).

The interim consolidated financial statements reflect all normal and recurring adjustments, which are, in the opinion of management, considered necessary for a fair presentation of the financial condition and results of operations for the periods presented. The results of operations for the three months and six months ended June 30, 2004 are not necessarily indicative of the results of operations that may be expected for all of 2004.

Certain information and note disclosures normally included in financial statements and prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission.

Certain prior period amounts have been reclassified to correspond with the current period presentations.

These unaudited consolidated financial statements should be read in conjunction with the December 31, 2003 Annual Report to Stockholders on Form 10-K.

B. Earnings per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations. The basic and diluted earnings per share for the six months ended June 30, 2003 is calculated by dividing the results of operations of $1,415,000 by the weighted average shares outstanding from January 15, 2003, the date the Bank completed its plan of conversion, through June 30, 2003.

	For Three Months Ended June 30,										For Six Months Ended June 30,
	2004					2003					2004					2003
	Income		Shares	Per Share Amount		Income		Shares	Per Share Amount		Income		Shares	Per Share Amount		Income		Shares	Per Share Amount
Net income (loss)	$	8,581				$	8,838				$	18,875				$	1,415
Basic earnings (loss) per share:
Income available to common stockholders	$	8,581	54,924,643	$	0.16	$	8,838	59,655	$	0.15	$	18,875	54,791,399	$	0.34	$	1,415	59,655	$	0.02
Effect of dilutive common stock equivalents			82										41
Dilutive earnings (loss) per share:
Income available to common stockholders	$	8,581	54,924,725	$	0.16	$	8,838	59,655	$	0.15	$	18,875	54,791,440	$	0.34	$	1,415	59,655	$	0.02

For the three months ended June 30, 2004, and for the six months ended June 30, 2004, anti-dilutive non-qualified stock options were 90,127 and 62,099 shares respectively. For the three months ended June 30, 2004, and for the six months ended June 30, 2004 anti-dilutive incentive stock options were 42,484 shares and 23,888 shares respectively.

8

Note 4. Comprehensive Income

For the three month periods ended June 30, 2004 and 2003, total comprehensive income (loss), representing net income plus or minus other items recorded directly in equity, such as the change in unrealized gains (losses) on securities available for sale amounted to ($4,702,000) and $6,081,000, respectively. For the six months ended June 30, 2004 and 2003, total comprehensive income (loss) was $10,305,000 and ($763,000), respectively.

Note 5. Loans and Allowance for Loan Losses

Loans receivable at June 30, 2004 (unaudited) and December 31, 2003 are summarized as follows (in thousands):

	June 30, 2004		December 31, 2003
Mortgage loans:
Residential	$	1,043,181	$	1,046,335
Commercial		453,027		449,092
Multifamily		86,680		90,552
Commercial construction		115,002		99,072
Total mortgage loans		1,697,890		1,685,051
Commercial loans		328,270		250,754
Consumer loans		348,371		299,278
Total other loans		676,641		550,032
Premium on purchased loans		10,662		5,411
Less: Discount on purchased loans		1,410		1,547
Less: Net deferred fees		2,081		1,580
	$	2,381,702	$	2,237,367

The activity in the allowance for loan losses for the three and six months ended June 30, 2004 and 2003

(in thousands):

	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
	(unaudited)						(unaudited)
Balance at beginning of period	$	20,620		$	21,016		$	20,631		$	20,986
Provision charged to operations		1,050			300			1,650			900
Loans charged off		(1,348	)		(1,422	)		(2,619	)		(2,153	)
Balance at end of period	$	20,920		$	21,517		$	20,920		$	21,517

Note 6. Deposits

Deposits at June 30, 2004 (unaudited) and December 31, 2003 are summarized as follows (in thousands):

	June 30, 2004		December 31, 2003
Savings deposits	$	997,373	$	987,877
Money market accounts		113,820		116,176
NOW accounts		334,694		329,997
Non-interest bearing deposits		367,050		328,815
Certificates of deposit		930,982		933,111
	$	2,743,919	$	2,695,976

9

Note 7. Components of Net Periodic Benefit Cost

The Bank has a noncontributory defined benefit pension plan covering all of its employees who have attained age 21 with at least one year of service. The plan was frozen on April 1, 2003. The plan provides for 100% vesting after five years of service. The plan’s assets are invested in group annuity contracts and investment funds managed by the Prudential Insurance Company and Allmerica Financial.

In addition to pension benefits, certain health care and life insurance benefits are made available to retired employees. The costs of such benefits are accrued based on actuarial assumptions from the date of hire to the date the employee is fully eligible to receive the benefits.

Net periodic benefit costs for the three months and six months ended June 30, 2003 and 2004 include the following components

(in thousands):

	Three months ended June 30,								Six months ended June 30,
	Pension Benefits					Other Postretirement Benefits			Pension Benefits					Other Postretirement Benefits
	2004			2003		2004	2003		2004			2003		2004	2003
Service Cost	$	0		480		141	122		$	0		880		282	244
Interest Cost		314		366		345	307			708		848		690	614
Expected return on plan assets		(461	)	(398	)	0	0			(879	)	(737	)	0	0
Amortization of Unrecognized Transitional Obligation		0		0		96	96			0		0		192	192
Amortization of prior service cost		0		171		0	0			0		190		0	0
Amortization of the net (gain) loss		(8	)	57		8	0			16		163		16	0
Net periodic benefit cost		(155	)	676		590	525			(155	)	1,344		1,180	1,050
Curtailment (gain)		0		0		0	(85	)		0		0		0	(170	)
Net benefit cost after curtailment	$	(155	)	676		590	440		$	(155	)	1,344		1,180	880

The Company previously disclosed in its financial statements for the year ended December 31, 2003 that it does not expect to contribute to its defined benefit pension plan in 2004. As of June 30, 2004, no contributions have been made.

The Net Periodic Benefit Cost for Pension Benefits for 2004 was calculated using the January 1, 2004 FAS No. 87 valuation results.

The estimated Net Periodic Benefit Cost for Other Postretirement Benefits for 2004 was calculated using the January 1, 2003 census data and the results of a December 31, 2003 valuation.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

Certain statements contained herein are not based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

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The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2004 AND DECEMBER 31, 2003

Total assets at June 30, 2004 increased $11.5 million or 0.27% to $4.296 billion compared to $4.285 billion at December 31, 2003. Increases in net loans, cash, cash equivalents and core deposits, were offset by decreases in investment securities, borrowings and securities available for sale.

Total loans at June 30, 2004 increased $144.3 million or 6.45% to $2.38 billion compared to $2.24 billion at December 31, 2003. Residential mortgage loans decreased $3.0 million or 0.29% to $1.043 billion for the six months ended June 30, 2004 compared to $1.046 billion at December 31, 2003. Residential mortgage loan originations totaled $70.2 million and residential mortgage loans purchased totaled $113.2 million at June 30, 2004. Residential mortgage loan payoffs totaled $76.1 million, excluding scheduled amortization. Residential mortgage loans sold totaled $74.6 million for the six-month period ended June 30, 2004. Commercial real estate loans, including multi-family and construction loans, increased $16.0 million or 2.50% to $654.7 million at June 30, 2004 compared to $638.7 million at December 31, 2003. Commercial loans increased $77.5 million or 30.91% to $328.3 million at June 30, 2004 compared to $250.8 million at December 31, 2003. Consumer loans increased $49.1 million or 16.4% to $348.4 million at June 30, 2004 compared to $299.3 million at December 31, 2003. In the third quarter of 2003, the Company began purchasing auto loans for its consumer loan portfolio. For the six months ended June 30, 2004, auto loans totaled $49.5 million or 14.22% of the total consumer loan portfolio. Retail loans, which consist of residential mortgages loans and consumer loans, such as fixed-rate home equity loans and lines of credit, totaled $1.39 billion and accounted for 58.73% of the loan portfolio at June 30, 2004 compared to $1.34 billion or 60.24% of the portfolio at December 31, 2003. Commercial loans, consisting of commercial real estate, multi-family, construction, and commercial and industrial loans, totaled $983.0 million, or 41.27% of the loan portfolio at June 30, 2004, compared to $889.5 million or 39.76% at December 31, 2003.

Total non-performing loans were $4.0 million at June 30, 2004 compared to $6.1 million at December 31, 2003 and $5.7 million at June 30, 2003. Non-performing assets were $4.0 million and $6.2 million at June 30, 2004 and December 31, 2003, respectively, compared to $7.5 million at June 30, 2003. Total non-performing loans as a percentage of total loans were 0.17% at June 30, 2004 compared to 0.27% at December 31, 2003 and 0.28% at June 30, 2003. The allowance for loan losses as a percentage of non-performing loans was 524.87% at June 30, 2004 compared to 336.67% at December 31, 2003 and 375.97% at June 30, 2003. The allowance for loan losses as a percentage of total loans was 0.88% at June 30, 2004 compared to 0.92% at December 31, 2003 and 1.06% at June 30, 2003.

The calculation of the allowance for loan losses is a critical accounting policy of the Company. Provisions for loan losses will continue to be based upon the assessment of the overall loan portfolio and the underlying collateral, trends in non-performing loans, current economic conditions and other relevant factors in order to maintain the allowance for loan losses at adequate levels to provide for estimated losses. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant judgment and short-term change. As part of the evaluation of the adequacy of the allowance for loan losses, each month a worksheet is prepared that categorizes the entire loan portfolio by certain risk characteristics including loan type and payment status. Loans with known potential losses are categorized separately. Potential loss factors are assigned to the risk rating categories based on the Company’s assessment of the potential risk inherent in each loan category. This worksheet is prepared, together with loan portfolio balances and delinquency reports, to evaluate the adequacy of the allowance for loan losses. Other key factors considered in this process are current real estate market conditions, changes in the trend of non-performing loans, the current state of the local, regional and national economy and loan portfolio growth.

The allowance for loan losses is maintained through provisions for loan losses that are charged to income. Losses on loans are charged against the allowance for loan losses when management believes the collection of the loan principal is unlikely. The

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provision for loan losses is established after considering the results of the review of delinquency and charge-off trends, the allowance for loan loss worksheet, the amount of the allowance for loan losses in relation to the total loan balance, loan portfolio growth, accounting principles generally accepted in the United States of America and regulatory guidance. This process has been applied consistently, and the Company has made minimal changes in the estimation methods and assumptions that have been used.

Investment securities held to maturity decreased $46.3 million or 8.95% to $471.5 million at June 30, 2004, compared to $517.8 million at December 31, 2003. Securities available for sale decreased $125.9 million or 10.93% to $1.0 billion at June 30, 2004 compared to $1.15 billion at December 31, 2003.

Cash and cash equivalents increased $32.2 million or 18.3% to $208.0 million at June 30, 2004 from $175.9 million at December 31, 2003. Short-term investments including federal funds sold increased $47.8 million or 68.61% to $117.4 million at June 30, 2004 from $69.6 million at December 31, 2003. Cash and due from banks decreased $15.6 million or 14.66% to $90.7 million at June 30, 2004 from $106.2 million at December 31, 2003.

Federal Home Loan Bank (“FHLB”) stock decreased $2.6 million or 7.60% to $32.0 million at June 30, 2004 from $34.6 million at December 31, 2003. This was due to a reduction in outstanding FHLB borrowings.

Bank owned life insurance increased $1.9 million or 2.71% to $73.4 million at June 30, 2004, compared to $71.5 million at December 31, 2003. This increase was due primarily to the increase in the cash surrender value of bank owned life insurance in the six months ended June 30, 2004. Other assets increased $8.6 million or 29.8% to $37.7 million at June 30, 2004 compared to $29.0 million at December 31, 2003. The increase in other assets is primarily attributable to an increase of $6.6 million in deferred tax assets.

Total deposits increased $47.9 million or 1.78% to $2.744 billion at June 30, 2004 from $2.696 billion at December 31, 2003. The largest increase was in demand deposit accounts, which increased $40.6 million to $815.6 million at June 30, 2004 from $775.0 million at December 31, 2003. Savings deposits increased $9.5 million or 0.96% to $997.4 million at June 30, 2004 compared to $987.9 million at December 31, 2003. Core deposits, which consist of all demand and savings deposits, represented 66.07% of total deposits at June 30, 2004 compared to 65.39% at December 31, 2003. Time deposits decreased $2.1 million or 0.23% to $931.0 million at June 30, 2004 from $933.1 million at December 31, 2003.

Total borrowed funds decreased $42.1 million or 5.71% to $694.3 million at June 30, 2004 from $736.3 million at December 31, 2003. Federal Home Loan Bank borrowings decreased $53.5 million or 7.74% to $638.2 million at June 30, 2004 compared to $691.7 million at December 31, 2003. Retail repurchase agreements totaled $56.1 million at June 30, 2004, an increase of $11.4 million or 25.61% compared to $44.7 million at December 31, 2003.

Total stockholders’ equity decreased $866,000 or 0.11% to $816.3 million at June 30, 2004 compared to $817.1 million at December 31, 2003. This decrease was primarily due to the allocation of ESOP shares of $1.6 million, a reduction in equity of $6.7 million due to the purchase of treasury stock, a decrease of $8.6 million in accumulated other comprehensive income and a decrease of $1.1 million due to the purchase of stock for the Stock Award Plan. This was offset by an increase of $12.2 million in retained earnings, and an increase of $1.7 million in additional paid in capital.

Liquidity and Capital Resources. The Company’s sources of funds are primarily from deposits, scheduled amortization of loans, loan repayments, scheduled maturities of investments and cash flows from mortgage-backed securities. Scheduled loan amortizations are fairly predictable sources of funds while loan and mortgage-backed securities prepayments and deposit flows are influenced by interest rates, local economic conditions and the competitive marketplace. Additional sources of liquidity that are available to the Company, should the need arise, are a $50.0 million overnight line of credit and a $50.0 million one month overnight repricing line of credit with the Federal Home Loan Bank of New York. As of June 30, 2004, the Company did not have any outstanding borrowings against the lines of credit as compared to $65.0 million in outstanding borrowings against the lines of credit at December 31, 2003.

Cash needs for the six months ended June 30, 2004 were provided for primarily from principal payments on loans and mortgage-backed securities, sales of residential mortgage loans, sales of mortgage-backed securities and increases in deposits. The cash was used primarily to fund loan originations, repay FHLB advances and for the purchase of treasury stock.

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As of June 30, 2004, the Bank exceeded all regulatory capital requirements as follows:

	As of June 30, 2004
	Capital
	Required				Actual
	Amount		Percent of Assets (1)		Amount		Percent of Assets (1)
	(Dollars in Thousands)
Regulatory Tier 1 leverage capital	$	164,180	4.00	%	$	558,190	13.60	%
Tier 1 risk-based capital		105,885	4.00			558,190	21.09
Total risk-based capital		211,769	8.00			579,191	21.88

(1) For purposes of calculating Regulatory Tier 1 leverage capital, assets are based on adjusted total leverage assets. In calculating Tier 1 risk-based capital and total risk-based capital, assets are based on total risk-weighted assets.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS AND THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

General. For the quarter ended June 30, 2004, the Company reported net income of $8.6 million compared to net income of $8.8 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004, the Company reported net income of $18.9 million compared to net income of $2.4 million for the same period in 2003. For the quarter ended June 30, 2004, the Company reported basic and diluted earnings per share of $0.16 compared to basic earnings per share of $0.15 for the quarter ended June 30, 2003. For the six months ended June 30, 2004 the Company reported basic and diluted earnings per share of $0.34 and basic earnings per share of $0.02 for the same period in 2003, which includes the results of operations from January 15, 2003. The Company did not have diluted shares for the three months and six months ended June 30, 2003.

Net Interest Income. Total net interest income decreased $485,000 or 1.47% to $32.5 million for the quarter ended June 30, 2004 compared to $33.0 million for the quarter ended June 30, 2003. Net interest income increased $1.7 million or 2.54% to $66.9 million for the six months ended June 30, 2004 compared to $65.2 million for the comparable period in 2003. Interest income for the second quarter of 2004 decreased $1.7 million or 3.67% to $45.3 million compared to $47.0 million for the comparable quarter in 2003. For the six months ended June 30, 2004 interest income decreased $1.9 million or 2.04% to $92.3 million compared to $94.2 million for the six month period ended June 30, 2003. Interest expense decreased $1.2 million or 8.83% to $12.8 million for the quarter ended June 30, 2004 compared to $14.1 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 interest expense decreased $3.6 million or 12.34% to $25.4 million compared to $29.0 million for the six months ended June 30, 2003. Net interest margin decreased 13 basis points to 3.28% for the quarter ended June 30, 2004 compared to 3.41% for the quarter ended June 30, 2003, and compared to the trailing quarter net interest margin decreased 22 basis points from 3.50%. The net interest margin decreased 7 basis points to 3.39% for the six months ended June 30, 2004 compared to 3.46% for the six months ended June 30, 2003. The average yield on interest-earning assets decreased 28 basis points to 4.58% for the quarter ended June 30, 2004 compared to 4.86% for the comparable quarter in 2003, primarily due to the reinvestment of cash flows from loan and mortgage backed securities prepayments in lower yielding loans and investments. Compared to the trailing quarter, the yield on interest-earning assets decreased 21 basis points to 4.58% from 4.79%. Contributing to the decline in the yield on interest earning assets was a decrease in the yield on the available for sale portfolio of 37 basis points as a result of a shift into lower yielding short term investments, including U.S. Treasury Bills, in preparation for the payment of the cash portion of the acquisition for First Sentinel. Another factor in the decline of interest earning asset yields was a reduction of 89 basis points in the yield on the commercial loan portfolio, due to an increase in short term floating rate loans. The average cost of interest-bearing liabilities decreased 24 basis points to 1.69% for the quarter ended June 30, 2004 compared to 1.93% for the quarter ended June 30, 2003, and compared to the trailing quarter the average cost of interest-bearing liabilities increased 2 basis points from 1.67%.

The average balance of net loans increased $305.5 million or 15.39% to $2.29 billion for the quarter ended June 30, 2004 compared to $1.99 billion for the comparable quarter in 2003. Income on all loans secured by real estate increased $2.7 million

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or 13.09% to $23.5 million for the three months ended June 30, 2004 compared to $20.8 million for the three months ended June 30, 2003. For the six months ended June 30, 2004 income on all loans secured by real estate increased $5.1 million or 12.12% to $47.3 million compared to $42.2 million for the six months ended June 30, 2003. Interest income on commercial loans decreased $1.8 million or 32.27% to $3.7 million for the quarter ended June 30, 2004 compared to $5.5 million for the quarter ended June 30, 2003. Interest income on commercial loans for the six months ended June 30, 2004 decreased $4.0 million or 36.46% to $7.0 million compared to $11.1 million for the six months ended June 30, 2003. Commercial loan income for the quarter ended June 30, 2003 included $2.3 million in mortgage warehouse interest income. The Company sold substantially all of its mortgage warehouse loans in the fourth quarter of 2003 and the proceeds were reinvested in residential mortgage loans. Consumer loan interest income increased $184,000 or 4.02% to $4.8 million for the quarter ended June 30, 2004 compared to $4.6 million for the quarter ended June 30, 2003.

Interest income on investment securities held to maturity decreased $281,000 or 5.78% to $4.6 million for the quarter ended June 30, 2004 compared to $4.9 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 interest income on investment securities held to maturity increased $1.2 million or 13.99% to $9.7 million compared to $8.5 million for the six months ended June 30, 2003. Interest income on securities available for sale decreased $2.4 million or 22.24% to $8.3 million for the quarter ended June 30, 2004 compared to $10.7 million at June 30, 2003. For the six months ended June 30, 2004, interest income on securities available for sale decreased $3.9 million or 17.80% to $18.2 million compared to $22.1 million for the six months ended June 30, 2003. The increase in income on securities held to maturity for the six months ended June 30, 2004, was primarily attributable to an increase in the average balance of $97.1 million or 23.82% to $504.9 million at June 30, 2004 compared to $407.8 million at June 30, 2003. The decrease in interest income on securities available for sale for the six months ended June 30, 2004, was primarily attributable to a decrease in the average balances of $199.0 million or 15.95% to $1.05 billion at June 30, 2004 compared to $1.25 billion at June 30, 2003.

The average balance of core deposit accounts increased $139.9 million or 8.59% to $1.77 billion for the quarter ended June 30, 2004 compared to $1.63 billion for the quarter ended June 30, 2003. Core deposit accounts consist of all demand deposit and savings accounts. Average time deposit account balances decreased $68.9 million or 6.85% to $937.9 million for the quarter ended June 30, 2004 compared to $1.01 billion for the comparable quarter in 2003. Average borrowings increased $113.2 million or 19.50% to $693.5 million for the quarter ended June 30, 2004 compared to $580.4 million for the quarter ended June 30, 2003. Interest paid on deposit accounts decreased $2.1 million or 20.79% to $7.9 million for the quarter ended June 30, 2004 compared to $10.0 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 interest paid on deposit accounts decreased $6.4 million or 28.72% to $15.8 million compared to $22.2 million for the six months ended June 30, 2003. Maturing certificates of deposit continued to renew at lower current interest rates. The decrease in interest paid on deposit accounts can be attributed to the decrease in core deposit account rates and the continued decrease in rates on time deposits. Interest paid on borrowed funds increased $841,000 or 20.80% to $4.9 million for the quarter ended June 30, 2004 from $4.0 million for the quarter ended June 30, 2003. Interest paid on borrowed funds for the six months ended June 30, 2004 increased $2.8 million or 40.99% to $9.6 million compared to $6.8 million in the prior period. This increase in interest expense is attributable to the increase in borrowings used to fund commercial real estate loans and leverage investment transactions.

Provision for Loan Losses. The Company establishes provisions for loan losses, which are charged to income, in order to maintain the allowance for loan losses at a level management considers adequate to absorb probable incurred credit losses in the loan portfolio. In determining the level of the allowance for loan losses, management considers past and current loss experiences, evaluation of real estate collateral, current economic conditions, volume and type of lending, adverse situations that may affect a borrower’s ability to repay the loan and the levels of non-performing and other classified loans. The amount of the allowance is based on estimates, and the ultimate losses may vary from such estimates as more information becomes available or events change. Management assesses the allowance for loan losses on a quarterly basis and makes provisions for loan losses in order to maintain the adequacy of the allowance.

