Document:

<PAGE>

                    SEVERANCE AGREEMENT AND GENERAL RELEASE

         This SEVERANCE AGREEMENT AND GENERAL RELEASE (the "Agreement") is made
by and between Claimsnet.com Inc. 12801 N. Central, Suite 1515, Dallas, Dallas
County, Texas 75243 ("Claimsnet"), and Terry A. Lee ("Employee").

         1. Background. Employee's employment with Claimsnet has ceased
effective on June 16, 2000.

         2. Consideration. As consideration for this Agreement, Claimsnet agrees
to pay to the order of Employee, the sum of ONE HUNDRED SIXTY-TWO THOUSAND FIVE
HUNDRED AND NO/100 DOLLARS ($162,500.00) and has agreed to the other terms and
conditions of this Agreement Employee acknowledges the sufficiency of this
Consideration and further acknowledges that the Consideration is in excess of
that which Employee would be entitled to absent the execution of this Agreement.
As consideration for this Agreement, Employee has agreed resign from the Board
of Directors of Claimsnet and has agreed to the release and other terms and
conditions of this Agreement.

         3. Schedule of Payments. The ONE HUNDRED SIXTY-TWO THOUSANDS FIVE
HUNDRED AND NO/100 DOLLARS ($162,500) consideration is to be paid (or has been
paid, as the case may be) to the Employee in the amounts and schedule set forth
on Exhibit A. The first payment in the gross amount of $23,214.29 has already
been made. The remaining payments shall commence with the next employee payroll
period and will be made in concurrence with the bi-weekly payroll period of
Claimsnet in the gross amount of $11,607.15 for 12 pay periods. Each payment
will have Federal Tax withheld at a flat 28% rate and Medicare and FICA
deductions withheld at statutory rates. Employee voluntary 401(k) contributions
shall be deducted as permitted by law and according to Employee's instructions
to the plan administrator (currently, 5% of gross pay). The final payments shall
be net of deductions to repay all amounts due and owing by the employee to
Claimsnet by reason of the loan of Claimsnet to the Employee in the original
principal amount of $25,000, plus interest accrued through June 22, 2000, in the
amount of $4,261.02. Payments made to the employee, but applied to payment of
the loan, shall be reflected as income to the employee on a Form W-2 or Form
1099 to be provided for year 2000 tax filings.

         4. Late Payments. In the event that any of the payments called for in
the immediately preceding numbered paragraph are not received by the Employee
within fifteen (15) days after the due date, the Employee shall have the option
to accelerate all remaining payments due, upon written notice to Claimsnet.

         5. Tax Responsibility. Employee hereby assumes any and all
responsibility for federal, state, or local income tax liability for any monies
paid to Employee pursuant to this Agreement. If

<PAGE>

any governmental body determines that tax is owed by Employee ("Tax") and that
the Tax should have been withheld in addition to those amounts already withheld
by Claimsnet, Employee expressly represents that he will pay the Tax, and any
associated penalties and interest, and shall hold Claimsnet harmless for such
Tax, and any associated penalties and interest.

         6. Release. Except for breaches of this Agreement, Employee and his
representatives, heirs, successors, and assigns do hereby completely release and
forever discharge Claimsnet, its Affiliate companies (as defined below), and its
and their present and former shareholders, officers, directors, agents,
employees, attorneys, successors, and assigns (collectively, "Released Parties")
from all claims, rights, demands, actions, obligations, liabilities, and causes
of action of every kind and character, known or unkown, mature or unmatured,
which Employee may now have or has ever had arising from or in any way related
to his employment by Claimsnet, including, without limitation, the termination
thereof and Employee's efforts to find subsequent employment, whether based on
tort, contract (express or implied), or any federal, state or local law, statute
or regulation (collectively, the "Released Claims"). Specifically and not in
limitation of the foregoing release, the Released Claims shall include any
claims arising under Title VII of the Civil Rights Act of 1964, and the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, the Employee Retirement Income Security
Act, the Civil Rights Act of 1991, the Fair Labor Standards Act, as well as any
claims asserting wrongful termination, breach of contract, breach of the
covenant of good faith and fair dealing, negligent or intentional infliction of
distress, negligent or intentional interference with contract or prospective
economic advantage, defamation, invasion of privacy, and claims related to
disability. Released Claims shall also include, but not be limited to, claims
for wages or salary, severance pay, bonuses, sick leave, vacation pay, life or
health insurance, or any other fringe benefit, except for Employee's COBRA
rights/benefits. Employee likewise releases the Released Parties from any and
all obligations for attorneys' fees incurred in regard to the above claims or
otherwise. Notwithstanding the foregoing, this Release is not intended to be,
and shall not be construed to be, a bar to Employee's rights, if any, to
unemployment compensation. For purposes of this Agreement, "Affiliate" shall be
defined as ANC Holdings, Inc., National Financial Corporation, American Medical
Finance, Inc., American Tuition Finance, Inc. or any person or entity that
directly or indirectly controls, is controlled by, or is under common control
with Claimsnet, National Financial Corporation, American Tuition Finance, Inc.
and/or American Medical Finance, Inc.

         7. Warranty/Covenant Not To Assert Claims. Employee warrant that he has
not initiated or filed any claims of any type against any Released Party with
any court, governmental or administrative agency, and covenants that he will not
do so in the future, directly or indirectly, nor will he assist others in doing
so.

         8. Nonadmission. The parties hereto mutually understand and agree that
this Agreement is not intended to and does not constitute any admission of
fault, wrongdoing, responsibility or liability on the part of Claimsnet.
Employee understands and acknowledges that Claimsnet has denied, continues to
deny, and will deny in the future all allegations of wrongdoing, liability, or
other impropriety, breach of contract, or illegality, if any, regarding
Employee's treatment as an employee or the termination of his employment with
Claimsnet.

