AMBANC HOLDING CO., INC.

                             2001 STOCK OPTION PLAN


     1.   Purpose of the Plan.  The Plan shall  be known as the  AMBANC  HOLDING
CO.,  INC.  2001 Stock Option Plan (the  "Plan").  The purpose of the Plan is to
attract  and  retain   qualified   personnel   for   positions  of   substantial
responsibility  and to provide  additional  incentive  to  officers,  directors,
employees and other persons providing  services to the Company,  the Bank or any
present or future Parent or  Subsidiary of the Company,  the Bank to promote the
success  of the  business.  The Plan is  intended  to  provide  for the grant of
"Incentive  Stock  Options,"  within the meaning of Section 422 of the  Internal
Revenue Code of 1986, as amended (the "Code") and  NonIncentive  Stock  Options,
options that do not so qualify. The provisions of the Plan relating to Incentive
Stock Options shall be interpreted to conform to the requirements of Section 422
of the Code.

     2.   Definitions. The following  words and  phrases when  used in this Plan
with an initial capital letter,  unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever  appropriate,  the masculine
pronoun  shall include the feminine  pronoun and the singular  shall include the
plural.

          "Award" means the grant by the Committee of an Incentive  Stock Option
or a NonIncentive Stock Option, or any combination  thereof,  or grants of Stock
Options made in accordance with Section 9(a) of the Plan.

          "Bank" or  "Savings  Bank" shall mean Mohawk  Community  Bank,  or any
successor corporation thereto.

          "Board"  shall  mean the Board of  Directors  of the  Company,  or any
successors thereto.




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          "Change in  Control"  shall  mean:  (i) the sale of all, or a material
portion,  of the  assets  of the  Company  or  the  Bank;  (ii)  the  merger  or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company,  as otherwise defined or determined by
the Office of Thrift  Supervision  ("OTS") or regulations  promulgated by it; or
(iv) the  acquisition,  directly  or  indirectly,  of the  beneficial  ownership
(within  the  meaning  of  that  term  as it is used  in  Section  13(d)  of the
Securities  Exchange  Act of 1934  and the  rules  and  regulations  promulgated
thereunder)  of  twentyfive  percent  (25%)  or more of the  outstanding  voting
securities of the Company by any person, trust, entity or group. This limitation
shall not apply to the purchase of shares by  underwriters  in connection with a
public  offering of Company stock, or the purchase of shares of up to 25% of any
class of securities  of the Company by a  tax-qualified  employee  stock benefit
plan. The term "person"  refers to an individual or a corporation,  partnership,
trust,  association,   joint  venture,  pool,  syndicate,  sole  proprietorship,
unincorporated  organization or any other form of entity not specifically listed
herein.

          "Code" shall mean the Internal  Revenue Code of 1986, as amended,  and
regulations promulgated thereunder.

          "Committee"  shall  mean  the  Board  or the  Stock  Option  Committee
appointed by the Board in accordance with Section 5(a) of the Plan.

          "Common  Stock"  shall mean the common  stock of the  Company,  or any
successor or parent corporation thereto.

          "Company" shall mean AMBANC HOLDING CO., INC.

          "Continuous  Employment" or "Continuous  Status as an Employee"  shall
mean the absence of any  interruption  or  termination  of  employment  with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence  approved by the Company or in the case of  transfers
between payroll  locations,  of the Company or between the Bank, its Parent, its
Subsidiaries or a successor.

          "Director"  shall  mean a member of the Board of the  Company,  or any
successor or Parent thereto.

          "Director  Emeritus"  shall  mean  a  person  serving  as  a  director
emeritus,  advisory director,  consulting director, or other similar position as
may be  appointed by the Board of Directors of the Bank or the Company from time
to time.

