Document:

Exhibit 10.17

1996 RESTRICTED STOCK INCENTIVE PLAN OF
FLUSHING FINANCIAL CORPORATION
(as amended through March 19, 2002)

I.   GENERAL

1.1  Purposes of the Plan

The 1996  Restricted  Stock  Incentive  Plan (the "Plan") of Flushing  Financial
Corporation  (the  "Company")  is intended to advance the best  interests of the
Company  and its  subsidiaries  by  providing  employees  of the Company and its
subsidiaries  and  Outside   Directors  (as  defined  in  Section  1.3(a))  with
additional  incentives through the award of shares of restricted common stock of
the Company ("Restricted Stock"),  thereby increasing the personal stake of such
employees  and  Outside  Directors  in the  continued  success and growth of the
Company and encouraging them to remain in the employ or service of the Company.

1.2  Administration of the Plan

(a) The Plan shall be administered by the Board of Directors of the Company (the
"Board of Directors").

(b) All awards  granted  under the Plan shall be on the terms and subject to the
conditions  hereinafter  provided.  Awards  granted to  participants  other than
Outside Directors shall be granted by the Board of Directors upon recommendation
of the Compensation  Committee or such other committee of directors as the Board
of Directors shall designate (the "Committee"),  which shall consist of not less
than two  directors.  The Board of  Directors  shall have no  authority to grant
awards to any  employee  covering  a number  of  shares in excess of the  number
recommended by the Committee.

(c) With respect to all awards  granted  under the Plan,  the Board of Directors
shall have  authority (i) to interpret  conclusively  the provisions of the Plan
and any award granted  thereunder,  (ii) to adopt, amend, and rescind such rules
and  regulations  for carrying out the Plan as it may deem  advisable,  (iii) to
decide  conclusively  all  questions of fact arising in the  application  of the
Plan,  (iv) to make  grants of awards to eligible  employees  and to specify the
amount and terms of such awards,  except that such grants to participants  other
than Outside Directors shall be made only upon  recommendation of the Committee,
and (v) to take all other action and to make all other determinations  necessary
or advisable for the  administration of the Plan. All determinations and acts of
the Board of Directors shall be final and binding on all persons,  including the
Company and  recipients  of awards  under the Plan and their heirs and  personal
representatives.

(d) Without  limiting its  authority  and powers,  the Board of Directors  (upon
recommendation of the Committee) shall have the authority with respect to awards
granted to participants other than Outside Directors:

     (i) to determine that amounts equal to the amount of any dividends declared
     with  respect to the number of shares  covered by an award (A) will be paid
     to the  employee  currently  or (B)  will  be  deferred  and  deemed  to be
     reinvested or (C) will  otherwise be credited to the employee,  or that the
     employee has no right with respect to such dividends;

     (ii) to provide that the shares of Common Stock  received as a result of an
     award shall be subject to a right of first  refusal,  pursuant to which the
     employee  shall be  required  to offer first to the Company any shares that
     the employee  wishes to sell,  subject to such terms and  conditions as the
     Board of Directors may specify;

     (iii) to amend  the terms of any  award,  prospectively  or  retroactively;
     provided,  however,  that no amendment shall impair the rights of the award
     holder without his or her written consent; and

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     (iv) to accelerate the vesting of any award.

(e)  Determinations  by the Board of  Directors  under the Plan with  respect to
Restricted   Stock  awarded  to  participants   other  than  Outside   Directors
(including, without limitation, determinations of the persons to receive awards;
the form,  amount and timing of such awards;  the terms and  provisions  of such
awards and the  agreements  evidencing  same;  and  provisions  with  respect to
termination of  employment)  need not be uniform and may be made by the Board of
Directors (upon  recommendation of the Committee)  selectively among persons who
receive, or are eligible to receive,  awards under the Plan, whether or not such
persons are similarly situated.

(f) The Board of Directors  shall have no discretion to vary the amount or terms
of awards to Outside  Directors as set forth in Article III,  except as provided
in Section 1.5(c).

1.3  Eligible Participants

(a) All employees,  including officers,  of the Company and of any subsidiaries,
partnerships,  joint  ventures  or other  entities  in which the  Company  owns,
directly or  indirectly,  at least a 20% beneficial  ownership  interest (all of
such  subsidiaries,  partnerships  and  joint  ventures  being  referred  to  as
"Subsidiaries")  shall be eligible to receive awards under the Plan,  other than
under  Article  III.  Except as  provided  in Section  1.3(b) and  Article  III,
directors of the Company or any  Subsidiary who are not employees of the Company
or its  Subsidiaries  ("Outside  Directors")  shall not be  eligible  to receive
awards  under the Plan.  The  participants  under the Plan  other  than  Outside
Directors  shall be selected  from time to time by the Board of  Directors  upon
recommendation of the Committee, in their discretion, from among those eligible.

(b)  Awards  under  Article  III of the Plan  shall be made  solely  to  Outside
Directors.

1.4 Type of Awards Under the Plan

Awards under the Plan shall be in the form of shares of Restricted Stock.

1.5 Shares Subject to the Plan

(a) The total number of shares of common stock of the Company  ("Common  Stock")
which may be received in the form of Restricted Stock by participants other than
Outside Directors shall be 817,125 shares,  subject to adjustment as provided in
Section 1.5(c). The total number of shares of Common Stock which may be received
in the form of Restricted  Stock by Outside  Directors  shall be 262,875 shares,
subject to adjustment as provided in Section 1.5(c). Shares distributed pursuant
to the Plan may consist of authorized but unissued  shares or treasury shares of
the Company, as shall be determined from time to time by the Board of Directors.

(b) If any shares of  Restricted  Stock shall be forfeited  to the Company,  the
forfeited  shares of  Restricted  Stock shall again become  available for awards
under the Plan.  Shares of Common  Stock which are  withheld in order to satisfy
federal,  state or local tax liability  shall not count against the Plan's share
limits set forth in Section 1.5(a).

