Exhibit 10.1



 Exhibit 10.1 
  
 SFSB, INC. 
  
 2005 STOCK OPTION PLAN 
  
 1. Purpose 
  
 The purpose of the SFSB, INC. (“Company”) 2005 Stock Option Plan (the “Plan”) is to advance the interests of the Company and its
stockholders by providing Key Employees and Outside Directors of the Company and its Affiliates, including Slavie Federal Savings Bank (“Bank”) and Slavie Bancorp, MHC, the mutual holding company of the Bank, upon whose judgment,
initiative and efforts the successful conduct of the business of the Company and its Affiliates largely depends, with an additional incentive to perform in a superior manner as well as to attract people of experience and ability. 
  
 2. Definitions 
  
 “Affiliate” means any “parent corporation” or “subsidiary corporation” of the Bank or the
Company, as such terms are defined in Section 424(e) or 424(f), respectively, of the Code, or a successor to a parent corporation or subsidiary corporation. 
  
 “Award” means an award of Non-Statutory Stock Options, Incentive Stock Options, Reload Options, Limited Rights, and/or Dividend Equivalent
Rights granted under the provisions of the Plan. 
  
 “Beneficiary” means the person or persons designated by a Participant to receive any benefits payable under the Plan in the event of such Participant’s death. Such person or persons shall be designated in writing on forms
provided for this purpose by the Committee and may be changed from time to time by similar written notice to the Committee. In the absence of a written designation, the Beneficiary shall be the Participant’s surviving spouse, if any, or if
none, his estate. 
  
 “Board” or “Board of
Directors” means the board of directors of the Company or its Affiliate, as applicable. 
  
 “Cause” means personal dishonesty, incompetence, willful misconduct, any breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, or the willful violation of any law,
rule or regulation (other than traffic violations or similar offenses) or a final cease-and-desist order, any of which results in a material loss to the Company or an Affiliate. 







 “Change in Control” means a transaction: 
  
 (i) that would be required to be reported in response to Item 5.01 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or 
  
 (ii) that results in a Change in Control of the Bank or the Company within the meaning of the Home Owners’ Loan Act, as
amended (“HOLA”), and applicable rules and regulations promulgated thereunder, as in effect at the time of the Change in Control; or 
  
 (i) in which: 
  
 (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 Company representing 25% or more of the combined voting power of Company’s outstanding securities except for any securities purchased by the Bank’s
employee stock ownership plan or trust; 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 at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by the Company’s stockholders was approved by the same Nominating Committee serving under an Incumbent Board, 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 Company or similar transaction in which the Bank or Company is not the surviving institution occurs;
or 
  
 (d) a proxy statement soliciting proxies from stockholders
of the Company, by someone other than the current management of the Company, seeking stockholder approval of a plan of reorganization, merger or consolidation of the 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 are to be exchanged for or converted into cash or property or securities not issued by the Company; or 
  
 (e) a tender offer is made for 25% or more of the voting securities of the Company and the shareholders owning beneficially
or of record 25% 







 or more of the outstanding securities of the Company have tendered or offered to sell their shares
pursuant to such tender offer and such tendered shares have been accepted by the tender offeror. 
  
 Notwithstanding anything in this subsection to the contrary, a change in control shall not be deemed to have occurred in the event of a conversion of the
Company’s or the Bank’s mutual holding company to stock form, or in connection with any reorganization used to effect such a conversion or other similar transaction. 
  
 “Code” means the Internal Revenue Code of 1986, as amended. 
  
 “Committee” means a Committee of the Board consisting of either (i)
two or more Non-Employee Directors of the Company, or (ii) the entire Board of the Company. 
  
 “Common Stock” means shares of the common stock of the Company, par value $.01 per share. 
  
 “Continuous Service” means employment as a Key Employee and/or service as an Outside Director without any interruption or termination of such
employment and/or service with the Company, the Bank or an Affiliate. Continuous Service shall also mean a continuation as a member of the Board of Directors following a cessation of employment as a Key Employee. In the case of a Key Employee,
employment shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Company, the Bank or their affiliates, or in the case of transfers between the Company, the Bank or their
affiliates. 
  