          "Disability"  means (a) with respect to Incentive  Stock Options,  the
"permanent  and total  disability"  of the  Employee  as such term is defined at
Section  22(e)(3)  of the Code;  and (b) with  respect  to  Non-Incentive  Stock
Options,  any  physical  or mental  impairment  which  renders  the  Participant
incapable of continuing in the employment or service of the Company, the Bank or
any present or future  Parent or  Subsidiary  of the Company in his then current
capacity as determined by the Committee.

          "Effective Date" shall mean February 23, 2001.

          "Employee" shall mean any person employed by the Company, the Bank, or
any present or future Parent or Subsidiary of the Company.




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          "Fair  Market  Value"  shall mean:  (i) if the Common  Stock is traded
otherwise than on a national securities exchange, then the Fair Market Value per
Share  shall be equal to the  mean  between  the last bid and ask  price of such
Common  Stock on such date or,  if there is no bid and ask  price on said  date,
then on the  immediately  prior  business  day on which  there was a bid and ask
price.  If no such bid and ask price is  available,  then the Fair Market  Value
shall be determined by the Committee in good faith;  or (ii) if the Common Stock
is listed on a national  securities  exchange,  then the Fair  Market  Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date,  then the Fair Market  Value shall be not less than the mean  between
the last bid and ask price on such date.

          "Incentive  Stock  Option" or "ISO"  shall mean an option to  purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and  restrictions of Section 8 hereof and is intended to qualify
as an incentive stock option under Section 422 of the Code.

          "NonIncentive  Stock  Option"  or  "NonISO"  shall  mean an  option to
purchase  Shares  granted  pursuant  to  Section 9 hereof,  which  option is not
intended to qualify under Section 422 of the Code.

          "Option" shall mean an Incentive  Stock Option or  NonIncentive  Stock
Option  granted  pursuant to this Plan  providing the holder of such Option with
the right to purchase Common Stock.

          "Optioned  Stock"  shall  mean  stock  subject  to an  Option  granted
pursuant to the Plan.

          "Optionee"  shall  mean any  person  who  receives  an Option or Award
pursuant to the Plan.

          "Parent" shall mean any present or future corporation which would be a
"parent corporation" as defined in Sections 424(e) and (g) of the Code.

          "Participant" means any director,  officer or employee of the Company,
the Bank,  or any  Parent  or  Subsidiary  of the  Company  or any other  person
providing a service to the Company who is selected by the  Committee  to receive
an Award, or who by the express terms of the Plan is granted an Award.

          "Plan" shall mean the AMBANC HOLDING CO., INC. 2001 Stock Option Plan.

          "Retirement" shall mean termination of service in all capacities as an
Employee,  Director and Director Emeritus following  attainment of not less than
age 55 and  completion  of not less than ten years of  Service  to the  Company.
Service to the Company  rendered prior to the Effective Date shall be recognized
in determining  eligibility  to meet the  requirements  of Retirement  under the
Plan.



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          "Share" shall mean one share of the Common Stock.

          "Subsidiary"  shall  mean any  present  or  future  corporation  which
constitutes a "subsidiary  corporation" as defined in Sections 424(f) and (g) of
the Code.

     3.   Shares Subject  to the  Plan.  Except  as  otherwise  required  by the
provisions of Section 13 hereof,  the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed  434,000  Shares.
Such  Shares  may  either  be from  authorized  but  unissued  shares  or shares
purchased  in the market for Plan  purposes.  If an Award shall  expire,  become
unexercisable,  or be forfeited for any reason prior to its exercise, new Awards
may be granted  under the Plan with  respect to the number of Shares as to which
such expiration has occurred.

     4.   Six Month Holding Period.

          Subject to vesting requirements, if applicable, except in the event of
death or  Disability  of the Optionee or a Change in Control of the  Company,  a
minimum of six months must elapse between the date of the grant of an Option and
the date of the sale of the Common Stock  received  through the exercise of such
Option.

     5.   Administration of the Plan.

          (a)  Composition of the Committee.  The Plan shall be  administered by
the Board of Directors of the Company or a Committee  which shall consist of not
less than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons  designated as members of the Committee shall
meet the  requirements of a "Non-Employee  Director"  within the meaning of Rule
16b3 under the Securities  Exchange Act of 1934, as amended,  as found at 17 CFR
'240.16b-3.

