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                                                                    Exhibit 10.1

                          FORM OF EMPLOYMENT AGREEMENT

     This Agreement is made effective as of ________________, 2000 by and
between the Savings Bank of the Finger Lakes, FSB (the "Bank"), a
federally-chartered stock savings and loan association, with its principal
executive office at 470 Exchange Street, Geneva, New York 14456 and
_____________ (the "Executive"). Any reference to "Company" herein shall mean
Finger Lakes Bancorp, Inc., the stock holding company parent of the Bank or any
successor thereto.

     WHEREAS, the Bank wishes to assure itself of the continued services of
Executive for the period provided in this Agreement; and

     WHEREAS, Executive is willing to continue to serve in the employ of the
Bank on a full-time basis for said period.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES

     During the period of his employment hereunder, Executive agrees to serve as
President and Chief Executive Officer, and a member of the Board of Directors,
of the Bank and the Company. During said period, Executive also agrees to serve,
if elected, as an officer and director of any subsidiary or affiliate of the
Bank. Failure to reelect Executive as the President and Chief Executive Officer,
and a member of the Board of Directors, of the Bank and the Company without the
consent of the Executive during the term of this Agreement shall constitute a
breach of this Agreement.

2.   TERMS AND DUTIES

     (a) The period of Executive's employment under this Agreement shall begin
as of the date first above written and shall continue for a period of thirty-six
(36) full calendar months thereafter. Commencing on the first anniversary date
of this Agreement, and continuing at each anniversary date thereafter, the
Agreement shall renew for an additional year such that the remaining term shall
be three (3) years; provided, however, if written notice of nonrenewal is
provided to Executive at least ten (10) days and not more than thirty (30) days
prior to any anniversary date, the employment of Executive hereunder shall cease
at the end of thirty-six (36) months following such anniversary date. Prior to
each notice period for non-renewal, the disinterested members of the Board of
Directors of the Bank ("Board") will conduct a performance evaluation and review
of the Executive for purposes of determining whether to extend the Agreement,
and the results thereof shall be included in the minutes of the Board's meeting
and communicated to Executive.

     (b) During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of
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his duties hereunder including activities and services related to the
organization, operation and management of the Bank; provided, however, that,
with the approval of the Board, as evidenced by a resolution of such Board, from
time to time, Executive may serve, or continue to serve, on the boards of
directors of, and hold any other offices or positions in, business companies or
business organizations, which, in such Board's judgment, will not present any
conflict of interest with the Bank, or materially affect the performance of
Executive's duties pursuant to this Agreement (for purposes of this Section
2(b), Board approval shall be deemed provided as to service with any such
business companies or organizations that Executive was serving as of the date of
this Agreement).

3.   COMPENSATION AND REIMBURSEMENT.

     (a) The compensation specified under this Agreement shall constitute the
salary and benefits paid for the duties described in Section 2(b). The Bank
shall pay Executive as compensation a salary of not less than $______ per year
("Base Salary"). Such Base Salary shall be payable biweekly. During the period
of this Agreement, Executive's Base Salary shall be reviewed at least annually.
Such review shall be conducted by a Committee designated by the Board, and the
Board may increase, but not decrease, Executive's Base Salary (any increase in
Base Salary shall become the "Base Salary" for purposes of this Agreement). In
addition to the Base Salary provided in this Section 3(a), the Bank shall
provide Executive at no cost to Executive with all such other benefits as are
provided uniformly to permanent full-time employees of the Bank. Base Salary
shall include any amounts of compensation deferred by Executive under qualified
and nonqualified plans maintained by the Bank.

     (b) The Bank will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement, and the Bank will not, without
Executive's prior written consent, make any changes in such plans, arrangements
or perquisites which would adversely affect Executive's rights or benefits
thereunder. Without limiting the generality of the foregoing provisions of this
Subsection (b), Executive will be entitled to participate in or receive benefits
under any employee benefit plans including but not limited to, retirement plans,
supplemental retirement plans, pension plans, profit-sharing plans,
health-and-accident plans, medical coverage or any other employee benefit plan
or arrangement made available by the Bank in the future to its senior executives
and key management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and arrangements.
Executive will be entitled to incentive compensation and bonuses as provided in
any plan of the Bank in which Executive is eligible to participate (and he shall
be entitled to a pro rata distribution under any incentive compensation or bonus
plan as to any year in which a termination of employment occurs, other than
termination for Cause). Nothing paid to the Executive under any such plan or
arrangement will be deemed to be in lieu of other compensation to which the
Executive is entitled under this Agreement.

     (c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Bank shall pay or reimburse Executive for all reasonable travel
and other reasonable expenses

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incurred by Executive performing his obligations under this Agreement and may
provide such additional compensation in such form and such amounts as the Board
may from time to time determine.

     (d) Executive shall be entitled to twenty-five (25) days of paid vacation
per calendar year, or such greater period as may be approved from time to time
by the Board of Directors. In the event that the full vacation is not taken in
any year due to the work commitments of Executive, Executive may carry over any
such unused vacation time from year to year. Upon any termination of Executive,
Executive will be entitled to be paid the value of any accrued or accumulated
vacation time and shall be required to reimburse the Company for the value of
any vacation time taken but not yet accrued. Executive hereby expressly agrees
to permit the Company to withhold from Executive's final paycheck(s) the value
of any such reimbursements to which the Company is reasonably entitled with
respect to Executive.

