EXHIBIT 10.1


<PAGE>
                       EAST TEXAS FINANCIAL SERVICES, INC.

                      1995 STOCK OPTION AND INCENTIVE PLAN


         1. Plan  Purpose.  The purpose of the Plan is to promote the  long-term
interests  of the  Corporation  and its  stockholders  by  providing a means for
attracting and retaining  directors,  officers and employees of the  Corporation
and its Affiliates.  It is intended that designated  Options granted pursuant to
the  provisions  of this Plan to  persons  employed  by the  Corporation  or its
Affiliates will qualify as Incentive  Stock Options.  Options granted to persons
who are not employees will be Non-Qualified Stock Options.

         2. Definitions. The following definitions are applicable to the Plan:

                  "Affiliate" - means any "parent  corporation"  or  "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.

                  "Association"   -  means  First   Federal   Savings  and  Loan
Association of Tyler, and any successor
entity.

                  "Award" - means  the grant of an  Incentive  Stock  Option,  a
Non-Qualified  Stock  Option,  a Stock  Appreciation  Right or a  Limited  Stock
Appreciation Right, or any combination thereof, as provided in the Plan.

                  "Code" - means the Internal Revenue Code of 1986, as amended.

                  "Committee"  - means the  Committee  referred  to in Section 3
hereof.

                  "Continuous  Service" - means the absence of any  interruption
or termination of service as a director,  advisory director,  director emeritus,
officer or employee of the  Corporation  or an Affiliate,  except that when used
with  respect to persons  granted an  Incentive  Option means the absence of any
interruption  or termination of service as an employee of the  Corporation or an
Affiliate.  Service  shall  not be  considered  interrupted  in the case of sick
leave,  military leave or any other leave of absence approved by the Corporation
or in the case of transfers  between  payroll  locations of the  Corporation  or
between the Corporation,  its parent,  its  subsidiaries or its successor.  With
respect to any advisory director or director emeritus,  continuous service shall
mean  availability  to  perform  such  functions  as  may  be  required  of  the
Association's advisory directors or directors emeritus, respectively.

                  "Corporation" - means East Texas Financial  Services,  Inc., a
Delaware corporation.

                  "Employee"  -  means  any  person,  including  an  officer  or
director, who is employed by the Corporation or any Affiliate.

                  "ERISA" - means the Employee Retirement Income Security Act of
1974, as amended.
<PAGE>
                  "Exercise  Price" - means  (i) in the case of an  Option,  the
price per Share at which the Shares subject to such Option may be purchased upon
exercise  of such  Option  and (ii) in the case of a Right,  the price per Share
(other  than the Market  Value per Share on the date of  exercise  and the Offer
Price per Share as  defined  in  Section  10  hereof)  which,  upon  grant,  the
Committee  determines shall be utilized in calculating the aggregate value which
a  Participant  shall be  entitled  to receive  pursuant to Sections 9, 10 or 12
hereof upon exercise of such Right.

                  "Incentive  Stock Option" - means an option to purchase Shares
granted by the  Committee  pursuant to Section 6 hereof  which is subject to the
limitations  and  restrictions  of Section 8 hereof and is  intended  to qualify
under Section 422 of the Code.

                  "Limited   Stock   Appreciation   Right"   -   means  a  stock
appreciation  right with respect to Shares granted by the Committee  pursuant to
Sections 6 and 10 hereof.

                  "Market  Value" - means the average of the high and low quoted
sales  price on the date in question  (or, if there is no reported  sale on such
date, on the last preceding date on which any reported sale occurred) of a Share
on the Composite Tape for the New York Stock  Exchange-Listed  Stocks, or, if on
such date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange,  or, if the  Shares  are not  listed or  admitted  to  trading on such
Exchange,  on the principal United States securities  exchange  registered under
the  Securities  Exchange Act of 1934 on which the Shares are listed or admitted
to trading,  or, if the Shares are not listed or admitted to trading on any such
exchange,  the mean between the closing high bid and low asked  quotations  with
respect  to a Share  on such  date on the  National  Association  of  Securities
Dealers,  Inc.,  Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall reasonably determine.

