Document:

MASTER LICENSE AND SERVICES AGREEMENT
                      -------------------------------------

A. This Master License and Services  Agreement (this  "Agreement")  entered into
March 1, 2000 by and between B2B Galaxy,  Inc.,  a Delaware  corporation  having
offices at 400 Lanidex  Plaza,  Parsippany,  NJ ("B2B"),  Vetgalaxy.com,  Inc. a
Delaware  corporation  having  offices at 8 South Morris Street Dover,  NJ 07801
("VG"),  and  USWeb/CKS  Cornerstone,   an  affiliate  of  B2B  and  a  Delaware
corporation  having  offices  at 584  Broadway  Suite  509,  New York,  NY 10012
("Cornerstone"),  summarizes the various agreements,  undertakings,  obligations
and understandings of the parties, as such agreements, undertakings, obligations
and  understandings  are  more  specifically  described  and  set  forth  in the
subsidiary  definitive  agreements  referenced  herein,  with respect to certain
proprietary software  (individually the "Purchasing and/or Vending Applications"
and collectively the "B2B Software"), and other intellectual property of B2B, to
be licensed by B2B to VG, and certain  services to be provided by B2B to VG, and
by Cornerstone to VG, in connection with and/or arising out of said licenses.

B.  The B2B  Software  is a  proprietary  exchange  system  designed  to  enable
purchasers in various  specific  industries  (sometimes  referred to herein as a
particular  "vertical" or "vertical market") to optimize prices of and access to
particular  products and/or services,  thereby lowering their costs,  increasing
profits and driving growth. The B2B Software is currently in use for restaurant,
and various other food service vertical markets,  at the FOODgalaxy.com  website
which is owned  or  controlled  by B2B,  and its use and  application  is in the
process of being applied to other vertical  markets,  in websites to be owned or
controlled by B2B, and/or by way of licensing same to third party entities.

C. VG has created or is in the process of creating an Internet based platform at
the URL www.vetgalaxy.com (the "VG Site"), for veterinarians, veterinary clinics
and/or animal  hospitals (which  professionals  and/or  businesses  collectively
comprise the "VG Vertical" and which may also sometimes be collectively referred
to hereinafter as "VG Target Clients",  and to the extent any such  professional
and/or  business  becomes a VG Site  subscriber  may  sometimes  be  referred to
hereinafter as a "VG Client"),  and in connection therewith,  desires to license
the B2B Software,  and to engage B2B to provide certain  services which: (i) may
be necessary or desirable to customize the B2B Software for the VG Vertical,  or
(ii) which will  otherwise be beneficial to the  creation,  launch,  maintenance
and/or  support  of the VG  Site.  Unless  and  until  the  termination  of this
Agreement,  and of the various licenses  described herein,  B2B will not license
the B2B Software to any entity,  which directly  competes with the VG Site (i.e.
is an Internet based exchange system targeting the VG Vertical). As a portion of
the  compensation to B2B herefor,  VG will issue to B2B 1,000,000  shares of its
common stock.

Now, therefore, the parties agree as follows:

1.       (a) B2B hereby  licenses to VG, and VG agrees to license  from B2B, the
B2B

<PAGE>

Software,  on the  terms and  conditions  set  forth  herein,  for VG's use as a
proprietary exchange system for businesses  comprising the VG Vertical (the "B2B
Software  License").  Unless  terminated  pursuant to the terms hereof,  the B2B
Software License shall be perpetual.

         (b) The B2B  Software  License  shall be,  with  respect to  businesses
comprising the VG Vertical,  exclusive to the VG Site. B2B shall not license the
B2B Software to any entity (a "VG Competitor"), which directly competes with the
VG Site (i.e. is an Internet based exchange  system  targeting the VG Vertical),
VG will not have the right to sublicense the B2B Software to any entity.

         (c) Except as is expressly set forth in Section 1(b) hereinabove, there
shall be no  limitations or  restrictions  on B2B in the conduct of any business
activities  in which  B2B is  currently  engaged  or which in the  future it may
engage,  or in the manner in which it chooses to exploit the B2B Software and/or
any other of its intellectual or other property.

         (d) This B2B Software  License  from B2B to VG is expressly  limited to
VG's  use in  the VG  Site  as a  proprietary  exchange  system  for  businesses
comprising the VG Vertical, and may not be assigned or transferred by VG without
the express  written  consent of B2B except in connection  with a sale of all of
the VG's assets.

         (e) For a period of one (1) year  commencing on the effective  date set
forth above, B2B shall provide for no additional  compensation,  maintenance and
upgrade  services to and for the B2B Software  which shall include such standard
revisions, bug fixes, and/or other standard upgrades as are developed by B2B for
the  FOODgalaxy.com  site, and/or generally made available to other licensees of
the B2B  Software.  Thereafter,  the  parties  shall  enter  into a  Maintenance
Agreement  setting forth the cost to VG of such  maintenance,  upgrade and other
support  services  to be  provided  by  B2B;  the  parties  agree  to use  their
respective best efforts to finalize and execute such a Maintenance  Agreement no
later than ninety (90) days prior to the end of said one year period.

2.       (a)  Distinct  from and in  addition  to the license to and for the B2B
Software,  and as an  undivided  element  of the  value  for  which B2B is to be
compensated as provided in Section 3(a)  hereinbelow,  B2B hereby licenses to VG
the right to use  derivatives  of B2B's trade and service  marks,  logos,  trade
dress and other  intellectual  property which are proprietary to B2B ("Galaxy IP
License").  The term of the Galaxy IP License will run, and will terminate if at
all,  concurrently  with  the  term  of the B2B  Software  License.  B2B  hereby
represents,  and VG  hereby  acknowledges,  that the  Galaxy  IP  License  has a
separate and intrinsic value distinct from the B2B Software License.

         (b) The Galaxy IP License  grants to VG the license  and right:  (i) to
use in commerce the name,  and/or  register  one or more trade or service  marks
for,  "VetGalaxy.com",  a derivative of the "galaxy.com"  family of names and/or
marks owned by B2B, and to use same as its  corporate  name;  (ii) to use and/or
register as a mark the VG logo, a derivative of one or more B2B marks;  (iii) to
use and to have registered the URL  www.vetgalaxy.com",  a

                                      -2-
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derivative of various URL's owned and  registered by B2B; (iv) and to use and to
incorporate into the VG Site, the trade dress and "look and feel" of one or more
of B2B's websites.  VG acknowledges that as between VG and B2B, the "galaxy.com"
family of names,  marks and URL's,  the  distinctive  and/or stylized use of the
galaxy.com  logo,  and the trade dress and "look and feel" of the B2B  websites,
are  proprietary  to B2B,  and but for the  Galaxy IP  License,  VG's use of the
various  items  enumerated  in items (i) - (iv) in this Section  3(b),  would be
unfairly  competitive,  potentially  confusing,  and/or otherwise  infringe upon
B2B's proprietary intellectual property.