 “Date of Grant” means the actual date on
which an Award is granted by the Committee. 
  
 “Director” means a member of the Board. 
  
 “Disability” means the permanent and total inability by reason of mental or physical infirmity, or both, of an employee to perform the work customarily assigned to him, or of a Director to serve as such. Additionally, in the case
of an employee, a medical doctor selected or approved by the Board must advise the Committee that it is either not possible to determine when such Disability will terminate or that it appears probable that such Disability will be permanent during
the remainder of said employee’s lifetime. 
  
 “Dividend
Equivalent Rights” means the right to receive an amount of cash based upon the terms set forth in Section 10 hereof. 
  
 “Effective Date” means the date of approval of the Plan by the Company’s stockholders. 
  
 “Fair Market Value” means, when used in connection with the Common
Stock on a certain date, the reported closing price of the Common Stock as reported by the 







 NASDAQ stock market (as published by The Wall Street Journal, if published) on such date, or if the Common Stock was not
traded on such date, then on the next preceding day on which the Common Stock was traded; provided, however, that if the Common Stock is not reported on the NASDAQ stock market, Fair Market Value shall mean the average sale price of all shares of
Common Stock sold during the 30-day period immediately preceding the date on which such stock option was granted, and if no shares of stock have been sold within such 30-day period, the average sale price of the last three sales of Common Stock sold
during the 90-day period immediately preceding the date on which such stock option was granted. In the event Fair Market Value cannot be determined in the manner described above, then Fair Market Value shall be determined by the Committee. The
Committee is authorized, but is not required, to obtain an independent appraisal to determine the Fair Market Value of the Common Stock. 
  
 “Incentive Stock Option” means an Option granted by the Committee to a Participant, which Option is designated as an Incentive Stock Option
pursuant to Section 8. 
  
 “Key Employee” means any
person who is currently employed by the Company or an Affiliate who is chosen by the Committee to participate in the Plan. 
  
 “Limited Right” means the right to receive an amount of cash based upon the terms set forth in Section 9. 
  
 “Non-Statutory Stock Option” means an Option granted by the
Committee to (i) an Outside Director or (ii) to any other Participant and such Option is either (A) not designated by the Committee as an Incentive Stock Option, or (B) fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder. 
  
 “Non-Employee Director” means, for purposes of the Plan, a Director who (a) satisfies 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) of the Securities Exchange Act of 1934, as amended, and (ii) if considered appropriate by the Board, such requirements as the Internal Revenue Service may establish for outside directors acting under
plans intended to qualify for exemption under Section 162 of the Code. 
  
 “Normal Retirement” means for a Key Employee, retirement at the normal or early retirement date set forth in the Bank’s Employee Stock Ownership Plan, or any successor plan. Normal Retirement for an Outside Director means a
cessation of service on the Board of Directors for any reason other than removal for Cause, after reaching 65 years of age and maintaining at least 10 years of Continuous Service. 
  
 “Outside Director” means a Director of the Company or an Affiliate who is not an employee of the Company or an
Affiliate. 







 “Option” means an Award granted under Section 7 or Section 8. 
  
 “Participant” means a Key Employee or Outside Director of the
Company or its Affiliates who receives or has received an award under the Plan. 
  
 “Reload Option” means an option to acquire shares of Common Stock equivalent to the shares (i) used by a Participant to pay for an Option, or (ii) deducted from any distribution in order to satisfy income
tax required to be withheld, based upon the terms set forth in Section 19. 
  
 “Termination for Cause” means the termination of employment or termination of service on the Board caused by the individual’s personal dishonesty, willful misconduct, any breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, or the willful violation of any law, rule or regulation (other than traffic violations or similar offenses), or a final cease-and-desist order, any of which results in material
loss to the Company or one of its Affiliates. 
  
 3. Plan Administration
Restrictions 
  
 The Plan shall be administered by the
Committee. The Committee is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it deems necessary for the proper administration of the Plan and to make whatever determinations and interpretations in
connection with the Plan it deems necessary or advisable. All determinations and interpretations made by the Committee shall be binding and conclusive on all Participants in the Plan and on their legal representatives and beneficiaries. 

