ex10-2.htm


    BETHEL
      BANCORP

    


    1989
      STOCK OPTION PLAN

    


    I.     THE
      PLAN

    


         1.   Purpose.
      The purpose of this Plan is to provide a means whereby Bethel Bancorp (the
      "Company") may, through the grant of stock options to Key Employees, as defined
      below, and Directors, as defined below, attract and retain persons of ability
      as
      employees and Directors and motivate such persons to exert their best efforts
      on
      behalf of the Company or any present or future Subsidiary thereof. As used
      herein the term "Subsidiary" shall mean any corporation which at the time an
      option is granted under this Plan qualifies as a subsidiary of the Company
      under
      the definition
      of "subsidiary corporation" contained in Section 425 (f) of the Internal
      Revenue Code of 1986 (the "Code"), as amended from time to time, or any similar
      provision hereafter enacted, except that such term shall not include any
      corporation which is classified as a foreign corporation pursuant to Section
      7701 of the Code. The term "Key Employees" means those employees (including
      officers and directors who are also employees) of the Company or of any
      Subsidiary, who, in the judgment of the Committee defined in Section 2 below,
      are considered especially important to the future of the Company. The term
      "Directors" means those members of the Board of Directors of the Company (the
      "Board") or of any Subsidiary, who are not Key Employees and, who, in the
      judgment of the Committee, are considered especially important to the future
      of
      the Company. The term "stock options", means options to purchase Common Stock,
      $1.00 par value, of the Company ("Stock") and in the case of stock options
      granted pursuant to Article II hereof, which at the time such options are
      granted qualify as incentive stock options within the meaning of Section 422A
      of
      the Code.

    


         2.   Administration
      of the Plan. The Plan shall be administered by the Stock Option Committee
      (the "Committee") of the Board. The Committee shall consist of at least three
      members of the Board and serve at the Board's pleasure. All decisions and
      selections by the Committee pursuant to the provisions of the Plan shall be
      made
      by a majority of its members. A member of the Committee who is eligible to
      receive a stock option under the Plan shall not vote on any question relating
      specifically to himself. Any decision reduced to writing and signed by all
      of
      the members shall be fully effective as if it had been unanimously made at
      a
      duly held meeting of the Committee.

    


    Except
      as
      otherwise expressly reserved to the Board in this Plan, the Committee may
      interpret the Plan, describe, amend and rescind any rules and regulations
      necessary or appropriate for the administration of the Plan or for the continued
      qualification of any stock options granted to Key Employees and make such other
      determinations and take such other actions as it deems necessary or advisable.
      Without limiting the generality of the foregoing, the Committee may, in its
      discretion, treat all or any portion of any period during which a Key Employee
      is on military leave or on an approved leave of absence from the Company or
      a
      Subsidiary as a period of employment by the Company or such Subsidiary, as
      the
      case may be, and not as an interruption of employment, for purposes of
      maintaining the Key Employee's continuous status as an employee and accrual
      of
      rights under any option granted hereunder. Any interpretation, determination
      or
      other action made or taken by the Committee shall be final, binding and
      conclusive.

    


         3.   Final
      Authority with Respect to the Plan. Notwithstanding any other provisions
      hereof to the contrary, final authority as to the administration of the Plan
      rests in the full Board. It is a requirement of the Plan that the Committee
      submit their interpretations, determinations and actions to the full Board
      for
      final approval. A Board member who is eligible to receive a stock option under
      the Plan may not vote on any question relating specifically to
      himself.

    


    II.   INCENTIVE
      STOCK OPTIONS

    


         1.   Incentive
      Stock Options. Subject to the provisions of the Plan, the Committee may
      grant stock options from time to time which qualify as incentive stock options
      within the meaning of Section 422A of the Code ("Incentive Stock Options")
      in
      accordance with provisions of this Article II.

    


         2.   Shares
      Subject to Incentive Stock Options. Incentive Stock Options may be granted
      by the Company from time to time to Key Employees to purchase an aggregate
      of
      33,000 shares of Stock. The Company shall reserve said number of shares for
      Incentive Stock Options granted under the Plan subject to adjustment as provided
      in Section 1 of Article V. The shares issued upon the exercise of Incentive
      Stock Options granted under the Plan may be authorized and unissued shares
      or
      shares held by the Company in its treasury. If any Incentive Stock Options
      granted hereunder should expire or become unexercisable for any reason without
      having been exercised in full, the unpurchased shares which were subject to
      an
      Incentive Stock Option shall, unless the Plan shall have been terminated, be
      available for the grant of other Incentive Stock Options under the
      Plan.

