EXHIBIT (10) i)
                       1999 INCENTIVE STOCK OPTION PLAN




 1. Purpose of the Plan.  The purpose of this  Incentive  Stock Option Plan (the
"Option Plan") is to secure for STATE BANCORP,  INC. (the "Holding Company") and
its  stockholders  the benefits of the  incentive  inherent in the  ownership of
Common Stock of the Holding Company by those present and future key employees of
the  Holding  Company,  STATE BANK OF LONG  ISLAND  (the  "Bank"),  or any other
subsidiary of the Holding  Company or of the Bank  (collectively  referred to as
the  "Corporations") who will be responsible for its future growth and continued
success. The Option Plan and the Incentive Stock Options (the "Options") granted
hereunder  are intended to comply with the  provisions of Sections 421, 422A and
425 of the  Internal  Revenue  Code of 1954,  as amended,  (the  "Code") and the
Option Plan and all Options granted hereunder shall be administered, interpreted
and construed in accordance with such intention.

 2. Stock  Subject to the Option Plan.  There will be reserved for issuance upon
the  exercise  of the Options  which may from time to time be granted  under the
Option Plan, an aggregate of 325,000 shares of Common Stock, par value $5.00 per
share, of the Holding  Company,  subject to adjustment as provided in Section 8.
Shares subject to the Option Plan may be shares now or hereafter  authorized but
unissued and issued shares which have been reacquired by the Holding Company. If
any Option under this Option Plan shall  expire,  terminate,  or be canceled for
any reason,  without  having been  exercised in full,  the shares which have not
been purchased  thereunder  shall again become available for the purpose of this
Option  Plan  unless  this  Option  Plan  shall have been  terminated,  but such
unpurchased  shares  shall not be deemed to  increase  the  aggregate  number of
shares  specified above for which Options may be granted,  subject to adjustment
as provided in Section 8.

 3.  Administration of the Option Plan. The Option Plan shall be administered by
a committee  selected by the Board of  Directors  of the  Holding  Company  (the
"Board")  consisting of not less than three  members,  not less than two of whom
shall be members of the Board,  who shall serve at the pleasure of the Board and
be designated the Stock Option Committee (the  "Committee").  The members of the
Committee shall be directors and other persons selected by the Board who are not
eligible to  participate in the Option Plan during such time as they are members
of the Committee.

 Subject to the express provisions of the Option Plan with
respect to eligibility, the Committee shall determine the key

                                        
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employees to whom, and the time or times at which,  Options shall be granted and
the number of shares to be  subject to each  Option.  The  Committee  shall have
authority to interpret the Option Plan,  to  prescribe,  amend and rescind rules
and  regulations  relating to it, to determine  the terms and  provisions of the
respective  Options  (which  terms and  provisions  need not be the same in each
case),  and to make all other  determinations  deemed  necessary or advisable in
administering  the Option Plan, all of which  determinations  shall be final and
binding upon all persons unless otherwise determined by the Board.

 A quorum of the  Committee  shall  consist of a majority of its members and the
Committee may act by the vote of a majority of its members at a meeting at which
a quorum is  present,  or  without a meeting  by a written  consent  to such act
signed by all members of the Committee.

 4. Eligibility and  Participation.  Options may be granted only to employees of
the Corporations  who, in the opinion of the Committee,  exercise such functions
or  discharge  such  responsibilities  that  they  merit  consideration  as  key
employees.  Employees  who  are  officers  or  directors  of one or  more of the
Corporations may participate in the Option Plan. Directors who are not employees
shall not be granted  Options  under the Option Plan. An employee may be granted
an Option  hereunder  and may  thereafter  be  granted an  additional  Option or
Options if the Committee shall so determine. Options shall not be granted to any
employee  pursuant  to the Option  Plan,  the effect of which would be to permit
such person to first exercise options, in any calendar year, for the purchase of
shares having a fair market value in excess of $100,000  (determined at the time
of the grant of the options). An optionee hereunder may exercise options for the
purchase of shares valued in excess of $100,000 (determined at the time of grant
of the  options)  in a calendar  year,  but only if the right to  exercise  such
options shall have first become available in prior calendar years.

