Roebling Financial Corp, Inc.
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                          ROEBLING FINANCIAL CORP, INC.
                             2006 STOCK OPTION PLAN

     1. PURPOSE OF THE PLAN.  The Plan shall be known as the Roebling  Financial
        -------------------
Corp, Inc.  ("Company") 2006 Stock Option Plan (the "Plan").  The purpose of the
Plan is to attract and retain  qualified  persons for  positions of  substantial
responsibility  in and to the Company  and to provide  additional  incentive  to
officers,  directors,  and employees  providing services to the Company,  or any
present or future  parent or subsidiary of the Company to promote the success of
the business.  The Plan is intended to provide for the grant of "Incentive Stock
Options,"  within the meaning of Section  422 of the  Internal  Revenue  Code of
1986, as amended (the "Code") and Non-Incentive  Stock Options,  options that do
not so qualify.  The provisions of the Plan relating to Incentive  Stock Options
shall be interpreted to conform to the requirements of Section 422 of the Code.

     2. DEFINITIONS. The following words and phrases when used in this Plan with
        -----------
an initial capital letter, unless the context clearly indicates otherwise, shall
have the meaning as set forth below. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural.

          "Award" means the grant by the Committee of an Incentive  Stock Option
or a Non-Incentive Stock Option, or any combination  thereof, as provided in the
Plan.

          "Bank" shall mean Roebling Bank, or any successor corporation to it.

          "Board"  shall  mean the Board of  Directors  of the  Company,  or any
successor or parent corporation thereto.

          "Change in  Control"  shall  mean:  (i) the sale of all, or a material
portion,  of the assets of the Company or its  Subsidiaries;  (ii) the merger or
recapitalization of the Company whereby the Company is not the surviving entity;
(iii) a change in control of the Company,  as otherwise defined or determined by
the Office of Thrift  Supervision or regulations  promulgated by it; or (iv) the
acquisition,  directly or indirectly,  of the beneficial  ownership  (within the
meaning of that term as it is used in Section 13(d) of the  Securities  Exchange
Act of 1934 and the  rules and  regulations  promulgated  thereunder,  as now in
effect and as they may  hereafter be amended) of  twenty-five  percent  (25%) or
more of the outstanding  voting securities of the Company by any person,  trust,
entity or group.  This  limitation  shall not apply to the purchase of shares by
underwriters  in  connection  with a public  offering of Company  stock,  or the
purchase of shares of up to 25% of any class of  securities  of the Company by a
tax-qualified  employee  stock  benefit  plan which is exempt from the  approval
requirements,  set forth  under 12  C.F.R.  Section  574.3(c)(1)(vii)  as now in
effect or as may hereafter be amended. The term "person" refers to an individual
or  a  corporation,   partnership,  trust,  association,  joint  venture,  pool,
syndicate, sole proprietorship, unincorporated organization or any other form of
entity not specifically listed herein.

          "Code" shall mean the Internal  Revenue Code of 1986, as amended,  and
regulations promulgated thereunder.

          "Committee"  shall  mean  the  Board  or the  Stock  Option  Committee
appointed by the Board in accordance with Section 5(a) of the Plan.


                                      1
<PAGE>


          "Common  Stock"  shall  mean  common  stock  of  the  Company,  or any
successor thereto or parent corporation thereof.

          "Company"  shall  mean  Roebling  Financial  Corp,  Inc.,  the  parent
corporation of the Bank, or any successor or Parent thereof.

          "Continuous  Employment" or "Continuous  Status as an Employee"  shall
mean the absence of any  interruption  or  termination  of  employment  with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence  approved by the Company or in the case of  transfers
between payroll  locations,  of the Company or between the Company,  its Parent,
its Subsidiaries or a successor.

          "Director"  shall  mean a member of the Board of the  Company,  or any
successor thereto or parent corporation thereof.

          "Director  Emeritus"  shall  mean  a  person  serving  as  a  director
emeritus,  advisory director,  consulting  director or other similar position as
may be  appointed by the Board of Directors of the Bank or the Company from time
to time.

          "Disability"  means (a) with respect to Incentive  Stock Options,  the
"permanent  and total  disability"  of the  Employee  as such term is defined at
Section  22(e)(3)  of the Code;  and (b) with  respect  to  Non-Incentive  Stock
Options,  any  physical  or mental  impairment  which  renders  the  Participant
incapable of continuing  in the  employment or service of the Bank or the Parent
in his then current capacity as determined by the Committee.

          "Effective  Date"  shall mean the date of  approval of the Plan by the
shareholders of the Company.

          "Employee"  shall  mean any  person  employed  by the  Company  or any
present or future Parent or Subsidiary of the Company.