         (c) Upon the  termination,  if such were to occur pursuant to the terms
hereof,  of the B2B  Software  License,  the Galaxy IP License  would  thereupon
immediately  terminate,  and  any  and  all  rights  in and to the  intellectual
property elements licensed thereunder would revert to B2B. Thereupon and in such
event, VG agrees to immediately assign, transfer and convey to B2B, and/or cease
the use of, as the case may be and the context may  require,  the various  items
enumerated in items (i) - (iv) of Section 2(b) hereinabove,  and execute any and
all  documents  so  providing  or  conveying  which may be necessary in order to
effectuate such assignments, transfers and/or conveyances; if VG were to fail so
to do  within  thirty  (30)  days of the  date of such  termination,  B2B  would
thereupon  be  appointed,  and VG  hereby  agrees to such  appointment,  as VG's
attorney in fact coupled  with an interest,  to act and execute upon VG's behalf
and in VG's  stead,  to  execute,  and  effectuate  and/or file any and all such
assignments, transfers and/or conveyances.

3.       (a) The  license  fee with  respect  to and for  collectively,  the B2B
Software  License  and the Galaxy IP  License,  shall be payable by VG to B2B as
follows:  within  ninety  (90) days of the date  hereof,  VG shall  issue to B2B
1,000,000 shares of VG's common stock.

         (b) B2B  acknowledges  that the VG common stock will not be  registered
under the Securities Act of 1933, as amended (the "Act") or any state securities
laws,  and that the VG common stock will be issued by VG in reliance upon one or
more of the  Act's  exemptions.  Further,  B2B  understands  that VG is under no
obligation to register the Stock under the Act or any state  securities law, and
that without  such  registration,  the said stock cannot be resold  unless it is
later registered or there is an available exemption. VG expressly agrees that in
the  event  that VG,  or any  successor  of VG,  shall  have any class of equity
interest   registered  under  the  Act,  B2B  shall  have  unlimited   piggyback
registration rights (subject only to standard  underwriter  cutbacks and similar
standard  terms)  with  respect  to the  shares of VG common  stock  held by B2B
pursuant to the terms hereof.

         (c) B2B shall have the right to appoint or designate  one (1) member of
the Board of Directors of VG.

         (d) The parties agree that one of the definitive  document(s) described
in Section 7(b) hereinbelow,  is a shareholder's  agreement setting forth, among
other  things,  the  provisions  of  Sections  3(b),  (c)  and  (d)  immediately
hereinabove.

                                      -3-
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4.       (a) Cornerstone and VG will immediately  commence, to define consulting
and/or  integration  services  with respect to the VG Site;  in  providing  such
services,  Cornerstone  shall  consult on an ongoing  basis with VG and VG shall
designate  a  primary  and  secondary  contact  person,  each of whom  shall  be
reasonably  available to Cornerstone for such purpose. The parties estimate that
the approximate fair market value of such customization and other services to be
provided by Cornerstone  is $236,000 and shall be payable on or before  November
30, 2000 as follows: 212,500 shares of Preferred Stock.

         (b)  Cornerstone  acknowledges  that the VG Preferred Stock will not be
registered under the Securities Act of 1933, as amended (the "Act") or any state
securities  laws,  and that  the VG  Preferred  Stock  will be  issued  by VG in
reliance upon one or more of the Act's exemptions. Further, B2B understands that
VG is under no obligation  to register the Preferred  Stock under the Act or any
state securities law, and that without such registration,  the said stock cannot
be resold unless it is later registered or there is an available  exemption.  VG
expressly  agrees that in the event that VG, or any  successor of VG, shall have
any class of equity interest  registered under the Act, B2B shall have unlimited
piggyback registration rights (subject only to standard underwriter cutbacks and
similar standard terms) with respect to the shares of VG Preferred Stock held by
B2B pursuant to the terms hereof.

         (c) The parties agree that one of the definitive  document(s) described
in Section 7(b) hereinbelow,  is a Services and Shareholder's  Agreement between
VG and  Cornerstone,  setting  forth,  among other  things,  the  provisions  of
Sections 4(a) and (b) immediately hereinabove.

5.       Except as expressly provided in this Agreement,  the B2B Software,  and
any and all modifications thereto for the purposes described herein,  regardless
of which party may have  initiated or  implemented  such  modifications,  or any
derivative  use  thereof  or  derivative  work  therefrom,  is and  shall be the
property  of B2B and shall  not be shall  not be  deemed to be a "work  made for
hire" as that term is defined in the Copyright  Act, 17 U.S.C.  ss. 101 et seq.;
to the extent  necessary to  effectuate  the  provisions  of this  sentence,  VG
acknowledges  and agrees that, to the extent,  if any, that ownership of the B2B
Software,  and any and all  modifications  thereto  for the  purposes  described
herein,  regardless  of which  party  may have  initiated  or  implemented  such
modifications,  or any derivative use thereof or derivative work therefrom, does
not  automatically  vest in B2B by virtue of this  Agreement  or  otherwise,  VG
hereby  transfers and assigns to B2B all right,  title and interest which VG may
have in and to the B2B Software,  and any and all modifications  thereto for the
purposes  described  herein,  regardless  of which party may have  initiated  or
implemented such modifications, or any derivative use thereof or derivative work
therefrom.

6.       (a) On or about March 1, 2000, the parties commenced a pilot program in
order  to  facilitate  the  collection  of   information   about   revisions  or
modifications,  which may be necessary to customize  the B2B Software for the VG
Vertical.  In connection  with its services with respect to said pilot  program,
B2B has invoiced,  and/or shall invoice, VG on a monthly basis: (i) all of B2B's
fully loaded staff costs incurred in providing such services multiplied by

                                      -4-
<PAGE>

110%,  plus (ii)  other  pro-rata  allocable  direct  expenses  related to these
activities.  Without  guaranteeing or limiting the exact amount of such services
with  respect  to said  pilot  program,  the  parties  have  estimated  that the
compensation payable to B2B therefore will be approximately $250,000.

