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                                                                    Exhibit 10.2

                      SAVINGS BANK OF THE FINGER LAKES, FSB
                             1996 STOCK OPTION PLAN


                                    ARTICLE I
                            ESTABLISHMENT OF THE PLAN

     Savings Bank of the Finger Lakes, FSB (the "Savings Bank") hereby
establishes this 1996 Stock Option Plan (the "Plan") upon the terms and
conditions hereinafter stated.


                                   ARTICLE II
                               PURPOSE OF THE PLAN

     The purpose of this Plan is to improve the growth and profitability of the
Savings Bank and its Subsidiary Companies by providing Employees with a
proprietary interest in the Savings Bank as an incentive to contribute to the
success of the Savings Bank and its Subsidiary Companies, and rewarding those
Employees for outstanding performance and the attainment of targeted goals. All
Incentive Stock Options issued under this Plan are intended to comply with the
requirements of Section 422 of the Code, and the regulations thereunder, and all
provisions hereunder shall be read, interpreted and applied with that purpose in
mind.


                                   ARTICLE III
                                   DEFINITIONS

     3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.

     3.02 "Board" means the Board of Directors of the Savings Bank.

     3.03 "Change of Control" means a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act, or any successor thereto,
whether or not the Savings Bank in fact is required to comply with Regulation
14A thereunder, except that a "change in control of the Savings Bank" shall not
include any corporate reorganization of the Savings Bank undertaken in
conjunction with the conversion of Finger Lakes Financial Corporation, M.H.C.,
the parent mutual holding company of the Savings Bank, from the mutual to the
stock form.

     3.04 "Code" means the Internal Revenue Code of 1986, as amended.
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     3.05 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, none of whom shall be an Officer or
Employee of the Savings Bank, and each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor
thereto. The functions of the committee may be undertaken by another committee
appointed by the Board.

     3.06 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Savings Bank.

     3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Savings Bank or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.

     3.08 "Effective Date" means the day upon which the Board adopts this Plan.

     3.09 "Employee" means any person who is employed by the Savings Bank or a
Subsidiary Company, or is an Officer of the Savings Bank or a Subsidiary
Company, but not including directors who are not also Officers of or otherwise
employed by the Savings Bank or a Subsidiary Company.

     3.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     3.11 "Fair Market Value" shall be equal to the fair market value per share
of the Savings Bank's Common Stock on the date an Award is granted. For purposes
hereof, the Fair Market Value of a share of Common Stock shall be the closing
sale price of a share of Common Stock on the date in question (or, if such day
is not a trading day in the U.S. markets, on the nearest preceding trading day),
as reported with respect to the principal market (or the composite of the
markets, if more than one) or national quotation system in which such shares are
then traded, or if no such closing prices are reported, the mean between the
high bid and low asked prices that day on the principal market or national
quotation system then in use, or if no such quotations are available, the price
furnished by a professional securities dealer making a market in such shares
selected by the Committee.

     3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.

     3.13 "MHC" means Finger Lakes Financial Corporation, a federally chartered
mutual holding company and the holder of a majority of the issued and
outstanding shares of Common Stock.

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     3.14 Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.

     3.15 "Offering" means the offering of Common Stock to the public pursuant
to a Plan of Stock Issuance adopted by the Savings Bank.

     3.16 "Officer" means an Employee whose position in the Savings Bank or
Subsidiary Company is that of a corporate officer, as determined by the Board.

     3.17 "OTS" means the Office of Thrift Supervision.

     3.18 "Option" means a right granted under this Plan to purchase Common
Stock.

     3.19 "Optionee" means an Employee or former Employee whom an Option is
granted under the Plan.

     3.20 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Savings Bank or a Subsidiary Company, or, if no such plan is applicable,
which would constitute "retirement' under any qualified pension benefit plan
maintained by the Savings Bank or a Subsidiary Company, if such individual were
a participant in such plan.

     3. 21 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Savings Bank in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.09.

     3.22 "Subsidiary Companies" means those subsidiaries of the Savings Bank,
which meet the definition of "subsidiary corporations" set forth in Section
425(f) of the Code, at the time of granting of the Option in question.