<PAGE>

         9. Confidential Information. Employee agrees not to divulge, reveal,
communicate, or use for the benefit of himself or any person or entity other
than Claimsnet, to the detriment of Clamsnet, any of Claimsnet's or its
Affiliates' confidential or proprietary information. "Confidential information"
includes (as an illustration and not a limitation): (i) security codes; (ii)
financial and business information generated by or for the benefit of Claimsnet;
(iii) strategic plans; (iv) customer lists, personnel and salary information;
(v) product development and market research; (vi) vendor information that
Claimsnet is obligated to keep in confidence, or (vii) software or source code
information. "Propriety information" includes, but is not limited to, any
materials, documents, software, source codes and files for which Claimsnet, ANC
Holdings, Inc., National Financial Corporation, American Tuition Finance, Inc.
and/or American Medical Finance, Inc. claims or claimed ownership or authorship.

         10. Goodwill. The parties to this Agreement shall not make any comments
to any person or entity that are adverse to the other party's interest or that
reflect negatively on the other party. Consistent with this provision, Claimsnet
will follow its standard practices regarding employment references.

         11. Confidentiality of Agreement. The parties will treat the terms of
this Agreement and the negotiations surrounding it as confidential. Employee
will not disclose to any person, including but not limited to mean employees or
former employees of Claimsnet or its Affiliates, the terms of this Agreement
except disclosure may be made to the following: a) in confidence to his spouse;
b) his attorney and tax-advisor, if any; or, c) where requried by law. Employee
shall instruct and require each such person to hold the terms of this Agreement
in confidence.

         12. Review and Right of Revocation. Employee hereby acknowledges that
Claimsnet has advised him, in writing and by this writing specifically, to
consult an attorney prior to signing this Agreement. Employee has two (2)
business days from the date this Agreement is presented to decide whether to
sign it. If Employee signs this Agreement within this two (2) day period,
Employee will be able to revoke his acceptance of this Agreement at any time
during the three (3) calendar days following execution of this Agreement by him.
In order to effectuate Employee's revocation, he must notify Bo W. Lycke, in
writing, at Claimsnet, 12801 N. Central, Suite 1515, Dallas, Dallas County,
Texas 75243. If Employee signs this Agreement within this two (2) day period,
this Agreement shall not take effect and shall not be enforceable until after
the three (3) days has passed without Claimsnet receiving a written revocation
from Employee.

         13. Waiver. As further consideration for this Agreement and for the
purposes of implementing a full and complete release and discharge of Claimsnet,
Employee expressly acknowledges that this Agreement is intended to include in
its effect, without limitation, any claims which he does not know or suspect to
exist in his favor at the time of execution hereof, and the Agreement
contemplates the extinguishment of any such claim or claims.

<PAGE>

         14. Future Employment. Employee shall not at any time in the future
seek employment with Claimsnet, ANC Holdings, Inc., National Financial
Corporation, American Tuition Finance Inc. and/or American Medical Finance,
Inc., and agrees that Claimsnet, National Financial Corporation, American
Tuition Finance, Inc. and/or American Medical Finance, Inc. shall not at any
time be under any obligation to employ him or consider him for employment.

         15. Cooperation. Employee shall cooperate with Claimsnet in the orderly
transfer of Employee's responsibilities to other person(s).

         16. Return of Property. Employee shall promptly return to Claimsnet all
property of Claimsnet, National Financial Corporation, and/or American Medical
Finance, Inc., including, without limitation, all equipment, tangible
proprietary information, documents, books, records, reports, contracts, lists,
computer disks (or other computer-generated files or data), or copies thereof,
created on any medium, prepared or obtained by Employee in the course of or
incident to his employment with Claimsnet.

         17. Integration. The parties understand and agree that the preceding
Sections recite the sole consideration of this Agreement, that no representation
or promise has been made by Claimsnet, Employee, or any Released Party, on any
subject whatsoever, except as expressly set forth in this Agreement; and that
all agreements and understandings between the parties on any subject whatsoever
are embodied and expressed in this Agreement. This agreement shall supersede all
prior agreements and understandings among Employee, Claimsnet, and any Released
Party, whether written or oral, express or implied, with respect to any subject
whatsoever, including without limitation, any employment-related agreement or
benefit, except to the extent that the provisions of any such agreement or
benefit have been expressly referred to in this Agreement as having continued
effect.

         18. Assignment; Successors and Assigns. Employee agrees that he will
not assign, sell, transfer, delegate, or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement. Any such purported assignment, transfer, or delegation
shall be null, void and of no force and effect. Employee represents that he has
not previously assigned or transferred any claims or rights released by him
pursuant to this Agreement. Subject to the foregoing, this Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
heirs, successors, attorneys, and permitted assigns. This Agreement shall also
inure to the benefit of any Released Party. This Agreement shall not benefit
any other person or entity except as specifically enumerated in this Agreement.

         19. Severability. If any provision of this Agreement, or its
application to any person, place or circumstances, is held by an arbitrator or a
court of competent jurisdiction to be invalid, unenforceable, or void, such
provision shall be enforced to the greatest extent permitted by law, and the
remainder of this Agreement and such provision as applied to other persons,
places, and circumstances shall remain in full force and effect.

<PAGE>

         20. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Texas, without regard to conflicts of
law or choice of law rules.

         21. Interpretation. This Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party. By way
of example and not in limitation, this Agreement shall not be construed in favor
of the party receiving a benefit nor against the party responsible for any
particular language in this Agreement.

         22. Execution. Employee acknowledges that he had at least two(2)
business days from his receipt of the Agreement, within which to consider
whether or not to sign the Agreement.

