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EXHIBIT 10.1      RICHMOND COUNTY FINANCIAL CORP. 1998 STOCK-BASED
                  INCENTIVE PLAN



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                        RICHMOND COUNTY FINANCIAL CORP.
                        1998 STOCK-BASED INCENTIVE PLAN


1.    DEFINITIONS.
      -----------

      (a) "Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Holding Company,  as such terms are defined in Sections 424(e) and 424(f)
of the Code.

      (b) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory  Stock Options,  Incentive  Stock Options,  Stock Awards,  Limited
Option Rights, and Limited Stock Rights.

      (c)   "Award Agreement" means an  agreement  evidencing  and setting forth
the terms of an Award.

      (d)   "Bank" means Richmond County Savings Bank.

      (e)   "Board of Directors" means the  board  of  directors  of the Holding
Company.

      (f) "Change in Control" of the Holding  Company or the Bank means an event
of a nature that:  (i) would be required to be reported in response to Item 1(a)
of the current report on Form 8-K, as in effect on the date hereof,  pursuant to
Section  13 or 15(d) of the  Exchange  Act;  or (ii)  results  in a  "change  in
control" of the Bank or the Holding  Company within the meaning of the Change in
Bank  Control  Act and the  Rules and  Regulations  promulgated  by the  Federal
Deposit Insurance  Corporation ("FDIC") at 12 C.F.R. ss. 303.4(a),  with respect
to the Bank, and the Rules and  Regulations  promulgated by the Office of Thrift
Supervision  ("OTS") (or its  predecessor  agency),  with respect to the Holding
Company; or (iii) 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 voting
securities of the Bank or the Holding  Company  representing  20% or more of the
Bank's  or the  Holding  Company's  outstanding  voting  securities  or right to
acquire such securities  except for any voting  securities of the bank purchased
by the  Holding  Company and any voting  securities  purchased  by any  employee
benefit plan of the Holding  Company or its  Affiliates,  or (B) individuals who
constitute  the Board of  Directors 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 at least  three-quarters  of the directors  comprising the
Incumbent  Board,  or whose  nomination  for  election by the Holding  Company's
stockholders  was approved by a Nominating  Committee solely composed of members
which are Incumbent  Board  members,  shall be, for purposes of this clause (B),
considered as though he 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 Bank or the Holding  Company or similar  transaction  occurs or is
effectuated in which the Bank or Holding Company is not the resulting entity, or
(D) a proxy statement has been distributed  soliciting proxies from stockholders
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  Bank  with  one or more
corporations  as a result  of  which  the  outstanding  shares  of the  class of
securities  then  subject  to such  plan or  transaction  are  exchanged  for or
converted  into cash or  property  or  securities  not issued by the Bank or the
Holding Company shall be  distributed,  or (E) a tender offer is made for 20% or
more of the voting securities of the Bank or Holding Company then outstanding.

      (g)   "Code" means the Internal Revenue Code of 1986, as amended.

      (h) "Committee" means the committee  designated by the Board of Directors,
pursuant to Section 2 of the Plan, to administer the Plan.

      (i) "Common  Stock"  means the Common  Stock of the Holding  Company,  par
value, $.01 per share.


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      (j)   "Date of Grant" means the effective date of an Award.

      (k)  "Disability"  means any mental or physical  condition with respect to
which the Participant  qualifies for and receives benefits for under a long-term
disability  plan of the Holding  Company or an  Affiliate,  or in the absence of
such a long-term  disability  plan or coverage  under such a plan,  "Disability"
shall mean a physical or mental  condition  which, in the sole discretion of the
Committee,   is  reasonably  expected  to  be  of  indefinite  duration  and  to
substantially   prevent  the   Participant   from   fulfilling   his  duties  or
responsibilities to the Holding Company or an Affiliate.

      (l) "Effective Date" means the earlier of the date the Plan is approved by
shareholders or February 17, 1999.

      (m)  "Employee"  means any person  employed by the  Holding  Company or an
Affiliate.  Directors  who are  employed by the Holding  Company or an Affiliate
shall be considered Employees under the Plan.

      (n)  "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      (o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.

      (p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:

            (i)   If the Common  Stock was traded on the date in question on The
                  Nasdaq  Stock Market then the Fair Market Value shall be equal
                  to the last  transaction  price  quoted  for such  date by The
                  Nasdaq Stock Market;

            (ii)  If the Common Stock was traded on a stock exchange on the date
                  in question,  then the Fair Market Value shall be equal to the
                  closing   price   reported   by   the   applicable   composite
                  transactions report for such date; and

            (iii) If neither of the foregoing provisions is applicable, then the
                  Fair Market Value shall be determined by the Committee in good
                  faith on such basis as it deems appropriate.

      Whenever possible, the determination of Fair Market Value by the Committee
shall  be  based  on  the  prices  reported  in The  Wall  Street  Journal.  The
                                                --------------------------
Committee's  determination  of Fair Market Value shall be conclusive and binding
on all persons.

      (q)   "Holding Company" means Richmond County Financial Corp.

      (r)   "Incentive   Stock  Option"  means  a  stock  option  granted  to  a
Participant,  pursuant  to Section 7 of the Plan,  that is  intended to meet the
requirements of Section 422 of the Code.

      (s)  "Limited  Option  Right"  means an  Award  granted  to a  Participant
pursuant to Section 9(a) of the Plan.

      (t) "Limited Stock Right" means an Award granted to a Participant pursuant
to Section 9(b) of the Plan.

      (u)  "Non-Statutory  Stock  Option"  means a  stock  option  granted  to a
Participant  pursuant  to the terms of the Plan but which is not  intended to be
and is not identified as an Incentive Stock Option or a stock option granted


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under the Plan which is intended to be and is identified  as an Incentive  Stock
Option but which does not meet the requirements of Section 422 of the Code.

      (v)  "Option"  means an  Incentive  Stock  Option or  Non-Statutory  Stock
Option.

      (w) "Outside  Director" means a member of the board(s) of directors of the
Holding  Company or an  Affiliate  who is not also an  Employee  of the  Holding
Company or an Affiliate.

      (x) "Participant" means any person who holds an outstanding Award.

      (y) "Performance  Award" means an Award granted to a Participant  pursuant
to Section 10 of the Plan.

      (z) "Plan" means this Richmond County  Financial  Corp.  1998  Stock-Based
Incentive Plan.