         (b) B2B and/or its affiliates shall, for a period of not less than five
(5) years  commencing on the  effective  date set forth above,  provide  general
management  consultative  services  to VG, and VG Client  support,  for and with
respect to the VG Site, for which B2B shall invoice VG monthly, and VG shall pay
such invoices within ten (10) business days of its receipt thereof, based on the
following  formula:  (i) all of B2B's  fully  loaded  staff  costs  incurred  in
providing such services  multiplied by 110%, plus (ii) other pro-rata  allocable
direct  expenses  related to these  activities,  plus (iii) at B2B's option,  an
additional  charge of up to 2% of its direct  expenses  to cover  administrative
expenses.  The parties agree that general management  consultative  services and
client support as described  herein shall only be provided by B2B upon the prior
written approval of VG.

7.       (a) Each  party  acknowledges  that in the  course of  performing  this
Agreement,  it may  acquire (or may already  have  acquired)  or have access (or
already  have  had  access)  to  information  deemed  by the  other  party to be
proprietary or confidential,  including without limitation, trade secrets, data,
software programs,  intellectual property,  specifications,  processes, methods,
formulae,  business and marketing plans and performance or financial information
(collectively,  "Confidential  Information";  for the purposes hereof, the party
receiving such  Confidential  Information shall be referred to as the "Receiving
Party" and the party  disclosing  same shall be referred  to as the  "Disclosing
Party".)  The  Receiving   Party  shall  preserve  as   confidential   all  such
Confidential  Information  received  from  the  Disclosing  Party  and  will not
divulge,  distribute,  publish or use for its own  benefit (or that of any third
party) any such Confidential  Information.  Each party further acknowledges that
the  restrictions  contained in this  section are  reasonable  and  necessary to
protect the other party's legitimate interests, do not cause the Receiving Party
undue  hardship,  and  that  any  violations  or  threatened  violations  of any
provision of this section will result in immediate and irreparable injury to the
Disclosing Party and that, therefore,  the Disclosing Party shall be entitled to
temporary, preliminary and permanent injunctive relief in any court of competent
jurisdiction,  which  rights  shall be  cumulative  and in addition to any other
rights or  remedies to which the  Disclosing  Party may be entitled at law or in
equity. As used herein,  the term  "Confidential  Information" shall not include
information  which can be shown to have been, at the time of disclosure,  in the
public  domain;  information  which becomes part of the public domain through no
fault of the Receiving Party; information which can be shown to have been in the
Receiving  Party's  possession  prior to  receipt of such  information  from the
Disclosing  Party  or its  representatives,  free of any  obligation  to keep it
confidential;  information  which  can  be  shown  to  have  been  independently
developed by the Receiving Party;  and,  information  which can be shown to have
been acquired by the Receiving Party after disclosure from a third party who did
not require that such  information be held in  confidence,  and who was under no
obligation to maintain such information in confidence.  Notwithstanding anything
contained in the previous  sentence  which may be to the contrary,  VG expressly
acknowledges  that any

                                      -5-
<PAGE>

and all information  with respect to the vendors  offering  products for sale to
the VG Vertical, as described in Section 1(d) hereinabove, shall be deemed to be
Confidential Information of B2B.

         (b) The parties further agree,  and  notwithstanding  any provisions of
Section 7(a) hereinabove which may be to the contrary, that:

                  (i)  B2B  can  incorporate  aggregate  (i.e.  non-individually
identifiable)  data arising  from or relating to VG Site  Clients in  statistics
which are sold or otherwise  made  available  to third  parties by B2B; any fees
generated  directly from any such sale of such data will be shared on a per unit
basis  with  VG on a  commercially  reasonable  basis  to be  negotiated  by the
parties.

                  (ii)  VG  may  request  and  to  the  extent   available   and
commercially  feasible,  B2B shall provide certain statistics with respect to VG
Site Clients for VG's own marketing purposes.

                  Each  party  shall,  to the  extent  relevant  or  applicable,
incorporate  the provisions of this Section 7(b) into their  respective  privacy
policies.

8.       (a) No party will issue or authorize to be issued any press  release or
other  public   statement  or  announcement   concerning  this  Agreement,   the
relationship  of the parties,  or any of the  transactions  contemplated  hereby
without  the prior  approval of the other  party,  which  approval  shall not be
unreasonably withheld nor delayed.

(b) This Agreement,  and the various  definitive  agreements  referenced herein,
constitute the entire  agreement  between the parties hereto with respect to the
subject  matter  hereof  and  supersedes  any and all other  understandings  and
agreements,  either oral or in writing,  between the parties hereto with respect
to the subject matter hereof,  including that certain Letter of Intent  executed
by the parties.  This  Agreement  may not be amended or  terminated  except by a
writing signed by each of the parties hereto.

         (c) This Agreement shall be binding upon and shall inure to the benefit
of  the  parties  hereto  and  their  respective  successors,   assigns,  heirs,
executors, and legal representatives.

         (d) The terms and conditions of this  Agreement  shall not be deemed to
have been waived except by a waiver signed by the waiving party. No delay on the
part of any party in exercising any right,  power or privilege  hereunder  shall
operate  as a waiver  thereof,  nor shall any waiver on the part of any party of
any right, power or privilege  hereunder,  nor any single or partial exercise of
any right, power or privilege hereunder,  preclude any other or further exercise
thereof or the exercise of any other right,  power or privilege which that party
might otherwise have hereunder, or at law or in equity.

                                      -6-
<PAGE>

         (e) This  Agreement,  and all  matters  arising  herefrom  directly  or
indirectly,  shall be governed by the internal  laws of the State of New Jersey,
without  giving effect to the principles of choice or conflicts of laws thereof.
The  federal  and state  courts  sitting in the State of New  Jersey  shall have
exclusive jurisdiction hereof, and service of process shall be effective for all
purposes when mailed to a party by certified  mail,  return  receipt  requested.
TRIAL BY JURY IS WAIVED.

         (f) This  Agreement may be signed in one or more  counterparts  each of
which shall  constitute an original and all of which together  shall  constitute
one and the same agreement.