 5. Option Price.  Except as otherwise provided in Section 6 of the Option Plan,
the Option price per share of Common Stock for each Option shall be fixed by the
Committee and with respect to each Option  granted  hereunder  shall not be less
than 100  percent  of the fair  market  value or the book  value,  whichever  is
greater,  of the Common  Stock of the Holding  Company on the date the Option is
granted.  Fair market value shall be determined by the Committee which shall use
any reasonable  method of valuation,  including:  (a) if the Common Stock is not
listed for  trading on a  recognized  securities  exchange  but is traded in the
over-the-counter  market, the mean of the highest bid price and the lowest asked
price for the  Common  Stock on the date of grant as  reported  by the  National
Quotation  Bureau,  Inc.,  or any successor  organization,  or (b) if the Common
Stock is listed for trading on a recognized securities

                                        
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exchange,  the mean of the high and low sale prices or the closing sale price on
such exchange on the date of grant,  whichever shall be higher, of if the Common
Stock shall not have been traded on such exchange on such date, the closing sale
price on such  exchange on the first day prior thereto on which the Common Stock
was so traded or the  closing  bid price on such  exchange on the date of grant,
whichever  shall be higher,  or (c) if a realistic and fair market value of such
shares is not readily  determinable,  an estimate of the fair market value shall
be made taking into  consideration:  (i) the difference between the market value
and book value of the shares of comparable financial institutions;  and (ii) the
trend of the Holding  Company's  consolidated  earnings  and of its book capital
account.

 6. Options Granted to Ten Percent (10%) Stockholders.  An Option may be granted
under the Option  Plan to an  employee  who, at the time such Option is granted,
owns  (within  the  meaning of Section  422A(b)(6)  of the Code,  including  the
applicable  attribution  provisions of the Code) stock  possessing  more than 10
percent of the total  combined  voting  power of all  classes of stock of one or
more of the  Corporations, only if: (a) at the time such Option is granted,  the
purchase price under such Option is not less than 110 percent of the fair market
value or book value,  whichever  is higher,  of the shares of stock  subject to
such Option,  determined  as provided in Section 5 of this Option Plan,  and (b)
such Option by its terms is not  exercisable  after the  expiration  of five (5)
years from the date such Option is granted.

 7. Terms and  Conditions of Options.  Each Option shall be subject to the terms
of the Option Plan and shall be evidenced by an Incentive Stock Option Agreement
substantially  in the form  attached  hereto as  Schedule  A and  containing  or
incorporating  by reference the following  terms and  conditions  and such other
terms and conditions not  inconsistent  therewith as may be determined from time
to time by the Committee.

 A. Term of  Options.  Except as  otherwise  provided in Section 6 of the Option
Plan, the term of each Option granted pursuant to this Option Plan shall be such
term,  not exceeding ten (10) years from the date on which the Option shall have
been granted, as shall be fixed at the time by the Committee and such term shall
be subject to earlier  termination  as  hereinafter  provided.  No Option may be
granted  after the  termination  of the Option  Plan as  provided in Section 12.
Options  hereunder  shall be deemed  granted on the date on which the  Committee
acts with respect to the grant thereof.

 B. Exercise of Option.  No Option granted pursuant to this Option Plan shall be
exercisable: (1) unless the holder shall have been an employee of one or more of
the Corporations  during the entire period beginning on the date of the granting
of the Option being exercised and ending on the date of such exercise (excluding

                                        
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in each case breaks in employment  due to military leave or sick leave which are
approved by the  Committee),  except as provided in  Subsections C and D; or (2)
until  twelve  (12)  months  after the date on which the Option  shall have been
granted,  provided,  however,  that on  recommendation  of the  Committee in any
individual case deemed exceptional by the Committee,  the Board of Directors may
specify a period  of less  than  twelve  (12)  months  but not less than six (6)
months after the date on which the Option  shall have been granted  during which
such Option may not be exercised.  The Committee, at the time of the granting of
each Option  pursuant to this Option Plan may provide that the Option may not be
exercised in any one year as to more than such percentage of the total number of
shares  covered  thereby as the Committee  shall  determine,  provided that such
limitation  shall not  prohibit  the  exercise  of the  Option as to all  shares
covered thereby within the term of such Option.