      (aa)  "Retirement"  means  retirement  from  employment  with the  Holding
Company or an Affiliate in accordance with the then current retirement  policies
of the Holding Company or Affiliate, as applicable. "Retirement" with respect to
an Outside  Director  means the  termination  of service  from the  board(s)  of
directors of the Holding Company and any Affiliate  following  written notice to
such board(s) of directors of the Outside Director's intention to retire.

      (bb) "Stock  Award" means an Award  granted to a  Participant  pursuant to
Section 8 of the Plan.

      (cc)  "Termination  for  Cause"  shall  mean,  in the  case of an  Outside
Director,  removal from the board(s) of directors of the Holding Company and its
Affiliates in accordance with the applicable  by-laws of the Holding Company and
its Affiliates  or, in the case of an Employee,  as defined under any employment
agreement with the Holding Company or an Affiliate;  PROVIDED,  HOWEVER, that if
no employment  agreement  exists with respect to the Employee,  Termination  for
Cause shall mean  termination  of  employment  because of a material loss to the
Holding Company or an Affiliate,  as determined by and in the sole discretion of
the Board of Directors or its designee(s).

      (dd)  "Trust"  means a trust  established  by the  Board of  Directors  in
connection  with  this  Plan to hold  Common  Stock  or other  property  for the
purposes set forth in the Plan.

      (ee)  "Trustee"  means  any  person  or  entity  approved  by the Board of
Directors or its designee(s) to hold any of the Trust assets.

2.    ADMINISTRATION.
      --------------

      (a) The Committee  shall  administer the Plan. The Committee shall consist
of two or more  disinterested  directors  of the Holding  Company,  who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be  "disinterested"  only if he satisfies (i) such requirements as the
Securities  and Exchange  Commission  may establish for  non-employee  directors
administering  plans intended to qualify for exemption  under Rule 16b-3 (or its
successor)  under the  Exchange Act and (ii) such  requirements  as the Internal
Revenue Service may establish for outside  directors acting under plans intended
to qualify for exemption  under Section  162(m)(4)(C)  of the Code. The Board of
Directors  may also  appoint  one or more  separate  committees  of the Board of
Directors,  each composed of one or more directors of the Holding  Company or an
Affiliate who need not be disinterested  and who may grant Awards and administer
the Plan with respect to Employees and Outside  Directors who are not considered
officers or directors of the Holding  Company  under  Section 16 of the Exchange
Act or for whom Awards are not  intended to satisfy  the  provisions  of Section
162(m) of the Code.

      (b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type,  number,  vesting
requirements and other features and conditions of such

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Awards,  (iii) interpret the Plan and Award  Agreements in all respects and (iv)
make all other  decisions  relating to the operation of the Plan.  The Committee
may adopt such rules or  guidelines  as it deems  appropriate  to implement  the
Plan. The Committee's  determinations  under the Plan shall be final and binding
on all persons.

      (c)  Each  Award  shall  be  evidenced  by  a  written  agreement  ("Award
Agreement")  containing  such  provisions  as may be  required  by the  Plan and
otherwise  approved by the Committee.  Each Award Agreement  shall  constitute a
binding   contract   between  the  Holding  Company  or  an  Affiliate  and  the
Participant, and every Participant, upon acceptance of an Award Agreement, shall
be bound by the terms and restrictions of the Plan and the Award Agreement.  The
terms of each Award  Agreement  shall be in accordance  with the Plan,  but each
Award  Agreement  may  include  any  additional   provisions  and   restrictions
determined by the Committee,  in its  discretion,  provided that such additional
provisions and restrictions are not inconsistent  with the terms of the Plan. In
particular  and at a  minimum,  the  Committee  shall  set  forth in each  Award
Agreement (i) the type of Award granted;  (ii) the Exercise Price of any Option;
(iii) the number of shares subject to the Award; (iv) the expiration date of the
Award;  (v) the manner,  time and rate  (cumulative or otherwise) of exercise or
vesting of such  Award;  and (vi) the  restrictions,  if any,  placed  upon such
Award,  or upon  shares  which may be issued upon  exercise  of such Award.  The
Chairman of the  Committee  and such other  directors  and  officers as shall be
designated by the Committee is hereby  authorized to execute Award Agreements on
behalf of the Company or an  Affiliate  and to cause them to be delivered to the
recipients of Awards.

      (d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any   Award   Agreement.   The   Committee   may   rely  on  the   descriptions,
representations,  reports and estimates  provided to it by the management of the
Holding  Company or an Affiliate for  determinations  to be made pursuant to the
Plan,  including the  satisfaction  of any  conditions  of a Performance  Award.
However,  only the  Committee  or a portion of the  Committee  may  certify  the
attainment  of any  conditions of a  Performance  Award  intended to satisfy the
requirements of Section 162(m) of the Code.

3.    TYPES OF AWARDS AND RELATED RIGHTS.
      ----------------------------------

      The following Awards may be granted under the Plan:

      (a)   Non-Statutory Stock Options.
      (b)   Incentive Stock Options.
      (c)   Stock Awards.
      (d)   Limited Option Rights.
      (e)   Limited Stock Rights.

4.    STOCK SUBJECT TO THE PLAN.
      -------------------------

      Subject to adjustment  as provided in Section 15 of the Plan,  the maximum
number of shares  reserved for Awards under the Plan is 3,699,297,  which number
shall not exceed 14% of the  outstanding  shares of the Common Stock  determined
immediately  as of the  Effective  Date.  Subject to  adjustment  as provided in
Section  15 of the  Plan,  the  maximum  number of shares  reserved  hereby  for
purchase pursuant to the exercise of Options, including Incentive Stock Options,
and  Option-related  Awards  granted under the Plan is  2,642,355,  which number
shall  not  exceed  10% of the  outstanding  shares  of  Common  Stock as of the
Effective  Date. The maximum  number of the shares  reserved for Stock Awards is
1,056,942,  which number shall not exceed 4% of the outstanding shares of Common
Stock as of the Effective Date. The shares of Common Stock issued under the Plan
may be either  authorized but unissued  shares or authorized  shares  previously
issued  and  acquired  or  reacquired  by the  Trustee or the  Holding  Company,
respectively.  To the extent that Options and Stock Awards are granted under the
Plan, the shares  underlying  such Awards will be unavailable  for any other use
including  future  grants under the Plan except  that,  to the extent that Stock
Awards or Options  terminate,  expire or are forfeited  without having vested or
without having been exercised


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(in the case of Limited  Option Rights and Limited  Stock Rights,  exercised for
cash), new Awards may be made with respect to these shares.

