<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>13
<FILENAME>ex10-5.txt
<DESCRIPTION>2003 STOCK OPTION PLAN
<TEXT>
                                   PARKE BANK

                             2003 STOCK OPTION PLAN
                             ----------------------


         1.  Purpose  of the Plan.  The Plan  shall be known as the  PARKE  BANK
             --------------------
("Bank")  2003 Stock  Option  Plan (the  "Plan").  The purpose of the Plan is to
attract  and  retain   qualified   personnel   for   positions  of   substantial
responsibility  and to provide  additional  incentive to officers and  employees
providing services to the Bank, or any present or future parent or subsidiary of
the Bank 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  Parke  Bank and any  successor  or Parent
thereto.

                  "Board"  shall mean the Board of Directors of the Bank, 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 Bank; (ii) the merger or recapitalization
of the Bank  whereby  the Bank is not the  surviving  entity;  (iii) a change in
control  of the Bank,  as  otherwise  defined  or  determined  by the New Jersey
Department of Banking and Insurance,  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) of twenty-five
percent (25%) or more of the  outstanding  voting  securities of the Bank 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 Bank stock.
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.

                                       -1-

<PAGE>

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

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

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

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

                  "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 in his then
current capacity as determined by the Committee.

                  "Effective  Date" shall mean the date  specified in Section 14
hereof.

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

                  "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,  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.

                  "Incentive  Stock  Option"  or "ISO"  shall  mean an option to
purchase  Shares granted by the Committee  pursuant to Section 8 hereof which is
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.

                                       -2-

<PAGE>

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

                  "Option" shall mean an Incentive Stock Option or Non-Incentive
Stock Option  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"  as defined in  Sections  424(e) and (g) of the
Code.

                  "Participant" means any officer or employee of the Bank or any
Parent or Subsidiary of the Bank providing a service to the Bank 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 Parke Bank 2003 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" as defined in Sections 424(f) and
(g) of the Code.

          3. Shares  Subject to the Plan.  Except as  otherwise  required by the
             ---------------------------
provisions of Section 12 hereof,  the aggregate number of Shares with respect to
which Awards may be made  pursuant to the Plan shall not exceed  73,749  Shares.
Such  Shares  may  either  be from  authorized  but  unissued  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 Bank,
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.

                                       -3-

<PAGE>

          5. Administration of the Plan.
             --------------------------

                  (a)   Composition  of  the   Committee.   The  Plan  shall  be
administered  by the Board of Directors  of the Bank or a Committee  which shall
consist of not less than two  Directors  of the Bank  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 CFR ss.240.16b-3 to the extent feasible.

                  (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  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 Bank and such other  officers as shall be
designated by the Committee are hereby authorized to execute written  agreements
evidencing Awards on behalf of the Bank 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  of  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
officers and employees who shall be granted Awards under the Plan, the number of
Awards to be granted to each such persons,  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
Bank 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.

                                       -4-

<PAGE>

                  (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 Bank or any present or future  Parent or  Subsidiary  of the Bank)
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 any
Participant  exceed more than 50% of the total number of Shares  authorized  for
delivery under the Plan.

          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 17  hereof.  No Option  shall be  granted  under the Plan after ten (10)
years from the Effective Date.

          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.
Notwithstanding  anything to the contrary,  in no event shall the exercise price
of such Options be less than $5.00 per Share, representing the par value of such
Common Stock.

                         (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  shall be  valued at the Fair  Market  Value at the date of
exercise.  The Bank 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 Bank,  and no Optionee  shall
have any of the rights of a stockholder of the Bank until Shares of Common Stock
are issued to the Optionee.

                                       -5-

<PAGE>

                  (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 Bank 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.

                  (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 shall give the Bank 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  Bank 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
Bank 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 Bank. The Option shall not be deemed  exercised  until
the Bank 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) 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.  Notwithstanding  anything to the
contrary,  in no event  shall the  exercise  price of such  Options be less than
$5.00 per Share, representing the par value of such Common Stock.

