Exhibit 10.1

 

AMENDMENT

 

to the

 

FIRST FINANCIAL BANK

EXECUTIVE DEFERRED COMPENSATION PLAN

 

WHEREAS, First Financial Bank maintained the First Financial Bank Executive
Deferred Compensation Plan, as amended and restated effective January 1, 2003
(the “Plan”);

 

WHEREAS, First Financial Bank merged with and into Willow Grove Bank (the
“Bank”), pursuant to the Agreement and Plan of Merger dated January 20, 2005, by
and between Chester Valley Bancorp Inc. and Willow Grove Bancorp, Inc. (the
“Merger”);

 

WHEREAS, in connection with the Merger, the Plan was amended to freeze
participation and to cease further deferrals of compensation;

 

WHEREAS, Section 5.2 of the Plan provides that any amounts credited to the
Account of a Participant or Inactive Participant shall accrue interest
compounded annually;

 

WHEREAS, the Bank, as successor employer, wishes to amend the Plan to provide
that amounts deferred by a Participant or an Inactive Participant may be
invested in the hypothetical investment choices as offered under the Willow
Grove Bancorp, Inc. Deferred Compensation Plan (the “Willow Grove Plan”), as
such investment elections may exist from time to time; and

 

WHEREAS, the Board of Directors of the Bank has the authority under Section 13
of the Plan to amend the Plan.

 

NOW THEREFORE, effective the date this amendment is executed, the Plan is hereby
amended, as follows:

 

1.                                       In the cover page of the Plan the
reference to “First Financial Bank” is changed to “Willow Grove Bank.”

 

2.                                       All references in the Plan to “First
Financial Bank” are changed to “Willow Grove Bank.”

 

3.                                       Section 2.1(f) of the Plan is amended
and restated in its entirety as follows:

 

“Company” refers to Willow Grove Bank.

 

--------------------------------------------------------------------------------

 

4.                                       Section 5.2 of the Plan is amended to
read in its entirety as follows:

 

5.2                                 Investment of Account Balances.

 

(a)                                  Interest Accruals.  Any amounts credited to
the Account of a Participant or Inactive Participant as a result of the deferral
of all or part of his or her Compensation shall accrue interest compounded
annually, until such time as the Participant or Inactive Participant shall elect
another Investment Choice as provided below.  The accrual of interest begins and
the compounding of interest occurs on January 1 of each Plan Year, except for
the first Plan Year, where the compounding of interest shall begin on the
Effective Date.  The rate at which interest accrues shall be equal to the
average of the three-month LIBOR for the calendar year preceding the Plan Year
plus 360 basis points, or such higher rate established by the Committee
provided, however, that in no event shall the rate be less than five percent
(5%) nor greater than twelve percent (12%).  If the full amount of such interest
accruals are allocated to a Participant’s Account, any federal, state, or local
income or employment tax consequences attributable to interest accruals under
this Section 5.2 shall be borne by or inure to the benefit of the Company.  If
the Company establishes a rabbi trust for all or a portion of the amounts
credited to a Participant’s Account, their earnings or losses on such credited
amounts shall be determined under that trust agreement.

 

(b)                                 Hypothetical Investment Choices.  The
Committee shall establish one or more hypothetical investment choices
(“Investment Choices”) under this Plan and may add to or change or discontinue
any Investment Choice included in the list of available Investment Choices in
its absolute discretion; however, the Plan may not offer the common stock of
Willow Grove Bancorp, Inc. as an Investment Choice.  An Investment Choice must
qualify as a notional investment measure that qualifies as a predetermined
actual investment within the meaning of Treasury Regulation
Section 31.3121(v)(2)-(1)(d)(2), which generally will require an Investment
Choice to be an actual available investment (for example, a mutual fund or
common stock and not based on the greater of the rate of return of two or more
actual investments).

 

(c)                                  Allocation and Reallocation of Investment
Choices.  A Participant may allocate amounts credited to his or her Account to
one or more of the Investment Choices authorized under the Plan.  Subject to the
rules established by the Committee, a Participant may reallocate amounts
credited to his or her Account (to be effective as soon as administratively
practicable) to one or more of such Investment Choices, by filing with the
Committee a notice, in such form as may be specified by the Committee.  The
Committee may restrict allocations or reallocations by specified Participants
into or out of specified Investment Choices or specify minimum amounts that may
be allocated or reallocated by a Participant; however, any such allocation or
reallocation shall be made in accordance with all applicable provisions of the
Exchange Act and the regulations promulgated thereunder, including but not
limited to, Section 16(b) and the regulations thereunder.