 C. Effect of Termination of Employment or Death or Change in Control. No Option
may be  exercised at any time unless the holder is an employee of one or more of
the Corporations  except in the following events:  (1) the holder,  provided the
Option has not  terminated  pursuant to the provisions of Subsection D, may, but
only in the case of an employee  who is disabled  (within the meaning of Section
105(d)(4)  of the Code) within one (1) year after the  cessation of  employment,
exercise  his or her Option to the extent he or she was  entitled to exercise it
as of the date of such  cessation of  employment;  (2) if an employee to whom an
Option  has been  granted  under the  Option  Plan  shall die while he or she is
employed by one or more of the Corporations, such Option may be exercised within
one (1) year after his or her death to the extent that the employee was entitled
to do so at the date of his or her  death,  by the person or persons to whom his
or her rights  under the Option shall pass by will or by the laws of descent and
distribution.  If a Change in Control (as herein  defined)  shall have  occurred
while the holder is an employee of one or more of the Corporations,  all Options
shall be accelerated and shall become immediately exercisable. In no event shall
the holder of any Option have the right to exercise it after the  expiration  of
the term of the Option.

 D. Employee's Agreement to Serve. Each employee receiving an Option shall agree
to serve in the employ of one or more of the  Corporations for a period of three
(3)  years  from  the  date on which it is  granted.  On  recommendation  of the
Committee in any individual case deemed exceptional by the Committee,  the Board
of Directors may specify an  employment  period of less than three (3) years but
in no event less than six (6) months. Such employment, subject to the provisions
of any other contract between the  Corporations  and such employee,  shall be at
the pleasure of such  Corporation and at such  compensation as such  Corporation
shall from time to time determine. Any termination of such employee's employment
during the period in which he has agreed pursuant to

                                        
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this  Subsection  D to remain in the  employ of one or more of the  Corporations
which is either: (1) for cause; or (2) voluntary on the part of the employee and
without the consent of such  Corporation  (except  that a voluntary  termination
within three (3) months after a Change in Control shall not be deemed  voluntary
on the part of the employee)  shall be deemed a violation by the employee of his
agreement and, upon the occurrence of such violation, the Option held by him, to
the extent not theretofore exercised,  shall terminate.  Such termination of the
Option  shall be in  addition  to all other  rights and  remedies  for breach of
contract to which the Corporations shall be entitled.

 E.  Restrictions  on Common Stock.  Common Stock issued upon the exercise of an
Option granted  hereunder shall not be  transferable  until the employee to whom
such Common Stock is issued has  fulfilled  his agreement to serve in the employ
of one or more of the  Corporations as provided in Subsection D of this Section.
Upon the  termination of employment of an employee by reason of retirement  from
such  Corporation  or by death or  within  three  (3)  months  after a Change in
Control,  the  restrictions  imposed by this Subsection E shall expire;  if such
employee's  employment shall terminate for any other reason before he or she has
fulfilled  his or her  agreement to serve in the employ of such  Corporation  as
provided in Subsection D of this Section,  then the restrictions imposed by this
Subsection E shall be extended for the period of five (5) years from the date of
such  termination.  The restrictions  imposed by this Subsection E and any other
restrictions  which are in the opinion of the Holding  Company's  counsel either
necessary  or  required  shall be noted on the  certificates  for the  shares of
Common  Stock  issued  upon the  exercise  of Options  granted  hereunder  by an
appropriate legend. The legend with respect to the restrictions  imposed by this
Subsection E shall be substantially as follows:

 The shares  represented by this  certificate  are subject to transfer and other
restrictions  contained in State  Bancorp,  Inc.'s 1999  Incentive  Stock Option
Plan, a copy of which is on file at the principal office of State Bancorp,  Inc.
As and when shares of Common  Stock become free of the  restrictions  imposed by
this Subsection E, the owner thereof shall be entitled,  upon demand, to receive
a new certificate therefor which does not bear such a legend.