                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

     4.01 Duties of the Committee. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its absolute
discretion to adopt, amend and rescind such rules, regulations and procedures
as, in its opinion, may be advisable in the administration of the Plan,
including, without limitation, rules, regulations and procedures which (i) deal
with satisfaction of an Optionee's tax withholding obligation pursuant to
Section 12.02 hereof, (ii) include arrangements to facilitate the Optionee's
ability to borrow funds for payment of the exercise or purchase price of an
Award, if applicable, from securities brokers and dealers, and (iii) include
arrangements which provide for the payment of some or all of such exercise or

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purchase price by delivery of previously owned shares of Common Stock or other
property and/or by withholding some of the shares of Common Stock which are
being acquired. The interpretation and construction by the Committee of any
provisions of the Plan, any rule, regulation or procedure adopted by it pursuant
thereto or of any Award shall be final and binding.

     4.02 Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, none of whom shall be an officer or employee of the
Savings Bank, and each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 under the Exchange Act. The Committee shall act by vote
or-written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. It may appoint one of its members to be chairman and any person,
whether or not a member, to be its secretary or agent. The Committee shall
report its actions and decisions to the Board at appropriate times but in no
event less than one time per calendar year.

     4.03 Revocation for Misconduct. The Committee may by resolution immediately
revoke, rescind and terminate any Option, or portion thereof, to the extent not
yet vested, or any Stock Appreciation Right, to the extent not yet exercised,
previously granted or awarded under this Plan to an Employee who is discharged
from the employ of the Savings Bank or a Subsidiary Company for cause, which,
for purposes hereof, shall mean termination because of the Employee's personal
dishonesty, incompetence, willful misconduct breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order.

     4.04 Limitation on Liability. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan, any
rule, regulation or procedure adopted by it pursuant thereto or any Awards
granted under it. If a member of the Committee is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of anything
done or not done by him in such capacity under or with respect to the Plan, the
Savings Bank shall, subject to the requirements of applicable laws and
regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonahly believed to
be in the best interests of the Savings Bank and its Subsidiary Companies and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.

     4.05 Compliance with Law and Regulations. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any


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government or regulatory agency as may be required. The Savings Bank shall not
be required to issue or deliver any certificates for shares of Common Stock
prior to the completion of any registration or qualification of or obtaining of
consents or approvals with respect to such shares under any Federal or state law
or any rule or regulation of any government body, which the Savings Bank shall,
in its sole discretion, determine to be necessary or advisable. Moreover, no
Option or Stock Appreciation Right may be exercised if such exercise would be
contrary to applicable laws and regulations.

     4.06 Restrictions on Transfer. The Savings Bank may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.


                                    ARTICLE V
                                   ELIGIBILITY

     Awards may be granted to such Employees of the Savings Bank and its
Subsidiary Companies as may be designated from time to time by the Committee.
Awards may not be granted to individuals who are not Employees of either the
Savings Bank or its Subsidiary Companies.


                                   ARTICLE VI
                        COMMON STOCK COVERED BY THE PLAN

     6.01 Option Shares. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 59,000 shares, which is equal to 10.0% of the shares of
Common Stock issued in the Offering to persons other than the MHC. None of such
shares shall be the subject of more than one Award at any time, but if an Option
as to any shares is surrendered before exercise, or expires or terminates for
any reason without having been exercised in full, or for any other reason ceases
to be exercisable, the number of shares covered thereby shall again become
available for grant under the Plan as if no Awards had been previously granted
with respect to such shares. Notwithstanding the foregoing, if an Option is
surrendered in connection with the exercise of a Stock Appreciation Right, the
number of shares covered thereby shall not be available for grant under the
Plan. During the time this Plan remains in effect, grants to any Employee shall
not exceed options to purchase more than 25% of the shares of Common Stock
available under the Plan.

     6.02 Source of Shares. The shares of Common Stock issued under the Plan may
be authorized but unissued shares, treasury shares or shares purchased by the
Savings Bank on the open market or from private sources for use under the Plan.