 

2

--------------------------------------------------------------------------------

 

(d)                                 Investment Return.  In order to simulate an
investment return for the amounts held in each Participant’s Account, the
account balance shall be reduced for the reasonable transaction costs associated
with the Participant’s investment directions and be adjusted to recognize the
hypothetical income, appreciation and depreciation generated by the hypothetical
investments that the Account is deemed to be invested in.

 

(e)                                  Trust.  The Committee has deposited in the
Trust Agreement for the Willow Grove Bancorp, Inc. Deferred Compensation Plan,
which is designed to constitute a “rabbi trust,” amounts of cash or other
property in an amount not exceeding the amount of the Company’s obligations with
respect to the Participants’ Account established under this Section 5.2.

 

5.                                       Section 13(a) of the Plan is hereby
amended to add the last sentence at the end thereof:

 

Notwithstanding anything in the Plan to the contrary, the Board of Directors of
the Company may amend in good faith any terms of the Plan, including
retroactively, in order to comply with Section 409A of the Code.

 

6.                                       All capitalized terms used but not
defined herein shall have the meaning as set forth in the Plan.

 

7.                                       In all other respects, the provisions
of the Plan shall remain in full force and effect.

 

IN WITNESS WHEREOF, this Amendment has been executed this 25th day of
October 2005.

 

 

WILLOW GROVE BANK

 

 

 

 

 

By:

/s/ Donna M. Coughey

 

 

 

Donna M. Coughey

 

 

President and Chief Executive Officer

 

3

--------------------------------------------------------------------------------

 

FIRST FINANCIAL BANK

 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

AS AMENDED AND RESTATED

 

EFFECTIVE JANUARY 1, 2003

 

--------------------------------------------------------------------------------

 

FIRST FINANCIAL BANK

EXECUTIVE DEFERRED COMPENSATION PLAN

 

First Financial Bank hereby establishes the First Financial Bank Executive
Deferred Compensation Plan effective November 1, 2002.

 

1.             PURPOSE

 

The primary purpose of the Plan is to provide deferred compensation to a select
group of management or highly compensated employees within the meaning of
Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, through an unfunded “top
hat” arrangement exempt from the fiduciary, funding, vesting, and plan
termination insurance provisions of Title I and Title IV of ERISA (“Top Hat”). 
More specifically, the Company has adopted this Plan to provide Employees with
the opportunity to defer part or all of that portion of their Compensation.

 

2.             DEFINITIONS AND CAPITALIZED TERMS

 

2.1.         WHEN USED IN THIS PLAN DOCUMENT, THE CAPITALIZED TERMS SET FORTH IN
ALPHABETICAL ORDER HEREIN HAVE THE DEFINITIONS SPECIFIED BELOW UNLESS THE
CONTEXT IN WHICH THE TERM APPEARS CLEARLY REQUIRES A DIFFERENT MEANING.

 

A.             “ACCOUNT” REFERS TO THE BOOKKEEPING ENTRIES ESTABLISHED AND
MAINTAINED BY THE COMPANY OR THE COMMITTEE FOR THE PURPOSE OF RECORDING (I) THE
AMOUNTS OF COMPENSATION DEFERRED BY AN EMPLOYEE UNDER THIS PLAN, (II) ANY
INVESTMENT EARNINGS, LOSSES, INTEREST ACCRUALS, ADMINISTRATIVE EXPENSES, ETC.
WITH RESPECT TO THOSE AMOUNTS, AND (III) ANY DISTRIBUTIONS TO AN EMPLOYEE OR
BENEFICIARY.

 