(c) In the event of any dividend or other  distribution  (whether in the form of
cash, Common Stock, other securities, or other property), merger, consolidation,
reorganization,  sale of assets, recapitalization,  stock dividend, stock split,
spin-off, split-up,  split-off,  issuance, repurchase or exchange of securities,
or other change in corporate  structure  affecting the Common Stock such that an
adjustment  is  determined  by the Board to be  appropriate  in order to prevent
dilution or enlargement of benefits under the Plan, then the Board shall, in its
sole discretion, in such a manner as it may deem equitable, adjust any or all of
(i) the  aggregate  number and kind of shares  reserved for  issuance  under the
Plan,  (ii)  the  number  and  kind of  shares  or  other  property  subject  to
outstanding  awards,  and (iii) the  amounts to be paid by award  holders or the
Company,  as the case may be,  with  respect to  outstanding  awards;  provided,
however,  that no such  adjustment  shall  increase the  aggregate  value of any
outstanding award except in insignificant  amounts due to rounding.  The Board's
determination as to which adjustments shall be made and the extent thereof shall
be final, binding and conclusive.

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1.6  Other Compensation Programs

The  existence  and terms of the Plan shall not limit the authority of the Board
of Directors in compensating  employees of the Company and its  Subsidiaries and
the Outside  Directors in such other forms and amounts,  including  compensation
pursuant  to any other  plans as may be  currently  in effect or  adopted in the
future, as it may determine from time to time.

II.  RESTRICTED STOCK FOR EMPLOYEES

2.1 Terms and Conditions of Restricted Stock Awards

Subject  to  the  following  provisions,  all  awards  of  Restricted  Stock  to
participants  other than Outside  Directors shall be in such form and shall have
such terms and conditions as the Board of Directors (upon  recommendation of the
Committee), in its discretion, may from time to time determine:

(a) The Restricted  Stock award shall specify the number of shares of Restricted
Stock to be  awarded,  the price,  if any,  to be paid by the  recipient  of the
Restricted Stock, and the date or dates on which the Restricted Stock will vest,
subject to the following:

     (i) The  Restricted  Stock  shall  become  vested  in full on the  date the
     respective participant terminates his or her employment with the Company or
     Subsidiary  because of his or her death or disability.  For these purposes,
     "disability" shall mean that the participant has been unable to perform the
     essential  functions  of  his  or  her  employment  due  to  disability  or
     incapacity  for  270  consecutive  days  or such  lesser  period  as may be
     determined by the Board of Directors (upon recommendation of the Committee)
     at the time of grant or thereafter; and

     (ii) The  Restricted  Stock  shall  become  vested  in full on the date the
     respective participant terminates his or her employment with the Company or
     Subsidiary  because of retirement.  For these purposes,  "retirement" shall
     mean termination at a time when the participant is eligible to retire under
     a  retirement  program  of the  Company  or one of its  Subsidiaries  or as
     otherwise determined by the Committee.

(b) Stock certificates  representing the Restricted Stock awarded to an employee
shall be registered in the employee's  name. Such  certificates  shall either be
held by the Company on behalf of the  employee,  or  delivered  to the  employee
bearing a legend to restrict  transfer of the  certificate  until the Restricted
Stock has vested, as provided in the grant letter.  The grant letter shall state
whether the employee  shall have the right to vote and/or  receive  dividends on
the Restricted  Stock before it has vested.  No share of Restricted Stock may be
sold,  transferred,  assigned,  or pledged by the employee  until such share has
vested in accordance with the terms of the Restricted Stock award. Except as may
be provided in the grant letter in accordance with Section 2.1(a),  in the event
of an employee's  termination of employment  before all of his Restricted  Stock
has  vested,  the shares of  Restricted  Stock  which  have not vested  shall be
forfeited and any purchase  price paid by the employee (or the fair market value
of the Restricted  Stock on the date of  forfeiture,  if lower) shall be paid to
the employee.  At the time Restricted Stock vests (and, if the employee has been
issued  legended  certificates  of  Restricted  Stock,  upon the  return of such
certificates  to the  Company),  a  certificate  for such vested shares shall be
delivered to the employee (or the beneficiary  designated by the employee in the
event of death), free of all restrictions.

(c)  Notwithstanding  any other  provision  of this  Section  2.1, all shares of
Restricted Stock awarded to participants other than Outside Directors shall vest
upon the  occurrence  of a Change of Control (as defined in Section  4.7) if the
holder of such  Restricted  Stock is an  employee  or  Outside  Director  of the
Company or its Subsidiaries at the time of such Change of Control.

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III. RESTRICTED STOCK FOR OUTSIDE DIRECTORS

3.1  Terms and Conditions of Restricted Stock Awards

Each person who becomes an Outside Director after May 22, 2001 shall be granted,
as of the date of his or her first  election,  an initial  award  (the  "Initial
Award") of 5,625 shares of  Restricted  Stock.  As of June 1 of each year,  each
person then serving as an Outside Director shall be granted an annual award (the
"Annual  Award") of 1,125 shares of  Restricted  Stock.  If on any date on which
Restricted  Stock is to be granted under this Section 3.1 the  remaining  shares
reserved for receipt by Outside  Directors  under the Plan are  insufficient  to
enable  each  Outside  Director  to receive an award for the number of shares of
Restricted Stock set forth above,  each Outside Director shall be awarded his or
her pro rata portion of such remaining shares. Notwithstanding the foregoing, no
award of Restricted Stock shall be made under this Section 3.1 to any person who
has  previously  received an employee  grant under Article II of the Plan unless
the Board of Directors  expressly  authorizes awards for such person. All awards
of Restricted  Stock under this Article III shall have the  following  terms and
conditions:

(a) An Outside Director shall not be required to make any payment to the Company
in consideration of the Restricted Stock received by such Outside Director.

(b) No  Restricted  Stock  granted  under this  Article III shall vest until the
first  anniversary of the date of its grant.  Each Initial Award shall vest with
respect to 20% of the underlying  shares on the first anniversary of the date of
grant,  and an  additional  20% of the  underlying  shares  on  each  subsequent
anniversary  thereof,  provided that the  participant is a Director on each such
anniversary  date. Each Annual Award shall vest with respect to one-third of the
underlying  shares  on the  first  anniversary  of the  date  of  grant,  and an
additional  one-third of the underlying  shares on each  subsequent  anniversary
thereof,  provided that the  participant is a Director on each such  anniversary
date.

(c)  Notwithstanding  the  provisions  of  Section  3.1(b),  in the event of the
Outside  Director's  death  while in service or the  termination  of the Outside
Director's service for disability, all shares of Restricted Stock awarded to the
Outside Director under this Section 3.1 shall become fully vested.  For purposes
of this Section 3.1(c),  termination for "disability"  shall mean termination on
account of the  director's  inability to perform his or her duties as an Outside
Director  due  to  disability  or  incapacity  as  determined  by the  Board  of
Directors.

