Document:

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                                   EXHIBIT 4.1

             PULASKI FINANCIAL CORP. 2000 STOCK-BASED INCENTIVE PLAN

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                             PULASKI FINANCIAL CORP.
                         2000 STOCK-BASED INCENTIVE PLAN

1.    DEFINITIONS.
      -----------

      (a) "Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Holding Company,  as such terms are defined in Sections 424(e) and 424(f)
of the Code.

      (b) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory Stock Options, Incentive Stock Options and Stock Awards.

      (c) "Award Agreement" means an agreement  evidencing and setting forth the
terms of an Award.

      (d) "Bank" means Pulaski Bank.

      (e)  "Board of  Directors"  means the board of  directors  of the  Holding
Company.

      (f) "Change in Control" of the Holding  Company or the Bank means:  (i) an
event of a nature that would be required to be reported in response to Item 1(a)
of the current report on Form 8-K, as in effect on the date hereof,  pursuant to
Section 13 or 15(d) of the  Exchange  Act;  or (ii) an event  that  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,  the Federal  Deposit  Insurance Act,
and the rules and  regulations  promulgated by the Office of Thrift  Supervision
(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 of Directors shall substitute its judgment for
that of the OTS); or (iii) 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 voting securities of the Bank or the Holding Company representing
20% or more of the Bank's or the Holding Company's outstanding voting securities
or the right to acquire such securities  except for any voting securities of the
Bank purchased by the Holding Company and any voting securities purchased by any
employee  benefit  plan  of the  Holding  Company  or its  Subsidiaries,  or (B)
individuals  who  constitute  the Board of  Directors  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 a Nominating Committee solely
composed of members which are Incumbent Board members, shall be, for purposes of
this clause (B),  considered  as though he or she 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 or is effectuated in which the Bank or Holding Company is not
the resulting entity; provided, however, that such an event listed above will be
deemed to have  occurred  or to have been  effectuated  upon the  receipt of all
required federal  regulatory  approvals not including the lapse of any statutory
waiting  periods,  or (D) a proxy  statement  has  been  distributed  soliciting
proxies from  stockholders  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
with one or more corporations as a result of which the outstanding shares of the
class of securities  then subject to such plan or transaction  are exchanged for
or converted  into cash or property or securities  not issued by the Bank or the
Holding  Company,  or (E) a tender  offer is made for 20% or more of the  voting
securities  of the Bank or Holding  Company then  outstanding  by a person other
than the Bank or Holding Company.

      (g) "Code" means the Internal Revenue Code of 1986, as amended.

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      (h) "Committee" means the committee  designated by the Board of Directors,
pursuant to Section 2 of the Plan, to administer the Plan.

      (i) "Common  Stock"  means the common  stock of the Holding  Company,  par
value $.01 per share.

      (j) "Date of Grant" means the effective date of an Award.

      (k)  "Disability"  means any mental or physical  condition with respect to
which the Participant  qualifies for and receives benefits for under a long-term
disability  plan of the Holding  Company or an  Affiliate,  or in the absence of
such a long-term  disability  plan or coverage  under such a plan,  "Disability"
shall mean a physical or mental  condition  which, in the sole discretion of the
Committee,   is  reasonably  expected  to  be  of  indefinite  duration  and  to
substantially  prevent  the  Participant  from  fulfilling  his or her duties or
responsibilities to the Holding Company or an Affiliate.

      (l) "Effective Date" means the date the Plan is approved by shareholders.

      (m)  "Employee"  means any person  employed by the  Holding  Company or an
Affiliate.  Directors  who are  employed by the Holding  Company or an Affiliate
shall be considered Employees under the Plan.

      (n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      (o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.

      (p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:

            (i)   If the Common  Stock was traded on the date in question on The
                  Nasdaq  Stock Market then the Fair Market Value shall be equal
                  to the closing price reported for such date;

            (ii)  If the Common Stock was traded on a stock exchange on the date
                  in question,  then the Fair Market Value shall be equal to the
                  closing   price   reported   by   the   applicable   composite
                  transactions report for such date; and

            (iii) If neither of the foregoing provisions is applicable, then the
                  Fair Market Value shall be determined by the Committee in good
                  faith on such basis as it deems appropriate.

      Whenever possible, the determination of Fair Market Value by the Committee
shall  be  based  on  the  prices  reported  in The  Wall  Street  Journal.  The
Committee's  determination  of Fair Market Value shall be conclusive and binding
on all persons.

      (q) "Holding Company" means Pulaski Financial Corp.

      (r)   "Incentive   Stock  Option"  means  a  stock  option  granted  to  a
Participant,  pursuant  to Section 7 of the Plan,  that is  intended to meet the
requirements of Section 422 of the Code.

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      (s)  "Non-Statutory  Stock  Option"  means a  stock  option  granted  to a
Participant  pursuant  to the terms of the Plan but which is not  intended to be
and is not  identified  as an Incentive  Stock Option or a stock option  granted
under the Plan which is intended to be and is identified  as an Incentive  Stock
Option but which does not meet the requirements of Section 422 of the Code.

      (t)  "Option"  means an  Incentive  Stock  Option or  Non-Statutory  Stock
Option.

      (u) "Outside  Director" means a member of the board(s) of directors of the
Holding  Company or an  Affiliate  who is not also an  Employee  of the  Holding
Company or an Affiliate.

      (v) "Participant" means any person who holds an outstanding Award.

      (w) "Plan" means this Pulaski  Financial  Corp. 2000 Stock-Based Incentive
Plan.

      (x) "Retirement" means retirement from employment with the Holding Company
or an Affiliate in accordance with the then current  retirement  policies of the
Holding  Company or Affiliate,  as applicable.  "Retirement"  with respect to an
Outside Director means the termination of service from the board(s) of directors
of the  Holding  Company  and any  Affiliate  following  written  notice to such
board(s) of directors of the Outside Director's intention to retire.

      (y)  "Stock Award"  means  an  Award  granted to a Participant pursuant to
Section 8 of the Plan.

      (z) "Termination for Cause" means  termination  because of a Participant'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  material  breach  of any  provision  of  any  employment
agreement  between  the Holding  Company  and/or any  subsidiary  of the Holding
Company and a Participant.

      (aa)  "Trust"  means a trust  established  by the  Board of  Directors  in
connection  with  this  Plan to hold  Common  Stock  or other  property  for the
purposes set forth in the Plan.

      (bb)  "Trustee"  means  any  person  or  entity  approved  by the Board of
Directors or its designee(s) to hold any of the Trust assets.

2.    ADMINISTRATION.
      --------------

      (a) The Committee  shall  administer the Plan. The Committee shall consist
of two or more  disinterested  directors  of the Holding  Company,  who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be  "disinterested"  only if he or she satisfies such  requirements as
the Securities and Exchange Commission may establish for non-employee  directors
administering  plans intended to qualify for exemption  under Rule 16b-3 (or its
successor) under the Exchange Act.

      (b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type,  number,  vesting
requirements  and other features and conditions of such Awards,  (iii) interpret
the Plan and Award  Agreements in all respects and (iv) make all other decisions
relating to the  operation of the Plan.  The  Committee  may adopt such rules or
guidelines  as it deems  appropriate  to  implement  the Plan.  The  Committee's
determinations under the Plan shall be final and binding on all persons.

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      (c)  Each  Award  shall  be  evidenced  by  a  written  agreement  ("Award
Agreement")  containing  such  provisions  as may be  required  by the  Plan and
otherwise  approved by the Committee.  Each Award Agreement  shall  constitute a
binding   contract   between  the  Holding  Company  or  an  Affiliate  and  the
Participant, and every Participant, upon acceptance of an Award Agreement, shall
be bound by the terms and restrictions of the Plan and the Award Agreement.  The
terms of each Award  Agreement  shall be in accordance  with the Plan,  but each
Award  Agreement  may  include  any  additional   provisions  and   restrictions
determined by the Committee,  in its  discretion,  provided that such additional
provisions and restrictions are not inconsistent  with the terms of the Plan. In
particular  and at a  minimum,  the  Committee  shall  set  forth in each  Award
Agreement: (i) the type of Award granted; (ii) the Exercise Price of any Option;
(iii) the number of shares subject to the Award; (iv) the expiration date of the
Award;  (v) the manner,  time, and rate (cumulative or otherwise) of exercise or
vesting of such  Award;  and (vi) the  restrictions,  if any,  placed  upon such
Award,  or upon  shares  which may be issued upon  exercise  of such Award.  The
Chairman of the  Committee  and such other  directors  and  officers as shall be
designated by the Committee are hereby authorized to execute Award Agreements on
behalf of the Company or an  Affiliate  and to cause them to be delivered to the
recipients of Awards.

      (d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any Award Agreement.

3.    TYPES OF AWARDS.
      ---------------

      The following Awards may be granted under the Plan:

      (a)   Non-Statutory Stock Options.
      (b)   Incentive Stock Options.
      (c)   Stock Awards.

4.    STOCK SUBJECT TO THE PLAN.
      -------------------------

      Subject to adjustment as provided in Section 13 of the Plan, the number of
shares  reserved for Awards under the Plan is 407,330.  Subject to adjustment as
provided  in Section 13 of the Plan,  the number of shares  reserved  hereby for
purchase  pursuant to the exercise of Options granted under the Plan is 290,950.
The number of the shares  reserved  for Stock  Awards is 116,380.  The shares of
Common Stock issued under the Plan may be either  authorized but unissued shares
or authorized shares previously issued and acquired or reacquired by the Trustee
or the  Holding  Company,  respectively.  To the extent  that  Options and Stock
Awards are granted  under the Plan,  the shares  underlying  such Awards will be
unavailable  for any other use  including  future  grants  under the Plan except
that,  to the extent  that  Stock  Awards or  Options  terminate,  expire or are
forfeited without having vested or without having been exercised, new Awards may
be made with respect to these shares.