B.             “BENEFICIARY” REFERS TO THE PERSON OR ENTITY SELECTED TO RECEIVE
ANY PORTION OF AN EMPLOYEE’S ACCOUNT THAT HAS NOT BEEN DISTRIBUTED FROM THE PLAN
AT THE TIME OF THE EMPLOYEE’S DEATH.  SUCH DESIGNATION SHALL BE ON A FORM
PROVIDED OR APPROVED BY THE PLAN ADMINISTRATOR, AND SUCH DESIGNATION SHALL BE
EFFECTIVE WHEN THE FORM IS RECEIVED BY THE COMMITTEE.  IF AN EMPLOYEE FAILS TO
DESIGNATE A BENEFICIARY OR NO DESIGNATED BENEFICIARY SURVIVES THE EMPLOYEE, OR,
IF NOT A NATURAL PERSON, DOES NOT CONTINUE IN EFFECT THE PLAN ADMINISTRATOR WILL
DIRECT PAYMENT OF BENEFITS TO THE EMPLOYEE’S SPOUSE, IF THE EMPLOYEE IS MARRIED
AT THE DATE OF HIS OR HER DEATH; OR TO THE EMPLOYEE’S ESTATE, IF THE EMPLOYEE IS
NOT MARRIED AT THE TIME OF HIS OR HER DEATH.  FOR PURPOSES OF THIS SUBSECTION,
AN EMPLOYEE WHO IS LEGALLY SEPARATED OR WHO HAS BEEN ABANDONED WITHIN THE
MEANING OF STATE LAW SHALL NOT BE REGARDED AS MARRIED.  IN THE EVENT OF A
CONFLICT BETWEEN THE DESIGNATION OF BENEFICIARY HEREUNDER AND THE DESIGNATION OF
BENEFICIARY UNDER A PARTICIPANT’S WILL, THE DESIGNATION OF BENEFICIARY HEREUNDER
SHALL GOVERN.  IF THE PARTICIPANT IS MARRIED AND HE OR SHE AND HIS OR HER SPOUSE
AS APPLICABLE, DIE UNDER CIRCUMSTANCES UNDER WHICH THE SURVIVOR CANNOT BE
DETERMINED, IT SHALL BE PRESUMED THAT THE PARTICIPANT WAS THE SURVIVOR.

 

C.             “BOARD” REFERS TO THE BOARD OF DIRECTORS OF THE COMPANY.

 

D.             “CODE” REFERS TO THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
FROM TIME TO TIME, AND SUCCESSOR CODES THERETO AS AMENDED.

 

--------------------------------------------------------------------------------

 

E.             “COMMITTEE” REFERS TO THE ADMINISTRATIVE COMMITTEE ESTABLISHED
PURSUANT TO SECTION 15.1 THAT ACTS ON BEHALF OF THE COMPANY IN DISCHARGING THE
COMPANY’S DUTIES AS THE PLAN ADMINISTRATOR.  NOTWITHSTANDING ANY OTHER PROVISION
OF THE PLAN DOCUMENT, ANY MEMBER OF THE COMMITTEE OR ANY OTHER OFFICER OR
EMPLOYEE OF THE COMPANY WHO EXERCISES DISCRETION OR AUTHORITY ON BEHALF OF THE
COMPANY SHALL NOT BE A FIDUCIARY OF THE PLAN MERELY BY VIRTUE OF HIS OR HER
EXERCISE OF SUCH DISCRETION OR AUTHORITY.  THE BOARD SHALL IDENTIFY THE COMPANY
OFFICERS WHO SHALL SERVE AS MEMBERS OF THE COMMITTEE.  BECAUSE THIS PLAN IS A
“TOP HAT” ARRANGEMENT, NEITHER THE COMPANY NOR THE COMMITTEE SHALL BE SUBJECT TO
THE FIDUCIARY DUTIES IMPOSED BY ERISA.

 

F.              “COMPANY” REFERS TO FIRST FINANCIAL BANK.

 

G.             “COMPENSATION” REFERS TO AN EMPLOYEE’S TOTAL CASH REMUNERATION
(WITHOUT REGARD TO ANY LIMITS IMPOSED BY OR WITH REFERENCE TO SECTION 401(A)(17)
OF THE CODE).

 

H.             “CONTROLLED GROUP” REFERS TO ALL CORPORATIONS AND ENTITIES WHICH
WITH THE COMPANY ARE TREATED AS A CONTROLLED GROUP WITHIN THE MEANING OF
SECTION 414(B) AND (C) OF THE CODE.

 

I.              “DISABILITY” REFERS TO A CONDITION DETERMINED BY THE COMPANY’S
LONG TERM DISABILITY CARRIER TO BE ONE WHICH MAKES THE EMPLOYEE ENTITLED TO
DISABILITY BENEFITS UNDER THE COMPANY’S LONG TERM DISABILITY PLAN AS FROM TIME
TO TIME IN EFFECT.

 

J.              “EFFECTIVE DATE” REFERS TO NOVEMBER 1, 2002.

 

K.             “EMPLOYEE” REFERS TO ANY EMPLOYEE OF THE COMPANY WITHIN THE
MEANING OF SECTION 3121(D) OF THE CODE, WHO IS HIGHLY COMPENSATED OR A MEMBER OF
MANAGEMENT WITHIN THE MEANING OF SECTION 201(2), 301(A)(3), AND 401(A)(1) OF
ERISA SELECTED BY THE PRESIDENT OF THE COMPANY TO PARTICIPATE IN THIS PLAN.

 

L.              “ERISA” REFERS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED FROM TIME TO TIME.

 

M.            “EXCHANGE ACT” SHALL MEAN THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND ANY VALID REGULATIONS ISSUED THEREUNDER.