The provision for loan losses for the quarter ended June 30, 2004 was $1.1 million as compared to $300,000 for the quarter ended June 30, 2003. For the six months ended June 30, 2004 the loan loss provision was $1.7 million as compared to $900,000 for the same period in 2003. The increase in the provision for loan losses was primarily due to significant growth in the loan portfolio. Net loans at June 30, 2004 were $2.36 billion compared to $2.01 billion at June 30, 2003, an increase of $354.2 million or 17.65%. The Company had net charge-offs for the quarter ended June 30, 2004 of $750,000 compared to net recoveries of $201,000 for the quarter ended June 30, 2003. For the six months ended June 30, 2004 net charge-offs were $1.4 million compared to net charge-offs of $369,000 at June 30, 2003. The allowance for loan losses was $20.9 million or 0.88% of total loans at June 30, 2004 compared to $21.5 million or 1.06% of total loans at June 30, 2003 and $20.6 million or 0.92% of total loans at December 31, 2003. At June 30, 2004, the allowance for loan losses as a percentage of non-performing loans increased to 524.84% from 375.97% at June 30, 2003 and 336.67% at December 31, 2003.

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Non-Interest Income. Non-interest income increased $1.6 million or 30.92% to $6.7 million for the quarter ended June 30, 2004 compared to $5.1 million for the comparable period in 2003. For the six months ended June 30, 2004 non-interest income increased $3.8 million or 35.50% to $14.37 million, compared to $10.61 million for the comparable period in 2003. This increase is attributable to an increase of $1.8 million in fee and commission income, a $739,000 increase in gains on securities sales, and a $1.1 million increase in other income. Fees on retail accounts increased $1.2 million or 31.58% to $4.81 million for the quarter ended June 30, 2004 compared to $3.7 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 fees on retail accounts increased $1.7 million or 22.40% to $9.44 million compared to $7.7 million for the six months ended June 30, 2003. This increase is primarily attributable to fee income associated with overdraft privilege on retail checking accounts. Other income increased $115,000 or 29.19% to $509,000 for the quarter ended June 30, 2004, compared to $394,000 in the comparable quarter in 2003. For the six months ended June 30, 2004 other income increased $1.07 million or 112.43% to $2.02 million compared to $949,000 for the same period in 2003. During the six months ended June 30, 2004, the Company sold $74.6 million of twenty and thirty year fixed-rate residential mortgage loans as part of an ongoing strategy to reduce interest rate risk. For the six months ended June 30, 2004, the Company recorded gains of $1.3 million on the sale of residential mortgage loans compared to gains of $577,000 for the same period in 2003. Proceeds from the sale of loans and mortgage-backed securities were used in the quarter ended March 31, 2004 to reduce short-term borrowings and reposition the balance sheet.

Non-Interest Expense. Non-interest expense increased $1.4 million or 5.59% to $26.1 million for the quarter ended June 30, 2004 compared to $24.7 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 non-interest expense decreased $19.5 million or 26.98% to $52.7 million from $72.2 million for the comparable time period in 2003. The decrease in non-interest expense for the six months ended June 30, 2004 is primarily due to the one-time expense associated with the $24 million contribution to The Provident Bank Foundation that was recorded in the first quarter of 2003. Salary and benefit expense increased $1.5 million or 11.51% to $14.1 million for the quarter ended June 30, 2004 compared to $12.6 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 salary and benefit expense increased $3.84 million or 15.56% to $28.5 million from $24.7 million for the six months ended June 30, 2003. This increase is primarily attributable to expenses related to stock-based benefit plans and $1.2 million in termination benefits. Expenses associated with the employee stock ownership plan amounted to $1.46 million for the six months ended June 30, 2004 compared to $1.23 million for the six months ended June 30, 2003. Stock awards plan expense in the amount of $2.56 million and stock option plan expense in the amount of $1.82 million were recorded in the six months ended June 30, 2004. There were no expenses associated with these plans in the comparable period in 2003. The Company has adopted the fair value based method, SFAS No. 123 “Accounting for Stock Based Compensation” to recognize compensation expense on all outstanding stock option awards from the time of grant. Other operating expenses decreased $954,000 or 18.72% to $4.1 million for the quarter ended June 30, 2004 compared to $5.1 million for the quarter ended June 30, 2003. For the six months ended June 30, 2004 other operating expenses decreased $878,000 or 9.13% to $8.7 million compared to $9.6 million at June 30, 2003. Advertising and promotion expense increased $806,000 or 96.53% to $1.64 million for the quarter ended June 30, 2004 compared to $835,000 for the quarter ended June 30, 2003. Advertising and promotion expense for the six months ended June 30, 2004 increased $1.6 million or 104.02% to $3.0 million compared to $1.49 million for the six months ended June 30, 2003. The increase in advertising expense is primarily attributable to small business lending and core deposit product promotions as part of the Company’s strategy to rebalance the composition of the loan portfolio and expand customer relationships.

Income Tax Expense. Income tax expense was $3.5 million for the quarter ended June 30, 2004, resulting in an effective tax rate of 28.99%, compared to $4.3 million for the quarter ended June 30, 2003, resulting in an effective tax rate of 32.61%. Income tax expense was $8.0 million for the six months ended June 30, 2004, resulting in an effective tax rate of 29.77%, compared to $326,000 for the six months ended June 30, 2003, resulting in an effective tax rate of 11.98%. The decrease in the effective tax rate was attributable to the income tax benefit in the first quarter of 2003 due to the pretax loss that was recorded as a result of the contribution to the charitable foundation.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Qualitative Analysis. Interest rate risk is the exposure of a Bank’s current and future earnings and capital arising from adverse movements in interest rates. The Company’s most significant risk exposure is interest rate risk. The guidelines of the Company’s interest rate risk policy seek to limit the exposure to changes in interest rates that affect the underlying economic

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value of assets and liabilities, earnings and capital. To minimize interest rate risk, twenty and thirty year fixed-rate mortgage loans may be sold at origination. Commercial real estate loans generally have interest rates that reset in five years, and other commercial loans such as construction loans and commercial lines of credit reset with changes in the prime rate, the federal funds rate or LIBOR. Investment securities purchases generally have maturities of five years or less, and mortgage-backed securities have weighted average lives between three and five years.

The Asset/Liability Committee meets on a monthly basis to review the impact of interest rate changes on net interest income, net interest margin, net income and the economic value of equity. The Asset/Liability Committee reviews a variety of strategies that project changes in asset or liability mix, various interest rate scenarios and the impact of those changes on projected net interest income and net income.

The Company’s strategy for liabilities has been to maintain a stable core-funding base by focusing on core deposit account acquisition and increasing products and services per household. A consistent focus on core deposit accounts has led to a shift in the funding base to less interest rate sensitive liabilities. The Company’s ability to retain maturing certificate of deposit accounts is the result of its strategy to remain competitively priced within its marketplace, typically within the upper quartile of rates offered by its competitors. Pricing strategy may vary depending upon current funding needs and the ability of the Company to fund operations through alternative sources, primarily by accessing short-term lines of credit with the Federal Home Loan Bank during periods of pricing dislocation.

Quantitative Analysis. Current and future sensitivity to changes in interest rates are measured through the use of balance sheet and income simulation models. The analyses capture changes in net interest income using flat rates as a base, a most likely rate forecast and rising and declining interest rate forecasts. Changes in net interest income and net income for the forecast period, generally twelve to twenty-four months, are measured and compared to limits for acceptable change.

The following sets forth the results of a twelve month net interest income projection model as of June 30, 2004:

Change in Interest Rates in Basis Points (Rate Shock)	Net Interest Income
	Amount ($)		Change ($)			Change (%)
	(Dollars in thousands)
-100	$	154,073	$	7,261		4.95	%
Static		146,812		—		—
+100		135,408		(11,404	)	(7.77	)
+200		123,563		(23,250	)	(15.84	)
+300		111,227		(35,585	)	(24.24	)

The above table indicates that as of June 30, 2004, in the event of an immediate and sustained 200 basis point increase in interest rates, based on a twelve month forward projection, net interest income would decrease 15.84% or $23.3 million. In the event of a 100 basis point decrease in interest rates, net interest income is projected to increase 4.95% or $7.3 million.

Another measure of interest rate sensitivity is to model changes in economic value of equity through the use of immediate and sustained interest rate shocks. The following table illustrates the result of the economic value of equity model as of

June 30, 2004:

Change in Interest Rates (Basis Points)	Present Value of Equity							Present Value of Equity as Percent of Present Value of Assets
	Dollar Amount		Dollar Change			Percent Change		Present Value Ratio		Percent Change
	(Dollars in thousands)
-100	$	990,171	$	69,129		7.51	%	22.06	%	5.31	%
Flat		921,042		—		—		20.95		—
+100		854,565		(66,477	)	(7.22	)	19.83		(5.32	)
+200		786,538		(134,504	)	(14.60	)	18.64		(11.02	)
+300		732,553		(188,489	)	(20.46	)	17.67		(15.64	)

The above table indicates that as of June 30, 2004, in the event of an immediate and sustained 200 basis point increase in interest rates, the present value of equity is projected to decrease 14.60% or $134.5 million. If rates were to decrease 100 basis points, the model forecasts a 7.51% or $69.1 million increase in the present value of equity.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes in net interest income requires the making of certain assumptions regarding prepayment and deposit decay rates, which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. While the Company believes such assumptions to be reasonable, there can be no assurance that assumed prepayment rates and decay rates will approximate actual future loan prepayment and deposit withdrawal activity. Moreover, the net interest income table presented assumes that the composition of the Company’s interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the net interest income table provides an indication of the Company’s interest rate risk exposure at a particular point in time, such measurement is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on the Company’s net interest income and will differ from actual results.

Item 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were evaluated at the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. There has been no change in the Company’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various legal actions and claims arising in the normal course of business. In the opinion of management, these legal actions and claims are not expected to have a material adverse impact on the Company’s financial condition and results of operations.

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Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares (or units) Purchased	(b) Average Price Paid per Share (or Unit)		(c)Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs (1)
April 1, 2004 through April 30, 2004	0	$	0	0	2,775,662
May 1, 2004 through May 31, 2004	85,000		18.09	85,000	2,690,662
June 1, 2004 through June 30, 2004	0		0	0	2,690,662
Total	85,000	$	18.09	85,000

(1) On January 22, 2004, the Company’s Board of Directors approved the purchase of up to 3,039,630 shares

of its common stock under a general repurchase program. The program does not have an expiration date.

On July 22, 2004, the Company’s Board of Directors authorized the expansion of the Company’s stock repurchase program through the purchase of up to an additional 927,033 shares for a total stock repurchase program of 3,966,663 shares

Item 3. Defaults Upon Senior Securities.

Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders.

The Annual Meeting of Stockholders was held on June 23, 2004. The matters considered and voted on by the Company’s stockholders at the annual meeting and the vote of the stockholders were as follows:

Matter 1. The approval of the Agreement and Plan of Merger, dated as of December 19, 2003, by and between the Company and First Sentinel Bancorp, Inc. and all matters contemplated in the merger agreement.

FOR	AGAINST	ABSTAIN	NON-VOTE
38,092,018	2,017,581	111,887	12,238,467

Matter 2. The election of directors, each for a three-year term.

Name	FOR	WITHHOLD
John G. Collins	50,566,661	1,893,292
Frank L. Fekete	50,663,642	1,796,311
David Leff	50,649,268	1,810,685
Paul M. Pantozzi	50,609,750	1,850,203

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Matter 3. The ratification of the appointment of KPMG LLP as the independent auditors of the Company for the year ending December 31, 2004.

FOR	AGAINST	ABSTAIN
51,372,923	819,702	267,308

Matter 4. The authorization of the Board of Directors of the Company, in its discretion, to vote upon other business as may properly come before the annual meeting, and any adjournment or postponement thereof, including without limitation, a motion to adjourn the annual meeting for the purpose of soliciting additional proxies in order to approve the merger agreement.

FOR	AGAINST	ABSTAIN
35,536,651	15,203,953	1,719,349

Item 5. Other Information.

None

Item 6. Exhibits and Reports on Form 8-K.

The following exhibits are filed herewith:

3.1     Certificate of Incorporation of Provident Financial Services, Inc.*

3.2     Bylaws of Provident Financial Services, Inc.

4.1     Form of Common Stock Certificate of Provident Financial Services, Inc.*

10.1     Form of Employment Agreement between Provident Financial Services, Inc. and certain executive officers*

10.2     Form of Change in Control Agreement between Provident Financial Services, Inc. and certain executive officers*

10.3     Amended and Restated Employee Savings Incentive Plan, as amended

10.4     Amendment No. 1 to the Employee Stock Ownership Plan

10.5     Amended and Restated Supplemental Executive Retirement Plan

10.6     Amended and Restated Supplemental Executive Savings Plan, as amended

10.7     Retirement Plan for the Board of Directors of The Provident Bank, as amended*

10.8     Amendment No. 1 and Amendment No. 2 to The Provident Bank Amended and Restated Board of Directors Voluntary Fee Deferral Plan

10.9     Voluntary Bonus Deferral Plan for the Chairman, as amended*

10.10     Voluntary Bonus Deferral Plan, as amended*

10.11     Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan, as amended

31.1     Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2     Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed as exhibits to Provident Financial Services, Inc.’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission. (Registration No. 333-98241).

(b) Reports on Form 8-K

On April 2, 2004, Provident Financial Services, Inc. filed a current report on Form 8-K that included a press release announcing that its Annual Meeting of Stockholders would be held on June 23, 2004 at 10:00 a.m. Eastern Time at the Hilton Newark Airport, 1170 Spring Street, Elizabeth, New Jersey. The record date for stockholders entitled to vote at the Annual Meeting was April 30, 2004.

On April 23, 2004, Provident Financial Services, Inc. filed a current report on Form 8-K that included a press release announcing its earnings for the quarter ended March 31, 2004.

On June 8, 2004, Provident Financial Services, Inc. filed a current report on Form 8-K that included a press release jointly issued with First Sentinel Bancorp, Inc. announcing that The Provident Bank received approval from the Federal Deposit Insurance Corporation and the New Jersey Department of Banking and Insurance to complete its merger with First Savings Bank.

On June 23, 2004, Provident Financial Services, Inc. (the “Company”) filed a current report on Form 8-K announcing that the Company would make a slide presentation at its 2004 Annual Meeting of Stockholders. The presentation discussed the Company’s current and historical performance and strategies.

On June 24, 2004, Provident Financial Services, Inc. filed a current report on Form 8-K that included a press release jointly issued with First Sentinel Bancorp, Inc. announcing annual meeting results, stockholder approval of the merger and receipt of final regulatory approval of the merger.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PROVIDENT FINANCIAL SERVICES, INC.
Date: August 6, 2004	By:	/s/ Paul M. Pantozzi
		Paul M. Pantozzi
		Chairman and Chief Executive Officer
Date: August 6, 2004	By:	/s/ Linda A. Niro
		Linda A. Niro
		Senior Vice President and Chief Financial Officer

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

PROVIDENT FINANCIAL SERVICES, INC.

ARTICLE I - STOCKHOLDERS

Section 1. Annual Meeting.

A. An annual meeting of the stockholders, for the election of Directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix, which date shall be within thirteen (13) months subsequent to the later of the date of incorporation or the last annual meeting of stockholders.

B. Nominations of persons for election to the Board of Directors and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s notice with respect to such meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of record of the Corporation who was a stockholder of record at the time of the giving of the notice provided for in the following paragraph, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this section.

C. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of the foregoing paragraph, (1) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (2) such business must be a proper matter for stockholder action under the General Corporation Law of the State of Delaware, (3) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice, as that term is defined in subclause (c)(iii) of this paragraph, such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation’s voting shares reasonably believed by such stockholder or beneficial holder to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice and (4) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this section. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 90 days prior to the date of the Corporation’s proxy materials for the preceding year’s annual meeting of stockholders (“Proxy Statement Date”); provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the 10^th day following the day on

which public announcement of the date of such meeting is first made. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person as would be required to be disclosed in solicitations of proxies for the elections of such nominees as directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such person’s written consent to serve as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the Corporation that are owned beneficially and of record by such stockholder and such beneficial owner and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the Corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation Notice”).

D. Notwithstanding anything in the second sentence of the third paragraph of this Section 1 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 85 days prior to the Proxy Statement Date, a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10^th day following the day on which such public announcement is first made by the Corporation.

E. Only persons nominated in accordance with the procedures set forth in this Section 1 shall be eligible to serve as directors and only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this section. The chairman of the meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defectively proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.

F. For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones New Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

G. Notwithstanding the foregoing provisions of this Section 1, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations

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thereunder with respect to matters set forth in this Section 1. Nothing in this Section 1 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

Section 2. Special Meetings.

A. Special meetings of the stockholders, other than those required by statute, may be called at any time by the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. The Board of Directors may postpone or reschedule any previously scheduled special meeting.

B. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of record of the Corporation who is a stockholder of record at the time of giving of notice provided for in this paragraph, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in Section 1 of this Article I. Nominations by stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders if the stockholder’s notice required by the third paragraph of Section 1 of this Article I shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90^th day prior to such special meeting or the 10^th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

C. Notwithstanding the foregoing provisions of this Section 2, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 2. Nothing in this Section 2 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

Section 3. Notice of Meetings.

Written notice of the place, date, and time of all meetings of the stockholders shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation of the Corporation).

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

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Section 4. Quorum.

At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy (after giving effect to the provisions of Article FOURTH of the Corporation’s Certificate of Incorporation), shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes is required, a majority of those represented in person or by proxy (after giving effect to the provisions of Article FOURTH of the Corporation’s Certificate of Incorporation) shall constitute a quorum entitled to take action with respect to that vote on that matter.

If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time.

If a notice of any adjourned special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held with those present in person or by proxy constituting a quorum, then except as otherwise required by law, those present in person or by proxy at such adjourned meeting shall constitute a quorum, and all matters shall be determined by a majority of the votes cast at such meeting.

Section 5. Organization.

Such person as the Board of Directors may have designated or, in the absence of such a person, the Chairman of the Board of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman appoints.

Section 6. Conduct of Business.

The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.

Section 7. Proxies and Voting.

At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting. Any facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph, may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

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All voting, including on the election of Directors but excepting where otherwise required by law or by the governing documents of the Corporation, may be made by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballot, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedures established for the meeting. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability.

All elections of Directors shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.

Section 8. Stock List.

A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting in the manner provided by law.

The stock list shall also be open to the examination of any such stockholder during the whole time of the meeting as provided by law. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

Section 9. Consent of Stockholders in Lieu of Meeting.

Subject to the rights of the holders of any class of series of preferred stock of the Corporation, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

ARTICLE II - BOARD OF DIRECTORS

Section 1. General Powers Number and Term of Office.

The business and affairs of the Corporation shall be under the direction of its Board of Directors. The number of Directors who shall constitute the Whole Board shall be such number as the Board of Directors shall from time to time have designated, except in the absence of such designation such number shall be eleven (11). The Board of Directors shall annually elect a Chairman of the Board from among its members who shall, when present, preside at its meetings.

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The Directors, other than those who may be elected by the holders of any class or series of Preferred Stock, shall be divided, with respect to the time for which they severally hold office, into three classes, with the term of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years, thereafter, with each Director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, Directors elected to succeed those Directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each Director to hold office until his or her successor shall have been duly elected and qualified.

Section 2. Vacancies and Newly Created Directorships.

Subject to the rights of the holders of any class or series of Preferred Stock, and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office (and not by stockholders), though less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such Director’s successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Board shall shorten the term of any incumbent Director.

Section 3. Regular Meetings.

Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all Directors. A notice of each regular meeting shall not be required.

Section 4. Special Meetings.

Special meetings of the Board of Directors may be called by one-third (1/3) of the Directors then in office (rounded up to the nearest whole number), by the Chairman of the Board or the Chief Executive Officer and shall be held at such place, on such date, and at such time as they, or he or she, shall fix. Notice of the place, date, and time of each such special meeting shall be given each Director by whom it is not waived by mailing written notice not less than five (5) days before the meeting or by telegraphing or telexing or by facsimile transmission or electronic transmission of the same not less than twenty-four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

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Section 5. Quorum.

At any meeting of the Board of Directors, a majority of the Whole Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.

Section 6. Participation in Meetings By Conference Telephone.

Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.

Section 7. Conduct of Business.

At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the Directors present, except as otherwise provided herein or required by law. Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic from if the minutes are maintained in electronic form.

Section 8. Powers.

The Board of Directors may, except as otherwise required by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including, without limiting the generality of the foregoing, the unqualified power:

(1) To declare dividends, from time to time in accordance with law;

(2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;

(3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith;

(4) To remove any Officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any Officer upon any other person for the time being;

(5) To confer upon any Officer of the Corporation the power to appoint, remove and suspend subordinate Officers, employees and agents;

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(6) To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for Directors, Officers, employees and agents of the Corporation and its subsidiaries as it may determine;

(7) To adopt from time to time such insurance, retirement, and other benefit plans for Directors, Officers, employees and agents of the Corporation and its subsidiaries as it may determine; and,

(8) To adopt from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation’s business and affairs.

Section 9. Compensation of Directors.

Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as Directors, including, without limitation, their services as members of committees of the Board of Directors.

Section 10. Qualification.

No director shall serve beyond the Annual Meeting of Stockholders following his attaining the age of seventy-two (72), regardless of whether or not his term has expired.

ARTICLE III - COMMITTEES

Section 1. Committees of the Board of Directors.

The Board of Directors, by a vote of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for these committees and any others provided for herein, elect a Director or Directors to serve as the member or members, designating, if it desires, other Directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

Section 2. Conduct of Business.

Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the members shall constitute a quorum unless the committee shall consist of one (1) or two (2) members, in which event one (1) member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic from if the minutes are maintained in electronic form.

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Section 3. Nominating Committee

The Board of Directors may appoint a Nominating Committee of the Board, consisting of not less than three (3) members. The Nominating Committee shall have authority (a) to review any nominations for election to the Board of Directors made by a stockholder of the Corporation pursuant to Section 6(c)(ii) of Article I of these Bylaws in order to determine compliance with such Bylaw and (b) to recommend to the Whole Board nominees for election to the Board of Directors to replace those Directors whose terms expire at the annual meeting of stockholders next ensuing.

ARTICLE IV - OFFICERS

Section 1. Generally.

(a) The Board of Directors as soon as may be practicable after the annual meeting of stockholders shall choose a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary and a Treasurer and from time to time may choose such other officers as it may deem proper. The Chairman of the Board shall be chosen from among the Directors. Any number of offices may be held by the same person.

(b) The term of office of all Officers shall be until the next annual election of Officers and until their respective successors are chosen but any Officer may be removed from office at any time by the affirmative vote of a majority of the authorized number of Directors then constituting the Board of Directors (without prejudice to contract rights under any employment agreement that may have been entered into).

(c) All Officers chosen by the Board of Directors shall have such powers and duties as generally pertain to their respective Offices, subject to the specific provisions of this ARTICLE IV. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof.

Section 2. Chairman of the Board of Directors.