                  "Non-Employee  Director"  -  means  a  director  who a) is not
currently an officer or employee of the Corporation; b) is not a former employee
of the Corporation who receives compensation for prior services (other than from
a tax-qualified retirement plan); c) has not been an officer of the Corporation;
d) does not receive remuneration from the Corporation in any capacity other than
as a director;  and e) does not possess an interest in any other transactions or
is not engaged in a business relationship for which disclosure would be required
under Item 404(a) or (b) of Regulation S-K.

                  "Non-Qualified  Stock  Option" - means an  option to  purchase
Shares  granted by the Committee  pursuant to Section 6 hereof,  which option is
not intended to qualify under Section 422(b) of the Code.

                  "Option" - means an Incentive  Stock Option or a Non-Qualified
Stock Option.

                  "OTS" - means the Office of Thrift Supervision.

                  "OTS  Regulations"  - means the rules and  regulations  of the
OTS.

                  "Participant"   -  means  any   officer  or  employee  of  the
Corporation  or any  Affiliate  who is selected by the  Committee  to receive an
Award  and  any  director,   advisory  director  or  director  emeritus  of  the
Corporation who is granted an Award pursuant to Section 20 hereof.
<PAGE>
                  "Plan" - means the 1995 Stock Option and Incentive Plan of the
Corporation.

                  "Related" - means (i) in the case of a Right, a Right which is
granted in connection with, and to the extent exercisable,  in whole or in part,
in lieu of, an Option or  another  Right and (ii) in the case of an  Option,  an
Option with respect to which and to the extent a Right is exercisable,  in whole
or in part, in lieu thereof has been granted.

                  "Right" - means a Limited Stock  Appreciation Right or a Stock
Appreciation Right.

                  "Shares"   -  means  the   shares  of  common   stock  of  the
Corporation.

                  "Stock  Appreciation Right" - means a stock appreciation right
with  respect to Shares  granted by the  Committee  pursuant to Sections 6 and 9
hereof.

                  "Ten Percent Beneficial Owner" - means the beneficial owner of
more  than ten  percent  of any  class of the  Corporation's  equity  securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934.

         3.  Administration.  The Plan  shall  be  administered  by a  Committee
consisting of two or more members, each of whom shall be Non-Employee  Director.
The members of the Committee shall be appointed by the Board of Directors of the
Corporation.  Except as  limited  by the  express  provisions  of the Plan,  the
Committee shall have sole and complete authority and discretion,  subject to OTS
Regulations,  to (i) select  Participants  and grant Awards;  (ii) determine the
number of  Shares to be  subject  to types of  Awards  generally,  as well as to
individual  Awards  granted  under  the  Plan;  (iii)  determine  the  terms and
conditions upon which Awards shall be granted under the Plan; (iv) prescribe the
form and terms of  instruments  evidencing  such grants;  and (v) establish from
time to time regulations for the administration of the Plan, interpret the Plan,
and make all determinations deemed necessary or advisable for the administration
of the Plan.

         A majority of the Committee shall constitute a quorum,  and the acts of
a majority of the  members  present at any meeting at which a quorum is present,
or acts  approved in writing by a majority of the  Committee  without a meeting,
shall be acts of the Committee.

         4.  Participation  in Committee  Awards.  The Committee may select from
time to time Participants in the Plan from those directors,  advisory directors,
directors emeritus officers and employees,  of the Corporation or its Affiliates
who, in the opinion of the Committee,  have the capacity for contributing to the
successful per formance of the Corporation or its Affiliates.