         (g) Unless otherwise  provided,  any notice required or permitted under
this Agreement shall be given in writing and shall be deemed  effectively  given
only upon delivery to each party to be notified by (i) personal  delivery,  (ii)
telecopier,  upon receipt of confirmation of complete  transmittal,  or (iii) an
internationally  recognized overnight air courier,  addressed to the party to be
notified at the address  first-above  written,  or at such other address as such
party may designate by ten (10) days' advance written notice to the other party,
and if to B2B, with a copy to Lowenstein Sandler PC ATT: Peter Skolnik, Esq., 65
Livingston Avenue, Roseland, NJ 07068, Fax: 973-597-2400,  Phone:  973-597-2500,
and if to VG, with a copy to Jay Bloom, 8 South Morris St, Dover, NJ 07801.

                                      -7-
<PAGE>

IN  WITNESS   WHEREOF,   the   parties   hereto,   by  their   duly   authorized
representatives,  have  executed  this  Agreement  as of the day and year  first
written above.

VETGALAXY.COM, INC.

By:  /s/ Jay Bloom
   -----------------------------
         Jay Bloom
         Chief Executive Officer

Date:  July 18, 2000
     ---------------------------

B2BGALAXY.COM, INC.

By:
   -----------------------------

Title: /s/ David Rowe
      --------------------------
         David Rowe
         Chief Executive Officer

Date: July 18, 2000
     ---------------------------

USWEB/CKS CORNERSTONE

By:
   -----------------------------

Title: /s/ Ken Gruber
      --------------------------
         Ken Gruber
         Executive Vice President &
         Chief Financial Officer

Date: July 18, 2000
     ---------------------------EXHIBIT 4.2

                             PERMANENT BANCORP, INC.

                      1993 STOCK OPTION AND INCENTIVE PLAN

<PAGE>

                             PERMANENT BANCORP, INC.

                      1993 Stock Option and Incentive Plan

     1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, advisory directors and directors emeritus,
officers and employees of the Corporation and its Affiliates. It is intended
that designated Options granted pursuant to the provisions of this Plan to
persons employed by the Corporation or its Affiliates will qualify as Incentive
Stock Options. Options granted to persons who are not employees will be
Non-Qualified Stock Options.

     2. Definitions. The following definitions are applicable to the Plan:

     "Affiliate" - means any "parent corporation" or "subsidiary corporation" of
the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.

     "Bank" - means Permanent Federal Savings Bank and any successor entity to
the Bank.

     "Award" - means the grant of an Incentive Stock Option, a Non-Qualified
Stock Option, a Stock Appreciation Right, a Limited Stock Appreciation Right, or
of Restricted Stock, or any combination thereof, as provided in the Plan.

     "Code" - means the Internal Revenue Code of 1986, as amended.

     "Committee" - means the Committee referred to in Section 3 hereof.

     "Continuous Service" - means the absence of any interruption or termination
of service as a director, advisory director or director emeritus, officer or
employee of the Corporation or an Affiliate, except that when used with respect
to persons granted an Incentive Stock Option means the absence of any
interruption or termination of service as an Employee of the Corporation or an
Affiliate. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Corporation
or in the case of transfers between payroll locations of the Corporation or
between the Corporation, its parent, its subsidiaries or its successor. With
respect to any advisory director or director emeritus, Continuous Service means
availability to perform such functions as may be required of an advisory
director or director emeritus of the Corporation or an Affiliate.

     "Conversion" - means the Bank's conversion from the mutual to the stock
form of ownership.

     "Corporation" - means Permanent Bancorp, Inc., a Delaware corporation.

                                        1
<PAGE>

     "Disinterested Person" - means any member of the Board of Directors of the
Corporation or an Affiliate who, within the prior year, has not been, and is not
being, granted any awards related to the Shares under this Plan or any other
plan of the Corporation or any of its Affiliates except for awards which: (i)
are calculated in accordance with a formula as contemplated in paragraph (c)(ii)
of Rule 16b-3 ("Rule 16b-3") under the Exchange Act, (ii) result from
participation in an ongoing securities acquisition plan meeting the conditions
of paragraph (d)(2) of Rule 16b-3, or (iii) arise from an election by a director
to receive all or part of his or her board fees in securities. No recipient of
an Award granted pursuant to Section 21 hereof shall be deemed not to be a
Disinterested Person solely by reason of such grant.

     "Employee" - means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.

     "ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.

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

     "Exercise Price" - means (i) in the case of an Option, the price per Share
at which the Shares subject to such Option may be purchased upon exercise of
such Option, and (ii) in the case of a Right, the price per Share (other than
the Market Value per Share on the date of exercise and the Offer Price per Share
as defined in Section 10 hereof) which, upon grant, the Committee determines
shall be utilized in calculating the aggregate value which a Participant shall
be entitled to receive pursuant to Sections 9, 10 or 13 hereof upon exercise of
such Right.

     "Incentive Stock Option" - means an option to purchase Shares granted by
the Committee pursuant to Section 6 hereof which is subject to the limitations
and restrictions of Section 8 hereof and is intended to qualify under Section
422 of the Code.

     "Limited Stock Appreciation Right" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 10 hereof.

     "Market Value" - means the average of the high and low quoted sales price
on the date in question (or, if there is no reported sale on such date, on the
last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the National Association of Securities
Dealers, Inc. Automated Quotations System, or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of a
Share as the Committee shall determine.

     "Non-Qualified Stock Option" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof, which option is not intended to
qualify under Section 422 of the Code.

                                        2
<PAGE>

     "Option" - means an Incentive Stock Option or a Non-Qualified Stock Option.

     "Participant" - means any officer or employee of the Corporation or any
Affiliate who is selected by the Committee to receive an Award and any director,
advisory director or director emeritus of the Corporation or an Affiliate who is
granted an Award pursuant to Section 21 hereof.

     "Plan" - means the 1993 Stock Option and Incentive Plan of the Corporation.

     "Related" - means (i) in the case of a Right, a Right which is granted in
connection with, and to the extent exercisable, in whole or in part, in lieu of,
an Option or another Right, and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof has been granted.

     "Restricted Period" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 11
hereof with respect to Restricted Stock awarded under the Plan.

     "Restricted Stock" - means Shares which have been contingently awarded to a
Participant by the Committee subject to the restrictions referred to in Section
11 hereof, so long as such restrictions are in effect.

     "Right" - means a Stock Appreciation Right or a Limited Stock Appreciation
Right.

     "Shares" - means the shares of common stock, par value $.01 per share, of
the Corporation.