 F. Method of Exercise.  Subject to the provisions of the Incentive Stock Option
Agreement and the Option Plan, an Option may be exercised in whole or in part at
any time by written  notice to the Holding  Company,  which notice shall specify
the number of shares as to which the holder of the Option  desires to  exercise.
The  notice  shall  be  accompanied  by cash or by an  unendorsed  certified  or
official bank draft or money order for the full Option  price,  in United States
dollars, payable to the order of the Holding Company.

                                        
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 G.  Non-assignability.  No Option shall be  transferred,  assigned,  pledged or
hypothecated  in any way  (whether  by  operation  of law of  otherwise)  by the
employee  otherwise  than by will or the laws of descent and  distribution,  and
shall be exercisable during his or her lifetime only by him or her and shall not
be subject to execution, attachment or similar process.

 H.  Rights as a  Shareholder.  The holder of the Option  shall have none of the
rights of a shareholder  with respect to any of the shares subject to the Option
until the  issuance of a  certificate  for such shares upon the  exercise of the
Option.

 I.  Adjustment.  The number of shares subject to the Option
and the Option price per share shall be subject to adjustment in
the manner provided in Section 8.

 8.  Adjustments.  The  number  of  shares  of  Common  Stock  covered  by  each
outstanding  Option, and the price per share thereof in each such Option,  shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Holding  Company  resulting from a sub-division or
consolidation of shares or a payment of a stock dividend (but only on the Common
Stock) or any other  increase or decrease in the number of such shares  effected
without receipt of consideration by the Holding Company.

 If the Holding  Company  shall be the  surviving  corporation  in any merger or
consolidation,  each  outstanding  Option  shall  pertain  to and  apply  to the
securities  to which the holder of the number of shares of Common Stock  subject
to the Option would have been entitled.

 In the event of any proposed  dissolution or liquidation of the Holding Company
or a proposed merger or  consolidation  in which the Holding Company will not be
the surviving  corporation,  the Holding Company shall mail or otherwise furnish
to the  holder  of each  outstanding  Option  written  notice  of such  proposed
dissolution,  liquidation,  merger or  consolidation  at least  twenty (20) days
prior to such  dissolution,  liquidation,  merger or consolidation and each such
holder shall thereupon have the right immediately and prior to such dissolution,
liquidation, merger or consolidation to exercise his or her entire Option or any
part thereof;  and any outstanding  Option not so exercised shall terminate upon
such dissolution, liquidation, merger or consolidation.

 In the  event  of a  change  in the  Common  Stock of the  Holding  Company  as
presently constituted which is limited to a change of all authorized shares with
par  value  into the  same  number  of  shares  with a  different  par  value no
adjustment  shall be made in the number of shares of Common Stock covered by any
outstanding  Option and the term "Common Stock" as used in the Option Plan shall
be

                                        
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deemed to refer to the shares of Common Stock as so changed.

 Except as herein before expressly provided in this Section,  the optionee shall
have no rights by reason of any subdivision or  consolidation of shares of stock
of any class or the  payment  of any stock  dividend  or any other  increase  or
decrease  in the  number  of  shares  of stock of any  class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or stock
of another corporation,  and any issue by the Holding Company of shares of stock
of any class, or securities convertible into shares of stock of any class, shall
not affect,  and no adjustment by reason  thereof shall be made with respect to,
the number or price of shares of Common Stock subject to the Option.

 If any event occurs which would cause an  adjustment in the number of shares of
Common Stock or the securities  subject to Option if an Option were  outstanding
hereunder then a like adjustment shall be made in the number of shares of Common
Stock or the securities subject to the Option Plan as provided in Section 2.

 To the extent that the foregoing  adjustments  relate to stock or securities of
the Holding Company,  such adjustments shall be made by the Board of the Holding
Company,  whose  determination  in that  respect  shall be  final,  binding  and
conclusive, provided that no Option granted pursuant to the Option Plan shall be
adjusted in a manner that causes the Option to fail to continue to qualify as an
incentive  stock option  within the meaning of the  Internal  Revenue  Code,  as
amended No  adjustment  provided for in this Section  shall  require the Holding
Company  to issue or sell a  fractional  share,  and the total  adjustment  with
respect to each Option shall be limited accordingly.

 The grant of an Option  pursuant to the Option Plan shall not affect in any way
the   right   or   power   of  the   Holding   Company   to  make   adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure or to merge or to  consolidate  or to dissolve,  liquidate or sell, or
transfer all or any part of its business of assets.