5.    ELIGIBILITY.
      -----------

      Subject to the terms of the Plan,  all  full-time  Employees  and  Outside
Directors  shall be eligible to receive Awards under the Plan. In addition,  the
Committee  may grant  eligibility  to  consultants  and  advisors of the Holding
Company or an Affiliate, as it sees fit.

6.    NON-STATUTORY STOCK OPTIONS.
      ---------------------------

      The  Committee  may,  subject  to the  limitations  of this  Plan  and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant  Non-Statutory  Stock Options to eligible  individuals upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Non-Statutory Stock Option.  However,  the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Terms of  Non-statutory  Stock Options.  The Committee shall determine
          --------------------------------------
the term during which a Participant may exercise a  Non-Statutory  Stock Option,
but in no event may a Participant  exercise a  Non-Statutory  Stock  Option,  in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each  Non-Statutory  Stock Option, or any
part  thereof,   first  becomes  exercisable  and  any  terms  or  conditions  a
Participant must satisfy in order to exercise each  Non-Statutory  Stock Option.
The shares of Common Stock  underlying  each  Non-Statutory  Stock Option may be
purchased in whole or in part by the  Participant at any time during the term of
such Non-Statutory Stock Option, or any portion thereof,  once the Non-Statutory
Stock Option becomes exercisable.

      (c)  Non-Transferability.  Unless otherwise determined by the Committee in
           -------------------
accordance  with this Section  6(c), a  Participant  may not  transfer,  assign,
hypothecate,  or  dispose  of in any  manner,  other than by will or the laws of
intestate succession,  a Non-Statutory Stock Option. The Committee may, however,
in its sole discretion,  permit transferability or assignment of a Non-Statutory
Stock Option if such transfer or assignment is, in its sole  determination,  for
valid estate  planning  purposes and such  transfer or  assignment  is permitted
under the Code and Rule 16b-3  under the  Exchange  Act.  For  purposes  of this
Section 6(c), a transfer for valid estate planning purposes includes, but is not
limited  to:  (a) a transfer  to a  revocable  intervivos  trust as to which the
Participant is both the settlor and trustee, (b) a transfer for no consideration
to: (i) any member of the Participant's  Immediate Family, (ii) any trust solely
for the  benefit of members of the  Participant's  Immediate  Family,  (iii) any
partnership  whose only  partners  are  members of the  Participant's  Immediate
Family,  and (iv) any limited  liability  corporation or corporate  entity whose
only members or equity owners are members of the Participant's Immediate Family,
or (c) a transfer to the Richmond  County  Savings  Foundation.  For purposes of
this Section 6(c),  "Immediate Family" includes,  but is not necessarily limited
to, a Participant's  parents,  grandparents,  spouse,  children,  grandchildren,
siblings  (including  half bothers and sisters),  and individuals who are family
members by adoption.  Nothing  contained in this Section 6(c) shall be construed
to require the  Committee to give its approval to any transfer or  assignment of
any Non-Statutory  Stock Option or portion thereof,  and approval to transfer or
assign any Non-Statutory Stock Option or portion thereof does not mean that such
approval will be given with respect to any other  Non-Statutory  Stock Option or
portion thereof.  The transferee or assignee of any  Non-Statutory  Stock Option
shall  be  subject  to  all of the  terms  and  conditions  applicable  to  such
Non-Statutory  Stock Option  immediately prior to the transfer or assignment and
shall be  subject  to any other  conditions  proscribed  by the  Committee  with
respect to such Non-Statutory Stock Option.



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      (d)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  upon the termination of a Participant's employment
or other service for any reason other than  Retirement,  Disability or death,  a
Change in Control,  or Termination for Cause,  the Participant may exercise only
those  Non-Statutory  Stock  Options that were  immediately  exercisable  by the
Participant at the date of such  termination  and only for a period of three (3)
months following the date of such termination.

      (e) Termination of Employment or Service  (Retirement).  In the event of a
          --------------------------------------------------
Participant's Retirement,  the Participant may exercise only those Non-Statutory
Stock Options that were  immediately  exercisable by the Participant at the date
of  Retirement  and  only for a period  of one (1)  year  following  the date of
Retirement;  PROVIDED,  HOWEVER,  that upon the  Participant's  Retirement,  the
Committee,  in its  discretion,  may  determine  that all Non-  Statutory  Stock
Options  that were not  exercisable  by the  Participant  as of such date  shall
continue  to  become  exercisable  in  accordance  with the  terms of the  Award
Agreement if the Participant is immediately engaged by the Holding Company or an
Affiliate as a consultant  or advisor or continues to serve the Holding  Company
or an Affiliate as a director, advisory director, or director emeritus.

      (f)  Termination of Employment or Service  (Disability  or death).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of the  termination  of a
Participant's  employment  or other  service  due to  Disability  or death,  all
Non-Statutory  Stock Options held by such Participant shall  immediately  become
exercisable and remain  exercisable for a period one (1) year following the date
of such termination.

      (g) Termination of Employment or Service  (Change in Control).  Subject to
          ---------------------------------------------------------
applicable  regulation and unless otherwise determined by the Committee,  in the
event of the  termination  of a  Participant's  employment  or service  due to a
Change  in  Control,  whether  such  termination  is  actual,  constructive,  or
otherwise,  Non-Statutory Stock Options that were immediately exercisable by the
Participant at the date of such termination  shall remain  exercisable for their
original  term  without  regard to the  Participant's  continued  employment  or
service with the Holding  Company or its  Affiliates.  All  Non-Statutory  Stock
Options not exercisable as of the date of the Change in Control shall be treated
in accordance with Section 22 or the Plan.

      (h) Termination of Employment or Service  (Termination for Cause).  Unless
          -------------------------------------------------------------
otherwise  determined  by  the  Committee,  in  the  event  of  a  Participant's
Termination  for  Cause,  all rights  with  respect  to the  Participant's  Non-
Statutory Stock Options shall expire immediately upon the effective date of such
Termination for Cause.

      (i)  Payment.  Payment  due  to  a  Participant  upon  the  exercise  of a
           -------
Non-Statutory Stock Option shall be made in the form of shares of Common Stock.

      (j) Maximum  Individual Award. No individual  Employee shall be granted an
          -------------------------
amount of Non-Statutory  Stock Options which exceeds 25% of all Options eligible
to be granted under the Plan within any 60-month period.