 
 All transactions involving a grant, award or other acquisition from the
Company shall: 
  
 (a) be approved by the Company’s full
Board or by the Committee; or 
  
 (b) be approved, or ratified, in
compliance with Section 14 of the Exchange Act, by either: the affirmative vote of the holders of a majority of the securities present, or represented and entitled to vote at a meeting duly held in accordance with the laws of the state in which the
Company is incorporated; or the written consent of the holders of a majority of the securities of the issuer entitled to vote provided that such ratification occurs no later than the date of the next annual meeting of shareholders; or

  
 (c) result in the acquisition of an Option or Limited Right
that is held by the Participant for a period of six months following the date of such acquisition. 
  
 No member of the Board or the Committee shall be liable for any determination made in good faith with respect to the Plan or any Awards granted under it.
If a member of the Board or the Committee is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, 







 administrative or investigative, by reason of anything done or not done by him in such capacity under or with respect to
the Plan, the Bank or the Company shall indemnify such member against expense (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to be in the best interests of the Bank and the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

  
 4. Types of Awards 
  
 Awards under the Plan may be granted in any one or a combination of: (a)
Incentive Stock Options; (b) Non-Statutory Stock Options; (c) Limited Rights; (d) Dividend Equivalent Rights and (e) Reload Options. 
  
 5. Stock Subject to the Plan 
  
 Subject to adjustment as provided in Section 17, the maximum number of shares reserved for issuance under the Plan is 145,805 shares. Shares issued under
the Plan may be issued by the Company from authorized but unissued shares, treasury shares or acquired by the Company in open market purchases. The maximum number of Options that may be awarded to a Key Employee is 36,451. To the extent that Options
or rights granted under the Plan are exercised, the shares covered will be unavailable for future grants under the Plan; to the extent that Options, together with any related rights granted under the Plan, terminate, expire or are canceled without
having been exercised or, in the case of Limited Rights exercised for cash, new Awards may be made with respect to these shares. 
  
 6. Eligibility 
  
 Key Employees of the Company and its Affiliates shall be eligible to receive Incentive Stock Options, Non-Statutory Stock Options, Limited Rights,
Dividend Equivalent Rights and/or Reload Options under the Plan. Outside Directors shall be eligible to receive Non-Statutory Stock Options, Dividend Equivalent Rights and Reload Options under the Plan. 
  
 7. Non-Statutory Stock Options 
  
 (a) Grants to Outside Directors and Key Employees. The Committee may, from
time to time, grant Non-Statutory Stock Options to eligible Key Employees and Outside Directors, and, upon such terms and conditions as the Committee may determine, grant Non-Statutory Stock Options in exchange for and upon surrender of previously
granted Awards under the Plan. Non-Statutory Stock Options granted under the Plan, including Non-Statutory Stock Options granted in exchange for and upon surrender of previously granted Awards, are subject to the terms and conditions set forth in
this Section 7. 







 (b) Option Agreement. Each Option shall be evidenced by a written option agreement between the Company
and the Participant specifying the number of shares of Common Stock that may be acquired through its exercise and containing the terms and conditions of the option which shall not be inconsistent with the terms of the Plan. 
  
 (c) Price. The purchase price per share of Common Stock deliverable upon the
exercise of each Non-Statutory Stock Option shall be the Fair Market Value of the Common Stock of the Company on the date the Option is granted. Shares may be purchased only upon full payment of the purchase price in one or more of the manners set
forth in Section 13 hereof, as determined by the Committee. 
  
 (d) Manner of Exercise and Vesting. A Non-Statutory Stock Option granted under the Plan shall vest in a Participant at the rate or rates determined by the Committee. A vested Option may be exercised from time to time, in whole or in part,
by delivering a written notice of exercise to the President or Chief Executive Officer of the Company, or his designee. Such notice shall be irrevocable and must be accompanied by full payment of the purchase price in cash or shares of Common Stock
at the Fair Market Value of such shares, determined on the exercise date in the manner described in Section 2 hereof. If previously acquired shares of Common Stock are tendered in payment of all or part of the exercise price, the value of such
shares shall be determined as of the date of such exercise. 
  