     (e) Executive shall be entitled to a membership, at the Bank's expense, for
him and his spouse in the Geneva Country Club. Executive will pay for his
personal use of the Club, billing the Bank for his expenses of using the Club in
connection with the Bank's business. Executive shall also be entitled to an
automobile of the Bank's selection to be used by Executive in rendering services
to the Bank, together with reimbursement for all gas, oil, maintenance,
insurance and repairs required by reason of the use of such vehicle. Executive
also shall comply with all reporting requirements established by the Bank
regarding the use of such automobile. The Bank shall pay for an annual physical
examination of Executive.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the occurrence of an Event of Termination (as herein defined)
during the Executive's term of employment under this Agreement, the provisions
of this Section shall apply. As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Bank or the Company of Executive's full-time employment
hereunder for any reason other than following a Change in Control, as defined in
Section 5(a) hereof, or termination for Cause, as defined in Section 8 hereof,
or upon Retirement as defined in Section 7 hereof, or for disability as set
forth in Section 6 hereof; and (ii) Executive's resignation from the Bank's
employ, upon any (A) failure to elect or reelect or to appoint or reappoint
Executive as President and Chief Executive Officer of the Company or the Bank,
or to nominate (and as to the Bank, elect) Executive to the Board of Directors
of Bank and the Company, unless consented to by the Executive, (B) a material
change in Executive's function, duties, or responsibilities, which change would
cause Executive's position to become one of lesser responsibility, importance,
or scope from the position and attributes thereof described in Sections 1 and 2
above, to which Executive has not agreed in writing (and any such material
change shall be deemed a continuing breach of this Agreement), (C) a relocation
of Executive's principal place of employment by more than 30 miles from its
location at the effective date of the Agreement, or a material reduction in the
benefits and perquisites to the Executive from those being provided as of the
effective date of this

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Agreement (unless such reduction is part of a reduction in benefits to all
employees of the Bank in connection with Bank-wide benefit plan), (D) a
liquidation or dissolution of the Bank or the Company, or (E) material breach of
this Agreement by the Bank. Upon the occurrence of any event described in
clauses (ii) (A), (B), (C), (D) or (E) above, Executive shall have the right to
elect to terminate his employment under this Agreement by resignation upon not
less than thirty (30) days prior written notice given within a reasonable period
of time (not to exceed, except in case of a continuing breach, four calendar
months) after the event giving rise to said right to elect, which termination by
Executive shall be an Event of Termination.

     (b) Upon the occurrence of an Event of Termination, the Bank shall pay
Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a cash amount equal to the greater of the payments due for the
remaining term of the Agreement, or three (3) times the sum of: (i) the highest
annual rate of Base Salary paid to Executive at any time under this Agreement,
and (ii) the greater of (x) the average annual cash bonus paid to Executive with
respect to the three completed fiscal years prior to the Event of Termination,
or (y) the cash bonus paid to Executive with respect to the fiscal year ended
prior to the Event of Termination; provided however, that if the Bank is not in
compliance with its minimum capital requirements or if such payments would cause
the Bank's capital to be reduced below its minimum capital requirements, such
payments shall be deferred until such time as the Bank is in capital compliance.
At the election of the Executive, which election is to be made annually by
January 31 of each year and is irrevocable for the year in which made (and once
payments commence), such payments shall be made in a lump sum or paid monthly
during the remaining term of the agreement following the Executive's
termination. In the event that no election is made, payment to the Executive
will be made on a monthly basis during the remaining term of the Agreement. Such
payments shall not be reduced in the event the Executive obtains other
employment following termination of employment.

     (c) Upon the occurrence of an Event of Termination, the Bank will cause to
be continued life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Bank for Executive prior to his
termination, except to the extent such coverage may be changed in its
application to all Bank employees. Such coverage shall cease thirty-six (36)
months following the Event of Termination.

5.   CHANGE OF CONTROL.

     (a) No benefit shall be payable under this Section 5 unless there shall
have been a Change in Control of the Bank or the Company, as set forth below.
For purposes of this Agreement, a "Change in Control" of the Bank or the Company
shall mean an event, which occurs subsequent to the date of this Agreement, of a
nature that: (i) would be required to be reported by the Company in response to
Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); or (ii) results in a change in control of the Bank or the
Company within the meaning of the Home Owners' Loan Act and the Rules and
Regulations promulgated by the Office of Thrift Supervision (or its predecessor

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agency) thereunder; or (iii) without limitation, such a Change in Control shall
be deemed to have occurred at such time as (a) any "person" (as that term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities representing 20% or more of a class of securities of
the Bank or Company ordinarily having the right to vote at the election of
directors ("Voting Securities"), except for any securities of the Bank purchased
by the Company in connection with the conversion of the Bank to the stock form
and any securities purchased by the Bank's employee stock ownership plan and
trust established with the approval of the Incumbent Board (as defined below),
and except that an investment advisor shall not be deemed to acquire the voting
stock of its advisee if the advisor votes the stock only upon instruction from
the beneficial owner, and does not provide the beneficial owner with advice
concerning the voting of such stock; or (b) individuals who constitute the Board
on the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose
nomination for election by the Company's shareholders was approved by the same
Nominating Committee serving under an Incumbent Board, shall be, for purposes of
this clause (b), considered as though he were a member of the Incumbent Board;
or (c) a merger, consolidation or sale of all or substantially all the assets of
the Bank or the Company occurs and the Bank or the Company is not the surviving
entity.

     (b) If any of the events described in Section 5(a) hereof constituting a
Change in Control shall have occurred or the Board has determined that a Change
in Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c) and (d) of this Section 5 upon his subsequent termination of
employment at any time during the term of this Agreement (regardless of whether
such termination results from his resignation or his dismissal), unless such
termination is (A) because of his death or Retirement, or, (B) for Disability.
Upon a Change in Control, Executive shall have the right to elect to terminate
his employment with the Bank and the Company at any time during the term of this
Agreement following any demotion, loss of title, office or significant
authority, reduction of his Base Salary or benefits or relocation of his
principal place of employment by more than 30 miles from its location
immediately prior to the Change in Control or such other conduct directed
against the Executive making his continued employment untenable.