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                                   ARTICLE VII
                                DETERMINATION OF
                         AWARDS, NUMBER OF SHARES, ETC.

     The Committee shall, in its discretion, determine from time to time which
Employees will be granted Awards under the Plan, the number of shares of Common
Stock subject to each Award, and whether each Option will be an Incentive Stock
Option or a Non-Qualified Stock Option. In making all such determinations there
shall be taken into account the duties, responsibilities and performance of each
respective Employee, his present and potential contributions to the growth and
success of the Savings Bank, his salary and such other factors as the Committee
shall deem relevant to accomplishing the purposes of the Plan.


                                  ARTICLE VIII
                      OPTIONS AND STOCK APPRECIATION RIGHTS

     Each Option granted hereunder shall be on the following terms and
conditions:

     8.01 Stock Option Agreement. The proper Officers on behalf of the Savings
Bank and each Optionee shall execute a Stock Option Agreement which shall set
forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Committee in each instance shall deem appropriate, provided they are not
inconsistent with the terms, conditions and provisions of this Plan. Each
Optionee shall receive a copy of his executed Stock Option Agreement

     8.02 Option Exercise Price.

     (a) Incentive Stock Options. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.09(b).

     (b) Non-Qualified Options. The per share price at which the subject Common
Stock may be purchased upon exercise of a Non-Qualified Option shall be no less
than one hundred percent (l00%) of the Fair Market Value of a share of Common
Stock at the time such Non-Qualified Option is granted.

     8.03 Vesting and Exercise of Options.

     (a) General Rules. Incentive Stock Options and Non-Qualified Options
granted hereunder shall become vested and exercisable at the rate of 20% per
year on each anniversary of the date the Option was granted, and the right to
exercise shall be cumulative. Notwithstanding the foregoing, no vesting shall
occur on or after an Employee's employment


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with the Savings Bank and all Subsidiary Companies is terminated for any reason
other than his death, Disability or Retirement. In determining the number of
shares of Common Stock with respect to which Options are vested and/or
exercisable, fractional shares will be rounded to the nearest whole number if
the fraction is 0.5 or higher, and down if it is less.

     (b) Accelerated Vesting Upon Death or Disability. Unless the Committee
shall specifically state otherwise at the time an Option is granted, all Options
granted hereunder shall become vested and exercisable in full on the date an
Optionee terminates his employment with the Savings Bank or a Subsidiary Company
because of his death or Disability.

     8.04 Duration of Options.

     (a) General Rule. Except as provided in Sections 8.04(b) and 8.09, each
Option or portion thereof granted to Employees shall be exercisable at any time
on or after it vests and becomes exercisable until the earlier of (i) ten (10)
years after its date of grant or (ii) three (3) months after the date on which
the Optionee ceases to be employed by the Savings Bank and all Subsidiary
Companies, unless the Committee in its discretion decides at the time of grant
or thereafter to extend such period of exercise upon termination of employment
from three (3) months to a period not exceeding three (3) years. To the extent
that any options on the date on which the Optionee ceases to be employed by the
Savings Bank and all Subsidiary Companies have not yet vested, they shall be
exercisable for one year from the date of vesting pursuant to Section 8.03(a)
hereof.

     (b) Exception for Termination Due to Death, Disability, Retirement or
Change in Control. If an Employee dies while in the employ of the Savings Bank
or a Subsidiary Company, terminates employment with the Savings Bank or a
Subsidiary Company as a result of Disability or Retirement or in the event of a
Change in Control without having fully exercised his Options, the Optionee or
the executors, administrators, legatees or distributees of his estate shall have
the right, during the twelve-month period following the earlier of his death or
Disability, Retirement or the Change in Control to exercise such Options to the
extent vested on the date of such death, Disability, Retirement or Change in
Control In no event, however, shall any Option be exercisable within six (6)
months after the date of grant or more than ten (10) years from the date it was
granted.

     8.05 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.

     8.06 Manner of Exercise. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set forth
in the written Stock Option Agreement provided for in Section 8.01 above.