 (e) Terms of Options. The term during which each Non-Statutory Stock Option may be exercised shall be determined by the Committee, but in no event shall a Non-Statutory Stock Option be exercisable in whole or in part more than 10 years from
the Date of Grant. No Options shall be earned by a Participant unless the Participant maintains Continuous Service until the vesting date of such Option, except as set forth herein. The shares comprising each installment may be purchased in whole or
in part at any time after such installment becomes purchasable. The Committee may, in its sole discretion, accelerate or extend the time at which any Non-Statutory Stock Option may be exercised in whole or in part by Key Employees and/or Outside
Directors. Notwithstanding any other provision of this Plan, in the event of a Change in Control of the Company or the Bank, all Non-Statutory Stock Options that have been awarded shall become immediately exercisable following such Change in
Control. 
  
 (f) Termination of Employment or Service. Upon the
termination of a Key Employee’s employment or upon termination of an Outside Director’s service for any reason other than Normal Retirement, death, Disability, Change in Control or Termination for Cause, the Participant’s
Non-Statutory Stock Options shall be exercisable only as to those shares that were immediately purchasable on the date of termination and only for one year following termination. In the event of Termination for Cause, all rights under a
Participant’s Non-Statutory Stock Options shall expire upon termination. In the event of termination of service or employment due to the Normal Retirement, or death or Disability of any Participant, all Non-Statutory Stock Options held by the
Participant, whether or not exercisable at such time, shall be exercisable by the Participant or his legal representative or beneficiaries for three years following the date of his termination due to Normal Retirement, death or Disability, provided
that in no event shall the period extend beyond the expiration of the Non-Statutory Stock Option term. 







 (g) Transferability. In the discretion of the Board, all or any Non-Statutory Stock Option granted
hereunder may be transferable by the Participant once the Option has vested in the Participant, provided, however, that the Board may limit the transferability of such Option or Options to a designated class or classes of persons. 
  
 8. Incentive Stock Options 
  
 The Committee may, from time to time, grant Incentive Stock Options to Key
Employees. Incentive Stock Options granted pursuant to the Plan shall be subject to the following terms and conditions: 
  
 (a) Option Agreement. Each Option shall be evidenced by a written option agreement between the Company and the Key Employee specifying the number of
shares of Common Stock that may be acquired through its exercise and containing such other terms and conditions that are not inconsistent with the terms of the Plan. 
  
 (b) Price. Subject to Section 17 of the Plan and Section 422 of the Code, the purchase price per share of Common Stock
deliverable upon the exercise of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock on the date the Incentive Stock Option is granted. However, if a Key Employee owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or its Affiliates (or under Section 424(d) of the Code is deemed to own stock representing more than 10% of the total combined voting power of all classes of stock of the
Company or its Affiliates), the purchase price per share of Common Stock deliverable upon the exercise of each Incentive Stock Option shall not be less than 110% of the Fair Market Value of the Common Stock on the date the Incentive Stock Option is
granted. Shares may be purchased only upon payment of the full purchase price in one or more of the manners set forth in Section 13 hereof, as determined by the Committee. 
  
 (c) Manner of Exercise. Incentive Stock Options granted under the Plan shall vest in a Participant at the rate or rates
determined by the Committee. The vested Options may be exercised from time to time, in whole or in part, by delivering a written notice of exercise to the President or Chief Executive Officer of the Company or his designee. Such notice is
irrevocable and must be accompanied by full payment of the purchase price in cash or shares of Common Stock at the Fair Market Value of such shares determined on the exercise date by the manner described in Section 2. 
  
 The Committee may, in its sole discretion, accelerate the time at which any
Incentive Stock Option may be exercised in whole or in part, provided that it is consistent with the terms of Section 422 of the Code. Notwithstanding the above, in the event of a Change in Control, all Incentive Stock Options that have been awarded
shall become immediately exercisable, unless the aggregate exercise price of the amount exercisable as 







 a result of a Change in Control, together with the aggregate exercise price of all other Incentive Stock Options first
exercisable in the year in which the Change in Control occurs, shall exceed $100,000 (determined as of the Date of Grant). In such event, the first $100,000 of Incentive Stock Options (determined as of the Date of Grant) shall be exercisable as
Incentive Stock Options and any excess shall be exercisable as Non-Statutory Stock Options but shall remain subject to the provisions of this Section 8 to the extent permitted. 
  