     (c) Upon the occurrence of a Change in Control followed by the termination
of Executive's employment by the Bank or the Company (including a termination
referred to in the last sentence of Section 5(b) above), the Executive, or, in
the event of his subsequent death (subsequent to such termination), his
beneficiary or beneficiaries, or his estate, as the case may be, shall receive
as severance pay or liquidated damages, or both, an amount equal to three times
the sum of: (i) the highest annual rate of Base Salary paid to Executive at any
time under this Agreement, and (ii) the greater of (x) the average annual cash
bonus paid to Executive with respect to the three completed fiscal years prior
to the termination, or (y) the cash bonus paid to Executive with respect to the
fiscal year ended prior to the termination. The foregoing severance/liquidated
damages payment(s), as well as all other benefits described in this Agreement
that would be payable upon a Change of Control, shall be made to the Executive's
surviving spouse, or if no surviving spouse, to his estate, in the event that
the Company or the Bank enters into an agreement as to a Change in Control of
the Company or the Bank, and Executive shall die after such agreement is
executed but prior to

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consummation of the Change in Control, which payments shall commence upon, and
shall be contingent upon, the actual consummation of the Change in Control. At
the election of the Executive pursuant to Section 4(b), such payment may be made
in a lump sum or paid monthly during the thirty-six (36) months following the
Executive's termination.

     (d) Upon the occurrence of a Change in Control followed by the termination
of Executive's employment, the Bank will cause to be continued life, health and
disability insurance coverage substantially identical to the coverage maintained
by the Bank or the Company for Executive prior to his severance, except to the
extent such coverage is changed in its application to all employees of the Bank.
Such coverage shall cease thirty-six (36) months from the date of Executive's
termination of employment.

6.   TERMINATION FOR DISABILITY.

     (a) If, as a result of Executive's incapacity due to physical or mental
illness, he shall have been absent from his duties with the Holding Company on a
full-time basis for six (6) consecutive months, and within thirty (30) days
after written notice of potential termination is given he shall not have
returned to the full-time performance of his duties, the Bank may terminate
Executive's employment for "Disability.

     (b) The Bank will pay Executive, or cause Executive to be paid under a
disability insurance plan, as disability pay, a bi-weekly payment equal to the
65% of the Executive's monthly rate of Base Salary on the effective date of such
termination. These disability payments shall commence on the effective date of
Executive's termination and will end on the earlier (i) the date Executive
returns to the full-time employment of the Bank in the same capacity as he was
employed prior to his termination for Disability and pursuant to an employment
agreement between Executive and the Bank; (ii) Executive's full-time employment
by another employer; (iii) Executive attaining the age of 65; or (iv)
Executive's death.

     (c) The Bank will cause to be continued life, medical, dental and
disability coverage substantially identical to the coverage maintained by the
Bank for Executive prior to his termination for Disability, except to the extent
such coverage may be changed in its application to all Bank employees. This
coverage shall cease upon the earlier of (i) the date Executive returns to the
full- time employment of the Bank in the same capacity as he was employed prior
to his termination for Disability and pursuant to an employment agreement
between Executive and the Bank; (ii) Executive's full-time employment by another
employer; (iii) Executive attaining the age of 65; or (iv) Executive's death.

     (d) Notwithstanding the foregoing, there will be no reduction in the
compensation otherwise payable to Executive during any period during which
Executive is incapable of performing his duties hereunder by reason of temporary
disability.

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7.   TERMINATION UPON RETIREMENT.

     Termination by the Bank of the Executive based on "Retirement" shall mean
termination by Executive at age 65 or in accordance with any retirement policy
established with Executive's consent with respect to him. Upon termination of
Executive upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Bank and other plans to which Executive is a party.

8.   TERMINATION FOR CAUSE.

     The term "Termination for Cause' shall mean termination because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. In determining incompetence, the acts
or omissions shall be measured against standards generally prevailing in the
savings institutions industry. For purposes of this paragraph, no act or failure
to act on the part of Executive shall be considered "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's action or omission was in the best interest of the
Bank. Notwithstanding the foregoing, Executive shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the members of the Board at a meeting of the Board called and held
for that purpose (after reasonable notice to Executive and an opportunity for
him, together with counsel, to be heard before the Board), finding that in the
good faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail. The
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause. Any stock options granted to Executive
under any stock option plan of the Bank, the Company or any subsidiary or
affiliate thereof, shall become null and void effective upon Executive's receipt
of Notice of Termination for Cause pursuant to Section 9 hereof, and shall not
be exercisable by Executive at any time subsequent to such Termination for Cause
(unless it is determined in arbitration that grounds for termination of
Executive for Cause did not exist, in which event all terms of the options as of
the date of termination shall apply, and any time periods for exercising such
options shall commence from the date of resolution in arbitration).

9.   NOTICE.

     (a) Any purported termination by the Bank for Cause shall be communicated
by Notice of Termination to the Executive. For purposes of this Agreement, a
"Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated. If,
within thirty (30) days after any Notice of Termination for Cause is given, the
Executive notifies the Bank or the Company that a dispute exists concerning the
termination, the parties shall promptly proceed to arbitration. Notwithstanding
the pendency of any such dispute, the Bank and the Company may

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discontinue to pay Executive compensation until the dispute is finally resolved
in accordance with this Agreement. If it is determined that Executive is
entitled to compensation and benefits under Section 4 or 5 of this Agreement,
the payment of such compensation and benefits by the Bank and Company shall
commence immediately following the date of resolution by arbitration, with
interest due Executive on the cash amount that would have been paid pending
arbitration (at the prime rate as published in the Wall Street Journal from time
to time).

     (b) Any other purported termination by the Bank or by Executive shall be
communicated by a Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in detail the facts and circumstances claimed to provide a basis
for termination of employment under the provision so indicated. "Date of
Termination" shall mean the date of the Notice of Termination. If, within thirty
(30) days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the parties shall promptly proceed to arbitration as provided
in Section 19 of this Agreement. Notwithstanding the pendency of any such
dispute, the Bank shall continue to pay the Executive his Base Salary, and other
compensation and benefits in effect when the notice giving rise to the dispute
was given (except as to termination of Executive for Cause). In the event of the
voluntary termination by the Executive of his employment, which is disputed by
the Bank, and if it is determined in arbitration that Executive is not entitled
to termination benefits pursuant to this Agreement, he shall return all cash
payments made to him pending resolution by arbitration, with interest thereon at
the prime rate as published in the Wall Street Journal from time to time if it
is determined in arbitration that Executive's voluntary termination of
employment was not taken in good faith and not in the reasonable belief that
grounds existed for his voluntary termination.