(d)  Notwithstanding  the provisions of Section 3.1(b),  Restricted  Stock shall
become  vested in full upon an Outside  Director's  retirement.  For purposes of
this Section 3.1(d), "retirement" shall mean termination of Board service, other
than for Cause, after at least five years of service as an Outside Director. For
purposes  of this Plan,  termination  for  "Cause"  shall mean  termination  for
dishonesty or willful misconduct involving moral turpitude.

(e) Stock  certificates  representing the Restricted Stock awarded to an Outside
Director shall be registered in the Outside Director's name and shall be held by
the Company on behalf of the Outside  Director until it has vested.  The Outside
Director shall have the right to vote and to receive dividends on the Restricted
Stock  before it has  vested.  The  Outside  Director  shall not be  entitled to
delivery  of the stock  certificates,  and no share of  Restricted  Stock may be
sold,  transferred,  assigned,  or pledged by the Outside  Director,  until such
share has vested in  accordance  with this Section 3.1. In the event the Outside
Director  ceases to be a director of the Company or a  Subsidiary  before all of
his  or  her  Restricted  Stock  has  vested,  all of  such  Outside  Director's
Restricted  Stock which has not vested shall be forfeited to the Company and the
Company  shall  not be  required  to make  any  payment  therefor.  At the  time
Restricted  Stock vests, a certificate for such vested shares shall be delivered
to the Outside Director (or the heirs or personal representatives of the Outside
Director, in the event of death), free of all restrictions.

(f)  Notwithstanding  any other  provision  of this  Section  3.1, all shares of
Restricted  Stock awarded to Outside  Directors shall become vested in full upon
the occurrence of a Change of Control if the holder of such Restricted  Stock is
a Director of the Company or a Subsidiary at the time of such Change of Control.

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IV.  ADDITIONAL PROVISIONS

4.1 General Restrictions

Each award under the Plan shall be subject to the  requirement  that,  if at any
time the Board of Directors shall  determine that (i) the listing,  registration
or  qualification  of the shares of Common Stock subject or related thereto upon
any  securities  exchange or under any state or federal law, or (ii) the consent
or approval of any  government  regulatory  body,  or (iii) an  agreement by the
recipient of an award with respect to the  disposition of shares of Common Stock
is necessary or desirable (in connection with any requirement or  interpretation
of any federal or state  securities  or banking law,  rule or  regulation)  as a
condition of, or in connection with, the making of such award or the issuance or
delivery  of shares of Common  Stock  thereunder,  such award may not be made or
stock  certificates  shall not be issued or delivered in whole or in part unless
such listing, registration,  qualification, consent, approval or agreement shall
have been  effected or obtained  free of any  conditions  not  acceptable to the
Board of Directors.

4.2  Amendments

(a) The  Board of  Directors  may  amend  the Plan  from  time to time.  No such
amendment shall require approval by the stockholders unless stockholder approval
is required by applicable law,  regulation,  or stock exchange  requirement.  No
amendment shall adversely affect any award previously  granted without the award
holder's written consent.

(b) The Board of Directors (upon recommendation of the Committee) shall have the
authority to amend any award to include any provision which, at the time of such
amendment, is authorized under the terms of the Plan; provided, however, that no
outstanding  award may be  revoked or  altered  in a manner  unfavorable  to the
holder without the written consent of the holder.

4.3  Cancellation of Awards

Any award granted under the Plan other than an award to an Outside  Director may
be  canceled  at any time with the  consent of the holder and a new award may be
made to such holder in lieu thereof,  which award may, in the  discretion of the
Board of Directors (upon recommendation of the Committee),  be on more favorable
terms and conditions than the canceled award.

4.4  Tax Withholding

(a) Whenever the value of an award first  becomes  includible  in an  employee's
gross income for  applicable  tax purposes,  the Company shall have the right to
require the employee to remit to the Company, or make arrangements  satisfactory
to the Board of Directors  regarding payment of, an amount sufficient to satisfy
any federal,  state or local  withholding tax liability prior to the delivery of
any certificate for such shares or the time of such income  inclusion.  Whenever
under the Plan  payments by the Company  are to be made in cash,  such  payments
shall be net of an amount  sufficient  to satisfy  any  federal,  state or local
withholding tax liability.

(b) To the extent  permitted in the grant  letter,  and subject to any terms and
conditions  imposed therein,  an employee entitled to receive Common Stock under
the Plan may  elect  to have the  federal,  state,  and  local  withholding  tax
liability  (or a specified  portion  thereof)  with respect to such Common Stock
satisfied by having the Company withhold from the shares  otherwise  deliverable
to the employee shares of Common Stock having a value equal to the amount of the
withholding tax liability to be satisfied with respect to the Common Stock or by
delivering to the Company shares of  unrestricted  Common Stock.  Alternatively,
the grant  letter  may  require  that a portion  of the  shares of Common  Stock
otherwise  deliverable  be withheld and applied to satisfy the  withholding  tax
obligations with respect to the award.

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4.5  Non-Assignability

Except as  expressly  provided  in the Plan,  no award  under the Plan  shall be
assignable or  transferable  by the holder thereof except by will or by the laws
of descent and distribution.

4.6 No Guarantee of Employment or Service

Neither the  adoption of the Plan nor the grant of an award under the Plan shall
constitute  an  assurance  of continued  employment  or continued  service as an
Outside Director for any period.

4.7 Change of Control

A "Change of Control" shall be deemed to have occurred upon:

(a) the acquisition of all or substantially all of the assets of the Bank or the
Company  by any  person or  entity,  or by any  persons  or  entities  acting in
concert;

(b) the occurrence of any event if, immediately following such event, a majority
of the members of the Board of  Directors  or the board of directors of the Bank
or of any  successor  corporation  shall  consist of persons  other than Current
Members (for these  purposes,  a "Current  Member"  shall mean any member of the
Board of Directors  or the board of  directors  of the Bank as of the  effective
date of the  conversion  of the Bank from the  mutual to  capital  stock form of
ownership and any successor of a Current Member whose nomination or election has
been approved by a majority of the Current Members then on the respective  board
of directors);

(c) the  acquisition  of the  beneficial  ownership,  directly or indirectly (as
provided in Rule 13d-3 under the Act, or any successor  rule), of 25% or more of
the  total  combined  voting  power of all  classes  of stock of the Bank or the
Company by any person or group  deemed a person  under  Section  13(d)(3) of the
Act; or

(d)  approval by the  stockholders  of the Bank or the  Company of an  agreement
providing  for the  merger  or  consolidation  of the Bank or the  Company  with
another  corporation  where  the  stockholders  of  the  Bank  or  the  Company,
immediately  prior to the merger or  consolidation,  would not beneficially own,
directly or indirectly,  immediately after the merger or  consolidation,  shares
entitling such stockholders to 50% or more of the total combined voting power of
all classes of stock of the surviving corporation.