The Chairman of the Board shall, subject to the provisions of these Bylaws and to the direction of the Board of Directors, serve in general executive capacity and unless the Board has designated another person, when present, shall preside at all meetings of the stockholders of the Corporation. The Chairman of the Board shall perform all duties and have all powers which are commonly incident to the office of Chairman of the Board or which are delegated to him or her by the Board of Directors. He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized.

Section 3. Chief Executive Officer.

The Chief Executive Officer shall have general responsibility for the management and control of the business and affairs of the Corporation and shall perform all duties and have all

9

powers which are commonly incident to the office of Chief Executive Officer or which are delegated to him or her by the Board of Directors. Subject to the direction of the Board of Directors, the Chief Executive Officer shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision of all of the other Officers (other than the Chairman of the Board), employees and agents of the Corporation. The Board shall determine the order of succession to the duties of the Chief Executive Officer.

Section 4. President.

The President shall perform all duties and have all powers which are commonly incident to the office of President and have such authority as, from time to time, may be delegated by the Chief Executive Officer or the Board.

Section 5. Vice Presidents.

The Vice President or Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them by the Board of Directors, the Chairman of the Board or the Chief Executive Officer. A Vice President or Vice Presidents may be designated as Executive Vice President or Senior Vice President.

Section 6. Secretary.

The Secretary or Assistant Secretary shall issue notices of meetings, shall keep their minutes, shall have charge of the seal and the corporate books, shall perform such other duties and exercise such other powers as are usually incident to such office and/or such other duties and powers as are properly assigned thereto by the Board of Directors, the Chairman of the Board or the Chief Executive Officer. Subject to the direction of the Board of Directors, the Secretary shall have the power to sign all stock certificates.

Section 7. Treasurer.

The Treasurer shall be the Comptroller of the Corporation and shall have the responsibility for maintaining the financial records of the Corporation. The Treasurer may be designated the Chief Financial Officer. He or she shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Treasurer shall also perform such other duties as the Board of Directors may from time to time prescribe. Subject to the direction of the Board of Directors, the Treasurer shall have the power to sign all stock certificates.

Section 8. Assistant Secretaries and Other Officers.

The Board of Directors may appoint one or more Assistant Secretaries and such other Officers who shall have such powers and shall perform such duties as are provided in these Bylaws or as may be assigned to them by the Board of Directors, the Chairman of the Board or the Chief Executive Officer.

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Section 9. Action with Respect to Securities of Other Corporations.

Unless otherwise directed by the Board of Directors, the Chief Executive Officer or any Officer of the Corporation authorized by the Chief Executive Officer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to, any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

ARTICLE V - STOCK

Section 1. Certificates of Stock.

Each stockholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the Chairman of the Board or the Chief Executive Officer, and by the Secretary or an Assistant Secretary, or any Treasurer or Assistant Treasurer, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile.

Section 2. Transfers of Stock.

Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of Article V of these Bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor.

Section 3. Record Date.

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the next day preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment or rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.

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A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 4. Lost, Stolen or Destroyed Certificates.

In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.

Section 5. Regulations.

The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.

ARTICLE VI - NOTICES

Section 1. Notices.

If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law.

Section 2. Waivers.

A written waiver of any notice, signed by a stockholder, Director, Officer, employee or agent, or waiver by electronic transmission by such person, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, Director, Officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver.

ARTICLE VII - MISCELLANEOUS

Section 1. Facsimile Signatures.

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

Section 2. Corporate Seal.

The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or an assistant to the Treasurer.

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Section 3. Reliance Upon Books, Reports and Records.

Each Director, each member of any committee designated by the Board of Directors, and each Officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its Officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such Director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 4. Fiscal Year.

The fiscal year of the Corporation shall end on December 31 of every year.

Section 5. Time Periods.

In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

ARTICLE VIII - AMENDMENTS

The Board of Directors may amend, alter or repeal these Bylaws at any meeting of the Board. The stockholders shall also have power to amend, alter or repeal these Bylaws at any meeting of stockholders provided notice of the proposed change was given in the notice of the meeting; provided, however, that, notwithstanding any other provisions of the Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the voting stock required by law, the Certificate of Incorporation, any Preferred Stock Designation or these Bylaws, the affirmative votes of the holders of at least 80% of the voting power of all the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of Directors (after giving effect to the provisions of Article FOURTH), voting together as a single class, shall be required to alter, amend or repeal any provisions of these Bylaws.

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EX-10.3

Exhibit 10.3

THE PROVIDENT BANK

EMPLOYEE SAVINGS INCENTIVE PLAN

As Amended and Restated

Effective April 1, 2003

With Certain Provisions Effective As Specified

TABLE OF CONTENTS

	Page
PREAMBLE	1
ARTICLE I - DEFINITIONS	2
ARTICLE II - PARTICIPATION	9
ARTICLE III - SERVICE	12
ARTICLE IV - CONTRIBUTIONS	15
ARTICLE V - LIMITATIONS ON CONTRIBUTIONS	20
ARTICLE VI - ACCOUNTS OF PARTICIPANTS – INVESTMENTS	25
ARTICLE VII - BENEFITS	28
ARTICLE VIII - WITHDRAWALS DURING EMPLOYMENT	32
ARTICLE IX - DESIGNATION OF BENEFICIARIES	37
ARTICLE X - MANAGEMENT OF TRUST FUND	38
ARTICLE XI - ADMINISTRATION OF THE PLAN	39
ARTICLE XII - TERMINATION OF EMPLOYER PARTICIPATION	43
ARTICLE XIII - AMENDMENT OR TERMINATION OF THE PLAN AND TRUST	44
ARTICLE XIV - TOP HEAVY PROVISIONS	46
ARTICLE XV - GENERAL LIMITATIONS AND PROVISIONS	51

i

THE PROVIDENT BANK

EMPLOYEE SAVINGS INCENTIVE PLAN

As Amended and Restated Effective April 1, 2003

with Certain Provisions Effective as Specified

PREAMBLE

The Provident Bank (the “Principal Employer”) established The Provident Bank Employee Savings Incentive Plan (the “Plan”) for the benefit of its employees effective as of January 1, 1975. The Plan has been amended from time to time thereafter.

Effective as of April 1, 2003, the Principal Employer has amended and restated the Plan as set forth herein. The terms of the Plan, as so amended and restated, are intended to continue to qualify as a profit sharing trust which meets the qualification and tax exemption requirements of Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended, and any other provisions of applicable law. In addition, the amended and restated Plan reflects certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). It is intended as good faith compliance with EGTRRA and is to be construed in accordance with EGTRRA and guidance issued thereunder. The amended and restated Plan also reflects the addition of a cash or deferred arrangement within the meaning of Code Section 401(k), effective as of April 1, 2003.

Unless otherwise expressly provided herein, or as may be required by applicable law, the rights of any person whose employment terminated or who retired prior to the effective date of this amendment and restatement, or the effective date of any particular provision, as provided herein, shall be determined solely under the terms of the Plan as in effect on the date of his Termination of Employment or retirement, unless such person is thereafter reemployed and again becomes a Participant. Notwithstanding the foregoing, solely to the extent required by applicable law, or specifically set forth in the Plan the provisions of this amended and restated Plan shall apply to a person described in the preceding sentence with respect to periods on and after its effective date as stated herein, or the effective date of any particular provision.

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ARTICLE I

DEFINITIONS

The words and phrases used herein shall have the following meanings unless a different meaning is plainly required by the context:

1.1 “Account” means the account established and maintained under the Plan on behalf of a Participant pursuant to Section 6.1, including, as applicable, his After Elective Account, Matching Account, and Rollover Account.

1.2 “Actual Contribution Percentage” means, separately with respect to Participants who are Highly Compensated Employees and all other Participants, the average, calculated to the nearest hundredth of a percentage point, of the Actual Contribution Ratios of each Participant in that group.

1.3 “Actual Contribution Ratio” means, for any Plan Year, with respect to any Participant, the ratio, calculated to the nearest hundredth of a percentage point, of (a) the amount of Matching Contributions made pursuant to Section 4.3 on behalf of such Participant for the Plan Year (including any Elective Contributions or Compliance Contributions which are treated as Matching Contributions pursuant to Section 5.3(c)) to (b) the Participant’s Compensation for that Plan Year (determined without regard to the exclusions for commissions and bonuses).

1.4 “Actual Deferral Percentage” means, separately with respect to Highly Compensated Employees who are Participants and all other Participants, the average, calculated to the nearest hundredth of a percentage point, of the Actual Deferral Ratios of each Participant in that group.

1.5 “Actual Deferral Ratio” means, for any Plan Year, with respect to any Participant, the ratio, calculated to the nearest hundredth of a percentage point, of (a) the amount of Elective Contributions made on behalf of such Participant pursuant to Section 4.1 for the Plan Year (including any Matching Contributions or Compliance Contributions which are treated as Elective Contributions for such Plan Year pursuant to Section 5.2(b)) to (b) the Participant’s Compensation for that Plan Year (determined without regard to the exclusions for commissions and bonuses).

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1.6 “Administrator” means the person or other entity provided for in Article XI. To the extent that no one is designated as the Administrator pursuant to Article XI, the Principal Employer shall be the Administrator. For purposes of ERISA, the Administrator shall be the named fiduciary of the Plan with respect to the matters for which it is hereby made responsible under the Plan, and shall be the administrator of the Plan for purposes of ERISA.

1.7 “After-Tax Account” means the means the portion of a Participant’s Account attributable to his After-Tax Contributions, as adjusted for investment gain and loss.

1.8 “After-Tax Contributions” means the voluntary after tax contributions made by the Participant to the Plan on or before April 1, 2003.

1.9 “Applicable Law” References to applicable law, whether or not capitalized, shall mean the Code, ERISA and any other law which governs the operation of this Plan, and any regulations, rulings or other administrative or judicial clarifications thereunder.

1.10 “Beneficiary” means the person or persons entitled to receive a distribution under the Plan in the event of the Participant’s death, as provided in Article IX.

1.11 “Break in Service” means the period described in Section 3.2.

1.12 “Code” means the Internal Revenue Code of 1986, as it now exists and as it may from time to time be amended. Any reference to a section of the Code shall include that section and any predecessor or successor citation, if applicable.

1.13 “Compensation” means, with respect to any Plan Year, an Employee’s wages as defined in Code Section 3401(a) for such Plan Year, including overtime, but, except as otherwise provided herein, excluding bonuses, and commissions, reimbursements or other expense allowances, realized exercised gains from the sale of stock options, car allowances, tuition reimbursement, other fringe benefits (cash and noncash), moving expenses, other allowances or cash/gift award, welfare benefits and contributions to any pension or profit sharing plan or any other forms of deferred compensation where payment is made after the Employee ceases to render employment services to an Employer. For purposes of the preceding sentence, commissions paid to dedicated salespeople for any Plan Year shall not be excluded from

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Compensation to the extent that such excluded amounts, together with all other amounts treated as Compensation, are less than the dollar limit in effect for such Plan Year under Code Section 414(q)(1)(B)(i) (as such limit applies to compensation earned in the preceding Plan Year). Compensation shall include amounts contributed on behalf of a Participant to any flexible benefits plan established by the Employer under Code Section 125 and amounts contributed to purchase qualified transportation fringe benefits under Code Section 132(f)(4). Compensation shall also include those amounts that would otherwise reduce a Participant’s Compensation pursuant to an election made under Section 4.1. Compensation for any Plan Year shall exclude any portion of a Participant’s annual Compensation that is in excess of the applicable dollar limit under Code Section 401(a)(17) for such Plan Year (adjusted as provided under said Section). Remuneration paid to an Employee pursuant to a collective bargaining agreement shall be excluded unless the agreement provides for coverage of such Employee under this Plan.

1.14 “Compliance Contribution” means a contribution by the Employer under Section 4.4 that is treated as an Elective or Matching Contribution under Section 5.2(b) or 5.3(c).

1.15 “Elective Account” means the portion of a Participant’s Account attributable to his Elective Contributions, as adjusted for investment gain and loss.

1.16 “Elective Contributions” means the Elective Contributions made by the Participant pursuant to Section 4.1, and any Compliance Contribution made by the Employer pursuant to Section 4.4 that is treated as an Elective Contribution in accordance with Section 5.2(b).

1.17 “Eligible Employee” means any Employee of an Employer, excluding any employee who is included in a unit of employees covered by a collective bargaining agreement under which retirement benefits have been the subject of good faith bargaining, but which does not provide for his participation in the Plan.

1.18 “Employee” means any person employed by an Employer or a Related Employer, including a self employed person who is treated as an employee under Code Section 401(c)(1), but excluding any person who is considered a leased employee within the meaning of Code Section 414(n)(2). For purposes of the preceding sentence, the term “leased employee” means any person (other than an employee of the Employer) who pursuant to an agreement between the Employer and any other person has performed services for the Employer or any Related

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Employer on a substantially full-time basis for a period of at least one year, and such services are performed under the Employer’s primary direction or control. Any person who performs services for the Employer or Related Employer solely as a consultant or any other type of independent contractor shall not be considered to be employed by such Employer or Related Employer.

1.19 “Employer” means the Principal Employer or any Related Employer which, with the consent of the Principal Employer, adopts the Plan and Trust Fund by appropriate action and makes participation under the Plan available to its Employees in the manner and to the extent permitted by the Principal Employer. Any Employer which adopts the Plan shall be deemed thereby to appoint the Principal Employer, the Administrator and the Trustee its exclusive agents to exercise on its behalf all of the power and authority conferred by the Plan or by the Trust Fund and shall make its allocable contributions to the Plan. The authority of the Principal Employer, the Administrator and the Trustee to act as such agents shall continue until the Plan is terminated as to such Employer and the relevant Trust Fund assets have been distributed by the Trustee as provided in Article XIII.

1.20 “Employer Contributions” means the Matching Contributions made by an Employer pursuant to Section 4.3.

1.21 “Employer Stock” means stock or other permitted securities of the Employer or a Related Employer that constitute “qualifying employer securities”, as defined in ERISA.

1.22 “Employer Stock Fund” means a separate investment fund established in accordance with Section 6.2(b) to invest Employer Stock.

1.23 “Employment Commencement Date” means the first day on which an Employee completes an Hour of Service.

1.24 “ERISA” means the Employee Retirement Income Security Act of 1974, as it now exists and as it may be amended from time to time.

1.25 “Highly Compensated Employee” means:

(a) any Employee who, at any time during the current or preceding Plan Year, was a 5% owner of the Employer or a Related Employer (as defined in Code Section 416(i));

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(b) any Employee who during the preceding Plan Year received more than $85,000 (adjusted at the same time and in the same manner as under Code Section 415(d)) in annual Compensation from an Employer or a Related Employer, and

For purposes of this definition, “Compensation” shall mean Compensation as defined in Code Section 415(c)(3).

1.26 “Hour of Service” means an hour for which an individual is directly or indirectly paid or entitled to payment by an Employer or Related Employer for the performance of services (or would be so paid or entitled to payment but for an absence for Military Service), or for a period during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence (provided, that no more than 501 Hours of Service shall be credited with respect to a period during which no duties are performed). For the purposes of determining the Hours of Service credited to an individual, the provisions of Department of Labor Regulations Sections 2530.200b-2(b) and (c) are incorporated by reference.

1.27 “Matching Account” means the portion of a Participant’s Account attributable to Matching Contributions, as adjusted for investment gain and loss.

1.28 “Matching Contributions” means the contributions made by an Employer pursuant to Section 4.3 as a match to a Participant’s Elective or After-Tax Contributions and any Compliance Contribution made by the Employer pursuant to Section 4.4 that is treated as a Matching Contribution in accordance with Section 5.3(c).

1.29 “Normal Retirement Date” means the date the Participant attains age 65.

1.30 “Participant” means an Eligible Employee who participates in the Plan, as provided in Section 2.1. The term “Participant” shall include former Employees whose accounts have not yet been fully distributed.

1.31 “Period of Service” means the period described in Section 3.1

1.32 “Period of Severance” means the period described in Section 3.2

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1.33 “Plan” means The Provident Bank Employee Savings Incentive Plan, as set forth herein, and as it may from time to time hereafter be amended.

1.34 “Plan Year” means the 12 month period beginning on a December 31.

1.35 “Principal Employer” means The Provident Bank, or any successor thereto.

1.36 “Qualified Domestic Relations Order” means a domestic relations order which constitutes a qualified domestic relations order within the meaning of Code Section 414(p).

1.37 “Reemployment Commencement Date” means the first date that an Employee is credited with an Hour of Service following a Break in Service.

1.38 “Related Employer” means any business which is included in a controlled group of corporations (within the meaning of Code Section 414(b)), which includes the Principal Employer, any trade or business (whether or not incorporated) which is under common control with the Principal Employer (within the meaning of Code Section 414(c)), any organization included in the same affiliated service group (within the meaning of Code Section 414(m)) as the Principal Employer and any other entity required to be aggregated with the Principal Employer pursuant to regulations under Code Section 414(o); except that for purposes of applying the limitations of Section 5.6, Code Section 415(h) shall apply.

1.39 “Rollover Account” means the portion of a Participant’s Account attributable to Rollover Contributions, adjusted for investment gain and loss.

1.40 “Rollover Contribution” means any contribution made by a Participant in accordance with Section 4.6.

1.41 “Service” means employment with the Employer or a Related Employer.

1.42 “Termination of Employment” or words of similar import means the termination of an Employee’s employment with an Employer or a Related Employer under circumstances where he is no longer employed by an Employer or a Related Employer. Transfer of employment from an Employer or a Related Employer or vice versa, shall not constitute a Termination of Employment.

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1.43 “Trust Fund” or “Fund” means the Trust established pursuant to Article X to hold all of the assets of the Plan.

1.44 “Trustee” means the Trustee or Trustees named in the Trust Agreement referred to in Article X hereof and any additional or successor Trustee or Trustees from time to time acting as Trustee of the Trust Fund as provided in Section 10.2. “Trustee” shall be deemed to refer to the plural as well as the singular, except where the context otherwise requires.

1.45 “Valuation Date” means the last day of each Plan Year, and such other dates as the Administrator may prescribe. Notwithstanding the foregoing, if the Administrator determines that the valuation of any portion of the assets held under the Plan shall be done a daily basis, then each business day on which such assets may be traded shall be a Valuation Date.

1.46 “Vested Account” means that portion of a Participant’s Account that, on the particular date of determination, is vested under the provisions of Section 7.3.

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ARTICLE II

PARTICIPATION

2.1 Eligibility Requirements.

(a) Participants Immediately Prior to April 1, 2003 - Each person who was a Participant in the Plan, as in effect immediately prior to April 1, 2003, and continues as an Eligible Employee thereafter shall continue to be a Participant hereunder as of such date. Each other Eligible Employee shall become a Participant of the Plan in accordance with paragraph (b) below.

(b) General Eligibility - An Employee who is not described in (a) above, shall, be eligible to become a Participant as of the first day of the calendar quarter on which:

(i) he has completed a 12-consecutive month period beginning on his Employment Commencement Date (or Reemployment Commencement Date, if applicable), or any anniversary thereof, during which 12 month period he completes at least 1,000 Hours of Service.

(ii) he is at least age 18; and

(iii) he is then an Eligible Employee.

(c) Election to Make Elective Contributions –Each Participant shall be entitled to elect to become a Participant and to make Elective Contributions in accordance with Section 4.1 as of the first day of any calendar quarter on or after the date on which he becomes eligible to become a Participant in accordance with this Section 2.1, but not before April 1, 2003. Any election to make Elective Contributions in accordance with Section 4.1 shall be made pursuant to a valid and legally binding salary reduction agreement between the Participant and his Employer that includes any necessary payroll reduction authorization. Except as otherwise provided in Section 4.2, any such election shall be effective as of the date specified in such election. Any election made in accordance with this Section 2.1(c) shall remain effective until changed in accordance with Section 4.2.

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(d) Application - In addition to the election described in Section 2.1(c), an Eligible Employee who becomes a Participant in accordance with this Section 2.1 shall file with the Administrator such additional application materials as the Administrator deem appropriate, including beneficiary designations.

2.2 Termination of Participation.

A Participant shall not be entitled to make or receive contributions in accordance with Article IV with respect to any period on or after the date of Termination of Employment, death or during which he is not an Eligible Employee. However, a Participant shall continue to be a Participant for all other relevant purposes of the Plan (other than Article VIII) until such time as his Account is fully distributed to him or forfeited in accordance with the terms of the Plan.

2.3 Interruption in Service.

(a) Break in Service - If a Participant terminates employment and incurs a Break in Service before becoming vested in any Employer Contributions pursuant to Section 7.3, and if the Period of Severance constituting such Break in Service exceeds the greater of five years or his Period of Service prior to such Break in Service (excluding any Period of Service previously disregarded under the Break in Service provisions of the Plan), then, in the event he returns to Service, he shall be treated as a new Employee for all purposes of the Plan. In all other cases of a Termination of Employment accompanied by a Break in Service he shall be eligible to participate in the Plan as of the first day of the month coincident with or immediately following the date he again becomes an Eligible Employee.

(b) No Break in Service - If a Participant terminates employment and does not incur a Break in Service, he shall be eligible to resume full participation in the Plan immediately upon his return to employment as an Eligible Employee.

(c) No Termination of Employment - If a Participant ceases to be an Eligible Employee but does not terminate employment, his participation in the Plan shall be subject to the provisions of Section 2.2 during the period in which he is not an Eligible Employee and he shall be eligible to resume full participation in the Plan immediately upon resuming the status of an Eligible Employee.

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2.4 Qualified Military Service.

Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u). Furthermore, loan repayments may be suspended under this Plan as permitted under Code section 414(u)(4).

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ARTICLE III

SERVICE

3.1 Period of Service.

An Employee’s Period of Service shall be the period beginning on his Employment Commencement Date (or his Reemployment Commencement Date, if applicable) and ending on his next Severance Date, measured in full years and completed months. Notwithstanding the foregoing, a Participant’s Period of Service attributable to employment prior to the date of execution of this amendment and restatement shall not be less than the Period of Service standing to his credit under the terms of the Plan, as in effect immediately prior to the date of such execution.

3.2 Period of Severance.

An Employee’s Period of Severance shall be the period beginning on his Severance Date and ending on his Reemployment Commencement Date, measured in full years and completed months.

3.3 Severance Date.

An Employee generally incurs a Severance Date on the earlier of (i) his Termination of Employment because of discharge, resignation retirement or death, or (ii) the first anniversary of his absence from employment (with or without pay). Notwithstanding the foregoing, certain periods of absence from employment shall be included in an Employee’s Period of Service and shall not result in a Severance Date, as follows:

(a) If an Employee whose Severance Date would otherwise occur as a result of Termination of Employment because of discharge, resignation or retirement returns to the employ of an Employer or Related Company and completes an Hour of Service within one year of such Termination of Employment, he shall not be deemed to have incurred a Severance Date and the period between such Termination of Employment and the completion of such Hour of Service shall be treated as part of his Period of Service.