 

N.             “INACTIVE PARTICIPANT” REFERS TO AN EMPLOYEE WHO DEFERRED
COMPENSATION UNDER THE PLAN DURING A PREVIOUS PLAN YEAR BUT WHO DOES NOT DEFER
ANY COMPENSATION PAYABLE DURING THE CURRENT PLAN YEAR AND TO A PARTICIPANT WHO
HAS HAD A TERMINATION OF EMPLOYMENT BUT STILL HAS A VESTED, ACCRUED BENEFIT.

 

O.             “MATCHING CONTRIBUTIONS” REFERS TO AMOUNTS DESCRIBED IN
SECTION 5.4.A BELOW.

 

P.             “PARTICIPANT” REFERS TO AN ELIGIBLE EMPLOYEE WHO ELECTS TO DEFER
UNDER THE PLAN PART OR ALL OF HIS OR HER COMPENSATION EARNED DURING THE
APPLICABLE PLAN YEAR.

 

Q.             “PLAN” SHALL MEAN THIS EXECUTIVE DEFERRED COMPENSATION PLAN, AS
AMENDED FROM TIME TO TIME.

 

2

--------------------------------------------------------------------------------

 

R.              “PLAN ADMINISTRATOR” REFERS TO THE COMPANY.

 

S.             “PLAN YEAR” REFERS TO THE CALENDAR YEAR.

 

T.              “SECURITIES ACT” REFERS TO THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY VALID REGULATIONS ISSUED THEREUNDER.

 

U.             “SUBSTANTIALLY EQUAL ANNUAL INSTALLMENTS” REFERS TO AN ANNUAL
INSTALLMENT PAYMENT OVER THE NUMBER OF YEARS SELECTED BY THE PARTICIPANT IN
ACCORDANCE WITH THIS PLAN, CALCULATED AS FOLLOWS:  THE ACCOUNT OF A PARTICIPANT
SHALL BE CALCULATED AS OF THE LAST DAY OF A MONTH; AND THE ANNUAL INSTALLMENT
SHALL BE CALCULATED BY MULTIPLYING THE BALANCE BY A FRACTION, THE NUMERATOR OF
WHICH IS ONE, AND THE DENOMINATOR OF WHICH IS THE REMAINING NUMBER OF ANNUAL
INSTALLMENTS DUE TO THE PARTICIPANT.

 

V.             “TERMINATION OF EMPLOYMENT” REFERS TO AN EMPLOYEE’S TERMINATION
OR SEPARATION FROM SERVICE WITH ALL MEMBERS OF THE COMPANY’S CONTROLLED GROUP.

 

3.             ELIGIBILITY

 

The President is hereby eligible to participate in the Plan.  The President of
the Company, in his or her sole discretion, may designate from time to time from
among those employees of the Company who are part of a select group of
management or highly compensated employees within the meaning of Section 201(2),
301(a)(3), and 401(a)(1) of ERISA, those Employees of the Company who are
eligible to participate in the Plan for one or more Plan Years and the date upon
which each such Employee’s participation may commence.  All designated Employees
shall be notified by the President or the Committee of their eligibility to
participate.  An Employee shall cease to be eligible when the Employee ceases
both (i) to be a member of a select group of management and (ii) to be highly
compensated as described in Section 1 above.  The effective date of any such
ineligibility shall be the first day of the month coinciding with or next
following the date on which the President or Committee provides the Employee
with notice of revocation of eligibility.  An Employee’s eligibility to
participate in the Plan does not confer upon the Employee any right to continue
as an Employee or to any bonus or remuneration of any kind.  If the Committee
determines in good faith that a Participant no longer qualifies as a member of a
select group of management or highly compensated employees, as membership in
such group is determined in accordance with Section 201(2), 301(a)(3) and
401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion,
to take whatever measures it deems necessary to preserve the Top Hat status of
the Plan.

 

4.             DEFERRAL OF COMPENSATION

 

4.1.         ELECTION TO DEFER.  AN EMPLOYEE WHO IS ELIGIBLE TO PARTICIPATE IN
THE PLAN MAY ELECT TO DEFER THE RECEIPT OF COMPENSATION BY COMPLETING A DEFERRAL
ELECTION FORM PROVIDED OR APPROVED BY THE COMPANY OR COMMITTEE. PURSUANT TO THE
DEFERRAL ELECTION FORM, AN ELIGIBLE EMPLOYEE MAY ELECT TO DEFER ANY WHOLE
PERCENTAGE, UP TO 100% OF HIS OR HER COMPENSATION.  AT THE TIME AN EMPLOYEE
COMPLETES A DEFERRAL ELECTION FORM, THE EMPLOYEE MAY DESIGNATE IN WRITING A
SPECIFIC DATE UPON THE OCCURRENCE OF WHICH THE COMPENSATION DEFERRED FOR ANY
PLAN YEAR,

 

3

--------------------------------------------------------------------------------

 

ADJUSTED UNDER SECTION 5 BELOW, SHALL BE DISTRIBUTED FROM THE EMPLOYEE’S ACCOUNT
AND THE RATE AND FORM OF THE DISTRIBUTION.

