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EXHIBIT 10.3      HAVEN BANCORP, INC. STOCK OPTION PLAN FOR OUTSIDE
                  DIRECTORS


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                              AMENDED AND RESTATED

                               HAVEN BANCORP, INC.
                     STOCK OPTION PLAN FOR OUTSIDE DIRECTORS


I.    PURPOSE

      The purpose of the Amended and Restated Haven Bancorp,  Inc. (the "Holding
Company") Stock Option Plan for Outside Directors of the Holding Company and its
affiliates,  including the outside  directors of Columbia  Federal  Savings Bank
(the  "Bank")  (the  "Directors'  Option  Plan" or the "Plan") is to promote the
growth  and  profitability  of the  Holding  Company  and the Bank by  providing
outside directors of the Holding Company and its affiliates with an incentive to
achieve  long-term  objectives of the Holding  Company and to attract and retain
non-employee  directors of  outstanding  competence  by  providing  such outside
directors  with an  opportunity  to acquire an equity  interest  in the  Holding
Company.

II.   GRANT OF OPTIONS

      (a) Initial Grant.  Each outside director (for purposes of this Directors'
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Option Plan,  the term  "Outside  Director"  shall mean a member of the Board of
Directors of the Holding  Company or any of its affiliates not also serving as a
full-time  employee of the  Holding  Company or any of its  affiliates),  who is
serving in such  capacity on the date of the Holding  Company's  initial  public
offering and at the  effective  date of this  Directors'  Option Plan, is hereby
granted  non-statutory  stock  options to purchase  18,597  shares of the common
stock of the Holding Company ("Common Stock"), subject to adjustment as provided
in Section IV hereof.

            The purchase  price per share of the Common Stock  deliverable  upon
the exercise of each non-  statutory  stock  option shall be the initial  public
offering price of the Common Stock sold in connection with the conversion of the
Bank to stock form.  The  effective  date of these  initial  grants shall be the
effective  date of the  Directors'  Option  Plan as  defined in Section V hereof
("Effective Date").

      (b) Grants to  Subsequent  Outside  Directors.  To the extent  options are
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available for grant under the Directors'  Option Plan, each Outside Director who
is first elected as a director  subsequent to the  Effective  Date  ("Subsequent
Outside  Director") is hereby  granted,  as of the date on which such Subsequent
Outside Director is qualified and first begins to serve as an Outside  Director,
non-statutory  stock options to purchase 18,597 shares of Common Stock,  subject
to  adjustment  pursuant  to Section IV, or to  purchase  such lesser  number of
shares of Common Stock as remain in this  Directors'  Option Plan.  The purchase
price per share of the Common  Stock  deliverable  upon  exercise of such option
shall equal the Fair Market  Value of the Common  Stock on the date the grant of
this Option is effective as determined under paragraph (d) of this Section II.

            If  options  for  sufficient  shares  are not  available  under  the
Directors'  Option  Plan to fulfill  the grant of options  under  Section  II(b)
hereof to any  Subsequent  Outside  Director  first  elected  subsequent  to the
Effective Date, and thereafter options become available, such Subsequent Outside
Director  shall then  receive  options to purchase an amount of shares of Common
Stock,  determined by dividing pro rata among each Subsequent  Outside Director,
options for the number of shares  then  available  under the Outside  Directors'
Plan,  not to exceed 18,597  shares,  subject to adjustment  under Section IV as
appropriate.  The date of grant shall be the date options for such shares become
available.  The purchase  price per share of the Common Stock  deliverable  upon
exercise of such  options  shall equal the Fair Market Value of the Common Stock
on the date the option is  granted as  determined  under  paragraph  (d) of this
Section II.



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      (c) Ineligibility. An option under the Directors' Option Plan shall not be
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granted to any  Outside  Director  who at any  previous  time was an employee of
either the Company or the Bank and in such  capacity was eligible to receive any
options to purchase Common Stock.

      (d) Fair Market Value.  For purposes of the Directors'  Option Plan,  when
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used in connection  with Common Stock on a certain date, Fair Market Value means
the  average of the bid and ask prices of the Common  Stock as  reported  by the
National  Association  of  Securities  dealers  Automated  Quotation  System (as
published by the Wall Street Journal, if published) on the effective date of the
grant, or if the Common Stock was not traded on such date, on the next preceding
day on which the Common Stock was traded  thereon.  For purposes of the grant of
options in the  Conversion  as defined  in Section V hereof,  of the Bank,  Fair
Market Value shall mean the initial  public  offering  price of the Common Stock
($10.00 per share).

III.  TERMS AND CONDITIONS

      (a) Option  Agreement.  Each option shall be evidenced by a written option
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agreement between the Holding Company and the recipient specifying the number of
shares of Common Stock that may be acquired  through its exercise and containing
such other terms and  conditions  which are not  inconsistent  with the terms of
this grant.