4.8 Duration and Termination

(a) The Plan shall be of unlimited duration.

(b) The Board of Directors  may  discontinue  or terminate the Plan at any time.
Such  action  shall not  impair  any of the  rights  of any  holder of any award
outstanding on the date of the Plan's  discontinuance or termination without the
holder's written consent.

4.9 No Liability

No  member  of the Board of  Directors  or the  Committee,  nor any  officer  or
employee of the  Company or the Bank acting on behalf of the Board of  Directors
or the Committee,  shall be personally  liable for any action,  determination or
interpretation  taken or made with  respect to the Plan,  and all members of the
Board or the  Committee and all officers or employees of the Company or the Bank
acting  on  their  behalf  shall,  to the  extent  permitted  by law,  be  fully
indemnified  and  protected  by the  Company  in  respect  of any  such  action,
determination or interpretation.

4.10 Effective Date

The Plan became  effective  upon approval by the Company's  stockholders  at the
1996 annual meeting.

                                       59Exhibit 10.18

1996 STOCK OPTION INCENTIVE PLAN OF
FLUSHING FINANCIAL CORPORATION
(as amended through March 19, 2002)

I.   GENERAL

1.1  Purposes of the Plan

     The 1996 Stock Option  Incentive  Plan (the  "Plan") of Flushing  Financial
Corporation  (the  "Company")  is intended to advance the best  interests of the
Company and its  subsidiaries  by providing the employees of the Company and its
subsidiaries  and  Outside   Directors  (as  defined  in  Section  1.3(a))  with
additional  incentives  through  the grant of options  ("Options")  to  purchase
shares of Common Stock of the Company ("Common Stock"),  thereby  increasing the
personal stake of such employees and Outside  Directors in the continued success
and  growth of the  Company  and  encouraging  them to  remain in the  employ or
service of the Company.

1.2  Administration of the Plan

(a) The Plan shall be administered by the Board of Directors of the Company (the
"Board of Directors").

(b) All awards  granted  under the Plan shall be on the terms and subject to the
conditions  hereinafter  provided.  Awards  granted to  participants  other than
Outside Directors shall be granted by the Board of Directors upon recommendation
of the Compensation  Committee or such other committee of directors as the Board
of Directors shall designate (the "Committee"),  which shall consist of not less
than two directors and which shall satisfy the requirements of Section 162(m) of
the  Internal  Revenue Code of 1986,  as amended  (the "Code") or any  successor
provision. The Board of Directors shall have no authority to grant awards to any
employee covering a number of shares in excess of the number  recommended by the
Committee.

(c) With respect to all awards  granted  under the Plan,  the Board of Directors
shall have  authority (i) to interpret  conclusively  the provisions of the Plan
and any award granted  thereunder,  (ii) to adopt, amend, and rescind such rules
and  regulations  for carrying out the Plan as it may deem  advisable,  (iii) to
decide  conclusively  all  questions of fact arising in the  application  of the
Plan,  (iv) to make  grants of awards to eligible  employees  and to specify the
amount and terms of such  awards,  the time when such awards will be granted and
the manner in which such  awards will be  exercised,  except that such grants to
participants other than Outside Directors shall be made only upon recommendation
of the  Committee,  and (v) to take  all  other  action  and to make  all  other
determinations  necessary or advisable for the  administration  of the Plan. All
determinations  and acts of the Board of Directors shall be final and binding on
all persons,  including the Company and  recipients of awards under the Plan and
their heirs and personal representatives.

(d) Without  limiting its  authority  and powers,  the Board of Directors  (upon
recommendation of the Committee) shall have the authority with respect to awards
granted to participants other than Outside Directors:

(i) to provide that the shares of Common Stock  received as a result of exercise
of an Option shall be subject to a right of first refusal, pursuant to which the
employee  shall be  required  to offer  first to the Company any shares that the
employee  wishes to sell,  subject to such terms and  conditions as the Board of
Directors may specify;

(ii) to amend the terms of any award, prospectively or retroactively;  provided,
however,  that no amendment  shall impair the rights of the award holder without
his or her written consent; and

(iii) to accelerate the exercisability of any awards.

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(e)  Determinations  by the Board of  Directors  under the Plan with  respect to
awards granted to participants other than Outside Directors (including,  without
limitation,  determinations  of the persons to receive awards;  the form, amount
and  timing of such  awards;  the  terms  and  provisions  of such  awards;  and
provisions  with respect to termination  of employment)  need not be uniform and
may be made by the Board of Directors  (upon  recommendation  of the  Committee)
selectively among persons who receive, or are eligible to receive,  awards under
the Plan, whether or not such persons are similarly situated.

(f) The Board of Directors  shall have no discretion to vary the amount or terms
of awards  granted to Outside  Directors as set forth in Article III,  except as
provided in Section 1.5(c).

1.3 Eligible Participants

(a) All employees,  including officers,  of the Company and of any subsidiaries,
partnerships,  joint  ventures  or other  entities  in which the  Company  owns,
directly or  indirectly,  at least a 20% beneficial  ownership  interest (all of
such  subsidiaries,  partnerships  and  joint  ventures  being  referred  to  as
"Subsidiaries")  shall be eligible to be granted  awards  under the Plan,  other
than under  Article III.  Except as provided in Section  1.3(b) and Article III,
directors of the Company or any  Subsidiary who are not employees of the Company
or its Subsidiaries  ("Outside  Directors")  shall not be eligible to be granted
awards  under the Plan.  The  participants  under the Plan  other  than  Outside
Directors  shall be selected  from time to time by the Board of  Directors  upon
recommendation of the Committee, in their discretion, from among those eligible.

(b) Awards  shall be granted  under  Article  III of the Plan  solely to Outside
Directors.