          "Fair  Market  Value"  shall mean:  (i) if the Common  Stock is traded
otherwise than on a national securities exchange, then the Fair Market Value per
Share  shall be equal to the  mean  between  the last bid and ask  price of such
Common  Stock on such date or,  if there is no bid and ask  price on said  date,
then on the  immediately  prior  business  day on which  there was a bid and ask
price.  If no such bid and ask price is  available,  then the Fair Market  Value
shall be determined by the Committee in good faith;  or (ii) if the Common Stock
is listed on a national  securities  exchange,  including  the  Nasdaq  National
Market,  then the Fair Market Value per Share shall be not less than the average
of the highest and lowest selling price of such Common Stock on such exchange on
such date,  or if there were no sales on said date,  then the Fair Market  Value
shall be not less than the mean between the last bid and ask price on such date.
If no such bid and ask price is  available,  then the Fair Market Value shall be
determined by the Committee in good faith.

          "Incentive  Stock  Option" or "ISO"  shall mean an option to  purchase
Shares  granted by the  Committee  pursuant  to  Section  8, and  subject to the
limitations  and  restrictions of Section 8 hereof and is intended to qualify as
an incentive stock option under Section 422 of the Code.

          "Non-Incentive  Stock  Option"  or  "Non-ISO"  shall mean an option to
purchase  Shares  granted by the Committee  pursuant to Section 9 hereof,  which
option is not intended to qualify under Section 422 of the Code.

                                      2
<PAGE>

          "Option" shall mean an Incentive Stock Option or  Non-Incentive  Stock
Option (subject to  specification as the context  requires)  granted pursuant to
this Plan providing the holder of such Option with the right to purchase  Common
Stock.

          "Optioned  Stock"  shall  mean  stock  subject  to an  Option  granted
pursuant to the Plan.

          "Optionee"  shall  mean any  person  who  receives  an Option or Award
pursuant to the Plan.

          "Parent" shall mean any present or future corporation which would be a
"parent  corporation"  of the Bank or the Company as defined in Sections  424(e)
and (g) of the Code.

          "Participant"  means any Director,  officer or Employee of the Company
or any Parent or  Subsidiary  of the  Company or any other  person  providing  a
service to the Company who is selected by the Committee to receive an Award,  or
who by the express terms of the Plan is granted an Award.

          "Plan" shall mean the Roebling  Financial Corp, Inc. 2006 Stock Option
Plan.

          "Share" shall mean one share of the Common Stock.

          "Subsidiary"  shall  mean any  present  or  future  corporation  which
constitutes  a  "subsidiary  corporation"  of the Company as defined in Sections
424(f) and (g) of the Code, including the Bank.

     3.  SHARES  SUBJECT  TO THE  PLAN.  Except  as  otherwise  required  by the
         -----------------------------
provisions of Section 13 hereof,  the aggregate number of Shares with respect to
which Awards may be made  pursuant to the Plan shall not exceed  91,076  Shares.
Such Shares may either be from authorized but unissued  shares,  treasury shares
or shares  purchased in the market for Plan purposes.  If an Award shall expire,
become unexercisable,  or be forfeited for any reason prior to its exercise, new
Awards may be granted  under the Plan with respect to the number of Shares as to
which such expiration has occurred.

     4.  SIX  MONTH  HOLDING  PERIOD.   Subject  to  vesting  requirements,   if
         ---------------------------
applicable,  except in the event of death or  Disability  of the  Optionee  or a
Change in Control of the  Company,  a minimum of six months must elapse  between
the date of the grant of an Option and the date of the sale of the Common  Stock
received through the exercise of such Option.

     5. ADMINISTRATION OF THE PLAN.
        --------------------------

          (a)  COMPOSITION OF THE COMMITTEE.  The Plan shall be  administered by
               ----------------------------
the Board of Directors of the Company or a Committee  which shall consist of not
less than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons  designated as members of the Committee shall
meet the  requirements of a "Non-Employee  Director"  within the meaning of Rule
16b-3 under the  Securities  Exchange  Act of 1934,  as amended,  as found at 17
C.F.R.  Section  240.16b-3;  provided,  however,  a failure  to comply  with the
requirement of being a "Non-Employee  Director" shall not disqualify any actions
taken by the Committee.

          (b) POWERS OF THE COMMITTEE.  The Committee is authorized (but only to
              -----------------------
the extent not contrary to the express  provisions of the Plan or to resolutions
adopted by the Board) to interpret  the Plan,  to  prescribe,  amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the


                                      3
<PAGE>

administration of the Plan, and shall have and may exercise such other power and
authority  as may be  delegated to it by the Board from time to time. A majority
of the entire  Committee shall  constitute a quorum and the action of a majority
of the  members  present at any  meeting  at which a quorum is present  shall be
deemed  the  action  of the  Committee.  In no event  may the  Committee  revoke
outstanding Awards without the consent of the Participant.

