ARROW FINANCIAL CORPORATION

                      Directors' Stock Plan



1.   Purpose.
     The Arrow Financial Corporation Directors' Stock Plan
(the "Plan") permits the board of
directors of Arrow Financial Corporation (the "Company") to
elect to pay some or all of the
directors' fees payable from time to time to the directors
of the Company and to directors of its
subsidiary banks (each, a "Bank") in the form of shares of
Common Stock of the Company
("Common Stock").

2.   Administration.
     The Plan will be administered by the board of directors
of the Company.  Subject to the
express provisions set forth elsewhere in this Plan, the
Plan Administrator will (i) determine the
portion of directors' fees payable in shares of Common Stock
under the Plan and the time or times
at which shares will be distributed, (ii) oversee the
distribution of shares to directors under the Plan
and the maintenance of Plan accounts on behalf of directors,
if and as necessary, (iii) distribute
appropriate notices and materials regarding the Plan
(including materials required under applicable
securities and other laws) and make all appropriate filings
with regulatory agencies, and (iv) interpret
the Plan and otherwise have responsibility for the orderly
operation of the Plan.  Interpretations
regarding the Plan by the Plan Administrator will be final
and binding on all directors subject to the
Plan.  The Administrator may delegate to other parties,
including officers of the Company, some or
all of its duties under the Plan, except for those duties
identified above in subparagraph (i) of this
Section 2.

3.   Determination of Stock Portion of Directors' Fees.
     The Plan Administrator will determine from time to time
the portion of directors' fees that
will be payable to directors in shares of Common Stock, as
opposed to cash or any other form of
compensation, subject, in the case of the Banks, to
ratification by the full board of directors of the
particular Bank.  The portion of fees payable in Common
Stock (the "Stock Portion") may be (i) a
portion or all of the annual retainer, if any, payable to
directors and/or (ii) a portion or all of the
meeting fees, if any, payable to directors for attendance at
board or committee meetings.  Such
determinations will be final and binding upon all directors
of the Company or the particular Bank, as
the case may be.  Individual directors will have no
discretion to receive greater or lesser amounts or
percentages of their directors' fees payable in Common Stock
than the Stock Portion then in effect
for their organization, as determined by the Plan
Administrator.  The Stock Portion may be expressed
as a percentage of fees or as an absolute dollar amount, and
may be increased, decreased or
eliminated by the Plan Administrator at any time.  The Stock
Portion will be the same as between
directors of the same participating organization (the
Company or the Bank) at any given time,
provided that distinctions may be made between (i) directors
who also are officers versus directors
who are not, (ii) directors who chair committees and
directors who are members of such committees
but do not serve as chair, and (iii) honorary or emeritus
directors and regular directors.

4.   Authorized Shares; Consideration; Vesting.
     The number of shares of Common Stock authorized for
distribution under the Plan is six
thousand (6,000).  All shares distributed under the Plan
will be treasury shares of the Company.  No
consideration will be paid or payable for such shares except
for the services rendered by the recipient
directors as directors of their particular organization.
Upon distribution, all such shares will be fully
vested and nonforfeitable.  No director will have a right to
receive shares under the Plan prior to the
distribution of such shares.  Subsequent transfers of
distributed shares, for value or otherwise, will
not be restricted, except for any restrictions on
transferability that may arise under applicable
securities laws or under any particular agreement to which
the distributee director may otherwise be
subject.  Termination of a director's service after
distribution to such director of any shares under the
Plan will not result in forfeiture of any such shares.

5.   Determination of Number of Shares to be Distributed.
     In order to determine the number of shares of Common
Stock distributable to a given director
on a particular distribution date, the dollar amount of fees
then distributable to such director in the
form of shares of Common Stock will be divided by the
"market value" of the Common Stock on
such date, with the quotient to be expressed to four decimal
places.  This determination will be
deemed to be made as of 12:01 a.m. on the distribution date.
The "market value" of Common Stock
for purposes of such determination shall be the average of
the closing bid and closing asked prices
of Common Stock as quoted on the NASDAQ National Market
System for the immediately
preceding trading day.

6.   Distributions; Plan Accounts.
     Shares will be distributed under the Plan on such date
or date(s) in each fiscal year as may be
determined by the Plan Administrator.  Such distributions
will be made directly into accounts
maintained by the Administrator under the Plan for
participating directors or into any accounts
maintained by or on behalf of directors under any other
Company plans into which such shares may
be directly deposited, with the consent of such directors.
Such shares will be registered in the name
of the Administrator or, if deposited into another plan, in
the name of the administrator of such plan,
or in the name of any custodian or nominee designated by
either.  If the Plan Administrator establishes
accounts for directors to hold shares distributed to them
under the Plan, all dividends and
distributions on such shares also shall be paid into the
accounts until such time as the shares are
distributed out of the accounts.  As long as shares are
maintained in Plan accounts, directors will
receive periodic account statements and will have sole right
to vote or direct the voting of such
shares.  The Administrator will establish procedures for
distribution of shares out of accounts to
directors at their request.

7.   Amendment or Termination.
     The Plan may be amended, suspended or terminated at any
time by the board of directors of
the Company acting in its sole discretion, provided that no
such amendment, suspension or
termination will in and of itself reduce the overall level
of directors' fees payable to directors of the
Company or any Bank or affect their ownership of shares
previously distributed to them under the
Plan.

8.   Miscellaneous
     a.   Nonqualified.  The Plan is not subject to the
Employee Retirement Income Security
Act of 1974 and is not qualified under Section 401 of the
Internal Revenue Code of 1986, as
amended.
     b.   Applicable Law; Successors.  The Plan shall be
governed by and interpreted in
accordance with the laws of the State of New York.  The
Plan, if not previously terminated, shall be
assumed by and be binding upon successors to the business
and affairs of the Company, including
successors by merger or by purchase of all or a majority of
the Company's assets, with such
adjustments to be made by the Plan Administrator as may be
appropriate under the circumstances.