1.4 Type of Awards Under the Plan

Awards under the Plan may be in the form of Options to purchase shares of Common
Stock  (including both incentive stock options within the meaning of Section 422
of the Code  ("Incentive  Stock  Options") and  nonstatutory  stock options) and
stock appreciation rights ("Stock Appreciation Rights") which may be issued only
in tandem with Options.

1.5 Shares Subject to the Plan.

(a) The total  number of shares of Common  Stock which may be received  upon the
exercise of Options  (including  Stock  Appreciation  Rights related thereto) by
participants other than Outside Directors shall be 2,115,937 shares,  subject to
adjustment as provided in Section  1.5(c).  The total number of shares of Common
Stock  which may be  received  upon the  exercise  of Options  (including  Stock
Appreciation  Rights  related  thereto)  by Outside  Directors  shall be 814,687
shares,  subject to adjustment as provided in Section 1.5(c).  In no event shall
an eligible  employee be granted  Options in any  calendar  year with respect to
more than 168,750  shares,  subject to adjustment as provided in Section 1.5(c).
Shares  distributed  pursuant to the Plan may consist of authorized but unissued
shares or treasury  shares of the Company,  as shall be determined  from time to
time by the Board of Directors.

(b) If any Option under the Plan shall expire,  terminate or be canceled (except
upon the holder's exercise of a tandem Stock Appreciation  Right) for any reason
without having been  exercised in full,  the shares  subject to the  unexercised
Option shall again become available for grants under the Plan.  Shares of Common
Stock equal in number to any shares  surrendered  in payment of the option price
of an Option,  and shares of Common Stock which are withheld in order to satisfy
federal, state or local tax liability,  shall not count against the Plan's share
limits set forth in Section 1.5(a).

(c) In the event of any dividend or other  distribution  (whether in the form of
cash, Common Stock, other securities, or other property), merger, consolidation,
reorganization,  sale of assets, recapitalization,  stock dividend, stock split,
spin-off, split-up,  split-off,  issuance, repurchase or exchange of securities,
or other change in corporate  structure  affecting the Common Stock such that an
adjustment  is  determined  by the Board to be  appropriate  in order to prevent
dilution or enlargement of benefits under the Plan, then the Board shall, in its
sole discretion, in such a manner as it may deem equitable, adjust any or all of
(i) the  aggregate  number and kind of shares  reserved for

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<PAGE>

issuance  under the Plan,  (ii) the number and kind of shares as to which awards
may be granted to any  individual in any fiscal year,  (iii) the number and kind
of shares or other property subject to outstanding awards, and (iv) the exercise
price of  outstanding  Options and any other amounts to be paid by award holders
or the  Company,  as the  case  may be,  with  respect  to  outstanding  awards;
provided, however, that no such adjustment shall increase the aggregate value of
any outstanding award except in insignificant amounts due to rounding.

In addition,  upon any  reorganization,  merger, or consolidation as a result of
which  the  Company  is  not  the  surviving   corporation  (or  survives  as  a
wholly-owned subsidiary of another corporation), or upon a sale of substantially
all the assets of the Company,  or upon the  dissolution  or  liquidation of the
Company,  the  Board  may  take  such  action  as it  in  its  discretion  deems
appropriate to (i) cash out outstanding Options and Stock Appreciation Rights at
or  immediately  prior  to the  date of such  event,  or  (ii)  provide  for the
assumption of outstanding  Options and Stock  Appreciation  Rights by surviving,
successor or transferee corporations.

The Board's  determination as to which  adjustments shall be made and the extent
thereof shall be final, binding and conclusive.

1.6 Other Compensation Programs

The  existence  and terms of the Plan shall not limit the authority of the Board
of Directors in compensating  employees of the Company and its  Subsidiaries and
the Outside  Directors in such other forms and amounts,  including  compensation
pursuant  to any other  plans as may be  currently  in effect or  adopted in the
future, as it may determine from time to time.

II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS FOR EMPLOYEES

2.1 Terms and Conditions of Options

Subject to the  following  provisions,  all  Options  granted  under the Plan to
participants  other than Outside  Directors shall be in such form and shall have
such terms and conditions as the Board of Directors (upon  recommendation of the
Committee), in its discretion, may from time to time determine.

(a) Option  Price.  The option  price per share  shall not be less than the fair
market value of the Common Stock (as  determined  by the Board of  Directors) on
the date the Option is granted.  Unless the Board of Directors  shall  determine
otherwise,  the fair market  value of the Common  Stock on a given date shall be
the mean between the highest and lowest quoted  selling  price,  regular way, of
the Common Stock on the Nasdaq National  Market (or the principal  exchange upon
which the Common  Stock is listed) on the day before  such date,  or, if no such
sale of Common Stock occurs on such day, the mean between the highest and lowest
quoted selling price on the nearest trading date before such day.

(b) Term of  Option.  The term of an Option  shall not exceed ten years from the
date of grant, and,  notwithstanding any other provision of this Plan, no Option
shall be exercised after the expiration of its term.

(c)  Exercisability  of Options.  Options shall be  exercisable  at such time or
times and shall be subject to such terms and conditions as shall be specified in
the Option grant, subject to the following:

(i) An Option shall become exercisable in full on the date the respective option
holder  terminates his or her employment with the Company or Subsidiary  because
of his or her death or disability.  For these purposes,  "disability" shall mean
that the option holder has been unable to perform the essential functions of his
or her employment due to disability or incapacity  for 270  consecutive  days or
such  lesser  period  as may be  determined  by the  Board  of  Directors  (upon
recommendation of the Committee) at the time of grant or thereafter; and

(ii) An  Option  shall  become  exercisable  in full on the date the  respective
option holder  terminates his or her  employment  with the Company or Subsidiary
because of retirement.  For these purposes,  "retirement" shall mean

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<PAGE>

termination  at a time when the  option  holder is  eligible  to retire  under a
retirement  program of the Company or one of its  Subsidiaries  or as  otherwise
determined by the Committee.

(d) Payment for  Shares.  Payment for shares as to which an Option is  exercised
shall be made in such  manner and at such time or times as shall be  provided in
the Option  grant or an  amendment  thereof.  The grant  letter may provide that
payment may be made in cash (including cash equivalents),  by delivery of shares
of Common Stock already  owned by the option holder for at least six months,  by
such other  instrument  as may be  acceptable  to the Board of  Directors  (upon
recommendation  of the  Committee)  (including a  promissory  note issued to the
Company  or  Flushing  Savings  Bank,  FSB (the  "Bank"),  if and to the  extent
permitted by applicable law, or any instrument  required pursuant to any program
established by the Company from time to time for the exercise of Options without
the  requirement of any cash payment by the option holder (a "cashless  exercise
program")), or by any combination of the foregoing.  Shares delivered in payment
of the exercise price shall be valued at their fair market value.