 

4.2.         DATE AND NOTICE OF DEFERRAL ELECTION.  AN ELIGIBLE EMPLOYEE MUST
SUBMIT HIS OR HER DEFERRAL ELECTION FORM TO THE COMMITTEE NO LATER THAN THE LAST
DAY OF THE DEFERRAL ELECTION PERIOD WHICH SHALL BE THE NINETY-DAY PERIOD ENDING
ON THE LAST DAY PRECEDING THE CALENDAR YEAR IN WHICH THE ELIGIBLE EMPLOYEE WILL
RENDER THE SERVICES FOR WHICH HE OR SHE WILL EARN ANY PART OF THE COMPENSATION
PAYABLE TO THE EMPLOYEE FOR SERVICE DURING THAT YEAR (“DEFERRAL ELECTION
PERIOD”).  FOR THE INITIAL PLAN YEAR OF THE PLAN, THE FIRST DEFERRAL ELECTION
PERIOD SHALL END NO EARLIER THAN OCTOBER 31, 2002.  THE DEFERRAL ELECTION OF AN
ELIGIBLE EMPLOYEE THAT IS MADE IN THE EMPLOYEE’S FIRST YEAR OF EMPLOYMENT WITH
THE COMPANY (“NEW HIRE ELECTION”), SHALL END NO EARLIER THAN 30 DAYS AFTER HIS
OR HER FIRST DATE OF EMPLOYMENT WITH THE COMPANY.  A NEW HIRE ELECTION SHALL BE
EFFECTIVE WITH RESPECT TO COMPENSATION PAID AFTER THE END OF THE ELECTION PERIOD
AND DURING THE CALENDAR YEAR IN WHICH THE ELECTION IS MADE.

 

4.3.         MULTIPLE ELECTIONS.  AN ELECTION TO DEFER COMPENSATION SHALL BE
EFFECTIVE ON THE DATE AN ELIGIBLE EMPLOYEE DELIVERS A COMPLETED DEFERRAL
ELECTION FORM TO THE COMMITTEE; PROVIDED, HOWEVER, THAT, IF THE ELIGIBLE
EMPLOYEE DELIVERS ANOTHER PROPERLY COMPLETED DEFERRAL ELECTION FORM TO THE
COMMITTEE PRIOR TO THE CLOSE OF THE DEFERRAL ELECTION PERIOD DESCRIBED IN
SECTION 4.2, THE DEFERRAL ELECTION ON THE FORM BEARING THE LATEST DATE SHALL
CONTROL.  AFTER THE LAST DAY OF THE ELECTION PERIOD, THE CONTROLLING ELECTION
MADE PRIOR TO THE CLOSE OF THE PERIOD SHALL BE IRREVOCABLE.  EXCEPT WITH RESPECT
TO A NEW HIRE ELECTION IN ORDER TO DEFER ANY PORTION OF COMPENSATION EARNED IN
ANY CALENDAR YEAR, AN ELIGIBLE EMPLOYEE MUST SUBMIT AT LEAST ONE COMPLETED
DEFERRAL ELECTION FORM DURING THE 90-DAY PERIOD IMMEDIATELY PRECEDING THE START
OF THAT CALENDAR YEAR.

 

4.4.         NO DEFERRAL ADJUSTMENTS.  AFTER AN ANNUAL ELECTION HAS TAKEN EFFECT
FOR ANY PLAN YEAR, A PARTICIPANT MAY NOT INCREASE OR DECREASE THE PERCENTAGE OF
COMPENSATION TO BE DEFERRED DURING THAT PLAN YEAR, PROVIDED, HOWEVER, THAT IF A
PARTICIPANT IS DETERMINED TO BE DISABLED, HE OR SHE SHALL BE EXCUSED FROM ANY
DEFERRALS FOR THE REMAINDER OF HIS OR HER DISABILITY, ALTHOUGH SUCH PERSON SHALL
OTHERWISE REMAIN A PARTICIPANT.