          The  President  of the  Company  and such other  officers  as shall be
designated by the Committee are hereby authorized to execute written  agreements
evidencing  Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option,  the expiration date of
such Options, and such other terms and restrictions  applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.

          (c) EFFECT OF COMMITTEE'S DECISION. All decisions,  determinations and
              ------------------------------
interpretations  made by the  Committee  shall be final  and  conclusive  on all
persons affected thereby.

     6. ELIGIBILITY FOR AWARDS AND LIMITATIONS.
        --------------------------------------

          (a) The Committee  shall from time to time determine the  Participants
who shall be granted  Awards under the Plan,  the number of Awards to be granted
to each such  Participant,  and whether Awards granted to each such  Participant
under  the Plan  shall be  Incentive  and/or  Non-Incentive  Stock  Options.  In
selecting  Participants  and in determining the number of Shares of Common Stock
to be granted to each such Participant, the Committee may consider the nature of
the prior and  anticipated  future services  rendered by each such  Participant,
each such  Participant's  current and potential  contribution to the Company and
such other factors as the Committee may, in its sole discretion,  deem relevant.
Participants  who have been  granted an Award may,  if  otherwise  eligible,  be
granted additional Awards.

          (b) The  aggregate  Fair Market Value  (determined  as of the date the
Option is granted) of the Shares with respect to which  Incentive  Stock Options
are  exercisable  for the first time by each  Employee  during any calendar year
(under all Incentive  Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future  Parent or  Subsidiary  of the  Company)
shall not exceed $100,000.  Notwithstanding the prior provisions of this Section
6, the  Committee  may grant  Options  in excess of the  foregoing  limitations,
provided said Options shall be clearly and specifically  designated as not being
Incentive Stock Options.

          (c)  In  no  event  shall  Shares   subject  to  Options   granted  to
non-employee  Directors in the aggregate under this Plan exceed more than 70% of
the total number of Shares  authorized  for delivery under this Plan pursuant to
Section 3 herein or more than 15% to any individual non-employee Director. In no
event shall Shares subject to Options  granted to any Employee  exceed more than
20% of the total number of Shares authorized for delivery under the Plan.

          (d) The exercise  price of any Options  awarded  during  calendar year
2006  shall  not be less  than  $10.00  per  share,  subject  to  adjustment  in
accordance with Section 13 herein.

     7. TERM OF THE PLAN.  The Plan shall  continue  in effect for a term of ten
        ----------------
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof.  No Option shall be granted  under the Plan after ten (10) years from
the Effective Date.

                                      4
<PAGE>

     8. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Incentive Stock Options
        -----------------------------------------------
may be granted only to  Participants  who are Employees.  Each  Incentive  Stock
Option granted  pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee  shall from time to time  approve.  Each  Incentive  Stock
Option  granted  pursuant to the Plan shall comply with,  and be subject to, the
following terms and conditions:

          (a) OPTION PRICE.

               (i) The price  per Share at which  each  Incentive  Stock  Option
granted by the  Committee  under the Plan may be exercised  shall not, as to any
particular  Incentive  Stock  Option,  be less than the Fair Market Value of the
Common Stock on the date that such Incentive Stock Option is granted.

               (ii)  In  the  case  of  an  Employee   who  owns  Common   Stock
representing more than ten percent (10%) of the outstanding  Common Stock at the
time the Incentive Stock Option is granted,  the Incentive Stock Option exercise
price  shall not be less than one  hundred  and ten  percent  (110%) of the Fair
Market Value of the Common Stock on the date that the Incentive  Stock Option is
granted.

          (b) PAYMENT.  Full  payment for each Share of Common  Stock  purchased
upon the exercise of any Incentive  Stock Option granted under the Plan shall be
made at the time of exercise of each such  Incentive  Stock  Option and shall be
paid in cash (in United States  Dollars),  Common Stock or a combination of cash
and Common  Stock.  Common  Stock  utilized  in full or  partial  payment of the
exercise price must have been owned by the party  exercising such Option for not
less than six months  prior to the date of  exercise  of such  Option,  and such
Common  Stock shall be valued at the Fair Market  Value at the date of exercise.
The Company  shall  accept full or partial  payment in Common  Stock only to the
extent  permitted by  applicable  law. No Shares of Common Stock shall be issued
until full payment has been received by the Company,  and no Optionee shall have
any of the rights of a  shareholder  of the Company until Shares of Common Stock
are issued to the Optionee.

          (c) TERM OF INCENTIVE STOCK OPTION. The term of exercisability of each
Incentive  Stock Option granted  pursuant to the Plan shall be not more than ten
(10) years from the date each such Incentive  Stock Option is granted,  provided
that in the  case of an  Employee  who owns  stock  representing  more  than ten
percent (10%) of the Common Stock  outstanding  at the time the Incentive  Stock
Option is granted,  the term of  exercisability  of the  Incentive  Stock Option
shall not exceed five (5) years.