5.    ELIGIBILITY.
      -----------

      Subject to the terms of the Plan,  all  Employees  and  Outside  Directors
shall be eligible to receive  Awards under the Plan. In addition,  the Committee
may grant  eligibility to consultants  and advisors of the Holding Company or an
Affiliate, as it sees fit.

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6.    NON-STATUTORY STOCK OPTIONS.
      ---------------------------

      The  Committee  may,  subject  to the  limitations  of the  Plan  and  the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant  Non-Statutory  Stock Options to eligible  individuals upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Non-Statutory Stock Option.  However,  the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Terms of  Non-statutory  Stock Options.  The Committee shall determine
          --------------------------------------
the term during which a Participant may exercise a  Non-Statutory  Stock Option,
but in no event may a Participant  exercise a  Non-Statutory  Stock  Option,  in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each  Non-Statutory  Stock Option, or any
part  thereof,   first  becomes  exercisable  and  any  terms  or  conditions  a
Participant  must satisfy in order to exercise each Non- Statutory Stock Option.
The shares of Common Stock  underlying  each  Non-Statutory  Stock Option may be
purchased in whole or in part by the  Participant at any time during the term of
such Non-Statutory Stock Option, or any portion thereof,  once the Non-Statutory
Stock Option becomes exercisable.

      (c)  Non-Transferability.  Unless otherwise determined by the Committee in
           -------------------
accordance  with this Section  6(c), a  Participant  may not  transfer,  assign,
hypothecate,  or  dispose  of in any  manner,  other than by will or the laws of
intestate succession,  a Non-Statutory Stock Option. The Committee may, however,
in its sole discretion,  permit transferability or assignment of a Non-Statutory
Stock Option if such transfer or assignment is, in its sole  determination,  for
valid estate  planning  purposes and such  transfer or  assignment  is permitted
under the Code and Rule 16b-3  under the  Exchange  Act.  For  purposes  of this
Section 6(c), a transfer for valid estate planning purposes includes, but is not
limited  to:  (a) a transfer  to a  revocable  intervivos  trust as to which the
Participant  is  both  the  settlor  and  trustee,  or  (b) a  transfer  for  no
consideration to: (i) any member of the Participant's Immediate Family, (ii) any
trust solely for the benefit of members of the  Participant's  Immediate Family,
(iii) any  partnership  whose only  partners  are  members of the  Participant's
Immediate Family, and (iv) any limited liability corporation or corporate entity
whose only members or equity owners are members of the  Participant's  Immediate
Family. For purposes of this Section 6(c),  "Immediate Family" includes,  but is
not  necessarily  limited to, a  Participant's  parents,  grandparents,  spouse,
children,  grandchildren,  siblings  (including  half bothers and sisters),  and
individuals  who are  family  members by  adoption.  Nothing  contained  in this
Section 6(c) shall be construed to require the Committee to give its approval to
any transfer or assignment of any Non-Statutory Stock Option or portion thereof,
and  approval to transfer or assign any  Non-Statutory  Stock  Option or portion
thereof does not mean that such approval will be given with respect to any other
Non-Statutory Stock Option or portion thereof. The transferee or assignee of any
Non-Statutory  Stock Option shall be subject to all of the terms and  conditions
applicable to such Non-Statutory  Stock Option immediately prior to the transfer
or  assignment  and shall be subject to any other  conditions  proscribed by the
Committee with respect to such Non-Statutory Stock Option.

      (d)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  upon the termination of a Participant's employment
or other service for any reason other than  Retirement,  Disability or death,  a
Change in Control,  or Termination for Cause,  the Participant may exercise only
those  Non-Statutory  Stock  Options that were  immediately  exercisable  by the
Participant at the date of such  termination  and only for a period of three (3)
months  following  the  date of such  termination,  or,  if  sooner,  until  the
expiration of the term of the Option.

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      (e) Termination of Employment or Service  (Retirement).  Unless  otherwise
          --------------------------------------------------
determined by the Committee,  in the event of a  Participant's  Retirement,  the
Participant  may  exercise  only those  Non-Statutory  Stock  Options  that were
immediately  exercisable  by the  Participant at the date of Retirement and only
for a period of one (1) year from the date of  Retirement  or, if sooner,  until
the expiration of the term of the Option.

      (f)  Termination of Employment or Service  (Disability  or Death).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of the  termination  of a
Participant's  employment  or other  service  due to  Disability  or death,  all
Non-Statutory  Stock Options held by such Participant shall  immediately  become
exercisable and remain exercisable for a period two (2) years following the date
of such  termination,  or, if sooner,  until the  expiration  of the term of the
Option.

      (g) Termination of Employment or Service  (Termination for Cause).  Unless
          -------------------------------------------------------------
otherwise  determined  by  the  Committee,  in  the  event  of  a  Participant's
Termination   for  Cause,   all  rights  with   respect  to  the   Participant's
Non-Statutory  Stock Options shall expire immediately upon the effective date of
such Termination for Cause.

      (h)  Acceleration  Upon a Change in  Control.  In the event of a Change in
           ---------------------------------------
Control all Non- Statutory Stock Options held by a Participant as of the date of
the Change in Control  shall  immediately  become  exercisable  and shall remain
exercisable until the expiration of the term of the Non-Statutory Stock Options,
regardless of termination of employment or service.

      (i)  Payment.  Payment  due  to  a  Participant  upon  the  exercise  of a
           -------
Non-Statutory Stock Option shall be made in the form of shares of Common Stock.

7.    INCENTIVE STOCK OPTIONS.
      -----------------------

      The  Committee  may,  subject  to the  limitations  of the  Plan  and  the
availability  of shares of Common Stock reserved but unawarded  under this Plan,
grant  Incentive  Stock Options to an Employee upon such terms and conditions as
it may determine to the extent such terms and conditions are consistent with the
following provisions:

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Incentive Stock Option.  However, the Exercise Price shall not be less than
100% of the  Fair  Market  Value  of the  Common  Stock  on the  Date of  Grant;
PROVIDED, HOWEVER, that if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning,  for purposes of Section 422 of the Code,
Common Stock  representing more than 10% of the total combined voting securities
of the Holding Company ("10% Owner"),  the Exercise Price shall not be less than
110% of the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Amounts of Incentive  Stock Options.  To the extent the aggregate Fair
          -----------------------------------
Market  Value of shares of Common Stock with  respect to which  Incentive  Stock
Options  that are  exercisable  for the first  time by an  Employee  during  any
calendar  year under the Plan and any other  stock  option  plan of the  Holding
Company  or an  Affiliate  exceeds  $100,000,  or such  higher  value  as may be
permitted  under  Section 422 of the Code,  such Options in excess of such limit
shall be treated as  Non-Statutory  Stock  Options.  Fair Market  Value shall be
determined  as of the Date of Grant with  respect to each such  Incentive  Stock
Option.

      (c) Terms of Incentive  Stock Options.  The Committee  shall determine the
          ---------------------------------
term during which a Participant may exercise an Incentive  Stock Option,  but in
no event may a Participant  exercise an Incentive  Stock Option,  in whole or in
part, more than ten (10) years from the Date of Grant; PROVIDED, HOWEVER, that

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if at the time an Incentive  Stock Option is granted to an Employee who is a 10%
Owner,  the  Incentive  Stock  Option  granted  to such  Employee  shall  not be
exercisable  after the expiration of five (5) years from the Date of Grant.  The
Committee shall also determine the date on which each Incentive Stock Option, or
any part  thereof,  first  becomes  exercisable  and any terms or  conditions  a
Participant  must satisfy in order to exercise each Incentive Stock Option.  The
shares of Common Stock  underlying  each Incentive Stock Option may be purchased
in whole or in part at any time during the term of such  Incentive  Stock Option
after such Option becomes exercisable.

      (d)  Non-Transferability.  No Incentive Stock Option shall be transferable
           -------------------
except  by will or the laws of  descent  and  distribution  and is  exercisable,
during his or her lifetime,  only by the Employee to whom the  Committee  grants
the Incentive Stock Option. The designation of a beneficiary does not constitute
a transfer of an Incentive Stock Option.

      (e) Termination of Employment  (General).  Unless otherwise  determined by
          ------------------------------------
the  Committee,  upon the  termination  of a  Participant's  employment or other
service for any reason other than  Retirement,  Disability or death, a Change in
Control,  or  Termination  for Cause,  the  Participant  may exercise only those
Incentive Stock Options that were immediately  exercisable by the Participant at
the date of such termination and only for a period of three (3) months following
the date of such termination, or, if sooner, until the expiration of the term of
the Option.

      (f) Termination of Employment (Retirement). Unless otherwise determined by
          --------------------------------------
the Committee, in the event of a Participant's  Retirement,  the Participant may
exercise only those Incentive Stock Options that were immediately exercisable by
the  Participant at the date of Retirement and only for a period of one (1) year
from the date of Retirement,  or, if sooner, until the expiration of the term of
the Option. Any Option originally  designated as an Incentive Stock Option shall
be treated as a  Non-Statutory  Stock  Option to the extent the Option  does not
otherwise  qualify as an Incentive  Stock Option  pursuant to Section 422 of the
Code.