         5. Shares  Subject to Plan.  Subject to  adjustment by the operation of
Section 11 hereof, the maximum number of Shares with respect to which Awards may
be made  under the Plan is 121,519  shares.  The  Shares  with  respect to which
Awards may be made under the Plan may be either  authorized and unissued  shares
or issued shares heretofore or hereafter reacquired and held as treasury shares.
Shares which are subject to Related Rights and Related  Options shall be counted
only once in  determining  whether the maximum  number of Shares with respect to
which Awards may be granted under the Plan has been exceeded. An Award shall not
be  considered  to have been made  under the Plan with  respect to any Option or
Right  which  terminates,  and new  Awards  may be  granted  under the Plan with
respect to the number of Shares as to which such termination has occurred.
<PAGE>
         6. General Terms and  Conditions  of Options and Rights.  The Committee
shall  have  full  and  complete  authority  and  discretion,   subject  to  OTS
Regulations and except as expressly limited by the Plan, to grant Options and/or
Rights and to provide  the terms and  conditions  (which  need not be  identical
among Participants)  thereof.  In particular,  the Committee shall prescribe the
following terms and  conditions:  (i) the Exercise Price of any Option or Right,
which shall not be less than the Market  Value per Share at the date of grant of
such Option or Right,  (ii) the number of Shares  subject to, and the expiration
date of, any Option or Right,  which  expiration date shall not exceed ten years
from the  date of  grant,  (iii)  the  manner,  time  and  rate  (cumulative  or
otherwise) of exercise of such Option or Right,  and (iv) the  restrictions,  if
any, to be placed  upon such Option or Right or upon Shares  which may be issued
upon  exercise of such Option or Right.  The  Committee  may, as a condition  of
granting any Option or Right, require that a Participant agree not to thereafter
exercise one or more Options or Rights  previously  granted to such Participant.
Notwithstanding   the  foregoing   and  subject  to  compliance   with  the  OTS
Regulations, no individual shall be granted Awards with respect to more than 25%
of the total shares  subject to the Plan, and no director who is not an employee
of the  Corporation  shall be granted Awards with respect to more than 5% of the
total Shares subject to the Plan. All non-employee directors of the Corporation,
in the aggregate, may not be granted Awards with respect to more than 30% of the
total Shares subject to the Plan. No Awards shall begin vesting earlier than one
year from the date the Plan is approved by  stockholders  of the Corporation and
shall not vest at a rate in excess of 20% per year,  beginning  from the date of
grant.

                  In the event the OTS  Regulations  are amended  (the  "Amended
Regulations") to permit shorter vesting periods, any Award made pursuant to this
Plan,  which Award is subject to the  requirements of such Amended  Regulations,
may vest, at the sole  discretion  of the  Committee,  in  accordance  with such
Amended Regulations.

                  Furthermore,  at the time of any Award, the Participant  shall
enter  into  an  agreement  with  the  Corporation  in a form  specified  by the
Committee,  agreeing  to the terms and  conditions  of the Award and such  other
matters as the Committee,  in its sole discretion,  shall determine (the "Option
Agreement").

         7.       Exercise of Options or Rights.

                  (a)  Except as  provided  herein,  an Option or Right  granted
under the Plan shall be  exercisable  during the lifetime of the  Participant to
whom such Option or Right was granted only by such  Participant  and,  except as
provided in  paragraphs  (c) and (d) of this  Section 7, no such Option or Right
may be exercised  unless at the time such  Participant  exercises such Option or
Right,  such  Participant  has maintained  Continuous  Service since the date of
grant of such Option or Right.
<PAGE>
                  (b) To  exercise  an  Option  or Right  under  the  Plan,  the
Participant  to whom such Option or Right was granted shall give written  notice
to the  Corporation  in form  satisfactory  to the  Committee  (and,  if partial
exercises  have been  permitted by the  Committee,  by specifying  the number of
Shares with respect to which such Participant  elects to exercise such Option or
Right)  together  with full  payment of the  Exercise  Price,  if any and to the
extent required.  The date of exercise shall be the date on which such notice is
received by the Corporation.  Payment, if any is required,  shall be made either
(i) in cash (including  check,  bank draft or money order) or (ii) by delivering
(A) Shares already owned by the Participant and having a fair market value equal
to the  applicable  exercise  price,  such fair market value to be determined in
such  appropriate  manner  as may be  provided  by  the  Committee  or as may be
required in order to comply with or to conform to requirements of any applicable
laws or regulations, or (B) a combination of cash and such Shares.