10.  POST-TERMINATION OBLIGATIONS.

     (a) All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with paragraph (b) of this Section 10 during
the term of this Agreement and for one (1) full year after the expiration or
termination hereof.

     (b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Bank as may reasonably be required by the Bank in connection
with any litigation in which it or any of its subsidiaries or affiliates is, or
may become, a party.

     (c) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Bank and affiliates
thereof, as it may exist from time to time, is a valuable, special and unique
asset of the business of the Bank. Executive will not, during or after the term
of his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Bank or affiliates thereof to any person,
firm, corporation, or other entity for any reason or purpose whatsoever (except
for such disclosure as may be required to be provided to the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation, or other federal banking
agency with jurisdiction over the Bank or Executive). Notwithstanding the
foregoing,

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Executive may disclose any knowledge of banking, financial and/or economic
principles, concepts or ideas which are not solely and exclusively derived from
the business plans and activities of the Bank, and Executive may disclose any
information regarding the Bank or the Company which is otherwise publicly
available. In the event of a breach or threatened breach by the Executive of the
provisions of this Section 10, the Bank will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, the knowledge of the
past, present, planned or considered business activities of the Bank or
affiliates thereof, or from rendering any services to any person, firm,
corporation, other entity to whom such knowledge, in whole or in part, has been
disclosed or is threatened to be disclosed. Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies available to the Bank for
such breach or threatened breach, including the recovery of damages from
Executive.

11.  SOURCE OF PAYMENTS.

     All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive
and, if such amounts and benefits due from the Bank are not timely paid or
provided by the Bank, such amounts and benefits shall be paid or provided by the
Company.

12.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Bank or any
predecessor of the Bank and Executive, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to the Executive
of a kind elsewhere provided. No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.

13.  NO ATTACHMENT.

     (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

     (b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Bank and their respective successors and assigns.

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14.  MODIFICATION AND WAIVER.

     (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

     (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.  REQUIRED PROVISIONS.

     (a) The Bank's Board of Directors may terminate the Executive's employment
at any time, but any termination by the Bank's Board of Directors, other than
Termination for Cause, shall not prejudice Executive's right to compensation or
other benefits under this Agreement. Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause as defined in Section 8 hereinabove.

     (b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 U.S.C. ss.ss. 1818(e)(3)) or 8(g) (12 U.S.C. ss. 1818(g)) of
the Federal Deposit Insurance Act, as amended by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989, the Bank's obligations under this
contract shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay the Executive all or part of the compensation
withheld while their contract obligations were suspended and (ii) reinstate (in
whole or in part) any of the obligations which were suspended.

     (c) If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 U.S.C. ss.ss. 1818(e)) or 8(g) (12 U.S.C. ss. 1818(g)) of the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, all obligations of the Bank under this
contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.

     (d) If the Bank is in default as defined in Section 3(x) (12 U.S.C. ss.
1813(x)(1)) of the Federal Deposit Insurance Act, as amended by the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, all obligations of
the Bank under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.

     (e) All obligations of the Bank under this contract shall be terminated,
except to the extent determined that continuation of the contract is necessary
for the continued operation of the institution, (i) by the Director, at the time
Federal Deposit Insurance Corporation ("FDIC") or the

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Resolution Trust Corporation enters into an agreement to provide assistance to
or on behalf of the Bank; or (ii) by the Office of Thrift Supervision ("OTS") at
the time the OTS or its District Director approves a supervisory merger to
resolve problems related to the operations of the Bank or when the Bank is
determined by the OTS or FDIC to be in an unsafe or unsound condition. Any
rights of the parties that have already vested, however, shall not be affected
by such action.

     (f) Any payments made to Executive pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 USC
Section 1828(k) and any regulations promulgated thereunder.

16.  SEVERABILITY.

     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Delaware but
only to the extent not superseded by federal law.

19.  ARBITRATION.

     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the employee within fifty
(50) miles of Geneva, New York, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

20.  PAYMENT OF LEGAL FEES.

     All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank, provided that the dispute or interpretation has been
settled by Executive and the Bank or resolved in the Executive's favor.

                                       11
<PAGE>

21.  INDEMNIFICATION.

     The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors' and officers'
liability insurance policy at its expense, and shall indemnify Executive (and
his heirs, executors and administrators) to the fullest extent permitted under
federal law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his having been a director or officer of the Bank
(whether or not he continues to be a director or officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements (such settlements must be approved by the
Board of Directors of the Bank).

22.  SUCCESSOR TO THE BANK.

     The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank or the Company, expressly
and unconditionally to assume and agree to perform the Bank's obligations under
this Agreement, in the same manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had taken place.

                                      12<PAGE>

                                                                    Exhibit 10.2

                      SAVINGS BANK OF THE FINGER LAKES, FSB
                             1996 STOCK OPTION PLAN

                                    ARTICLE I
                            ESTABLISHMENT OF THE PLAN

     Savings Bank of the Finger Lakes, FSB (the "Savings Bank") hereby
establishes this 1996 Stock Option Plan (the "Plan") upon the terms and
conditions hereinafter stated.

                                   ARTICLE II
                               PURPOSE OF THE PLAN

     The purpose of this Plan is to improve the growth and profitability of the
Savings Bank and its Subsidiary Companies by providing Employees with a
proprietary interest in the Savings Bank as an incentive to contribute to the
success of the Savings Bank and its Subsidiary Companies, and rewarding those
Employees for outstanding performance and the attainment of targeted goals. All
Incentive Stock Options issued under this Plan are intended to comply with the
requirements of Section 422 of the Code, and the regulations thereunder, and all
provisions hereunder shall be read, interpreted and applied with that purpose in
mind.

                                   ARTICLE III
                                   DEFINITIONS

     3.01 "Award" means an Option or Stock Appreciation Right granted pursuant
to the terms of this Plan.

     3.02 "Board" means the Board of Directors of the Savings Bank.