7.    INCENTIVE STOCK OPTIONS.
      -----------------------

      The  Committee  may,  subject  to the  limitations  of the  Plan  and  the
availability  of shares of Common Stock reserved but unawarded  under this Plan,
grant  Incentive  Stock Options to an Employee upon such terms and conditions as
it may determine to the extent such terms and conditions are consistent with the
following provisions:

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Incentive Stock Option.  However, the Exercise Price shall not be less than
100% of the  Fair  Market  Value  of the  Common  Stock  on the  Date of  Grant;
PROVIDED, HOWEVER, that if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning,  for purposes of Section 422 of the Code,
Common Stock  representing more than 10% of the total combined voting securities
of the Holding Company ("10% Owner"),  the Exercise Price shall not be less than
110% of the Fair Market Value of the Common Stock on the Date of Grant.


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      (b) Amounts of Incentive  Stock Options.  To the extent the aggregate Fair
          -----------------------------------
Market  Value of shares of Common Stock with  respect to which  Incentive  Stock
Options  that are  exercisable  for the first  time by an  Employee  during  any
calendar  year under the Plan and any other  stock  option  plan of the  Holding
Company  or an  Affiliate  exceeds  $100,000,  or such  higher  value  as may be
permitted  under  Section 422 of the Code,  such Options in excess of such limit
shall be treated as  Non-Statutory  Stock  Options.  Fair Market  Value shall be
determined  as of the Date of Grant with  respect to each such  Incentive  Stock
Option.

      (c) Terms of Incentive  Stock Options.  The Committee  shall determine the
          ---------------------------------
term during which a Participant may exercise an Incentive  Stock Option,  but in
no event may a Participant  exercise an Incentive  Stock Option,  in whole or in
part, more than ten (10) years from the Date of Grant;  PROVIDED,  HOWEVER, that
if at the time an Incentive  Stock Option is granted to an Employee who is a 10%
Owner,  the  Incentive  Stock  Option  granted  to such  Employee  shall  not be
exercisable  after the expiration of five (5) years from the Date of Grant.  The
Committee shall also determine the date on which each Incentive Stock Option, or
any part  thereof,  first  becomes  exercisable  and any terms or  conditions  a
Participant  must satisfy in order to exercise each Incentive Stock Option.  The
shares of Common Stock  underlying  each Incentive Stock Option may be purchased
in whole or in part at any time during the term of such  Incentive  Stock Option
after such Option becomes exercisable.

      (d)  Non-Transferability.  No Incentive Stock Option shall be transferable
           -------------------
except  by will or the laws of  descent  and  distribution  and is  exercisable,
during his  lifetime,  only by the  Employee  to whom the  Committee  grants the
Incentive Stock Option.  The designation of a beneficiary  does not constitute a
transfer of an Incentive Stock Option.

      (e) Termination of Employment  (General).  Unless otherwise  determined by
          ------------------------------------
the  Committee,  upon the  termination  of a  Participant's  employment or other
service for any reason other than  Retirement,  Disability or death, a Change in
Control,  or  Termination  for Cause,  the  Participant  may exercise only those
Incentive Stock Options that were immediately  exercisable by the Participant at
the date of such termination and only for a period of three (3) months following
the date of such termination.

      (f)   Termination   of  Employment   (Retirement).   In  the  event  of  a
            -------------------------------------------
Participant's  Retirement,  the  Participant  may exercise only those  Incentive
Stock Options that were  immediately  exercisable by the Participant at the date
of  Retirement  and  only for a period  of one (1)  year  following  the date of
Retirement;  PROVIDED  HOWEVER,  that  upon the  Participant's  Retirement,  the
Committee,  in its  discretion,  may determine that all Incentive  Stock Options
that were not otherwise  exercisable  by the  Participant  as of such date shall
continue  to  become  exercisable  in  accordance  with the  terms of the  Award
Agreement if the Participant is immediately engaged by the Holding Company or an
Affiliate as a consultant  or advisor or continues to serve the Holding  Company
or an Affiliate as a director,  advisory  director,  or director  emeritus.  Any
Option originally  designated as an Incentive Stock Option shall be treated as a
Non-Statutory Stock Options to the extent the Participant  exercises such Option
more than three (3) months following the Date of the Participant's Retirement.

      (g)  Termination  of Employment  (Disability or Death).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  in the event of the termination of a Participant's
employment  or other service due to  Disability  or death,  all Incentive  Stock
Options held by such Participant shall immediately become exercisable and remain
exercisable for a period one (1) year following the date of such termination.

      (h) Termination of Employment  (Change in Control).  Subject to applicable
          ----------------------------------------------
regulation and unless otherwise determined by the Committee, in the event of the
termination of a Participant's employment or service due to a Change in Control,
whether such termination is actual, constructive, or otherwise,  Incentive Stock
Options that were immediately exercisable by the Participant at the date of such
termination  shall remain  exercisable for their original term without regard to
the  Participant's  continued  employment or service with the Holding Company or
its Affiliates;  provided,  however, that any Option originally designated as an
Incentive Stock Option shall be treated as a Non-Statutory  Stock Options to the
extent  the  Participant  exercises  such  Option  more than  three  (3)  months
following

                                        7

<page> 9



the Date of the Participant's  termination from employment.  All Incentive Stock
Options not exercisable as of the date of the Change in Control shall be treated
in accordance with Section 22 or the Plan.

      (i) Termination of Employment  (Termination  for Cause).  Unless otherwise
          ---------------------------------------------------
determined  by the  Committee,  in the event of an  Employee's  Termination  for
Cause,  all rights under such  Employee's  Incentive  Stock Options shall expire
immediately upon the effective date of such Termination for Cause.

      (j)  Payment.  Payment  due  to a  Participant  upon  the  exercise  of an
           -------
Incentive Stock Option shall be made in the form of shares of Common Stock.

      (k) Maximum  Individual Award. No individual  Employee shall be granted an
          -------------------------
amount of Incentive  Stock Options which exceeds 25% of all Options  eligible to
be granted under the Plan within any 60-month period.

      (l)  Disqualifying  Dispositions.  Each Award Agreement with respect to an
           ---------------------------
Incentive  Stock Option shall require the Participant to notify the Committee of
any  disposition  of shares of Common Stock  issued  pursuant to the exercise of
such Option  under the  circumstances  described  in Section  421(b) of the Code
(relating  to  certain  disqualifying  dispositions),  within  10  days  of such
disposition.