         23. Acknowledgments. Employee hereby acknowledges that Employee is
entering this Agreement knowingly and voluntarily, and further acknowledges that
(a) this Agreement is written in a manner understood by Employee and is fully
understood in all respects by Employee; (b) this Agreement refers to and
specifically waives claims under the Age Discrimination in Employment Act, as
amended, except to the extent that such claims arise after the date of this
Agreement; (c) Employee has received valuable consideration in exchange for the
waiver and release of claims included in this Agreement which substantially
exceeds amounts that Employee would otherwise be entitled to receive; (d)
Employee has been advised by Claimsnet in writing to consult with an attorney
prior to executing this Agreement; (e) Employee may take until two (2) business
days from his receipt of the Agreement to consider whether or not to sign the
Agreement; and (f) Employee shall have three (3) days following execution to
revoke this Agreement and the Agreement shall not take effect until those three
(3) days have ended.

         WITNESS the following signatures by the respective parties.

Employee:                                     Claimsnet:

                                              Claimsnet.com, Inc.

By: /s/ Terry A. Lee                          By: /s/ Bo W. Lycke
   -------------------------------               ------------------------------
Terry A. Lee                                  Bo W. Lycke, President

Date: 6/28/00                                 Date: June 28, 2000
      -------------------                           ---------------------

<PAGE>

                                                                       Exhibit A

<TABLE>
<CAPTION>

                                        Statutory Deductions                              Voluntary Deductions
                              -----------------------------------                         ---------------------
Pay date     Gross Pay        Soc. Sec.      FICA         Fed W/H       After Tax         401(k)           Loan       Net Pay
--------     ---------        ---------      ----         -------       ---------         ------           ----       -------
<S>         <C>               <C>           <C>          <C>            <C>             <C>            <C>          <C>
6/19/00      23,214.29        (318.30)     (336.61)     (6,175.00)      16,384.38      (1,160.71)                    15,223.67
7/7/00       11,607.15                     (168.30)     (3,087.50)       8,361.36        (580.36)                     7,770.99
7/21/00      11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)                     7,770.99
8/4/00       11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)                     7,770.99
8/18/00      11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)                     7,770.99
9/1/00       11.607.15                     (168.30)     (3,087.50)       8,351.36        (580.36)                     7,770.99
9/15/00      11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)                     7,770.99
9/29/00      11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)                     7,770.99
10/13/00     11,667.15                     (168.30)     (3,087.50)       8,351.35        (580.36)                     7,770.99
10127/00     11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)        (5,948.05)   1,822.94
11/10/00     11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)        (7,770.99)          -
11/24/00     11,607.15                     (168.30)     (3,087.50)       8,351.35        (580.36)        (7,770.99)          -
12/8/00      11,607.15                     (168.30)     (3,087.50)       8,351.36        (580.36)        (7,770.99)          -
            ------------------------------------------------------------------------------------------------------------------
            162,500.09        (318.30)   (2,356.21)    (43,225.00)     116,600.58      (8,125.03)       (29,261.02)  79,214.53
            ==================================================================================================================
</TABLE><PAGE>   1
                                                                     Exhibit 4.1

                             STOCK OPTION AGREEMENT

                  THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO
                   CERTAIN PROVISIONS CONTAINED HEREIN AND TO
                          RESALE RESTRICTIONS UNDER THE
                       SECURITIES ACT OF 1933, AS AMENDED

         STOCK OPTION AGREEMENT, dated July 9, 2000, between Premier National
Bancorp Inc., a New York corporation ("Issuer"), and M&T Bank Corporation, a New
York corporation ("Grantee").

                              W I T N E S S E T H:

         WHEREAS, Grantee, Issuer and Olympia Financial Corp., a Delaware
corporation and a wholly owned subsidiary of Grantee ("Merger Sub") have entered
into an Agreement and Plan of Reorganization of even date herewith (the
"Reorganization Agreement"), which agreement has been executed by the parties
hereto immediately prior to this Stock Option Agreement (the "Agreement"), and
will enter into an Agreement and Plan of Merger to be dated as of the date of
this Agreement (the "Plan of Merger," and, together with the Reorganization
Agreement, the "Merger Agreements"); and

         WHEREAS, as a condition to Grantee's entering into the Merger
Agreements and in consideration therefor, Issuer has agreed to grant Grantee the
Option (as hereinafter defined);

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreements, the
parties hereto agree as follows:

                  1. (a) Issuer hereby grants to Grantee an unconditional,
irrevocable option (the "Option") to purchase, subject to the terms hereof, up
to 3,144,107 fully paid and nonassessable shares of Issuer's Common Stock, par
value $0.80 per share ("Common Stock"), at a price of $13.375 per share (the
"Option Price"); provided, however, that in no event shall the number of shares
of Common Stock for which this Option is exercisable exceed 19.9% of the
Issuer's issued and outstanding shares of Common Stock without giving effect to
any shares subject to or issued pursuant to the Option. The number of shares of
Common Stock that may be received upon the exercise of the Option and the Option
Price are subject to adjustment as herein set forth. Notwithstanding anything
else in this Agreement to the contrary, the number of shares of Common Stock
subject to the Option shall be reduced to such lesser number, if any, as may
from time to time be necessary, but only for so long as may be necessary, to
cause Grantee not to become an "interested shareholder" for purposes of Section
912 of the New York Business Corporation Law.