      (b) Vesting.  All options granted  pursuant to Section II(a) or (b) hereof
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shall become  exercisable one (1) year from the date of grant, which in the case
of Outside  Directors  serving on the Board at the time of the Conversion of the
Bank from mutual to stock form shall be the Effective Date as defined in Section
V;  provided,  however,  that in the event of death,  retirement,  disability or
change in control of the  Holding  Company  or the Bank all  options  shall vest
immediately, subject to Section III(f) below. However, no shares of Common Stock
acquired  through the exercise of such option may be sold or otherwise  disposed
of for a period of one year from the date of grant of the option.

      (c) Manner of Exercise.  The option when exercisable may be exercised from
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time to time, in whole or in part, by delivering a written notice of exercise to
the President of the Holding  Company  signed by the  recipient.  Such notice is
irrevocable  and must be  accompanied  by full payment of the exercise price (as
determined  in  Section  II(a) or (b)  hereof)  in cash or shares of  previously
acquired  Common  Stock of the Holding  Company at the Fair Market Value of such
shares  determined on the exercise date by the manner described in Section II(d)
above. 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.

      (d)  Transferability.  Each option granted hereby may be exercised only by
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the  recipient  to whom it is issued or in the event of the  Outside  Director's
death,  his  or  her  personal  representative(s)  or  designee(s),  heir(s)  or
devisee(s) pursuant to the terms of Section III(b) hereof.

      (e) Termination of Service.  Upon the termination of a recipient's service
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for any reason other than Disability,  Retirement,  Change in Control,  death or
Removal for Cause, the participant's  stock options shall be exercisable only as
to those shares which were immediately  purchasable by the recipient at the date
of termination.

            In the event of death or termination of service due to Disability of
any  recipient,  all  stock  options  held by  such  recipient,  whether  or not
exercisable at such time, shall become immediately  exercisable by the recipient
or the recipient's legal  representatives or beneficiaries.  Upon termination of
the recipient's  service due to Retirement,  or a Change in Control occurs,  all
stock options held by such  recipient,  whether or not exercisable at such time,
shall become  immediately  exercisable.  For purposes of this plan the following
terms are defined:

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            (i) "Change in  Control"  for  purposes  of this Plan,  a "Change of
      Control" of the Bank or Company shall mean an event of a nature that:  (1)
      would be  required  to be  reported  in  response to Item 1 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 (the "Exchange  Act");
      or (2)  results in a Change in Control of the Bank or the  Company  within
      the meaning of the Home Owners' Loan Act, as amended,  the Federal Deposit
      Insurance Act, and the Rules and Regulations  promulgated by the Office of
      Thrift Supervision  ("OTS") (or its predecessor  agency),  as in effect on
      the date hereof  (provided,  that in applying the  definition of change in
      control as set forth under the Rules and Regulations of the OTS, the Board
      shall  substitute  its  judgment  for  that of the  OTS);  or (3)  without
      limitation  such a Change in Control  shall be deemed to have  occurred at
      such time as (A) any "person"  (as the term is used in Sections  13(d) and
      14(d) of the  Exchange  Act) is or  becomes  the  "beneficial  owner"  (as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly,  of
      securities  of the  Bank or the  Company  representing  20% or more of the
      Bank's or the Company's  outstanding  securities except for any securities
      of the Bank purchased by the Company in connection  with the conversion of
      the Bank to the stock  form and any  securities  purchased  by the  Bank's
      employee stock ownership plan and 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  occurs in
      which the Bank or Company is not the resulting entity.

            (ii) "Disability"  means the permanent and total inability by reason
      of mental or  physical  infirmity,  or both,  of an  outside  director  to
      perform  the work  customarily  assigned to him.  Additionally,  a medical
      doctor  selected  or approved  by the Board of  Directors  must advise the
      Board 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 recipient's lifetime.

            (iii)  "Retirement"  means the termination of service from the Board
      of Directors of the Bank and/or  Company  following  written notice to the
      Board as a whole of such Director's intention to retire.

            (iv)  "Removal for Cause" means the removal of the Outside  Director
      because of a material loss to the Holding Company or one of its Affiliates
      caused by the Outside Director'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.