    


         3.   Grant
      of Incentive Stock Options to Key Employees. Subject to the provisions of
      the Plan and in particular this Article II, the Committee shall (i) determine
      and designate from time to time those Key Employees to whom Incentive Stock
      Options are to be granted and the number of shares of Stock to be optioned
      to
      each such employee and (ii) determine the time or times when and the manner
      in
      which each Incentive Stock option shall be exercisable and the duration of
      the
      exercise period. Notwithstanding the above (i) no option shall be granted
      pursuant to this Section 3 after the expiration of ten years from the effective
      date of the Plan as defined in Section 5 of Article V hereof and (ii)
      the

    aggregate
      fair market value (determined as of the date the Incentive Stock Option is
      granted) of Stock which is first exercisable by any employee during any calendar
      year under all stock option plans of the Company and its Subsidiaries shall
      not
      exceed $100,000. Incentive Stock Options need not be identical and in fixing
      the
      terms of any Incentive Stock Option, the Committee may take into account such
      individual factors bearing on the value of an employee as it considers
      appropriate.

    


        
      No Director as defined in Section 1 of Article I shall be entitled to receive
      any Incentive Stock Option under this Article II.

    


         4.   Terms
      and Conditions of Incentive Stock Options. Each Incentive Stock Option
      granted under the Plan to a Key Employee pursuant to Section 3 hereof shall
      be
      evidenced by an agreement with the optionee (the "Incentive Stock Option
      Agreement") in a form approved by the Committee. Each Incentive Stock Option
      and
      the Incentive Stock Option Agreement shall be subject to the following express
      terms and conditions and to such other terms and conditions as the Committee
      may
      deem appropriate.

    


            (a)   Incentive
      Stock Option Period. Subject to the terms of Section 3 hereof, each
      Incentive Stock Option Agreement shall specify the period for which the
      Incentive Stock option or any portion thereof is granted and exercisable, as
      determined by the Committee, and shall provide that the Incentive Stock Option
      shall expire at the end of such period. In no event shall any Incentive Stock
      Option be exercisable after the expiration of 10 years from the date of grant
      unless the Incentive Stock Option price is determine pursuant to Section 4(c)(2)
      hereof in which event the Incentive Stock. Option shall not be exercisable
      after
      the expiration of 5 years from the date of grant.

    


            (b)   Date
      of Grant. The date of grant of an Incentive Stock Option to a Key Employee
      under the Plan shall, for all purposes, be the date on which the Committee
      makes
      the determination of granting such Incentive Stock Option. Notice of the
      determination shall be given to each Key Employee to whom an Incentive Stock
      Option is so granted within a reasonable time after the date of such
      grant.

    


            (c)   Incentive
      Stock Option Price.

     

         
                (1)   The
      option price per share of Stock shall be determined by the Committee at the
      time
      any Incentive Stock Option is granted and except as provided in subsection
      (2)
      below shall not be less than the fair market value of one share of Stock on
      the
      date the Incentive Stock Option is granted. The fair market value of a share
      of
      Stock on the date of grant shall be the mean between the highest and lowest
      quoted selling prices on such date in the over-the-counter market, as reported
      by any market makers in the Stock.

    


          
               (2)   If an
      Incentive Stock Option is granted to a Key Employee then owning Stock possessing
      more than 10% of the total combined voting power of all classes of stock of
      the
      Company or any Subsidiary taking into account the attribution rules of Section
      425(d) of the Code, then the Committee shall set the Incentive Stock Option
      price per share of Stock at 110% of the Incentive Stock Option price determined
      pursuant to subsection (1) hereof.

    


            (d)   Exercise
      of Incentive Stock Option. The Incentive Stock Option Agreement shall
      provide the amount of the aggregate fair market value (determined as of the
      date
      the Incentive Stock Option is granted) of the Stock which may be exercised
      for
      the first time during any calendar year of the option period and may provide
      that after the date Stock is first exercisable, the option may be exercised
      in
      whole or in part at any time or times during the remainder of option
      period.