8.     STOCK AWARDS.
       ------------

      The Committee may make grants of Stock Awards,  which shall consist of the
grant of some number of shares of Common Stock, to a Participant upon such terms
and  conditions as it may determine to the extent such terms and  conditions are
consistent with the following provisions:

      (a)  Grants of the Stock  Awards.  Stock  Awards may only be made in whole
           ---------------------------
shares of Common  Stock.  Stock Awards may only be granted from shares  reserved
under the Plan and  available  for award at the time the Stock  Award is made to
the Participant.

      (b) Terms of the Stock Awards.  The Committee shall determine the dates on
          -------------------------
which  Stock  Awards  granted  to a  Participant  shall  vest  and any  terms or
conditions  which must be  satisfied  prior to the vesting of any Stock Award or
portion  thereof.  Any such  terms or  conditions  shall  be  determined  by the
Committee as of the Date of Grant.

      (c)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  upon the termination of a Participant's employment
or service for any reason other than  Retirement,  Disability or death, a Change
in Control,  or Termination for Cause, any Stock Awards in which the Participant
has not become vested as of the date of such termination  shall be forfeited and
any rights the Participant had to such Stock Awards shall become null and void.

      (d) Termination of Employment or Service  (Retirement).  In the event of a
          --------------------------------------------------
Participant's  Retirement,  any Stock  Awards in which the  Participant  has not
become vested as of the date of Retirement shall be forfeited and any rights the
Participant  had to such  unvested  Stock  Awards  shall  become  null and void;
PROVIDED HOWEVER, that upon the Participant's Retirement,  the Committee, in its
discretion,  may determine that all unvested Stock Awards shall continue to vest
in accordance with the Award Agreement if the Participant is immediately engaged
by the Holding  Company or an Affiliate as a consultant  or advisor or continues
to serve the Holding Company or an Affiliate as a director, advisory director or
director emeritus.

      (e)  Termination of Employment or Service  (Disability  or death).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of a  termination  of the
Participant's  service due to Disability or death all unvested Stock Awards held
by such Participant shall immediately vest as of the date of such termination.



                                       8

<page> 10



      (f)  Termination  of  Employment  or Service  (Change in Control).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of a  termination  of the
Participant's  service due to a Change in Control any Stock  Awards in which the
Participant has not become vested shall be treated in accordance with Section 22
or the Plan.

      (g) Termination of Employment or Service  (Termination for Cause).  Unless
          -------------------------------------------------------------
otherwise  determined  by the  Committee,  or in the event of the  Participant's
Termination for Cause,  all Stock Awards in which the Participant had not become
vested as of the effective date of such Termination for Cause shall be forfeited
and any rights such  Participant  had to such unvested Stock Awards shall become
null and void.

      (h) Maximum  Individual Award. No individual  Employee shall be granted an
          -------------------------
amount of Stock  Awards  which  exceeds 25% of all Stock  Awards  eligible to be
granted under the Plan within any 60-month period.

      (i)  Issuance  of  Certificates.   Unless  otherwise  held  in  Trust  and
           --------------------------
registered  in the name of the Trustee,  reasonably  promptly  after the Date of
Grant with  respect to shares of Common  Stock  pursuant to a Stock  Award,  the
Holding Company shall cause to be issued a stock certificate,  registered in the
name of the  Participant to whom such Stock Award was granted,  evidencing  such
shares;  provided,  that  the  Holding  Company  shall  not  cause  such a stock
certificate  to be issued  unless it has received a stock power duly endorsed in
blank with respect to such shares.  Each such stock  certificate  shall bear the
following legend:

            "The  transferability  of this  certificate  and the shares of stock
            represented  hereby  are  subject  to the  restrictions,  terms  and
            conditions (including forfeiture provisions and restrictions against
            transfer)  contained in the Richmond  County  Financial  Corp.  1998
            Stock-Based  Incentive Plan and Award Agreement entered into between
            the registered  owner of such shares and Richmond  County  Financial
            Corp. or its  Affiliates.  A copy of the Plan and Award Agreement is
            on file in the office of the Corporate  Secretary of Richmond County
            Financial Corp. located at 1214 Castleton Avenue, Staten Island, New
            York 10310.

Such legend shall not be removed until the  Participant  becomes  vested in such
shares pursuant to the terms of the Plan and Award  Agreement.  Each certificate
issued pursuant to this Section 8(i), in connection with a Stock Award, shall be
held by the Holding Company or its Affiliates,  unless the Committee  determines
otherwise.

      (j)  Non-Transferability.  Except to the extent permitted by the Code, the
           -------------------
rules  promulgated  under  Section  16(b) of the Exchange  Act or any  successor
statutes or rules:

            (i)   The  recipient  of a Stock  Award  shall not  sell,  transfer,
                  assign,  pledge,  or otherwise  encumber shares subject to the
                  Stock  Award until full  vesting of such shares has  occurred.
                  For purposes of this  section,  the  separation  of beneficial
                  ownership  and  legal  title  through  the  use of any  "swap"
                  transaction is deemed to be a prohibited encumbrance.

            (ii)  Unless determined otherwise by the Committee and except in the
                  event of the  Participant's  death or  pursuant  to a domestic
                  relations  order, a Stock Award is not transferable and may be
                  earned in his lifetime only by the  Participant  to whom it is
                  granted.  Upon the death of a  Participant,  a Stock  Award is
                  transferable by will or the laws of descent and  distribution.
                  The  designation  of a  beneficiary  shall  not  constitute  a
                  transfer.

            (iii) If a recipient  of a Stock Award is subject to the  provisions
                  of  Section 16 of the  Exchange  Act,  shares of Common  Stock
                  subject  to such  Stock  Award may not,  without  the  written
                  consent of the  Committee  (which  consent may be given in the
                  Award Agreement),  be sold or otherwise disposed of within six
                  (6) months following the date of grant of the Stock Award.


                                        9

<page> 11



      (k) Accrual of Dividends. To the extent Stock Awards are held in Trust and
          --------------------
registered in the name of the Trustee,  unless otherwise  specified by the Trust
agreement  whenever  shares  of  Common  Stock  underlying  a  Stock  Award  are
distributed  to a  Participant  or  beneficiary  thereof  under the  Plan,  such
Participant  or beneficiary  shall also be entitled to receive,  with respect to
each such  share  distributed,  a payment  equal to any cash  dividends  and the
number of shares of Common Stock equal to any stock dividends, declared and paid
with respect to a share of the Common  Stock if the record date for  determining
shareholders  entitled  to receive  such  dividends  falls  between the date the
relevant  Stock  Award was  granted  and the date the  relevant  Stock  Award or
installment  thereof is issued.  There shall also be  distributed an appropriate
amount of net earnings,  if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.