     3.03 "Change of Control" means a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act, or any successor thereto,
whether or not the Savings Bank in fact is required to comply with Regulation
14A thereunder, except that a "change in control of the Savings Bank" shall not
include any corporate reorganization of the Savings Bank undertaken in
conjunction with the conversion of Finger Lakes Financial Corporation, M.H.C.,
the parent mutual holding company of the Savings Bank, from the mutual to the
stock form.

     3.04 "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE>

     3.05 "Committee" means a committee of two or more directors appointed by
the Board pursuant to Article IV hereof, none of whom shall be an Officer or
Employee of the Savings Bank, and each of whom shall be a "disinterested person"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor
thereto. The functions of the committee may be undertaken by another committee
appointed by the Board.

     3.06 "Common Stock" means shares of the common stock, $0.01 par value per
share, of the Savings Bank.

     3.07 "Disability" means any physical or mental impairment which qualifies
an Employee for disability benefits under the applicable long-term disability
plan maintained by the Savings Bank or a Subsidiary Company, or, if no such plan
applies, which would qualify such Employee for disability benefits under the
Federal Social Security System.

     3.08 "Effective Date" means the day upon which the Board adopts this Plan.

     3.09 "Employee" means any person who is employed by the Savings Bank or a
Subsidiary Company, or is an Officer of the Savings Bank or a Subsidiary
Company, but not including directors who are not also Officers of or otherwise
employed by the Savings Bank or a Subsidiary Company.

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

     3.11 "Fair Market Value" shall be equal to the fair market value per share
of the Savings Bank's Common Stock on the date an Award is granted. For purposes
hereof, the Fair Market Value of a share of Common Stock shall be the closing
sale price of a share of Common Stock on the date in question (or, if such day
is not a trading day in the U.S. markets, on the nearest preceding trading day),
as reported with respect to the principal market (or the composite of the
markets, if more than one) or national quotation system in which such shares are
then traded, or if no such closing prices are reported, the mean between the
high bid and low asked prices that day on the principal market or national
quotation system then in use, or if no such quotations are available, the price
furnished by a professional securities dealer making a market in such shares
selected by the Committee.

     3.12 "Incentive Stock Option" means any Option granted under this Plan
which the Board intends (at the time it is granted) to be an incentive stock
option within the meaning of Section 422 of the Code or any successor thereto.

     3.13 "MHC" means Finger Lakes Financial Corporation, a federally chartered
mutual holding company and the holder of a majority of the issued and
outstanding shares of Common Stock.

                                       2
<PAGE>

     3.14 Non-Qualified Option" means any Option granted under this Plan which
is not an Incentive Stock Option.

     3.15 "Offering" means the offering of Common Stock to the public pursuant
to a Plan of Stock Issuance adopted by the Savings Bank.

     3.16 "Officer" means an Employee whose position in the Savings Bank or
Subsidiary Company is that of a corporate officer, as determined by the Board.

     3.17 "OTS" means the Office of Thrift Supervision.

     3.18 "Option" means a right granted under this Plan to purchase Common
Stock.

     3.19 "Optionee" means an Employee or former Employee whom an Option is
granted under the Plan.

     3.20 "Retirement" means a termination of employment which constitutes a
"retirement" under any applicable qualified pension benefit plan maintained by
the Savings Bank or a Subsidiary Company, or, if no such plan is applicable,
which would constitute "retirement' under any qualified pension benefit plan
maintained by the Savings Bank or a Subsidiary Company, if such individual were
a participant in such plan.

     3. 21 "Stock Appreciation Right" means a right to surrender an Option in
consideration for a payment by the Savings Bank in cash and/or Common Stock, as
provided in the discretion of the Committee in accordance with Section 8.09.

     3.22 "Subsidiary Companies" means those subsidiaries of the Savings Bank,
which meet the definition of "subsidiary corporations" set forth in Section
425(f) of the Code, at the time of granting of the Option in question.

                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

     4.01 Duties of the Committee. The Plan shall be administered and
interpreted by the Committee, as appointed from time to time by the Board
pursuant to Section 4.02. The Committee shall have the authority in its absolute
discretion to adopt, amend and rescind such rules, regulations and procedures
as, in its opinion, may be advisable in the administration of the Plan,
including, without limitation, rules, regulations and procedures which (i) deal
with satisfaction of an Optionee's tax withholding obligation pursuant to
Section 12.02 hereof, (ii) include arrangements to facilitate the Optionee's
ability to borrow funds for payment of the exercise or purchase price of an
Award, if applicable, from securities brokers and dealers, and (iii) include
arrangements which provide for the payment of some or all of such exercise or

                                        3
<PAGE>

purchase price by delivery of previously owned shares of Common Stock or other
property and/or by withholding some of the shares of Common Stock which are
being acquired. The interpretation and construction by the Committee of any
provisions of the Plan, any rule, regulation or procedure adopted by it pursuant
thereto or of any Award shall be final and binding.

     4.02 Appointment and Operation of the Committee. The members of the
Committee shall be appointed by, and will serve at the pleasure of, the Board.
The Board from time to time may remove members from, or add members to, the
Committee, provided the Committee shall continue to consist of two or more
members of the Board, none of whom shall be an officer or employee of the
Savings Bank, and each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 under the Exchange Act. The Committee shall act by vote
or-written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. It may appoint one of its members to be chairman and any person,
whether or not a member, to be its secretary or agent. The Committee shall
report its actions and decisions to the Board at appropriate times but in no
event less than one time per calendar year.

     4.03 Revocation for Misconduct. The Committee may by resolution immediately
revoke, rescind and terminate any Option, or portion thereof, to the extent not
yet vested, or any Stock Appreciation Right, to the extent not yet exercised,
previously granted or awarded under this Plan to an Employee who is discharged
from the employ of the Savings Bank or a Subsidiary Company for cause, which,
for purposes hereof, shall mean termination because of the Employee's personal
dishonesty, incompetence, willful misconduct breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order.