      (g)  Termination  of Employment  (Disability or Death).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  in the event of the termination of a Participant's
employment  or other service due to  Disability  or death,  all Incentive  Stock
Options held by such Participant shall immediately become exercisable and remain
exercisable for a period two (2) years  following the date of such  termination,
or, if  sooner,  until the  expiration  of the term of the  Option.  Any  Option
originally  designated  as an  Incentive  Stock  Option  shall be  treated  as a
Non-Statutory  Stock Option to the extent the Option does not otherwise  qualify
as an Incentive Stock Option pursuant to Section 422 of the Code.

      (h) Termination of Employment  (Termination  for Cause).  Unless otherwise
          ---------------------------------------------------
determined  by the  Committee,  in the event of an  Employee's  Termination  for
Cause,  all rights under such  Employee's  Incentive  Stock Options shall expire
immediately upon the effective date of such Termination for Cause.

      (i)  Acceleration  Upon a Change in  Control.  In the event of a Change in
           ---------------------------------------
Control all Incentive  Stock Options held by a Participant as of the date of the
Change  in  Control  shall  immediately  become  exercisable  and  shall  remain
exercisable  until the  expiration  of the term of the  Incentive  Stock Options
regardless  of  termination  of  employment  or service.  Any Option  originally
designated  as an Incentive  Stock  Option  shall be treated as a  Non-Statutory
Stock Option to the extent the Option does not otherwise qualify as an Incentive
Stock Option pursuant to Section 422 of the Code.

      (j)  Payment.  Payment  due  to a  Participant  upon  the  exercise  of an
           -------
Incentive Stock Option shall be made in the form of shares of Common Stock.

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      (k)  Disqualifying  Dispositions.  Each Award Agreement with respect to an
           ---------------------------
Incentive  Stock Option shall require the Participant to notify the Committee of
any  disposition  of shares of Common Stock  issued  pursuant to the exercise of
such Option  under the  circumstances  described  in Section  421(b) of the Code
(relating  to  certain  disqualifying  dispositions)  within  10  days  of  such
disposition.

8.     STOCK AWARDS.
       ------------

      The Committee may make grants of Stock Awards,  which shall consist of the
grant of some number of shares of Common Stock, to a Participant upon such terms
and  conditions as it may determine to the extent such terms and  conditions are
consistent with the following provisions:

      (a)  Grants of the Stock  Awards.  Stock  Awards may only be made in whole
           ---------------------------
shares of Common  Stock.  Stock Awards may only be granted from shares  reserved
under the Plan and  available  for award at the time the Stock  Award is made to
the Participant.

      (b) Terms of the Stock Awards.  The Committee shall determine the dates on
          -------------------------
which  Stock  Awards  granted  to a  Participant  shall  vest  and any  terms or
conditions  which must be  satisfied  prior to the vesting of any Stock Award or
portion  thereof.  Any such  terms or  conditions  shall  be  determined  by the
Committee as of the Date of Grant.

      (c)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  upon the termination of a Participant's employment
or service for any reason other than  Retirement,  Disability or death, a Change
in Control,  or Termination for Cause, any Stock Awards in which the Participant
has not become vested as of the date of such termination  shall be forfeited and
any rights the Participant had to such Stock Awards shall become null and void.

      (d) Termination of Employment or Service  (Retirement).  Unless  otherwise
          --------------------------------------------------
determined by the Committee,  in the event of a  Participant's  Retirement,  any
Stock Awards in which the  Participant  has not become  vested as of the date of
Retirement  shall  be  forfeited  and any  rights  the  Participant  had to such
unvested Stock Awards shall become null and void.

      (e)  Termination of Employment or Service  (Disability  or Death).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of a  termination  of the
Participant's  service due to Disability or death all unvested Stock Awards held
by such Participant shall immediately vest as of the date of such termination.

      (f) Termination of Employment or Service  (Termination for Cause).  Unless
          -------------------------------------------------------------
otherwise  determined  by the  Committee,  in  the  event  of the  Participant's
Termination for Cause,  all Stock Awards in which the Participant had not become
vested as of the effective date of such Termination for Cause shall be forfeited
and any rights such  Participant  had to such unvested Stock Awards shall become
null and void.

      (g)  Acceleration  Upon a Change in  Control.  In the event of a Change in
           ---------------------------------------
Control all unvested Stock Awards held by a Participant shall immediately vest.

      (h)  Issuance  of  Certificates.   Unless  otherwise  held  in  Trust  and
           --------------------------
registered  in the name of the Trustee,  reasonably  promptly  after the Date of
Grant with  respect to shares of Common  Stock  pursuant to a Stock  Award,  the
Holding Company shall cause to be issued a stock certificate,  registered in the
name of the  Participant to whom such Stock Award was granted,  evidencing  such
shares;  provided,  that  the  Holding  Company  shall  not  cause  such a stock
certificate  to be issued  unless it has received a stock power duly endorsed in
blank with respect to such shares.  Each such stock  certificate  shall bear the
following legend:

                                      8

<PAGE> 10

            "The  transferability  of this  certificate  and the shares of stock
            represented  hereby  are  subject  to the  restrictions,  terms  and
            conditions (including forfeiture provisions and restrictions against
            transfer)  contained in the Pulaski Financial Corp. 2000 Stock-Based
            Incentive  Plan  and  Award  Agreement   entered  into  between  the
            registered  owner of such shares and Pulaski  Financial Corp. or its
            Affiliates. A copy of the Plan and Award Agreement is on file in the
            office of the Corporate Secretary of Pulaski Financial Corp. located
            at 12300 Olive Boulevard, St. Louis, Missouri 63141.

Such legend shall not be removed until the  Participant  becomes  vested in such
shares pursuant to the terms of the Plan and Award  Agreement.  Each certificate
issued pursuant to this Section 8(h), in connection with a Stock Award, shall be
held by the Holding Company or its Affiliates,  unless the Committee  determines
otherwise.

      (i)  Non-Transferability.  Except to the extent permitted by the Code, the
           -------------------
rules  promulgated  under  Section  16(b) of the Exchange  Act or any  successor
statutes or rules:

            (i)   The  recipient  of a Stock  Award  shall not  sell,  transfer,
                  assign,  pledge,  or otherwise  encumber shares subject to the
                  Stock  Award until full  vesting of such shares has  occurred.
                  For purposes of this  section,  the  separation  of beneficial
                  ownership  and  legal  title  through  the  use of any  "swap"
                  transaction is deemed to be a prohibited encumbrance.

            (ii)  Unless determined otherwise by the Committee and except in the
                  event of the  Participant's  death or  pursuant  to a domestic
                  relations  order, a Stock Award is not transferable and may be
                  earned in his or her lifetime only by the  Participant to whom
                  it is granted. Upon the death of a Participant,  a Stock Award
                  is   transferable   by  will  or  the  laws  of  descent   and
                  distribution.  The  designation  of a  beneficiary  shall  not
                  constitute a transfer.

            (iii) If a recipient  of a Stock Award is subject to the  provisions
                  of  Section 16 of the  Exchange  Act,  shares of Common  Stock
                  subject  to such  Stock  Award may not,  without  the  written
                  consent of the  Committee  (which  consent may be given in the
                  Award Agreement),  be sold or otherwise disposed of within six
                  (6) months following the date of grant of the Stock Award.

      (j) Accrual of Dividends. To the extent Stock Awards are held in Trust and
          --------------------
registered in the name of the Trustee,  unless otherwise  specified by the Trust
agreement,  whenever  shares  of  Common  Stock  underlying  a Stock  Award  are
distributed  to a  Participant  or  beneficiary  thereof  under the  Plan,  such
Participant  or beneficiary  shall also be entitled to receive,  with respect to
each such  share  distributed,  a payment  equal to any cash  dividends  and the
number of shares of Common Stock equal to any stock dividends, declared and paid
with respect to a share of the Common  Stock if the record date for  determining
shareholders  entitled  to receive  such  dividends  falls  between the date the
relevant  Stock  Award was  granted  and the date the  relevant  Stock  Award or
installment  thereof is issued.  There shall also be  distributed an appropriate
amount of net earnings,  if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.

                                      9

<PAGE> 11

      (k) Voting of Stock  Awards.  After a Stock Award has been granted but for
          -----------------------
which the shares  covered by such Stock Award have not yet been  vested,  earned
and distributed to the Participant  pursuant to the Plan, the Participant  shall
be entitled  to vote or to direct the Trustee to vote,  as the case may be, such
shares of Common  Stock  which the Stock Award  covers  subject to the rules and
procedures  adopted by the Committee for this purpose and in a manner consistent
with the Trust agreement.

      (l) Payment.  Payment due to a Participant  upon the redemption of a Stock
          -------
Award shall be made in the form of shares of Common Stock.

9.    DEFERRED PAYMENTS.
      -----------------

      The  Committee,  in its  discretion,  may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such  payment.  The  Committee  shall  determine  the  terms  and
conditions of any such deferral, including the period of deferral, the manner of
deferral,  and the method for measuring  appreciation on deferred  amounts until
their payout.

10.   METHOD OF EXERCISE OF OPTIONS.
      -----------------------------

      Subject to any applicable Award Agreement,  any Option may be exercised by
the  Participant in whole or in part at such time or times,  and the Participant
may make  payment of the Exercise  Price in such form or forms  permitted by the
Committee,  including,  without limitation,  payment by delivery of cash, Common
Stock  or  other  consideration  (including,  where  permitted  by law  and  the
Committee,  Awards) having a Fair Market Value on the day immediately  preceding
the exercise date equal to the total Exercise  Price,  or by any  combination of
cash,  shares of Common  Stock and other  consideration,  including  exercise by
means of a cashless exercise arrangement with a qualifying broker-dealer, as the
Committee may specify in the applicable Award Agreement.

