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                                                                    EXHIBIT 10.1

                      FRANKLIN SAVINGS AND LOAN ASSOCIATION

                         KEY EXECUTIVE STOCK OPTION PLAN
1. PURPOSE

The Key Executive Stock Option Plan (the "Plan") is designed to enable key
executive employees of Franklin Savings and Loan Association (the "Association")
to acquire or increase a proprietary interest in the Association, and thus to
share in the future success of the Association's business. Accordingly, the
Plan is intended as a further means, not only of attracting and retaining
outstanding management personnel, but also of promoting a closer identity of
interests between executives and stockholders. Since the executives eligible to
receive Options under the Plan will be those who are in positions to make
important and direct contributions to the success of the Association, the Board
believes that the grant of Options under the Plan will be in the Association's
interest.

2. DEFINITIONS

Unless the context clearly indicates otherwise, the following terms when used in
the Plan, shall have the meaning set forth in this Section 2.

(a) "Beneficiary" means the person or persons designated in writing by the
Grantee or, in the absence of such a designation or if the designated person or
persons predecease the Grantee, the Grantee's Beneficiary shall be the person or
persons who shall acquire the right to exercise an Option by bequest or
inheritance. In order to be effective, a Grantee's designation of a Beneficiary
must be on file with the Committee before the Grantee's death. Any such
designation may be revoked and a new designation substituted therefor at any
time before the Grantee's death.

(b) "Board of Directors" or "Board" means the Board of Directors of the
Association at any given point in time.

(c) "Code" means the Internal Revenue Code of 1954, as amended from time to
time.

(d) "Committee" means a committee selected by the Board of Directors whose
members are "disinterested administrators" within the meaning of Rule 16b-3(b)
under the Securities and Exchange Act of 1934 (or any successor rule of similar
import). Unless otherwise determined by the Board, the disinterested members of
the Executive Committee of the Board shall be the Committee.

(e) "Disability" means a physical or mental condition of a Grantee resulting
from bodily injury, disease, or mental disorder which renders him incapable of
continuing his usual and customary employment with the Association. The
disability of a Grantee shall be determined by a licensed physician chosen by
the Committee and shall be applied uniformly to all Grantees.

(f) "Grantee" means a person to whom an Option has been granted under the Plan.

(g) "Option" means an option to purchase a share or shares of the Association's
common stock.

(h) "Option Agreement" means the written agreement to be entered into by the
Association and the Grantee as provided in Section 8 hereof.

(i) "Retirement" means retirement pursuant to the Association's Employment
Manual, as amended from time to time.

(g) "Shares" means common shares of the Association, par value $8.00 per share.

(k) Wherever used herein, unless the context indicates otherwise, words in the
masculine form shall be deemed to refer to females as well as to males.



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3. EFFECTIVE DATE AND TERM OF PLAN

The Plan shall become effective when adopted by the Board of Directors and,
subject to Section 11 hereof, shall terminate on the date ten years from such
date; provided, however, that if the Plan is not approved by the holders of a
majority, of the outstanding Shares prior to the first anniversary of the date
of adoption by the Board of Directors, the Plan and all Options granted
thereunder prior to such anniversary shall be null and void and shall be of no
effect.

4. NUMBER AND SOURCE OF SHARES SUBJECT TO THE PLAN

(a) The Association may grant Options under the Plan for not more than 40,000
shares (subject however, to adjustment as provided in Section 5(a)(v) and 10
hereof), which shall be provided from Shares in the treasury or by the issuance
of Shares authorized but unissued. Options shall be granted as follows:


<TABLE>
<CAPTION>
              Level                         Shares Per Grantee

<S>                                         <C>
              I                                   10,000
              II                                   3,000
              III                                  2,000
</TABLE>

(b) In the event an Option previously granted shall for any reason lapse, be
terminated or forfeited without being exercised in whole or in part, the
unpurchased Shares subject to the Option shall be restored to the total number
of Shares with respect to which Options may be granted under the Plan.