    


            (e)
      Exercise During Employment or Following Retirement, Disability or Death.
      Unless otherwise provided in the terms of an Incentive Stock Option Agreement,
      an Incentive Stock option may he exercised by an optionee only while he is
      an
      employee of the Company or a Subsidiary and has maintained continuous status
      as
      an employee since the date of the grant of the Incentive Stock Option, except
      if
      his continuous employment is terminated by reason of the employee's voluntary
      termination of employment, disability or death. If the continuous employment
      of
      an optionee is terminated as a result of the employee's voluntary termination
      of
      employment, he may, hut only within a period of 90 days beginning the day
      following the date of such termination of employment (and no later than the
      date
      the Incentive Stock Option would otherwise expire), exercise his option to
      the
      extent that he was entitled to exercise it at the date of such termination.
      If
      the continuous employment of an optionee is terminated as a result of the
      optionee's disability, he may, but only within the one year period from the
      date
      of such termination of employment (and no later than the date the Incentive
      Stock Option would otherwise expire), exercise his option to the extent he
      was
      entitled to exercise it at the date of such termination. If the continuous
      employment of an optionee is terminated by death, then to the extent that the
      optionee would have been entitled to exercise the Incentive Stock option
      immediately prior to his death, such Incentive Stock Option of the deceased
      optionee may be exercised within 90 days from the date of his death (but no
      later than the date on which such Incentive Stock option would otherwise expire)
      by the person or persons (including his estate) to whom his rights under such
      Incentive Stock option shall have passed by will or by the laws of descent
      and
      distribution. Termination of continuous employment for any other reason shall
      result in cancellation of the Incentive Stock Option.

    


         The
      terms "continuous employment" and "continuous status as an employee" mean the
      absence of any interruption or termination of employment with the Company or
      with any present or future Subsidiary. Employment shall not be considered
      interrupted in the case of transfers between the Company and any Subsidiary
      or
      between Subsidiaries, nor in the case of any military leave or any approved
      leave of absence which the Committee, in its discretion, treats as a period
      of
      employment.

    


            (f)   Non-transferability.
      No Incentive Stock Option granted to a Key Employee under the Plan shall be
      transferable other than by will or by the laws of descent and distribution.
      During the lifetime of the optionee, an Incentive Stock option shall be
      exercisable only by him.

     

            (g)   Code
      Requirements. Each Incentive Stock Option Agreement shall contain such terms
      and provisions as the Committee may determine to be necessary or desirable
      in
      order to qualify such Incentive Stock Option as an incentive stock option within
      the meaning of Section 422A of the Code.

    


            (h)   No
      Rights as Shareholder. No optionee shall have any rights as a shareholder
      with respect to any shares of Stock subject to his Incentive Stock option prior
      to the date of issuance to him of a certificate or certificates for such
      shares.

    


            (i)   No
      Rights to Continued Employment. The Plan and any Incentive Stock Option
      granted pursuant to Section 3 of this Article II shall not confer upon any
      Key
      Employee any right with respect to continuance of employment by the Company
      or
      any Subsidiary nor shall they interfere in any way with the right of the Company
      or any subsidiary employing an optionee to terminate his employment at any
      time.

    


         5.   Disposition
      of Shares by Key Employees No share of Stock acquired as a result of the
      exercise of an Incentive Stock Option granted to a Key Employee under the Plan
      shall be transferable other than by will or by the laws of descent and
      distribution before the latter of the expiration of the two year period
      beginning on the date such Incentive Stock Option was granted or the expiration
      of the one year period beginning on the date of the transfer of such share
      pursuant to such exercise.

    


    III.
      NONQUALIFIED STOCK OPTIONS

    


         1.   Nonqualified
      Stock Options. Subject to the provisions of the Plan, the Committee may
      grant other stock options ("Nonqualified Stock options") from time to time
      in
      accordance with the provisions of this Article III.

    


         2.   Share
      Subject to Nonqualified Stock Options. Nonqualified Stock Options may be
      granted by the Company from time to time to Key Employees and Directors to
      purchase an aggregate of 12,000 shares of Stock. The Company shall reserve
      said
      number of shares for Nonqualified Stock Options granted under the Plan subject
      to adjustment as provided in Section 1 of Article V. The shares issued upon
      the
      exercise of Nonqualified Stock Options granted under the Plan may be authorized
      and unissued shares or shares held by the Company in its treasury. If any
      Nonqualified Stock Options granted hereunder should expire or become
      unexercisable for any reason without having been exercised in full, the
      unpurchased shares which were subject to a Nonqualified Stock Option shall,
      unless the Plan shall terminate, be available for the grant of other
      Nonqualified Stock Options under the Plan.