                  (c) Except as provided in Section 13 hereof,  if a Participant
to whom an  Option or Right  was  granted  shall  cease to  maintain  Continuous
Service  for any  reason  (excluding  death or  disability  and  termination  of
employment by the Corporation or any Affiliate for cause), such Participant may,
but only within the period of three months immediately succeeding such cessation
of Continuous  Service and in no event after the expiration  date of such Option
or Right,  exercise such Option or Right to the extent that such Participant was
entitled  to  exercise  such  Option  or Right  at the  date of such  cessation,
provided,  however,  that such right of exercise  after  cessation of Continuous
Service  shall not be  available to a  Participant  if the  Committee  otherwise
determines  and  so  provides  in  the  applicable   instrument  or  instruments
evidencing the grant of such Option or Right. If a Participant to whom an Option
or Right was granted  shall cease to  maintain  Continuous  Service by reason of
death or disability then, unless the Committee shall have otherwise  provided in
the instrument  evidencing the grant of an Option or Stock  Appreciation  Right,
all  Options  and  Rights  granted  and  not  fully   exercisable  shall  become
exercisable  in full  upon the  happening  of such  event  and  shall  remain so
exercisable (i) in the event of death for the period  described in paragraph (d)
of this  Section  7 and (ii) in the  event of  disability  for a period of three
months  following such date. If the Continuous  Service of a Participant to whom
an Option or Right was granted by the  Corporation is terminated for cause,  all
rights under any Option or Right of such  Participant  shall expire  immediately
upon the giving to the Participant of notice of such termination.

                  (d) In the  event of the death of a  Participant  while in the
Continuous  Service of the Corporation or an Affiliate or within the three month
period  referred to in  paragraph  (c) of this Section 7, the person to whom any
Option or Right held by the  Participant at the time of his death is transferred
by will or the  laws of  descent  and  distribution,  or in the case of an Award
other than an Incentive Stock Option, pursuant to a qualified domestic relations
order,  as defined in the Code or Title 1 of ERISA or the rules  thereunder may,
but only to the extent such  Participant was entitled to exercise such Option or
Right as set forth in paragraph  (c) of this Section 7,  exercise such Option or
Right at any time  within a period of one year  succeeding  the date of death of
such Participant, but in no event later than ten years from the date of grant of
such Option or Right.  Following the death of any  Participant to whom an Option
was granted under the Plan, irrespective of whether any Related Right shall have
theretofore  been granted to the  Participant or whether the person  entitled to
exercise  such  Related  Right  desires  to do  so,  the  Committee  may,  as an
<PAGE>
alternative  means of settlement  of such Option,  elect to pay to the person to
whom  such  Option  is  transferred  by  will  or by the  laws  of  descent  and
distribution,  or in the case of an Option other than an Incentive Stock Option,
pursuant  to a qualified  domestic  relations  order,  as defined in the Code or
Title I of ERISA or the rules  thereunder,  the amount by which the Market Value
per Share on the date of exercise of such Option shall exceed the Exercise Price
of such  Option,  multiplied  by the number of Shares with respect to which such
Option  is  properly  exercised.  Any  such  settlement  of an  Option  shall be
considered an exercise of such Option for all purposes of the Plan.

         8. Incentive Stock Options. Incentive Stock Options may be granted only
to  Participants  who are  Employees.  Any provision of the Plan to the contrary
notwithstanding,  (i) no  Incentive  Stock Option shall be granted more than ten
years  from the  date  the Plan is  adopted  by the  Board of  Directors  of the
Corporation  and no Incentive  Stock Option shall be  exercisable  more than ten
years from the date such  Incentive  Stock Option is granted,  (ii) the Exercise
Price of any Incentive  Stock Option shall not be less than the Market Value per
Share on the date such  Incentive  Stock Option is granted,  (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock  Option  is  granted  other  than  by  will or the  laws  of  descent  and
distribution,  and shall be exercisable during such Participant's  lifetime only
by such  Participant,  (iv) no  Incentive  Stock  Option shall be granted to any
individual who, at the time such Incentive  Stock Option is granted,  owns stock
possessing  more than ten  percent  of the total  combined  voting  power of all
classes of stock of the  Corporation or any Affiliate  unless the Exercise Price
of such  Incentive  Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such  Incentive  Stock Option is not  exercisable
after the expiration of five years from the date such Incentive  Stock Option is
granted,  and (v) the  aggregate  Market  Value  (determined  as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock  Options  are  exercisable  for the  first  time by a  Participant  in any
calendar year shall not exceed $100,000.