<PAGE>   2
                           (b) In the event that any additional shares of Common
Stock are either (i) issued or otherwise become outstanding after the date of
this Agreement (other than pursuant to this Agreement or as permitted under the
terms of the Merger Agreements) or (ii) redeemed, repurchased, retired or
otherwise cease to be outstanding after the date of the Agreement, the number of
shares of Common Stock subject to the Option shall be increased or decreased, as
appropriate, so that, after such issuance, such number equals 19.9% of the
number of shares of Common Stock then issued and outstanding without giving
effect to any shares subject or issued pursuant to the Option. Nothing contained
in this Section 1(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer or Grantee to breach any provision of the Merger Agreements.

                  2. (a) The Holder (as hereinafter defined) may exercise the
Option, in whole or part, and from time to time, if, but only if, both an
Initial Triggering Event (as hereinafter defined) and a Subsequent Triggering
Event (as hereinafter defined) shall have occurred prior to the occurrence of an
Exercise Termination Event (as hereinafter defined), provided, however, that the
Holder shall have sent the written notice of such exercise (as provided in
subsection (e) of this Section 2) within six months following such Subsequent
Triggering Event; provided, further, however, that if the Option cannot be
exercised on any day because of any injunction, order or similar restraint
issued by a court of competent jurisdiction, the period during which the Option
may be exercised shall be extended so that the Option shall expire no earlier
than on the 10th business day after such injunction, order or restraint shall
have been dissolved or when such injunction, order or restraint shall have
become permanent and no longer subject to appeal, as the case may be, but in any
event within one year following the Subsequent Triggering Event. Each of the
following shall be an "Exercise Termination Event": (i) the Effective Date (as
defined in the Plan of Merger) of the Merger; (ii) termination of the Merger
Agreements in accordance with the provisions thereof if such termination occurs
prior to the occurrence of an Initial Triggering Event; or (iii) the passage of
twelve months after termination of the Merger Agreements if such termination
follows the occurrence of an Initial Triggering Event. The term "Holder" shall
mean the holder or holders of the Option. Notwithstanding anything to the
contrary contained herein, the Option may not be exercised (nor may Grantee's
rights under Section 10 hereof be exercised) at any time when Grantee shall be
in breach of any of its covenants or agreements contained in the Merger
Agreements under circumstances that would entitle Issuer to terminate the Merger
Agreements (without regard to any grace period provided for in Section 6.1(b)(x)
of the Reorganization Agreement). In the event that Issuer terminates the Merger
Agreement pursuant to Section 6.1(f) of the Reorganization Agreement, then
immediately upon Grantee's receipt of the wire transfer contemplated by such
Section 6.1(f), this Agreement shall terminate and shall become void and have no
further force or effect and Grantee shall surrender this Agreement to Issuer.

                           (b) The term "Initial Triggering Event" shall mean
any of the following events or transactions occurring after the date hereof:

                                    (i)     Issuer  or any of  its  Subsidiaries
(each an "Issuer Subsidiary"), without having received Grantee's prior written
consent, shall have entered

                                     - 2 -
<PAGE>   3
into an agreement to engage in an Acquisition Transaction (as hereinafter
defined) with any person (the term "person" for purposes of this Agreement
having the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder) other than Grantee or any of its Subsidiaries (each
a "Grantee Subsidiary"). For purposes of this Agreement, "Acquisition
Transaction" shall mean (w) a merger or consolidation, or any similar
transaction, involving Issuer or any Significant Subsidiary (as defined in Rule
1-02 of Regulation S-X promulgated by the Securities and Exchange Commission
(the "SEC")) of Issuer, (x) a purchase, lease or other acquisition or assumption
of all or a substantial portion of the assets or deposits of Issuer or any
Significant Subsidiary of Issuer, (y) a purchase or other acquisition (including
by way of merger, consolidation, share exchange or otherwise) of securities
representing 10% or more of the voting power of Issuer, or (z) any substantially
similar transaction; provided, however, that in no event shall any merger,
consolidation, purchase or similar transaction involving only the Issuer and one
or more of its Subsidiaries or involving only two or more of such Subsidiaries,
be deemed to be an Acquisition Transaction; provided that any such transaction
is not entered into in violation of the terms of the Merger Agreements;

                                    (ii) Issuer or any Issuer Subsidiaries,
without having received Grantee's prior written consent, shall have authorized,
recommended, proposed, or publicly announced its intention to authorize,
recommend or propose to engage in an Acquisition Transaction with any person
other than Grantee or a Grantee Subsidiary;

                                    (iii) Any person (other than Grantee or any
Subsidiary of Grantee) shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 10% or more of the outstanding shares of Common
Stock (the term "beneficial ownership" for purposes of this Agreement having the
meaning assigned thereto in Section 13(d) of the Exchange Act, and the rules and
regulations thereunder) or any person other than Grantee or any Subsidiary of
Grantee shall have commenced (as such term is defined under the rules and
regulations of the SEC), or shall have filed or publicly disseminated a
registration statement or similar disclosure statement with respect to, a tender
offer or exchange offer to purchase any shares of Issuer Common Stock such that,
upon consummation of such offer, such person would beneficially own, directly or
indirectly, 10% or more of the then outstanding shares of Issuer Common Stock
(such an offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively);

                                    (iv) (A) the holders of Issuer Common Stock
shall not have approved the Merger Agreements and the transactions contemplated
thereby, at the meeting of such stockholders at which such agreement is voted
on, (B) such meeting shall not have been held or shall have been cancelled prior
to termination of the Merger Agreements, or (C) the Board of Directors of Issuer
shall have publicly withdrawn or modified, or publicly announced its intent to
withdraw or modify, in any manner adverse to Grantee, its recommendation that
the stockholders of Issuer approve the transactions contemplated by the Merger
Agreements, in each case after it shall have been publicly announced that any
person other than Grantee or any Subsidiary of Grantee shall have (x) made, or
disclosed an intention to make, a proposal to engage in an Acquisition

                                     - 3 -
<PAGE>   4
Transaction, (y) commenced a Tender Offer, or filed or publicly disseminated a
registration statement or similar disclosure statement with respect to an
Exchange Offer, or (z) filed an application (or given a notice), whether in
draft or final form, under any federal or state banking laws seeking regulatory
approval to engage in an Acquisition Transaction; or

                                    (v)     After  an  overture  is  made  by  a
third party to Issuer or its stockholders to engage in an Acquisition
Transaction, Issuer shall have breached any covenant or obligation contained in
the Reorganization Agreement and such breach (x) would entitle Grantee to
terminate the Merger Agreements and (y) shall not have been cured prior to the
later of 30 days after written notice of breach is delivered or the Notice Date
(as defined below).