 9. Uses of  Proceeds.  The  proceeds  from the sale of  shares of Common  Stock
pursuant to Options shall constitute general funds of the Holding Company.

 10. Change in Control.  Change in Control,  for purposes of this Plan, means an
event of a nature  that:  (i) would be  required  to be  reported by the Holding
Company in response to Item 1 of the current report on Form 8-K, as in effect on
the date hereof,  pursuant to Section 13 of the Securities  Exchange Act of 1934
(the "Exchange  Act"); or (ii) results in a Change in Control of the Bank within
the  meaning of the  Change in Bank  Control  Act and the rules and  regulations
promulgated by the Federal Deposit Insurance

                                        
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Corporation (the "FDIC") at 12 C.F.R. ss.303.80, as in effect on the date hereof
or as same may be amended;  or (iii)  results in a transaction  requiring  prior
approval of the Federal  Reserve Board ("FRB"),  under the Bank Holding  Company
Act of 1956 and the regulations promulgated or as same may be amended thereunder
by the FRB at 12 C.F.R.  ss.225.11,  as in effect on the date  hereof or as same
may be amended;  or (iv) without  limitation,  such a Change in Control shall be
deemed to have occurred at such time as (A) any "person" (as the term is used in
Sections  13(d) and 14(d) of the  Exchange  Act) is or becomes  the  "beneficial
owner"  (as  defined  in  Rule  13d-3  under  the  Exchange  Act),  directly  or
indirectly,  of  securities of the Bank  representing  20% or more of the Bank's
outstanding  securities or (B)  individuals who constitute the Board on the date
hereof (the  "Incumbent  Board")  cease for any reason to  constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of a majority of the directors
comprising the Incumbent  Board, or whose nomination for election by the Holding
Company's  stockholders  was  approved  by the  Incumbent  Board,  shall be, for
purposes of this clause (B), considered as though he or she were a member of the
Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of
all  or  substantially  all  the  assets  of  the  Holding  Company  or  similar
transaction  occurs in which the Holding Company is not the resulting entity; or
(D) a proxy statement shall be distributed  soliciting proxies from shareholders
of the  Holding  Company by someone  other than the  current  management  of the
Holding  Company,  seeking  stockholder  approval  of a plan of  reorganization,
merger or consolidation  of the Holding Company or similar  transaction with one
or more corporations as a result of which the outstanding shares of the class of
securities  then  subject  to the  plan  or  transaction  are  exchanged  for or
converted into cash or property or securities not issued by the Holding Company;
or (E) a tender  offer is made for 20% or more of the voting  securities  of the
Holding Company.

 11.  Modification,  Extension and Renewal of Options.  Subject to the terms and
conditions  and within the  limitations  of the  Option  Plan,  the Board of the
Holding Company may modify,  extend or renew  outstanding  Options granted under
the Option Plan, or accept the surrender of  outstanding  Options (to the extent
not  theretofore  exercised)  and  authorize  the  granting  of new  Options  in
substitution therefor (to the extent not theretofore exercised). The Board shall
not, however,  modify any outstanding  Options so as to specify a lower exercise
price or accept the surrender of outstanding  Options and authorize the granting
of new Options in  substitution  therefore  specifying a lower  exercise  price.
Notwithstanding  the foregoing,  however,  no  modification  of an Option shall,
without  the  consent  of the  individual  to whom any  Option  shall  have been
granted,  alter or impair any rights or obligations  under any Option  therefore
granted under the Option Plan.

                                        
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 12.  Governmental  and Other  Regulations.  The Option Plan,  and the grant and
exercise of Options hereunder,  and the Holding Company's obligation to sell and
deliver  stock  under  such  Options,  shall be subject  to the  provisions  and
approvals of any regulatory or governmental agency as may be required.

 13.  Amendment and  Termination.  The Option Plan shall terminate  February 25,
2009 and no  Option  shall be  granted  hereunder  after  that  date,  provided,
however,  that subject to the  limitations  on  exercisability  contained in the
Option  Plan,  any Option  granted  under the Option Plan prior to such date may
continue to be  exercised  by the holder  after such date until such time as the
Option expires by its terms.