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(b) If an Employee who is absent from employment for reasons other than Termination of Employment because of discharge, resignation or retirement actually terminates employment for any such reason within one year of the date his original absence began and then returns to the employ of an Employer or Related Company and completes an Hour of Service before the anniversary of the inception of such original absence, he shall not be deemed to have incurred a Severance Date and the period from the inception of his original absence to the completion of such Hour of Service shall be included in his Period of Service.

(c) If an Employee terminates employment due to Disability and is eligible for benefits under an Employer sponsored long term disability benefits program, he shall not be deemed to have incurred a Severance Date and the period from the date of his Termination of Employment due to Disability to the cessation of his coverage under such program shall be included in his Period of Service.

3.4 Break in Service.

A Break in Service is a Period of Severance of not less than twelve (12) consecutive months (measured in full years and completed months). In the case of an individual who is absent from work for maternity or paternity reason (whether or not the employment relationship has terminated), the first twelve (12) consecutive months of such absence shall not be included in a Break in Service, but only to the extent required by applicable law. For purposes of this Section 3.4, an absence from work for maternity or paternity reasons means an absence from employment which commences and continues (a) by reason of the pregnancy of the individual, (b) by reason of the birth of a child of the individual, (c) by reason of the placement of a child with the individual in connection with the adoption of such child by the individual, or (d), for purposes of caring for such child for a period beginning immediately following such birth or placement.

3.5 Restoration of Eligibility and Service:

(a) In General - Except as otherwise provided in (b) below, if an Employee incurs a Break in Service and subsequently has a Reemployment Commencement Date, his Period of Service prior to the Break in Service shall be restored as soon as he has completed a Period of Service of one full year, such restoration to be effective as of his Reemployment Commencement Date. However, Service rendered after a Break in Service of at least five years will not be counted in determining a Participant’s vested interest under Section 7.3 in the portion of his Account attributable to Employer Contributions made with respect to periods prior to such Break in Service.

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(b) Exception - Periods of Service prior to a Break in Service shall not be restored upon an Employee’s Reemployment Commencement Date if the Employee had no vested interest in Employer Contributions under Section 7.3 at the time of the Break in Service, and the length of his Break in Service (as determined under Section 3.4 hereof) equals or exceeds the greater of (i) five years, or (ii) his Period of Service prior to such Break in Service.

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ARTICLE IV

CONTRIBUTIONS

4.1 Elective Contributions.

(a) Amount of Elective Contributions - Subject to the limitations of Article V, each Participant may elect to make an Elective Contribution of a percentage of his Compensation for each payroll period. Elective Contributions shall be made by payroll reduction in accordance with the salary reduction agreement described in Section 2.1(c) and shall only be permitted for those periods during which the Participant is an Eligible Employee and has a valid salary reduction agreement in effect.

(b) Catch Up Contributions – A Participant who will attain age 50 before the close of such Plan Year shall be eligible to make Elective Contributions in addition to those described in (a) above, to the extent that such contributions constitute catch up contributions in accordance with, and subject to the limitations of, Section 414(v) of the Code. Such catch up contributions shall not be taken into account for purposes of the limitations of Sections 5.1 through 5.6 and Article XIV, except as may be required by applicable law.

(c) Payment and Allocation of Elective Contributions - All Elective Contributions made by or on behalf of the Participant shall be transferred by the Employer to the Trust Fund and allocated to the Participant’s Elective Account as soon as administratively practicable after the end of the payroll period for which the payroll reduction is made, but not later than the time required by applicable law.

4.2 Change and Suspension of Elective Contributions.

(a) A Participant may suspend Elective Contributions as of any date and may change the rate of or resume Elective Contributions at such times as the Administrator may prescribe, by filing or completing a prescribed form or procedure required by the Administrator within such time prior to the effective date of the change as the Administrator shall prescribe. Any such change shall become effective in the first payroll period for which it can be administratively effected and shall remain in effect for all subsequent payroll periods until changed as permitted under this Section 4.2.

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(b) During any Plan Year, the Administrator may require a Participant to decrease or suspend Elective Contributions to the extent necessary to comply with the limitations of Article V for that Plan Year. The Participant’s contribution rate in effect prior to a required reduction shall resume as of the first payroll period in the next Plan Year, unless changed in accordance with Section 4.2(a).

4.3 Matching Contributions.

(a) Amount of Matching Contributions - Each Employer shall, in its sole discretion, determine whether and to what extent to make a Matching Contribution on behalf of its Participants who make Elective Contributions in such Plan Year. Subject to the limitations of Article V, the amount of such Matching Contribution to be made on behalf of each such Participant shall be expressed as a percentage of the Elective Contributions made by such Participant for such Plan Year, or as a percentage of the Participant’s Compensation for such Plan Year, subject to any maximum limitations as the Employer shall determine. Notice of an Employer’s determination with respect to any Plan Year shall be given to Participants as soon as practicable after such determination is made.

(b) Amount of Additional Matching Contributions - In addition to the Matching Contributions described in (a) above, an Employer may, in its sole discretion, but subject to the limitations of Article V, determine to make additional Matching Contributions with respect to any Plan Year. Such additional contributions shall be expressed as an increase in the otherwise stated matching percentage or in the maximum amount of Elective Contribution to be matched, or any combination thereof, and may further be limited to such Participants as meet specified criteria determined by the Employer.

(c) Time of Matching Contributions - Matching Contributions shall be made to the Trust Fund no later than the latest date as of which such contributions must be made in order to be treated as made on account of such Plan Year under applicable law.

(d) Allocation of Matching Contributions - Matching Contributions made on behalf of a Participant shall be allocated to the Participant’s Matching Account as soon as administratively practicable after being made, but no later than the last day of the Plan Year for which such contributions are made.

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4.4 Compliance Contribution.

An Employer may make a contribution with respect to any Plan Year solely for the purpose of enabling the Plan to satisfy the limitations of Sections 5.2 through 5.4 for such Plan Year. Such contribution shall be treated as an Elective or Matching Contribution in accordance with Section 5.2(b) or 5.3(c) and shall be allocated only to Participants who are not Highly Compensated Employees and may further be limited to such Participants whose Compensation does not exceed a specified limit determined by the Employer.

4.5 Return of Contributions to Employer.

Except as otherwise provided in this Section 4.5, all contributions made by an Employer shall be irrevocable and shall be transferred to the Administrator and held as provided in Article X, to be used in accordance with the provisions of this Plan in providing the benefits and paying the expenses hereof. Notwithstanding the preceding provisions of this Article IV, to the extent permitted by applicable law, contributions shall be returned to an Employer under the following circumstances:

(a) Mistake - If and to the extent that any contribution was made by a mistake of fact, the Administrator may return the contribution to the Employer at any time within one year after the payment of such contribution.

(b) Nondeductibility - All contributions made by an Employer are expressly conditioned on their deductibility under Code Section 404. If and to the extent that the Internal Revenue Service determines that a contribution is not deductible under Code Section 404, the Administrator may return the contribution to the Employer at any time within one year after the date of disallowance.

(c) Adjustments - Any contribution returned pursuant to (a) or (b) above shall be adjusted to reflect only its proportionate share of the Trust Fund’s loss, if any.

(d) Limitation on Rights - Notwithstanding any provision of this Plan to the contrary, the right or claim of any Participant or Beneficiary to any asset of the Trust or to any benefit under the Plan shall be subject to and limited by the provisions of this Section 4.5.

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4.6 Rollover Contributions.

In accordance with procedures established by the Administrator and applied in a uniform and nondiscriminatory manner, an Eligible Employee (whether or not then a Participant) may make a Rollover Contribution to the Plan at any time of cash, or such other property as the Administrator may specifically approve in advance, of the taxable portion of a rollover contribution that meets the requirements of Code Section 408(d)(3)(A)(ii) from another qualified pension or profit sharing plan or other eligible retirement plan or an individual retirement account and which is contributed to the Plan in compliance with the requirements for the Employee making a federal income tax-free “rollover” contribution under the Code, including the direct transfer of such Rollover Contribution to the Trust Fund from such other plan or account. The Administrator shall obtain such evidence, assurances, opinions and certifications it may deem necessary to establish to its satisfaction that the amounts to be contributed as a Rollover Contribution will not affect the qualification of the Plan or the tax-exempt status of the Trust under Code Sections 401(a) and 501(a). Any Rollover Contribution which is found by the Administrator not to be qualified for tax-free rollover treatment shall be returned to the Participant. Any expense to or liability incurred by the Plan or any fiduciary of the Plan because of a transfer of such disqualified assets to the Administrator shall be borne solely by and charged to the individual who requested the transfer. Rollover Contributions shall be credited to the Participant’s Rollover Account. At all times a Participant shall be 100% vested in the value of his Rollover Account.

4.7 Forfeitures.

(a) Determination of Forfeitures - If a Participant who has terminated employment before he has become 100% vested in Employer Contributions pursuant to Section 7.3, the nonvested portion of his Account shall be forfeited as of the earlier of (i) the date he receives a distribution of his Vested Account, and (ii) the last day of the Plan Year as of which he incurs a Break in Service of at least five years. For purposes of the preceding sentence, a Participant who terminates employment with no vested interest in his Account shall be deemed to have received a distribution of his entire Vested Account.

(b) Reallocation of Forfeitures - The total amount of forfeitures determined in accordance with (a) above with respect to any Plan Year shall be used to reduce future Employer Contributions or to defray the expenses of the Plan.

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(c) Return to Employment and Restoration of Forfeitures - If a Participant incurs forfeitures in accordance with (a) above and returns to the employ of the Employer or a Related Employer before he incurs a Break in Service of at least five years, the amount forfeited from his Account shall be restored to such Account upon such return to employment in accordance with the provisions of this Section 4.8(c). If the returning Participant received a distribution of his Vested Account prior to his return to employment, the forfeitures shall be restored to the Participant’s Account only if the Participant repays to the Plan the entire distribution resulting in the forfeiture no later than the earlier of (1) the date which is 5 years after the participant’s return to employment, or (ii) the close of the first period constituting a Break in Service commencing after the distribution. If the Participant did not receive a distribution of his Vested Account prior to his return to employment, the forfeited amounts shall be restored to his Account upon his return to employment. Any such restoration shall be made from current forfeitures, and to the extent necessary, from amounts contributed directly by the Employer. No restoration of forfeitures shall occur with respect to a Participant who has a Reemployment Commencement Date after incurring a Break in Service of at least five years.

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ARTICLE V

LIMITATIONS ON CONTRIBUTIONS

5.1 Dollar Limitation on Elective Contributions.

(a) The amount of Elective Contributions (other than those made in accordance with Section 4.1(b)) made on behalf a Participant during any Plan Year, shall be limited to the extent necessary to satisfy the dollar limitation contained in Code Section 402(g) that is applicable to the taxable years of the Participant that begin in and end in such Plan Year. In order to prevent the limitation of this Section from being exceeded for any Plan Year, the Administrator may prospectively limit the percentage or amount of Compensation that a Participant may elect to have contributed as an Elective Contribution.

(b) If the Elective Contributions of a Participant which are made to the Plan and any other plan of a Related Employer exceed the limitation of Section 5.1(a) as of the end of any calendar year, or if prior to March 1 following the end of any calendar year a Participant has submitted to the Administrator, in writing, a certification stating that all or part of his Elective Contributions to the Plan constitute “excess deferrals” under Code Section 402(g), such excess amount and any income allocable thereto shall be distributed to the Participant no later than April 15 following the end of the calendar year with respect to which such excess amount was contributed. Notwithstanding the distribution of any Elective Contributions in accordance with this Section 5.1(b), such Elective Contributions shall be included for purposes of determining the Actual Deferral Ratio of Highly Compensated Employees, but not of all other Eligible Employees.

(c) If, as a result of the application of Section 5.1(b), a Participant’s Elective Contribution is reduced, the corresponding Matching Contribution shall be forfeited and used to reduce future Matching Contributions. The vesting provisions of this Plan applicable to Matching Contributions are conditioned on such Elective Contributions being permissible Elective Contributions. Elective Contributions in excess of the applicable limit described in Section 5.1(a) are specifically prohibited and, as a result, the Employer reserves the right for up to one Plan Year following the Plan Year for which the Matching Contribution was made to recapture any Matching Contribution mistakenly made to the Plan as a result of Elective Contributions exceeding the limitation of Code Section 402(g).

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5.2 Additional Limitation on Elective Contributions.

(a) The Actual Deferral Percentage of Highly Compensated Employees for each Plan Year shall not exceed the greater of:

(1) The Actual Deferral Percentage of all other Eligible Employees for the preceding Plan Year multiplied by 1.25, or

(2) The lesser of: (A) The Actual Deferral Percentage of all other Eligible Employees for the preceding Plan Year plus two percentage points, or (B) the Actual Deferral Percentage of all other Eligible Employees for the preceding Plan Year multiplied by 2.00.

Notwithstanding the foregoing, for purposes of applying the above limitation for the Plan Year ending December 30, 2003, the current Plan Year shall be used instead of the preceding Plan Year.

(b) For the purposes of satisfying the tests in Section 5.2(a) for any Plan Year, the Administrator may treat Compliance Contributions made with respect to such Plan Year as Elective Contributions. Any such treatment shall be subject to and in accordance with the provisions of Income Tax Regulations Section 1.401(k)-1(b)(5), as modified. The Administrator shall establish such accounting procedures as may be necessary to allow for the treatment provided in this Section 5.2(b), including the separate identification of such contributions.

(c) In order to prevent the limitation of this Section 5.2 from being exceeded in any Plan Year, the Administrator may limit the percentage or amount of Compensation that may be contributed as Elective Contributions by Highly Compensated Employees. If the limitation of this Section 5.2 is exceeded as of the end of any Plan Year, the amount of such excess and any income allocable thereon shall, before the end of the next succeeding Plan Year, be distributed to those Highly Compensated Employees whose Elective Contributions require reduction. The amount to be distributed shall be determined in the following manner, subject to the provisions of Code Section 401(k)(3) and any Income Tax Regulations to be issued thereunder. First, an excess contribution amount shall be determined by hypothetically reducing the Elective Contributions of those Highly Compensated Employees with the highest Actual Deferral Ratios to the extent required to meet the limitation, but not in excess of the amount that would reduce such ratios to the next highest Actual Deferral Ratio for a Highly Compensated Employee. If additional reduction is required, the hypothetical reduction process shall be repeated until the

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limitation is met. Second, there shall be an actual reduction of the dollar amounts of Elective Contributions for those Highly Compensated Employees with the highest dollar amounts of Elective Contributions in a total amount equal to the excess contribution derived in the hypothetical reduction process described above. This reduction shall be accomplished by reducing the Elective Contributions of those Highly Compensated Employees to the extent required to satisfy the excess contribution amount, but not in excess of the amount that would reduce such dollar amounts to the next highest dollar amount for a Highly Compensated Employee. If additional reduction is required, the actual reduction process shall be repeated until the total actual reductions equal the excess contribution amount. The provisions of this Section 5.2(c) shall be applied after application of Section 5.1(b).

(d) Notwithstanding anything to the contrary, if this Plan is aggregated with another Plan of an Employer or Related Employer for purposes of satisfying the requirements of Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)), the provisions of this Section 5.2 shall apply to any Participant by treating all pre-tax contributions made by such Participant under such other Plan as having been made under this Plan. In addition, if a Participant who is a Highly Compensated Employee makes pre-tax contributions in any Plan Year to one or more other cash or deferred arrangements (within the meaning of Code Section 401(k)) maintained by an Employer or Related Employer, such contributions shall be treated as Elective Contributions made hereunder for purposes of determining such Participant’s Actual Contribution Ratio for such Plan Year.

(e) Notwithstanding the foregoing, Elective Contributions made in accordance with Section 4.1(b) shall be disregarded in applying the provisions of his Section 5.2.

5.3 Limitation on Matching Contributions.

(a) The Actual Contribution Percentage of Highly Compensated Employees for each Plan Year shall not exceed the greater of:

(1) the Actual Contribution Percentage of all other Eligible Employees for preceding Plan Year, multiplied by 1.25, or

(2) the lesser of: (A) the Actual Contribution Percentage of all other Eligible Employees for the preceding Plan Year plus two percentage points, or (B) the Actual Contribution Percentage of all other Eligible Employees for the preceding Plan Year multiplied by 2.00.

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Notwithstanding the foregoing, for purposes of applying the above limitation for the Plan Year ending December 30, 2003, the current Plan Year shall be used instead of the preceding Plan Year.

(b) In order to prevent the limitation of this Section 5.3 from being exceeded in any Plan Year, the Administrator may limit the amount of Matching Contribution allocated to Highly Compensated Employees. If the limitation of this Section 5.3 is exceeded as of the end of any Plan Year, the amount of such excess Matching Contributions shall, before the end of the next succeeding Plan Year, be forfeited (or not made, if applicable) to the extent not yet vested, and any remaining excess Matching Contributions shall then be distributed to those Highly Compensated Employees whose Matching Contributions require reduction. the amount of such excess and any income allocable thereon shall, before the end of the next succeeding Plan Year, be distributed to those Highly Compensated Employees whose Matching Contributions require reduction. The amount to be distributed shall be determined in the following manner, subject to the provisions of Code Section 401(m)(2) and any Income Tax Regulations to be issued thereunder. First, an excess aggregate contribution amount shall be determined by hypothetically reducing the Matching Contributions of those Highly Compensated Employees with the highest Actual Contribution Ratios to the extent required to meet the limitation, but not in excess of the amount that would reduce such ratios to the next highest Actual Contribution Ratio for a Highly Compensated Employee. If additional reduction is required, the hypothetical reduction process shall be repeated until the limitation is met. Second, there shall be an actual reduction of the dollar amounts of Matching Contributions for those Highly Compensated Employees with the highest dollar amounts of Matching Contributions in a total amount, together with any amounts not made or forfeited, as described above, equal to the excess aggregate contribution derived in the hypothetical reduction process described above. This reduction shall be accomplished by reducing the Elective Contributions of those Highly Compensated Employees to the extent required to satisfy the excess aggregate contribution amount, but not in excess of the amount that would reduce such dollar amounts to the next highest dollar amount for a Highly Compensated Employee. If additional reduction is required, the actual reduction process shall be repeated until the total actual reductions equal the excess aggregate contribution amount.

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(c) For the purposes of satisfying the tests in Section 5.3(a) for any Plan Year, the Administrator may treat Compliance Contributions and Elective Contributions made with respect to such Plan Year as Matching Contributions. Any such treatment shall be subject to and in accordance with the provisions of Income Tax Regulations Section 1.401(m)-1(b)(5), as modified. The Administrator shall establish such accounting procedures as may be necessary to allow for the treatment provided in this Section 5.3(b), including the separate identification of such contributions.

5.5 Determination of Allocable Income.

In the event Elective or Matching Contributions have to be distributed pursuant to Section 5.1, 5.2 or 5.3 with respect to any Plan Year, the amount of such distribution shall be adjusted to reflect the income (gain or loss) allocable to such amounts. The amount of income allocable to any such distribution shall be determined by the Administrator consistent with applicable law and under a method used for all such adjustments with respect to such Plan Year.

5.6 Limitations on Benefits.

Annual Additions to a Participant’s Account in respect of any Plan Year may not exceed the lesser of (i) $40,000, adjusted in accordance with Code Section 415(d)), or (ii) 100% of the Participant’s Compensation. The foregoing limitations shall be applied in accordance with the limitations of Code Section 415, which are incorporated herein by reference. For these purposes, “Annual Additions” shall have the meaning set forth in Code Section 415(c)(2), as modified elsewhere in the Code and in any regulations thereunder, and the limitation year shall mean the Plan Year unless any other 12-consecutive month period is designated pursuant to a written resolution adopted by the Employer. In the event that after the adjustments made in accordance with Sections 5.1 through 5.5, amounts which would otherwise be allocated to a Participant’s Account under the Plan must be reduced by reason of the limitations of this Section 5.6 as a result of the allocation of forfeitures, a reasonable error in estimating a Participant’s annual compensation, or a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to any individual under the limits of Code Section 415, such reduction shall be made in the following order of priority, but only to the extent necessary:

(a) To the extent permitted by the Code and applicable law, the amount of Elective Contributions made on behalf of such Participant in respect of such Plan Year shall be refunded to the Participant; and then

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(b) Matching Contributions made pursuant to Section 4.3 which are allocable to such Participant in respect of such Plan Year shall be reduced and the amount of such reduction shall be utilized to reduce Employer Contributions which would otherwise be made to the Plan.

ARTICLE VI

ACCOUNTS OF PARTICIPANTS - INVESTMENTS

6.1 Separate Accounting.

(a) Accounts - The Administrator shall establish and maintain in respect of each Participant an Account showing his interest under the Plan and in the Trust (including if the Administrator deems it appropriate, separate accounts reflecting the different types of contributions made by and on behalf of Participants, any separately identifiable investment funds, if applicable, and all other relevant data pertaining thereto). The establishment and maintenance of, or allocations and credits to the Account of any Participant shall not vest in any Participant any right, title or interest in and to any Plan assets or benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Plan and in accordance with the terms of the Trust.

(b) Value of Accounts - The value of any Account as of any date of determination shall be equal to:

(a) the aggregate amount credited to such Account as of the Valuation Date coinciding with or next preceding such date of determination, after all allocations as of such Valuation Date have been made, plus

(b) any amounts contributed to or otherwise to be credited to such Account since such Valuation Date, less

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(c) any amounts distributed from or otherwise to be charged to such Account since such Valuation Date.

6.2 Investment of Accounts.

(a) Investment by Trustee - Except as otherwise provided in (b) below, the Accounts of Participants shall be invested by the Trustee in accordance with the terms of the Trust Agreement.

(b) Investment Funds for Accounts - The Trustee may cause to be established under the Trust separate funds for the investment of assets held in the Trust in order to provide differing investment opportunities for Participants to choose from. Any such separate fund may be established through separate accounting of a portion of the assets of the Trust, through the use of investment products offered by insurance companies, mutual funds or other similar financial institutions, by investment in stock or other permitted securities of the Employer or a Related Employer that are “qualifying employer securities”, as defined in ERISA, or through individual brokerage accounts. If established, the Trustee shall provide information to Participants concerning the nature of each such separate fund and may change the separate funds available to Participants as it deems appropriate. If applicable, the Trustee shall from time to time establish such rules and procedures for implementing the provisions of this Section 6.2(b) as it deems necessary, including without limitation, the use of prescribed forms, the imposition of reasonable time and notice requirements, the imposition of limitations on investment choices and transfers between the separate investment funds and the provision for periodic valuations during the Plan Year. All such rules and procedures shall be established and applied on a uniform and non-discriminatory basis to all persons similarly situated.