     "Senior Officer" - means the Corporation's president, principal financial
officer, or principal accounting officer, any vice president of the Corporation
in charge of a principal business unit, division or function (such as lending,
administration or finance), any other officer who performs a policy-making
function, or any other person who performs similar policy-making functions for
the Corporation. Officers of the Corporation's Affiliates shall be deemed Senior
Officers of the Corporation if they perform such policy-making functions for the
Corporation.

     "Stock Appreciation Right" - means a stock appreciation right with respect
to Shares granted by the Committee pursuant to Sections 6 and 9 hereof.

     "Ten Percent Beneficial Owner" - means the beneficial owner of more than
ten percent of any class of the Corporation's equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.

     3. Administration. The Plan shall be administered by a Committee consisting
of two or more members, each of whom shall be a Disinterested Person. The
members of the Committee shall be appointed by the Board of Directors of the
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion to (i) select
Participants and grant Awards, (ii) determine the number of Shares to be subject
to types of Awards generally, as well

                                        3
<PAGE>

as to individual Awards granted under the Plan, (iii) determine the terms and
conditions upon which Awards shall be granted under the Plan, (iv) prescribe the
form and terms of instruments evidencing such grants, and (v) establish from
time to time regulations for the administration of the Plan, interpret the Plan,
and make all determinations deemed necessary or advisable for the administration
of the Plan. The Committee may maintain, and update from time to time as
appropriate, a list designating selected directors as Disinterested Persons. The
purpose of such list shall be to evidence the status of such individuals as
Disinterested Persons, and the Board of Directors may appoint to the Committee
any individual actually qualifying as a Disinterested Person, regardless of
whether identified as such on said list.

     A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.

     4. Participation in Committee Awards. The Committee may select from time to
time Participants in the Plan from those directors, officers and employees
(other than Disinterested Persons), of the Corporation or its Affiliates who, in
the opinion of the Committee, have the capacity for contributing to the
successful performance of the Corporation or its Affiliates.

     5. Shares Subject to Plan. Subject to adjustment by the operation of
Section 12 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan is 10% of the total Shares sold in the Conversion. The
Shares with respect to which Awards may be made under the Plan may be either
authorized and unissued Shares or issued Shares heretofore or hereafter
reacquired and held as treasury shares. Shares which are subject to Related
Rights and Related Options shall be counted only once in determining whether the
maximum number of Shares with respect to which Awards may be granted under the
Plan has been exceeded. An Award shall not be considered to have been made under
the Plan with respect to any Option or Right which terminates or with respect to
Restricted Stock which is forfeited, and new Awards may be granted under the
Plan with respect to the number of Shares as to which such termination or
forfeiture has occurred.

     6. General Terms and Conditions of Options and Rights. The Committee shall
have full and complete authority and discretion, except as expressly limited by
the Plan, to grant Options and/or Rights and to provide the terms and conditions
(which need not be identical among Participants) thereof. In particular, the
Committee shall prescribe the following terms and conditions: (i) the Exercise
Price of any Option or Right, which shall not be less than the Market Value per
Share at the date of grant of such Option or Right, (ii) the number of Shares
subject to, and the expiration date of, any Option or Right, which expiration
date shall not exceed ten years from the date of grant, (iii) the manner, time
and rate (cumulative or otherwise) of exercise of such Option or Right, and (iv)
the restrictions, if any, to be placed upon such Option or Right or upon Shares
which may be issued upon exercise of such Option or Right. The Committee may, as
a condition of granting any Option or Right, require that a Participant agree
not to thereafter exercise one or more Options or Rights previously granted to
such Participant.

                                        4
<PAGE>

     7. Exercise of Options or Rights.

     (a) Except as provided herein, an Option or Right granted under the Plan
shall be exercisable during the lifetime of the Participant to whom such Option
or Right was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such Option or Right may be
exercised unless at the time such Participant exercises such Option or Right,
such Participant has maintained Continuous Service since the date of grant of
such Option or Right. Cash settlements of Rights may be made only in accordance
with any applicable restrictions pursuant to Rule 16b-3(e) under the Exchange
Act or any similar or successor provision.

     (b) To exercise an Option or Right under the Plan, the Participant to whom
such Option or Right was granted shall give written notice to the Corporation in
form satisfactory to the Committee (and, if partial exercises have been
permitted by the Committee, by specifying the number of Shares with respect to
which such Participant elects to exercise such Option or Right) together with
full payment of the Exercise Price, if any and to the extent required. The date
of exercise shall be the date on which such notice is received by the
Corporation. Payment, if any is required, shall be made either (i) in cash
(including check, bank draft or money order) or (ii) if permitted by the
Committee, by delivering (A) Shares already owned by the Participant and having
a fair market value equal to the applicable exercise price, such fair market
value to be determined in such appropriate manner as may be provided by the
Committee or as may be required in order to comply with or to conform to
requirements of any applicable laws or regulations, or (B) a combination of cash
and such Shares.

     (c) If a Participant to whom an Option or Right was granted shall cease to
maintain Continuous Service for any reason (including total or partial
disability and normal or early retirement, but excluding death and termination
of employment by the Corporation or any Affiliate for cause), such Participant
may, but only within the period of two years immediately succeeding such
cessation of Continuous Service and in no event after the expiration date of
such Option or Right, exercise such Option or Right to the extent that such
Participant was entitled to exercise such Option or Right at the date of such
cessation; provided, however, that such right of exercise after cessation of
Continuous Service shall not be available to a Participant if the Committee
otherwise determines and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. Notwithstanding the foregoing, if
a Participant to whom an Option or Right was granted shall cease to maintain
Continuous Service due to normal or early retirement, and such Participant has
served the Corporation or an Affiliate for at least ten years, the Option or
Right granted to such Participant shall become immediately exercisable, and the
Participant may exercise such Option or Right only during the shorter of the
following periods: (i) the five-year period immediately succeeding such
cessation of Continuous Service, or (ii) the period remaining until the
expiration of such Option or Right. If the Continuous Service of a Participant
to whom an Option or Right was granted by the Corporation is terminated for
cause, all rights under any Option or Right of such Participant shall expire
immediately upon the giving to the Participant of notice of such termination.