     4.04 Limitation on Liability. No member of the Committee shall be liable
for any action or determination made in good faith with respect to the Plan, any
rule, regulation or procedure adopted by it pursuant thereto or any Awards
granted under it. If a member of the Committee is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of anything
done or not done by him in such capacity under or with respect to the Plan, the
Savings Bank shall, subject to the requirements of applicable laws and
regulations, indemnify such member against all liabilities and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonahly believed to
be in the best interests of the Savings Bank and its Subsidiary Companies and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.

     4.05 Compliance with Law and Regulations. All Awards granted hereunder
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any

                                          4
<PAGE>

government or regulatory agency as may be required. The Savings Bank shall not
be required to issue or deliver any certificates for shares of Common Stock
prior to the completion of any registration or qualification of or obtaining of
consents or approvals with respect to such shares under any Federal or state law
or any rule or regulation of any government body, which the Savings Bank shall,
in its sole discretion, determine to be necessary or advisable. Moreover, no
Option or Stock Appreciation Right may be exercised if such exercise would be
contrary to applicable laws and regulations.

     4.06 Restrictions on Transfer. The Savings Bank may place a legend upon any
certificate representing shares acquired pursuant to an Award granted hereunder
noting that the transfer of such shares may be restricted by applicable laws and
regulations.

                                    ARTICLE V
                                   ELIGIBILITY

     Awards may be granted to such Employees of the Savings Bank and its
Subsidiary Companies as may be designated from time to time by the Committee.
Awards may not be granted to individuals who are not Employees of either the
Savings Bank or its Subsidiary Companies.

                                   ARTICLE VI
                        COMMON STOCK COVERED BY THE PLAN

     6.01 Option Shares. The aggregate number of shares of Common Stock which
may be issued pursuant to this Plan, subject to adjustment as provided in
Article IX, shall be 59,000 shares, which is equal to 10.0% of the shares of
Common Stock issued in the Offering to persons other than the MHC. None of such
shares shall be the subject of more than one Award at any time, but if an Option
as to any shares is surrendered before exercise, or expires or terminates for
any reason without having been exercised in full, or for any other reason ceases
to be exercisable, the number of shares covered thereby shall again become
available for grant under the Plan as if no Awards had been previously granted
with respect to such shares. Notwithstanding the foregoing, if an Option is
surrendered in connection with the exercise of a Stock Appreciation Right, the
number of shares covered thereby shall not be available for grant under the
Plan. During the time this Plan remains in effect, grants to any Employee shall
not exceed options to purchase more than 25% of the shares of Common Stock
available under the Plan.

     6.02 Source of Shares. The shares of Common Stock issued under the Plan may
be authorized but unissued shares, treasury shares or shares purchased by the
Savings Bank on the open market or from private sources for use under the Plan.

                                        5
<PAGE>

                                   ARTICLE VII
                                DETERMINATION OF
                         AWARDS, NUMBER OF SHARES, ETC.

     The Committee shall, in its discretion, determine from time to time which
Employees will be granted Awards under the Plan, the number of shares of Common
Stock subject to each Award, and whether each Option will be an Incentive Stock
Option or a Non-Qualified Stock Option. In making all such determinations there
shall be taken into account the duties, responsibilities and performance of each
respective Employee, his present and potential contributions to the growth and
success of the Savings Bank, his salary and such other factors as the Committee
shall deem relevant to accomplishing the purposes of the Plan.

                                  ARTICLE VIII
                      OPTIONS AND STOCK APPRECIATION RIGHTS

     Each Option granted hereunder shall be on the following terms and
conditions:

     8.01 Stock Option Agreement. The proper Officers on behalf of the Savings
Bank and each Optionee shall execute a Stock Option Agreement which shall set
forth the total number of shares of Common Stock to which it pertains, the
exercise price, whether it is a Non-Qualified Option or an Incentive Stock
Option, and such other terms, conditions, restrictions and privileges as the
Committee in each instance shall deem appropriate, provided they are not
inconsistent with the terms, conditions and provisions of this Plan. Each
Optionee shall receive a copy of his executed Stock Option Agreement

     8.02 Option Exercise Price.

     (a) Incentive Stock Options. The per share price at which the subject
Common Stock may be purchased upon exercise of an Incentive Stock Option shall
be no less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock at the time such Incentive Stock Option is granted, except as
provided in Section 8.09(b).

     (b) Non-Qualified Options. The per share price at which the subject Common
Stock may be purchased upon exercise of a Non-Qualified Option shall be no less
than one hundred percent (l00%) of the Fair Market Value of a share of Common
Stock at the time such Non-Qualified Option is granted.

     8.03 Vesting and Exercise of Options.

     (a) General Rules. Incentive Stock Options and Non-Qualified Options
granted hereunder shall become vested and exercisable at the rate of 20% per
year on each anniversary of the date the Option was granted, and the right to
exercise shall be cumulative. Notwithstanding the foregoing, no vesting shall
occur on or after an Employee's employment

                                        6
<PAGE>

with the Savings Bank and all Subsidiary Companies is terminated for any reason
other than his death, Disability or Retirement. In determining the number of
shares of Common Stock with respect to which Options are vested and/or
exercisable, fractional shares will be rounded to the nearest whole number if
the fraction is 0.5 or higher, and down if it is less.

     (b) Accelerated Vesting Upon Death or Disability. Unless the Committee
shall specifically state otherwise at the time an Option is granted, all Options
granted hereunder shall become vested and exercisable in full on the date an
Optionee terminates his employment with the Savings Bank or a Subsidiary Company
because of his death or Disability.

     8.04 Duration of Options.

     (a) General Rule. Except as provided in Sections 8.04(b) and 8.09, each
Option or portion thereof granted to Employees shall be exercisable at any time
on or after it vests and becomes exercisable until the earlier of (i) ten (10)
years after its date of grant or (ii) three (3) months after the date on which
the Optionee ceases to be employed by the Savings Bank and all Subsidiary
Companies, unless the Committee in its discretion decides at the time of grant
or thereafter to extend such period of exercise upon termination of employment
from three (3) months to a period not exceeding three (3) years. To the extent
that any options on the date on which the Optionee ceases to be employed by the
Savings Bank and all Subsidiary Companies have not yet vested, they shall be
exercisable for one year from the date of vesting pursuant to Section 8.03(a)
hereof.