      (l) Voting of Stock  Awards.  After a Stock Award has been granted but for
          -----------------------
which the shares  covered by such Stock Award have not yet been  vested,  earned
and distributed to the Participant  pursuant to the Plan, the Participant  shall
be entitled  to vote or to direct the Trustee to vote,  as the case may be, such
shares of Common  Stock  which the Stock Award  covers  subject to the rules and
procedures  adopted by the Committee for this purpose and in a manner consistent
with the Trust agreement.

      (m) Payment.  Payment due to a Participant  upon the redemption of a Stock
          -------
Award shall be made in the form of shares of Common Stock.

9.     LIMITED RIGHTS.
       --------------

      Simultaneously  with the grant of any Option or Stock Award, the Committee
may, at its discretion,  grant a Limited Option Right or Limited Stock Right, as
applicable, with respect to all or some of the shares of Common Stock covered by
such Option or Award, subject to the following provisions:

      (a) Limited  Option  Right.  In no event shall a Limited  Option  Right be
          ----------------------
exercisable  before the  expiration  of six (6) months from the Date of Grant of
the Limited  Option  Right.  Unless in  connection  with a Change in Control the
underlying  Option with respect to which a Limited Option Right has been granted
is (i) assumed by the successor  corporation or its parent; (ii) replaced with a
comparable award for the purchase of shares of the common stock of the successor
corporation or its parent;  (iii) replaced with a cash incentive  program of the
successor  corporation or its parent that  preserves the spread  existing at the
time of the Change in Control and provides for  subsequent  payout in accordance
with the same vesting  schedule  applicable  to such Option;  or (iv) subject to
other  limitation  imposed by the Award  Agreement,  the  Limited  Option  Right
granted in  connection  with all then  outstanding  Options of the  Participant,
whether  exercisable  or not, shall  automatically  be exercised as of effective
date of the Change in Control on behalf of the  Participant  and the  underlying
Option shall expire; PROVIDED,  HOWEVER, that the Fair Market value of the Stock
on such date exceeds the Exercise Price of the underlying Option. Upon automatic
exercise of a Limited Option Right,  the holder shall promptly  receive from the
Holding  Company  or an  Affiliate  an  amount of cash  equal to the  difference
between the Exercise Price of the underlying Option and the Fair Market Value of
the Common Stock subject to such Option on the date the Limited  Option Right is
exercised  multiplied by the number of shares with respect to which such Limited
Option Right is being exercised.  The determination of comparability of an award
offered by a successor  corporation  or its parent under clause (ii) above shall
be made by the Committee, and the Committee's  determination shall be conclusive
and binding.  Any such Options that are assumed or replaced in connection with a
Change in Control and the vesting of which do not  otherwise  accelerate at that
time shall be accelerated in the event the  Participant's  employment or service
should  subsequently  terminate  within  two (2) years  following  the Change in
Control, unless such termination constitutes as Termination for Cause. A Limited
Option  Right  is  transferable  only  if and  when  the  underlying  Option  is
transferable  and  under  the same  conditions.  A Limited  Option  Right  shall
automatically  expire  and  become  null and void upon the full  vesting  of the
Option with respect to which the Limited Right was simultaneously granted.

      (b)  Limited  Stock  Right.  In no event  shall a Limited  Stock  Right be
           ---------------------
exercisable  before the  expiration  of six (6) months from the Date of Grant of
the Limited Option Right. Unless in connection with a Change in Control


                                       10

<page> 12



the underlying  Stock Award with respect to which a Limited Stock Right has been
granted is (i) assumed by the successor corporation or its parent; (ii) replaced
with a  comparable  award for the  issuance of shares of the common stock of the
successor  corporation  or its  parent;  (iii)  replaced  with a cash  incentive
program of the successor  corporation  or its parent that preserves the value of
the  Award  existing  at the time of the  Change in  Control  and  provides  for
subsequent  payout in accordance  with the same vesting  schedule  applicable to
such Award; or (iv) subject to other limitation  imposed by the Award Agreement,
the Limited Stock Right granted in connection  with all then  outstanding  Stock
Awards of the Participant which have not vested shall automatically be exercised
as of effective date of the Change in Control on behalf of the  Participant  and
the underlying Stock Awards shall expire.  Upon automatic  exercise of a Limited
Stock Right,  the holder shall promptly  receive from the Holding  Company or an
Affiliate  an amount of cash equal to the Fair Market  Value of the Common Stock
subject to such Stock  Award on the date the Limited  Stock  Right is  exercised
multiplied  by the number of shares  with  respect to which such  Limited  Stock
Right is being exercised. The determination of comparability of an award offered
by a successor  corporation  or its parent under clause (ii) above shall be made
by the  Committee,  and the  Committee's  determination  shall be conclusive and
binding. Any such Stock Awards that are assumed or replaced in connection with a
Change in Control and the vesting of which do not  otherwise  accelerate at that
time shall be accelerated in the event the  Participant's  employment or service
should  subsequently  terminate  within  two (2) years  following  the Change in
Control, unless such termination constitutes as Termination for Cause. A Limited
Stock  Right is  transferable  only if and when the  underlying  Stock  Award is
transferable  and  under  the same  conditions.  A  Limited  Stock  Right  shall
automatically  expire  and  become  null and void upon the  vesting of any Stock
Award with respect to which the Limited Stock Right was simultaneously granted.

10.   PERFORMANCE AWARDS.
      ------------------

      (a) The  Committee  may  determine  to  make  any  Award  under  the  Plan
contingent upon the satisfaction of any conditions related to the performance of
the Holding  Company,  an Affiliate of the Participant.  Each Performance  Award
shall be evidenced in the Award Agreement,  which shall set forth the applicable
conditions,  the maximum  amounts payable and such other terms and conditions as
are applicable to the  Performance  Award.  Unless  otherwise  determined by the
Committee,  each  Performance  Award shall be granted and administered to comply
with the requirements of Section 162(m) of the Code and subject to the following
provisions:

      (b) Any  Performance  Award shall be made not later than 90 days after the
start of the period for which the  Performance  Award  relates and shall be made
prior to the completion of 25% of such period. All determinations  regarding the
achievement of any  applicable  conditions  will be made by the  Committee.  The
Committee may not increase during a year the amount of a Performance  Award that
would otherwise be payable upon satisfaction of the conditions but may reduce or
eliminate the payments as provided for in the Award Agreement.