          (d) EXERCISE  GENERALLY.  Except as  otherwise  provided in Section 10
hereof,  no Incentive  Stock Option may be exercised  unless the Optionee  shall
have been in the employ of the Company at all times during the period  beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3)  months  prior to the date of  exercise  of any such  Incentive  Stock
Option.  The Committee  may impose  additional  conditions  upon the right of an
Optionee to exercise any Incentive Stock Option granted  hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by  action of the  Committee  at the time of the  grant of the  Options,  the
Options will be first exercisable at the rate of 25% as of the date of grant and
25% annually thereafter during such periods of service as an Employee,  Director
or Director Emeritus.

          (e) CASHLESS EXERCISE. Subject to vesting requirements, if applicable,
an Optionee who has held an  Incentive  Stock Option for at least six months may
engage in the "cashless  exercise" of the Option.  Upon a cashless exercise,  an
Optionee gives the Company written notice of the exercise of the Option together
with an order to a registered  broker-dealer  or equivalent third party, to sell
part or all of the

                                      5
<PAGE>

Optioned  Stock and to deliver  enough of the proceeds to the Company to pay the
Option exercise price and any applicable withholding taxes. If the Optionee does
not sell the Optioned  Stock  through a registered  broker-dealer  or equivalent
third party, the Optionee can give the Company written notice of the exercise of
the Option and the third party  purchaser  of the  Optioned  Stock shall pay the
Option exercise price plus any applicable  withholding taxes to the Company. The
Option shall not be deemed exercised until the Company has received full payment
for the exercise price of such Option.

          (f) TRANSFERABILITY. An Incentive Stock Option granted pursuant to the
Plan shall be exercised  during an  Optionee's  lifetime only by the Optionee to
whom it was granted and shall not be assignable or  transferable  otherwise than
by will or by the laws of descent and distribution.

     9. TERMS AND CONDITIONS OF NON-INCENTIVE STOCK OPTIONS.  Each Non-Incentive
        ---------------------------------------------------
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve.  Each  Non-Incentive
Stock  Option  granted  pursuant to the Plan shall comply with and be subject to
the following terms and conditions.

          (a)  OPTIONS  GRANTED  TO  DIRECTORS.  Subject to the  limitations  of
Section 6(c),  Non-Incentive  Stock  Options to purchase  9,107 shares of Common
Stock  will  be  granted  to  each  Director  who is not an  Employee  as of the
Effective  Date,  at an exercise  price  equal to the Fair  Market  Value of the
Common  Stock on such  date of  grant;  provided  that,  in no event  shall  the
exercise  price of such Options be less than $10.00 per share.  The Options will
be 100%  exercisable as of the Effective  Date.  Upon the death or Disability of
the Director or Director Emeritus,  such Option shall continue to be exercisable
for a period  of ten years  following  the date of grant  without  regard to the
continued services of such Director as a Director or Director Emeritus. Upon the
retirement or termination of service of a Director or Director Emeritus,  absent
death or Disability,  such options shall remain  exercisable for a period of one
year from such date of  termination  of service.  In the event of the Optionee's
death,  such  Options may be exercised  by the  personal  representative  of his
estate or person or  persons to whom his rights  under  such  Option  shall have
passed by will or by the laws of descent and  distribution.  Additional  Options
may be granted to newly appointed or elected non-employee  Directors or to prior
Award recipients within the sole discretion of the Board. The exercise price per
Share of such  Options  granted  shall be equal to the Fair Market  Value of the
Common  Stock  at  the  time  such  Options  are   granted.   Unless   otherwise
inapplicable, or inconsistent with the provisions of this paragraph, the Options
to be granted to Directors hereunder shall be subject to all other provisions of
this Plan.

          (b) OPTION  PRICE.  The  exercise  price per Share of Common Stock for
each  Non-Incentive  Stock Option granted  pursuant to the Plan shall be at such
price as the  Committee may  determine in its sole  discretion,  but in no event
less than the Fair  Market  Value of such  Common  Stock on the date of grant as
determined by the Committee in good faith.

          (c) PAYMENT.  Full  payment for each Share of Common  Stock  purchased
upon the exercise of any Non-Incentive Stock Option granted under the Plan shall
be made at the time of  exercise  of each such  Non-Incentive  Stock  Option and
shall be paid in cash (in United States Dollars),  Common Stock or a combination
of cash and Common Stock.  Common Stock  utilized in full or partial  payment of
the exercise price must have been owned by the party  exercising such Option for
not less than six months prior to the date of exercise of such Option,  and such
Common  Stock shall be valued at the Fair Market  Value at the date of exercise.
The Company  shall  accept full or partial  payment in Common  Stock only to the
extent  permitted by  applicable  law. No Shares of Common Stock shall be issued
until full payment has been  received by the Company and no Optionee  shall have
any of the rights of a  shareholder  of the  Company  until the Shares of Common
Stock are issued to the Optionee.