          (b) Powers of the Committee.  The Committee is authorized (but only to
the extent not contrary to the express  provisions of the Plan or to resolutions
adopted by the Board) to interpret  the Plan,  to  prescribe,  amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the  administration  of the Plan,  and shall have and may exercise
such other power and  authority as may be delegated to it by the Board from time
to time. A majority of the entire  Committee  shall  constitute a quorum and the
action of a majority of the members  present at any meeting at which a quorum is
present  shall be  deemed  the  action  of the  Committee.  In no event  may the
Committee revoke outstanding Awards without the consent of the Participant.




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          The  President  of the  Company  and such other  officers  as shall be
designated by the Committee are hereby authorized to execute written  agreements
evidencing  Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option,  the expiration date of
such Options, and such other terms and restrictions  applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.

          (c) Effect of Committee's Decision. All decisions,  determinations and
interpretations  of the Committee  shall be final and  conclusive on all persons
affected thereby.

     6.   Eligibility for Awards and Limitations.

          (a) The  Committee  shall from time to time  determine  the  officers,
Directors,  employees  and other  persons who shall be granted  Awards under the
Plan,  the  number of Awards to be  granted to each such  persons,  and  whether
Awards granted to each such Participant  under the Plan shall be Incentive Stock
Options and/or  NonIncentive  Stock Options.  In selecting  Participants  and in
determining  the  number of Shares of Common  Stock to be  granted  to each such
Participant,  the Committee may consider the nature of the prior and anticipated
future  services  rendered  by each such  Participant,  each such  Participant's
current and potential  contribution to the Company and such other factors as the
Committee may, in its sole discretion, deem relevant. Participants who have been
granted an Award may, if otherwise eligible, be granted additional Awards.

          (b) The  aggregate  Fair Market Value  (determined  as of the date the
Option is granted) of the Shares with respect to which  Incentive  Stock Options
are  exercisable  for the first time by each  Employee  during any calendar year
(under all Incentive  Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future  Parent or  Subsidiary  of the  Company)
shall not exceed $100,000.  Notwithstanding the prior provisions of this Section
6, the  Committee  may grant  Options  in excess of the  foregoing  limitations,
provided said Options shall be clearly and specifically  designated as not being
Incentive Stock Options.

          (c)  In  no  event  shall  Shares   subject  to  Options   granted  to
non-employee  Directors in the aggregate under this Plan exceed more than 30% of
the total number of Shares  authorized  for delivery under this Plan pursuant to
Section  3  herein  or more  than 5% to any  individual  non-employee  Director;
provided,  however,  no such  Options  are  specifically  reserved  for award to
non-employee  Directors.  In no event shall Shares subject to Options granted to
any Employee  exceed more than 35% of the total number of Shares  authorized for
delivery under the Plan.

     7.   Term of the Plan. The Plan shall continue  in effect for a term of ten
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof.  No Option shall be granted  under the Plan after ten (10) years from
the Effective Date.




<PAGE>



     8.   Terms and  Conditions of  Incentive  Stock  Options.  Incentive  Stock
Options may be granted only to  Participants  who are Employees.  Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Incentive Stock
Option  granted  pursuant to the Plan shall comply with,  and be subject to, the
following terms and conditions:

          (a) Option Price.

          (i) The price per Share at which each  Incentive  Stock Option granted
by the Committee under the Plan may be exercised shall not, as to any particular
Incentive  Stock Option,  be less than the Fair Market Value of the Common Stock
on the date that such Incentive Stock Option is granted.  (ii) In the case of an
Employee who owns Common Stock  representing  more than ten percent (10%) of the
outstanding Common Stock at the time the Incentive Stock Option is granted,  the
Incentive Stock Option exercise price shall not be less than one hundred and ten
percent (110%) of the Fair Market Value of the Common Stock on the date that the
Incentive Stock Option is granted.

