EXHIBIT 10.3


                              AMENDED AND RESTATED
                             RELIANCE BANCORP, INC.
                  1994 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS


I.  Purpose

         The purpose of the Reliance Bancorp,  Inc. (the "Holding Company") 1994
Stock  Option  Plan  for  Outside  Directors  of the  Holding  Company  and  its
affiliates,  including the outside  directors of Reliance  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 and Subsequent Grants.

                  (i) Each outside  director  (for  purposes of this  Directors'
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  39,330  shares of the common
stock of the Holding Company ("Common Stock"), subject to adjustment as provided
in Section IV hereof.

                  (ii) Additional  grants of non-statutory  stock options may be
made to each outside director under this Plan by the committee administering the
Plan (the  "Committee").  The  Committee  shall  consist of the entire  Board of
Directors or two or more members of the Board of Directors who are "Non-employee
Directors" as that term is defined in Rule 16b-3(b)(3)(i), as promulgated by the
Securities and Exchange  Commission,  under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").

                  (iii)  The  purchase  price  per  share  of the  Common  Stock
deliverable  upon  the  exercise  of each  non-statutory  stock  option  granted
pursuant to Section  II(a)(i) shall be the initial public  offering price of the
Common Stock sold in  connection  with the  conversion  of the Bank to the 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").


                                                         1

<PAGE>



                  (iv)  The  purchase  price  per  share  of  the  Common  Stock
deliverable  upon  the  exercise  of each  Non-statutory  Stock  Option  granted
pursuant to Section II(a)(ii) shall be the Fair Market Value of the Common Stock
on the date of grant.

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

         (c) Fair Market Value. For purposes of the Directors' Option Plan, when
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,  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  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.  Each option granted  pursuant to Section  II(a)(i) hereof
shall  become  exercisable  in three  annual  installments  of thirty  three and
one-third percent (331/3%).  Options granted pursuant to Section II(a)(ii) shall
vest in accordance  with the terms and conditions set forth in each  recipient's
Option Award Agreement.

         (c) Manner of Exercise.  The option when  exercisable  may be exercised
from  time to time,  in whole or in part,  by  delivering  a  written  notice of
exercise to the Chief  Executive  Officer 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) 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(c) above.

         (d)  Transferability.  Each option granted hereby may be exercised only
by 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(e)  hereof  or as  otherwise
provided by Rule 16(b)-3 of the Securities Exchange Act of 1934, as amended.

         (e)  Termination  of Service.  Upon the  termination  of a  recipient's
service  for  any  reason  other  than  disability,  retirement,  failure  to be
are-elected  at any annual  meeting of  shareholders  at which the recipient has
been nominated, the occurrence of a Change in Control, death or removal

                                                         2

<PAGE>



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 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,  failure to be are-elected or a Change in Control occurs, all
stock options held by such  recipient,  whether or not exercisable at such time,
shall become immediately  exercisable.  However, shares of Common Stock acquired
through the exercise of options  granted  under Section II(a) may not be sold or
otherwise  disposed  of for a period  of one year  from the date of grant of the
option.
For purposes of this plan the following terms are defined:

                  (i) "Change in Control" of the Bank or Holding  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 Holding Company within the meaning of the
         Home Owners' Loan Act of 1933, as amended 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 Holding Company  representing 20% or more of the Bank's
         or  the  Holding  Company's  outstanding   securities  except  for  any
         securities of the Bank  purchased by the Holding  Company in connection
         with the  conversion  of the Bank to the stock form and any  securities
         purchased by any  tax-qualified  employee  benefit plan of the Bank; 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  Holding  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  Holding  Company  or
         similar  transaction occurs in which the Bank or Holding Company is not
         the resulting entity; or (D) a proxy statement  soliciting proxies from
         shareholders of the Holding Company,  by someone other than the current
         management of the Holding Company,  seeking  stockholder  approval of a
         plan of reorganization,  merger or consolidation of the Holding Company
         or Bank or  similar  transaction  with  one or more  corporations  as a
         result of which the outstanding  shares of the class of securities then
         subject to the plan or transaction  are exchanged for or converted into
         cash or property or securities

                                                         3

<PAGE>



         not issued by the Bank or the Holding Company shall be distributed;  or
         (E) a tender offer is made for 20% or more of the voting  securities of
         the Bank or the Holding Company.

                  (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 the Holding  Company  following
         written notice to the Board of Directors as a whole of such  Director's
         intention to retire or retirement as determined by the Bank's bylaws.

                  (iv)  "Removal  for Cause"  means the  removal of the  Outside
         Director based upon 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) which
         results  in a  material  loss  to  the  Holding  Company  or any of its
         affiliates.

         (f) Termination of Option. Options shall expire upon the earlier of (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 in  accordance  with the
Holding  Company's  Certificate of Incorporation  and applicable law.  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 Holding Company for ratification, the stock
options  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  options  may be
exercised by such Outside Director's  beneficiary,  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  options  be
exercisable  more than one hundred and twenty (120) months after the date of its
grant.  If the Outside  Director  fails to be renominated  or  are-elected,  all
options  awarded to him shall  become  immediately  exercisable.  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 210,105
shares of the Common  Stock of the  Holding  Company,  par value $.01 per share,
subject to

                                                         4

<PAGE>



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 Holding 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  Association by the
Holding Company (the "Conversion").  Following Conversion, the Directors' Option
Plan shall be presented to shareholders of the Holding 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. Taxes.

         There may be deducted from each  distribution of Common Stock under the
Plan  sufficient  amounts of shares of Common Stock to cover for any  applicable
tax obligations  incurred as a result of the exercise of options under the Plan.
If this Plan is qualified under 17 C.F.R.  ss. 240.16b-3 under the Exchange Act,
then any deduction for taxes shall comply with 17 C.F.R. ss. 240.16b-3.

VII. Termination of the Plan

         The  right to grant  options  under  the  Directors'  Option  Plan will
terminate  automatically  upon the earlier of ten years after the Effective Date
of the Plan or the  issuance  of 210,105  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 Plan for any other reason; provided,  however, no such termination shall,
without the consent of the affected  recipient,  affect such recipient's  rights
under a previously granted option.


                                                         5

<PAGE>



VIII.  Amendment of the Plan

         The  Directors'  Option  Plan may be  amended  from time to time by the
Board of  Directors  of the Holding  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.  ss.240.16(b)-3  ("Rule 16(b)-3") of the rules
and  regulations  promulgated  under the Securities  Exchange Act of 1934 and an
amendment would require  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.

IX.  Applicable Law

         The Plan will be  administered in accordance with the laws of the State
of Delaware.

X.  Compliance with Section 16

         If this Plan is qualified under Rule 16b-3 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 that any provision of the Plan
fails to so comply,  such provision shall be deemed null and void, to the extent
permitted by law.


         IN WITNESS WHEREOF,  Reliance Bancorp, Inc. established this Plan which
was executed by its duly  authorized  executive  officer and effective as of the
31st day of March, 1994 and is amended and restated as of June 17, 1998.


                                    By:



Attest:
-------------------------------






                                                         6