                                       -6-

<PAGE>

                  (b)  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 shall be valued at its Fair Market  Value at the
date of exercise.  The Bank 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 Bank and no Optionee shall
have any of the rights of a  stockholder  of the Bank until the Shares of Common
Stock are issued to the Optionee.

                  (c) 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.

                  (d) 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.

                  (e) 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 shall give the Bank 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  Bank 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
Bank 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 Bank. The Option shall not be deemed  exercised  until
the Bank has received full payment for the exercise price of such Option.

                  (f)  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 Bank shall terminate for any reason,  other than
Disability or death, all of any such Optionee's Incentive Stock Options, and all
of any such  Optionee's  rights to  purchase or receive  Shares of Common  Stock
pursuant thereto,  shall automatically  terminate on the earlier of (i) or (ii):
(i) the respective expiration dates of any such Incentive Stock Options, or (ii)
the date  which is  three  months  following  the  date of such  termination  of
employment.  In the event that a  Subsidiary  ceases to be a  Subsidiary  of the
Bank, the employment of all of its employees who are

                                      -7-

<PAGE>

not  immediately  thereafter  employees of the Bank shall be deemed to terminate
upon the date such Subsidiary so ceases to be a Subsidiary of the Bank.

                  (b)  Disability.  In the event that any Optionee's  employment
with the Bank 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 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 Bank  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  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.

                                       -8-

<PAGE>

         12.  Recapitalization,  Merger,  Consolidation,  Change in Control  and
              ------------------------------------------------------------------
Other Transactions.
-------------------

                  (a)  Adjustment.   Subject  to  any  required  action  by  the
stockholders  of the Bank,  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 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 Bank (other than
Shares held by dissenting stockholders).

                  (b) Change in Control.  All  outstanding  Awards  shall become
immediately  exercisable in the event of a Change in Control of 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  consummation  of the  Change in Control
transaction 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 Bank 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.

                                       -9-

<PAGE>

                  (c)  Extraordinary   Corporate  Action.   Notwithstanding  any
provisions  of the Plan to the contrary,  subject to any required  action by the
stockholders   of  the   Bank,   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 Bank 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 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.  Upon the payment of a special or
non-recurring  cash  dividend  that has the effect of a return of capital to the
stockholders,   the  Option   exercise   price  per  share   shall  be  adjusted
proportionately and in an equitable manner.

         Except as expressly provided in Sections 12(a), 12(b) and 12(e) hereof,
no  Optionee  shall  have any rights by reason of the  occurrence  of any of the
events described in this Section 12.

         13. 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.

         14.  Effective  Date. The Plan shall become  effective upon the date of
              ---------------
approval of the Plan by the  stockholders  of the Bank. The Committee may make a
determination  related to Awards prior to the Effective Date with such Awards to
be effective upon the date of stockholder approval of the Plan.

         15.   Approval  by   Stockholders.   The  Plan  shall  be  approved  by
               ---------------------------
stockholders  of the Bank within twelve (12) months before or after the date the
Plan is approved by the Board.

                                      -10-

<PAGE>

         16.  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 17 hereof.

         17. 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 12 hereof) the maximum number of Shares permitted to
be  optioned  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 stockholders of the Bank.

                  (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 or  regulation  which would make the exercise of all or part of
any previously  granted Option unlawful or subject the Bank 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.

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

                  (c) As a condition to the exercise of an Option,  the Bank may
require  the  person  exercising  the  Option 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.

                                      -11-

<PAGE>

                  (d) Notwithstanding  anything herein to the contrary, upon the
termination  of  employment  or  service  of an  Optionee  by  the  Bank  or its
Subsidiaries  for "cause" as determined  by the Board of Directors,  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
Bank under Section 16(b) of the Securities Exchange Act of 1934, as amended, and
regulations promulgated thereunder.

         19.  Reservation of Shares.  During the term of the Plan, the Bank will
              ---------------------
reserve  and keep  available  a number  of  Shares  sufficient  to  satisfy  the
requirements of the Plan.

         20. Unsecured Obligation.  No Participant under the Plan shall have any
             --------------------
interest  in any fund or special  asset of the Bank 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.

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

         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 or in any other capacity with the Bank or its 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>