    


         3.   Grant
      of Nonqualified Stock Options to Key Employees and Directors. Subject to the
      provisions of the Plan and in particular this Article III, the Committee shall
      (i) determine and designate from time to time those Key Employees and Directors
      to whom Nonqualified Stock Options are to be granted and the number of shares
      of
      Stock to be optioned to each such person and (ii) determine the time or times
      and the manner in which each nonqualified Stock option shall be exercisable
      and
      the duration of the exercise period. Nonqualified Stock Options need not be
      identical and in fixing the terms of any Incentive Stock Option, the Committee
      may take into account such individual factors bearing on the value of the
      employee or Director as it considers appropriate.

    


         4.   Terms
      and Conditions of Nonqualified Stock Options. Each Nonqualified Stock Option
      granted under the Plan to a Key Employee or Director pursuant to Section 3
      hereof shall be evidenced by an agreement with the optionee (the "Nonqualified
      Stock Option Agreement") in a form approved by the Committee. Each Nonqualified
      Stock Option and the Nonqualified Stock Option Agreement shall be subject to
      the
      following express terms and conditions and to such other terms and conditions
      as
      the Committee may deem appropriate.

    


            (a)   Nonqualified
      Stock Option Period. Each Nonqualified Stock Option Agreement shall specify
      the period for which the Nonqualified Stock Option thereunder is granted and
      exercisable, as determined by the Committee, and shall provide that the option
      shall expire at the end of such period.

    


            (b)   Date
      of Grant. The date of grant of a Nonqualified Stock Option to a Key Employee
      or Director under the Plan shall, for all purposes, be the date on which the
      Committee makes the determination of granting such Nonqualified Stock Option.
      Notice of such determination shall be given to each Key Employee or Director
      to
      whom an option is so granted within a reasonable period of time after the date
      of such grant.

    


            (c)   Nonqualified
      Stock Option Price

    


                     (1)   The
      option price per share of Stock shall be determined by the Committee at the
      time
      any Nonqualified Stock option is granted and except as provided in Subsection
      (2) below shall not be less than the fair market value of one share of Stock
      on
      the date the Nonqualified Stock option is granted. The fair market value of
      a
      share of Stock on the date of grant shall be the mean between the highest and
      lowest quoted selling prices on such date in the over-the-counter market, as
      reported by any market makers in the Stock.

    


                     (2)   If
      a Nonqualified Stock Option is granted to a Key Employee or Director then owning
      Stock possessing more than 10% of the total combined voting power of all classes
      of Stock of the Company or any Subsidiary taking into account the attribution
      rules of Section 425(d) of the Code, then the Committee shall set the option
      price per share of Stock at 110% of the option price determined pursuant to
      subsection (1) hereof.

    


            (d)   Exercise
      of Nonqualified Stock Option The Nonqualified Stock option-Agreement may
      provide that the option may be exercised in whole or in part at any time or
      times during the option period.

    


            (e)   Exercise
      During Employment or Board Tenure. Unless otherwise provided under the terms
      of a Nonqualified Stock Option Agreement, a Nonqualified Stock option granted
      to
      a Key Employee or Director may be exercised by an optionee only while he is
      an
      employee or Director of the Company or a Subsidiary and has maintained
      continuous status as an employee or Director since the date of the grant of
      the
      Nonqualified Stock Option, except if his continuous employment or directorship
      is terminated by reason of the optionee's voluntary termination of employment
      or
      directorship, disability or death. If the continuous employment or directorship
      of an optionee is terminated as a result of the optionee's voluntary
      termination, he may, but only within a period of 90 days beginning the date
      following the date of such termination of employment or directorship (and no
      later than the date the Nonqualified Stock Option would otherwise expire),
      exercise his option to the extent that he was entitled to exercise it at the
      date of such termination. If the continuous employment or directorship of an
      optionee is terminated as a result of optionee's disability, he may, but only
      within the one year period from the date of such termination of employment
      or
      directorship (and no later than the date the Incentive Stock Option would
      otherwise expire), exercise his option to the extent he was entitled to exercise
      it at the date of such termination. If the continuous employment or directorship
      of an optionee is terminated by death, then to the extent that the optionee
      would have been entitled to exercise the Nonqualified Stock option immediately
      prior to his death, such Nonqualified Stock option of a deceased optionee may
      be
      exercised within 90 days from the date of his death (but no later than the
      date
      on which such Nonqualified Stock Option would otherwise expire) by the person
      or
      persons (including his estate) to whom his rights under such NonQualified Stock
      option shall have passed by will or by the laws of descent and distribution.
      Termination of continuous employment or directorship for any other reason shall
      result in cancellation of the Nonqualified Stock option.