      (c)  Nothing  contained  in the Plan will be deemed in any way to limit or
restrict the Committee  from making any Award or payment to any person under any
other plan,  arrangement or understanding,  whether now existing or hereafter in
effect.

      (d) A Participant who receives a Performance Award payable in Common Stock
shall have no rights as a shareholder until the Company Stock is issued pursuant
to the terms of the Award Agreement. The Common Stock may be issued without cash
consideration.

      (e) A  Participant's  interest  in a  Performance  Award  may not be sold,
assigned, transferred, pledged, hypothecated, or otherwise encumbered.

      (f) No Award or portion thereof that is subject to the satisfaction of any
condition  shall be  distributed  or considered to be earned or vested until the
Committee  certifies in writing that the  conditions to which the  distribution,
earning or vesting of such Award is subject have been achieved.



                                       11

<page> 13



11.   DEFERRED PAYMENTS.
      -----------------

      The  Committee,  in its  discretion,  may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such  payment.  The  Committee  shall  determine  the  terms  and
conditions of any such deferral, including the period of deferral, the manner of
deferral,  and the method for measuring  appreciation on deferred  amounts until
their payout.

12.    METHOD OF EXERCISE OF OPTIONS.
       -----------------------------

      Subject to any applicable Award Agreement,  any Option may be exercised by
the  Participant in whole or in part at such time or times,  and the Participant
may make  payment of the Exercise  Price in such form or forms  permitted by the
Committee,  including,  without limitation,  payment by delivery of cash, Common
Stock  or  other  consideration  (including,  where  permitted  by law  and  the
Committee,  Awards) having a Fair Market Value on the exercise date equal to the
total Exercise Price, or by any combination of cash,  shares of Common Stock and
other  consideration,  including  exercise  by  means  of  a  cashless  exercise
arrangement with a qualifying broker-dealer, as the Committee may specify in the
applicable Award Agreement.

13.   RIGHTS OF PARTICIPANTS.
      ----------------------

      No Participant  shall have any rights as a shareholder with respect to any
shares of Common  Stock  covered by an Option  until the date of  issuance  of a
stock  certificate  for such Common Stock.  Nothing  contained  herein or in any
Award  Agreement  confers on any person any right to  continue  in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the  Holding  Company or an  Affiliate  to  terminate  a  Participant's
services.

14.   DESIGNATION OF BENEFICIARY.
      --------------------------

      A Participant  may, with the consent of the Committee,  designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Holding Company and may be revoked in writing. If a Participant
fails effectively to designate a beneficiary, then the Participant's estate will
be deemed to be the beneficiary.

15.   DILUTION AND OTHER ADJUSTMENTS.
      ------------------------------

      In the event of any change in the  outstanding  shares of Common  Stock by
reason of any stock dividend or split, recapitalization,  merger, consolidation,
spin-off,  reorganization,  combination or exchange of shares,  or other similar
corporate  change,  or other increase or decrease in such shares without receipt
or  payment  of  consideration  by  the  Holding  Company,  or in the  event  an
extraordinary  capital  distribution  is  made,  the  Committee  may  make  such
adjustments to previously  granted Awards, to prevent dilution,  diminution,  or
enlargement  of the  rights  of  the  Participant,  including  any or all of the
following:

      (a)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other  securities that may underlie future Awards under the
            Plan;

      (b)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other securities  underlying  Awards already made under the
            Plan;

      (c)   adjustments in the Exercise Price of  outstanding  Incentive  and/or
            Non-statutory  Stock Options, or any Limited Rights attached to such
            Options.



                                      12

<page> 14



No such  adjustments  may,  however,  materially  change  the value of  benefits
available to a Participant  under a previously  granted Award.  All Awards under
this Plan  shall be  binding  upon any  successors  or  assigns  of the  Holding
Company.

16.   TAX WITHHOLDING.
      ---------------

      (a)  Whenever  under this Plan,  cash or shares of Common  Stock are to be
delivered  upon  exercise or payment of an Award or any other event with respect
to rights and benefits hereunder,  the Committee shall be entitled to require as
a condition of delivery (i) that the Participant  remit an amount  sufficient to
satisfy all federal,  state,  and local  withholding  tax  requirements  related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any  combination  of the foregoing  PROVIDED,  HOWEVER,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.

      (b) If any  disqualifying  disposition  described  in Section 7(l) is made
with respect to shares of Common Stock acquired under an Incentive  Stock Option
granted  pursuant to this Plan,  or any  transfer  described  in Section 6(c) is
made,  or any election  described in Section 17 is made,  then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its  Affiliates an amount  sufficient to satisfy all federal,  state,
and local withholding  taxes thereby  incurred;  provided that, in lieu of or in
addition to the foregoing,  the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation  otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.

17.   NOTIFICATION UNDER SECTION 83(b).
      --------------------------------

      The  Committee  may,  on the Date of Grant or any later  date,  prohibit a
Participant  from making the election  described below. If the Committee has not
prohibited  such  Participant  from making such  election,  and the  Participant
shall, in connection with the exercise of any Option,  or the grant of any Stock
Award,  make the  election  permitted  under  Section  83(b) of the  Code,  such
Participant shall notify the Committee of such election within 10 days of filing
notice of the election  with the Internal  Revenue  Service,  in addition to any
filing and  notification  required  pursuant  to  regulations  issued  under the
authority of Section 83(b) of the Code.

18.   AMENDMENT OF THE PLAN AND AWARDS.
      --------------------------------

      (a) Except as provided in  paragraph  (c) of this Section 18, the Board of
Directors  may at any time,  and from time to time,  modify or amend the Plan in
any respect,  prospectively or retroactively;  provided however, that provisions
governing  grants of Incentive  Stock Options shall be submitted for shareholder
approval to the extent required by such law, regulation or otherwise. Failure to
ratify or approve amendments or modifications by shareholders shall be effective
only as to the specific  amendment or modification  requiring such ratification.
Other  provisions  of this Plan will  remain in full force and  effect.  No such
termination,  modification  or amendment  may  adversely  affect the rights of a
Participant  under an outstanding  Award without the written  permission of such
Participant.