5. TERMS AND CONDITIONS

(a) ALL OPTIONS. The following shall apply to all options granted under the
Plan:

(i) Option Price. The option price per share for each stock option shall be
determined by the Committee, but in no event, shall it be less than the fair
market value on the date the option is granted. The fair market value shall be
equal to the average of the reported bid and asked prices for a Share in the
NASDAQ-NMS, as reported by such sources as the Committee shall select, or if
such prices are not reported, then the fair market value shall be determined as
prescribed by the Internal Revenue Code and Regulations.

(ii) Time of Exercise of Option. The Committee shall establish the time or times
within the option period when the stock option may be exercised in whole or in
such parts as may be specified from time to time by the Committee. In all cases
exercise of a stock option shall be subject to the provisions of Section
5(b)(ii) and 5(c)(iv), as the case may be.

(iii) Payment. The entire option price may be paid at the time the option is
exercised. When an option is exercised prior to termination of employment, the
Committee shall have the discretion to arrange for the payment of such price, in
whole or in part, in installments. In such cases, the Committee shall obtain
such evidence of the Grantee's obligation, establish such interest rate and
require such security as it may deem appropriate for the adequate protection of
the Association.

(iv) Non-Transferability of Option. An option by its terms shall not be
transferable by the Grantee otherwise than by will or by the laws of descent and
distribution and shall be exercisable during the Grantee's lifetime only by the
Grantee.

(v) Adjustment in Event of Recapitalization of the Association. In the event of
a reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, or any other change in the
corporate structure or shares of the Association, the Board of Directors shall
make such adjustment as it may deem equitably required in the number and kind of
shares authorized by and for the Plan, in the number and kind of shares covered
by the options granted, and in the option price.

(b) NON-QUALIFIED STOCK OPTIONS. The Committee may, in its discretion, grant
options under the Plan which, in whole or in part, do not qualify as incentive
stock options under Section 422A of the Internal Revenue Code. In addition to
the terms and conditions set forth in Section 5(a) above, the following terms
and conditions shall govern any option (or portion thereof) to the extent that
it does not so qualify.

(i) Form of Payment. Payment of the option price of any option (or portion
thereof) not qualifying as an incentive stock option shall be made in cash or,
in the discretion of the Committee, in the Common Stock of the Association



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valued at its fair market value (as the same shall be determined by the
Committee), or a combination of Common Stock and cash.

(ii) Rights After Termination of Employment. In the event of termination of
employment due to any cause including death, disability or retirement, a
Grantee's rights to exercise the stock options shall cease, except for those
which have accrued to the date of termination, unless the Committee shall
otherwise specify. These accrued rights shall remain exercisable for a period of
three months, or such longer period (not to exceed three years) as the Committee
shall provide, following termination for any cause other than death, disability
or retirement and for a period of three years following termination due to
death, disability or retirement, unless the Committee otherwise specifies. The
Committee may in its discretion extend beyond the expiration date originally
provided in said option. However, no stock option shall, in any event, be
exercised after the expiration of 10 years from the date such option is granted.

(iii) Exercise Period of Option. The exercise period of each non-qualified stock
option by its terms shall not be more than 10 years from the date the option
is granted as specified by the Committee.

(c) INCENTIVE STOCK OPTIONS. The Committee may, in its discretion, grant options
under the Plan which qualify in whole or in part as incentive stock options
under Section 422A of the Internal Revenue Code. In addition to the terms and
conditions set forth in Section 5(a) above, the following terms and conditions
shall govern any option (or portion thereof) to the extent that it so qualifies:

(i) Sequential Exercise. No incentive stock option shall, by its terms, be
exercisable while there is outstanding (within the meaning of Section 422A(c)(7)
of the Internal Revenue Code) any incentive stock option (as that term is
defined in the Internal Revenue Code and Regulations) which was granted, before
the granting of such option, to the Grantee to purchase stock in the
Association.

(ii) Maximum Fair Market Value of Incentive Stock Options. The aggregate fair
market value (determined as of the time such option is granted) of the Common
Stock for which any Grantee may be granted incentive stock options in any
calendar year (under all incentive stock option plans of the Association) shall
not exceed $100,000 plus any unused limit carryover to such year permitted by
Section 422A(c)(4) of the Internal Revenue Code.

