FORM OF
INCENTIVE STOCK OPTION AWARD AGREEMENT
FOR THE POLONIA BANCORP 2007 EQUITY INCENTIVE PLAN

This Award Agreement is provided to ________________ (the
"Participant") by Polonia Bancorp (the "Company") as of _________ (the "Grant
Date"), the date the Compensation Committee of the Board of Directors (the
"Committee") granted the Participant the right and option to purchase Shares
pursuant to the Polonia Bancorp 2007 Equity Incentive Plan (the "2007 Plan"),
subject to the terms and conditions of the 2007 Plan and this Award Agreement:

1. OPTION GRANT: You have been granted an INCENTIVE STOCK OPTION
(referred to in this Agreement as your "Option").
2. NUMBER OF SHARES
SUBJECT TO YOUR OPTION: ___________ shares of Common Stock ("Shares"),
subject to adjustment as may be necessary pursuant to
Article 10 of the 2007 Plan.

3. GRANT DATE: ___________

4. EXERCISE PRICE: You may purchase Shares covered by your Option at a
price of $_______ per share.

Unless sooner vested in accordance with Section 2 of the Terms and
Conditions (attached hereto) or otherwise in the discretion of the Committee,
the Options shall vest (become exercisable) in accordance with the following
schedule:

Continuous Status Percentage of Number of Shares
as a Participant Option Vested/ Available for
after Grant Date Number of Shares Exercise Vesting Date
---------------------- ---------------- -------- ------------
Less than 1 year 0% _____ ______
1 year 20% _____ ______
2 years 40% _____ ______
3 years 60% _____ ______
4 years 80% _____ ______
5 years 100% _____ ______

IN WITNESS WHEREOF, Polonia Bancorp, acting by and through the
Committee, has caused this Award Agreement to be executed as of the Grant Date
set forth above.

POLONIA BANCORP

ACCEPTED BY PARTICIPANT: By: _______________________________________
On behalf of the Compensation Committee

__________________________
[Name]

__________________________
Date

TERMS AND CONDITIONS

1. GRANT OF OPTION. The Grant Date, Exercise Price and number of Shares
subject to your Option are stated on page 1 of this Award Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the 2007 Plan. The Company intends
this grant to qualify as an Incentive Stock Option under Section 422 of
the Internal Revenue Code of 1986, as amended.

2. VESTING OF OPTIONS. The Option shall vest (become exercisable) in
accordance with the vesting schedule shown on page 1 of this Award
Agreement. Notwithstanding the vesting schedule on page 1, the Option
will also vest and become exercisable:

(a) Upon your death or Disability during your Continuous Status as a
Participant; or

(b) Upon a Change in Control (as defined in the 2007 Plan).

3. TERM OF OPTIONS AND LIMITATIONS ON RIGHT TO EXERCISE. The term of the
Option will be for a period of ten (10) years, expiring at 5:00 p.m.,
Eastern Time, on the tenth anniversary of the Grant Date (the
"Expiration Date"). To the extent not previously exercised, the vested
portion of your Option will lapse prior to the Expiration Date upon the
earliest to occur of the following circumstances:

(a) Three (3) months after the termination of your Continuous Status
as a Participant for any reason other than your death or
Disability.

(b) Twelve (12) months after termination of your Continuous Status as
a Participant by reason of Disability.

(c) Twelve (12) months after the date of your death, if you die while
employed, or during the three-month period described in
subsection (a) above or during the twelve-month period described
in subsection (b) above and before the Option would otherwise
lapse. Upon your death, your beneficiary (designated pursuant to
the terms of the 2007 Plan) may exercise your Option.

(d) At the end of the remaining original term of the Option, if your
employment is involuntarily or constructively terminated within
twelve (12) months of a Change in Control. Options exercised more
than three (3) months after your termination date will be treated
as Non-Statutory Stock Options for tax purposes.

The Committee may, prior to the lapse of your Option under the
circumstances described in paragraphs (a), (b), (c) or (d) above,
extend the time to exercise your Option as determined by the Committee
in writing and subject to federal regulations. If you return to
employment with the Company during the designated post-termination
exercise period, then you will be restored to the status as a
Participant that you held prior to termination, but no vesting credit
will be earned for any period you were not in Continuous Status as a
Participant. If you or your beneficiary exercises an Option after your
termination of service, the Option may be exercised only with respect
to the Shares that were otherwise vested on the date of your
termination of service.

4. EXERCISE OF OPTION. You may exercise your Option by providing:

(a) a written notice of intent to exercise to [NAME] at the address
and in the form specified by the Committee from time to time;
and

(b) payment to the Company in full for the Shares subject to the
exercise (unless the exercise is a cashless exercise). Payment
for such Shares can be made in cash, Company common stock ("stock
swap"), a combination of cash and Company common stock or by
means of "cashless exercise" (if permitted by the Committee).