      (b) Except as provided in paragraph  (c) of this Section 18, the Committee
may  amend  any  Award  Agreement,  prospectively  or  retroactively;  PROVIDED,
HOWEVER,  that no such  amendment  shall  adversely  affect  the  rights  of any
Participant  under an  outstanding  Award  without the  written  consent of such
Participant.

      (c) In no event shall the Board of  Directors  amend the Plan or shall the
Committee amend an Award Agreement in any manner that has the effect of:



                                       13

<page> 15



            (i)  Allowing  any Option to be granted  with an exercise  below the
            Fair Market Value of the Common Stock on the Date of Grant.

            (ii) Allowing the exercise  price of any Option  previously  granted
            under the Plan to be reduced subsequent to the Date of Award.

      (d)  Notwithstanding  anything in this Plan or any Award  Agreement to the
contrary,  if any Award or right  under this Plan  would,  in the opinion of the
Holding Company's accountants,  cause a transaction to be ineligible for pooling
of interest  accounting that would, but for such Award or right, be eligible for
such accounting treatment, the Committee, at its discretion, may modify, adjust,
eliminate or terminate the Award or right so that pooling of interest accounting
is available.

19.   EFFECTIVE DATE OF PLAN.
      ----------------------

      The Plan shall become  effective  upon  approval by the Holding  Company's
shareholders in accordance with the FDIC, New York State Banking Board ("NYSBB")
and Internal Revenue Service ("IRS") regulations or February 17, 1999, whichever
is earlier.  The failure to obtain  shareholder  ratification  for such purposes
will not effect  the  validity  of the Plan and any Awards  made under the Plan;
PROVIDED,  HOWEVER,  that  if  the  Plan  is not  ratified  by  stockholders  in
accordance with IRS regulations, the Plan shall remain in full force and effect,
and any  Incentive  Stock  Options  granted under the Plan shall be deemed to be
Non-Statutory Stock Options and any Award intended to comply with Section 162(m)
of the Code shall not comply with Section 162(m) of the Code.

20.   TERMINATION OF THE PLAN.
      -----------------------

      The right to grant Awards under the Plan will  terminate  upon the earlier
of: (i) ten (10) years after the Effective  Date;  (ii) the issuance of a number
of  shares  of  Common  Stock  pursuant  to  the  exercise  of  Options  or  the
distribution  of Stock Awards which together with the exercise of Limited Rights
is equivalent  to the maximum  number of shares  reserved  under the Plan as set
forth in Section 4 hereof.  The Board of  Directors  has the right to suspend or
terminate the Plan at any time,  provided that no such action will,  without the
consent of a Participant, adversely affect a Participant's vested rights under a
previously granted Award.

21.   APPLICABLE LAW.
      --------------

      The Plan will be  administered in accordance with the laws of the state of
Delaware to the extent not pre- empted by applicable federal law.

22.   TREATMENT OF UNVESTED, UNEXERCISED, OR NON-EXERCISABLE AWARDS UPON A
      --------------------------------------------------------------------
CHANGE IN CONTROL.
-----------------

      (a) Notwithstanding any other provision of this Plan, and unless otherwise
determined  by the  Committee,  in the event of a Change in Control,  all Awards
shall continue to remain exercisable (in the case of Options) and shall continue
to vest or become  exercisable  (in the case of Stock  Awards  and  Options)  in
accordance  with the terms and  conditions  of the grant of the  Awards,  as set
forth in the Award  Agreement(s)  governing the grant of such Awards;  provided,
however, that the continuation or timing of vesting or exercisability shall take
place without  regard to the  Participant's  continued  employment or service or
satisfaction of any other requirements  concerning vesting or exercisability set
forth in the Award Agreement(s).

      (b) Subject to paragraph  (a) of this Section 22, in the event of a Change
in Control where the Holding  Company or the Bank is not the  surviving  entity,
the Board of Directors of the Holding  Company  and/or the Bank, as  applicable,
shall require that the successor  entity take one of the following  actions with
respect to all Awards held by Participants at the date of the Change in Control:


                                       14

<page> 16



            (i) Assume the Awards with the same terms and  conditions as granted
            to the Participant under this Plan; or

            (ii) Replace the Awards with comparable Awards,  subject to the same
            or more  favorable  terms and conditions as the Award granted to the
            Participant under this Plan, whereby the Participant will be granted
            common stock or the option to purchase common stock of the successor
            entity;  or, only if the  Committee  determines  that neither of the
            alternatives set forth in clauses (i) or (ii) are legally available,

            (iii)  Replace the Awards  with a cash  payment  under an  incentive
            plan,  program,  or other  arrangement of the successor  entity that
            preserves  the economic  value of the Awards and makes any such cash
            payment  subject  to the same  vesting  or  exercisability  schedule
            applicable to such Awards.

      (c) The  determination  of  comparability of Awards offered by a successor
entity under clause (ii) of  paragraph(b)  above shall be made by the Committee,
and the Committee's determination shall be conclusive and binding.

23.   COMPLIANCE WITH NYSBB AND FDIC CONVERSION REGULATIONS.
      -----------------------------------------------------

      Notwithstanding any other provision contained in this Plan:

      (a)   unless the Plan is  approved by a majority  vote of the  outstanding
            shares of the  Holding  Company  eligible to be cast at a meeting of
            stockholders  to consider the Plan,  as  determined by Delaware law,
            the Plan and any Awards under the Plan shall not become effective or
            implemented prior to February 17, 1999;

      (b)   No Options or Stock Awards granted to any individual  Employee prior
            to one year from the date of the Bank's  conversion  from the mutual
            to stock form  ("Conversion")  may exceed 25% of the total amount of
            Options or Stock Awards,  as applicable,  which may be granted under
            the Plan;

      (c)   No  Options  or  Stock  Awards  granted  to any  individual  Outside
            Director prior to one year from the Bank's  Conversion may exceed 5%
            of the total amount of Options or Stock Awards, as applicable, which
            may be granted under the Plan;

      (d)   The  aggregate  amount of  Options  or Stock  Awards  granted to all
            Outside  Directors prior to one year from the Bank's  Conversion may
            not exceed 30% of the total  amount of Options or Stock  Awards,  as
            applicable, which may be granted under the Plan; and

      (e)   No Option  granted prior to one year from the Bank's  Conversion may
            be granted with an exercise price which is less than the Fair Market
            Value of the  Common  Stock  underlying  the  Option  on the Date of
            Grant.


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