                                      6
<PAGE>

          (d)  TERM.  The term of  exercisability  of each  Non-Incentive  Stock
Option  granted  pursuant to the Plan shall be not more than ten (10) years from
the date each such Non-Incentive Stock Option is granted.

          (e) EXERCISE GENERALLY. The Committee may impose additional conditions
upon the right of any  Participant  to exercise any  Non-Incentive  Stock Option
granted  hereunder which is not inconsistent  with the terms of the Plan. Except
as otherwise  provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options,  the Options will be first  exercisable at
the  rate of 20% on the one  year  anniversary  of the  date  of  grant  and 20%
annually  thereafter during such periods of service as an Employee,  Director or
Director Emeritus.

          (f) CASHLESS EXERCISE. Subject to vesting requirements, if applicable,
an Optionee  who has held a  Non-Incentive  Stock Option for at least six months
may engage in the "cashless  exercise" of the Option.  Upon a cashless exercise,
an  Optionee  gives the  Company  written  notice of the  exercise of the Option
together with an order to a registered  broker-dealer or equivalent third party,
to sell part or all of the Optioned  Stock and to deliver enough of the proceeds
to the Company to pay the Option  exercise price and any applicable  withholding
taxes.  If the Optionee  does not sell the Optioned  Stock  through a registered
broker-dealer  or  equivalent  third  party,  the  Optionee can give the Company
written  notice of the  exercise of the Option and the third party  purchaser of
the  Optioned  Stock  shall pay the Option  exercise  price plus any  applicable
withholding  taxes to the  Company.  Such Option  shall not be deemed  exercised
until the Company has  received  full  payment  for the  exercise  price of such
Option.

          (g)  TRANSFERABILITY.  Any Non-Incentive Stock Option granted pursuant
to the  Plan  shall be  exercised  during  an  Optionee's  lifetime  only by the
Optionee  to whom it was  granted and shall not be  assignable  or  transferable
otherwise than by will or by the laws of descent and distribution.

     10. EFFECT OF TERMINATION  OF EMPLOYMENT,  DISABILITY OR DEATH ON INCENTIVE
         -----------------------------------------------------------------------
STOCK OPTIONS.
--------------

          (a)  TERMINATION  OF  EMPLOYMENT.  In the  event  that any  Optionee's
employment  with  the  Company  shall  terminate  for  any  reason,  other  than
Disability  or death,  all of any such  Optionee's  Incentive  Stock Options not
exercised,  and all of any such Optionee's  rights to purchase or receive Shares
of Common  Stock  pursuant  thereto,  shall  automatically  terminate on (A) the
earlier  of (i) or  (ii):  (i)  the  respective  expiration  dates  of any  such
Incentive  Stock  Options,  or (ii) the  expiration  of not more than  three (3)
months after the date of such  termination of  employment;  or (B) at such later
date as is  determined  by the  Committee at the time of the grant of such Award
based upon the Optionee's  continuing  status as a Director or Director Emeritus
of the Bank or the Company,  but only if, and to the extent  that,  the Optionee
was entitled to exercise any such  Incentive  Stock  Options at the date of such
termination  of  employment,  and further  that such Award shall  thereafter  be
deemed a Non-Incentive Stock Option. In the event that a Subsidiary ceases to be
a Subsidiary of the Company,  the employment of all of its employees who are not
immediately  thereafter  employees  of the Company  shall be deemed to terminate
upon the date such Subsidiary so ceases to be a Subsidiary of the Company.

          (b) DISABILITY.  In the event that any Optionee's  employment with the
Company shall  terminate as the result of the Disability of such Optionee,  such
Optionee  may  exercise  any  Incentive  Stock  Options  granted to the Optionee
pursuant  to the Plan at any time  prior to the  earlier  of (i) the  respective
expiration  dates of any such Incentive  Stock Options or (ii) the date which is
one (1) year after the date of

                                      7
<PAGE>

such  termination  of  employment,  but only if,  and to the  extent  that,  the
Optionee was entitled to exercise any such  Incentive  Stock Options at the date
of such termination of employment.

          (c) DEATH.  In the event of the death of an  Optionee,  any  Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the  Optionee's  rights under any such  Incentive  Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that,  the  Optionee  was entitled to exercise any such  Incentive
Stock  Options at the date of death.  For  purposes of this Section  10(c),  any
Incentive  Stock Option held by an Optionee  shall be considered  exercisable at
the  date of his  death  if the  only  unsatisfied  condition  precedent  to the
exercisability  of such  Incentive  Stock  Option  at the  date of  death is the
passage of a specified period of time. At the discretion of the Committee,  upon
exercise  of  such  Options  the  Optionee  may  receive  Shares  or  cash  or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the  difference  between the Fair  Market  Value of such Shares and the
exercise price of such Options on the exercise date.