     (b) Exception for Termination Due to Death, Disability, Retirement or
Change in Control. If an Employee dies while in the employ of the Savings Bank
or a Subsidiary Company, terminates employment with the Savings Bank or a
Subsidiary Company as a result of Disability or Retirement or in the event of a
Change in Control without having fully exercised his Options, the Optionee or
the executors, administrators, legatees or distributees of his estate shall have
the right, during the twelve-month period following the earlier of his death or
Disability, Retirement or the Change in Control to exercise such Options to the
extent vested on the date of such death, Disability, Retirement or Change in
Control In no event, however, shall any Option be exercisable within six (6)
months after the date of grant or more than ten (10) years from the date it was
granted.

     8.05 Nonassignability. Options shall not be transferable by an Optionee
except by will or the laws of descent or distribution, and during an Optionee's
lifetime shall be exercisable only by such Optionee or the Optionee's guardian
or legal representative.

     8.06 Manner of Exercise. Options may be exercised in part or in whole and
at one time or from time to time. The procedures for exercise shall be set forth
in the written Stock Option Agreement provided for in Section 8.01 above.

     8.07 Payment for Shares. Payment in full of the purchase price for shares
of Common Stock purchased pursuant to the exercise of any Option shall be made
to the Savings Bank upon exercise of the Option. All shares sold under the Plan
shall be fully paid and nonassessable.

                                        7
<PAGE>

Payment for shares may be made by the Optionee in cash or, at the discretion of
the Committee by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an Option) or other property equal in Fair Market
Value to the purchase price of the shares to be acquired pursuant to the Option,
by withholding some of the shares of Common Stock which are being purchased upon
exercise of an Option, or any combination of the foregoing.

     8.08 Voting and Dividend Rights. No Optionee shall have any voting or
dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Savings Bank's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.

     8.09 Additional Terms Applicable to Incentive Stock Options. All Options
issued under the Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 8.01 to 8.08 above, to those contained in this
Section 8.09.

     (a) Notwithstanding any contrary provisions contained elsewhere in this
Plan and as long as required by Section 422 of the Code, the aggregate Fair
Market Value, determined as of the time an Incentive Stock Option is granted, of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year, under this Plan and
stock options that satisfy the requirements of Section 422 of the Code under any
other stock option plan or plans maintained by the Savings Bank (or any parent
or Subsidiary Company), shall not exceed $100,000.

     (b) Limitation on Ten Percent Stockholders. The price at which shares of
Common Stock may be purchased upon exercise of an Incentive Stock Option granted
to an individual who, at the time such Incentive Stock Option is granted, owns,
directly or indirectly, more than ten percent (10%) of the total combined voting
power of all classes of stock issued to stockholders of the Savings Bank or any
Subsidiary Company, shall be no less than one hundred and ten percent (110%) of
the Fair Market Value of a share of the Common Stock of the Savings Bank at the
time of grant, and such Incentive Stock Option shall by its terms not be
exercisable after the earlier of the date determined under Section 8.03 or the
expiration of five (5) years from the date such Incentive Stock Option is
granted.

     (c) Notice of Disposition; Withholding; Escrow. An Optionee shall
immediately notify the Savings Bank in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition within
the meaning of Section 421 of the Code) of any shares of Common Stock acquired
through exercise of an Incentive Stock Option, within two (2) years after the
grant of such Incentive Stock Option or within one (1) year after the
acquisition of such shares, setting forth the date and manner of disposition,
the number of shares disposed of and the price at which such shares were
disposed of. The Savings Bank shall be entitled to withhold from any
compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of Federal
or state law or regulation and, further, to collect from the Optionee any
additional

                                        8
<PAGE>

amounts which may be required for such purpose. The Committee may, in its
discretion, require shares of Common Stock acquired by an Optionee upon exercise
of an Incentive Stock Option to be held in an escrow arrangement for the purpose
of enabling compliance with the provisions of this Section 8.09(c).

     8.10 Stock Appreciation Rights.

     (a) General Terms and Conditions. The Committee may, but shall not be
obligated to, authorize the Savings Bank, on such terms and conditions as it
deems appropriate in each case, to grant rights to Optionees to surrender an
exercisable Option, or any portion thereof, in consideration for the payment by
the Savings Bank of an amount equal to the excess of the Fair Market Value of
the shares of Common Stock subject to the Option, or portion thereof,
surrendered over the exercise price of the Option with respect to such shares
(any such authorized surrender and payment being hereinafter referred to as a
"Stock Appreciation Right"). Such payment, at the discretion of the Committee,
may be made in shares of Common Stock valued at the then Fair Market Value
thereof, or in cash, or partly in cash and partly in shares of Common Stock.

     The terms and conditions set with respect to a Stock Appreciation Right my
include (without limitation), subject to other provisions of this Section 8.10
and the Plan, the period during which, date by which or event upon which the
Stock Appreciation Right may be exercised (which shall be on the same terms as
the Option to which it relates pursuant to Section 8.03 hereunder); the method
for valuing shares of Common Stock for purposes of this Section 8.10; a ceiling
on the amount of consideration which the Savings Bank may pay in connection with
exercise and cancellation of the Stock Appreciation Right; and arrangements for
income tax withholding. The Committee shall have complete discretion to
determine whether, when and to whom Stock Appreciation Rights may be granted.
Notwithstanding the foregoing, the Savings Bank may not permit the exercise of a
Stock Appreciation Right issued pursuant to this Plan until the Savings Bank has
been subject to the reporting requirements of Section 13 of the Exchange Act for
a period of at least one year prior to the exercise of any such Stock
Appreciation Right and until a Stock Appreciation Right issued pursuant to this
Plan has been outstanding for at least six months from the daze of grant.