                  (c) The term "Subsequent Triggering Event" shall mean either
of the following events or transactions occurring after the date hereof:

                           (i)      The  acquisition  by any person of
beneficial ownership of 25% or more of the then outstanding shares of Common
Stock; or

                           (ii)     The occurrence of the Initial  Triggering
Event described in paragraph (i) of subsection (b) of this Section 2, except
that the percentage referred to in clause (y) shall be 25%.

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

                  (e) In the event the Holder is entitled to and wishes to
exercise the Option, it shall send to Issuer a written notice (the date of which
being herein referred to as the "Notice Date") specifying (i) the total number
of shares it will purchase pursuant to such exercise and (ii) a place and date
not earlier than three business days nor later than 60 business days from the
Notice Date for the closing of such purchase (the "Closing Date"); provided,
that if prior notification to or approval of the Federal Reserve Board or any
other regulatory agency is required in connection with such purchase, the Holder
shall promptly file the required notice or application for approval and shall
expeditiously process the same and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such approvals have been
obtained and any requisite waiting period or periods shall have passed. Any
exercise of the Option shall be deemed to occur on the Notice Date relating
thereto, except that the Common Stock issuable pursuant to the Option shall not
be deemed outstanding until they are issued in accordance with the provisions
herein.

                  (f) At the closing referred to in subsection (e) of this
Section 2, the Holder shall pay to Issuer the aggregate purchase price for the
shares of Common Stock

                                     - 4 -
<PAGE>   5
purchased pursuant to the exercise of the Option in immediately available funds
by wire transfer to a bank account designated by Issuer; provided, that failure
or refusal of Issuer to designate such a bank account shall not preclude the
Holder from exercising the Option.

                  (g) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (f) of this Section 2,
Issuer shall deliver to the Holder a certificate or certificates representing
the number of shares of Common Stock purchased by the Holder and, if the Option
should be exercised in part only, a new Option evidencing the rights of the
Holder thereof to purchase the balance of the shares purchasable hereunder, and
the Holder shall deliver to Issuer a copy of this Agreement and a letter
agreeing that the Holder will not offer to sell or otherwise dispose of such
shares in violation of applicable law or the provisions of this Agreement.

                  (h) Certificates for Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:

                  "THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
                  SUBJECT TO CERTAIN PROVISIONS OF AN AGREEMENT BETWEEN THE
                  REGISTERED HOLDER HEREOF AND ISSUER AND TO RESALE RESTRICTIONS
                  ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED. A COPY
                  OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF ISSUER
                  AND WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
                  RECEIPT BY ISSUER OF A WRITTEN REQUEST THEREFOR."

It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "Securities Act"), in the above
legend shall be removed by delivery of substitute certificate(s) without such
reference if the Holder shall have delivered to Issuer a copy of a letter from
the staff of the SEC, or an opinion of counsel, in form and substance reasonably
satisfactory to Issuer, to the effect that such legend is not required for
purposes of the Securities Act; (ii) the reference to the provisions to this
Agreement in the above legend shall be removed by delivery of substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii) the
legend shall be removed in its entirety if the conditions in the preceding
clauses (i) and (ii) are both satisfied. In addition, such certificates shall
bear any other legend as may be required by law.

                  (i) Upon the giving by the Holder to Issuer of the written
notice of exercise of the Option provided for under subsection (e) of this
Section 2 and the tender of the applicable purchase price in immediately
available funds and obtaining all regulatory approvals and the expiration of all
statutory waiting periods, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of Issuer shall then be closed or

                                     - 5 -
<PAGE>   6
that certificates representing such shares of Common Stock shall not then be
actually delivered to the Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issue and delivery of stock
certificates under this Section 2 in the name of the Holder or its assignee,
transferee or designee.

                  3. Issuer agrees: (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued or treasury
shares of Common Stock so that the Option may be exercised without additional
authorization of Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Stock; (ii)
that it will not, by charter amendment or through reorganization, consolidation,
merger, dissolution or sale of assets, or by any other voluntary act, avoid or
seek to avoid the observance or performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by Issuer;
(iii) promptly to take all commercially reasonable action as may from time to
time be required (including (x) complying with all premerger notification,
reporting and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under federal or state
banking law, prior approval of or notice to the Federal Reserve Board or any
other federal or state regulatory authority is necessary before the Option may
be exercised, cooperating fully with the Holder in preparing such applications
or notices and providing such information to the Federal Reserve Board or such
other federal or state regulatory authority as they may require) in order to
permit the Holder to exercise the Option and Issuer duly and effectively to
issue shares of Common Stock pursuant hereto; and (iv) promptly to take all
action provided herein to protect the rights of the Holder against dilution.