5. BENEFICIARY DESIGNATION. You may, in the manner determined by the
Committee, designate a beneficiary to exercise your rights under the
2007 Plan and to receive any distribution with respect to this Option
upon your death. A beneficiary, legal guardian, legal representative,
or other person claiming any rights under the 2007 Plan is subject to
all terms and conditions of this Award Agreement and the 2007 Plan, and
to any additional restrictions deemed necessary or appropriate by the
Committee. If you have not designated a beneficiary or none survives
you, the Option may be exercised by the legal representative of your
estate, and payment will be made to your estate. You may change or
revoke a beneficiary designation at any time, provided the change or
revocation is filed with the Company.

6. WITHHOLDING.

(a) EXERCISE OF INCENTIVE
STOCK OPTION:
There are no regular federal or
state income or employment tax
liabilities upon the exercise of an
Incentive Stock Option (SEE
INCENTIVE STOCK OPTION HOLDING
PERIOD), although the excess, if
any, of the Fair Market Value of the
shares of Common Stock on the date
of exercise over the Exercise Price
will be treated as income for
alternative minimum tax ("AMT")
purposes and may subject you to AMT
in the year of exercise. PLEASE
CHECK WITH YOUR TAX ADVISOR.

(b) DISQUALIFYING DISPOSITION:

In the event of a disqualifying
disposition (described below), you
may be required to pay Polonia
Bancorp or its Affiliates (based on
the federal and state regulations in
place at the time of exercise) an
amount sufficient to satisfy all
federal, state and local tax
withholding.

(c) INCENTIVE STOCK OPTION
HOLDING PERIOD:
In order to receive Incentive Stock
Option tax treatment under Section
422 of the Code, you may not dispose
of Shares acquired under an
Incentive Stock Option Award (i) for
two (2) years from the Date of Grant
and (ii) for one (1) year after the
date you exercise your Incentive
Stock Option. YOU MUST NOTIFY THE
COMPANY WITHIN TEN (10) DAYS OF AN
EARLY DISPOSITION OF COMMON STOCK
(I.E., A "DISQUALIFYING
DISPOSITION").

7. LIMITATION OF RIGHTS. This Option does not confer on you or your
beneficiary any rights as a shareholder of the Company unless and until
Shares are in fact issued in connection with the Option exercise.
Nothing in this Award Agreement will interfere with or limit in any way
the right of the Company or any Affiliate to terminate your service at
any time, nor confer upon you any right to continue in the service of
the Company or any Affiliate.

8. STOCK RESERVE. The Company shall, at all times during the term of this
Award Agreement, reserve and keep available a sufficient number of
Shares to satisfy the requirements of this Award Agreement.

9. RESTRICTIONS ON TRANSFER AND PLEDGE. You may not pledge, encumber, or
hypothecate your rights or interests in this Option to or in favor of
any party other than the Company or an Affiliate, and the Option shall
not be subject to any lien, obligation, or liability of the Participant
to any other party other than the Company or an Affiliate. You may not
assign or transfer the Option, other than by will or the laws of
descent and distribution or pursuant to a domestic relations order that
would satisfy Section 414(p)(1)(A) of the Code, if such Section applied
to an Option under the 2007 Plan. Only you or a permitted transferee
may exercise the Option during your lifetime.

10. PLAN CONTROLS. The terms contained in the 2007 Plan are incorporated
into and made a part of this Award Agreement and this Award Agreement
shall be governed by and construed in accordance with the 2007 Plan. In
the event of any actual or alleged conflict between the provisions of
the 2007 Plan and the provisions of this Award Agreement, the
provisions of the 2007 Plan will control.

11. SUCCESSORS. This Award Agreement shall be binding upon any successor of
the Company, in accordance with the terms of this Award Agreement and
the 2007 Plan.

12. SEVERABILITY. If any one or more of the provisions contained in this
Award Agreement is invalid, illegal or unenforceable, the other
provisions of this Award Agreement will be construed and enforced as if
the invalid, illegal or unenforceable provision had never been included
in the Award Agreement.

13. NOTICE. Notices and communications under this Award Agreement must be
in writing and either personally delivered or sent by registered or
certified United States mail, return receipt requested, postage
prepaid. Notices to the Company must be addressed to:

Polonia Bancorp
3993 Huntingdon Pike, 3rd Floor
Huntingdon Valley, Pennsylvania 19006
Attn: Compensation Committee

or any other address designated by the Company in a written notice to
the Participant. Notices to you will be directed to your address, then
currently on file with the Company, or to any other address that you
provide in a written notice to the Company.