          (b) Payment.  Full  payment for each Share of Common  Stock  purchased
upon the exercise of any Incentive  Stock Option granted under the Plan shall be
made at the time of exercise of each such  Incentive  Stock  Option and shall be
paid in cash (in United States  Dollars),  Common Stock or a combination of cash
and Common  Stock.  Common  Stock  utilized  in full or  partial  payment of the
exercise price shall be valued at the Fair Market Value at the date of exercise.
The Company  shall  accept full or partial  payment in Common  Stock only to the
extent  permitted by  applicable  law. No Shares of Common Stock shall be issued
until full payment has been received by the Company,  and no Optionee shall have
any of the rights of a  stockholder  of the Company until Shares of Common Stock
are issued to the Optionee.

          (c) Term of Incentive Stock Option. The term of exercisability of each
Incentive  Stock Option granted  pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive  Stock Option is granted,  provided
that in the  case of an  Employee  who owns  stock  representing  more  than ten
percent (10%) of the Common Stock  outstanding  at the time the Incentive  Stock
Option is granted,  the term of  exercisability  of the  Incentive  Stock Option
shall not exceed five (5) years.




<PAGE>


          (d) Exercise  Generally.  Except as  otherwise  provided in Section 10
hereof,  no Incentive  Stock Option may be exercised  unless the Optionee  shall
have been in the  employ of the  Company,  the Bank,  or any  present  or future
Parent or  Subsidiary  of the Company at all times  during the period  beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3)  months  prior to the date of  exercise  of any such  Incentive  Stock
Option.  The Committee  may impose  additional  conditions  upon the right of an
Optionee to exercise any Incentive Stock Option granted  hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by  action of the  Committee  at the time of the  grant of the  Options,  the
Options will be first exercisable at the rate of 25% on the one year anniversary
of the date of grant and 25% annually  thereafter during such periods of service
as an Employee, Director or Director Emeritus.

          (e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held an  Incentive  Stock Option for at least six months may
engage in the "cashless  exercise" of the Option.  Upon a cashless exercise,  an
Optionee  shall give the Company  written  notice of the  exercise of the Option
together with an order to a registered  brokerdealer or equivalent  third party,
to sell part or all of the Optioned  Stock and to deliver enough of the proceeds
to the Company to pay the Option  exercise price and any applicable  withholding
taxes.  If the Optionee  does not sell the Optioned  Stock  through a registered
brokerdealer  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  Optioned  Stock  shall pay the Option  exercise  price plus any  applicable
withholding taxes to the Company.

          (f) Transferability. An Incentive Stock Option granted pursuant to the
Plan shall be exercised  during an  Optionee's  lifetime only by the Optionee to
whom it was granted and shall not be assignable or  transferable  otherwise than
by will or by the laws of descent and distribution.

     9.   Terms and Conditions of NonIncentive  Stock Options. Each NonIncentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee  shall from time to time approve.  Each  NonIncentive
Stock  Option  granted  pursuant to the Plan shall comply with and be subject to
the following terms and conditions.

          (a) Option  Price.  The  exercise  price per Share of Common Stock for
each  NonIncentive  Stock Option  granted  pursuant to the Plan shall be at such
price as the  Committee may  determine in its sole  discretion,  but in no event
less than the Fair  Market  Value of such  Common  Stock on the date of grant as
determined by the Committee in good faith.

          (b) Payment.  Full  payment for each Share of Common  Stock  purchased
upon the exercise of any NonIncentive  Stock Option granted under the Plan shall
be made at the time of exercise of each such NonIncentive Stock Option and shall
be paid in cash (in United States  Dollars),  Common Stock or a  combination  of
cash and Common Stock.  Common Stock utilized in full or partial  payment of the
exercise price shall be valued at its Fair Market Value at the date of exercise.
The Company  shall  accept full or partial  payment in Common  Stock only to the
extent  permitted by  applicable  law. No Shares of Common Stock shall be issued
until full payment has been  received by the Company and no Optionee  shall have
any of the rights of a  stockholder  of the  Company  until the Shares of Common
Stock are issued to the Optionee.