    


              The
      terms "continuous employment" and "continuous status as an employee" mean the
      absence of any interruption or termination of employment with the Company or
      with any present or future Subsidiary. Employment shall not be considered
      interrupted in the case of transfers between the Company and any Subsidiary
      or
      between Subsidiaries, nor in the case of any military leave or any approved
      leave of absence which the committee, in its discretion, treats as a period
      of
      employment.

    


            The
      terms "continuous directorship" and "continuous status as a Director" mean
      the
      absence of any interruption or termination as a Director of the Company or
      with
      any present or future Subsidiary. Directorship shall not be considered
      interrupted in the case of transfers between the Company and any Subsidiary
      or
      between Subsidiaries.

    


            (f)   Non-transferability.
      No Nonqualified Stock Option granted to a Key Employee or Director under the
      Plan shall be transferrable other than by will or by the laws of descent and
      distribution. During the lifetime of the optionee, a Nonqualified Stock Option
      shall be exercisable only by him.

    


            (g)   No
      Rights as Shareholder. No optionee shall have any rights as a shareholder
      with respect to any shares of Stock subject to his Nonqualified Stock Option
      prior to the date of issuance to him of a certificate or certificates for such
      shares.

    


            (h)   No
      Rights to Continued Employment or Directorship. The Plan and any
      Nonqualified Stock Option granted pursuant to Section 3 of this Article III
      shall not confer upon any Key Employee or Director any right with respect to
      continuance of employment by or as a Director of the Company or any subsidiary
      nor shall they interfere in any way with the right of any party to terminate
      his
      employment or directorship at any time.

    


         5.   Disposition
      of Shares. No share of Stock acquired as a result of the exercise of a
      Nonqualified Stock Option granted under the Plan shall be subject to any
      restrictions on transferability or otherwise.

    


    IV.
      EXERCISE AND PURCHASE PROVISIONS

    


         1.   Limitation
      on Exercise of options. Each option granted under the Plan shall provide
      that the option may not he exercised in whole or in part by the optionee for
      less than 100 shares of Stock unless only less than 100 shares of Stock remain
      subject to the option. In addition, an option may not be exercised for a
      fractional share.

    


         2.   Payment
      of-Purchase Price upon Exercise of Option. Each option granted under the
      Plan shall provide that the purchase price of the shares as to which an option
      is exercised will be paid to the Company at the time of exercise, either in
      cash
      or in Stock already owned by the optionee having a total fair market value,
      as
      determined by the Committee, equal to the purchase price, or a combination
      of
      cash and Stock having a total fair market value, as so determined, equal to
      the
      purchase price.

    


         3.   Procedure
      for Exercising Options. Each option granted under the Plan shall be
      exercisable at such times and under such conditions as shall be permissible
      under the terms of the Plan and the Incentive Stock Option Agreement or the
      Nonqualified Stock Option Agreement, as the case may be.

    


         An
      option may be exercised, subject to the applicable provisions of this Plan
      relative to its termination and limitations on its exercise, from time to time
      only by (i) written notice of intent to exercise the option with respect to
      a
      specified number of shares and (ii) payment to the Company (contemporaneously
      with delivery of each such notice) of the option price as provided in Section
      1
      hereof. Each such notice and payment shall be delivered, or mailed by prepaid
      registered or certified mail, addressed to the Treasurer of the Company at
      its
      executive offices.

    


    V.
      MISCELLANEOUS PROVISIONS

    


         1.   Adjustments
      in Event of Change in Common Stock. In the event of any change in the Common
      Stock of the Company by reason of any stock dividend, recapitalization,
      reorganization, merger, consolidation, split-up, combination, or exchange of
      shares, or rights offering to purchase Common Stock at a price substantially
      below fair market value, or of any similar change affecting the Stock, the
      number and kind of shares which thereafter may be optioned
      and sold under the Plan pursuant to Articles II and III hereof and the number
      and kind of shares subject to option in outstanding option agreements and the
      purchase price per share thereof shall he appropriately adjusted consistent
      with
      such change in such manner as the Committee may deem equitable to prevent
      substantial dilution or enlargement of the rights granted to, or available
      for,
      participants in the Plan.

    


         2.   Compliance
      With Other Laws and Regulations The Plan, the grant and exercise of options
      thereunder and the obligations of the Company to sell and deliver shares under
      such options, shall be subject to all applicable federal and state laws, rules
      and regulations and to such approvals by any government or regulatory agency
      as
      may he required. The Company shall not be required to issue or deliver any
      certificates for shares of Stock prior to the completion of any registration
      or
      qualification of such shares under any federal or state law, or any ruling
      or
      regulation of any government body which the Company shall, in its sole
      discretion, determine to be necessary or advisable.