11.   RIGHTS OF PARTICIPANTS.
      ----------------------

      No Participant  shall have any rights as a shareholder with respect to any
shares of Common  Stock  covered by an Option  until the date of  issuance  of a
stock  certificate  for such Common Stock.  Nothing  contained  herein or in any
Award  Agreement  confers on any person any right to  continue  in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the  Holding  Company or an  Affiliate  to  terminate  a  Participant's
services.

12.   DESIGNATION OF BENEFICIARY.
      --------------------------

      A Participant  may, with the consent of the Committee,  designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Holding Company and may be revoked in writing. If a Participant
fails effectively to designate a beneficiary, then the Participant's estate will
be deemed to be the beneficiary.

13.   DILUTION AND OTHER ADJUSTMENTS.
      ------------------------------

      In the event of any change in the  outstanding  shares of Common  Stock by
reason of any stock dividend or split, recapitalization,  merger, consolidation,
spin-off,  reorganization,  combination or exchange of shares,  or other similar
corporate  change,  or other increase or decrease in such shares without receipt
or

                                      10

<PAGE> 12

payment  of  consideration   by  the  Holding  Company,   or  in  the  event  an
extraordinary  capital  distribution  is  made,  the  Committee  may  make  such
adjustments to previously  granted Awards, to prevent dilution,  diminution,  or
enlargement  of the  rights  of  the  Participant,  including  any or all of the
following:

      (a)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other  securities that may underlie future Awards under the
            Plan;

      (b)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other securities  underlying  Awards already made under the
            Plan;

      (c)   adjustments in the Exercise Price of  outstanding  Incentive  and/or
            Non-Statutory Stock Options.

No such  adjustments  may,  however,  materially  change  the value of  benefits
available to a Participant  under a previously  granted Award.  All Awards under
this Plan  shall be  binding  upon any  successors  or  assigns  of the  Holding
Company.  Notwithstanding  the above, in the event of an  extraordinary  capital
distribution,  any adjustment under this Section 13 shall be subject to required
approval by the Office of Thrift Supervision.

14.   TAXES.
      -----

      (a)  Whenever  under this Plan,  cash or shares of Common  Stock are to be
delivered  upon  exercise or payment of an Award or any other event with respect
to rights and benefits hereunder,  the Committee shall be entitled to require as
a condition of delivery (i) that the Participant  remit an amount  sufficient to
satisfy all federal,  state,  and local  withholding  tax  requirements  related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any  combination of the foregoing;  PROVIDED,  HOWEVER,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.  Furthermore,  Participants  may direct the Committee to instruct the
Trustee to sell shares of Common  Stock to be  delivered  upon the payment of an
Award to satisfy tax obligations.

      (b) If any  disqualifying  disposition  described  in Section 7(k) is made
with respect to shares of Common Stock acquired under an Incentive  Stock Option
granted  pursuant to this Plan,  or any  transfer  described  in Section 6(c) is
made,  or any election  described in Section 15 is made,  then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its  Affiliates an amount  sufficient to satisfy all federal,  state,
and local withholding  taxes thereby  incurred;  provided that, in lieu of or in
addition to the foregoing,  the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation  otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.

15.   NOTIFICATION UNDER SECTION 83(b).
      --------------------------------

      The  Committee  may,  on the Date of Grant or any later  date,  prohibit a
Participant  from making the election  described below. If the Committee has not
prohibited  such  Participant  from making such  election,  and the  Participant
shall, in connection with the exercise of any Option,  or the grant of any Stock
Award,  make the  election  permitted  under  Section  83(b) of the  Code,  such
Participant shall notify the Committee of such election within 10 days of filing
notice of the election with the Internal Revenue Service, in addition

                                      11

<PAGE> 13

to any filing and notification required pursuant to regulations issued under the
authority of Section 83(b) of the Code.

16.   AMENDMENT OF THE PLAN AND AWARDS.
      --------------------------------

      (a) Except as provided in  paragraph  (c) of this Section 16, the Board of
Directors  may at any time,  and from time to time,  modify or amend the Plan in
any respect, prospectively or retroactively;  PROVIDED, HOWEVER, that provisions
governing  grants of Incentive  Stock Options shall be submitted for shareholder
approval to the extent  required by law,  regulation  or  otherwise.  Failure to
ratify or approve amendments or modifications by shareholders shall be effective
only as to the specific amendment or modification requiring such ratification or
approval. Other provisions of this Plan will remain in full force and effect. No
such termination, modification or amendment may adversely affect the rights of a
Participant  under an outstanding  Award without the written  permission of such
Participant.

      (b) Except as provided in paragraph  (c) of this Section 16, the Committee
may  amend  any  Award  Agreement,  prospectively  or  retroactively;  PROVIDED,
HOWEVER,  that no such  amendment  shall  adversely  affect  the  rights  of any
Participant  under an  outstanding  Award  without the  written  consent of such
Participant.

      (c) In no event shall the Board of  Directors  amend the Plan or shall the
Committee amend an Award Agreement in any manner that has the effect of:

            (i)   Allowing any Option to be granted with an Exercise Price below
                  the  Fair  Market  Value  of the  Common  Stock on the Date of
                  Grant.

            (ii)  Allowing the Exercise Price of any Option  previously  granted
                  under the Plan to be reduced subsequent to the Date of Award.

      (d)   Notwithstanding  anything in this Plan or any Award Agreement to the
            contrary,  if any  Award or right  under  this  Plan  would,  in the
            opinion of the Holding Company's accountants, cause a transaction to
            be ineligible for pooling of interest accounting that would, but for
            such Award or right, be eligible for such accounting treatment,  the
            Committee,  at its  discretion,  may modify,  adjust,  eliminate  or
            terminate the Award or right so that pooling of interest  accounting
            is available.

17.   EFFECTIVE DATE OF PLAN.
      ----------------------

      The Plan shall become effective upon shareholder approval.

18.   TERMINATION OF THE PLAN.
      -----------------------

      The right to grant Awards under the Plan will  terminate  upon the earlier
of: (i) ten (10) years after the Effective  Date;  (ii) the issuance of a number
of  shares  of  Common  Stock  pursuant  to  the  exercise  of  Options  or  the
distribution  of Stock  Awards is  equivalent  to the  maximum  number of shares
reserved under the Plan as set forth in Section 4 hereof. The Board of Directors
has the right to suspend or  terminate  the Plan at any time,  provided  that no
such  action  will,  without the consent of a  Participant,  adversely  affect a
Participant's vested rights under a previously granted Award.

                                      12

<PAGE> 14

19.   APPLICABLE LAW.
      --------------

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

20.   TREATMENT OF UNVESTED, UNEXERCISED, OR NON-EXERCISABLE AWARDS UPON
      ------------------------------------------------------------------
      A CHANGE IN CONTROL.
      -------------------

      In the event of a Change in Control where the Holding  Company or the Bank
is not the  surviving  entity,  the Board of  Directors  of the Holding  Company
and/or the Bank, as applicable, shall require that the successor entity take one
of the following  actions with respect to all Awards held by Participants at the
date of the Change in Control:

      (a) Assume the Awards with the same terms and conditions as granted to the
Participant under this Plan; or

      (b) Replace the Awards with comparable Awards, subject to the same or more
favorable  terms and  conditions as the Award granted to the  Participant  under
this Plan, whereby the Participant will be granted common stock or the option to
purchase common stock of the successor entity; or

      (c) Replace the Awards with an immediate cash payment of equivalent value.

                                      13<PAGE> 1

                    SOUTH JERSEY FINANCIAL CORPORATION, INC.

                             STOCK OPTION AGREEMENT

      STOCK OPTION AGREEMENT, dated as of March 15, 2000 ("Agreement"), by and
between South Jersey Financial Corporation, Inc., a Delaware corporation
("Issuer"), and Richmond County Financial Corp. a Delaware corporation
("Grantee").

                                    RECITALS

      A.  THE AGREEMENT AND PLAN OF MERGER. Grantee and Issuer have entered into
an Agreement and Plan of Merger, dated as of March 15, 2000 ("Merger
Agreement"), providing for, among other things, the merger of a wholly owned
subsidiary of Grantee with and into Issuer, with Issuer being the surviving
corporation and becoming a wholly owned subsidiary of Grantee.

      B. CONDITION TO AGREEMENT AND PLAN OF MERGER. As a condition and an
inducement to Grantee's execution and delivery of the Merger Agreement, Grantee
has required that Issuer agree, and Issuer has agreed, to grant Grantee the
Option (as hereinafter defined).

      NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Issuer and
Grantee agree as follows:

      1. DEFINED TERMS. Capitalized terms that are used but not defined in this
Agreement shall have the meanings ascribed to such terms in the Merger
Agreement.

      2. GRANT OF OPTION. Subject to the terms and conditions set forth in this
Agreement, Issuer hereby grants to Grantee an irrevocable option ("Option") to
purchase up to 681,290 shares of common stock, par value $.01 per share ("Issuer
Common Stock"), of Issuer (as adjusted as set forth herein, the "Option Shares,"
which shall include the Option Shares before and after any transfer of such
Option Shares, but in no event shall the number of Option Shares for which this
Option is exercisable exceed 19.9% of the issued and outstanding shares of
Issuer Common Stock), at a purchase price per Option Share (as adjusted as set
forth herein, the "Purchase Price") equal to $15.72.