          (c) Term. The term of exercisability of each NonIncentive Stock Option
granted pursuant to the Plan shall be not more than ten (10) years from the date
each such NonIncentive Stock Option is granted.
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          (d) Exercise Generally. The Committee may impose additional conditions
upon the right of any  Participant  to exercise  any  NonIncentive  Stock Option
granted  hereunder which is not inconsistent  with the terms of the Plan. Except
as otherwise  provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options,  the Options will be first  exercisable at
the rate of one-third  on the date of grant and  one-third  annually  thereafter
during such periods of service as an Employee, Director or Director Emeritus.

          (e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held a NonIncentive Stock Option for at least six months may
engage in the "cashless  exercise" of the Option.  Upon a cashless exercise,  an
Optionee  shall give the Company  written  notice of the  exercise of the Option
together with an order to a registered  brokerdealer or equivalent  third party,
to sell part or all of the Optioned  Stock and to deliver enough of the proceeds
to the Company to pay the Option  exercise price and any applicable  withholding
taxes.  If the Optionee  does not sell the Optioned  Stock  through a registered
brokerdealer  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  Optioned  Stock  shall pay the Option  exercise  price plus any  applicable
withholding taxes to the Company.

          (f)  Transferability.  Unless otherwise determined by the Committee in
accordance with this Section,  any NonIncentive Stock Option granted pursuant to
the Plan shall be exercised  during an Optionee's  lifetime only by the Optionee
to whom it was granted and shall not be  assignable  or  transferable  otherwise
than by will or by the laws of descent  and  distribution.  The  Committee  may,
however,  in its sole  discretion,  permit  transferability  or  assignment of a
NonIncentive Stock Option by a Participant 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. For purposes of this Section, 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,  or (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. For purposes of this Section,
"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 shall be construed to require the Committee to
give its approval to any transfer or assignment of any NonIncentive Stock Option
or portion thereof,  and approval to transfer or assign any  NonIncentive  Stock
Option or portion  thereof does not mean that such  approval  will be given with
respect  to  any  other  NonIncentive  Stock  Option  or  portion  thereof.  The
transferee or assignee of any NonIncentive  Stock Option shall be subject to all
of the  terms  and  conditions  applicable  to such  NonIncentive  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  NonIncentive
Stock Option.



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     10. Effect of Termination of Employment,  Disability,  Death and Retirement
on Incentive Stock Options.

          (a)  Termination  of  Employment.  In the  event  that any  Optionee's
employment  with the Company,  the Bank,  or other  present or future  Parent or
Subsidiaries  shall terminate for any reason,  other than  Disability,  death or
Retirement,  all of any such Optionee's  Incentive Stock Options, and all of any
such  Optionee's  rights to purchase or receive  Shares of Common Stock pursuant
thereto,  shall  automatically  terminate on (A) the earlier of (i) or (ii): (i)
the respective expiration dates of any such Incentive Stock Options, or (ii) the
expiration of not more than three (3) months after the date of such  termination
of  employment;  or (B) at such later date as is  determined by the Committee at
the time of the grant of such Award based upon the Optionee's  continuing status
as a Director or Director Emeritus of the Bank or the Company,  but only if, and
to the extent that,  the  Optionee  was entitled to exercise any such  Incentive
Stock Options at the date of such  termination of  employment,  and further that
such Award shall thereafter be deemed a Non-Incentive Stock Option. In the event
that a Subsidiary  ceases to be a Subsidiary of the Company,  the  employment of
all of its employees who are not immediately thereafter employees of the Company
shall be deemed to  terminate  upon the date such  Subsidiary  so ceases to be a
Subsidiary of the Company.