 The Board of the Holding  Company  shall have  complete  power and authority to
amend the Option Plan, provided,  however,  that the Board shall not without the
affirmative vote of the holders of a majority of the outstanding Common Stock of
the Holding Company: (i) increase the maximum number of shares for which Options
may be granted  under the Option  Plan,  (ii) reduce the minimum  Option  price,
(iii) extend the period  provided in Section  7(A) during  which  Options may be
granted or make an option exercisable earlier than as specified in Section 7(B),
(iv) amend the  requirements  as to the class of  employees  eligible to receive
Options,  or (v)  increase the number of shares which may be optioned to all key
employees  or any  one of  them,  or  (vi)  affect  outstanding  options  or any
unexercised rights thereunder, except as provided in Section 8.

 14.  Effectiveness.  The Plan  shall be  effective  upon  its  approval  by the
stockholders of the Holding Company.

 15. Termination of Right of Action.  Every right of action arising out of or in
connection  with the Option  Plan or any  Options  granted  hereunder,  by or on
behalf of the Holding  Company,  or by any  stockholder  of the Holding  Company
against any past, present or future member of the Board of Directors or employee
of one of the Corporations,  or by an employee (past,  present or future) of one
of the Corporations against one or more of the Corporations or against any past,
present or future  member of the Board of Directors or an employee of one of the
Corporations shall, irrespective of the place where an action may be brought and
irrespective  of the place of residence of any such director or employee,  cease
and be barred by the  expiration  of five (5) years  from the date of the act or
omission in respect of which such right of action arises or is alleged to arise.

 The Option Plan shall be deemed to have been  entered  into and adopted and all
Options have been granted in Nassau County,  New York, and shall be interpreted,
and the  rights  and  liabilities  of all  individuals  hereunder  and under the
Options determined,  in accordance with the laws of the State of New York. Every
action,

                                        
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suit or proceeding  brought to enforce any claim arising out of or in connection
with the Option  Plan or any  Option  shall be  commenced  only in courts of the
State of New York located in the County of Nassau and having  jurisdiction  over
the claim involved.

 16.  Indemnification of Committee.  No member or former member of the Committee
or of the Board shall be liable, in the absence of bad faith or misconduct,  for
any act or omission with respect to his or her service on the Committee. Service
on the Committee shall  constitute  service as a Director of the Holding Company
so that  members of the  Committee  shall be  entitled  to  indemnification  and
reimbursement  as  Directors  of the Holding  Company  pursuant to its  By-Laws,
resolution and the Business Corporation Law of the State of New York.

 17.  Compliance  with  Section  16. If this Plan is  qualified  under 17 C.F.R.
ss.240.16b-3 of the Exchange Act,  transactions  under this Plan are intended to
comply with all applicable  conditions of Rule 16b-3 or its successors under the
Exchange Act.

                                       
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                                   SCHEDULE A

                               STATE BANCORP, INC.

                        INCENTIVE STOCK OPTION AGREEMENT




 INCENTIVE STOCK OPTION AGREEMENT dated as of  ______________,  1999, (the "Date
of Grant"),  between  STATE  BANCORP,  INC.  (the  "Holding  Company")  and (the
"Optionee").