     8.07 Payment for Shares. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Savings Bank upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable.


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Payment for shares may be made by the Optionee in cash or, at the discretion of
the Committee by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an Option) or other property equal in Fair Market
Value to the purchase price of the shares to be acquired pursuant to the Option,
by withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.

     8.08 Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Savings Bank's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.

     8.09 Additional Terms Applicable to Incentive Stock Options. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.08 above, to those contained in this
Section 8.09.

     (a) Notwithstanding any contrary provisions contained elsewhere in this
Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Savings Bank (or any parent
or Subsidiary Company), shall not exceed $100,000.

     (b) Limitation on Ten Percent Stockholders. The price at which shares of
Common Stock may be purchased upon exercise of an Incentive Stock Option granted
to an individual who, at the time such Incentive Stock Option is granted, owns,
directly or indirectly, more than ten percent (10%) of the total combined voting
power of all classes of stock issued to stockholders of the Savings Bank or any
Subsidiary Company, shall be no less than one hundred and ten percent (110%) of
the Fair Market Value of a share of the Common Stock of the Savings Bank at the
time of grant, and such Incentive Stock Option shall by its terms not be
exercisable after the earlier of the date determined under Section 8.03 or the
expiration of five (5) years from the date such Incentive Stock Option is
granted.

     (c) Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Savings Bank in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Savings Bank shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of Federal
or state law or regulation and, further, to collect from the Optionee any
additional


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amounts which may be required for such purpose. The Committee may, in its
discretion, require shares of Common Stock acquired by an Optionee upon exercise
of an Incentive Stock Option to be held in an escrow arrangement for the purpose
of enabling compliance with the provisions of this Section 8.09(c).

     8.10 Stock Appreciation Rights.

     (a) General Terms and Conditions. The Committee may, but shall not be
obligated to, authorize the Savings Bank, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment by
the Savings Bank of an amount equal to the excess of the Fair Market Value of
the shares of Common Stock subject to the Option, or portion thereof,
surrendered over the exercise price of the Option with respect to such shares
(any such authorized surrender and payment being hereinafter referred to as a
"Stock Appreciation Right"). Such payment, at the discretion of the Committee,
may be made in shares of Common Stock valued at the then Fair Market Value
thereof, or in cash, or partly in cash and partly in shares of Common Stock.

     The terms and conditions set with respect to a Stock Appreciation Right my
include (without limitation), subject to other provisions of this Section 8.10
and the Plan, the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised (which shall be on the same terms as
the Option to which it relates pursuant to Section 8.03 hereunder); the method
for valuing shares of Common Stock for purposes of this Section 8.10; a ceiling
on the amount of consideration which the Savings Bank may pay in connection with
exercise and cancellation of the Stock Appreciation Right; and arrangements for
income tax withholding. The Committee shall have complete discretion to
determine whether, when and to whom Stock Appreciation Rights may be granted.
Notwithstanding the foregoing, the Savings Bank may not permit the exercise of a
Stock Appreciation Right issued pursuant to this Plan until the Savings Bank has
been subject to the reporting requirements of Section 13 of the Exchange Act for
a period of at least one year prior to the exercise of any such Stock
Appreciation Right and until a Stock Appreciation Right issued pursuant to this
Plan has been outstanding for at least six months from the daze of grant.

     (b) Time Limitations. If a holder of a Stock Appreciation Right terminates
service with the Savings Bank as an Officer or Employee, the Stock Appreciation
Right may be exercised only within the period, if any, within which the Option
to which it relates may be exercised. Notwithstanding the foregoing, any
election by an Optionee to exercise the Stock Appreciation Rights provided in
this Plan shall be made during the period beginning on the third business day
following the release for publication of quarterly or annual financial
information required to be prepared and disseminated by the Savings Bank
pursuant to the requirements of the Exchange Act and ending on the twelfth
business day following such date. The required release of information shall be
deemed to have been satisfied when the specified financial data


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appears on or in a wire service, financial news service or newspaper of general
circulation or is otherwise first made publicly available.