      (f)  Termination  of Option.  Each option shall expire upon the earlier of
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(i) one hundred and twenty (120) months following the date of grant, or (ii) one
(1) year  following  the date on which the outside  director  ceases to serve in
such  capacity for any reason other than Removal for Cause.  Provided,  however,
that if the recipient's  service on the Board of Directors is terminated for any
reason  other  than  being  removed  for  cause  prior  to the  date the Plan is
presented to the  shareholders of the Company for  ratification,  the option may
not be exercised prior to the date of the  shareholders'  meeting regarding such
ratification but shall remain exercisable for a period of one year from the date
of such  meeting.  If the Outside  Director  dies before  fully  exercising  any
portion of an option  then  exercisable,  such option may be  exercised  by such
Outside Director's personal representative(s), heir(s) or devisee(s) at any time
within the one (1) year period  following his or her death;  provided,  however,
that in no event  shall the  option be  exercisable  more than one  hundred  and
twenty


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(120) months after the date of its grant. If the Outside Director is removed for
cause, all options awarded to him shall expire upon such removal.

IV.   COMMON STOCK SUBJECT TO THE DIRECTORS' OPTION PLAN

      The shares which shall be issued and  delivered  upon  exercise of options
granted under the Directors'  Option Plan may be either  authorized and unissued
shares of Common Stock or  authorized  and issued shares of Common Stock held by
the Holding  Company as  treasury  stock.  The number of shares of Common  Stock
reserved for issuance under the Directors'  Option Plan shall not exceed 148,781
shares of the Common  Stock of the  Holding  Company,  par value $.01 per share,
issued by the Holding Company in connection with the Conversion of the Bank from
the mutual to the stock form of ownership,  subject to  adjustments  pursuant to
this Section IV. Any shares of Common  Stock  subject to an option which for any
reason either  terminates  unexercised or expires,  shall again be available for
issuance under the Directors' Option Plan.

      In the event of any change or changes in the  outstanding  Common Stock of
the Holding Company by reason of any stock dividend or split,  recapitalization,
reorganization,  merger,  consolidation,  spin-off,  combination  or any similar
corporate  change, or other increase or decrease in such shares effected without
receipt or  payment of  consideration  by the  Company,  the number of shares of
Common Stock which may be issued under this  Directors'  Option Plan, the number
of shares of Common  Stock  subject to  options  granted  under this  Directors'
Option  Plan and the  option  price  of such  options,  shall  be  automatically
adjusted to prevent  dilution or  enlargement of the rights granted to recipient
under the Directors' Option Plan.

V.    EFFECTIVE DATE OF THE PLAN; SHAREHOLDER RATIFICATION

      The Directors'  Option Plan after adoption by the Board of Directors shall
become  effective  upon the  conversion  of the Bank from the  mutual to capital
stock form of ownership and the  acquisition of the Bank by the Holding  Company
(the "Conversion").  Following  Conversion,  the Directors' Option Plan shall be
presented to  shareholders of the Company for  ratification  for purposes of (i)
obtaining favorable treatment under Section 16(b) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act");  and (ii)  maintaining  listing on the
Nasdaq  National  Market;   provided,   however,  that  the  failure  to  obtain
shareholder  ratification  shall not  affect the  validity  of this Plan and the
options granted hereunder.

VI.   TERMINATION OF THE PLAN

      The right to grant options under the Directors' Option Plan will terminate
upon the earlier of ten years after the Effective Date of the Plan, the issuance
of 148,781  shares of Common Stock (the maximum number of shares of Common Stock
reserved  for under this  Plan)  subject to  adjustment  pursuant  to Section IV
hereof.  A majority of the  outstanding  shares of the Common Stock  entitled to
vote is required to terminate the Directors' Option; provided,  however, no such
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termination shall,  without the consent of the affected  recipient,  affect such
recipient's rights under a previously granted option.

VII.  AMENDMENT OF THE PLAN

      The Directors' Option Plan may be amended from time to time by the Board
of Directors of the Company provided that Section II and III hereof, shall not
be amended more than once every six months other than to comport with the
Internal Revenue Code of 1986, as amended, or the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder. Except as provided in
Section IV hereof, rights and obligations under any option granted before an
amendment shall not be altered or impaired by such amendment without the written
consent of the optionee. If the Directors' Option Plan becomes qualified under
17 C.F.R. Section 16(b)-3 of the rules and regulations promulgated under the
Exchange Act and an amendment would require


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shareholder approval under such rule 16(b)-3 to retain the Plan's qualification,
then subject to the discretion of the Board of Directors of the Holding Company,
such amendment shall be presented to shareholders  for  ratification,  provided,
however,  that the failure to obtain  shareholder  ratification shall not affect
the validity of this Plan as so amended and the options granted thereunder.

VIII. APPLICABLE LAW

      The Plan will be  administered in accordance with the laws of the State of
Delaware to the extent not preempted by federal law.

IX.   COMPLIANCE WITH SECTION 16

      If this Plan is qualified under 17 C.F.R. Section 240.16b-3 of the
Exchange Act of 1934 ("Exchange Act") Rules, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provisions of the Plan fail
to so comply, it shall be deemed null and void, to the extent permitted by law.



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