     (d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the two or five year
periods referred to in paragraph (c) of this Section 7, the person to whom any
Option or Right held by the Participant at the time of his or her death

                                        5
<PAGE>

is transferred by will or the laws of descent and distribution, or in the case
of an Award other than an Incentive Stock Option, pursuant to a qualified
domestic relations order, as defined in the Code or Title I of ERISA or the
rules thereunder may, but only to the extent such Participant was entitled to
exercise such Option or Right immediately prior to his or her death, exercise
such Option or Right at any time within a period of one year succeeding the date
of death of such Participant, but in no event later than ten years from the date
of grant of such Option or Right. Following the death of any Participant to whom
an Option was granted under the Plan, irrespective of whether any Related Right
shall have theretofore been granted to the Participant or whether the person
entitled to exercise such Related Right desires to do so, the Committee may, as
an alternative means of settlement of such Option, elect to pay to the person to
whom such Option is transferred by will or by the laws of descent and
distribution (or, in the case of an Option other than an Incentive Stock Option,
pursuant to a qualified domestic relations order, as defined in the Code or
Title I of ERISA or the rules thereunder) the amount by which the Market Value
per Share on the date of exercise of such Option shall exceed the Exercise Price
of such Option, multiplied by the number of Shares with respect to which such
Option is properly exercised. Any such settlement of an Option shall be
considered an exercise of such Option for all purposes of the Plan.

     8. Incentive Stock Options. Incentive Stock Options may be granted only to
Participants who are Employees. Any provision of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
years from the date the Plan is adopted by the Board of Directors of the
Corporation and no Incentive Stock Option shall be exercisable more than ten
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall not be transferable by the Participant to whom such Incentive
Stock Option is granted other than by will or the laws of descent and
distribution, and shall be exercisable during such Participant's lifetime only
by such Participant, (iv) no Incentive Stock Option shall be granted to any
individual who, at the time such Incentive Stock Option is granted, owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation or any Affiliate unless the Exercise Price
of such Incentive Stock Option is at least 110 percent of the Market Value per
Share at the date of grant and such Incentive Stock Option is not exercisable
after the expiration of five years from the date such Incentive Stock Option is
granted, and (v) the aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant in any
calendar year shall not exceed $100,000.

     9. Stock Appreciation Rights. A Stock Appreciation Right shall, upon its
exercise, entitle the Participant to whom such Stock Appreciation Right was
granted to receive a number of Shares or cash or combination thereof, as the
Committee in its discretion shall determine, the aggregate value of which (i.e.,
the sum of the amount of cash and/or Market Value of such Shares on date of
exercise) shall equal (as nearly as possible, it being understood that the
Corporation shall not issue any fractional Shares) the amount by which the
Market Value per Share on the date of such exercise shall exceed the Exercise
Price of such Stock Appreciation Right, multiplied by the number of Shares with
respect of which such Stock Appreciation Right shall have been exercised. A
Stock Appreciation Right may be Related to an Option or may be granted
independently of any Option as the Committee shall from time to time in each
case determine. At the time of grant of an Option the Committee shall determine
whether

                                        6
<PAGE>

and to what extent a Related Stock Appreciation Right shall be granted with
respect thereto; provided, however, and notwithstanding any other provision of
the Plan, that if the Related Option is an Incentive Stock Option, the Related
Stock Appreciation Right shall satisfy all the restrictions and limitations of
Section 8 hereof as if such Related Stock Appreciation Right were an Incentive
Stock Option and as if other rights which are Related to Incentive Stock Options
were Incentive Stock Options. In the case of a Related Option, such Related
Option shall cease to be exercisable to the extent of the Shares with respect to
which the Related Stock Appreciation Right was exercised. Upon the exercise or
termination of a Related Option, any Related Stock Appreciation Right shall
terminate to the extent of the Shares with respect to which the Related Option
was exercised or terminated. Notwithstanding the foregoing, no Stock
Appreciation Right shall be exercisable by a director, Senior Officer or Ten
Percent Beneficial Owner of the Corporation within six months of the date of its
grant.

     10. Limited Stock Appreciation Rights. At the time of grant of an Option or
Stock Appreciation Right to any Participant, the Committee shall have full and
complete authority and discretion to also grant to such Participant a Limited
Stock Appreciation Right which is Related to such Option or Stock Appreciation
Right; provided, however, and notwithstanding any other provision of the Plan,
that if the Related Option is an Incentive Stock Option, the Related Limited
Stock Appreciation Right shall satisfy all the restrictions and limitations of
Section 8 hereof as if such Related Limited Stock Appreciation Right were an
Incentive Stock Option and as if all other Rights which are Related to Incentive
Stock Options were Incentive Stock Options. Notwithstanding any other provision
of the Plan, a Limited Stock Appreciation Right shall be exercisable only during
the period beginning on the first day following the date of expiration of any
"offer" (as such term is hereinafter defined) and ending on the forty-fifth day
following such date; provided, however, that no Limited Stock Appreciation Right
shall be exercisable by a director, Senior Officer or Ten Percent Beneficial
Owner within six months of the date of its grant.

     A Limited Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Limited Stock Appreciation Right was granted to receive
an amount of cash equal to the amount by which the "Offer Price per Share" (as
such term is hereinafter defined) or the Market Value on the date of such
exercise, as shall have been provided by the Committee in its discretion at the
time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect to which
such Limited Stock Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option or Related Stock
Appreciation Right, any Related Limited Stock Appreciation Right shall terminate
to the extent of the Shares with respect to which such Related Option or Related
Stock Appreciation Right was exercised or terminated.

     For the purposes of this Section 10, the term "Offer" shall mean any tender
offer or exchange offer for Shares other than one made by the Corporation,
provided that the corporation, person or other entity making the offer acquires
pursuant to such offer either (i) 25% of the Shares outstanding immediately
prior to the commencement of such offer or (ii) a number of Shares which,
together with all other Shares acquired in any tender offer or exchange offer
(other than one made by the Corporation)

                                        7
<PAGE>

which expired within sixty days of the expiration date of the offer in question,
equals 25% of the Shares outstanding immediately prior to the commencement of
the offer in question. The term "Offer Price per Share" as used in this Section
10 shall mean the highest price per Share paid in any Offer which Offer is in
effect any time during the period beginning on the sixtieth day prior to the
date on which a Limited Stock Appreciation Right is exercised and ending on the
date on which such Limited Stock Appreciation Right is exercised. Any securities
or property which are part or all of the consideration paid for Shares in the
Offer shall be valued in determining the Offer Price per Share at the higher of
(A) the valuation placed on such securities or property by the corporation,
person or other entity making such Offer or (B) the valuation placed on such
securities or property by the Committee.