         9. Stock  Appreciation  Rights. A Stock  Appreciation Right shall, upon
its exercise,  entitle the Participant to whom such Stock Appreciation Right was
granted to  receive a number of Shares or cash or  combination  thereof,  as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the  amount of cash  and/or  Market  Value of such  Shares on date of
exercise)  shall  equal (as nearly as  possible,  it being  understood  that the
Corporation  shall not  issue any  fractional  shares)  the  amount by which the
Market  Value per Share on the date of such  exercise  shall exceed the Exercise
Price of such Stock Appreciation Right,  multiplied by the number of Shares with
respect of which such Stock  Appreciation  Right  shall have been  exercised.  A
Stock  Appreciation  Right  may be  Related  to an  Option  or  may  be  granted
independently  of any  Option as the  Committee  shall from time to time in each
case determine.  At the time of grant of an Option the Committee shall determine
whether and to what extent a Related Stock  Appreciation  Right shall be granted
with respect thereto; provided, however, and notwithstanding any other provision
of the Plan,  that if the  Related  Option is an  Incentive  Stock  Option,  the
Related  Stock  Appreciation  Right  shall  satisfy  all  the  restrictions  and
limitations of Section 8 hereof as if such Related Stock Appreciation Right were
an Incentive  Stock Option and as if other rights which are Related to Incentive
Stock Options were  Incentive  Stock Options.  In the case of a Related  Option,
such Related  Option shall cease to be  exercisable  to the extent of the Shares
with respect to which the Related Stock Appreciation  Right was exercised.  Upon
the exercise or termination of a Related Option,  any Related Stock Appreciation
Right  shall  terminate  to the extent of the Shares  with  respect to which the
Related Option was exercised or terminated.
<PAGE>
         10.  Limited  Stock  Appreciation  Rights.  At the  time of grant of an
Option or Stock Appreciation Right to any Participant,  the Committee shall have
full and complete  authority and discretion to also grant to such  Participant a
Limited  Stock  Appreciation  Right  which is  Related  to such  Option or Stock
Appreciation Right; provided, however and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive  Stock Option,  the Related
Limited  Stock  Appreciation  Right  shall  satisfy  all  the  restrictions  and
limitations  of Section 8 hereof as if such Related  Limited Stock  Appreciation
Right  were an  Incentive  Stock  Option  and as if all other  Rights  which are
Related to Incentive  Stock Options were  Incentive  Stock  Options.  Subject to
vesting requirements  contained in 12 C.F.R. ss.  563b.3(g)(4),  a Limited Stock
Appreciation  Right shall be exercisable only during the period beginning on the
first day  following  the date of  expiration  of any  "offer"  (as such term is
hereinafter defined) and ending on the forty-fifth day following such date.

         A Limited Stock  Appreciation  Right shall, upon its exercise,  entitle
the  Participant  to whom such Limited Stock  Appreciation  Right was granted to
receive  an amount of cash  equal to the  amount by which the  "Offer  Price per
Share" (as such term is hereinafter  defined) or the Market Value on the date of
such exercise, as shall have been provided by the Committee in its discretion at
the time of  grant,  shall  exceed  the  Exercise  Price of such  Limited  Stock
Appreciation  Right,  multiplied  by the number of Shares with  respect to which
such  Limited  Stock  Appreciation  Right  shall have been  exercised.  Upon the
exercise  of a Limited  Stock  Appreciation  Right,  any Related  Option  and/or
Related Stock  Appreciation Right shall cease to be exercisable to the extent of
the Shares  with  respect to which such  Limited  Stock  Appreciation  Right was
exercised.  Upon the  exercise or  termination  of a Re lated  Option or Related
Stock  Appreciation  Right, any Related Limited Stock  Appreciation  Right shall
terminate to the extent of the Shares with respect to which such Related  Option
or Related Stock Appreciation Right was exercised or terminated.