          (b) Disability.  In the event that any Optionee's  employment with the
Bank,  the  Company,  or any  present or future  Parent or  Subsidiaries  of the
Company shall  terminate as the result of the Disability of such Optionee,  such
Optionee  may  exercise  any  Incentive  Stock  Options  granted to the Optionee
pursuant  to the Plan at any time  prior to the  earlier  of (i) the  respective
expiration  dates of any such Incentive  Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment,  but only if, and
to the extent that,  the  Optionee  was entitled to exercise any such  Incentive
Stock Options at the date of such termination of employment.

          (c) Death.  In the event of the death of an  Optionee,  any  Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the  Optionee's  rights under any such  Incentive  Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that,  the  Optionee  was entitled to exercise any such  Incentive
Stock  Options at the date of death.  For  purposes of this Section  10(c),  any
Incentive  Stock Option held by an Optionee  shall be considered  exercisable at
the  date of his  death  if the  only  unsatisfied  condition  precedent  to the
exercisability  of such  Incentive  Stock  Option  at the  date of  death is the
passage of a specified period of time. At the discretion of the Committee,  upon
exercise  of  such  Options  the  Optionee  may  receive  Shares  or  cash  or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the  difference  between the Fair  Market  Value of such Shares and the
exercise price of such Options on the exercise date.



<PAGE>



          (d)  Incentive  Stock  Options  Deemed  Exercisable.  For  purposes of
Sections  10(a),  10(b) and 10(c) above,  any Incentive Stock Option held by any
Optionee  shall  be  considered  exercisable  at  the  date  of  termination  of
employment if any such  Incentive  Stock Option would have been  exercisable  at
such date of termination of employment without regard to the Disability or death
of the Participant.

          (e) Termination of Incentive Stock Options;  Vesting Upon  Retirement.
Except as may be specified  by the  Committee at the time of grant of an Option,
to the extent that any  Incentive  Stock  Option  granted  under the Plan to any
Optionee whose employment with the Company or the Bank terminates shall not have
been exercised  within the  applicable  period set forth in this Section 10, any
such  Incentive  Stock Option,  and all rights to purchase or receive  Shares of
Common Stock pursuant  thereto,  as the case may be, shall terminate on the last
day of the applicable period.  Notwithstanding the foregoing,  the Committee may
authorize  at the time of the  grant  of an  Option  that  such  Award  shall be
immediately 100% exercisable upon the Retirement of the Optionee.

     11. Effect of Termination of Employment, Disability, Death or Retirement on
NonIncentive  Stock  Options.  The terms and  conditions of  NonIncentive  Stock
Options  relating to the effect of the  Retirement  or other  termination  of an
Optionee's  employment or service,  Disability of an Optionee or his death shall
be such terms and  conditions as the Committee  shall,  in its sole  discretion,
determine at the time of termination of service,  unless  specifically  provided
for by the terms of the Agreement at the time of grant of the Award.

     12.  Withholding  Tax. The Company  shall have the right to deduct from all
amounts paid in cash with respect to the cashless  exercise of Options under the
Plan  any  taxes  required  by law to be  withheld  with  respect  to such  cash
payments.  Where a  Participant  or other  person is entitled to receive  Shares
pursuant  to the  exercise  of an Option,  the  Company  shall have the right to
require the  Participant  or such other  person to pay the Company the amount of
any taxes which the Company is required to withhold with respect to such Shares,
or, in lieu  thereof,  to retain,  or to sell without  notice,  a number of such
Shares sufficient to cover the amount required to be withheld.