          (d)  INCENTIVE  STOCK  OPTIONS  DEEMED  EXERCISABLE.  For  purposes of
Sections  10(a),  10(b) and 10(c) above,  any Incentive Stock Option held by any
Optionee  shall  be  considered  exercisable  at  the  date  of  termination  of
employment if any such  Incentive  Stock Option would have been  exercisable  at
such date of termination of employment without regard to the Disability or death
of the Participant.

          (e) TERMINATION OF INCENTIVE STOCK OPTIONS. Except as may be specified
by the  Committee  at the time of grant of an  Option,  to the  extent  that any
Incentive  Stock Option granted under the Plan to any Optionee whose  employment
with the Company  terminates shall not have been exercised within the applicable
period set forth in this Section 10, any such  Incentive  Stock Option,  and all
rights to purchase or receive  Shares of Common Stock pursuant  thereto,  as the
case may be, shall terminate on the last day of the applicable period.

     11.  EFFECT  OF  TERMINATION   OF   EMPLOYMENT,   DISABILITY  OR  DEATH  ON
          ----------------------------------------------------------------------
NON-INCENTIVE  STOCK OPTIONS.  The terms and conditions of  Non-Incentive  Stock
----------------------------
Options relating to the effect of the termination of an Optionee's employment or
service,  Disability  of an  Optionee  or his  death  shall  be such  terms  and
conditions as the Committee shall, in its sole discretion, determine at the time
of termination of service,  unless specifically provided for by the terms of the
Agreement at the time of grant of the award.

     12.  WITHHOLDING  TAX. The Company  shall have the right to deduct from all
          ----------------
amounts paid in cash with respect to the cashless  exercise of Options any taxes
required  by law to be  withheld  with  respect to such cash  payments.  Where a
Participant  or other  person is  entitled  to receive  Shares  pursuant  to the
exercise  of an  Option,  the  Company  shall  have  the  right to  require  the
Participant  or such  other  person to pay the  Company  the amount of any taxes
which the Company is required to withhold  with respect to such  Shares,  or, in
lieu  thereof,  to retain,  or to sell without  notice,  a number of such Shares
sufficient to cover the amount required to be withheld.

     13. RECAPITALIZATION,  MERGER,  CONSOLIDATION,  CHANGE IN CONTROL AND OTHER
         -----------------------------------------------------------------------
TRANSACTIONS.
-------------

          (a) ADJUSTMENT.  Subject to any required action by the shareholders of
the Company,  within the sole discretion of the Committee,  the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding  Option,  and the exercise
price  per  Share  of  Common   Stock  of  each  such   Option,   shall  all  be
proportionately

                                      8
<PAGE>

adjusted  for any  increase or decrease in the number of issued and  outstanding
Shares of Common Stock resulting from a subdivision or  consolidation  of Shares
(whether by reason of merger, consolidation, recapitalization, reclassification,
split-up,  combination  of  shares,  or  otherwise)  or the  payment  of a stock
dividend (but only on the Common Stock) or any other increase or decrease in the
number of such Shares of Common Stock effected without the receipt or payment of
consideration   by  the  Company   (other   than   Shares  held  by   dissenting
shareholders).

          (b) CHANGE IN CONTROL. All outstanding Awards shall become immediately
exercisable  in the event of a Change in Control of the Company or the Bank.  In
the event of such a Change in Control,  the Committee and the Board of Directors
will take one or more of the following actions to be effective as of the date of
such Change in Control:

               (i) provide that such  Options  shall be assumed,  or  equivalent
options  shall  be  substituted,  ("Substitute  Options")  by the  acquiring  or
succeeding  corporation (or an affiliate  thereof),  provided that: (A) any such
Substitute  Options  exchanged  for  Incentive  Stock  Options  shall  meet  the
requirements of Section 424(a) of the Code, and (B) the shares of stock issuable
upon  the  exercise  of such  Substitute  Options  shall  constitute  securities
registered in accordance  with the  Securities  Act of 1933, as amended,  ("1933
Act") or such  securities  shall be exempt from such  registration in accordance
with  Sections  3(a)(2) or 3(a)(5) of the 1933 Act,  (collectively,  "Registered
Securities"),  or in  the  alternative,  if the  securities  issuable  upon  the
exercise of such Substitute Options shall not constitute Registered  Securities,
then the Optionee  will receive  upon the exercise of the  Substitute  Options a
cash payment for each Option surrendered equal to the difference between (1) the
Fair Market Value of the  consideration  to be received for each share of Common
Stock in the Change in Control  transaction times the number of shares of Common
Stock subject to such surrendered  Options, and (2) the aggregate exercise price
of all such surrendered Options, or

               (ii) in the event of a  transaction  under the terms of which the
holders  of the Common  Stock of the  Company  will  receive  upon  consummation
thereof a cash  payment  (the  "Merger  Price")  for each share of Common  Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees  equal to the  difference  between (A) the Merger Price
times the number of shares of Common Stock  subject to such Options held by each
Optionee (to the extent then  exercisable  at prices not in excess of the Merger
Price) and (B) the aggregate  exercise price of all such surrendered  Options in
exchange for such surrendered Options.