     11. Terms and Conditions of Restricted Stock. The Committee shall have full
and complete authority, subject to the limitations of the Plan, to grant awards
of Restricted Stock and, in addition to the terms and conditions contained in
paragraphs (a) through (f) of this Section 11, to provide such other terms and
conditions (which need not be identical among Participants) in respect of such
Awards, and the vesting thereof, as the Committee shall determine and provide in
the agreement referred to in paragraph (d) of this Section 11.

     (a) At the time of an award of Restricted Stock, the Committee shall
establish for each Participant a Restricted Period of not less than six months
during which or at the expiration of which, as the Committee shall determine and
provide in the agreement referred to in paragraph (d) of this Section 11, the
Shares awarded as Restricted Stock shall vest. Subject to any such other terms
and conditions as the Committee shall provide, shares of Restricted Stock may
not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, except as hereinafter provided, during the Restricted Period.
Except for such restrictions, and subject to paragraphs (c), (d) and (e) of this
Section 11 and Section 12 hereof, the Participant as owner of such Shares shall
have all the rights of a stockholder, including but not limited to the right to
receive all dividends paid on such Shares and the right to vote such Shares. The
Committee shall have the authority, in its discretion, to accelerate the time at
which any or all of the restrictions shall lapse with respect to any shares of
Restricted Stock prior to the expiration of the Restricted Period with respect
thereto, or to remove any or all of such restrictions, whenever it may determine
that such action is appropriate by reason of changes in applicable tax or other
laws or other changes in circumstances occurring after the commencement of such
Restricted Period.

     (b) Except as provided in Section 14 hereof, if a Participant ceases to
maintain Continuous Service for any reason (other than death, total or partial
disability or normal or early retirement), unless the Committee shall otherwise
determine, all shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 11 shall
upon such termination of Continuous Service be forfeited and returned to the
Corporation. Unless the Committee shall otherwise determine, if a Participant
ceases to maintain Continuous Service by reason of death, total or partial
disability or normal or early retirement, such shares of Restricted Stock
awarded to such Participant which at the time of such termination of Continuous
Service are subject to the restrictions imposed by paragraph (a) of this Section
11 shall be immediately free of restrictions and shall not be forfeited.

                                        8
<PAGE>

     (c) Each certificate in respect of shares of Restricted Stock awarded under
the Plan shall be registered in the name of the Participant and deposited by the
Participant, together with a stock power endorsed in blank, with the Corporation
and shall bear the following (or a similar) legend:

               "The transferability of this certificate and the shares of stock
          represented hereby are subject to the terms and conditions (including
          forfeiture) contained in the 1993 Stock Option and Incentive Plan of
          Permanent Bancorp, Inc. and an Agreement entered into between the
          registered owner and Permanent Bancorp, Inc. Copies of such Plan and
          Agreement are on file in the offices of the Secretary of Permanent
          Bancorp, Inc., 101 Southeast Third Street, Evansville, Indiana 47708."

     (d) At the time of an award of shares of Restricted Stock, the Participant
shall enter into an Agreement with the Corporation in a form specified by the
Committee, agreeing to the terms and conditions of the award and such other
matters as the Committee shall in its sole discretion determine.

     (e) At the time of an award of shares of Restricted Stock, the Committee
may, in its discretion, determine that the payment to the Participant of
dividends declared or paid on such Shares, or specified portion thereof, by the
Corporation shall be deferred until the earlier to occur of (i) the lapsing of
the restrictions imposed under paragraph (a) of this Section 11 or (ii) the
forfeiture of such Shares under paragraph (b) of this Section 11, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.

     (f) At the expiration or lapse of the restrictions imposed by paragraph (a)
of this Section 11, the Corporation shall redeliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 11 applies in the case
of a deceased Participant, to his legal representative, beneficiary or heir) the
certificate(s) and stock power deposited with it pursuant to paragraph (c) of
this Section 11 and the Shares represented by such certificate(s) shall be free
of the restrictions referred to in paragraph (a) of this Section 11.

     12. Adjustments Upon Changes in Capitalization. In the event of any change
in the outstanding Shares subsequent to the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities and shall be legended and deposited with the Corporation in the
manner provided in Section 11 hereof.

                                        9
<PAGE>

     13. Effect of Merger. In the event of any merger, consolidation or
combination of the Corporation (other than a merger, consolidation or
combination in which the Corporation is the continuing entity and which does not
result in the outstanding Shares being converted into or exchanged for different
securities, cash or other property, or any combination thereof) pursuant to a
plan or agreement the terms of which are binding upon all stockholders of the
Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions or provisions contained in the certificate of
incorporation, to receive the appraised or fair value of their holdings), any
Participant to whom an Option or Right has been granted at least six months
prior to such event shall have the right (subject to the provisions of the Plan
and any limitation applicable to such Option or Right), thereafter and during
the term of each such Option or Right, to receive upon exercise of any such
Option or Right an amount equal to the excess of the fair market value on the
date of such exercise of the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a Share over the Exercise Price of such Right or Option, multiplied by the
number of Shares with respect to which such Option or Right shall have been
exercised. Such amount may be payable fully in cash, fully in one or more of the
kind or kinds of property payable in such merger, consolidation or combination,
or partly in cash and partly in one or more of such kind or kinds of property,
all in the discretion of the Committee. Unless the Committee shall have provided
otherwise in the agreement referred to in paragraph (d) of Section 11 hereof, in
the event of any such merger, consolidation or combination any Restricted Period
shall lapse with respect to Shares of Restricted Stock awarded at least six
months prior to such event, all such Shares shall be fully vested in the
Participants to whom such Shares were awarded, and the holders of such Shares
shall be eligible to receive in respect thereof the full amount receivable per
Share in such merger, consolidation or combination.