(c) Employer Stock Fund-General – To the extent that an Employer Stock Fund is established in accordance with (b) above, the Trustee may keep such amounts uninvested or invested in such investments other than Employer Stock as it deems necessary from time to time, as and to the extent provided for by, and consistent with, the terms of the Trust Agreement. A Participant’s Account shall reflect his interest in the assets of the Trust held for investments in Employer Stock. Such interest shall be accounted for in shares of Employer Stock to the extent possible, with fractions thereof being reflected in cash. Notwithstanding the foregoing, such accounting shall not entitle any Participant to any right title or interest to any specific shares of Employer Stock.

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(d) Voting Rights in Employer Stock – Each person with shares of Employer Stock in the Employer Stock Fund shall have the right to participate confidentially in the exercise of voting rights appurtenant to such shares that were credited to his Account as of the most recent Valuation Date coincident with or preceding the applicable record date for which records are available. Such participation shall be achieved by completing and filing with the inspector of elections, or such other person who shall be independent of the issuer of the shares as the Administrator shall designate, a written direction in such form and at such time as the Administrator shall prescribe. Such directions shall be tabulated on a strictly confidential basis that provides the Administrator only with the final results of the tabulation. The aggregate value (as of the Valuation Date coincident with or preceding the applicable record date) of the shares of Employer Stock in the Employer Stock Fund shall be voted affirmatively or negatively in proportion to the votes cast by the Participant’s who gave such voting directions. The Administrator shall furnish, or cause to be furnished, to each person whose Account is invested in the Employer Stock Fund, all annual reports, proxy materials and other information known to have been furnished by the issuer of the Employer Stock or by any proxy solicitor, to the holders of shares of Employer Stock.

(e) Tender Offers and Other Offers – Each person with shares of Employer Stock in the Employer Stock Fund shall have the right to participate confidentially in the response to a tender offer, or any other offer, made to the holders of shares of such Employer Stock generally, to purchase, exchange, redeem or otherwise transfer shares: provided that such person has such shares in his Account as of the most recent Valuation Date coincident with or immediately preceding the first day for delivering shares or otherwise responding to such tender or other offer. Such participation shall be achieved by completing and filing with the inspector of elections, or such other person who shall be independent of the issuer of the shares as the Administrator shall designate, a written direction in such form and at such time as the Administrator shall prescribe. Such directions shall be tabulated on a strictly confidential basis that provides the Administrator only with the final results of the tabulation. The aggregate value (as of the Valuation Date coincident with or preceding the applicable record date) of the shares of Employer Stock in the Employer Stock Fund shall be tendered or withheld in proportion to the votes cast by the Participant’s who gave such voting directions date for which records are available. The Administrator shall furnish, or cause to be furnished, to each person whose Account is invested in the Employer Stock Fund, all information concerning such tender offer furnished by the issuer of the Employer Stock, or by or on behalf of the person making the tender or other offer.

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6.3 Notice to Participants.

Within a reasonable time after each Valuation Date, the Trustee shall notify each Participant or Beneficiary of the balance in such Participant’s Accounts as of such Valuation Date. If Valuation Dates occur more frequently than quarterly, the notification requirement of this section may be met by quarterly notification.

ARTICLE VII

BENEFITS

7.1 Distribution Upon Termination Of Employment.

(a) Entitlement - A Participant who terminates his employment for any reason other than death shall be entitled to receive a distribution of the value of his Vested Account as soon as practicable following his Termination of Employment.

(b) De Minimis Distribution - If at the time he is entitled to a distribution, the value of a Participant’s Vested Account does not exceed $5,000, distribution shall be made to the Participant as soon as practicable in a single sum payment. In applying the $5,000 threshold in the preceding sentence and the provisions of (c) below, the value of a Participant’s Vested Account shall be determined without regard rollover contributions and earnings allocable thereto within the meaning of Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

(c) Regular Distribution - If at the time he is entitled to a distribution the value of a Participant’s Vested Account exceeds $5,000 (determined as provided in (b) above), the Participant may elect, in accordance with procedures established by the Administrator, to receive distribution of his Vested Account in the manner provided in Section 7.1(d) as soon as practicable, or to defer such distribution to any Valuation Date occurring on or after his termination of employment, but no later than the Valuation Date coinciding with or immediately following his Normal Retirement Date.

(d) Form of Payment - A Participant may elect to have the distribution to which he is entitled in accordance with Section 7.1(c) paid to him in one of the following forms:

(i) a lump sum payment; or

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(ii) substantially equal monthly, quarterly, semi-annual or annual payments over a fixed period not to exceed the life expectancy of the Participant or the combined life expectancy of the Participant and his designated Beneficiary.

7.2 Distribution Upon Death.

If a Participant dies while employed by the Employer or a Related Employer or before a distribution to which he is entitled in accordance with Section 7.1 has commenced, the value of his entire Account (or the distribution awaiting commencement in accordance with Section 7.1) as of the Valuation Date coinciding with or immediately shall be distributed to his Beneficiary in a single sum payment as soon as practicable following his death.

7.3 Vesting.

(a) Employee Contributions - A Participant shall at all times be 100% vested in his Elective Contributions After-Tax Contributions and Rollover Contributions.

(b) Employer Contributions - A Participant shall become 100% vested in his Matching Account if he terminates employment (i) with Period of Service of at least three years, (ii) on or after attaining his Normal Retirement Date, or (iii) as a result of his death or Disability. If a Participant terminates employment prior to becoming 100% vested, he shall be vested in a percentage of his Matching Account determined from the following schedule:

Period of Service	Vested Percentage
Less than 1 year	0%
at least 1 years	33-1/3%
at least 2 years	66-2/3%
at least 3 years	100%

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If a Participant terminates employment prior to becoming 100% vested, he shall forfeit the non-vested portion of his Matching Account and Profit Sharing Account in accordance with Section 4.8.

7.4 Statutory Payment Date.

(a) Notwithstanding any other provision of the Plan, and unless otherwise provided by law, any amount payable to a Participant who is a five-percent owner (as defined in Code Section 416(i)(1)(B)) at any time during the 5-Plan Year period ending in the calendar year in which such Employee attains age 70-1/2 shall commence no later than the April 1st of the calendar year following the calendar year in which the Participant attained age 70 1/2 or the April 1st following the end of any subsequent calendar year if he becomes a 5% owner during such subsequent calendar year (the appropriate April 1st being the “required beginning date” and the calendar year in which it occurs being the “first distribution calendar year”). If not made in a single sum payment, such amount shall be paid, in accordance with applicable regulations, (i) over the life of the Participant, (ii) over the life of the Participant and a designated Beneficiary, (iii) over a period certain not extending beyond the life expectancy of the Participant, or (iv) over a period certain not extending beyond the joint life expectancies of the Participant and a designated Beneficiary. The minimum distribution required for the Participant’s first distribution calendar year must be made on or before the Participant’s required beginning date. The minimum distribution for each other calendar year, including the minimum distribution for the year in which the Participant’s required beginning date occurs, must be made on or before December 31st of the applicable calendar year.

(b) Except as provided above, or with the Participant’s consent, distribution to the Participant shall commence no later than 60 days after the close of the Plan Year in which occurs the latest of his Normal Retirement Date, his 10^th anniversary of plan participation or his Termination of Employment.

7.5 Transferred Employees.

If a Participant ceases to be an Employee by reason of a transfer or employment to a class of employees of an Employer not eligible for participation or to a Related Employer which is not an Employer then, except as hereinafter provided, such Participant’s Account shall be held for distribution until such time as such Participant’s employment terminates.

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7.6 Direct Rollover.

Solely to the extent required under applicable law and regulations, and notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this section 7.6, a Distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

For purposes of this section 7.6, the following terms shall have the following meanings:

(i) Eligible Rollover Distribution: Solely to the extent required under applicable law and regulations, an Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution 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 Distributee and the Distributee’s designated beneficiary, or for a specified period of 10 years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities); and any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code (subject to the right of the Plan Administrator to avail itself of any transitional relief promulgated in regard to such hardship distributions).

(ii) Eligible Retirement Plan: An Eligible Retirement Plan is an individual retirement account described in Section 408(a) of the Code, 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. However, 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. In addition, an Eligible Retirement Plan shall also mean 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, a political subdivision of a state, or any instrumentality of a state or a political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan. Further, with respect to distributions made to a surviving spouse or to a spouse or former spouse who is an alternate payee under a QDRO, the definition of Eligible Retirement Plan, as set forth herein, but without the limitation in the second sentence hereof, shall apply.

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(iii) Distributee: A Distributee includes an employee or former employee. In addition, the employee’s or former employee’s spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order are Distributees with regard to the interest of the spouse or former spouse.

(iv) Direct Rollover: A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

ARTICLE VIII

WITHDRAWALS DURING EMPLOYMENT

8.1 Permitted Withdrawals.

(a) Matching Contributions on After-Tax Contributions – Matching Contributions made under the terms of the Plan as in effect prior to April 1, 2003 are available for withdrawal during employment as soon as the Class to which they belong matures, as provided herein. Matching Contributions attributable to After-Tax Contributions made in any Plan Year shall be deemed to be part of a Class designated for that Plan Year. Any such Class shall be deemed to mature at the end of the third Plan Year following the Plan Year for which it is designated. A Participant may not make a withdrawal under this paragraph (a) within twelve months of a previous withdrawal.

(b) After-Tax Account- Not more than once in any Plan Year, a Participant may withdraw all or any part of the portion of his After-Tax Account that does not exceed his After-Tax Contributions made to the Plan.

(c) Rollover Account - Not more than once in any Plan Year, a Participant may withdraw all or any part of his Rollover Account.

(c) Employer Contributions - Not more than once in any Plan Year, a Participant may withdraw all or any part of the portion of his Vested Account that is attributable to Employer Contributions not described in (a) above, provided, that if less than five full years have elapsed

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since the date the Participant first became a Participant, the amount available for such withdrawal shall be limited to that portion of his Account which is attributable to Employer Contributions that have been in the Plan for at least two years.

(d) Financial Hardship - Not more than once in any Plan Year, a Participant may elect to make a withdrawal from his Elective Account in the event of Financial Hardship. The amount available for withdrawal and the terms and conditions applicable to such withdrawal are set forth in Section 8.2.

(e) Procedures - The Administrator shall establish such procedures as it deems necessary for the processing of withdrawal requests and the disbursement of amounts withdrawn.

8.2 Financial Hardship.

(a) Hardship - A withdrawal under Section 8.1(a) must be on account of an immediate and heavy financial need of the Participant resulting from: (1) the purchase of a primary residence; (2) tuition expenses and related educational expenses for the next 12 months of post-secondary education for the Participant or his dependents; (3) payments to prevent eviction from or foreclosure on the mortgage of the Participant’s primary residence; (4) medical expenses of the Participant or his dependents previously incurred and not covered by insurance, or expenses necessary for the obtaining of medical care for the Participant or his dependents; (5) funeral and other expenses related to the death of a family member; or (6) any amounts necessary to pay federal, state and local income taxes or penalties reasonably anticipated to result from the distribution on account of any of the preceding hardships. Any withdrawal on account of Financial Hardship shall be limited to the amount of actual financial need that is unavailable to the Participant from the Participant’s other resources. The determination with respect to the Financial Hardship shall be made by the Administrator in accordance with this Section 8.2 and such determination shall be made on a nondiscriminatory basis, and applied uniformly to all Participants under similar circumstances.

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(b) Amount Necessary To Satisfy Need - No amount may be withdrawn in accordance with Section 8.1(a) unless it is necessary to satisfy a Financial Hardship. The Administrator will make a determination that a withdrawal is necessary to satisfy a Financial Hardship of a Participant, provided that the Participant satisfies either (1) or (2) below:

(1) The Participant provides such information as the Administrator may reasonably require and certifies that the Financial Hardship will place him in immediate and heavy financial need and that he has insufficient funds reasonably available to meet this financial need and that the need cannot be relieved:

(A) Through reimbursement or compensation by insurance or otherwise,

(B) By reasonable liquidation of his assets, to the extent such liquidation would not itself cause an immediate and heavy financial need,

(C) By cessation of his contribution (including deferrals) to the Plan, or

(D) By other distributions or non-taxable (at the time of the loan) loans from the Plan or other plans maintained by an Employer, or by borrowing from commercial sources on reasonable commercial terms in an amount sufficient to satisfy the need, but only to the extent that any such loan would not itself increase the amount of such need.

(2) The Participant satisfies the following:

(A) The Participant has obtained all other available distributions and non-taxable loans available under this Plan or any other plan maintained by an Employer, but only to the extent that any such loan would not itself increase the amount of such financial need,

(B) For the 6-month period following the Financial Hardship withdrawal his Elective Contributions under this Plan and all other plans maintained by an Employer (as defined in Income Tax Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4)) shall be suspended, and

(C) The maximum Elective Contribution for the Plan Year following the Plan Year in which the Financial Hardship withdrawal occurs is reduced by the amount of his Elective Contributions made in the Plan Year in which the Financial Hardship withdrawal occurs.

(c) Maximum Amount - In no event shall the portion of any withdrawal on account of Financial Hardship exceed the amount of the Participant’s actual Elective Contributions to the Plan (excluding any amounts treated as Elective Contributions in accordance with Section 4.2(b)), less any such amounts previously withdrawn in accordance with this Section 8.2

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(d) Procedures - The Administrator shall establish such procedures as it deems necessary to carry out the provisions of this Section 8.2.

8.3 Participant Loans.

(a) Permitted Loans – Upon written application of a Participant, the Administrator may direct that a loan from the Trust be made to such Participant from his Account. In order to apply for a loan, a Participant shall complete a loan application form provided by the Administrator and provide any additional documentation or financial information which the loan request form or the Administrator requests. Loans shall be made available to Participants in a uniform and nondiscriminatory manner with all Participants in similar circumstances being treated alike. Upon receipt of a completed loan application, the Administrator shall review the application and notify the Participant in a reasonable period of time whether the loan has been approved or denied. The application for a loan, approval or denial of the loan and the resulting loan must be made in accordance with the provisions of this Section 8.3.

(b) Maximum Loan - The maximum permissible loan available shall not exceed the lesser of:

(1) $50,000 reduced by the excess (if any) of:

(A) the highest outstanding balance of loans to the Participant from the Plan (and all other qualified Plans of any Employer or Related Employer) during the one-year period ending on the day before the date on which the loan was made, over

(B) the outstanding balance of loans to the Participant from the Plan (and all other qualified Plans of any Employer or Related Employer) on the date on which such loan was made, or

(2) 50% of his Account.

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(c) Frequency - A Participant may not have more than one loan outstanding at any time.

(d) Minimum Loan - No loan shall be granted for less than $3,000.

(e) Repayment - Any loan made pursuant to this Section 8.3 must generally be repaid within a period not to exceed the earlier of Termination of Employment or five years. However, the Administrator, in its discretion, may grant a loan, the purpose of which is the acquisition of the primary residence of the Participant in which case such loan shall be paid over a reasonable period of time. The period and method of repayment for any loan shall be determined by the Administrator. Except as may be provided by applicable law, each loan to which this Section applies must provide for a substantially level amortization of the loan with payments being made not less frequently than quarterly. The method of timing for repayment of any loan hereunder shall be determined at the time the loan is made and a copy shall be kept with the promissory note referred to below. Repayment of any loan shall be by payroll deduction, unless otherwise agreed to by the Administrator.

(f) Interest - Loans from the Plan shall bear a reasonable rate of interest and shall be determined by the Administrator by reference to the prevailing interest rate charged by commercial lenders under similar circumstances on the date the loan is made. The interest rate, once fixed, shall remain in effect for the duration of the loan. The Administrator shall determine the rate on the first day of every month for loans granted during that month.

(g) Adequate Security - Each loan shall be evidenced by a promissory note and such note shall be held as an asset of the Trust in a segregated account applicable to the Participant to whom the loan is granted. The loan shall be collateralized with 50 percent of the Participant’s Account. The Administrator may require such additional collateral as deemed necessary depending on the type of loan being made. The type of additional collateral shall be determined on the same basis as would be used in a normal commercial setting by an entity in the business of making similar loans.

(h) Source of Loan - All loans shall be taken from a Participant’s Account in the following order, until satisfied: first from his Rollover Account, then from his After-Tax Account, Matching Account and Elective Account.

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(i) Default - In the event of the death, retirement or Termination of Employment of a Participant prior to the time the loan is repaid, or failure to comply with any terms of the loan, the loan shall be considered to be in default (subject to a 90 day grace period) unless suitable repayment terms have been established by the Administrator, and the balance of such loan shall become due and payable with such repayment being satisfied by (i) satisfying the indebtedness from the amount held in the Participant’s Account before making payments to the Participant or his Beneficiary, (ii) by an adjustment to any outstanding payroll due to the Participant, (iii) sale, foreclosure or disposal of any collateral which was required to secure the loan in addition to the Participant’s Account and, lastly, (iv) from any other assets of the Participant. Notwithstanding the preceding, in no event shall a distribution occur prior to a distributable event pursuant to Article VII.

ARTICLE IX

DESIGNATION OF BENEFICIARIES

9.1 Beneficiary Designation.

Each Participant shall file with the Administrator a written designation of one or more persons as the Beneficiary who shall be entitled to receive the amount, if any, payable under the Plan upon his death. A Participant may from time to time revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Administrator. Notwithstanding the foregoing, if the Participant is married, his spouse must consent in writing to the designation of a Beneficiary other than the Participant’s spouse (unless the Administrator makes a written determination in accordance with the Code and applicable law that no such consent is required). The last such designation received by the Administrator shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Administrator prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt.

9.2 Lack of Designated Beneficiary.

If no valid Beneficiary designation is in effect at the time of a Participant’s death, or if no validly designated Beneficiary survives the Participant or if each surviving validly designated Beneficiary is legally impaired or prohibited from taking, then the Participant’s Beneficiary shall

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be his surviving spouse, if any, or if the Participant has no surviving spouse, then his estate. If the Administrator is in doubt as to the right of any person to receive such amount, it may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Administrator may pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and the Trust therefor.

ARTICLE X

MANAGEMENT OF TRUST FUND

10.1 Establishment and Use of Trust Fund.

The Trust Fund shall be established pursuant to a Trust Agreement between the Employer and the Trustee and shall be used to provide the benefits and pay the expenses of this Plan and of the Trust Fund and, except as otherwise provided in Section 4.6, no part of the corpus or income shall be used for or diverted to purposes other than for the exclusive benefit of Participants and their Beneficiaries and the payment of expenses of this Plan.

10.2 Trustee.

The Trust Fund shall be held in trust by a Trustee appointed from time to time by the Employer with such powers and duties in the Trustee as shall be provided in the Trust Agreement between the Trustee and the Employer. Subject to the provisions of the Trust Agreement, the Trustee shall be the named fiduciary with respect to the control or management of the assets of the Plan.

10.3 Investments.

The investment of the Trust Fund shall be in accordance with Article VI and with the provisions of the Trust Agreement between the Trustee and the Employer.

10.4 Payment of Expenses.

The administrative and other expenses of the Plan shall be paid out of the Trust Fund unless paid by the Employer.

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ARTICLE XI

ADMINISTRATION OF THE PLAN

11.1 The Administrator.

(a) The Plan shall be administered by an Administrator which shall have general responsibility for the administration and interpretation of the Plan (including, but not limited to, complying with applicable reporting and disclosure requirements, establishing and maintaining Plan records, issuing instructions to the Trustee regarding the benefits that are to be paid from the Trust Fund to Participants and Beneficiaries and adopting amendments to the Plan as described in Section 12.1) and may exercise such other rights and powers as may be specifically granted to it herein or by the Principal Employer. Any interpretation of any term or provision of the Plan by the Administrator shall be binding and conclusive as to all affected parties unless such interpretation is determined to be arbitrary and capricious by a court of competent jurisdiction.

(b) The Administrator shall periodically review the investment performance and methods of the Trustee and any other funding agency, including any insurance company under the Plan, and may appoint and remove or change the Trustee and any such funding agency. The Administrator shall have the power to appoint or remove one or more investment managers and to delegate to such manager authority and discretion to manage (including the power to acquire and dispose of) the assets of the Plan, provided that (i) each manager with such authority and discretion shall be either a bank, an insurance firm or a registered investment adviser under the Investment Advisers Act of 1940 and shall acknowledge in writing that it is a fiduciary with respect to the Plan and (ii) the Administrator shall periodically review the investment performance and methods of each manager with such authority and discretion. The Administrator shall determine any requirements and objectives of the Plan which may be pertinent to the investment of Plan assets and shall establish investment standards and policies incorporating such requirements and objectives and communicate the same to the Trustee (or other funding agencies under the Plan). If annuities are to be purchased under the Plan, the Administrator shall determine what contracts should be made available to terminated Participants or purchased by the Trust.

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11.2 Indemnity.

To the maximum extent permitted by law, no person acting in the capacity of Administrator (including any member of any committee acting as such) shall be personally liable by reason of any contract or other instrument executed by him or on his behalf in the performance of the duties of the Administrator nor for any mistake of judgment made in good faith, and the Employer shall indemnify and hold harmless, directly from its own assets (including the proceeds of any insurance policy the premiums of which are paid from the Employer’s own assets), such person and each other officer, employee, or director of the Employer to whom any duty or power relating to the administration or interpretation of the Plan or to the management and control of the assets of the Plan may be delegated or allocated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Employer) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or bad faith.

11.3 Services to the Plan.

The Administrator may arrange for the engagement of such legal counsel, who may be counsel for the Employer, and make use of such agents, professional and clerical or other personnel as they each shall require or may deem advisable for purposes of the Plan. The Administrator may rely upon the written opinion of such counsel and any actuary and accountants engaged by the Administrator and may delegate to any such agent or to any sub-committee or member of the Administrator its authority to perform any act hereunder, including without limitation those matters involving the exercise of discretion, provided that such delegation shall be subject to revocation at any time at the discretion of the Administrator. The Administrator shall report to the Principal Employer, at such times as shall be specified by the Principal Employer, with regard to the matters for which it is responsible under the Plan.

11.4 Administrator Records.

The Administrator shall appoint an individual who shall cause to be kept full and accurate accounts of receipts and disbursements of the Plan, and shall cause to be deposited all funds of the Plan to the name and credit of the Plan, in such depositories as may be designated by the Administrator. Such individual shall cause to be disbursed the monies and funds of the Plan when so authorized by the Administrator and shall generally perform such other duties as may be assigned to him from time to time by the Administrator. All demands for money of the Plan shall be signed by such officer or officers or such other person or persons as the Administrator may from time to time designate in writing.

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11.5 Claims Procedure.