     (c) Effects of Exercise of Stock Appreciation Rights or Options. Upon the
exercise of a Stock Appreciation Right, the number of shares of Common Stock
available under the Option to which it relates shall decrease by a number equal
to the number of shares for which the Stock Appreciation Right was exercised.
Upon the exercise of an Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.

     (d) Time of Grant. A Stock Appreciation Right may be granted concurrently
with the Option to which it relates or at any time thereafter prior to the
exercise or expiration of such Option.

     (e) Non-Transferable. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.

     (f) Stock Appreciation Right Agreement. The proper Officers on behalf of
the Savings Bank and each Optionee who is granted a Stock Appreciation Right
shall execute a Stock Appreciation Right Agreement, which shall set forth the
terms, conditions, restrictions and privileges of the Stock Appreciation Right
provided that they are not inconsistent with the terms, conditions, restrictions
and privileges of this Plan. Each holder of a Stock Appreciation Right shall
receive a copy of his executed Stock Appreciation Right Agreement


                                   ARTICLE IX
                         ADJUSTMENTS FOR CAPITAL CHANGES

     The aggregate number of shares of Common Stock available for issuance under
this Plan, the number of shares to which any Award relates and the exercise
price per share of Common Stock under any Option shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of this Plan resulting
from a split, subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt or payment of consideration by the Savings
Bank. If, upon a merger, consolidation, reorganization, liquidation,
recapitalition or the like of the Savings Bank, the shares of the Savings Bank's
Common Stock shall be exchanged for other securities of the Savings Bank or of
another corporation, each recipient of an Award shall be entitled, subject to
the conditions herein stated, to purchase or acquire such number of shares of
Common Stock or amount of other securities of the Savings Bank or such other
corporation as were exchangeable for the number of shares of Common Stock of the
Savings Bank which such optionees would have been entitled


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to purchase or acquire except for such action, and appropriate adjustments shall
be made to the per share exercise price of outstanding Options.


                                    ARTICLE X
                      AMENDMENT AND TERMINATION OF THE PLAN

     The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Awards have not been granted,
subject to regulations of the OTS and any required stockholder approval or any
stockholder approval which the Board may deem to be advisable for any reason,
such as for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying any applicable stock
exchange listing requirements. The Board may not, without the consent of the
holder of an Award, alter or impair any Award previously granted or awarded
under this Plan as specifically authorized herein.


                                   ARTICLE XI
                                EMPLOYMENT RIGHTS

     Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee of the Savings Bank or a Subsidiary Company to
continue in such capacity.


                                   ARTICLE XII
                                   WITHHOLDING

     12.01 Tax Withholding. The Savings Bank may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Savings Bank may require the Optionee to pay to the Savings Bank the amount
required to be withheld as a condition to delivering the shares acquired
pursuant to an Award. The Savings Bank also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.09(c).

     12.02 Methods of Tax Withholding. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common Stock
to which the Employee would otherwise be entitled pursuant to an Award and/or by
the Optionee's delivery of previously owned shares of Common Stock or other
property.


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                                  ARTICLE XIII
                        EFFECTIVE DATE OF THE PLAN; TERM

     13.01 Effective Date of the Plan. This Plan shall become effective on the
Effective Date, and Awards may be granted hereunder as of or after the Effective
Date and prior to the termination of the Plan, provided that no Incentive Stock
Option issued pursuant to this Plan shall qualify as such unless this Plan is
approved by the requisite vote of the holders of the outstanding voting shares
of the Savings Bank at a meeting of stockholders of the Savings Bank held within
twelve (12) months of the Effective Date. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan and any
Awards granted pursuant hereto is subject to the approval of the Savings Bank's
stockholders and the approval of the Plan of Stock Issuance by the OTS.

     13.02 Term of Plan. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.


                                   ARTICLE XIV
                                  MISCELLANEOUS

     14.01 Governing Law. To the extent not governed by Federal law, this Plan
shall be construed under the laws of the State of New York.

     14.02 Pronouns. Wherever appropriate, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.


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