          (c) EXTRAORDINARY CORPORATE ACTION.  Notwithstanding any provisions of
the Plan to the contrary,  subject to any required action by the shareholders of
the Company,  in the event of any Change in Control,  recapitalization,  merger,
consolidation,  exchange  of Shares,  spin-off,  reorganization,  tender  offer,
partial or  complete  liquidation  or other  extraordinary  corporate  action or
event,  the Committee,  in its sole discretion,  shall have the power,  prior or
subsequent to such action or event to:

               (i)  appropriately  adjust the  number of Shares of Common  Stock
subject to each Option, the Option exercise price per Share of Common Stock, and
the  consideration  to be given or received by the Company  upon the exercise of
any outstanding Option;

               (ii) cancel any or all previously granted Options,  provided that
appropriate  consideration  is paid to the  Optionee  in  connection  therewith;
and/or

               (iii) make such other  adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary,  desirable,  appropriate
or advisable;  provided, however, that no action

                                      9
<PAGE>

shall be taken by the  Committee  which  would  cause  Incentive  Stock  Options
granted  pursuant to the Plan to fail to meet the requirements of Section 422 of
the Code without the consent of the Optionee.

          (d)  ACCELERATION.  The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan.

          (e) NON-RECURRING  DIVIDENDS.  Notwithstanding  anything herein to the
contrary,  upon the payment of a special or non-recurring  dividend that has the
effect of a return of capital  distribution  to the  shareholders,  the  Company
shall, within the discretion of the Committee, either:

               (i) adjust the Option exercise price per share in a proportionate
and equitable manner to reflect the payment of such capital distribution, or

               (ii) make an equivalent  payment to each  Participant  holding an
outstanding Option as of the dividend record date of such dividend. Such payment
shall be made at substantially the same time, in substantially the same form and
in  substantially  the same amount per  Optioned  Stock as the dividend or other
distribution paid with respect to outstanding Shares; provided, however, that if
any dividend or  distribution  on  outstanding  Shares is paid in property other
than cash, the Company, in the Committee's discretion,  may make such payment in
a cash amount per  Optioned  Stock equal in fair market value to the fair market
value of the non-cash dividend or distribution; or

               (iii) take the action  described in Section 13(e)(i) with respect
to certain  outstanding  Options and the action  described in Section  13(e)(ii)
with respect to the remaining outstanding Options.

                  Except as expressly  provided in Sections 13(a) and 13(b),  no
Optionee  shall have any rights by reason of the occurrence of any of the events
described in this Section 13.

     14. TIME OF GRANTING OPTIONS. The date of grant of an Option under the Plan
         ------------------------
shall,  for  all  purposes,  be the  date  on  which  the  Committee  makes  the
determination of granting such Option. Notice of the grant of an Option shall be
given to each  individual  to whom an Option is so granted  within a  reasonable
time after the date of such grant in a form determined by the Committee.

     15.  EFFECTIVE  DATE.  The Plan  shall  become  effective  upon the date of
          ---------------
approval of the Plan by the shareholders of the Company.  The Committee may make
a  determination  related to Awards prior to the Effective Date with such Awards
to be effective upon the date of shareholder ratification of the Plan.

     16.  APPROVAL  BY  SHAREHOLDERS.  The Plan shall be approved by a vote of a
          --------------------------
majority of the shares of Common Stock present in person or by proxy and cast on
the matter at a meeting of  shareholders  of the Company held within twelve (12)
months before or after the date the Plan is approved by the Board.

     17.  MODIFICATION OF OPTIONS.  At any time and from time to time, the Board
          -----------------------
may authorize  the Committee to direct the execution of an instrument  providing
for the modification of any outstanding  Option,  provided no such modification,
extension  or renewal  shall  confer on the  holder of said  Option any right or
benefit  which  could not be  conferred  on the  Optionee  by the grant of a new
Option at such time, or shall not materially  decrease the  Optionee's  benefits
under the Option  without  the  consent of the holder of the  Option,  except as
otherwise permitted under Section 18 hereof.