      3.    EXERCISE OF OPTION.

            (a) Provided that (i) Grantee or Holder (as hereinafter defined), as
applicable, shall not be in material breach of the agreements or covenants
contained in this Agreement or the Merger Agreement, and (ii) no preliminary or
permanent injunction or other order against the delivery of shares covered by
the Option issued by any court of competent jurisdiction in the

<PAGE> 2

United States shall be in effect, the Holder may exercise the Option, in whole
or in part, at any time and from time to time, following the occurrence of a
Purchase Event (as hereinafter defined); provided, that, the Option shall
terminate and be of no further force or effect upon the earliest to occur of (A)
the Effective Time, (B) termination of the Merger Agreement in accordance with
the terms thereof prior to the occurrence of a Purchase Event or a Preliminary
Purchase Event other than a termination thereof by Grantee pursuant to Section
6.1(e) of the Merger Agreement (a termination of the Merger Agreement by Grantee
pursuant to Section 6.1(e) of the Merger Agreement, being referred to herein as
a "Default Termination"), (C) 18 months after a Default Termination or (D) 18
months after termination of the Merger Agreement (other than a Default
Termination) following the occurrence of a Purchase Event or a Preliminary
Purchase Event; provided, however, that any purchase of shares upon exercise of
the Option shall be subject to compliance with applicable law; provided further,
however, that if the Option cannot be exercised on any day an injunction, order
or similar restraint issued by a court of competent jurisdiction, the period
during which the Option may be exercised shall be extended so that the Option
shall expire no earlier than the tenth business day after such injunction, order
or restraint shall have been dissolved or when such injunction, order or
restraint shall have become permanent and no longer subject to appeal, as the
case may be. The term "Holder" shall mean the holder or holders of the Option
from time to time, and which initially is Grantee. The rights set forth in
Sections 8 and 9 of this Agreement shall terminate when the right to exercise
the Option and Substitute Option terminate (other than as a result of a complete
exercise of the Option) as set forth herein.

            (b) As used herein, a "Purchase Event" means any of the following
events:

                  (i) Without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an intention to
authorize, recommend or propose, or Issuer shall have entered into an agreement
with any person (other than Grantee or any subsidiary of Grantee) to effect (A)
a merger, consolidation or similar transaction involving Issuer or any of its
significant subsidiaries, (B) the disposition, by sale, lease, exchange or
otherwise, of assets or deposits of Issuer or any of its significant
subsidiaries representing in either case 10% or more of the consolidated assets
or deposits of Issuer and its subsidiaries, other than in the ordinary course of
business, or (C) the issuance, sale or other disposition by Issuer of (including
by way of merger, consolidation, share exchange or any similar transaction)
securities representing 10% or more of the voting power of Issuer or any of its
significant subsidiaries (each of (A), (B) or (C), an "Acquisition
Transaction"); or

                  (ii) Any person (other than Grantee or any subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended ("Exchange
Act")) of, or the right to acquire beneficial ownership of, or any "group" (as
such term is defined in Section 13(d)(3) of the Exchange Act), other than a
group of which Grantee or any subsidiary of Grantee is a member, shall have been
formed which beneficially owns, or has the right to acquire beneficial ownership
of, 10% or more of the voting power of Issuer or any of its significant
subsidiaries.

                                      2

<PAGE> 3

            (c) As used herein, a "Preliminary Purchase Event" means any of the
following events:

                  (i) Any person (other than Grantee or any subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2 under the
Exchange Act) or shall have filed a registration statement under the Securities
Act of 1933, as amended, ("Securities Act"), with respect to, a tender offer or
exchange offer to purchase any shares of Issuer Common Stock such that, upon
consummation of such offer, such person would own or control 10% or more of the
then outstanding shares of Issuer Common Stock (such an offer being referred to
herein as a "Tender Offer" or an "Exchange Offer," respectively); or

                  (ii) The stockholders of Issuer shall not have approved the
Merger Agreement by the requisite vote at the meeting of the stockholders of the
Issuer required to be called to approve the Merger Agreement ("Issuer Meeting"),
the Issuer Meeting shall not have been held or shall have been canceled prior to
termination of the Merger Agreement or Issuer's Board of Directors shall have
withdrawn or modified in a manner adverse to Grantee the recommendation of
Issuer's Board of Directors with respect to the Merger Agreement, in each case
after it shall have been publicly announced that any person (other than Grantee
or any subsidiary of Grantee) shall have (A) made, or disclosed an intention to
make, a bona fide proposal to engage in an Acquisition Transaction, (B)
commenced a Tender Offer or filed a registration statement under the Securities
Act with respect to an Exchange Offer or (C) filed an application (or given a
notice), whether in draft or final form, under the Bank Holding Company Act of
1956, as amended ("BHC Act"), the Home Owners' Loan Act, as amended ("HOLA"),
the Bank Merger Act, as amended ("BMA") or the Change in Bank Control Act of
1978, as amended ("CBCA"), for approval to engage in an Acquisition Transaction;
or

                  (iii) Any person (other than Grantee or any subsidiary of
Grantee) shall have made a bona fide proposal to Issuer or its stockholders by
public announcement, or written communication that is or becomes the subject of
public disclosure, to engage in an Acquisition Transaction; or

                  (iv) After a proposal is made by a third party to Issuer or
its stockholders to engage in an Acquisition Transaction, or such third party
states its intention to the Issuer to make such a proposal if the Merger
Agreement terminates, and thereafter Issuer shall have breached any
representation, warranty, covenant or agreement contained in the Merger
Agreement and such breach would entitle Grantee to terminate the Merger
Agreement under Section 6.1(e) thereof (without regard to the cure period
provided for therein unless such cure is promptly effected without jeopardizing
consummation of the Merger pursuant to the terms of the Merger Agreement).

      As used in this Agreement, the term "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.

                                      3

<PAGE> 4

            (d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event of which it has
knowledge, it being understood that the giving of such notice by Issuer shall
not be a condition to the right of Holder to exercise the Option.

            (e) In the event Holder wishes to exercise the Option, it shall send
to Issuer a written notice (the "Option Notice," the date of which being herein
referred to as the "Notice Date") specifying (i) the total number of Option
Shares it intends to purchase pursuant to such exercise and (ii) a place and
date not earlier than three business days nor later than 15 business days from
the Notice Date for the closing ("Closing") of such purchase ("Closing Date");
provided, that the first Option Notice shall be sent to Issuer within 180 days
after the first Purchase Event of which Grantee has been notified. If prior
notification to or approval of any Governmental Entity is required in connection
with any such purchase, Issuer shall cooperate with the Holder in the filing of
the required notice of application for approval and the obtaining of such
approval, and the Closing shall occur promptly following such regulatory
approvals and any mandatory waiting periods. Any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto.

      4.    PAYMENT AND DELIVERY OF CERTIFICATES.

            (a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified in Section 13(f)
of this Agreement; provided that failure or refusal of Issuer to designate a
bank account shall not preclude Holder from exercising the Option.

            (b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a) of
this Agreement, (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all liens (as defined in the
Merger Agreement) and subject to no preemptive rights, and (B) if the Option is
exercised in part only, an executed new agreement with the same terms as this
Agreement evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder, and (ii) Holder shall deliver to Issuer a
letter agreeing that Holder shall not offer to sell or otherwise dispose of such
Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.

            (c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as follows:

                                      4

<PAGE> 5

THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF MARCH 15, 2000. A COPY OF
SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT
BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.

It is understood and agreed that the portion of the above legend relating to the
Securities Act shall be removed by delivery of substitute certificate(s) without
such legend if Holder shall have delivered to Issuer a copy of a letter from the
staff of the Securities and Exchange Commission ("SEC"), or an opinion of
counsel in form and substance reasonably satisfactory to Issuer and its counsel,
to the effect that such legend is not required for purposes of the Securities
Act.

            (d) Upon the giving by Holder to Issuer of an Option Notice, the
tender of the applicable purchase price in immediately available funds and the
tender of this Agreement to Issuer, Holder shall be deemed to be the holder of
record of the shares of Issuer Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall then be closed or
that certificates representing such shares of Issuer Common Stock shall not then
be actually delivered to Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 4 in the name of Holder or its assignee,
transferee or designee.

            (e) Issuer agrees (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Issuer Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or conditions to be observed or performed hereunder by
Issuer, (iii) promptly to take all action as may from time to time be required
(including (A) complying with all premerger notification, reporting and waiting
period requirements and (B) in the event prior approval of or notice to any
Governmental Entity is necessary before the Option may be exercised, cooperating
fully with Holder in preparing such applications or notices and providing such
information to such Governmental Entity as it may require) in order to permit
Holder to exercise the Option and Issuer duly and effectively to issue shares of
Issuer Common Stock pursuant hereto and (iv) promptly to take all action
provided herein to protect the rights of Holder against dilution.

      5.  REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents and
warrants to Grantee (and Holder, if different than Grantee) as follows:

                                      5

<PAGE> 6

            (a) CORPORATE AUTHORITY. Issuer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Issuer, and no other corporate
proceedings on the part of Issuer are necessary to authorize this Agreement or
to consummate the transactions contemplated by this Agreement. This Agreement
has been duly and validly executed and delivered by Issuer.

            (b) BENEFICIAL OWNERSHIP. To the best knowledge of Issuer, as of the
date of this Agreement, no person or group has beneficial ownership of more than
10% of the issued and outstanding shares of Issuer Common Stock.

            (c) SHARES RESERVED FOR ISSUANCE. Capital Stock. Issuer has taken
all necessary corporate action to authorize and reserve and permit it to issue,
and at all times from the date hereof through the termination of this Agreement
in accordance with its terms, will have reserved for issuance upon the exercise
of the Option, that number of shares of Issuer Common Stock equal to the maximum
number of shares of Issuer Common Stock at any time and from time to time
purchasable upon exercise of the Option, and all such shares, upon issuance
pursuant to the Option, will be duly authorized, validly issued, fully paid and
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests (other than those created by this Agreement)
and not subject to any preemptive rights.