(e) Shareholder Rights. The holder of an Option shall, as such, have none of the
rights of a shareholder.

(f) Termination of Employment. Subject to Sections 2.1(b) and 2.1(c) hereof, the
Option grant, or an amendment  thereof,  may contain  provisions with respect to
the period, not extending beyond the term of the Option, during which the Option
may be exercised following the option holder's termination of employment.

(g) Change of Control.  Notwithstanding any other provision of this Section 2.1,
upon the  occurrence  of a Change of Control  (as defined in Section  4.7),  all
Options and Stock Appreciation  Rights that are outstanding and that are held by
option  holders who are  employees  or Outside  Directors  of the Company or its
Subsidiaries  at the time of such  Change of Control  shall  become  immediately
exercisable.

2.2 Stock Appreciation Rights in Tandem with Options

(a) The Board of Directors (upon recommendation of the Committee) may, either at
the time of grant of an Option  under  Section 2.1 or, with respect to an Option
that is not an  Incentive  Stock  Option,  at any  time  during  the term of the
Option,  grant Stock  Appreciation  Rights to  participants  other than  Outside
Directors  with  respect to all or any  portion  of the  shares of Common  Stock
covered by such Option. A Stock  Appreciation Right may be exercised at any time
the Option to which it relates is then  exercisable,  but only to the extent the
Option  to which  it  relates  is  exercisable  and  subject  to the  conditions
applicable  to such  Option.  Alternatively,  the grant may provide that a Stock
Appreciation  Right may be  exercised  only upon the  occurrence  of a Change of
Control, in which case the Stock Appreciation Right shall be exercisable only to
the extent the Option to which it  relates is  exercisable  upon such  Change of
Control.  When a Stock Appreciation  Right is exercised,  the Option to which it
relates shall cease to be exercisable to the extent of the number of shares with
respect to which the Stock Appreciation Right is exercised.  Similarly,  when an
Option is exercised, the Stock Appreciation Right relating to the shares covered
by such Option exercise shall terminate.

(b) Upon exercise of a Stock Appreciation  Right, the holder shall receive,  for
each share with respect to which the Stock  Appreciation  Right is exercised,  a
cash payment in an amount (the "Appreciation")  equal to the amount by which (i)
the fair market  value of a share of Common Stock on the date of exercise of the
Stock  Appreciation  Right exceeds (ii) the option price per share of the Option
to which the Stock Appreciation Right relates. The Appreciation shall be paid to
the  option  holder  within 30 days of the  exercise  of the Stock  Appreciation
Right.

(c) The grant may provide that if a Stock Appreciation Right (other than a Stock
Appreciation  Right  granted  in  tandem  with an  Incentive  Stock  Option)  is
exercised within 90 days after the occurrence of a Change of Control, in lieu of
the amount  described in Section  2.2(b),  the holder shall receive a payment in
cash equal to the  amount by which (i) the  greater  of (A) the  highest  market
price per share of Common Stock during the 90-day period  preceding  exercise of
the Stock  Appreciation Right or (B) the highest price per share of Common Stock
(or the cash equivalent thereof as determined by the Board of Directors) paid by
an  acquiring  person  during the 90-day  period  preceding a Change of Control,
exceeds  (ii) the  option  price  per  share of the  Option  to which  the Stock
Appreciation Right relates.

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<PAGE>

2.3 Statutory Options

Subject to the  limitations  on Option terms set forth in Section 2.1, the Board
of Directors (upon  recommendation of the Committee) shall have the authority to
grant to employees (i) Incentive Stock Options and (ii) Options  containing such
terms  and  conditions  as  shall  be  required  to  qualify  such  Options  for
preferential  tax  treatment  under  the Code as in  effect  at the time of such
grant.  Options granted pursuant to this Section 2.3 may contain any other terms
and  conditions  permitted  by  Article  II of  this  Plan  (including,  without
limitation,  provision for Stock Appreciation  Rights),  to the extent that such
terms and  conditions  do not cause the Options to lose their  preferential  tax
treatment.   To  the  extent  the  Code  and  Treasury  Regulations  promulgated
thereunder  require a plan to contain  specified  provisions in order to qualify
options for  preferential  tax treatment,  such provisions shall be deemed to be
stated in this Plan.

III. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS FOR OUTSIDE DIRECTORS

3.1 Terms and Conditions of Options

Each person who becomes an Outside Director after May 22, 2001 shall be granted,
as of the date of his or her first election, an Option to purchase 11,250 shares
of Common Stock (the "Initial  Option").  As of June 1 of each year, each person
then serving as an Outside Director shall be granted an Option to purchase 9,900
shares of Common Stock (the "Annual  Options").  If on any date on which Options
are to be granted  under this  Section 3.1 the  remaining  shares  reserved  for
receipt by Outside  Directors  under the Plan are  insufficient  to enable  each
Outside Director to receive an Option to purchase the number of shares of Common
Stock set forth  above,  each  Outside  Director  shall be  granted an Option to
purchase his or her pro rata portion of such remaining  shares.  Notwithstanding
the  foregoing,  no grant of Options shall be made under this Section 3.1 to any
person who has  previously  received an employee  grant under  Article II of the
Plan unless the Board of Directors expressly  authorizes awards for such person.
All awards of Options under this Article III shall have the following  terms and
conditions:

(a) Option  Price.  The option price per share of Common Stock shall be the fair
market value of the Common  Stock on the date of grant,  which shall be equal to
the mean between the highest and lowest quoted  selling  price,  regular way, of
the Common Stock on the Nasdaq National  Market (or the principal  exchange upon
which the  Common  Stock is  listed)  on the day  before  the date the Option is
granted,  or, if no such  sale of Common  Stock  occurs on such  date,  the mean
between the highest and lowest quoted selling price on the nearest  trading date
before such date.

(b) Term of  Option.  The term of an Option  shall be ten years from the date of
grant,  subject to earlier termination in the event of termination of service as
an Outside  Director as set forth in paragraphs (e), (f), (g) and (i) below. The
term  "option  period"  refers  to  the  period  after  the  Option  has  become
exercisable  and prior to the  earliest  date on which  the  option  expires  or
terminates.