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

                  5. In addition to the adjustment in the number of shares of
Common Stock that are purchasable upon exercise of the Option pursuant to
Section 1 of this Agreement, the number of shares of Common Stock purchasable
upon the exercise of the Option and the Option Price shall be subject to
adjustment from time to time as provided

                                     - 6 -
<PAGE>   7
in this Section 5. In the event of any change in, or distributions in respect
of, the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares,
distributions on or in respect of the Common Stock that would be prohibited
under the terms of the Merger Agreement, or the like, the type and number of
shares of Common Stock purchasable upon exercise hereof and the Option Price
shall be appropriately adjusted so that Grantee on exercise will receive what it
would have received had it exercised and held Common Stock immediately before
such event.

                  6. Upon the occurrence of a Subsequent Triggering Event that
occurs prior to an Exercise Termination Event, Issuer shall, at the request of
Grantee delivered within six months of such Subsequent Triggering Event (whether
on its own behalf or on behalf of any subsequent holder of this Option (or part
thereof) or any of the shares of Common Stock issued pursuant hereto), promptly
prepare, file and keep current a registration statement under the Securities Act
covering this Option and any shares issued and issuable pursuant to this Option
and shall use its reasonable best efforts to cause such registration statement
to become effective and remain current in order to permit the sale or other
disposition of this Option and any shares of Common Stock issued upon total or
partial exercise of this Option ("Option Shares") in accordance with any plan of
disposition requested by Grantee. Issuer will use its reasonable best efforts to
cause such registration statement first to become effective and then to remain
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective or such shorter time as may be
reasonably necessary to effect such sales or other dispositions. The foregoing
notwithstanding, Issuer may postpone filing or updating such registration for a
reasonable period of time after receipt of the original request (not exceeding
180 days) if, in the good faith opinion of Issuer's board of directors,
effecting the registration statement would adversely affect a material
financing, acquisition, disposition of assets or stock, merger or other
comparable transaction or would require Issuer to make public disclosure of
information the public disclosure of which would have a material adverse effect
upon Issuer, provided that the Issuer shall not delay such action pursuant to
this sentence more than once in any twelve-month period. Grantee shall have the
right to demand two such registrations. The foregoing notwithstanding, if, at
the time of any request by Grantee for registration of the Option or Option
Shares as provided above, Issuer is in registration with respect to an
underwritten public offering of shares of Common Stock, and if in the good faith
judgment of the managing underwriter or managing underwriters, or, if none, the
sole underwriter or underwriters, of such offering the inclusion of the Holder's
Option or Option Shares would interfere with the successful marketing of the
shares of Common Stock offered by Issuer, the number of Option Shares otherwise
to be covered in the registration statement contemplated hereby may be reduced;
and provided, however, that after any such required reduction the number of
Option Shares to be included in such offering for the account of the Holder or
Holders shall constitute at least 25% of the total number of shares to be sold
by the Holder or Holders and Issuer in the aggregate; and provided, further,
however, that if such reduction occurs, then the Issuer shall file a
registration statement for the balance as promptly as practicable and no
reduction shall thereafter occur. Each such Holder shall provide all information
reasonably requested by Issuer for inclusion in any registration

                                     - 7 -
<PAGE>   8
statement to be filed hereunder. If requested by any such Holder in connection
with such registration, Issuer shall become a party to any underwriting
agreement relating to the sale of such shares, but only to the extent of
obligating itself in respect of representations, warranties, indemnities and
other agreements customarily included in secondary offering underwriting
agreements for the Issuer. Upon receiving any request under this Section 6 from
Grantee, Issuer agrees to send a copy thereof to any other person known to
Issuer to be entitled to registration rights under this Section 6, in each case
by promptly mailing the same, postage prepaid, to the address of record of the
persons entitled to receive such copies. Notwithstanding anything to the
contrary contained herein, in no event shall Issuer be obligated to effect more
than two registrations pursuant to this Section 6 by reason of the fact that
there shall be more than one Holder as a result of any assignment or division of
this Agreement. In addition, Grantee agrees to use all reasonable efforts to
cause, and to cause any underwriters of any safe or other disposition to cause,
any sale or other disposition pursuant to such registration statement to be
effected on a widely distribution basis so that upon consummation thereof no
purchaser or transferee shall own beneficially more than 2% of the then
outstanding voting power of the Issuer.

                  7. The periods for exercise of certain rights under Sections
2, 6, 10 and 12 shall be extended: (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights, and for the expiration of
all statutory waiting periods; and (ii) to the extent necessary to avoid
liability under Section 16(b) of the Exchange Act by reason of such exercise.

                  8. Issuer hereby represents and warrants to Grantee as
follows:

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

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

                  9. Grantee hereby represents and warrants to Issuer that:

                                     - 8 -
<PAGE>   9
                  (a) Grantee has all requisite corporate power and authority to
enter into this Agreement and, subject to any approvals or consents referred to
herein, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Grantee. This Agreement has been duly executed and delivered by Grantee.

                  (b) The Option is not being, and any shares of Common Stock or
other securities acquired by Grantee upon exercise of the Option will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.

                  10. Neither of the parties hereto may assign any of its rights
or obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an Exercise
Termination Event, Grantee, subject to the express provisions hereof, may assign
in whole or in part its rights and obligations hereunder within six months
following such Subsequent Triggering Event (or such later period as provided in
Section 7); provided, however, that until the date fifteen days following the
date on which the Federal Reserve Board approves an application by Grantee to
acquire the shares of Common Stock subject to the Option (proof of which
approval shall be furnished promptly to Issuer), Grantee may not assign its
rights under the Option except in (i) a widely dispersed public distribution,
(ii) a private placement in which no one party acquires the right to purchase in
excess of 2% of the voting shares of Issuer, (iii) an assignment to a single
party (e.g., a broker or investment banker) for the purpose of conducting a
widely dispersed public distribution on Grantee's behalf, or (iv) any other
manner approved by the Federal Reserve Board.