 

5.             DEFERRED COMPENSATION ACCOUNTS

 

5.1.         MAINTENANCE OF ACCOUNTS.  THE PLAN ADMINISTRATOR SHALL MAINTAIN ONE
OR MORE ACCOUNTS WITH RESPECT TO ANY COMPENSATION DEFERRED BY AN ELIGIBLE
EMPLOYEE UNDER SECTION 4 ABOVE.  THE PLAN ADMINISTRATOR SHALL CREDIT THE ACCOUNT
WITH THE FULL AMOUNT OF COMPENSATION DEFERRED IN ANY PAYROLL PERIOD.  IF THE
COMPENSATION DEFERRED IS SUBJECT TO FEDERAL OR STATE EMPLOYMENT TAXES (E.G.,
TAXES UNDER THE FEDERAL INSURANCE CONTRIBUTIONS ACT OR FEDERAL UNEMPLOYMENT TAX
ACT), SAID TAXES SHALL BE WITHHELD AND DEDUCTED FROM A PORTION OF THE EMPLOYEE’S
COMPENSATION NOT DEFERRED UNDER THIS PLAN.  A PARTICIPANT OR INACTIVE
PARTICIPANT SHALL BE FULLY VESTED AT ALL TIMES IN AMOUNTS DEFERRED UNDER
SECTION 4 ABOVE, AS ADJUSTED FOR ANY INTEREST ACCRUALS, ADMINISTRATIVE EXPENSES,
OR DISTRIBUTIONS AS DESCRIBED BELOW.

 

5.2.         INTEREST ACCRUALS.  ANY AMOUNTS CREDITED TO THE ACCOUNT OF A
PARTICIPANT OR INACTIVE PARTICIPANT AS A RESULT OF THE DEFERRAL OF ALL OR PART
OF HIS OR HER COMPENSATION SHALL ACCRUE INTEREST COMPOUNDED ANNUALLY.  THE
ACCRUAL OF INTEREST BEGINS AND THE COMPOUNDING OF

 

4

--------------------------------------------------------------------------------

 

INTEREST OCCURS ON JANUARY 1 OF EACH PLAN YEAR, EXCEPT FOR THE FIRST PLAN YEAR,
WHERE THE COMPOUNDING OF INTEREST SHALL BEGIN ON THE EFFECTIVE DATE.  THE RATE
AT WHICH INTEREST ACCRUES SHALL BE EQUAL TO THE AVERAGE OF THE THREE-MONTH LIBOR
FOR THE CALENDAR YEAR PRECEDING THE PLAN YEAR PLUS 360 BASIS POINTS, OR SUCH
HIGHER RATE ESTABLISHED BY THE COMMITTEE PROVIDED, HOWEVER, THAT IN NO EVENT
SHALL THE RATE BE LESS THAN FIVE PERCENT (5%) NOR GREATER THAN TWELVE PERCENT
(12%).  IF THE FULL AMOUNT OF SUCH INTEREST ACCRUALS ARE ALLOCATED TO A
PARTICIPANT’S ACCOUNT, ANY FEDERAL, STATE, OR LOCAL INCOME OR EMPLOYMENT TAX
CONSEQUENCES ATTRIBUTABLE TO INTEREST ACCRUALS UNDER THIS SECTION 5.2 SHALL BE
BORNE BY OR INURE TO THE BENEFIT OF THE COMPANY.  IF THE COMPANY ESTABLISHES A
RABBI TRUST FOR ALL OR A PORTION OF THE AMOUNTS CREDITED TO A PARTICIPANT’S
ACCOUNT, THEIR EARNINGS OR LOSSES ON SUCH CREDITED AMOUNTS SHALL BE DETERMINED
UNDER THAT TRUST AGREEMENT.

 

5.3.         UNPAID BALANCES.  THE UNPAID BALANCE OF ALL ACCOUNTS PAYABLE UNDER
THE PLAN SHALL CONTINUE TO BE CREDITED WITH THE ACCRUALS OF INTEREST AS
DESCRIBED IN SECTION 5.2 ABOVE.