 (d) Amounts of Options. Incentive Stock Options may be granted to any eligible Key Employee in such amounts as determined by
the Committee; provided that the amount granted is consistent with the terms of Section 422 of the Code. In granting Incentive Stock Options, the Committee shall consider such factors as it deems relevant, which factors may include, among others,
the position and responsibilities of the Key Employee, the length and value of his or her service to the Bank, the Company, or the Affiliate, the compensation paid to the Key Employee and the Committee’s evaluation of the performance of the
Bank, the Company, or the Affiliate, according to measurements that may include, among others, key financial ratios, levels of classified assets, and independent audit findings. In the case of an Option intended to qualify as an Incentive Stock
Option, the aggregate Fair Market Value (determined as of the time the Option is granted) of the Common Stock with respect to which Incentive Stock Options granted are exercisable for the first time by the Participant during any calendar year (under
all plans of the Company and its Affiliates) shall not exceed $100,000. The provisions of this Section 8(d) shall be construed and applied in accordance with Section 422(d) of the Code and the regulations, if any, promulgated thereunder. 

 
 (e) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an Incentive Stock Option be exercisable in whole or in part more than 10 years from the Date of Grant. If any Key Employee, at the time an Incentive Stock Option is
granted to him, owns stock representing more than 10% of the total combined voting power of all classes of stock of the Company or its Affiliate (or, under Section 424(d) of the Code, is deemed to own stock representing more than 10% of the total
combined voting power of all classes of stock), the Incentive Stock Option granted to him shall not be exercisable after the expiration of five years from the Date of Grant. Notwithstanding any other provision of this Plan, in the event of a Change
in Control of the Company or the Bank, all Incentive Stock Options that have been awarded shall become immediately exercisable following such Change in Control. 
  

(f) Termination of Employment. Upon the termination of a Key Employee’s service for any reason other than Disability, Normal Retirement, Change in
Control, death or termination for Cause, the Key Employee’s Incentive Stock Options shall be exercisable only as to those shares that were immediately purchasable by such Key Employee at the date of termination and only for a period of three
months following termination. In the event of Termination for Cause, all rights under the Incentive Stock Options shall expire upon termination. 







 Upon termination of a Key Employee’s employment due to Normal Retirement, or death or Disability,
all Incentive Stock Options held by such Key Employee, whether or not exercisable at such time, shall be exercisable for a period of three years following the date of his cessation of employment, provided however, that any such Option shall not,
consistent with applicable law and subject to the provisions of the option agreement, be eligible for treatment as an Incentive Stock Option in the event such Option is exercised more than three months following the date of his Normal Retirement or
termination of employment following a Change in Control; and provided further, that no Option shall be eligible for treatment as an Incentive Stock Option in the event such Option is exercised more than one year following termination of employment
due to Disability and provided further, in order to obtain Incentive Stock Option treatment for Options exercised by heirs or devisees of an Optionee, the Optionee’s death must have occurred while employed or within three (3) months of
termination of employment. In no event shall the exercise period extend beyond the expiration of the Incentive Stock Option term. 
  
 (g) Transferability. No Incentive Stock Option granted under the Plan is transferable except by will or the laws of descent and distribution and is
exercisable during his lifetime only by the Key Employee to which it is granted. 
  
 (h) Compliance with Code. The options granted under this Section 8 are intended to qualify as Incentive Stock Options within the meaning of Section 422 of the Code, but the Company makes no warranty as to the
qualification of any Option as an Incentive Stock Option within the meaning of Section 422 of the Code. If an Option granted hereunder fails for whatever reason to comply with the provisions of Section 422 of the Code, and such failure is not or
cannot be cured, such Option shall be a Non-Statutory Stock Option. 
  
 9.
Limited Rights 
  
 The Committee may grant a Limited Right
simultaneously with the grant of any Option to any Key Employee, with respect to all or some of the shares covered by such Option. Limited Rights granted under the Plan are subject to the following terms and conditions: 
  
 (a) Terms of Rights. In no event shall a Limited Right be exercisable in
whole or in part before the expiration of six months from the date of grant of the Limited Right. A Limited Right may be exercised only in the event of a Change in Control. The terms and conditions of any Limited Right shall be evidenced in the
Option agreement entered into with the Participant and shall be subject to the terms and conditions of the Plan. 
  