    


         3.   Modification
      of Options. At any time and from time to time the Board of Directors of the
      Company may authorize the modification of any outstanding option, provided
      no
      such modification, extension or renewal shall confer on the holder of said
      option any right or benefit which could not he conferred on him by the grant
      of
      a new option at such time or impair the option without the consent of the holder
      of the option.

    


         4.   Amendment
      and Termination of the Plan. The Board of Directors of the Company may
      alter, suspend or discontinue the Plan except that no action of the Board may
      increase(other than as provided in Section 1 hereof) the maximum number of
      shares permitted to be optioned under the Plan, reduce the minimum option price
      provided for in Section 4(c) of Article II or extend the period within which
      options may he exercised, unless such action of the Board shall be subject
      to
      approval or ratification by the shareholders of the Company.

    


         5.   Effective
      Date of the Plan. The effective date of the Plan shall be the date of its
      adoption on by the Board of Directors of the Company, but such adoption shall
      be
      subject to approval and ratification of a majority of the shareholders of the
      Company entitled to vote. Notwithstanding any provision hereof to the contrary,
      this Plan shall not take effect unless the Company purchases all of the issued
      and outstanding stock of Bethel Savings Bank FSB.

    


         6.   Interpretation
      of Article II Options. The terms of this Plan which relate to the grant of
      an Incentive Stock option to a Key Employee are subject to all present and
      future rules and regulations of the Secretary of the Treasury or his delegate
      regarding the qualifications of incentive stock options under Section 422A
      of
      the Code. If any such provision of the Plan conflicts with any such rule or
      regulation, then the provision of the Plan shall be void and of no force and
      effect.

    


    


    


    AMENDMENT
      ONE TO BETHEL BANCORP 1989 STOCK OPTION PLAN

    


           Amendment
      One made by Bethel Bancorp (the "Company") to the Bethel Bancorp 1989 Stock
      Option Plan (the "Plan").

     

           1.   Section
      5 of Article II shall be amended by deleting Section 5 of Article II in its
      entirety and substituting therefor the following Section 5 of Article
      II:

    


           "5.   Disposition
      of Shares by Key Employees. With respect to shares of Stock acquired as a
      result of the exercise of an Incentive Stock Option, any disposition of such
      shares other than by will or by the laws of descent and distribution before
      the
      later of the expiration of the two-year period beginning on the date such
      Incentive Stock Option was granted or the expiration of the one-year period
      beginning on the date of the transfer of such share pursuant to such exercise,
      will not be prohibited by the Plan, but may disqualify the disposition from
      receiving favorable tax treatment under Section 421(a) of the
      Code."

     

           2.   Section
      6 of Article V shall be amended by deleting Section 6 of Article V in its
      entirety and substituting therefor the following Section 6 of Article
      V:


           "6.   Interpretation
      of Incentive Stock Options. The terms of this Plan which relate to the grant
      of Incentive Stock Options to Key Employees are intended to comply with rules
      and regulations regarding the qualification of Incentive Stock Options under
      Section 422 of the Code, and the Plan shall be interpreted and construed
      accordingly. Except with respect to certain disqualifying dispositions of Stock
      acquired as a result of the exercise of an Incentive Stock Option, which are
      not
      prohibited by the Plan, if a provision of the Plan conflicts with any such
      rule
      or regulation, then the provision of the Plan shall be void and of no force
      and
      effect."

    


           3.   Section
      4(c) of Article III of the Plan shall be amended by deleting Section 4(c) of
      Article III in its entirety and substituting therefor the following Section
      4(c)
      of Article III:

    


           "(c)   Non-qualified
      Stock Option Price. The option price per share of Stock shall be determined
      by the Committee at the time any Non-qualified Stock Option is granted and
      shall
      not be less than the fair market value of one share of Stock on the date the
      Non-qualified Stock Option is granted."

    


           4.   Amendment
      One shall be effective as of the date hereof.

    


           IN
      WITNESS WHEREOF, the Company has caused this Amendment One to be executed by
      its
      duly authorized President as of the ____day of________,1994.

    


                                                                                                               BETHEL
      BANCORP

     

     

                                                           By:
/s/ James
      D. Delamater

                                                                                                
James
      D.
      Delamater,President