                                      10
<PAGE>

     18. AMENDMENT AND TERMINATION OF THE PLAN.
         -------------------------------------

          (a) ACTION BY THE BOARD.  The Board may alter,  suspend or discontinue
the  Plan,  except  that no action of the  Board  may  increase  (other  than as
provided  in Section 13 hereof)  the maximum  number of Shares  permitted  to be
issued under the Plan, materially increase the benefits accruing to Participants
under  the Plan or  materially  modify  the  requirements  for  eligibility  for
participation  in the Plan  unless  such action of the Board shall be subject to
approval or  ratification by the  shareholders  of the Company.  Notwithstanding
anything  herein to the  contrary,  in no event shall the Board or the Committee
amend the Plan or amend an Award under the Plan which allows the exercise  price
of any  Option  granted  under the Plan to be  reduced  after the date of grant,
except as otherwise permitted in accordance with Section 13 of the Plan, without
shareholder approval of such action.

          (b) CHANGE IN  APPLICABLE  LAW.  Notwithstanding  any other  provision
contained  in the Plan,  in the event of a change in any  federal  or state law,
rule,  regulation  or policy which would make the exercise of all or part of any
previously  granted Option  unlawful or subject the Company to any penalty,  the
Committee may restrict any such exercise  without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.

     19.  CONDITIONS  UPON ISSUANCE OF SHARES;  LIMITATIONS ON OPTION  EXERCISE;
          ----------------------------------------------------------------------
CANCELLATION OF OPTION RIGHTS.
------------------------------

          (a) Shares  shall not be issued  with  respect  to any Option  granted
under the Plan unless the issuance and delivery of such Shares shall comply with
all relevant  provisions of applicable law, including,  without limitation,  the
Securities  Act of 1933,  as  amended,  the  rules and  regulations  promulgated
thereunder,  any applicable  state  securities laws and the  requirements of any
stock exchange upon which the Shares may then be listed.

          (b)  The   inability   of  the   Company  to  obtain   any   necessary
authorizations,  approvals or letters of non-objection  from any regulatory body
or  authority  deemed by the  Company's  counsel to be  necessary  to the lawful
issuance and sale of any Shares issuable  hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.

          (c) As a condition to the exercise of an Option or the delivery of the
Shares,  the Company may require the person  exercising  the Option or receiving
delivery of the Shares to make such  representations  and  warranties  as may be
necessary  to assure the  availability  of an  exemption  from the  registration
requirements of federal or state securities law.

          (d)  Notwithstanding   anything  herein  to  the  contrary,  upon  the
termination  of  employment  or service  of an  Optionee  by the  Company or its
Subsidiaries  for "cause" as defined at 12 C.F.R.  563.39(b)(1) as determined by
the Board of Directors or the  Committee,  all Options held by such  Participant
shall cease to be exercisable  as of the date of such  termination of employment
or service.

          (e) Upon the exercise of an Option by an Optionee  (or the  Optionee's
personal  representative),  the Committee,  in its sole and absolute discretion,
may make a cash  payment to the  Optionee,  in whole or in part,  in lieu of the
delivery  of shares of Common  Stock.  Such cash  payment  to be paid in lieu of
delivery  of Common  Stock  shall be equal to the  difference  between  the Fair
Market  Value of the  Common  Stock on the date of the Option  exercise  and the
exercise  price per share of the Option.  Such cash payment shall be in exchange
for the cancellation of such Option.  Such cash payment shall not be made in the
event that such  transaction  would  result in  liability to the Optionee or the
Company under Section

                                      11
<PAGE>

16(b) of the  Securities  Exchange  Act of 1934,  as  amended,  and  regulations
promulgated thereunder, or subject the Participant to additional tax liabilities
related to such cash payments pursuant to Section 409A of the Code.

          (f)  In  the  event   that  the  Bank   shall  be  deemed   critically
undercapitalized  (as  defined  at 12  C.F.R.  Section  565.4),  is  subject  to
enforcement  action by the Office of Thrift  Supervision,  or receives a capital
directive under 12 C.F.R.  Section 565.7,  then all Options awarded to executive
officers or  directors of the Company or its  Subsidiaries  must be exercised or
forfeited.

     20.  RESERVATION  OF SHARES.  During the term of the Plan, the Company will
          ----------------------
reserve  and keep  available  a number  of  Shares  sufficient  to  satisfy  the
requirements of the Plan.

     21.  UNSECURED  OBLIGATION.  No  Participant  under the Plan shall have any
          ---------------------
interest  in any fund or special  asset of the  Company by reason of the Plan or
the grant of any  Option  under the Plan.  No trust  fund  shall be  created  in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.

     22. NO EMPLOYMENT RIGHTS. No Director,  Employee or other person shall have
         --------------------
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in  administration  of the Plan shall be construed
as giving any  person any rights of  employment  or  retention  as an  Employee,
Director,  Director Emeritus or in any other capacity with the Company, the Bank
or other Subsidiaries.

     23.  GOVERNING  LAW.  The  Plan  shall  be  governed  by and  construed  in
          --------------
accordance  with the laws of the State of New Jersey,  except to the extent that
federal law shall be deemed to apply.


                                      12
</TEXT>
</DOCUMENT>