 

5.4.         COMPANY’S GENERAL ASSETS.  PARTICIPANT UNDERSTANDS AND AGREES THAT,
EXCEPT AS PROVIDED IN A RABBI TRUST ADOPTED BY COMPANY, ALL COMPENSATION
DEFERRED UNDER THE PLAN AND ALL AMOUNTS CREDITED TO A PARTICIPANT’S ACCOUNT
UNDER THE PLAN (A) ARE THE GENERAL ASSETS OF THE COMPANY, (B) MAY BE USED IN THE
OPERATION OF THE COMPANY’S BUSINESS OR IN ANY OTHER MANNER PERMITTED BY LAW, AND
(C) REMAIN SUBJECT TO THE CLAIMS OF THE COMPANY’S CREDITORS.  PARTICIPANT
AGREES, ON BEHALF OF PARTICIPANT AND HIS OR HER BENEFICIARY, THAT (I) TITLE TO
ANY AMOUNTS DEFERRED UNDER THE PLAN OR CREDITED TO A PARTICIPANT’S ACCOUNT
REMAINS IN THE COMPANY AND (II) NEITHER PARTICIPANT NOR HIS OR HER BENEFICIARY
HAS ANY PROPERTY INTERESTS WHATSOEVER IN SAID AMOUNTS, EXCEPT AS GENERAL
UNSECURED CREDITORS OF THE COMPANY.

 

6.             EFFECT ON EMPLOYEE BENEFITS

 

Amounts deferred under this Plan or distributed pursuant to the terms of this
Plan are not taken into account in the calculation of an Employee’s benefits
under any employee pension or welfare benefit program or under any other
compensation practice maintained by the Company, except to the extent provided
in such program or practice.  However, the benefits provided for a Participant
and a Participant’s Beneficiary under this Plan are in addition to benefits
available to such Participant or Beneficiary under any other plan or program of
the Company.

 

7.             PAYMENT OF DEFERRED COMPENSATION ACCOUNTS

 

7.1.         IN-SERVICE WITHDRAWALS.

 

A.             WITHDRAWALS ON PREVIOUSLY SPECIFIED DATES.  PRIOR TO THE
TERMINATION OF HIS OR HER EMPLOYMENT, A PARTICIPANT SHALL RECEIVE A WITHDRAWAL
OF AMOUNTS DEFERRED IN A PARTICULAR PLAN YEAR UPON THE OCCURRENCE OF THE DATE
AND PURSUANT TO THE FORM SPECIFIED IN HIS OR HER DEFERRAL ELECTION FORM FOR THAT
PLAN YEAR, UNDER SECTION 4.1 ABOVE, TO THE EXTENT THAT SUCH AMOUNTS HAVE NOT
BEEN DISBURSED UNDER THIS SECTION 7 PRIOR TO THAT DATE.

 

B.             OTHER WITHDRAWALS.  PRIOR TO THE TERMINATION OF HIS OR HER
EMPLOYMENT, DISABILITY, OR AN INCOME TAX OBLIGATION DISTRIBUTION, A PARTICIPANT
MAY NOT WITHDRAW ANY FUNDS FROM HIS OR HER ACCOUNT, EXCEPT AS PROVIDED IN
PARAGRAPH 7.1.A.

 

5

--------------------------------------------------------------------------------

 

7.2.         TERMINATION OF EMPLOYMENT.  SUBJECT TO A PARTICIPANT’S OR INACTIVE
PARTICIPANT’S ELECTION OF A DISTRIBUTION DATE AND FORM UNDER SECTION 4.1, UPON
THE TERMINATION OF EMPLOYMENT OF A PARTICIPANT OR INACTIVE PARTICIPANT, THE
COMPANY SHALL DISTRIBUTE HIS OR HER ACCOUNT UNDER THE PLAN, IN EITHER (I) A
SINGLE LUMP SUM OR (II) SUBSTANTIALLY EQUAL ANNUAL INSTALLMENTS OVER A PERIOD OF
FIFTEEN YEARS.  SUCH SELECTION MUST BE MADE AT THE TIME THE ELECTION TO DEFER
COMPENSATION IS MADE UNDER SECTION 4.1; IN THE ABSENCE OF A TIMELY ELECTION,
PAYMENTS SHALL BE MADE ON SUBSTANTIALLY EQUAL INSTALLMENTS OVER A FIFTEEN-YEAR
PERIOD COMMENCING ON THE START DATE.  THE PAYMENT FROM THE ACCOUNT SHALL OCCUR
OR COMMENCE AS SOON AS ADMINISTRATIVELY FEASIBLE AFTER THE TERMINATION OF
EMPLOYMENT OCCURS (“START DATE”).

 

7.3.         DEATH PRIOR TO COMMENCEMENT OF DISTRIBUTIONS.  UPON THE DEATH OF A
PARTICIPANT OR INACTIVE PARTICIPANT PRIOR TO THE COMMENCEMENT OF ANY
DISTRIBUTION UNDER SECTION 7.2 ABOVE, THE ACCOUNTS OF SUCH PARTICIPANT OR
INACTIVE PARTICIPANT SHALL BE DISTRIBUTED TO HIS OR HER BENEFICIARY IN A LUMP
SUM.  THE PAYMENT FROM THE ACCOUNTS SHALL OCCUR AS SOON AS ADMINISTRATIVELY
FEASIBLE AFTER THE DEATH OF THE PARTICIPANT OR INACTIVE PARTICIPANT.