(c)  Exercisability.  No Option  granted  under this  Article  III shall  become
exercisable  until the first  anniversary of the date of its grant. Each Initial
Option shall become  exercisable with respect to 20% of the underlying shares on
the  first  anniversary  of the  date of  grant,  and an  additional  20% of the
underlying  shares on each  subsequent  anniversary  thereof,  provided that the
option holder is a Director on each such  anniversary  date.  Each Annual Option
shall become  exercisable with respect to one-third of the underlying  shares on
the first  anniversary of the date of grant, and an additional  one-third of the
underlying  shares on each  subsequent  anniversary  thereof,  provided that the
option holder is a Director on each such anniversary date.

(d) Method of Exercise.  The Options may be exercised in whole or in part (for a
whole number of shares) at any time during the option  period by giving  written
notice  of  exercise  to the  Company  specifying  the  number  of  shares to be
purchased, accompanied by payment of the purchase price. Payment of the purchase
price may, at the election of the Outside  Director,  be made by delivery of the
exercise price in cash  (including cash  equivalents),  by delivery of shares of
Common Stock already owned by the Outside  Director for at least six months,  by
delivery of any documents  required under any cashless exercise program that the
Company may have in effect at the time of

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<PAGE>

such  exercise,  or by any  combination of the  foregoing.  Shares  delivered in
payment of the exercise  price shall be valued at their fair market value on the
date of exercise (determined as provided in Section 3.1(a)).

(e) Termination of Service as Outside Director Generally. If an option holder is
removed as an Outside Director for Cause,  such Outside  Director's Option shall
terminate on the date of such  termination of service.  For the purposes of this
Plan,  removal  for  "Cause"  shall  mean  removal  for  dishonesty  or  willful
misconduct  involving moral  turpitude.  If an Outside Director resigns from the
Board of Directors or the board of directors of a Subsidiary  or does not permit
his or her name to be submitted to stockholders  for  re-election,  in each case
other  than  upon  his  or her  Retirement  (as  defined  below),  such  Outside
Director's  Option may be exercised  only within 60 days of such  termination of
service and only to the extent such Option was  exercisable  on the date of such
termination  of service,  provided  that in no event shall the  exercise  period
extend  beyond the  expiration  of the Option term. If the Board of Directors or
the board of directors of a Subsidiary  does not submit an option  holder's name
to  stockholders  for  re-election or if an option holder's name is submitted to
stockholders  for  re-election  but he or she is not  re-elected,  such  Outside
Director's Option may be exercised only within six months of the option holder's
termination of service and only to the extent such Option was exercisable on the
date of such  termination  of  service,  provided  that in no  event  shall  the
exercise period extend beyond the expiration of the Option term.

(f) Death or Disability.  Notwithstanding  the provisions of Section 3.1(c), any
Option held by an Outside Director whose service as such is terminated by reason
of his or her death or Disability shall become  immediately  exercisable and may
be exercised  by such option  holder or his or her legal  representatives  for a
period of two years  following his or her death or disability,  provided that in
no event shall the exercise  period extend  beyond the  expiration of the Option
term. For purposes of this Section 3.1(f),  termination for  "disability"  shall
mean  termination on account of the option holder's  inability to perform his or
her duties as an Outside  Director due to disability or incapacity as determined
by the Board of Directors.

(g) Retirement.  Notwithstanding  the provisions of Section  3.1(c),  any Option
held by an Outside Director whose service as such is terminated by reason of his
or her retirement shall become  immediately  exercisable and may be exercised by
such option holder for a period of two years  following  his or her  retirement,
provided that in no event shall the exercise period extend beyond the expiration
of the Option  term.  For  purposes  of this  Section  3.1(g),  termination  for
"retirement"  shall mean termination,  other than for Cause, after at least five
years of service as an Outside Director.

(h) Shareholder Rights. The holder of an Option shall, as such, have none of the
rights of a shareholder.

(i) Change of Control.  Notwithstanding  the  provisions of Sections  3.1(c) and
(e),  upon the  occurrence  of a Change of  Control  (i) all  Options  and Stock
Appreciation Rights that are outstanding and that are held by option holders who
are  Directors at the time of such Change of Control  shall  become  immediately
exercisable and (ii) any Option and Stock  Appreciation Right granted under this
Section 3.1 that is or becomes exercisable upon a Change of Control shall expire
no sooner than one year after any  termination of service  following a Change of
Control.

3.2 Stock Appreciation Rights in Tandem with Options

(a) Each Option grant to an Outside  Director under the Plan shall be granted in
tandem  with  Stock  Appreciation  Rights  with  respect to all of the shares of
Common  Stock  covered  by such  Option.  The Stock  Appreciation  Rights may be
exercised  only within the 90-day period  following a Change of Control.  When a
Stock  Appreciation  Right is  exercised,  the Option to which it relates  shall
cease to be  exercisable  to the extent of the number of shares with  respect to
which the Stock  Appreciation Right is exercised.  Similarly,  when an Option is
exercised,  the Stock Appreciation Rights relating to the shares covered by such
Option exercise shall terminate.

(b) Upon exercise of a Stock Appreciation Right, the holder shall receive within
30 days after  such  exercise,  for each  share with  respect to which the Stock
Appreciation Right is exercised, a cash payment equal to the amount by which (i)
the greater of (A) the highest market price per share of Common Stock during the
90-day period  preceding  exercise of the Stock  Appreciation  Right and (B) the
highest  price per share of Common  Stock  (or the cash  equivalent  thereof  as
determined  by the Board of  Directors)  paid by an acquiring  person during the
90-day  period

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<PAGE>

preceding  a Change of Control  exceeds  (ii) the option  price per share of the
Option to which the Stock Appreciation Right relates.

3.3 Nonstatutory Options

The  Options  granted  to Outside  Directors  under  this  Article  III shall be
nonstatutory  stock  options,  defined as stock  options which do not qualify as
Incentive Stock Options.