(iii) Form of Payment. Payment of the option price for incentive stock options
shall be made in cash or in the Common Stock of the Association valued at its
fair market value (as the same shall be determined by the Committee), or a
combination of Common Stock and cash. Payment may not be made with Common Stock
of the Association unless the Common Stock shall have been held by the Grantee
for at least one year.

(iv) Rights After Termination of Employment. In the event of termination of
employment due to any cause including death, disability or retirement, the
Grantee's rights to exercise the stock options shall cease, except for those
which have accrued to the date of termination, unless the Committee shall
otherwise specify. These accrued rights shall remain exercisable for a period of
three months, or such longer period (not to exceed three years) as the Committee
shall provide, following termination for any cause other than death, disability
or retirement and for a period of three years following termination due to
death, disability or retirement, unless the Committee otherwise specifies.
However, no incentive stock option shall, in any event, be exercised after the
expiration of 10 years from the date such option is granted, or such earlier
date as may be specified in the option.

The exercise period of each incentive stock option by its terms shall not be
more than 10 years from the date the option is granted as specified by the
Committee.

(d) CONDITIONS TO EXERCISE ALL OPTIONS. Any options granted shall be exercisable
according to the following schedule:

(i) Twenty (20%) percent of the total shares granted shall become available for
exercise (according to the schedule set forth in Section 5(d)(iii))upon granting
with the balance becoming available for exercise, subject to the conditions of
Section 5(d)(ii), at the rate of 20% on each of the next four consecutive
anniversary dates.

(ii) Each fiscal year the Committee shall establish performance criteria. The
Association's actual performance measured against this criteria shall establish
a percentage according to the grid, below, which percentage shall be multiplied
by the total shares potentially available to determine the number of shares
available for exercise in accordance with 5(d)(iii). For fiscal 1987 the
following performance criteria shall apply:


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<TABLE>
<CAPTION>
                                              EPS GROWTH
                                          25%      20%      15%
                                          ---      ---      ---
<S>                    <C>               <C>      <C>      <C>
                        1.0%              100%     80%      60%
                                          ----     ---      ---

                ROA     .95%              90%      70%      50%
                                          ---      ---      ---

                        .90%              80%      60%      40%
                                          ---      ---      ---
</TABLE>

For purposes hereof, "ROA" shall mean the Association's return on average
assets, as computed by the Committee, equal to the ratio of after-tax earnings
to average monthly assets, and "EPS Growth" shall mean the percentage of change
in earnings per share for the current fiscal year as compared to the prior
fiscal year. For fiscal 1988 and thereafter, the performance criteria shall be
determined in advance by the Committee and, in the event no such determination
is timely made, the performance criteria from the prior fiscal year shall apply.

(iii) Of the total Shares which become available for exercise pursuant to
5(d)(i) and (ii), twenty (20%) percent of such shares shall become exercisable
one year from the date they first became available for exercise and the balance
shall be exercisable in equal amounts on each of the next four anniversary
dates.

EXAMPLE:

If 10,000 Shares are initially granted on October 1, 1986, then twenty (20%)
percent (2,000 Shares) would be available for exercise according to the schedule
set forth in Section 5(d)(iii) (ie., 400 shares each on October 1, 1987, 1988,
1989, 1990 and 1991).

If fiscal year 1987 performance is:
- EPS Growth - 25%
- ROA - 1.0%
- Then, according to the performance grid set forth in 5d(ii), 100% (2,000
shares) potentially available actually become available for exercise according
to the schedule set forth in Section (d)(iii) (ie., 400 shares each on October
1, 1988, 1989, 1990, 1991 and 1992).

6. ADMINISTRATION OF THE PLAN

(a) The Plan shall be administered by the Committee.

(b) The Committee shall adopt such rules of procedures as it may deem proper;
provided however, that it may take actions upon the agreement of a majority of
its members then in office. Any able action that the Committee may take through
a written instrument signed by a majority of its members then in office shall be
as effective as though taken at a meeting duly called and held.