     13. Recapitalization,  Merger,  Consolidation,  Change in Control and Other
Transactions.




<PAGE>


          (a) Adjustment.  Subject to any required action by the stockholders of
the Company,  within the sole discretion of the Committee,  the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding  Option,  and the exercise
price  per  Share  of  Common   Stock  of  each  such   Option,   shall  all  be
proportionately  adjusted  for any  increase or decrease in the number of issued
and  outstanding  Shares  of  Common  Stock  resulting  from  a  subdivision  or
consolidation   of  Shares   (whether   by  reason  of  merger,   consolidation,
recapitalization,   reclassification,   split-up,   combination  of  shares,  or
otherwise) or the payment of a stock  dividend (but only on the Common Stock) or
any other  increase or  decrease  in the number of such  Shares of Common  Stock
effected  without the receipt or payment of  consideration by the Company (other
than Shares held by dissenting stockholders).

          (b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a Change in Control of the Company.  In the event of
such 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:

          (i) 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 such  registration  in accordance with Sections
3(a)(2) or 3(a)(5) 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 Optionee
will  receive  upon  consummation  of the Change in Control  transaction  a cash
payment for each Option surrendered equal to the difference between (1) the Fair
Market Value of the  consideration to be received for each share of Common Stock
in the Change in Control  transaction 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

          (ii) in the  event of a  transaction  under  the  terms  of which  the
holders  of the Common  Stock of the  Company  will  receive  upon  consummation
thereof a cash  payment  (the  "Merger  Price")  for each share of Common  Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees  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.

          (c) Extraordinary Corporate Action.  Notwithstanding any provisions of
the Plan to the contrary,  subject to any required action by the stockholders of
the Company,  in the event of any Change in Control,  recapitalization,  merger,
consolidation,  exchange  of  Shares,  spinoff,  reorganization,  tender  offer,
partial or  complete  liquidation  or other  extraordinary  corporate  action or
event,  the Committee,  in its sole discretion,  shall have the power,  prior or
subsequent to such action or event to:

          (i) appropriately  adjust the number of Shares of Common Stock subject
to each Option,  the Option  exercise  price per Share of Common Stock,  and the
consideration  to be given or received by the Company  upon the  exercise of any
outstanding Option;




<PAGE>



          (ii)  cancel any or all  previously  granted  Options,  provided  that
appropriate  consideration  is paid to the  Optionee  in  connection  therewith;
and/or

          (iii) make such other  adjustments in connection  with the Plan as the
Committee, in its sole discretion,  deems necessary,  desirable,  appropriate or
advisable;  provided,  however,  that no action shall be taken by the  Committee
which would cause Incentive  Stock Options granted  pursuant to the Plan to fail
to meet the  requirements  of Section 422 of the Code without the consent of the
Optionee.

          (d)  Acceleration.  The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.

          (e)  Non-recurring  Dividends.  Upon  the  payment  of  a  special  or
non-recurring  cash  dividend  that has the effect of a return of capital to the
stockholders,   the  Option   exercise   price  per  share   shall  be  adjusted
proportionately and in an equitable manner.

          Except  as  expressly  provided  in  Sections  13(a),  13(b) and 13(e)
hereof,  no Optionee shall have any rights by reason of the occurrence of any of
the events described in this Section 13.

     14. Time of Granting Options. The date of grant of an Option under the Plan
shall,  for  all  purposes,  be the  date  on  which  the  Committee  makes  the
determination of granting such Option. Notice of the grant of an Option shall be
given to each  individual  to whom an Option is so granted  within a  reasonable
time after the date of such grant in a form determined by the Committee.

     15.  Effective  Date.  The Plan  shall  became  effective  upon the date of
approval of the Plan by the Board of the Company (February 23 , 2001).

     16.   Ratification  by   Stockholders.   The  Plan  shall  be  ratified  by
stockholders  of the Company  within twelve (12) months before or after the date
the Plan is approved by the Board.

     17.  Modification of Options.  At any time and from time to time, the Board
may authorize  the Committee to direct the execution of an instrument  providing
for the modification of any outstanding  Option,  provided no such modification,
extension  or renewal  shall  confer on the  holder of said  Option any right or
benefit  which  could not be  conferred  on the  Optionee  by the grant of a new
Option at such time, or shall not materially  decrease the  Optionee's  benefits
under the Option  without  the  consent of the holder of the  Option,  except as
otherwise permitted under Section 18 hereof.