 The Limited Right may be exercised only when the underlying Option is eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related Option. 
  
 Upon exercise of a Limited Right, the related Option shall cease to be exercisable. Upon exercise or termination of an Option, any related Limited Rights shall terminate. 







 The Limited Rights may be for no more than 100% of the difference between the exercise price and the Fair Market Value of
the Common Stock subject to the underlying Option. The Limited Right is transferable only when the underlying Option is transferable and under the same conditions. 
  
 (b) Payment. Upon exercise of a Limited Right, the holder shall promptly receive from the Company an amount of cash equal to
the difference between the Fair Market Value on the Date of Grant of the related Option and the Fair Market Value of the underlying shares on the date the Limited Right is exercised, multiplied by the number of shares with respect to which such
Limited Right is being exercised. If provided in the option agreement, the Limited Right may be exercisable for shares of stock of the Company or for shares of the acquiring corporation or its parent, as applicable. The number of shares to be
received on the exercise of such Limited Right shall be determined by dividing the amount of cash that would have been available under the first sentence above by the Fair Market Value at the time of exercise of the shares underlying the Option
subject to the Limited Right. 
  
 10. Dividend Equivalent Rights

  
 Simultaneously with the grant of any Option to a
Participant, the Committee may grant a Dividend Equivalent Right with respect to all or some of the shares covered by such Option. Dividend Equivalent Rights granted under this Plan are subject to the following terms and conditions: 
  
 (a) Terms of Rights. The Dividend Equivalent Right provides the Participant
with a cash benefit per share for each share underlying the unexercised portion of the related Option equal to the amount of any extraordinary dividend (as defined in Section 10(c)) per share of Common Stock declared by the Company. The terms and
conditions of any Dividend Equivalent Right shall be evidenced in the Option agreement entered into with the Participant and shall be subject to the terms and conditions of the Plan. The Dividend Equivalent Right is transferable only when the
related Option is transferable and under the same conditions. 
  
 (b) Payment. Upon the payment of an extraordinary dividend, the Participant holding a Dividend Equivalent Right with respect to Options or portions thereof which have vested shall promptly receive from the Company the amount of cash equal
to the amount of the extraordinary dividend per share of Common Stock, multiplied by the number of shares of Common Stock underlying the unexercised portion of the related Option. With respect to options or portions thereof which have not vested,
the amount that would have been received pursuant to the Dividend Equivalent Right with respect to the shares underlying such unvested Option or portion thereof shall be paid to the Participant holding such Dividend Equivalent Right together with
earnings thereon, on such date as the Option or portion thereof becomes vested. Payments shall be decreased by the amount of any applicable tax withholding prior to distribution to the Participant as set forth in Section 19. 







 (c) Extraordinary Dividend. For purposes of this Section 10, an extraordinary dividend is any dividend
paid on shares of Common Stock where (i) the dividend rate exceeds the Bank’s weighted average cost of funds on interest-bearing liabilities for the current quarter, or (ii) the annualized aggregate dollar amount of the dividend exceeds the
Bank’s after-tax net income for the current quarter. For purposes of this Section 10, the dividend rate equals the quotient, expressed as a percentage, of (i) the annualized dollar amount of the dividend, and (ii) the last trade price of the
Company’s Common Stock on the day immediately before the dividend is declared. 
  
 11. Reload Option 
  
 Simultaneously with the
grant of any Option to a Participant, the Committee may grant a Reload Option with respect to all or some of the shares covered by such Option. A Reload Option may be granted to a Participant who satisfies all or part of the exercise price of the
Option with shares of Common Stock (as described in Section 13(c) below). The Reload Option represents an additional option to acquire the same number of shares of Common Stock as is used by the Participant to pay for the original Option. Reload
Options may also be granted to replace Common Stock withheld by the Company for payment of a Participant’s withholding tax under Section 19. A Reload Option is subject to all of the same terms and conditions as the original Option except that
(i) the exercise price of the shares of Common Stock subject to the Reload Option will be determined at the time the original Option is exercised and (ii) such Reload Option will conform to all provisions of the Plan at the time the original Option
is exercised. 
  