IV. ADDITIONAL PROVISIONS

4.1 General Restrictions

Each award under the Plan shall be subject to the  requirement  that,  if at any
time the Board of Directors shall  determine that (i) the listing,  registration
or  qualification  of the shares of Common Stock subject or related thereto upon
any  securities  exchange or under any state or federal law, or (ii) the consent
or approval of any  government  regulatory  body,  or (iii) an  agreement by the
recipient of an award with respect to the  disposition of shares of Common Stock
is necessary or desirable (in connection with any requirement or  interpretation
of any federal or state  securities  or banking law,  rule or  regulation)  as a
condition of, or in connection  with, the granting of such award or the issuance
or delivery of shares of Common Stock thereunder,  such award may not be granted
or   exercised  in  whole  or  in  part  unless  such   listing,   registration,
qualification,  consent,  approval  or  agreement  shall have been  effected  or
obtained free of any conditions not acceptable to the Board of Directors.

4.2 Amendments

(a) The  Board of  Directors  may  amend  the Plan  from  time to time.  No such
amendment shall require approval by the stockholders unless stockholder approval
is required by applicable law,  regulation,  or stock exchange  requirement.  No
amendment  shall  adversely  affect any award  previously  granted  without  the
holder's written consent.

(b) The Board of Directors (upon recommendation of the Committee) shall have the
authority to amend any grant to include any provision which, at the time of such
amendment,  is authorized under the terms of the Plan;  however,  no outstanding
award may be revoked or altered in a manner  unfavorable  to the holder  without
the written consent of the holder.

4.3 Cancellation of Options

Any Option  granted  under the Plan  other than an Option  granted to an Outside
Director may be canceled at any time with the consent of the option holder and a
new Option may be granted to such holder in lieu  thereof,  which Option may, in
the discretion of the Board of Directors (upon recommendation of the Committee),
be on more favorable terms and conditions than the canceled Option.

4.4 Tax Withholding

(a) Whenever the Company  proposes or is required to issue or transfer shares of
Common  Stock under the Plan,  or whenever  the value of an award first  becomes
includible  in an  employee's  gross income for  applicable  tax  purposes,  the
Company shall have the right to require the employee to remit to the Company, or
make arrangements  satisfactory to the Board of Directors  regarding payment of,
an amount  sufficient  to satisfy any federal,  state or local  withholding  tax
liability  prior to the delivery of any  certificate for such shares or the time
of such income inclusion. Whenever under the Plan payments by the Company are to
be made in cash,  such payments shall be net of an amount  sufficient to satisfy
any federal, state or local withholding tax liability.

(b) To the extent  permitted in the grant  letter,  and subject to any terms and
conditions  imposed therein,  an employee entitled to receive Common Stock under
the Plan may  elect  to have the  federal,  state,  and  local

                                       66
<PAGE>

withholding tax liability (or a specified  portion thereof) with respect to such
Common Stock satisfied by having the Company  withhold from the shares otherwise
deliverable  to the employee  shares of Common Stock having a value equal to the
amount of the  withholding  tax  liability to be  satisfied  with respect to the
Common  Stock or by  delivering  to the Company  shares of  unrestricted  Common
Stock. Alternatively,  the grant letter may require that a portion of the shares
of Common  Stock  otherwise  deliverable  be withheld and applied to satisfy the
withholding tax obligations with respect to the Option.

4.5 Non-transferability

Unless otherwise provided by the Board of Directors (upon  recommendation of the
Committee),  (i) awards  shall not be  transferable  by the holder other than by
will or by the laws of  descent  and  distribution,  and (ii)  during  the award
holder's  lifetime,  all awards shall be  exercisable  only by such holder.  The
Board of Directors (upon  recommendation  of the Committee),  in its discretion,
may permit awards to be transferred by gift or for estate  planning  purposes to
such transferees and on such terms and conditions as may be determined by it.

4.6 No Guarantee of Employment or Service

Neither the  adoption of the Plan nor the grant of an award under the Plan shall
constitute  an  assurance  of continued  employment  or continued  service as an
Outside Director for any period.

4.7 Change of Control

A "Change of Control" shall be deemed to have occurred upon:

(a) the acquisition of all or substantially all of the assets of the Bank or the
Company  by any  person or  entity,  or by any  persons  or  entities  acting in
concert;

(b) the occurrence of any event if, immediately following such event, a majority
of the members of the Board of  Directors  or the board of directors of the Bank
or of any  successor  corporation  shall  consist of persons  other than Current
Members (for these  purposes,  a "Current  Member"  shall mean any member of the
Board of Directors  or the board of  directors  of the Bank as of the  effective
date of the  conversion  of the Bank from the  mutual to  capital  stock form of
ownership and any successor of a Current Member whose nomination or election has
been approved by a majority of the Current Members then on the respective  board
of directors);

(c) the  acquisition  of the  beneficial  ownership,  directly or indirectly (as
provided in Rule 13d-3 under the Act, or any successor  rule), of 25% or more of
the  total  combined  voting  power of all  classes  of stock of the Bank or the
Company by any person or group  deemed a person  under  Section  13(d)(3) of the
Act; or

(d)  approval by the  stockholders  of the Bank or the  Company of an  agreement
providing  for the  merger  or  consolidation  of the Bank or the  Company  with
another  corporation  where  the  stockholders  of  the  Bank  or  the  Company,
immediately  prior to the merger or  consolidation,  would not beneficially own,
directly or indirectly,  immediately after the merger or  consolidation,  shares
entitling such stockholders to 50% or more of the total combined voting power of
all classes of stock of the surviving corporation.

4.8 Duration and Termination

(a) The Plan shall be of unlimited duration.  Notwithstanding the foregoing,  no
Incentive  Stock  Option  shall be  granted  under  the Plan more than ten years
following the effective  date of the Plan, but awards granted prior to such date
may extend beyond such date,  and the terms of this Plan shall continue to apply
to all awards granted hereunder.

(b) The Board of Directors  may  discontinue  or terminate the Plan at any time.
Such  action  shall not  impair  any of the  rights  of any  holder of any award
outstanding on the date of the Plan's  discontinuance or termination without the
holder's written consent.

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<PAGE>

4.9 No Liability

No  member  of the Board of  Directors  or the  Committee,  nor any  officer  or
employee of the  Company or the Bank acting on behalf of the Board of  Directors
or the Committee,  shall be personally  liable for any action,  determination or
interpretation  taken or made with  respect to the Plan,  and all members of the
Board of Directors or the Committee and all officers or employees of the Company
or the Bank acting on their  behalf  shall,  to the extent  permitted by law, be
fully  indemnified  and  protected by the Company in respect of any such action,
determination or interpretation.

4.10 Effective Date

The Plan became  effective  upon approval by the Company's  stockholders  at the
1996 annual meeting.

                                       68

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