                  11. Each of Grantee and Issuer will use its reasonable best
efforts to make all filings with, and to obtain consents of, all third parties
and governmental authorities necessary to the consummation of the transactions
contemplated by this Agreement, including without limitation making application
to list the shares of Common Stock issuable hereunder on the Amex upon official
notice of issuance and applying to the Federal Reserve Board, for approval to
acquire the shares issuable hereunder, and Grantee's ability to exercise the
Option is conditioned on obtaining all such consents and approvals, but Grantee
shall not be obligated to apply to state banking authorities for approval to
acquire the shares of Common Stock issuable hereunder until such time, if ever,
as it deems appropriate to do so.

                  12. (a) Upon the occurrence of a Subsequent Triggering Event
that occurs prior to an Exercise Termination Event, (i) at the request of any
Holder, delivered within thirty days following such occurrence (or such later
period as provided in Section 7), Issuer shall repurchase the Option from the
Holder at a price (the "Option Repurchase Price") equal to the amount by which
(A) the market/offer price (as defined below) exceeds (B) the Option Price,
multiplied by the number of shares for which this Option may then be exercised,
plus, to the extent not previously reimbursed, Grantee's

                                     - 9 -
<PAGE>   10
reasonable documented out-of-pocket expenses incurred in connection with the
transactions contemplated by, and the enforcement of Grantee's rights under, the
Merger Agreements, including without limitation reasonable legal, accounting and
investment banking fees (the "Grantee's Out-of-Pocket Expenses"), and (ii) at
the request of any owner of Option Shares from time to time (the "Owner"),
delivered within thirty days following such occurrence (or such later period as
provided in Section 7), Issuer shall repurchase such number of the Option Shares
from such Owner as the Owner shall designate at a price per share ("Option Share
Repurchase Price") equal to the greater of (A) the market/offer price and (B)
the average option price per share paid by the Owner for the Option Shares so
designated, plus, to the extent not previously reimbursed, Grantee's
Out-of-Pocket Expenses. The term "market/offer price" shall mean the highest of
(w) the price per share of the Common Stock at which a tender offer or exchange
offer therefor constituting the Subsequent Trigger Event has been consummated,
(x) the price per share of the Common Stock to be paid by any Person, other than
Grantee or a subsidiary of Grantee, pursuant to an agreement with Issuer, (y)
the highest closing price for shares of Common Stock within the 60-day period
immediately preceding the required repurchase of Options or Option Shares, as
the case may be, or (z) in the event of a sale of all or substantially all of
Issuer's assets, the sum of the price paid in such sale for such assets and the
current market value of the remaining net assets of Issuer as determined by a
nationally recognized investment banking firm selected by a majority in the
interest of the Holders or the Owners, as the case may be, and reasonably
acceptable to Issuer, divided by the number of shares of Common Stock of Issuer
outstanding at the time of such sale. In determining the market/offer price, the
value of consideration other than cash shall be determined by a nationally
recognized investment banking firm selected by a majority in interest of the
Holders or the Owners, as the case may be, and reasonably acceptable to Issuer.

                           (b)      Each Holder and Owner,  as the case may be,
may exercise its right to require Issuer to repurchase the Option and any Option
Shares pursuant to this Section 12 by surrendering for such purpose to Issuer,
at its principal office, a copy of this Agreement or certificates for Option
Shares, as applicable, accompanied by a written notice or notices stating that
such Holder or Owner elects to require Issuer to repurchase this Option and/or
Option Shares in accordance with the provisions of this Section 12 and a
representation as to the ownership and freedom from liens. As promptly as
practicable, and in any event within ten business days after the surrender of
the Option and/or certificates representing Option Shares and the receipt of
such notice or notices relating thereto, Issuer shall deliver or cause to be
delivered to each Holder the Option Repurchase Price and/or to each Owner the
Option Share Repurchase Price therefor or the portion thereof that Issuer is not
then prohibited under applicable law and regulation from so delivering;
provided, however, that the Holder may not exercise its right to require Issuer
to repurchase the Option or any Option Shares more than one time.

                           (c)      To the extent that Issuer is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, or as a result of a written agreement or other binding obligation with a
governmental or regulatory body or agency, from repurchasing the Option and/or
the Option Shares in full, Issuer shall immediately so notify each Holder and/or
each Owner and thereafter deliver or cause to be delivered,

                                     - 10 -
<PAGE>   11
from time to time, to such Holder and/or Owner, as appropriate, the portion of
the Option Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within ten business days after
the date on which Issuer is no longer so prohibited; provided, however, that if
Issuer at any time after delivery of a notice of repurchase pursuant to
paragraph (b) of this Section 12 is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from delivering to any
Holder and/or Owner, as appropriate, the Option Repurchase Price and the Option
Share Repurchase Price, respectively, in part or in full (and Issuer hereby
undertakes to use its best efforts to receive any required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to accomplish such repurchase), such Holder or Owner may revoke its notice of
repurchase of the Option or the Option Shares either in whole or to the extent
of the prohibition, whereupon Issuer shall promptly (i) deliver to such Holder
and/or Owner, as appropriate, that portion of the Option Purchase Price or the
Option Share Repurchase Price that Issuer is not prohibited from delivering; and
(ii) deliver, as appropriate, either (A) to such Holder, a new Stock Option
Agreement evidencing the right of such Holder to purchase that number of shares
of Common Stock obtained by multiplying the number of shares of Common Stock for
which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Option Repurchase Price less the portion thereof theretofore delivered to
the Holder and the denominator of which is the Option Repurchase Price, or (B)
to such Owner, a certificate for the Option Shares it is then so prohibited from
repurchasing.