 12. Surrender of Option 
  
 In the event of a Participant’s termination of employment or
termination of service as a result of death, Disability or Normal Retirement, the Participant (or his or her personal representative(s), heir(s), or devisee(s)) may, in a form acceptable to the Committee, make application to surrender all or part of
the Options held by such Participant in exchange for a cash payment from the Company of an amount equal to the difference between the Fair Market Value of the Common Stock on the date of termination of employment or the date of termination of
service on the Board and the exercise price per share of the Option. Whether the Committee accepts such application or determines to make payment, in whole or part, is within its absolute and sole discretion, it being expressly understood that the
Committee is under no obligation to any Participant whatsoever to make such payments. In the event that the Committee accepts such application and determines to make payment, such payment shall be in lieu of the exercise of the underlying Option and
such Option shall cease to be exercisable. 
  
 13. Alternate Option Payment
Mechanism 
  
 The Committee has sole discretion to determine
what form of payment it will accept for the exercise of an Option. The Committee may indicate acceptable forms in the agreement with the Participant covering such Options or may reserve its decision to the time of exercise. No Option is to be
considered exercised until payment in full is accepted by the Committee or its agent. 







 (a) Cash Payment. The exercise price may be paid in cash or by certified check. To the extent permitted
by law, the Committee may permit all or a portion of the exercise price of an Option to be paid through borrowed funds. 
  
 (b) Cashless Exercise. Subject to vesting requirements, if applicable, a Participant may engage in a “cashless exercise” of the Option. Upon a
cashless exercise, the Participant shall give the Company written notice of the exercise of the Option, together with an order to a registered broker-dealer or equivalent third party, to sell part or all of the Common Stock subject to the Option and
to deliver enough of the proceeds to the Company to pay the Option exercise price and any applicable withholding taxes. If the Participant does not sell the Common Stock subject to the Option through a registered broker-dealer or equivalent third
party, the Optionee can give the Company written notice of the exercise of the Option and the third party purchaser of the Common Stock subject to the Option shall pay the Option exercise price plus applicable withholding taxes to the Company.

  
 (c) Exchange of Common Stock. The Committee may permit payment
of the Option exercise price by the tendering of previously acquired shares of Common Stock and any such term shall be reflected in the Option agreement. All shares of Common Stock tendered in payment of the exercise price of an Option shall be
valued at the Fair Market Value of the Common Stock on the date prior to the date of exercise. No tendered shares of Common Stock which were acquired by the Participant upon the previous exercise of an Option or as awards under a stock award plan
(such as the Company’s Recognition and Retention Plan) shall be accepted for exchange unless the Participant has held such shares (without restrictions imposed by said plan or award) for at least six months prior to the exchange. 
  
 14. Rights of a Stockholder 
  
 A Participant shall have no rights as a stockholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date of issuance of a stock certificate for such shares. Nothing in the Plan or in any Award granted confers on any person any right to continue in the employ of the Company
or its Affiliates or to continue to perform services for the Company or its Affiliates or interferes in any way with the right of the Company or its Affiliates to terminate his services as an officer, director or employee at any time. 
  
 15. Agreement with Participants 
  
 Each Award of Options, Reload Options, Limited Rights and/or Dividend
Equivalent Rights will be evidenced by a written agreement, executed by the Participant and the Company or its Affiliates, that describes the conditions for receiving the Awards, including the date of Award, the purchase price, applicable periods,
and any other terms and conditions as may be required by the Board or applicable securities law. 







 16. 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
Option, Reload Option, Limited Rights Award or Dividend Equivalent Rights to which he would then be entitled. Such designation will be made upon forms supplied by and delivered to the Company and may be revoked in writing. If a Participant fails
effectively to designate a Beneficiary, then his estate will be deemed to be the Beneficiary. 
  