(c) The powers of the Committee shall include plenary authority to interpret the
Plan, and, subject to the provisions hereof, the Committee may determine (1) the
persons to whom Options shall be granted; (2) the number of Shares subject to
each Option; (3) the term of each Option; (4) the date on which each Option
shall be granted provided however that the Committee shall grant the maximum
number of shares for which a person is eligible on the date the Committee first
determines to grant such options); and, (5) the provisions of each option
agreement.

7. EMPLOYEES ELIGIBLE TO RECEIVE OPTIONS

(a) Options may be granted under the Plan to key executives employed by the
Association or any subsidiary (including full-time employees who are directors
or officers). All determinations by the Committee as to the identity of the
persons to whom Options shall be granted hereunder shall be conclusive.


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(b) Directors who are not regular salaried employees of the Association or any
subsidiary shall not be eligible to receive Options under this Plan.

(c) An individual executive may receive more than one Option.

8. OPTION AGREEMENT

(a) No Option shall be exercised by a Grantee unless he shall have executed and
delivered an Option Agreement.

(b) Appropriate officers of the Association are hereby authorized to execute and
deliver Option Agreements in the name of the Association as directed from time
to time by the Committee.

9. STOCKHOLDER RIGHTS

No person shall have any rights of a stockholder by virtue of an Option except
with respect to Shares actually issued to him, and the issuance of Shares shall
confer no retroactive right to dividends.

10. EFFECT OF MERGER OR OTHER REORGANIZATION

If the Association shall be the surviving corporation in a merger or other
reorganization, Option rights shall extend to stock and securities of the
Association to the same extent that a holder of that number of Shares
immediately before the merger or consolidation corresponding to the number of
Shares covered by the Option would be entitled to have or obtain stock and
securities of the Association under the terms of the merger or consolidation. If
the Association dissolves, sells substantially all of its assets, is acquired in
a stock for stock or securities exchange, or is a party to a merger or other
reorganization in which it is not the surviving corporation, then each Option
which has become available under Section 5(d)(i) and (ii) shall be exercisable
in full within the period of 60 days commencing upon the later of the date the
action of the shareholders (or of the Board if shareholders' action is not
required) or the date governmental approval, if required, is taken to approve
the transaction, and upon the expiration of that period all Options and all
rights thereto shall automatically terminate.

11. TERMINATION, SUSPENSION, OR MODIFICATION OF PLAN

The Board of Directors may at any time terminate, suspend, or modify the Plan,
except that the Board shall not, without the authorization of the holders of a
majority of the Association's outstanding Shares at a shareholders' meeting duly
called and held, change (other than through adjustment for changes in
capitalization as provided in Section 5(a)(v) or 10 hereof): (a) the aggregate
number of Shares for which Options may be granted; (b) the class of persons
eligible for Options; (c) the Option price; or (d) the maximum duration of the
Plan. No termination, suspension or modification of the Plan shall adversely
affect any right acquired by any Grantee, or by any Beneficiary, under the terms
of an Option granted before the date of such termination, suspension or
modification, unless such Grantee or Beneficiary shall consent; but it shall be
conclusively presumed that any adjustment for changes in capitalization in
accordance with Sections 5 or 10 hereof does not affect any such right. The
Board of Directors may modify the Plan to conform with or take advantage of the
provisions of t the Tax Reform Act of 1986.

12. APPLICATION OF PROCEEDS

The proceeds received by the Association from the sale of Shares under the Plan
shall be used for general corporate purposes.

13. INDEMNIFICATION OF COMMITTEE

In addition to such other rights of indemnification as they may have as
Directors, the members of the Committee shall be indemnified by the Association
against the reasonable expenses including attorney's fees, actually and
reasonably incurred in connection with the defense of any action, suit or d an
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted hereunder, and against all
amounts reasonably paid by them in settlement thereof or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, if such


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members acted in good faith and in a manner which they believed to be in, and
not opposed to, the best interests of the Association.

14. GENERAL PROVISIONS

The grant of an Option in any year shall not give the Grantee any right to
similar grants in future years or any right to be retained in the employ of the
Association.

15. GOVERNING LAW

The Plan shall be construed and its provisions enforced and administered in
accordance with the that laws of Michigan except to the extent that such laws
may be superseded by any Federal law.









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