<PAGE>



     18. Amendment and Termination of the Plan.

          (a) Action by the Board.  The Board may alter,  suspend or discontinue
the  Plan,  except  that no action of the  Board  may  increase  (other  than as
provided  in Section 13 hereof)  the maximum  number of Shares  permitted  to be
optioned  under  the  Plan,   materially   increase  the  benefits  accruing  to
Participants   under  the  Plan  or  materially   modify  the  requirements  for
eligibility for  participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.

          (b) Change in  Applicable  Law.  Notwithstanding  any other  provision
contained  in the Plan,  in the event of a change in any  federal  or state law,
rule  or  regulation  which  would  make  the  exercise  of all or  part  of any
previously  granted Option  unlawful or subject the Company to any penalty,  the
Committee may restrict any such exercise  without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.

     19.  Conditions  Upon Issuance of Shares;  Limitations on Option  Exercise;
Cancellation of Option Rights.

          (a) Shares  shall not be issued  with  respect  to any Option  granted
under the Plan unless the issuance and delivery of such Shares shall comply with
all relevant  provisions of applicable law, including,  without limitation,  the
Securities  Act of 1933,  as  amended,  the  rules and  regulations  promulgated
thereunder,  any applicable  state  securities laws and the  requirements of any
stock exchange upon which the Shares may then be listed.

          (b)  The   inability   of  the   Company  to  obtain   any   necessary
authorizations,  approvals or letters of non-objection  from any regulatory body
or  authority  deemed by the  Company's  counsel to be  necessary  to the lawful
issuance and sale of any Shares issuable  hereunder shall relieve the Company of
any liability with respect to the nonissuance or sale of such Shares.

          (c) As a  condition  to the  exercise  of an Option,  the  Company may
require  the  person  exercising  the  Option to make such  representations  and
warranties as may be necessary to assure the  availability  of an exemption from
the registration requirements of federal or state securities law.

          (d)  Notwithstanding   anything  herein  to  the  contrary,  upon  the
termination  of  employment  or service  of an  Optionee  by the  Company or its
Subsidiaries  for "cause" as determined  by the Board of Directors,  all Options
held by such  Participant  shall cease to be  exercisable as of the date of such
termination of employment or service.




<PAGE>



          (e) Upon the exercise of an Option by an Optionee  (or the  Optionee's
personal  representative),  the Committee,  in its sole and absolute discretion,
may make a cash  payment to the  Optionee,  in whole or in part,  in lieu of the
delivery  of shares of Common  Stock.  Such cash  payment  to be paid in lieu of
delivery  of Common  Stock  shall be equal to the  difference  between  the Fair
Market  Value of the  Common  Stock on the date of the Option  exercise  and the
exercise  price per share of the Option.  Such cash payment shall be in exchange
for the cancellation of such Option.  Such cash payment shall not be made in the
event that such  transaction  would  result in  liability to the Optionee or the
Company under Section 16(b) of the Securities  Exchange Act of 1934, as amended,
and regulations promulgated thereunder.

     20.  Reservation  of Shares.  During the term of the Plan, the Company will
reserve  and keep  available  a number  of  Shares  sufficient  to  satisfy  the
requirements of the Plan.

     21.  Unsecured  Obligation.  No  Participant  under the Plan shall have any
interest  in any fund or special  asset of the  Company by reason of the Plan or
the grant of any  Option  under the Plan.  No trust  fund  shall be  created  in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.

     22. No Employment Rights. No Director,  Employee or other person shall have
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in  administration  of the Plan shall be construed
as giving any  person any rights of  employment  or  retention  as an  Employee,
Director or in any other capacity with the Company,  the Bank, or any present or
future Parent or Subsidiary.

     23.  Governing  Law.  The  Plan  shall  be  governed  by and  construed  in
accordance  with the laws of the State of New York,  except to the  extent  that
federal law shall be deemed to apply.