         For the purposes of this  Section 10, the term  "Offer"  shall mean any
tender  offer  or  exchange  offer  for  Shares  other  than  one  made  by  the
Corporation,  provided that the  corporation,  person or other entity making the
offer acquires  pursuant to such offer either (i) 25% of the Shares  outstanding
immediately  prior to the  commencement of such offer or (ii) a number of Shares
which,  together with all other Shares  acquired in any tender offer or exchange
offer (other than one made by the  Corporation)  which expired within sixty days
of the  expiration  date of the  offer in  question,  equals  25% of the  Shares
outstanding  immediately prior to the commencement of the offer in question. The
term "Offer  Price per Share" as used in this  Section 10 shall mean the highest
price per Share paid in any Offer  which  Offer is in effect any time during the
period  beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation  Right is  exercised  and ending on the date on which such  Limited
Stock Appreciation Right is exercised. Any securities or property which are part
or all of the  consideration  paid for  Shares in the  Offer  shall be valued in
determining the Offer Price per Share at the higher of (A) the valuation  placed
on such securities or property by the corporation, person or other entity making
such Offer or (B) the reasonable valuation placed on such securities or property
by the Committee.
<PAGE>
         11.  Adjustments  Upon Changes in  Capitalization.  In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any  reorganization,  recapitalization,  stock split,  stock dividend,
combination or exchange of shares,  merger,  consolidation  or any change in the
corporate  structure or Shares of the Corporation,  the maximum aggregate number
and class of shares as to which  Awards  may be  granted  under the Plan and the
number,  class  and  exercise  price of  shares  with  respect  to which  Awards
theretofore have been granted under the Plan shall be appropriately  adjusted by
the Committee, whose determination shall be conclusive.

         12.  Effect of Merger.  In the event of any  merger,  consolidation  or
combination  of  the  Corporation   (other  than  a  merger,   consolidation  or
combination in which the Corporation is the continuing entity and which does not
result in the outstanding Shares being converted into or exchanged for different
securities,  cash or other property,  or any combination  thereof) pursuant to a
plan or agreement  the terms of which are binding upon all  stockholders  of the
Corporation (except to the extent that dissenting  stockholders may be entitled,
under  statutory  provisions  or  provisions  contained  in the  certificate  of
incorporation,  to receive the appraised or fair value of their  holdings),  any
Participant  to whom an Option or Right has been  granted  shall  have the right
(subject to the pro  visions of the Plan and any  limitation  or vesting  period
applicable to such Option or Right), thereafter and during the term of each such
Option or Right,  to receive upon exercise of any such Option or Right an amount
equal to the excess of the fair market value on the date of such exercise of the
securities, cash or other property, or combination thereof, receivable upon such
merger,  consolidation  or  combination  in respect of a Share over the Exercise
Price of such Right or Option,  multiplied  by the number of Shares with respect
to which such  Option or Right  shall have been  exercised.  Such  amount may be
payable  fully  in cash,  fully in one or more of the kind or kinds of  property
payable in such  merger,  consolidation  or  combination,  or partly in cash and
partly in one or more of such kind or kinds of property,  all in the  discretion
of the Committee.

         13.  Effect of Change in Control.  Each of the events  specified in the
following clauses (i) through (iii) of this Section 13 shall be deemed a "change
of  control":  (i) any third  person,  including a "group" as defined in Section
13(d)(3) of the  Securities  Exchange Act of 1934,  shall become the  beneficial
owner of  shares of the  Corporation  with  respect  to which 25% or more of the
total  number  of  votes  for the  election  of the  Board of  Directors  of the
Corporation  may be cast,  (ii) as a result of, or in connection  with, any cash
tender offer,  exchange  offer,  merger or other business  combination,  sale of
assets or contested election,  or combination of the foregoing,  the persons who
were  directors of the  Corporation  shall cease to constitute a majority of the
Board  of  Directors  of  the  Corporation  or  (iii)  the  stockholders  of the
Corporation  shall approve an agreement  providing  either for a transaction  in
which the Corporation  will cease to be an independent  publicly owned entity or
for a sale or other  disposition of all or  substantially  all the assets of the
Corporation  or the  Association.  In the event a change in control shall occur,
unless the Committee shall have otherwise provided in the instrument  evidencing
the  grant of an Option  or Stock  Appreciation  Right,  all  Options  and Stock
Appreciation  Rights theretofore  granted and not fully exercisable shall become
exercisable  in full  upon the  happening  of such  event  and  shall  remain so
exercisable  for a period of sixty days  following  such date,  after which they
shall revert to being  exercisable  in  accordance  with their terms;  provided,
however,  that no Option or Stock  Appreciation  Right which has previously been
exercised or otherwise terminated shall become exercisable.
<PAGE>
         14. Assignments and Transfers.  No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned,  encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
Awards  other than  Incentive  Stock  Options  pursuant to a qualified  domestic
relations  order,  as  defined  in the Code or  Title I of  ERISA  or the  rules
thereunder.