(a) All claims for benefits under the Plan shall be submitted to, and within a reasonable period of time, decided in writing by the Administrator. Written notice of the decision on each such claim shall be furnished reasonably promptly to the claimant. If the claim is wholly or partially denied, written notice of the denial shall be furnished within 90 days after receipt of the claim; provided, however, that, if special circumstances require an extension of time for processing the claim, an additional 90 days from the end of the initial period shall be allowed for processing the claim, in which event the claimant shall be furnished with a written notice of the extension prior to the termination of the initial 90-day period indicating the special circumstances requiring an extension. Such written notice shall set forth an explanation of the specific findings and conclusions on which such denial is based.

(b) A claimant may review all pertinent documents and may request a review by the Administrator of such a decision denying the claim. Such a request shall be made in writing and filed with the Administrator within 60 days after delivery to the claimant of written notice of the decision. Such written request for review shall contain all additional information which the claimant wishes the Administrator to consider. The Administrator may hold any hearing or conduct any independent investigation which it deems necessary to render its decision, and the decision on review shall be made as soon as possible after the Administrator’s receipt of the request for review. Written notice of the decision on review shall be furnished to the claimant within 60 days after receipt by the Administrator of a request for review, unless special circumstances require an extension of time for processing, in which event an additional 60 days shall be allowed for review and the claimant shall be so notified in writing. Such notice of denial shall include specific reasons for such decision. For all purposes under the Plan, such decisions on claims (where no review is requested) and decisions on review (where review is requested) shall be final, binding and conclusive on all interested persons as to any matter of fact or interpretation relating to the Plan.

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11.6 Communications.

Any notice, election, application, instruction, designation or other form of communication required to be given or submitted by any Participant, other Employee or Beneficiary shall be in such form as is prescribed from time to time by the Administrator, sent by first class mail or delivered in person or by such other suitable means, and shall be deemed to be duly given only upon actual receipt thereof by the Administrator. Any notice, statement, report and other communication from the Employer or the Administrator to any Participant, other Employee or Beneficiary required or permitted by the Plan shall be deemed to have been duly given when delivered to such person or mailed by first class mail to such person at his address last appearing on the records of the Employer or the Administrator. Each person entitled to receive a payment under the Plan shall file in accordance herewith his complete mailing address and each change therein. A check or communication mailed to any person at his address on file with the Employer or the Administrator shall be deemed to have been received by such person for all purposes of the Plan, and no employee or agent of the Employer or member of the Administrator shall be obliged to search for or ascertain the location of any such person except as required by ERISA. If the Administrator is in doubt as to whether payments are being received by the person entitled thereto, it may, by registered mail addressed to such person at his address last known to the Administrator, notify such person that all future payments will be withheld until such person submits to the Administrator his proper mailing address and such other information as the Administrator may reasonably request.

11.7 Information From Participant.

Each Participant shall file with the Administrator such pertinent information concerning himself and his Beneficiary, and each Beneficiary shall file with the Administrator such information concerning himself, as the Administrator may specify, and in such manner and form as the Administrator may specify or provide, and no Participant or Beneficiary shall have the right or be entitled to any benefits or further benefits under the Plan unless such information is filed by him or on his behalf.

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ARTICLE XII

TERMINATION OF EMPLOYER PARTICIPATION

12.1 Right of Termination.

Any Employer may terminate its participation in the Plan by giving the Principal Employer prior written notice specifying a termination date which shall be the last day of a month at least 60 days subsequent to the date such notice is received by the Principal Employer. The Principal Employer may terminate any Employer’s participation in the Plan, as of any termination date specified by the Principal Employer.

12.2 Rights of Participants on Termination.

To the maximum extent permitted by ERISA, the rights of Participants no longer employed by the Employer and former Participants and their Beneficiaries and surviving spouses shall be unaffected by a termination of the Plan as to any Employer. Subject to the provisions of Section 13.3, the benefits provided under the Plan with respect to each Participant in service with such Employer as of the termination date will be paid or forfeited in accordance with the Plan as if such termination had not occurred, except that the Administrator may direct the Trustee to segregate such portion of the assets of the Trust (the “Distributable Reserve”) as shall be properly allocable in accordance with ERISA to the active employees of such Employer and direct the Trustee to apply the Distributable Reserve for the benefit of the Participants employed by the Employer as of the termination date in such manner as the Administrator shall determine including, without limitation, a transfer to a successor employee benefit plan which is qualified under Code Section 401(a); provided, however, that in the event of any transfer of assets to a successor employee benefit plan, the provisions of Section 13.4 will apply. Any such payments or transfers of the Distributable Reserve shall constitute a complete discharge of all liabilities under the Plan with respect to such Employer’s participation in the Plan and any Participant then employed by such Employer. To the maximum extent permitted by ERISA, the termination of the Plan as to any Employer shall not in any way affect any other Employer’s participation in the Plan.

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ARTICLE XIII

AMENDMENT OR TERMINATION

OF THE PLAN AND TRUST

13.1 Right of Amendment or Termination.

(a) Subject to (b) and (c) below, the Principal Employer reserves the right at any time to amend, suspend or terminate the Plan, any contributions thereunder, the Trust or any contract issued by an insurance carrier forming a part of the Plan, in whole or in part and for any reason and without the consent of any Employer, Participant, Beneficiary or surviving spouse; provided, however, that the Administrator may adopt amendments which do not materially affect the cost of the Plan and which may be necessary or appropriate to facilitate the administration, management or interpretation of the Plan or to conform the Plan thereto, to qualify or maintain the Plan and Trust as a plan and trust meeting the requirements of Code Sections 401(a) and 501(a) or any other provision of applicable law (including ERISA), and may exercise such additional powers and authority as may be granted by the Principal Employer from time to time.

(b) No amendment or modification shall be made which would retroactively impair any rights to any benefit under the Plan which any Participant, Beneficiary or surviving spouse would otherwise have had at the date of such amendment by reason of the contributions theretofore made, except to such extent as may be necessary or appropriate to qualify or maintain the Plan and Trust as a plan and trust meeting the requirements of Code Sections 401(a) and 501(a) or any other provision of applicable law (including ERISA), or make it possible for any part of the funds of the Plan (other than such part as is required to pay taxes, if any, and administrative expenses as provided in Section 10.4) to be used for or diverted to any purposes other than for the exclusive benefit of Participants and their Beneficiaries and surviving spouses prior to the satisfaction of all liabilities with respect thereto.

(c) Any amendment, modification, suspension or termination of any provisions of the Plan may be made retroactively if necessary or appropriate to qualify or maintain the Plan and Trust as a plan and trust meeting the requirements of Code Sections 401(a) and 501(a) or any other provision of applicable law.

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13.2 Notice.

Notice of any amendment, modification, suspension or termination of the Plan shall be given by the Employer or the Administrator, whichever adopts the amendment, to the other and, where and to the extent required by law, to Participants and other interested parties.

13.3 Plan Termination.

(a) Upon termination of the Plan, no amount shall thereafter be payable under the Plan to or in respect of any Participant except as provided in this Article XIII, and to the maximum extent permitted by ERISA, transfers or distributions of the assets of the Plan as provided in this Article XIII shall constitute a complete discharge of all liabilities under the Plan. The Administrator shall remain in existence and all of the provisions of the Plan which in the opinion of the Administrator are necessary for the execution of the Plan and the distribution or transfer of the assets of the Plan shall remain in force. All determinations and notifications referred to in this Article XIII shall be in form and substance satisfactory to counsel for the Plan.

(b) Upon the complete or partial termination of the Plan, or upon the complete discontinuance of contributions hereunder, the Account of each affected Participant shall be determined promptly and, if not already fully vested, shall become fully vested and nonforfeitable. Distribution to the affected Participants thereafter shall be made in one of the manners and on the appropriate date or dates described in Article VII. Until fully distributed, each Account shall continue to be revalued in accordance with the provisions of Article VI.

13.4 Successor Plan.

No transfer of the Plan’s assets and liabilities to a successor employee benefit plan (whether by merger or consolidation with such successor plan or otherwise) shall be made unless each Participant would, if either the Plan or such successor plan then terminated, receive a benefit immediately after such transfer which (after taking account of any distributions or payments to them as part of the same transaction) is equal to or greater than the benefit he would have been entitled to receive immediately before such transfer if the Plan had then been terminated. The Trustee may also request appropriate indemnification from the employer or employers maintaining such successor plan before making such a transfer.

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ARTICLE XIV

TOP HEAVY PROVISIONS

14.1 Top Heavy Plan.

(a) Notwithstanding any other provisions of the Plan, the provisions of this Article XIV shall apply and supersede all other provisions of the Plan during each Plan Year with respect to which the Plan is determined to be a Top Heavy Plan. However, the provisions of this Article XIV shall not apply to the Plan for any Plan Year beginning on or after January 1, 2002 in which the Plan consists solely of a cash or deferred arrangement which meets the requirements of Code Section 401(k)(12) and matching contributions with respect to which the requirements of Code Section 401(m)(11) are met.

(b) The Plan will be considered a Top Heavy Plan for any Plan Year if it is determined to be a Top Heavy Plan as of the last day of the preceding Plan Year or, with respect to the first Plan Year, the last day of such Plan Year (the “Determination Date”).

(c) For any Plan Year, the Plan will be a Top Heavy Plan if any of the following conditions exist:

(i) The Plan is not part of a Required Aggregation Group or Permissive Aggregation Group and the Top Heavy Ratio for the Plan exceeds 60 percent.

(ii) The Plan is part of a Required Aggregation Group but not part of a Permissive Aggregation Group and the Top Heavy Ratio for the Required Aggregation Group exceeds 60 percent.

(iii) The Plan is part of a Required Aggregation Group and a Permissive Aggregation Group and the Top Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent.

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14.2 Special Definitions.

For purposes of this Article XIV and as otherwise used in the Plan, the following terms shall have the meanings set forth below:

(a) “Valuation Date” means the Determination Date. Participants’ Accounts shall be valued on the Valuation Date for purposes of determining the Top Heavy Ratio.

(b) “Required Aggregation Group” means (i) the group composed of each qualified plan maintained by the Employer or any Related Employer in which at least one Key Employee participates or participated in the Plan Year containing the Determination Date or any of the four preceding Plan Years, regardless of whether the plan has been terminated, and (ii) any other qualified plan maintained by the Employer or any Related Employer which enables a plan described in clause (i) during the period tested to meet the requirements of Code Section 401(a)(4) or 410.

(c) “Permissive Aggregation Group” means the Required Aggregation Group plus any other qualified plan or plans maintained by the Employer or any Related Employer which, when considered as a group, would continue to satisfy the requirements of Code Sections 401(a)(4) and 410 with such other plans being taken into account.

(d) “Key Employee” means, with respect to Plan Years beginning on and after January 1, 2002, any employee of the Employer who at any time during the Plan Year is (i) an officer of the Employer whose annual compensation from the Employer exceeds $130,000 (as adjusted under Code Section 416(i)(1)(A)), (ii) a five-percent owner of the Employer, or (iii) a one-percent owner of the Employer whose annual compensation from the Employer exceeds $150,000. For Plan Years ending prior to January 1, 2002, the determination of who is a Key Employee shall be made in accordance with the provisions of Code Section 416 that are applicable to such determinations made with respect to any such Plan Year.

For the purpose of determining who are Key Employees, “annual compensation” means compensation as defined in Code Section 415(c)(3), but including amounts contributed by the Employer pursuant to a salary reduction agreement which are excludable from the Employee’s gross income under Code Sections 125, 402(e)(3), 402(h) or 403(b).

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(e) “Non-Key Employee” means any employee or former employee (and the Beneficiaries of such employee) of the Employer who is not a Key Employee.

(f) “Top Heavy Ratio”

(i) If the Employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Employer has not maintained any defined benefit plan which during the five-year period ending on the Determination Date has or has had accrued benefits, the Top Heavy Ratio for this Plan, or for the Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of the Account balances of all Key Employees as of the Determination Date (including any part of any Account balance distributed in the five-year period ending on the Determination Date) and the denominator of which is the sum of all Account balances (including any part of any Account balance distributed in the five-year period ending on the Determination Date), both computed in accordance with Code Section 416 and the regulations thereunder. Both the numerator and denominator of the Top Heavy Ratio shall be increased to reflect any contribution not actually made as of the Determination Date, but which is required to be taken into account on that date under Code Section 416 and the regulations thereunder.

(ii) If the Employer maintains one or more defined contribution plans (including any Simplified Employee Pension Plan) and the Employer maintains or has maintained one or more defined benefit plans which, during the five-year period ending on the Determination Date, has or has had any accrued benefits, the Top Heavy Ratio for any Required or Permissive Aggregation Group, as appropriate, is a fraction, the numerator of which is the sum of Account balances under the aggregated defined contribution plans for all Key Employees, determined in accordance with (i) above, and the present value of accrued benefits under the aggregated defined benefit plans for all Key Employees as of the Determination Date, and the denominator or which is the sum of the Account balances under the aggregated defined contribution plans for all Participants, determined in accordance with (i) above, and the present value of accrued benefits under the defined benefit plans for all Participants as of the Determination Date, all determined in accordance with Code Section 416 and the regulations thereunder. The accrued benefits under a defined benefit plan in both the numerator and denominator of the Top Heavy Ratio shall be increased for any distribution of an accrued benefit made in the five-year period ending on the Determination Date.

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(iii) For purposes of (i) and (ii) above, 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 12-month period ending on the Determination Date, except as provided in Code Section 416 and the regulations thereunder for the first and second plan years of a defined benefit plan. The Account balances and accrued benefits of a Participant who is not a Key Employee but who was a Key Employee in a prior year, or who has not been credited with at least one Hour of Service with any Employer at any time during the five-year period ending on the Determination Date will be disregarded. The provisions of this Article XIV shall be applied by disregarding Elective Contributions made in accordance with Section 4.1(b).

(iv) The calculations of the Top Heavy Ratio, and the extent to which distributions, rollovers and transfers are taken into account will be made in accordance with Code Section 416 and the regulations thereunder. When aggregating plans, the value of Account balances and accrued benefits will be calculated with reference to the Determination Dates that all within the same calendar year.

(v) The accrued benefit of a Participant other than a Key Employee shall be determined under the method, if any, that uniformly applies for accrual purposes under all defined benefit plans maintained by the Employer, or 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 Code Section 411(b)(l)(C).

(g) “Super Top Heavy Plan” means a Top Heavy Plan which would continue to be a Top Heavy Plan if 90 percent were substituted for 60 percent each place it appears in the definition of Top Heavy Plan.

14.3 Minimum Contributions.

(a) Except as otherwise provided below, the Employer Contributions allocated on behalf of any non-key Employee shall not be less than the lesser of three percent of such Participant’s Compensation or, if the Employer has no defined benefit plan which designates this Plan to satisfy Code Section 401(a), the largest percentage of Employer Contributions, as a percentage of the Key Employee’s Compensation, allocated on behalf of any Key Employee for that year. For purposes of this Section 14.3, “Compensation” means compensation as defined in Section 1.415-2(d) of the Income Tax Regulations.

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(b) The provisions of (a) above shall not apply to any Participant who was not employed by the Employer on the last day of the Plan Year or to any Participant to the extent he is covered under any other plan or plans of the Employer and the Employer has provided that the minimum allocation or benefit requirement applicable to Top Heavy Plans will be met in such other plan or plans.

(c) If the Plan is a Super Top Heavy Plan, the allocation of Employer contributions shall, in any Plan Year for any Participant who is not a Key Employee, be equal to the lesser of four percent of such Participant’s compensation or the percentage of compensation for the Key Employer for whom such percentage is the highest for such Plan Year.

(d) For purposes of this Section 14.3, all defined contributions plans in the Required Aggregation Group shall be treated as a single plan. If the Required Aggregation Group includes both a defined benefit plan and the Plan, a minimum benefit shall be provided in the defined benefit plan and offset by the benefit provided in the Plan.

14.4 Combination of Plans.

For each Plan Year beginning prior to January 1, 2000 that the Plan is a Top Heavy Plan, 1.0 shall be substituted for 1.25 as the multiplicand of the dollar limitation in determining the denominator of the defined benefit plan fraction and of the defined contribution plan fraction for purposes of Plan Section 5.6 and Code Section 415(e).

14.5 Other Plans.

The Trustee shall, to the maximum extent permitted by the Code and in accordance with the regulations thereunder, apply the provisions of this Article XIV by taking into account the benefits payable and the contribution made under all other defined contribution plans and defined benefit plans maintained by the Employer or any Related Employer which are qualified under Code Section 401(a) to prevent inappropriate omissions or required duplications or minimum benefits or contributions.

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ARTICLE XV

GENERAL LIMITATIONS AND PROVISIONS

15.1 Rights of Employer.

Nothing contained in the Plan shall give any employee the right to be retained in the employment of the Employer or any Related Employer or affect the right of any such employer to dismiss any employee. The adoption and maintenance of the Plan shall not constitute a contract between the Employer and any employee or consideration for, or an inducement to or condition of, the employment of any employee.

15.2 Trust as Source of Benefits.

Any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of the Trust Agreement which the Employer shall enter into with the Trustee. The Trust shall be the sole source of benefits under the Plan and, except as otherwise required by ERISA, the Employer and the Trustee assume no liability or responsibility for payment of such benefits, and each Participant, Surviving Spouse, Beneficiary or other person who shall claim the right to any payment under the Plan shall be entitled to look only to the Trust for such payment and shall not have any right, claim or demand therefor against the Employer, or the Trustee or any member thereof or any employee or director of the Employer.

15.3 Incompetent Payee.

If the Administrator shall find that any person to whom any amount is payable under the Plan is found by a court of competent jurisdiction to be unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due him or his estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Administrator so elects, be paid to his Spouse, a child, a relative, an institution maintaining or having custody of such person, or any other person deemed by the Administrator to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Plan and the Trust therefor.

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15.4 Nonalienation of Benefits.

Except insofar as may otherwise be required by law or pursuant to the terms of a Qualified Order, no amount payable at any time under the Plan and the Trust shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any manner be subject to the debts or liabilities of any person and any attempt to so alienate or subject any such amount, whether presently or thereafter payable, shall be void. If any person shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach, charge or otherwise encumber any amount payable under the Plan and Trust, or any part thereof, or if by reason of his bankruptcy or other event happening at any such time such amount would be made subject to his debts or liabilities or would otherwise not be enjoyed by him, then the Administrator may, in accordance with procedures applied in a uniform and nondiscriminatory manner, direct that such amount be withheld and that the same or any part thereof be paid or applied to or for the benefit of such person, his Spouse, children or other dependents, or any of them, in such manner and proportion as the Administrator may deem proper. For purposes of the Plan, a “Qualified Order” means any judgment, order, settlement, decree, or the like, under which the Participant is ordered or required to pay an amount pursuant to a Qualified Domestic Relations Order, within the meaning of Code Section 414(p)(l), or an order or requirement described in Code Section 401(a)(13)(C).

15.5 Lost Payee.

If the Administrator cannot ascertain the whereabouts of any person to whom a payment is due under the Plan, including an alternate payee under a Qualified Order, as provided in Section 15.4, and if, after three years from the date such payment is due, a notice of such payment due is mailed to the last known address of such person, as shown on the records of the Administrator or the Employer, and within three months after such mailing such person has not made written claim therefor, the Administrator, if it so elects, after receiving advice from counsel to the Plan, may direct that such payment and all remaining payments otherwise due to such person be canceled on the records of the Plan and the amount thereof applied to reduce the contributions of the Employer, and upon such cancellation, the Plan and the Trust shall have no further liability therefor, except that, in the event such person later notifies the Administrator of his whereabouts and requests the payment or payments due to him under the Plan, the amount so applied shall be paid to him as provided in Article VII.

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15.6 Insurance Contracts.

If the payment of any benefit under the Plan is provided for by a contract with an insurance firm, the payment of such benefit shall be subject to all the provisions of such contract.

15.7 Gender.

Whenever used in the Plan, the masculine gender includes the feminine.

15.8 Captions.

The captions preceding the Sections of the Plan have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions of the Plan.

15.9 Governing Law.

The Plan and all rights thereunder shall be governed by and construed in accordance with ERISA and by the laws of the State of New Jersey, to the extent not preempted by ERISA.

In WITNESS WHEREOF the Employer has caused this amended and restated Plan to be executed this 29th day of December, 2003.

ATTEST:	THE PROVIDENT BANK
/s/ Ann Callahan	By:	/s/ C. G. Haagensen
	Title:

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FIRST AMENDMENT TO THE

PROVIDENT BANK

EMPLOYEE SAVINGS INCENTIVE PLAN

(As amended and restated effective April 1, 2003)

The Plan is hereby amended in the following respects, effective as of the effective date of the merger of First Savings Bank into The Provident Bank:

1. Section 2.1 is amended by the addition of the following new paragraph (e):

“(e) Special Provisions for Certain Employees of First Savings Bank. Subject to Section 2.1(c), an Eligible Employee who was employed by First Savings Bank (“FSB”) immediately before the effective date of the merger of FSB into the Employer (the “Merger Effective Date”) and who became an employee of the Employer as of the Merger Effective Date (an “FSB Employee”) shall be eligible to become a Participant in the Plan in accordance with the following provisions:

(i) FSB Employees Eligible Under FSB Plan. An FSB Employee who was eligible to participate in the Incentive Savings Plan of First Savings Bank (the “FSB Plan”) immediately prior to the Merger Effective Date shall be eligible to become a Participant in the Plan as of the first payroll period on or after the Merger Effective Date that is administratively practicable.

(ii) FSB Employees Meeting Eligibility Requirements of This Plan. An FSB Employee not described in (i) above, who would have been eligible to become a Participant in the Plan in accordance with the preceding provisions of this Section 2.1 on or before the Merger Effective Date if his employment with FSB were employment with the Employer shall also be eligible to become a Participant in the Plan as of the first payroll period on or after the Merger Effective Date that is administratively practicable.

(iii) Other FSB Employees. An FSB Employee not described in (i) or (ii) above shall be eligible to become a Participant in the Plan in accordance with Section 2.1(b) as of the date occurring on or after the Merger Effective Date that he would have been so eligible if his employment with FSB were employment with the Employer.”

2. Section 3.1 is amended in its entirety to read as follows:

“3.1 Period of Service.

(a) In General - An Employee’s Period of Service shall be the period beginning on his Employment Commencement Date (or his Reemployment Commencement Date, if applicable) and ending on his next Severance Date, measured in full years and completed months. Notwithstanding the foregoing, a Participant’s Period of Service attributable to employment prior to the date of execution of this amendment and restatement shall not be less than the Period of Service standing to his credit under the terms of the Plan, as in effect immediately prior to the date of such execution.