            (d) NO VIOLATIONS. The execution, delivery and performance of this
Agreement does not and will not, and the consummation by Issuer of any of the
transactions contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, its Certificate of Incorporation or
By-Laws, or the comparable governing instruments of any of its subsidiaries, or
(ii) a breach or violation of, or a default under, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation of it or
any of its subsidiaries (with or without the giving of notice, the lapse of time
or both) or under any law, rule, ordinance or regulation or judgment, decree,
order, award or governmental or non-governmental permit or license to which it
or any of its subsidiaries is subject, that would, in any case, give any other
person the ability to prevent or enjoin Issuer's performance under this
Agreement in any material respect.

      6. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby represents
and warrants to Issuer that Grantee has full corporate power and authority to
enter into this Agreement and, subject to obtaining the approvals referred to in
this Agreement, to consummate the transactions contemplated by this Agreement;
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee; and this Agreement has been duly
executed and delivered by Grantee.

                                       6

<PAGE> 7

      7.    ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC.

            (a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
any such transaction so that Holder shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Holder would
have received in respect of Issuer Common Stock if the Option had been exercised
immediately prior to such event, or the record date therefor, as applicable. If
any additional shares of Issuer Common Stock are issued after the date of this
Agreement (other than pursuant to an event described in the first sentence of
this Section 7(a), upon exercise of any option to purchase Issuer Common Stock
outstanding on the date hereof or upon conversion into Issuer Common Stock of
any convertible security of Issuer outstanding on the date hereof), the number
of shares of Issuer Common Stock subject to the Option shall be adjusted so
that, after such issuance, the Option, together with any shares of Issuer Common
Stock previously issued pursuant hereto, equals 19.9% of the number of shares of
Issuer Common Stock then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to the Option. No provision of this Section
7 shall be deemed to affect or change, or constitute authorization for any
violation of, any of the covenants or representations in the Merger Agreement.

            (b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and Issuer shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee or
one of its subsidiaries, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the then
outstanding shares of Issuer Common Stock shall be changed into or exchanged for
stock or other securities of Issuer or any other person or cash or any other
property, or the outstanding shares of Issuer Common Stock immediately prior to
such merger shall, after such merger, represent less than 50% of the outstanding
shares and share equivalents of the merged company or (iii) to sell or otherwise
transfer all or substantially all of its assets or deposits to any person, other
than Grantee or one of its subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions so that the
Option shall, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
("Substitute Option"), at the election of Holder, to purchase shares of either
(A) the Acquiring Corporation (as hereinafter defined), (B) any person that
controls the Acquiring Corporation or (C) in the case of a merger described in
clause (ii), Issuer (such person being referred to as "Substitute Option
Issuer").

            (c) The Substitute Option shall have the same terms as the Option,
provided, that, if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to Holder. The

                                      7

<PAGE> 8

Substitute Option Issuer shall also enter into an agreement with Holder in
substantially the same form as this Agreement, which shall be applicable to the
Substitute Option.

            (d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as hereinafter defined) as is equal to the
Assigned Value (as hereinafter defined) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided by
the Average Price (as hereinafter defined). The exercise price of the Substitute
Option per share of Substitute Common Stock ("Substitute Option Price") shall
then be equal to the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of Issuer Common Stock for which the Option
was theretofore exercisable and the denominator is the number of shares of the
Substitute Common Stock for which the Substitute Option is exercisable.

            (e)   The following terms have the meanings indicated:

                  (i) "Acquiring Corporation" shall mean (A) the continuing or
surviving corporation of a consolidation or merger with Issuer (if other than
Issuer), (B) Issuer in a merger in which Issuer is the continuing or surviving
person, or (C) the transferee of all or substantially all of Issuer's assets (or
a substantial part of the assets of its subsidiaries taken as a whole).

                  (ii) "Substitute Common Stock" shall mean the shares of
capital stock (or similar equity interest) with the greatest voting power in
respect of the election of directors (or persons similarly responsible for the
direction of the business and affairs) of the Substitute Option Issuer.

                  (iii) "Assigned Value" shall mean the highest of (A) the price
per share of Issuer Common Stock at which a Tender Offer or an Exchange Offer
therefor has been made, (B) the price per share of Issuer Common Stock to be
paid by any third party pursuant to an agreement with Issuer, (C) the highest
closing price for shares of Issuer Common Stock within the 60-day period
immediately preceding the consolidation, merger or sale in question and (D) in
the event of a sale of all or substantially all of Issuer's assets or deposits,
an amount equal to (x) the sum of the price paid in such sale for such assets
(and/or deposits) and the current market value of the remaining assets of
Issuer, as determined by a nationally recognized investment banking firm
selected by Holder, divided by (y) the number of shares of Issuer Common Stock
outstanding at such time. In the event that a Tender Offer or an Exchange Offer
is made for Issuer Common Stock or an agreement is entered into for a merger or
consolidation involving consideration other than cash, the value of the
securities or other property issuable or deliverable in exchange for Issuer
Common Stock shall be determined by a nationally recognized investment banking
firm selected by Holder.

                  (iv) "Average Price" shall mean the average closing price of a
share of Substitute Common Stock for the one year immediately preceding the
consolidation, merger or

                                      8

<PAGE> 9

sale in question, but in no event higher than the closing price of the shares of
Substitute Common Stock on the day preceding such consolidation, merger or sale;
provided, that, if Issuer is the issuer of the Substitute Option, the Average
Price shall be computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which controls such
person, as Holder may elect.

            (f) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of Substitute Common Stock
outstanding but for the limitation in the first sentence of this Section 7(f),
Substitute Option Issuer shall make a cash payment to Holder equal to the excess
of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 7(f) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 7(f). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Holder.

            (g) Issuer shall not enter into any transaction described in Section
7(b) of this Agreement unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation, any action that may be necessary so that the holders of the other
shares of common stock issued by Substitute Option Issuer are not entitled to
exercise any rights by reason of the issuance or exercise of the Substitute
Option and the shares of Substitute Common Stock are otherwise in no way
distinguishable from or have lesser economic value (other than any diminution in
value resulting from the fact that the shares Substitute Common Stock are
restricted securities, as defined in Rule 144, promulgated under the Securities
Act ("Rule 144"), or any successor provision) than other shares of common stock
issued by Substitute Option Issuer).

      8.    REPURCHASE AT THE OPTION OF HOLDER.

            (a) Subject to the last sentence of Section 3(a) of this Agreement,
at the request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) hereof) and ending 12 months
immediately thereafter, Issuer shall repurchase from Holder (i) the Option and
(ii) all shares of Issuer Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 8 is referred to as the "Request Date."
Such repurchase shall be at an aggregate price ("Section 8 Repurchase
Consideration") equal to the sum of:

                                      9

<PAGE> 10

                  (i) The aggregate Purchase Price paid by Holder for any shares
of Issuer Common Stock acquired pursuant to the Option with respect to which
Holder then has beneficial ownership;

                  (ii) The excess, if any, of (A) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (B) the Purchase Price
(subject to adjustment pursuant to Section 7 of this Agreement), multiplied by
the number of shares of Issuer Common Stock with respect to which the Option has
not been exercised; and

                  (iii) The excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7 of this Agreement)
paid (or, in the case of Option Shares with respect to which the Option has been
exercised but the Closing Date has not occurred, payable) by Holder for each
share of Issuer Common Stock with respect to which the Option has been exercised
and with respect to which Holder then has beneficial ownership, multiplied by
the number of such shares.

            (b) If Holder exercises its rights under this Section 8, Issuer
shall, within 10 business days after the Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment, Holder shall surrender to Issuer the Option
and the certificates evidencing the shares of Issuer Common Stock purchased
thereunder with respect to which Holder then has beneficial ownership, and
Holder shall warrant that it has sole record and beneficial ownership of such
shares and that the same are then free and clear of all Liens. Notwithstanding
the foregoing, to the extent that prior notification to or approval of any
Governmental Entity is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for repurchase pursuant to this Section 8, in whole
or in part, or to require that Issuer deliver from time to time that portion of
the Section 8 Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for approval and
expeditiously process the same (and each party shall cooperate with the other in
the filing of any such notice or application and the obtaining of any such
approval). If any Governmental Entity disapproves of any part of Issuer's
proposed repurchase pursuant to this Section 8, Issuer shall promptly give
notice of such fact to Holder and Holder shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by such Governmental Entity,
determine whether the repurchase should apply to the Option and/or Option Shares
and to what extent to each, and Holder shall thereupon have the right to
exercise the Option as to the number of Option Shares for which the Option was
exercisable at the Request Date less the number of shares covered by the Option
in respect of which payment has been made pursuant to Section 8(a)(ii) of this
Agreement. Holder shall notify Issuer of its determination under the preceding
sentence within five business days of receipt of notice of disapproval of the
repurchase. Notwithstanding anything herein to the contrary, in the event that
Issuer delivers to the Holder written notice accompanied by a certification of
Issuer's independent auditor each stating that a requested repurchase of Issuer
Common Stock would result in the recapture of Issuer's bad debt reserves under
the Internal Revenue Code of 1986, as

                                      10

<PAGE> 11

amended ("Code"), Holder's repurchase request shall be deemed to be
automatically revoked. Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of termination
of this Option pursuant to Section 3(a) of this Agreement.