 17. 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, pro rata return of capital to all shareholders, recapitalization, or any merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other corporate change, or other increase or decrease in such shares, without receipt or payment of consideration by the Company, the Committee shall make such adjustments to previously granted
Awards, to prevent dilution or enlargement of the rights of the Participant, including any or all of the following: 
  
 (a) Adjustments in the aggregate number of shares of Common Stock that may be awarded under the Plan; 
  
 (b) Adjustments in the aggregate number of shares of Common Stock that may be
awarded to any single individual under the Plan; 
  
 (c)
Adjustments in the aggregate number of shares of Common Stock covered by Awards already made under the Plan; or 
  
 (d) Adjustments in the purchase price of outstanding Incentive and/or Non-Statutory Stock Options, or any Related Options or any Limited Rights attached
to such Options. 
  
 No such adjustments may, however, materially
change the value of benefits available to a Participant under a previously granted Award. With respect to Incentive Stock Options, no such adjustment shall be made if it would be deemed a “modification” of the Award under Section 424 of
the Code. 







 18. Effect of a Change in Control on Option Awards 
  
 In the event of a Change in Control, the Committee and the Board of Directors will take one or more of the following actions
to be effective as of the date of such Change in Control: 
  
 (a)
Provide that such Options shall be assumed, or equivalent options shall be substituted (“Substitute Options”) by the acquiring or succeeding corporation (or an affiliate thereof), provided that: (A) any such Substitute Options exchanged
for Incentive Stock Options shall meet the requirements of Section 424(a) of the Code, and (B) the shares of stock issuable upon the exercise of such Substitute Options shall constitute securities registered in accordance with the Securities Act of
1933, as amended (“1933 Act”) or such securities shall be exempt from the registration provisions of the 1933 Act, (collectively, “Registered Securities”), or in the alternative, if the securities issuable upon the exercise of
such Substitute Options shall not constitute Registered Securities, then the Participant will receive upon consummation of the Change in Control a cash payment for each Option surrendered equal to the difference between the (1) Fair Market Value of
the consideration to be received for each share of Common Stock in the Change in Control times the number of shares of Common Stock subject to such surrendered Options, and (2) the aggregate exercise price of all such surrendered Options, or

  
 (b) In the event of a transaction under the terms of which the
holders of Common Stock will receive upon consummation thereof a cash payment (the “Merger Price”) for each share of Common Stock exchanged in the Change in Control transaction, make or provide for a cash payment to the Participants equal
to the difference between (A) the Merger Price times the number of shares of Common Stock subject to such Options held by each Optionee (to the extent then exercisable at prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all such surrendered Options in exchange for such surrendered Options. 
  
 19. Withholding 
  
 There may be deducted from
each distribution of cash and/or Common Stock under the Plan the minimum amount of tax required by any governmental authority to be withheld. Shares of Common Stock shall be withheld where required from any distribution of Common Stock. 

 
 20. Amendment of the Plan 
  
 The Board may at any time, and from time to time, terminate, modify or amend
the Plan in any respect, or modify or amend an Award received by Key Employees and/or Outside Directors; provided, however, that no such termination, modification or amendment may affect the rights of a Participant, without his consent, under an
outstanding Award. Notwithstanding anything to the contrary contained in the Plan, the Board may not amend or modify the Plan without stockholder approval where such approval is required by applicable law or by the rules of any securities exchange
or quotation system (e.g., Nasdaq) on which the Common Stock is listed or traded. Furthermore, notwithstanding anything to the contrary contained in the Plan, the Board or the Committee may not amend or modify any Award if such amendment or
modification would require the approval of the stockholders if the amendment or modification were made to the Plan. 







 21. Effective Date of Plan 
  
 The Plan shall become effective upon the date of approval of the Plan by the Company’s stockholders. 
  
 22. Termination of the Plan 
  
 The right to grant Awards under the Plan will terminate upon the earlier of
(i) 10 years after the Effective Date, or (ii) the date on which the exercise of Options or related rights equaling the maximum number of shares reserved under the Plan occurs, as set forth in Section 5. The Board may suspend or terminate the Plan
at any time, provided that no such action will, without the consent of a Participant, adversely affect his rights under a previously granted Award. 
  
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 IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its duly authorized officers, as of
the      day of             , 2005. 
  
 Date Approved by Stockholders:              
  
 Effective Date:
             
  

			
	ATTEST:	 	SFSB, INC.
	  
  

 Secretary
	 	  

 Chief
Executive Officer