     14. Effect of Change in Control. Each of the events specified in the
following clauses (i) through (iii) of this Section 14 shall be deemed a "change
in control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Exchange Act, shall become the beneficial owner of shares of the
Corporation with respect to which 25% or more of the total number of votes for
the election of the Board of Directors of the Corporation may be cast, (ii) as a
result of, or in connection with, any cash tender offer, exchange offer, merger
or other business combination, sale of assets or contested election, or
combination of the foregoing, the persons who were directors of the Corporation
shall cease to constitute a majority of the Board of Directors of the
Corporation, or (iii) the stockholders of the Corporation shall approve an
agreement providing either for a transaction in which the Corporation will cease
to be an independent publicly owned entity or for a sale or other disposition of
all or substantially all the assets of the Corporation; provided, however, that
the occurrence of any such events shall not be deemed a "change in control" if,
prior to such occurrence, a resolution specifically approving such occurrence
shall have been adopted by at least a majority of the Board of Directors of the
Corporation. If the Continuous Service of any Participant of the Corporation or
any Affiliate is involuntarily terminated for whatever reason, at any time
within eighteen months after a change in control, unless the Committee shall
have otherwise provided in the agreement referred to in paragraph (d) of Section
11 hereof, any Restricted Period with respect to Restricted Stock theretofore
awarded to such Participant shall lapse upon such termination and all Shares
awarded as Restricted Stock shall become fully vested in the Participant to whom
such Shares were awarded. If a tender offer or exchange offer for Shares (other
than such an offer by the Corporation) is commenced, or if the event specified
in clause (iii) above shall occur, unless the Committee shall have otherwise
provided in the instrument evidencing the grant of an

                                       10
<PAGE>

Option or Stock Appreciation Right, all Options and Stock Appreciation Rights
theretofore granted and not fully exercisable shall become exercisable in full
upon the happening of such event and shall remain so exercisable for a period of
sixty days following such date, after which they shall revert to being
exercisable in accordance with their terms; provided, however, that no Option or
Stock Appreciation Right shall be exercisable by a director, Senior Officer or
Ten Percent Beneficial Owner of the Corporation within six months of the date of
grant of such Option or Stock Appreciation Right and no Option or Stock
Appreciation Right which has previously been exercised or otherwise terminated
shall become exercisable.

     15. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or in the case of
Awards other than Incentive Stock Options pursuant to a qualified domestic
relations order, as defined in the Code or Title I of ERISA or the rules
thereunder.

     16. Employee Rights Under the Plan. No director, officer or employee shall
have a right to be selected as a Participant nor, having been so selected, to be
selected again as a Participant and no director, officer, employee or other
person shall have any claim or right to be granted an Award under the Plan or
under any other incentive or similar plan of the Corporation or any Affiliate.
Neither the Plan nor any action taken thereunder shall be construed as giving
any employee any right to be retained in the employ of the Corporation or any
Affiliate.

     17. Delivery and Registration of Stock. The Corporation's obligation to
deliver Shares with respect to an Award shall, if the Committee so requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), or
any other Federal, state or local securities legislation or regulation. It may
be provided that any representation requirement shall become inoperative upon a
registration of the Shares or other action eliminating the necessity of such
representation under the Securities Act or other securities legislation. The
Corporation shall not be required to deliver any Shares under the Plan prior to
(i) the admission of such Shares to listing on any stock exchange on which
Shares may then be listed, and (ii) the completion of such registration or other
qualification of such Shares under any state or Federal law, rule or regulation,
as the Committee shall determine to be necessary or advisable.

     This Plan is intended to comply with Rule 16b-3 under the Exchange Act. Any
provision of the Plan which is inconsistent with said Rule shall, to the extent
of such inconsistency, be inoperative and shall not affect the validity of the
remaining provisions of the Plan.

     18. Withholding Tax. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if any,
that an election is made by the Participant under Section 83(b) of the Code, or
any successor provision thereto, to include the value of such shares in taxable
income), the Corporation shall retain a sufficient number of shares held by it
to cover the amount required to be withheld. The Corporation shall have the
right to deduct from all dividends paid

                                       11
<PAGE>

with respect to shares of Restricted Stock the amount of any taxes which the
Corporation is required to withhold with respect to such dividend payments.

     The Corporation shall have the right to deduct from all amounts paid in
cash with respect to the exercise of a Right under the Plan any taxes required
by law to be withheld with respect to such cash payments. Where a Participant or
other person is entitled to receive Shares pursuant to the exercise of an Option
or Right pursuant to the Plan, the Corporation shall have the right to require
the Participant or such other person to pay the Corporation the amount of any
taxes which the Corporation is required to withhold with respect to such Shares.

     No discretion or choice shall be conferred upon any Participant, or other
person entitled to receive Shares, with respect to the form, timing or method of
any such tax withholding.

     19. Amendment or Termination. The Board of Directors of the Corporation may
amend, suspend or terminate the Plan or any portion thereof at any time, but
(except as provided in Section 12 hereof) no amendment shall be made without
approval of the stockholders of the Corporation which shall (i) materially
increase the benefits accruing to Participants under the Plan, (ii) materially
increase the number of Shares or other securities with respect to which Awards
may be granted under the Plan, or (iii) materially modify the requirements as to
eligibility for participation in the Plan; provided, however, that no such
amendment, suspension or termination shall impair the rights of any Participant,
without his consent, in any Award theretofore made pursuant to the Plan.

     20. Effective Date and Term of Plan. The Plan shall become effective upon
its adoption by the Board of Directors of the Corporation, subject to the Bank
converting to a stock institution, and approval of the Plan by stockholders of
the Corporation. It shall continue in effect for a term of ten years unless
sooner terminated under Section 19 hereof.

     21. Initial Grant. By, and simultaneously with, the adoption of this Plan,
each member of the Board of Directors of the Corporation at the time of the
Conversion who is not an Employee, is hereby granted a ten-year, Non-Qualified
Stock Option to purchase a number of Shares equal to 0.20% of the Shares sold in
the Conversion at an Exercise Price per share equal to the per share price at
which Shares are sold in the Conversion. In addition, each director of the
Corporation who is not an Employee elected after the completion of the
Conversion is hereby granted as of the date he or she is elected and qualified
("election date") a ten-year Non-Qualified Stock Option to purchase a number of
Shares equal to the fair market value (as of the Conversion) of 0.20% of the
Shares issued in the Conversion at the applicable Market Value per Share on the
election date, subject to availability. Each such Option shall be evidenced by a
Non-Qualified Stock Option Agreement in a form approved by the Board of
Directors and shall be subject in all respects to the terms and conditions of
this Plan, which are controlling. All Options granted pursuant to this Section
21 shall be rounded down to the nearest whole share to the extent necessary to
ensure that no Options to purchase fractional shares are granted.

                                       12
<PAGE>

     22. Notwithstanding anything else in this Plan to the contrary, to the
extent that the Plan provides for formula awards, as defined in Rule
16b-3(c)(2)(ii) under the Exchange Act, such provisions may not be amended more
than once every six months, other than to comport with changes in the Code,
ERISA or the rules thereunder.

                                       13

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