(b) FSB Employees – An FSB Employee’s Period of Service shall be determined in accordance with (a) above by treating employment with FSB immediately prior to the

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Merger Effective Date as employment with the Employer. For purposes of the preceding sentence, the terms “FSB, “FSB Employee” and “Merger Effective Date” shall have the meaning given to them in Section 2.1(e).”

In WITNESS WHEREOF the Bank has caused this amendment to be executed this 29^th day of June, 2004.

ATTEST:	THE PROVIDENT BANK
/s/ Mary Louise Festa	By:	/s/ Paul M. Pantozzi
Mary Louise Festa		Paul M. Pantozzi
Corporate Secretary		Chairman of the Board,
		Chief Executive Office & President

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EX-10.4

Exhibit 10.4

THE PROVIDENT BANK

EMPLOYEE STOCK OWNERSHIP PLAN

Amendment Number One

The Provident Bank Employee Stock Ownership Plan (the “Plan”) is hereby amended in accordance with the following, effective as of January 1, 2002:

1. The third paragraph of Section 10.6 of the Plan shall be amended in its entirety to provide as follows:

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 beginning not later than 30 days after the exercise of the put right and not exceeding five years, 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.

2. Section 12.4 of the Plan shall be amended in its entirety to provide as follows:

Valuation of Stock. If the valuation of any Stock is not established by reported trading on a generally recognized public market, the valuation of such Stock shall be determined by an independent appraiser. For purposes of the preceding sentence, the term “independent appraiser” means any appraiser meeting requirements similar to the requirements of the regulations prescribed under Section 170(a)(1) of the Code.

IN WITNESS WHEREOF, this Amendment Number One has been executed by the duly authorized officers of the Bank as of the 19^th day of February, 2004.

ATTEST:	THE PROVIDENT BANK
/s/ Mary Louis Festa	By:	/s/ Paul M. Pantozzi
Corporate Secretary		Authorized Officer

EX-10.5

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;

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 form of deferred raises 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;

WHEREAS, effective January 1, 1990, with retroactive application to January 1, 1988, the Bank adopted the Supplemental Executive Retirement Plan of The Provident Bank, and

WHEREAS, the Bank desires to add a provision to freeze benefits as of March 31, 2003;

NOW, THEREFORE, in accordance with resolutions of its Board of Managers at the meeting of January 23, 2003, the Bank amends and restates the Supplemental Executive Retirement Plan 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 to participate in this Plan (hereinafter “Employee”).

2. The Bank will pay to or in respect of each Employee an 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 in the form of deferred raises, 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.

The Bank will pay to the Beneficiary of an Employee who dies while actively employed by Provident or prior to commencement of benefits from this Plan an amount equal to the amount which would have been payable under the terms of the Retirement Plan but for the limitation under Sections 401(a)(17) and 415 of the Code less the amount payable under the terms of the Retirement Plan. Any such payments to the Beneficiary shall commence on the first of the month following the later of the date the Employee would have attained age 55 and the date of his death. The Employee’s Beneficiary shall be the person who is his beneficiary in the Retirement Plan.

Notwithstanding the foregoing, no additional retirement or death benefits shall accrue to a participant or their Beneficiary under this Plan on account of any Pension Credit or Earnings after March 31, 2003.

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. “Notwithstanding any other provision of this Plan, the undistributed balance of each Employee’s accrued benefit under the Plan shall be distributed to him within 60 days after the date of a “Change in Control” as hereafter defined. For purposes hereof, a “Change in Control” shall mean the occurrence of any of the following events:

(a) approval by the shareholders of Provident Financial Services, Inc. (the “Company”) of a transaction that would result and does result in the reorganization, merger or consolidation of the Company, with one or more other persons, other than a transaction following which:

(i) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(ii) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the Rule of 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

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(b) the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the Rule of 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert, or approval by the shareholders of the Company of any transaction which would result in such an acquisition;

(c) a complete liquidation or dissolution of the Company or the Bank, or approval by the shareholders of the Company of a plan for such liquidation or dissolution;

(d) the occurrence of any event if, immediately following such event, members of the Company’s Board of Directors who belong to any of the following groups do not aggregate at least a majority of the Company’s Board of Directors:

(i) individuals who were members of the Company’s initial Board of Directors; or

(ii) individuals, other than members of the Company’s Board of Directors who first became members of the Company’s Board of Directors:

(A) upon election to serve as a member of the Company’s Board of Directors by the affirmation vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(B) upon election by the shareholders of the Company to serve as a member of the Company’s Board of Directors, but only if nominated for election by the affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first nomination; provided that such individual’s election or nomination did not result from an actual or threatened election contest or other actual or threatened solicitation of proxies or consents other than by or on behalf of the Company’s Board of Directors; or

(e) any event which would be described in Section 4(a), (b), (c) or (d) if the term “Bank” were substituted for the term “Company” therein and the term “Bank’s Board of Managers” were substituted for the term “Company’s Board of Directors” therein. In no event, however, shall a Change in Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 4, the term “person” shall include the meaning assigned to it under Section 13(d)(3) or 14(d)(2) of the Exchange Act.”

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5. 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.

6. 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 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.

7. 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.

8. If the Board of Managers determines that an eligible member (or the designated beneficiary of an eligible member) is unable to manage his affairs, it may, in its sole discretion, pay any amount due to such person to the individual or institution then providing for the care, maintenance and support of such person, unless prior to such payment claim shall be made therefor by a duly appointed guardian, committee or other legal representative designated to receive such payment on behalf of such person.

9. 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.

10. 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 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.

11. Whenever used herein, the term “Board of Managers” shall mean the Board of Managers of the Provident Bank in its mutual form and the Board of Directors of the Provident Bank in its stock form. Wherever the context shall require, the masculine gender shall be construed to include the feminine and the singular number the plural.”

12. Whenever used hereto, the term “Compensation” shall mean, for any applicable period, the total earnings of a Participant and shall include deferred compensation in the form of deferred raises. However, compensation shall exclude bonuses, commissions, severance pay, reimbursements for expenses and any other fringe benefits.

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14. 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, CHAIRMAN,

CHIEF EXECUTIVE OFFICER, and PRESIDENT

DATED: January 23, 2003

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EX-10.6

Exhibit 10.6

AMENDED AND RESTATED

SUPPLEMENTAL EXECUTIVE SAVINGS PLAN

OF

THE PROVIDENT BANK

WHEREAS, The Provident Bank (the “Bank”) sponsors the Supplemental Executive Savings Plan (the “Plan”) of Provident Bank for the benefit of certain senior executives whose benefits are limited under The Provident Bank Employee Savings Incentive Plan, a tax-qualified thrift savings plan (the “Savings Plan”) due to limitations imposed by Sections 401(a)(17), 401(m) and 415 of the Internal Revenue Code (“Code”) (hereinafter, said limitations shall be referred to collectively as the “Applicable Limitations”); and

WHEREAS, in connection with its conversion to a stock form savings bank as the wholly-owned subsidiary of Provident Financial Services, Inc. (the “Company”) and initial offering of the common stock of the (“Company Stock”), the Bank intends to adopt a tax-qualified Employee Stock Ownership Plan (“ESOP”) and to have the ESOP obtain a loan to purchase up to 8% of the shares issued in the offering; and

WHEREAS, in consideration of the above, the Bank recently amended the Plan in order to (i) credit the accounts of Participants with supplemental ESOP benefits to the extent that the Applicable Limitations limit the amount of benefits to such persons in the tax-qualified ESOP, (ii) revise the definition of “change in control” to conform to the definition in its other benefit plans and arrangements, and (iii) for certain other purposes set forth herein; and

WHEREAS, the Bank now desires to amend and restate the Plan to permit eligible executives to make a special one-time election to invest all or any portion of their existing account balance in the Plan in Company Stock.

NOW THEREFORE, in consideration of the foregoing, the Supplemental Executive Savings Plan of The Provident Bank (the “Plan”) is hereby amended and restated effective December 1, 2002 in accordance with the following:

1. Participation. Participation in this Plan shall be limited to a select group of management or highly compensated employees of the Bank whose benefits under the Savings Plan and ESOP are affected by Section 401(a)(17), 401(m), or Section 415 of the Code and who are designated by the Board of Managers to participate in this Plan (hereinafter “Employee”). Those Employees who are designated to participate and who, in fact, participate shall sometimes hereinafter be referred to as “Participants”.

2.     A.    Supplemental Savings Plan Benefits. The Bank will pay to or in respect of each Employee an amount equal to the amount which would have been payable under the terms of the Savings Plan but for the limitations under Sections 401(a)(17), 401(m), and 415 of the Code less the amount payable under the terms of the Savings Plan. The Bank will also pay to or in respect of each Employee an amount equal to the amount which would have been payable under the terms of the Savings Plan for any deferred compensation in the form of deferred raises. Such amounts, which shall be contingent upon the Employee deferring 5% of his Compensation, on a pre-tax basis, (minus the amount actually contributed to the Savings Plan) to this Plan, shall be paid commencing no later than ninety (90) days following termination of employment, but in no event before age 60, in 180 monthly installments, provided, however, that if the amount attributable to the Employee is equal to or less than Twenty-Five Thousand Dollars ($25,000) (or such other amount as the Board of Managers may be resolution determine),

the Board of Managers, may in its sole discretion determine that the Employee’s account shall be distributed in a lump sum within ninety (90) days following termination of employment, irrespective of the Employee’s age at termination. Notwithstanding anything herein to the contrary, if the Employee has a portion of his Supplemental Savings benefit invested in Company Stock, as contemplated under Section 4.B hereof, the amount so invested shall be distributed in-kind in a lump sum distribution no later than ninety (90) days following termination of employment and the remainder of his account shall be paid in 180 monthly installments as contemplated above.

B.    Supplemental ESOP Benefit. Each year, the Bank shall credit the account (or applicable sub-account) of each Participant, with a number of units of Phantom Stock, which number shall be determined in the following manner: the Bank shall determine (in accordance with such procedures as it may determine) the amount by which the Participant’s maximum contribution under the ESOP exceeds his actual contribution due to the reductions imposed by the Applicable Limitations and then shall determine the number of shares of Stock such amount would have purchased under the ESOP if it had been contributed to the ESOP for the benefit of the Participant. The number of shares of Company Stock such amount would have purchased under the ESOP, shall for these purposes, be converted into units of Phantom Stock and shall be credited to the Participant’s sub-account. The Bank’s determination regarding “the number of shares of Company Stock such amount would have purchased under the ESOP” may take into consideration such factors as: whether the additional amount, if contributed to the ESOP, would have been used to repay an outstanding ESOP loan, and if so, the appropriate number of additional shares to be released from the suspense account and allocated to the Participant’s account based on such ESOP loan payment.

(i) Crediting of Earnings. Phantom Stock credited to a Participant’s account under this Section shall be credited with dividends at the same time and in the same manner as is applicable to the Company Stock held in the Participant’s account under the ESOP. Cash dividends allocated to a Participant’s account shall be credited with interest at a rate determined by the Board of Managers.

(ii) Stock Dividends and Stock Splits. In the case of a stock dividend or stock split, additional units of Phantom Stock shall be credited to each Participant’s account under the Plan.

(iii) Valuation of Sub-Accounts. The value of a Participant’s ESOP sub-account shall be determined as of each “valuation date” (as determined by the Bank) in the following manner:

(a) First, the Bank will add the earnings to the Participant’s sub-account in accordance with Section 2 B(i).

(b) Next, all Bank contributions to the Participant’s ESOP Sub-Account shall be credited in accordance with Section 2B.

(c) Finally, a Participant’s ESOP sub-account shall be reduced by the amount of any benefits distributed to or on behalf of the Participant from said sub-account, if any.

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(d) Each Participant’s ESOP sub-account shall be valued as of each valuation date or more frequently, as determined in the sole discretion of the Bank, and shall again be valued as of the date that a Participant receives a payment under the Plan attributable thereto, in accordance with the procedures established by the Bank.

(e) All allocations to and deductions from a Participant’s account under this Section 2.B(iii) shall be deemed to have been made on the applicable valuation date in the order of priority set forth in this Section, even though actually determined at a later date.

(iv) Distribution of Supplemental ESOP Benefit. Except to the extent that a different time or different manner of distribution is specifically set forth in this Plan, the supplemental ESOP benefit shall be distributed at the same time and in the same manner, i.e., lump sum or installments, as the benefit payable under the ESOP. A Participant’s supplemental ESOP benefit under this Plan shall be a benefit paid in the form of Company Stock to the extent of the units of Phantom Stock credited to the Participant’s account. The value of a Participant’s supplemental ESOP benefit at the time of distribution shall be equal to the number of units of Phantom Stock allocated to the Participant’s Account multiplied by the fair market value of a share of Company Stock on the date of distribution plus the dollar value of any earnings thereon.

3.   A.    The accounts of Participants who are not employed by The Provident Bank on or after January 1, 1998 shall be allocated earnings once a month at the same rate as the Provident prime rate.

B.    The Bank shall establish a fund (“Fund”) in order to provide for the payment of the amounts due under this Plan to employees who are employed by The Provident Bank on or after January 1, 1998. The Fund shall be held separate and apart from other assets of the Bank and shall be used exclusively for the uses and purposes herein set forth. The amounts credited to the benefit of each Employee under the Fund shall be segregated into sub-accounts representing the “Supplemental Savings” benefit and the “Supplemental ESOP” benefit attributable to such Employee.

C.    The Employees, their beneficiaries, and the Plan shall not have any preferred claim on, or any beneficial ownership interest in, any assets of the Fund prior to the time such assets are to be paid to the Employee or his beneficiary as set forth in the Plan. All rights created under the Plan shall be deemed unsecured contractual rights of the Employees against the Bank until such time as the Employees or their beneficiaries are entitled to receipt of their separate account.

4.   A.    The Supplemental Savings accounts in the Supplemental Savings portion of the Fund shall be invested by the Board of Managers, in its sole discretion, after consulting with the eligible Employees (those who are employed by The Provident Bank on or after January 1, 1998) in a portfolio of assets. The portfolio of assets shall consist of any combination of stocks, bonds, notes, mutual funds, certificates of deposit, money-market funds, or other cash equivalent investments. A separate sub-account, referred to as the

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Investment Account, shall be maintained in the name of each eligible Employee in the Supplemental Savings portion of the Fund which account shall reflect the amount of each Employee’s contributions and the Bank’s contributions on his behalf and any distributions to such Employee. From time to time, the value of each Investment Account shall be adjusted to reflect its proportionate share of the net increment or decrement in the portfolio of assets due to all interest, dividends and other income received, as well as any realized and unrealized gains and losses. For purposes of making any distribution under paragraph 2 above the value of an eligible Employee’s interest in the portfolio shall be its value (adjusted as aforesaid) as of the last day of the month next preceding the month distribution occurs. Appropriate payroll and other taxes shall be withheld from all payments made under the terms of this Plan.

B.     Effective December 1, 2002, in connection with the conversion of the Company to stock form, each eligible Employee shall be provided with the opportunity to invest all or any portion of the amount credited to his or her Investment Account (in increments of $10) in the Supplemental Savings portion of the Fund in Company Stock on a one-time basis in connection with the stock offering. Such election shall be irrevocable. Any eligible Employee who wishes to take advantage of this opportunity shall execute a special investment election form, a copy of which is annexed hereto as “Exhibit A”. Notwithstanding any provision of the Plan to the contrary, if an eligible Employee elects to invest all or a portion of the eligible Employee’s Investment Account under the Plan in Company Stock (in increments of $10), the amount so invested shall remain invested in Company Stock for the duration of such eligible Employee’s participation in the Plan. Each eligible Employee who has directed the investment of all or any portion of his or her Investment Account under the Plan in Company Stock may exercise the voting rights appurtenant to such shares of Company Stock by giving voting instructions to the trustee of the Fund. If an eligible Employee has elected to invest all or a portion of his Investment Account in Company Stock, the common stock so purchased shall be credited to his separate account in the Fund and shall be segregated from the other assets or investments credited to the benefit of the Employee. The Company Stock shall be credited to a Stock Fund Account in the Supplemental Savings portion of the Fund for the benefit of such Employee. The value of any Employee’s Stock Fund Account shall be determined by reference to the last reported trading price of the Company Stock on the applicable valuation date. Any earnings on such common stock shall be credited to the Investment Account and invested in accordance with the procedures for such account.

5. Any benefits payable under this Plan which are attributable to the Bank’s contributions and the earnings on these contributions shall become vested under the same terms and conditions as the respective benefits provided under the Savings Plan and ESOP. Any benefits payable under this Plan which are attributable to the Employee’s contributions and the earnings on these contributions shall be immediately 100% vested.

6. Hardship Distribution. An eligible Employee, who believes that he has incurred a Hardship may petition the Board of Managers for a Hardship distribution. Upon a finding that the Employee has suffered a Hardship, the Board of Managers may, in its sole discretion, make distributions from the Employees account prior to the time specified for payment of benefits. The amount of such distribution shall be limited to the amount reasonably necessary to meet the requirements during the financial Hardship. A distribution due to Hardship shall first be made from assets credited to such Employee other than Company Stock.

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7. The undistributed balance, if any, of each Employee’s separate account shall be distributed to his Beneficiary upon his death. The Employee’s Beneficiary shall be the person who is his beneficiary in the Savings Plan. The Employee’s Beneficiary with respect to the ESOP benefit under the Plan shall be the same person who is his beneficiary in the ESOP. Any portion of the undistributed balance which is invested in Company Stpcl, shall be distributed in-kind.

8. Notwithstanding any other provision of this Plan, the undistributed balance of each Participant’s separate account, including the Participant’s separate supplemental Savings Plan account and supplemental ESOP account, shall be distributed to him within 60 days after the date of a “Change in Control” as hereafter defined. For purposes hereof, a “Change in Control” shall mean the occurrence of any of the following events:

(a) approval by the shareholders of Provident Financial Services, Inc. (the “Company”) of a transaction that would result and does result in the reorganization, merger or consolidation of the Company, with one or more other persons, other than a transaction following which:

(i) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(ii) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

(b) the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert, or approval by the shareholders of the Company of any transaction which would result in such an acquisition;

(c) a complete liquidation or dissolution of the Company or the Bank, or approval by the shareholders of the Company of a plan for such liquidation or dissolution;

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(d) the occurrence of any event if, immediately following such event, members of the Company’s Board of Directors who belong to any of the following groups do not aggregate at least a majority of the Company’s Board of Directors:

(i) individuals who were members of the Company’s initial Board of Directors; or

(ii) individuals, other than members of the Company’s initial Board of Directors who first became members of the Company’s Board of Directors:

(A) upon election to serve as a member of the Company’s Board of Directors by the affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(B) upon election by the shareholders of the Company to serve as a member of the Company’s Board of Directors, but only if nominated for election by the affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first nomination; provided that such individual’s election or nomination did not result from an actual or threatened election contest or other actual or threatened solicitation of proxies or consents other than by or on behalf of the Company’s Board of Directors; or

(e) any event which would be described in Paragraph 8(a), (b), (c) or (d) if the term “Bank” were substituted for the term “Company” therein and the term “Bank’s Board of Managers” were substituted for the term “Company’s Board of Directors” therein. In no event, however, shall a Change in Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank or a subsidiary of either of them, by the Company, the Bank, any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Paragraph 8, the term “person” shall include the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

9. 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 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 supplemental Savings Plan component of the Plan shall terminate upon the termination of the Savings Plan, unless sooner terminated by the Board of Managers and the supplemental ESOP component of the Plan shall terminate upon the termination of the ESOP component of the Plan, unless sooner terminated by the Board of Managers.

10. 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.

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11. If the Board of Managers determines that an eligible member (or the designated beneficiary of an eligible member) is unable to manage his affairs, it may, in its sole discretion, pay any amount due to such person to the individual or institution then providing for the care, maintenance and support of such person, unless prior to such payment claim shall be made therefore by a duly appointed guardian, committee or other legal representative designated to receive such payment on behalf of such person.

12. The interpretation and construction of the Plan by the Board of Managers, and any action taken hereunder, shall be binding and conclusive upon the eligible member and any other person claiming any rights hereunder. The Board of Managers may from time to time delegate to such person or persons or to such committee as it shall designate any one or more of its administrative duties under the Plan.

13. 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 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.

14. Whenever used herein, the term “Board of Managers” shall mean the Board of Managers of The Provident Bank in its mutual form and the Board of Directors of The Provident Bank in its stock form. Wherever the context shall require, the masculine gender shall be construed to include the feminine and the singular number the plural.

15. Whenever used hereto, the term “Compensation” shall mean, for any applicable period, the total earnings of a Participant and shall include deferred compensation in the form of deferred raises. However, compensation shall exclude bonuses, commissions, severance pay, reimbursements for expenses and any other fringe benefits.

16. The provisions of this Plan shall bind and inure to the benefit of the Bank and its successors and assigns. The term “successors” as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Bank, and successors of any such corporation or other business entity.

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

Attest:	Approved by:
/s/ Mary Louise Festa	/s/ Paul M. Pantozzi
Secretary	Authorized Officer

DATED: December 13, 2002

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AMENDED AND RESTATED

SUPPLEMENTAL EXECUTIVE SAVINGS PLAN

OF

THE PROVIDENT BANK

Amendment Number One

WHEREAS, The Provident Bank (the “Bank”) sponsors the Amended and Restated Supplemental Executive Savings Plan (the “Plan”) of Provident Bank for the benefit of certain senior executives whose benefits are limited under The Provident Bank Employee Savings Incentive Plan and The Provident Bank Employee Stock Ownership Plan due to limitations imposed by Sections 401(a)(17), 401(m) and 415 of the Internal Revenue Code; and

WHEREAS, Section 9 of the Plan permits the Board of Directors to amend the Plan at any time and from time to time; and

WHEREAS, the Bank desires to amend the Plan in order to freeze further contributions to the Plan with respect to all future employee contributions, effective as of December 31, 2003, with respect to plan years commencing after December 31, 2003, and to maintain such Plan only to hold assets for distribution to Plan participants; and

WHEREAS, in connection with freezing the Plan, the Bank desires to make a final employer contribution on behalf of the eligible participants.

NOW THEREFORE, in consideration of the foregoing, the Plan is hereby amended effective December 31, 2003 in accordance with the following:

1. Section 2.A of the Plan shall be amended by adding the following paragraph at the end thereof:

Effective for all periods after December 31, 2003, no further amounts will be credited under this Section to any Employee in the Plan. With respect to the Plan year ending December 31, 2003, the Bank shall credit one final contribution to the Plan for the benefit of Employee participants pursuant to this Section. Such contribution shall be made or credited on or before December 31, 2003, in an amount to be determined by the Board.