     (b) Time Limitations. If a holder of a Stock Appreciation Right terminates
service with the Savings Bank as an Officer or Employee, the Stock Appreciation
Right may be exercised only within the period, if any, within which the Option
to which it relates may be exercised. Notwithstanding the foregoing, any
election by an Optionee to exercise the Stock Appreciation Rights provided in
this Plan shall be made during the period beginning on the third business day
following the release for publication of quarterly or annual financial
information required to be prepared and disseminated by the Savings Bank
pursuant to the requirements of the Exchange Act and ending on the twelfth
business day following such date. The required release of information shall be
deemed to have been satisfied when the specified financial data

                                        9
<PAGE>

appears on or in a wire service, financial news service or newspaper of general
circulation or is otherwise first made publicly available.

     (c) Effects of Exercise of Stock Appreciation Rights or Options. Upon the
exercise of a Stock Appreciation Right, the number of shares of Common Stock
available under the Option to which it relates shall decrease by a number equal
to the number of shares for which the Stock Appreciation Right was exercised.
Upon the exercise of an Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock subject to the Stock
Appreciation Right that exceeds the total number of shares for which the Option
remains unexercised.

     (d) Time of Grant. A Stock Appreciation Right may be granted concurrently
with the Option to which it relates or at any time thereafter prior to the
exercise or expiration of such Option.

     (e) Non-Transferable. The holder of a Stock Appreciation Right may not
transfer or assign the Stock Appreciation Right otherwise than by will or in
accordance with the laws of descent and distribution, and during a holder's
lifetime a Stock Appreciation Right may be exercisable only by the holder.

     (f) Stock Appreciation Right Agreement. The proper Officers on behalf of
the Savings Bank and each Optionee who is granted a Stock Appreciation Right
shall execute a Stock Appreciation Right Agreement, which shall set forth the
terms, conditions, restrictions and privileges of the Stock Appreciation Right
provided that they are not inconsistent with the terms, conditions, restrictions
and privileges of this Plan. Each holder of a Stock Appreciation Right shall
receive a copy of his executed Stock Appreciation Right Agreement

                                   ARTICLE IX
                         ADJUSTMENTS FOR CAPITAL CHANGES

     The aggregate number of shares of Common Stock available for issuance under
this Plan, the number of shares to which any Award relates and the exercise
price per share of Common Stock under any Option shall be proportionately
adjusted for any increase or decrease in the total number of outstanding shares
of Common Stock issued subsequent to the effective date of this Plan resulting
from a split, subdivision or consolidation of shares or any other capital
adjustment, the payment of a stock dividend, or other increase or decrease in
such shares effected without receipt or payment of consideration by the Savings
Bank. If, upon a merger, consolidation, reorganization, liquidation,
recapitalition or the like of the Savings Bank, the shares of the Savings Bank's
Common Stock shall be exchanged for other securities of the Savings Bank or of
another corporation, each recipient of an Award shall be entitled, subject to
the conditions herein stated, to purchase or acquire such number of shares of
Common Stock or amount of other securities of the Savings Bank or such other
corporation as were exchangeable for the number of shares of Common Stock of the
Savings Bank which such optionees would have been entitled

                                       10
<PAGE>

to purchase or acquire except for such action, and appropriate adjustments shall
be made to the per share exercise price of outstanding Options.

                                    ARTICLE X
                      AMENDMENT AND TERMINATION OF THE PLAN

     The Board may, by resolution, at any time terminate or amend the Plan with
respect to any shares of Common Stock as to which Awards have not been granted,
subject to regulations of the OTS and any required stockholder approval or any
stockholder approval which the Board may deem to be advisable for any reason,
such as for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying any applicable stock
exchange listing requirements. The Board may not, without the consent of the
holder of an Award, alter or impair any Award previously granted or awarded
under this Plan as specifically authorized herein.

                                   ARTICLE XI
                                EMPLOYMENT RIGHTS

     Neither the Plan nor the grant of any Awards hereunder nor any action taken
by the Committee or the Board in connection with the Plan shall create any right
on the part of any Employee of the Savings Bank or a Subsidiary Company to
continue in such capacity.

                                   ARTICLE XII
                                   WITHHOLDING

     12.01 Tax Withholding. The Savings Bank may withhold from any cash payment
made under this Plan sufficient amounts to cover any applicable withholding and
employment taxes, and if the amount of such cash payment is insufficient, the
Savings Bank may require the Optionee to pay to the Savings Bank the amount
required to be withheld as a condition to delivering the shares acquired
pursuant to an Award. The Savings Bank also may withhold or collect amounts with
respect to a disqualifying disposition of shares of Common Stock acquired
pursuant to exercise of an Incentive Stock Option, as provided in Section
8.09(c).

     12.02 Methods of Tax Withholding. The Committee is authorized to adopt
rules, regulations or procedures which provide for the satisfaction of an
Optionee's tax withholding obligation by the retention of shares of Common Stock
to which the Employee would otherwise be entitled pursuant to an Award and/or by
the Optionee's delivery of previously owned shares of Common Stock or other
property.

                                         11
<PAGE>

                                  ARTICLE XIII
                        EFFECTIVE DATE OF THE PLAN; TERM

     13.01 Effective Date of the Plan. This Plan shall become effective on the
Effective Date, and Awards may be granted hereunder as of or after the Effective
Date and prior to the termination of the Plan, provided that no Incentive Stock
Option issued pursuant to this Plan shall qualify as such unless this Plan is
approved by the requisite vote of the holders of the outstanding voting shares
of the Savings Bank at a meeting of stockholders of the Savings Bank held within
twelve (12) months of the Effective Date. Notwithstanding the foregoing or
anything to the contrary in this Plan, the implementation of this Plan and any
Awards granted pursuant hereto is subject to the approval of the Savings Bank's
stockholders and the approval of the Plan of Stock Issuance by the OTS.

     13.02 Term of Plan. Unless sooner terminated, this Plan shall remain in
effect for a period of ten (10) years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.

                                   ARTICLE XIV
                                  MISCELLANEOUS

     14.01 Governing Law. To the extent not governed by Federal law, this Plan
shall be construed under the laws of the State of New York.

     14.02 Pronouns. Wherever appropriate, the masculine pronoun shall include
the feminine pronoun, and the singular shall include the plural.

                                      12

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