            (c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i) hereof, (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger, sale or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement, or (iii) the highest closing sales price per share of Issuer Common
Stock as quoted on the New York Stock Exchange ("NYSE"), the American Stock
Exchange ("AMEX") or the National Market System of The Nasdaq Stock Market
("Nasdaq") (or if Issuer Common Stock is not quoted on the NYSE, AMEX or Nasdaq,
the highest bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a recognized
source chosen by Holder) during the 40 business days preceding the Request Date;
provided, however, that in the event of a sale of less than all of Issuer's
assets, the Applicable Price shall be the sum of the price paid in such sale for
such assets and the current market value of the remaining assets of Issuer as
determined by a nationally recognized investment banking firm selected by
Holder, divided by the number of shares of Issuer Common Stock outstanding at
the time of such sale. If the consideration to be offered, paid or received
pursuant to either of the foregoing clauses (i) or (ii) shall be other than in
cash, the value of such consideration shall be determined in good faith by an
independent nationally recognized investment banking firm selected by Holder and
reasonably acceptable to Issuer, which determination shall be conclusive for all
purposes of this Agreement.

            (d) As used herein, "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee) shall have acquired beneficial
ownership of (as such term is defined in Rule 13d-3, promulgated under the
Exchange Act), or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, more than
25% of the then outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement shall be consummated.

      9.    REPURCHASE OF SUBSTITUTE OPTION.

            (a) Subject to the last sentence of Section 3(a) of this Agreement,
at the request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) hereof) and ending 12 months
immediately thereafter, Substitute Option Issuer (or any successor entity
thereof) shall repurchase from Holder (i) the Substitute Option and (ii) all
shares of Substitute Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights

                                      11

<PAGE> 12

under this Section 9 is referred to as the "Section 9 Request Date." Such
repurchase shall be at an aggregate price ("Section 9 Repurchase Consideration")
equal to the sum of:

                  (i) The aggregate Purchase Price paid by Holder for any shares
of Substitute Common Stock acquired pursuant to the Substitute Option with
respect to which Holder then has beneficial ownership;

                  (ii) The excess, if any, of (A) the Highest Closing Price (as
defined below) for each share of Substitute Common Stock over (B) the Purchase
Price (subject to adjustment pursuant to Section 7 of this Agreement),
multiplied by the number of shares of Substitute Common Stock with respect to
which the Substitute Option has not been exercised; and

                  (iii) The excess, if any, of the Highest Closing Price over
the Purchase Price (subject to adjustment pursuant to Section 7 of this
Agreement) paid (or, in the case of Substitute Option Shares with respect to
which the Substitute Option has been exercised but the Closing Date has not
occurred, payable) by Holder for each share of Substitute Common Stock with
respect to which the Substitute Option has been exercised and with respect to
which Holder then has beneficial ownership, multiplied by the number of such
shares.

            (b) If Holder exercises its rights under this Section 9, Substitute
Option Issuer shall, within 10 business days after the Section 9 Request Date,
pay the Section 9 Repurchase Consideration to Holder in immediately available
funds, and contemporaneously with such payment, Holder shall surrender to
Substitute Option Issuer the Substitute Option and the certificates evidencing
the shares of Substitute Common Stock purchased thereunder with respect to which
Holder then has beneficial ownership, and Holder shall warrant that it has sole
record and beneficial ownership of such shares and that the same are then free
and clear of all Liens. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Governmental Entity is required in connection
with the payment of all or any portion of the Section 9 Repurchase
Consideration, Holder shall have the ongoing option to revoke its request for
repurchase pursuant to this Section 9, in whole or in part, or to require that
Substitute Option Issuer deliver from time to time that portion of the Section 9
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If any
Governmental Entity disapproves of any part of Substitute Option Issuer's
proposed repurchase pursuant to this Section 9, Substitute Option Issuer shall
promptly give notice of such fact to Holder and Holder shall have the right (i)
to revoke the repurchase request or (ii) to the extent permitted by such
Governmental Entity, determine whether the repurchase should apply to the
Substitute Option and/or Substitute Option Shares and to what extent to each,
and Holder shall thereupon have the right to exercise the Substitute Option as
to the number of Substitute Option Shares for which the Substitute Option was
exercisable at the Section 9 Request Date less the number of shares covered by
the Substitute Option in respect of which payment has been made

                                      12

<PAGE> 13

pursuant to Section 9(a)(ii) of this Agreement. Holder shall notify Substitute
Option Issuer of its determination under the preceding sentence within five
business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, in the event that Substitute
Option Issuer delivers to the Holder written notice accompanied by a
certification of Substitute Option Issuer's independent auditor each stating
that a requested repurchase of Substitute Common Stock would result in the
recapture of Substitute Option Issuer's bad debt reserves under the Code,
Holder's repurchase request shall be deemed to be automatically revoked.
Notwithstanding anything herein to the contrary, all of Holder's rights under
this Section 9 shall terminate on the date of termination of this Substitute
Option pursuant to Section 3(a) of this Agreement.

            (c) For purposes of this Agreement, the "Highest Closing Price"
means the highest of the closing sales price per share of Substitute Common
Stock, as quoted on the NYSE, AMEX or Nasdaq (or if the Substitute Common Stock
is not quoted on the NYSE, AMEX or Nasdaq, the highest bid price per share as
quoted on the principal trading market or securities exchange on which such
shares are traded as reported by a recognized source) during the six- month
period preceding the Section 9 Request Date.

      10.   REGISTRATION RIGHTS.

            (a) DEMAND REGISTRATION RIGHTS. Issuer shall, subject to the
conditions of Section 10(c) of this Agreement, if requested by any Holder,
including Grantee and any permitted transferee ("Selling Shareholder"), as
expeditiously as possible, prepare and file and keep current a registration
statement under the Securities Act if such registration is necessary in order to
permit the sale or other disposition of any or all shares of Issuer Common Stock
or other securities that have been acquired by or are issuable to the Selling
Shareholder upon exercise of the Option in accordance with the intended method
of sale or other disposition stated by the Selling Shareholder in such request,
including without limitation a "shelf" registration statement under Rule 415,
promulgated under the Securities Act, or any successor provision, and Issuer
shall use its best efforts to qualify such shares or other securities for sale
under any applicable state securities laws.

            (b) ADDITIONAL REGISTRATION RIGHTS. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common Stock
under the Securities Act in connection with an underwritten public offering of
such Issuer Common Stock, Issuer will promptly give written notice to the
Selling Shareholders of its intention to do so and, upon the written request of
any Selling Shareholder given within 30 days after receipt of any such notice
(which request shall specify the number of shares of Issuer Common Stock
intended to be included in such underwritten public offering by the Selling
Shareholder), Issuer will cause all such shares for which a Selling Shareholder
requests participation in such registration, to be so registered and included in
such underwritten public offering; provided, however, that Issuer may elect to
not cause some or all of such shares to be so registered (i) if the underwriters
in the Public Offering in good faith object for valid business reasons, or (ii)
in the case of a registration

                                      13

<PAGE> 14

solely to implement an employee benefit agreement or a registration filed on
Form S-4 of the Securities Act or any equivalent or successor Form. If some, but
not all the shares of Issuer Common Stock, with respect to which Issuer shall
have received requests for registration pursuant to this Section 10(b), shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among the Selling Shareholders desiring to register
their shares pro rata in the proportion that the number of shares requested to
be registered by each such Selling Shareholder bears to the total number of
shares requested to be registered by all such Selling Shareholders then desiring
to have Issuer Common Stock registered for sale.

            (c) CONDITIONS TO REQUIRED REGISTRATION. Issuer shall use all
reasonable efforts to cause each registration statement referred to in Section
10(a) of this Agreement to become effective and to obtain all consents or
waivers of other parties which are required therefor and to keep such
registration statement effective, provided, however, that Issuer may delay any
registration of Option Shares required pursuant to Section 10(a) of this
Agreement for a period not exceeding 180 days provided Issuer shall in good
faith determine that any such registration would adversely affect an offering or
contemplated offering of other securities by Issuer, and Issuer shall not be
required to register Option Shares under the Securities Act pursuant to Section
10(a) hereof: (i) Prior to the earliest of (A) termination of the Merger
Agreement pursuant to Article VI thereof, (B) failure to obtain the requisite
stockholder approval pursuant to Section 6.1(b) of the Merger Agreement, and (C)
a Purchase Event or a Preliminary Purchase Event; (ii) On more than one occasion
during any calendar year; (iii) Within 90 days after the effective date of a
registration referred to in Section 10(b) of this Agreement pursuant to which
the Selling Shareholder or Selling Shareholders concerned were afforded the
opportunity to register such shares under the Securities Act and such shares
were registered as requested; and (iv) Unless a request therefor is made to
Issuer by Selling Shareholders that hold at least 25% or more of the aggregate
number of Option Shares (including shares of Issuer Common Stock issuable upon
exercise of the Option) then outstanding. In addition to the foregoing, Issuer
shall not be required to maintain the effectiveness of any registration
statement after the expiration of nine months from the effective date of such
registration statement. Issuer shall use all reasonable efforts to make any
filings, and take all steps, under all applicable state or local securities laws
to the extent necessary to permit the sale or other disposition of the Option
Shares so registered in accordance with the intended method of distribution for
such shares; provided, however, that Issuer shall not be required to consent to
general jurisdiction or qualify to do business in any state or locality where it
is not otherwise required to so consent to such jurisdiction or to so qualify to
do business.

            (d) EXPENSES. Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if Issuer so desires or the underwriters so require, and the
reasonable fees and expenses of any

                                      14

<PAGE> 15

necessary special experts) in connection with each registration pursuant to
Section 10(a) or 10(b) of this Agreement (including the related offerings and
sales by holders of Option Shares) and all other qualifications, notifications
or exemptions pursuant to Section 10(a) or 10(b) of this Agreement.