                           (d)      At any time after the occurrence of a
Subsequent Triggering Event and prior to the later of (a) the expiration of 24
months immediately following the first purchase of shares of Common Stock
pursuant to the Option and (b) the termination of the Option, if Grantee shall
desire to sell, assign, transfer or otherwise dispose of all or any of the
Option or the shares of Common Stock or other securities acquired by it pursuant
to the Option, it shall give Issuer written notice of the proposed transaction,
identifying the proposed transferee, accompanied by a copy of a binding offer to
purchase such shares or other securities signed by such transferee and setting
forth the terms of the proposed transaction. Upon receipt of such notice, Issuer
shall for a period of 10 business days have the right of first refusal to
purchase the Option or the Common Stock then held by the Grantee that is
proposed to be sold at the purchase price set forth in such notice. The purchase
of any such shares or other securities shall be settled within 10 business days
of the date of the acceptance of the offer and the purchase price shall be paid
to Grantee in immediately available funds; provided that, if prior notification
to or approval of any governmental or regulatory authority is required in
connection with such purchase, Issuer shall promptly file the required notice or
application for approval and shall expeditiously process the same (and Grantee
shall cooperate with Issuer in the filing of any such notice or application and
the obtaining of any such approval) and the period of time that otherwise would
run pursuant to this sentence shall run instead from the date on which, as the
case may be, (a) any required notification period has expired or been terminated
or (b) such approval has been obtained and, in either event, any requisite
waiting period shall have passed. In the event of the failure or refusal of
Issuer to purchase all the shares or other securities covered by such notice or
if any such governmental or regulatory authority disapproves Issuer's proposed

                                     - 11 -
<PAGE>   12
purchase of such shares or other securities, Grantee may, within 60 days from
the date of such notice (subject to any necessary extension for regulatory
notification, approval or waiting periods), sell all, but not less than all, of
such shares or other securities to the proposed transferee at no less than the
price specified and on terms no more favorable than those set forth in such
notice. The requirements of this Section 12(d) shall not apply to (w) any
disposition as a result of which the proposed transferee would own beneficially
not more than 2% of the outstanding voting power of Issuer, (x) any disposition
of Common Stock or other securities by a person to whom Grantee has assigned its
rights under the Option with the consent of Issuer, (y) any sale by means of
public offering registered under the Securities Act in which steps are taken to
reasonably assure that no purchaser will acquire securities representing more
than 2% of the outstanding voting power of Issuer or (z) any transfer to a
wholly-owned subsidiary of Grantee which agrees in writing to be bound by the
terms thereof.

                  13. (a) Notwithstanding any other provision of this Agreement,
in no event shall the Grantee's Total Profit (as hereinafter defined) exceed $24
million and, if it otherwise would exceed such amount, the Grantee, at its sole
election, shall either (i) reduce the number of shares of Common Stock subject
to this Option, (ii) deliver to the Issuer for cancellation Option Shares
previously purchased by Grantee valued at fair market value at the time of
delivery, (iii) pay cash to the Issuer, or (iv) undertake any combination
thereof, so that Grantee's actually realized Total Profit shall not exceed $24
million after taking into account the foregoing actions.

                      (b) Notwithstanding  any other provision of this
Agreement, this Option may not be exercised for a number of shares as would, as
of the date of exercise, result in a Notional Total Profit (as defined below) of
more than $24 million; provided, that nothing in this sentence shall restrict
any exercise of the Option permitted hereby on any subsequent date.

                      (c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of (i)(x) the net cash amounts received by
Grantee pursuant to the sale of Option Shares (or any other securities into
which such Option Shares are converted or exchanged) to any unaffiliated party,
including the Issuer, less (y) the Grantee's purchase price of such Option
Shares, plus (ii) any amounts received by Grantee on the transfer of the Option
(or any portion thereof) to any unaffiliated party, including the Issuer.

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

                                     - 12 -
<PAGE>   13
                  14. The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto and that
the obligations of the parties hereto shall be enforceable by either party
hereto through injunctive or other equitable relief.

                  15. If any term, provision, covenant or restriction contained
in this Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Agreement
shall remain in full force and effect, and shall in no way be affected, impaired
or invalidated. If for any reason such court or regulatory agency determines
that the Holder is not permitted to acquire the full number of shares of Common
Stock provided in Section 1(a) hereof (as adjusted pursuant to Sections 1(b) or
5 hereof), it is the express intention of Issuer to allow the Holder to acquire
such lesser number of shares as may be permissible, without any amendment or
modification hereof.

                  16. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, by cable, telegram, telecopy or telex, or by registered or certified
mail (postage prepaid, return receipt requested) at the respective addresses of
the parties set forth in the Reorganization Agreement.

                  17. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.

                  18. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

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

                  20. Except as otherwise expressly provided herein or in the
Merger Agreements, this Agreement contains the entire agreement between the
parties with respect to the transactions contemplated hereunder and supersedes
all prior arrangements or understandings with respect thereto, written or oral.
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, expressed or implied, is intended to confer
upon any party, other than the parties hereto, and their respective successors
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided herein.

                                     - 13 -
<PAGE>   14
                  21. Capitalized terms used in this Agreement and not defined
herein shall have the meanings assigned thereto in the Merger Agreement.

                                     - 14 -
<PAGE>   15
                  IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.

PREMIER NATIONAL BANCORP, INC.

By    /s/ T. Jefferson Cunningham III
      -------------------------------
      T. Jefferson Cunningham III
      Chairman

M&T BANK CORPORATION

By    /s/ Michael P. Pinto
      ----------------------------
      Michael P. Pinto
      Executive Vice President and Chief Financial Officer

                                     - 15 -

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