         15.  Employee  Rights Under the Plan. No director,  officer or employee
shall have a right to be selected as a Participant nor, having been so selected,
to be selected  again as a  Participant  and no director,  officer,  employee or
other person shall have any claim or right to be granted an Award under the Plan
or  under  any  other  incentive  or  similar  plan  of the  Corporation  or any
Affiliate.  Neither the Plan nor any action taken  thereunder shall be construed
as giving any employee any right to be retained in the employ of the Corporation
or any Affiliate.

         16. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests,  be
conditioned upon the receipt of a representation as to the investment  intention
of the Participant to whom such Shares are to be delivered,  in such form as the
Committee  shall  determine  to be  necessary  or  advisable  to comply with the
provisions of the Securities  Act of 1933 or any other  Federal,  state or local
securities legislation or regulation. It may be provided that any representation
requirement shall become  inoperative upon a registration of the Shares or other
action  eliminating the necessity of such  representation  under such Securities
Act or other securities  legislation.  The Corporation  shall not be required to
deliver any Shares  under the Plan prior to (i) the  admission of such shares to
listing on any stock  exchange on which Shares may then be listed,  and (ii) the
completion of such registration or other  qualification of such Shares under any
state or Federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable.

         17.  Withholding  Tax. The  Corporation  shall have the right to deduct
from all amounts  paid in cash with respect to the exercise of a Right 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 Op tion or Right  pursuant  to the  Plan,  the
Corporation shall have the right to require the Participant or such other person
to pay the Corporation the amount of any taxes which the Corporation is required
to  withhold  with  respect to such  Shares,  and may,  in its sole  discretion,
withhold sufficient Shares to cover the amount of taxes which the Corporation is
required to withhold.

         18. Amendment or Termination. The Board of Directors of the Corporation
may amend,  suspend or  terminate  the Plan or any portion  thereof at any time,
subject to OTS  Regulations,  but  (except as  provided in Section 11 hereof) no
amendment shall be made without  approval of the stockholders of the Corporation
which shall (i) materially  increase the aggregate number of Shares with respect
to which  Awards  may be made  under  the Plan,  (ii)  materially  increase  the
aggregate  number of Shares  which may be subject to Awards or (iii)  change the
class of persons eligible to participate in the Plan; provided, however, that no
such  amendment,  suspension  or  termination  shall  impair  the  rights of any
Participant,  without his consent, in any Award theretofore made pursuant to the
Plan.

         19.  Effective Date and Term of Plan.  The Plan shall become  effective
upon its approval by the stockholders of the  Corporation.  It shall continue in
effect for a term of ten years unless sooner terminated under Section 18 hereof.
<PAGE>
         20. Initial  Grant.  By, and  simultaneously  with, the approval of the
Plan by the  stockholders  of the  Corporation,  each  member  of the  Board  of
Directors of the  Corporation  who is not an Employee,  is hereby  granted a ten
year,  Non-Qualified  Stock Option to purchase 5,225 Shares at an Exercise Price
per share  equal to the Market  Value per share on the date of the grant,  which
shall be the  date of  stockholder  approval  of the  Plan.  In  addition,  each
non-employee  director  of the  Corporation  elected  subsequent  to the date of
stockholder  approval of the Plan, is hereby granted as of the date he or she is
elected and  qualified a ten-year  Non-Qualified  Stock  Option to purchase  100
Shares at an Exercise Price equal to the Market Value per Share of the Shares on
the date of grant. Each such Option shall be evidenced by a Non-Qualified  Stock
Option  Agreement  in a form  approved  by the Board of  Directors  and shall be
subject in all  respects  to the terms and  conditions  of this Plan,  which are
controlling.  All Options  granted  pursuant to this section  shall vest in five
equal  annual  installments  with the  first  installment  vesting  on the first
anniversary of the date of grant, subject to the Director maintaining Continuous
Service with the Corporation or its Affiliates since the date of grant.