            (e)   INDEMNIFICATION.

                  (i) In connection with any registration under Section 10(a) or
10(b) of this Agreement, Issuer hereby indemnifies the Selling Shareholders, and
each underwriter thereof, including each person, if any, who controls such
holder or underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, losses, claims, damages and liabilities caused by any
untrue, or alleged untrue, statement of a material fact contained in any
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission, or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such expenses, losses, claims, damages or
liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon and in conformity with,
information furnished in writing to Issuer by such indemnified party expressly
for use therein, and Issuer and each officer, director and controlling person of
Issuer shall be indemnified by such Selling Shareholders, or by such
underwriter, as the case may be, for all such expenses, losses, claims, damages
and liabilities caused by any untrue, or alleged untrue, statement, that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.

                  (ii) Promptly upon receipt by a party indemnified under this
Section 10(e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this Section 10(e), such indemnified party
shall notify the indemnifying party in writing of the commencement of such
action, but the failure so to notify the indemnifying party shall not relieve it
of any liability which it may otherwise have to any indemnified party under this
Section 10(e). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (x) the indemnifying party either
agrees to pay the same, (y) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified party, or (z) the
indemnified

                                      15

<PAGE> 16

party has been advised by counsel that one or more legal defenses may be
available to the indemnifying party that may be contrary to the interest of the
indemnified party, in which case the indemnifying party shall be entitled to
assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.

                  (iii) If the indemnification provided for in this Section
10(e) is unavailable to a party otherwise entitled to be indemnified in respect
of any expenses, losses, claims, damages or liabilities referred to herein, then
the indemnifying party, in lieu of indemnifying such party otherwise entitled to
be indemnified, shall contribute to the amount paid or payable by such party to
be indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, the Selling Shareholders and the underwriters from
the offering of the securities and also the relative fault of Issuer, the
Selling Shareholders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The amount
paid or payable by a party as a result of the expenses, losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, however, that in no
case shall any Selling Shareholder be responsible, in the aggregate, for any
amount in excess of the net offering proceeds attributable to its Option Shares
included in the offering. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any obligation by any holder to indemnify shall be several
and not joint with other holders.

                  (iv) In connection with any registration pursuant to Section
10(a) or 10(b) of this Agreement, Issuer and each Selling Shareholder (other
than Grantee) shall enter into an agreement containing the indemnification
provisions of Section 10(e) of this Agreement.

            (f) MISCELLANEOUS REPORTING. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Selling Shareholders
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144. Issuer shall at its expense provide the Selling Shareholders with any
information necessary in connection with the completion and filing of any
reports or forms required to be filed by them under the Securities Act or the
Exchange Act, or required pursuant to any state securities laws or the rules of
any stock exchange.

            (g) ISSUE TAXES. Issuer will pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save the Selling Shareholders harmless, without
limitation as to time, against any and all liabilities, with respect to all such
taxes.

                                      16

<PAGE> 17

      11. QUOTATION; LISTING. If Issuer Common Stock or any other securities to
be acquired in connection with the exercise of the Option are then authorized
for quotation or trading or listing on the NYSE, AMEX, Nasdaq or any other
securities exchange, Issuer, upon the request of Holder, will promptly file an
application, if required, to authorize for quotation or trading or listing the
shares of Issuer Common Stock or other securities to be acquired upon exercise
of the Option on the NYSE, AMEX, Nasdaq or such other securities exchange and
will use its best efforts to obtain approval, if required, of such quotation or
listing as soon as practicable.

      12. DIVISION OF OPTION. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like
tenor and date. Any such new Agreement executed and delivered shall constitute
an additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.

      13.   PROFIT LIMITATION.

            (a) Notwithstanding any other provision of this agreement, in no
event shall Grantee's Total Profit (as hereinafter defined) exceed $3,500,000,
plus Grantee's documented, reasonable out-of-pocket expenses (including fees and
expenses of legal, financial and accounting advisors) incurred in connection
with the transactions contemplated by the Merger Agreement, and, if it otherwise
would exceed such amount, Grantee, at its sole election, shall either (i)
deliver to Issuer for cancellation Shares previously purchased by Grantee, (ii)
pay cash or other consideration to Issuer or (iii) undertake any combination
thereof, so that Grantee's Total Profit shall not exceed $30 million, plus
Grantee's documented, reasonable out-of-pocket expenses (including fees and
expenses of legal, financial and accounting advisors) incurred in connection
with the transactions contemplated by the Merger Agreement, after taking into
account the foregoing actions.

            (b) Notwithstanding any other provision of this Agreement, this
Option may not be exercised for a number of Shares as would, as of the Notice
Date, result in a Notional Total Profit (as defined below) of more than
$3,500,000, plus Grantee's documented, reasonable out-of-pocket expenses
(including fees and expenses of legal, financial and accounting advisors)
incurred in connection with the transactions contemplated by the Merger
Agreement, and, if

                                      17

<PAGE> 18

exercise of the Option otherwise would exceed such amount, Grantee, at its
discretion, may increase the Purchase Price for that number of Shares set forth
in the Option Notice so that the Notional Total Profit shall not exceed
$3,500,000, plus Grantee's documented, reasonable out-of- pocket expenses
(including fees and expenses of legal, financial and accounting advisors)
incurred in connection with the transactions contemplated by the Merger
Agreement; provided, that nothing in this sentence shall restrict any exercise
of the Option permitted hereby on any subsequent date at the Purchase Price set
forth in Section 2 hereof.

            (c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Grantee pursuant to Section (a)(ii) hereof, (ii) (x) the amount received by
Grantee pursuant to the repurchase of Option Shares pursuant to Section 8 or
Section 9 hereof, less Grantee's purchase price for such Option Shares, and
(iii) the net cash amounts received by Grantee pursuant to the sale of Option
Shares (or any other securities into which such Option Shares are converted or
exchanged) to any unaffiliated party, less Grantee's purchase price for such
Option Shares.

            (d) As used herein, the term "Notional Total Profit" with respect to
any number of Option Shares as to which Grantee may propose to exercise this
Option shall be the Total Profit determined as of the date of the Option Notice
assuming that this Option were exercised on such date for such number of Shares
and assuming that such Option Shares, together with all other Option Shares held
by Grantee and its affiliates as of such date, were sold for cash at the closing
market price for the Common Stock as of the close of business on the preceding
trading day (less customary brokerage commissions).

      14.   MISCELLANEOUS.

            (a) EXPENSES. Except to the extent expressly provided for herein,
each of the parties hereto shall bear and pay all costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.

            (b) WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.

            (c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES; SEVERABILITY.
This Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto (other than the indemnified parties under Section 10(e)
of this Agreement and any transferees of the Option Shares or any permitted
transferee of this Agreement pursuant

                                      18

<PAGE> 19

to Section 14(h) of this Agreement) any rights or remedies hereunder. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or Governmental Entity to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. If for any reason such court or
Governmental Entity determines that the Option does not permit Holder to
acquire, or does not require Issuer to repurchase, the full number of shares of
Issuer Common Stock as provided in Section 3 of this Agreement (as may be
adjusted herein), it is the express intention of Issuer to allow Holder to
acquire or to require Issuer to repurchase such lesser number of shares as may
be permissible without any amendment or modification hereof.

            (d) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law rules.

            (e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.

            (f) NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Merger Agreement (or
at such other address for a party as shall be specified by like notice).

            (g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.

            (h) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Holder may assign this
Agreement to a wholly-owned subsidiary of Holder and Holder may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.

            (i) FURTHER ASSURANCES. In the event of any exercise of the Option
by the Holder, Issuer, and the Holder shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.

                                      19

<PAGE> 20

            (j) SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.

            (k) LIMITATION ON RESALE OF ISSUER COMMON STOCK. Grantee agrees that
no shares of Issuer Common Stock acquired by it upon exercise of the Option, if
any, shall be sold, transferred or otherwise disposed by it prior to the
termination of the Merger Agreement in accordance with the terms thereof, except
as follows. If the Grantee shall determine to accept a bona fide offer to
purchase the Issuer Common Stock then held by it or to sell any such Stock on
the open market, the Grantee shall give notice thereof to the Issuer specifying
(i) the Issuer Common Stock to be sold and (ii) the purchase price to be offered
therefor (or in the case of open market sales, that the sales are to be at
prices prevailing on the market) and any other significant terms of the proposed
transaction. Upon receipt of such notice, the Issuer shall, for a period of
three business days immediately following such receipt, have the right of first
refusal to purchase the Issuer Common Stock then held by Grantee that is
proposed to be sold at the purchase price set forth in such notice or, if such
shares are to be sold in open market transaction, at a purchase price equal to
the average of the closing prices therefor (and if there is no such closing
price on any of such days, then the mean of the closing bid and the closing
asked prices on that day) on the principal market on which Issuer Common Stock
is traded for the five trading days immediately prior to the Issuer's receipt of
such notice. Payment for such shares shall be made to the Grantee in immediately
available funds within three business days immediately following receipt of the
notice of the proposed sale.

                                      20

<PAGE> 21

      IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.

                              SOUTH JERSEY FINANCIAL CORPORATION, INC.

                              By:   /s/ Robert J. Colacicco
                                    ----------------------------------------
                                    Robert J. Colacicco
                                    President and Chief Executive Officer

                              RICHMOND COUNTY FINANCIAL CORP.

                              By:   /s/ Michael F. Manzulli
                                    ----------------------------------------
                                    Michael F. Manzulli
                                    Chief Executive Officer

                                      21

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