2. Section 2.B of the Plan shall be amended by adding the following paragraph at the end thereof:

Effective with respect to Plan years commencing after December 31, 2003, no further contributions of units of Phantom Stock shall be credited to the Supplemental ESOP portion of the Plan. With respect to the Plan year ending December 31, 2003, the Bank shall credit one final contribution of Phantom Stock to the Plan for the benefit of Employee participants pursuant to this Section. Such contribution shall be determined in accordance with the previous provisions of this paragraph as soon as

administratively feasible after the end of the ESOP plan year ending December 31, 2003. Notwithstanding the foregoing, nothing herein contained shall be construed as prohibiting the crediting of units of Phantom Stock based on earnings on or dividends credited to the units previously allocated to Employee participants accounts hereunder.

IN WITNESS WHEREOF, this Amendment Number One has been executed by the duly authorized officers of The Provident Bank as of the 18th day of December, 2003.

ATTEST:	THE PROVIDENT BANK
/s/ Mary Louise Festa	By:	/s/ Paul M. Pantozzi
Corporate Secretary		Authorized Officer

AMENDED AND RESTATED

SUPPLEMENTAL EXECUTIVE SAVINGS PLAN

OF

THE PROVIDENT BANK

Amendment Number Two

The Amended and Restated Supplemental Executive Savings Plan of The Provident Bank (the “Plan”) is hereby amended, effective March 1, 2004, in accordance with the following:

1. Section 4B of the Plan shall be amended by adding the following to the end thereof:

“Effective March 1, 2004, any earnings on Company Stock held in the Investment Account as of March 1, 2004, shall be applied to the purchase of Company Stock and shall be credited to the Employee’s Stock Fund Account. From and after March 1, 2004, any dividends declared on the Company Stock credited to a Participant’s account shall be credited in the form of Company Stock.”

IN WITNESS WHEREOF, this Amendment Number Two has been executed by the duly authorized officers of The Provident Bank as of the 19^th day of February 2004.

ATTEST:	THE PROVIDENT BANK
/s/ Mary Louise Festa	By:	/s/ Paul M. Pantozzi
Corporate Secretary		Authorized Officer

EX-10.8

Exhibit 10.8

THE PROVIDENT BANK

AMENDED AND RESTATED

BOARD OF DIRECTORS VOLUNTARY FEE DEFERRAL PLAN

Amendment Number One

The Provident Bank Amended and Restated Board of Directors Voluntary Fee Deferral Plan (the “Plan”) is hereby amended, effective December 18, 2003, in accordance with the following:

Section 1(a) of the Plan shall be amended by replacing its first sentence by the following:

Any eligible member may participate in this Plan by executing a form of deferral election, a copy of which is annexed hereto as Exhibit “A,” under which each calendar year the eligible member can elect irrevocably to defer the receipt of 25%, 50%, 75% or 100% of any fees that may be paid to the member.

IN WITNESS WHEREOF, this Amendment Number One has been executed by the duly authorized officers of The Provident Bank as of the 18th day of December, 2003.

ATTEST:	THE PROVIDENT BANK
/s/ Mary Louise Festa	By:	/s/ Paul M. Pantozzi
Corporate Secretary		Authorized Officer

THE PROVIDENT BANK

AMENDED AND RESTATED

BOARD OF DIRECTORS VOLUNTARY FEE

DEFERRAL PLAN

EXHIBIT A

Election to Defer Board of Directors Fees in 200    

Pursuant to the provisions of The Provident Bank Amended and Restated Board of Directors Voluntary Fee Deferral Plan (the “Plan”), I understand that I may make an irrevocable election to defer the receipt of board fees due to me during calendar year 200    . In accordance with the Plan:

I hereby elect (check one):

         not to defer my board fees after the date hereof and during calendar year 200    .

         to defer the receipt of

                     25%

                     50%

                     75%

                   100%

of my board fees (includes Retainer, Executive Committee, Board and Committee Fees) after the date hereof and during calendar year 200    .

The deferral, if any, indicated above shall be until the following year (check one):

         Calendar year of my normal retirement from the Board of Directors.

         Certain year that is prior to the calendar year of my normal retirement from the Board of Directors. You must select the year on this form. Year :     

I hereby further elect that the amount of the above deferred compensation shall be paid at the end of the deferral period as follows (check one):

         In a lump sum.

         In 3 annual installments until the entire amount of my deferred compensation for 200     shall have been paid to me.

I understand that this election is subject to applicable laws and regulations and to the terms and conditions of The Provident Bank Amended and Restated Board of Directors Voluntary Fee Deferral Plan as from time to time in effect. I further understand that the election to defer the receipt of any compensation I may receive in 200         may not be modified or revoked, other than as set forth in the Plan.

Name of Eligible Member (Print or Type)
Signature of Eligible Member	Date
Received by The Provident Bank
This          day of                     , 200

By:

THE PROVIDENT BANK

AMENDED AND RESTATED

BOARD OF DIRECTORS VOLUNTARY FEE DEFERRAL PLAN

Amendment Number Two

The Provident Bank Amended and Restated Board of Directors Voluntary Fee Deferral Plan (the “Plan”) is hereby amended, effective March 1, 2004, in accordance with the following:

Section 3(b) of the Plan shall be amended in its entirety to provide as follows:

“Investment in Company Stock. Notwithstanding the above, if an eligible member has elected pursuant to paragraph 1(b) to purchase common stock of the Company in accordance with paragraph 1(b) hereof, the common stock so purchased shall be credited to a separate account in the name of the member. Such account shall be referred to as the member’s Stock Fund Account. The value of each member’s Stock Fund Account shall be determined by reference to the last reported trading price of the Company’s common stock on the applicable valuation date. Any earnings on such common stock shall be credited to the Investment Account and shall be credited with interest in accordance with the provisions of paragraph 3(a) above, unless the Board of Directors determines that such earnings shall be applied towards the purchase of additional Company stock which shall be allocated to the Stock Fund Account. Notwithstanding the foregoing, effective as of March 1, 2004, all cash credited to a member’s Investment Account attributable to dividends declared and earnings thereon, if any, shall be applied to the purchase of additional Company stock, which Company stock shall be credited to the Stock Fund Account. From and after March 1, 2004, any dividends declared on the Company common stock credited to a member’s account shall be credited to the Stock Fund Account in the form of Company common stock. For purposes of making any distribution under paragraph 4 below, the applicable number of shares of Company common stock credited to such member’s account shall be distributed in-kind to the eligible member on the distribution date.”

IN WITNESS WHEREOF, this Amendment Number Two has been executed by the duly authorized officers of The Provident Bank as of the 19^th day of February 2004.

ATTEST:	THE PROVIDENT BANK
/s/ Mary Louis Festa	By:	/s/ Paul M. Pantozzi
Corporate Secretary		Authorized Officer

EX-10.11

Exhibit 10.11

PROVIDENT FINANCIAL SERVICES, INC.

BOARD OF DIRECTORS VOLUNTARY FEE DEFERRAL PLAN

The purpose of this Board of Directors Voluntary Fee Deferral Plan (the “Plan”) is to enable any non-employee member of the Board of Directors (“eligible member”) to defer future fees payable to them for their service as a member of the Provident Financial Services, Inc.’s Board of Directors.

1. Elections. Any eligible member may participate in this Plan by executing a form of deferral election, a copy of which is annexed hereto as Exhibit “A”, under which each calendar year the eligible member can elect irrevocably to defer the receipt of all (but not less than all) of any fees that may be paid to the member. In no event shall any deferral of fees be permitted which the eligible member would otherwise have the unrestricted right to receive currently. Except for the first year of the Plan, any election by an eligible member to defer future fees shall be made in the calendar year next preceding the calendar year in which the fees would be earned. Subject to the provisions of the Plan, an eligible member’s election on the deferral election form shall specify when and in what manner distribution shall be made of any deferred fees. If the eligible member fails to choose a year of distribution, it shall be deemed to be the year of his normal retirement. If the eligible member fails to specify a form of payment, he shall be deemed to have elected a lump-sum distribution.

2. Period of Deferral. An eligible member may defer his fees to a future year as selected by him. However, in no event shall any fee otherwise payable on account of any year be deferred so that the distribution begins beyond the year that the eligible member attains the mandatory retirement age prescribed by the Board of Directors (in 2003, the mandatory retirement age is age 72). In the event that the mandatory retirement age is increased (or decreased) an eligible member who has not yet attained the mandatory retirement age (as set prior to such increase or decrease) shall be entitled to make an election to maintain their previous election or to accelerate or defer their distribution to the new mandatory retirement age, so long as the election is made in the calendar year prior to the attainment of the original or new mandatory retirement age.

3. Investment and Adjustment of Deferred Fees. Subject to Paragraph 6, any fees deferred pursuant to an eligible member’s election as aforesaid shall be credited to a separate account maintained in the name of such member. Such Account shall be referred to as the member’s Investment Account. The value of each member’s Investment Account shall be credited monthly with interest at the then prevailing Wall Street Prime Rate. For purposes of making any distribution under paragraph 4 below, the value of an eligible member’s Investment Account shall be its value, adjusted with interest as aforesaid, as of the last day of the month next preceding the month distribution occurs.

4. Payment of Deferred Fees. Except as otherwise provided in this paragraph, or in the case of a “Change in Control” described in paragraph 5, the amount of an eligible member’s separate account (adjusted as provided in paragraph 3) shall be distributed to the eligible member in a lump-sum or in annual installments after such number of years or after

retiring from the Board of Directors as the eligible member may elect in accordance with paragraph 2, or, in the event of his death or total disability, in a lump-sum to the eligible member or to the person or persons designated by the eligible member to receive such distribution. An eligible member who wishes to receive a distribution of his separate account in installments may elect to receive it in annual installments over a period of three (3) years. If distribution is to be made in annual installments, the amount of each installment shall be equal to the adjusted value of the eligible member’s Investment Account determined in accordance with paragraph 3 above multiplied by a fraction, the numerator of which is one and the denominator of which is the number of installment payments remaining to be made. If an eligible member’s service is terminated but he has not attained age 65, the undistributed balance of his account shall be paid to him in a single lump sum within a reasonable time following termination of service. If an eligible member’s service is terminated on or after attainment of age 65, the eligible member shall receive the balance of his separate account at such time and in such form as he has elected or, the Board of Directors may, in its sole discretion, after receipt of a written request by such member, pay the undistributed balance of such member’s separate account in a single lump sum within a reasonable time following termination of service.

5. Distribution in the Event of a Change in Control. Notwithstanding any other provision of this Plan or of any election made by an eligible member with respect to the period of any fee deferral or the form and timing of any distributions from his separate account, the undistributed balance thereof shall be distributed to him within 60 days after the date of a Change in Control of the Company or the Bank. For purposes hereof, a “Change in Control” shall mean the occurrence of any of the following events:

(a) approval by the shareholders of the Company of a transaction that would result and does result in the reorganization, merger or consolidation of the Company, with one or more other persons, other than a transaction following which:

(i) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(ii) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

(b) the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert, or approval by the shareholders of the Company of any transaction which would result in such an acquisition;

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(c) a complete liquidation or dissolution of the Company or the Bank, or approval by the shareholders of the Company of a plan for such liquidation or dissolution;

(d) the occurrence of any event if, immediately following such event, members of the Company’s Board of Directors who belong to any of the following groups do not aggregate at least a majority of the Company’s Board of Directors:

(i) individuals who were members of the Company’s initial Board of Directors; or

(ii) individuals, other than members of the Company’s initial Board of Directors who first became members of the Company’s Board of Directors:

(A) upon election to serve as a member of the Company’s Board of Directors by the affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(B) upon election by the shareholders of the Company to serve as a member of the Company’s Board of Directors, but only if nominated for election by the affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first nomination; provided that such individual’s election or nomination did not result from an actual or threatened election contest or other actual or threatened solicitation of proxies or consents other than by or on behalf of the Company’s Board of Directors; or

(e) any event which would be described in Section 5(a), (b), (c) or (d) if the term “Bank” were substituted for the term “Company” therein and the term “Bank’s Board of Directors” were substituted for the term “Company’s Board of Directors” therein. In no event, however, shall a Change in Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank or a subsidiary of either of them, by the Company, the Bank, any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 5, the term “person” shall include the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

6. Rights of Eligible Member or Other Distributee. Nothing contained herein, and no action taken pursuant to the provisions hereof shall create, or be deemed to create a trust of any kind, or to establish any fiduciary relationship between the Company and any eligible member or other distributee. The separate accounts established hereunder shall be for record keeping purposes. Fees which have been deferred will be recorded as a liability on the Company’s general ledger when earned, but no funds shall be set aside for payment of the liability. To the extent that any person acquires a right to receive payments from the Company under the provisions hereof, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments made pursuant to this Plan shall be made from

3

the general assets of the Company, provided, however, that nothing set forth herein shall be construed as prohibiting the Company from establishing a rabbi trust to hold any assets for the benefit of eligible members of this Plan. Deferred fees and the earnings thereon shall be subject to the claims of the Company’s general creditors at all times prior to distribution, including any fees that are contributed to and become assets of a rabbi trust.

7. Designation of Beneficiary. An eligible member may designate one or more person or persons to receive the undistributed balance of his deferred fees in the event of his death by executing and delivering to the Company a beneficiary designation form, a copy of which is annexed hereto as Exhibit “B”, and may change and successively change any such designation by executing a subsequent beneficiary designation form. Unless the beneficiary designation form indicates otherwise, any designation of beneficiary shall be deemed to apply to the undistributed balance of all of the eligible member’s prior deferrals. If there is no valid beneficiary designation on file with the Company on the date of death of the eligible member, the undistributed balance of deferred fees shall be paid to the personal representative of his estate.

8. Nonassignability of Benefits. Neither the eligible member nor any other person shall have any power or right to assign, anticipate, hypothecate or otherwise encumber any deferred fees payable by the Company hereunder, nor shall any such fees be transferable by operation of law in the event of the bankruptcy or insolvency of the eligible member or other person.

9. Administration of the Plan. The Board of Directors shall have the exclusive authority to manage and control the operation and administration of the Plan and shall be the named fiduciary as described in section 402(a) of the Employee Retirement Income Security Act of 1974. The Board of Directors shall make all determinations regarding the right of any person to receive a benefit under the Plan and to determine the amount and time of distribution thereof in accordance with the provisions of this Plan and the eligible member’s election, provided, however, that any determination made with respect to the account of any eligible member shall be made by the Board of Directors sitting without such member. The interpretation and construction of this Plan by the Board of Directors, and any action taken hereunder, shall be binding and conclusive upon the eligible and member and any other person claiming any rights hereunder. The Board of Directors may from time to time delegate to such person or persons or to such committee as it shall designate any one or more of its administrative duties under the Plan.

10. Right to Amend and Terminate the Plan. The Company reserves the right to amend the Plan in whole or in part and to terminate the Plan at any time, provided that no such action shall affect the rights of any eligible member or other person to receive payment of benefits in accordance with the terms of the Plan as in effect on the day immediately preceding the effective date of such amendment or termination.

11. Special Terms, Gender and Number. The term “normal retirement” means the date of the Board of Directors Annual Meeting after the manager attains his seventy-second birthday. The term “total disability” shall mean a physical or mental condition that renders an

4

eligible member incapable of carrying out the ordinary duties and responsibilities of his usual occupation. Whenever the context shall require, the masculine gender shall be construed to include the feminine and the singular number the plural.

12. Incompetence. If the Board of Directors determines that an eligible member (or the designated beneficiary of an eligible member) is unable to manage his affairs, it may, in its sole discretion, pay any amount due to such person to the individual or institution then providing for the care, maintenance and support of such person, unless prior to such payment claim shall be made therefor by a duly appointed guardian, committee or other legal representative designated to receive such payment on behalf of such person.

13. Hardship Distribution. An eligible member, who believes that he has incurred a hardship may petition the Board of Directors for a hardship distribution. Upon a finding that the Director has suffered a hardship, the Board of Directors may, in its sole discretion, make distributions from the eligible member’s account prior to the time specified for payment of benefits in the Director’s Deferral Election. The amount of such distribution shall be limited to the amount reasonably necessary to meet the requirements during the financial hardship.

14. Applicable Law. This Plan shall be governed and construed in accordance with the laws of the State of New Jersey to the extent not inconsistent with applicable federal law.

15. Successors. The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term “successors” as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity.

IN WITNESS WHEREOF, this Board of Directors Voluntary Fee Deferral Plan has been executed by the duly authorized officers of Provident Financial Services, Inc. as of the 17^th day of July, 2003.

ATTEST:	PROVIDENT FINANCIAL SERVICES, INC.
/s/ John F. Kuntz	/s/ Paul M. Pantozzi
Secretary	Chairman, CEO & President

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PROVIDENT FINANCIAL SERVICES, INC.

BOARD OF DIRECTORS VOLUNTARY FEE

DEFERRAL PLAN

EXHIBIT A

Election to Defer Board of Directors Fees in 200    

Pursuant to the provisions of Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan, I understand that I may make an irrevocable election to defer the receipt of board fees otherwise due to be paid to me during calendar year 200            . In accordance with the Plan:

I hereby elect (check one):

         not to defer my board fees earned after the date hereof and during calendar year 200    .

         to defer the receipt of all my board fees (includes Board and Committee Fees) after the date hereof and during calendar year 200        .

The deferral, if any, indicated above shall be until the following year (check one):

         Calendar year of my normal retirement from the Board of Directors.

         Certain year that is prior to the calendar year of my normal retirement from the Board of Directors. You must select the year on this form. Year :                 

I hereby further elect that the amount of the above deferred compensation shall be paid at the end of the deferral period as follows (check one):

         In a lump sum.

         In 3 annual installments until the entire amount of my deferred compensation for 200     shall have been paid to me.

6

I understand that this election is subject to applicable laws and regulations and to the terms and conditions of the Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan as from time to time in effect. I further understand that the election to defer the receipt of any compensation I may receive in 200         may not be modified or revoked, other than as set forth in the Plan.

Name of Eligible Member (Print or Type)
Signature of Eligible Member	Date

Received by Provident Financial Services

This          day of                     , 200    

By:

7

PROVIDENT FINANCIAL SERVICES, INC.

BOARD OF DIRECTORS

VOLUNTARY FEE DEFERRAL PLAN

EXHIBIT B

Beneficiary Designation

As an eligible director under the Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan (“Plan”) I hereby designate the following person(s) to receive a lump sum payment of the undistributed balance credited to my separate account under the Plan as soon as practicable in the event of my death. (If no beneficiary designation is made, then the undistributed balance due to me under the Plan shall be paid to my estate in a lump sum.)

Name	Name
Address	Address
City, State, Zip	City, State, Zip

Note: Unless indicated otherwise, payment to two or more persons shall be made in equal shares.

This beneficiary designation shall apply to all amounts deferred under the Plan and revokes any and all prior designations made by me. I understand that I am permitted at any time and from time to time to modify or revoke the beneficiary designation herein made by executing and delivering a new beneficiary designation form to Provident Financial Services, Inc.

Name of Eligible Member (Print or Type)
Signature of Eligible Member	Date
Received by Provident Financial Services, Inc.
This          day of                     ,

By:

8

PROVIDENT FINANCIAL SERVICES, INC.

BOARD OF DIRECTORS VOLUNTARY FEE DEFERRAL PLAN

Amendment Number One

The Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan (the “Plan”) is hereby amended, effective December 18, 2003, in accordance with the following:

Section 1 of the Plan shall be amended by replacing its first sentence by the following:

Any eligible member may participate in this Plan by executing a form of deferral election, a copy of which is annexed hereto as Exhibit “A,” under which each calendar year the eligible member can elect irrevocably to defer the receipt of 25%, 50%, 75% or 100% of any fees that may be paid to the member.

IN WITNESS WHEREOF, this Amendment Number One has been executed by the duly authorized officers of Provident Financial Services, Inc. as of the 18th day of December, 2003.

ATTEST:	PROVIDENT FINANCIAL SERVICES, INC.
/s/ John F. Kuntz	By:	/s/ Kevin J. Ward
Corporate Secretary		Authorized Officer

PROVIDENT FINANCIAL SERVICES, INC.

BOARD OF DIRECTORS VOLUNTARY FEE DEFERRAL PLAN

EXHIBIT A

Election to Defer Board of Directors Fees in 200    

Pursuant to the provisions of the Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan (the “Plan”), I understand that I may make an irrevocable election to defer the receipt of board fees due to me during calendar year 200    . In accordance with the Plan:

I hereby elect (check one):

         not to defer my board fees after the date hereof and during calendar year 200    .

         to defer the receipt of

                     25%

                     50%

                     75%

                   100%

of my board fees (includes Retainer, Executive Committee, Board and Committee Fees) after the date hereof and during calendar year 200    .

The deferral, if any, indicated above shall be until the following year (check one):

         Calendar year of my normal retirement from the Board of Directors.

         Certain year that is prior to the calendar year of my normal retirement from the Board of Directors. You must select the year on this form. Year :                 

I hereby further elect that the amount of the above deferred compensation shall be paid at the end of the deferral period as follows (check one):

         In a lump sum.

         In 3 annual installments until the entire amount of my deferred compensation for 200     shall have been paid to me.

2

I understand that this election is subject to applicable laws and regulations and to the terms and conditions of the Provident Financial Services, Inc. Board of Directors Voluntary Fee Deferral Plan as from time to time in effect. I further understand that the election to defer the receipt of any compensation I may receive in 200             may not be modified or revoked, other than as set forth in the Plan.

Name of Eligible Member (Print or Type)
Signature of Eligible Member	Date
Received by Provident Financial Services, Inc.
This          day of                     , 200

By:

3

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Paul M. Pantozzi, Chairman and Chief Executive Officer certify that:

1. I have reviewed this quarterly report on Form 10-Q of Provident Financial Services, Inc;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

c) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2004	/s/ Paul M. Pantozzi
	Paul M. Pantozzi, Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Linda A. Niro, Senior Vice President and Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Provident Financial Services, Inc;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

c) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2004	/s/ Linda A. Niro
	Linda A. Niro, Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

Certification pursuant to

18 U.S.C. Section 1350,

as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Paul M. Pantozzi, Chairman and Chief Executive Officer, and Linda A. Niro, Senior Vice President and Chief Financial Officer of Provident Financial Services, Inc. (the “Company”), each certify in his or her capacity as an officer of the Company that he or she has reviewed the quarterly report of the Company on Form 10-Q for the quarter ended June 30, 2004 and that to the best of his or her knowledge:

(1) the report fully complies with the requirements of Sections 13(a) of the Securities Exchange Act of 1934; and

(2) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations.

The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002.

August 6, 2004	/s/ Paul M. Pantozzi
Date	Chairman and Chief Executive Officer
August 6, 2004	/s/ Linda A. Niro
Date	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Provident Financial Services, Inc. and will be retained by Provident Financial Services, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.