 1. As a separate inducement and agreement in connection with employment and not
in lieu of any salary or other  compensation  for services,  and pursuant to the
Holding  Company's 1999  Incentive  Stock Option Plan (the "Option  Plan"),  the
Holding  Company hereby grants the Optionee the option to purchase shares of its
Common  Stock,  par value  $5.00 per share  (the  "Optioned  Shares"),  upon the
following terms and conditions: (a) The option shall be an effective and binding
obligation  of the Holding  Company only during the Option Term (as  hereinafter
defined)  and, upon the  expiration of the Option Term,  the option shall become
null and void to the extent of the Optioned  Shares not  theretofore  purchased.
The  "Option  Term",  for  purposes  of  this  Agreement,  shall  be the  period
commencing  with the Date of Grant and ending with the earlier of the  following
dates:  (i) the _____  anniversary of the Date of Grant; or (ii) the termination
of the  employment  of the  Optionee  by the  Holding  Company  or a  subsidiary
corporation provided,  however, the Optionee may, (x): in case of the disability
of the Optionee (within the meaning of Internal Revenue Code 105(d)(4)), and (y)
in case of death, exercise the option within one (1) year after the cessation of
employment to the extent the Optionee was entitled to exercise it as of the date
of such cessation of employment; (b) The option price per share shall be $______
being not less than 100% of the fair market  value or the book value,  whichever
is greater, of the Common Stock of the Holding Company on the Date of Grant. (c)
The number of shares of Common Stock  covered by this option,  and the price per
share  thereof,  shall be subject to  adjustment as provided in the Option Plan.
(d) Subject to the  provisions of the Option Plan,  this Option may be exercised
after the  expiration  of twelve (12) months after the Date of Grant at any time
during the Option Term;  provided,  however (i) the Optionee  shall have been an
employee of the Holding  Company or a subsidiary  corporation  during the entire
period  beginning on the Date of Grant and ending on the date of exercise of the
option, or in the case of the disability (within the meaning of Internal Revenue
Code 105(d)(4) or death of the Optionee, a date not more than one (1) year prior
to exercise

                                        
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of the option;  (ii) that this option shall not be  exercisable in part for less
than ten (10) shares  except where the balance of the  Optioned  Shares shall be
less than ten (10);  and (iii) that this option shall not be  exercisable  as to
more than ( %) percent  of the total  number of  Optioned  Shares in any one (1)
calendar  year,  providing  that any options not  exercised  within the earliest
period permitted may be exercised at any time thereafter within the Option Term;
and (iii) that the Option  Holder may  exercise  this  option as to one  hundred
(100%) percent of the total number of Optioned  Shares upon or after a Change in
Control;  (e) The shares of Common  Stock  covered by this option are subject to
restrictions  as provided in the Option Plan.  (f) If the Optionee (or any other
person  entitled to exercise this option)  desires to exercise this option,  the
Optionee or such other person,  as the case may be, shall give written notice to
the Holding  Company at its principal  office at 699 Hillside  Avenue,  New Hyde
Park,  New York (or such  other  place as may  hereafter  be  designated  by the
Holding  Company)  stating  the number of shares as to which the Option is being
exercised.  Such notice shall be accompanied by cash or an unendorsed  certified
or  official  bank  draft or money  order  payable  to the order of the  Holding
Company for the full price, in United States dollars,  of the shares as to which
the option is being  exercised.  (g) The terms and provisions of this option are
subject to and shall be governed by the terms and  provisions  contained  in the
Option Plan, which is hereby incorporated herein by reference and made a part of
this Agreement.


 2.  Optionee  agrees to  remain  in the  employ  of the  Holding  Company  or a
subsidiary corporation for a period of at least three (3) years from the Date of
Grant.  Such  employment,  subject to the provisions of any contract between the
Holding  Company  and the  Optionee,  shall be at the  pleasure  of the  Holding
Company and at such  compensation as the Holding Company shall from time to time
determine.  Any  termination of the Optionee's  employment  during the period of
three years referred to above which is either:  (a) for cause;  or (b) voluntary
on the part of the  Optionee  and without  the  consent of the  Holding  Company
(except that a voluntary  termination within three (3) months following a Change
in Control  shall not be deemed  voluntary  on the part of the  Option  Holder),
shall be deemed a violation by the Optionee of his or her  agreement  and,  upon
the occurrence of such violation, this Option shall terminate and Optionee shall
have no further  rights under this  Agreement  or the Option or Options  granted
under the Option Plan.  Such  termination of this option shall be in addition to
any other  rights and  remedies  for  breach of  contract  to which the  Holding
Company shall be entitled.


 3. This Option shall not be transferred,  assigned,  pledged or hypothecated in
any way  (whether by operation of law or  otherwise)  by the Optionee  otherwise
than by will or laws of descent and distribution and shall be exercisable during
his or her lifetime only by the Optionee, and shall not be subject to execution,

                                        
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attachment or similar process.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the Date of Grant.



                                                             STATE BANCORP, INC.


                                                      BY:_______________________
                                                         
                                                      __________________________
                                                      (Optionee)
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