 

7.4.         DEATH AFTER COMMENCEMENT OF DISTRIBUTIONS.  UPON THE DEATH OF A
PARTICIPANT OR INACTIVE PARTICIPANT AFTER THE COMMENCEMENT OF ANY DISTRIBUTION
IN ACCORDANCE WITH SECTION 7.2 ABOVE, THE BALANCE REMAINING IN THE ACCOUNT OF
SUCH PARTICIPANT OR INACTIVE PARTICIPANT SHALL BE DISTRIBUTED TO HIS OR HER
BENEFICIARY IN A LUMP SUM.  THE PAYMENT FROM THE ACCOUNTS SHALL OCCUR AS SOON AS
ADMINISTRATIVELY FEASIBLE AFTER THE DEATH OF THE PARTICIPANT OR INACTIVE
PARTICIPANT.

 

7.5.         WITHHOLDING AND OTHER TAX CONSEQUENCES.  FROM ANY PAYMENTS MADE
UNDER THIS PLAN, THE COMPANY SHALL WITHHOLD ANY TAXES OR OTHER AMOUNTS WHICH
FEDERAL, STATE, OR LOCAL LAW REQUIRES THE COMPANY TO DEDUCT, WITHHOLD, AND
DEPOSIT.  THE COMPANY’S DETERMINATION OF THE TYPE AND AMOUNT OF TAXES TO BE
WITHHELD FROM ANY PAYMENT SHALL BE FINAL AND BINDING ON ALL PERSONS HAVING OR
CLAIMING TO HAVE AN INTEREST IN THIS PLAN OR IN ANY ACCOUNTS UNDER THIS PLAN. 
ANY ADVERSE CONSEQUENCES INCURRED BY A PARTICIPANT OR INACTIVE PARTICIPANT WITH
RESPECT TO HIS OR HER PARTICIPATION IN THE PLAN OR IN CONNECTION WITH A
DISTRIBUTION FROM OR VESTING UNDER THE PLAN SHALL BE THE SOLE RESPONSIBILITY OF
THE PARTICIPANT OR INACTIVE PARTICIPANT.

 

7.6.         VESTING.  ALL BENEFITS ACCRUED UNDER THIS PLAN SHALL BE FULLY
VESTED AT ALL TIMES.

 

8.             TRANSFER

 

8.1.         OUTGOING TRANSFERS.  IF A PARTICIPANT UNDER THIS PLAN IS
TRANSFERRED TO AN ENTITY WHICH IS A MEMBER OF THE COMPANY’S CONTROLLED GROUP
(“U.S. ENTITY”) AND THE PARTICIPANT SHALL NOT BE DEEMED TO HAVE TERMINATED
EMPLOYMENT FOR PURPOSES OF THIS PLAN UNTIL THE PARTICIPANT CEASES TO BE EMPLOYED
BY A U.S. ENTITY.

 

9.             FUNDING

 

All amounts deferred under this Plan remain or become general assets of the
Company.  All payments under this Plan shall come from the general assets of the
Company.  The amounts credited to an Employee’s Accounts are not secured by any
specific assets of the Company.  This Plan shall not be construed to require the
Company to fund any of the benefits provided

 

6

--------------------------------------------------------------------------------

 

hereunder or to establish a trust or purchase insurance or other product for
such purpose.  The Company may make such arrangements as it desires to provide
for the payment of benefits.  Neither an Employee, Participant, or Inactive
Participant nor his or her Beneficiary or estate shall have any rights against
the Company with respect to any portion of any Account under the Plan except as
general unsecured creditors.  No Employee, Participant, Inactive Participant, or
Beneficiary has an interest in any Account under this Plan until the Employee,
Participant, Inactive Participant, or Beneficiary actually receives payment from
the Account.  Notwithstanding the terms of this Section, the Company may, but
need not, establish a rabbi trust with respect to all or a portion of a
Participant’s Accounts.  Notwithstanding the foregoing, in the event of a Change
in Control, (i) if a rabbi trust is in existence at such time, the Company will
contribute such amount to the trust as will satisfy all obligations to
Participants and Beneficiaries hereunder, and (ii) if no rabbi trust is in
existence at such time, the Company will establish an irrevocable rabbi trust
and contribute thereto an amount that will satisfy all obligations to
Participant and Beneficiaries hereunder.

 

10.          NON-ALIENATION OF BENEFITS

 

No Employee, Participant, Inactive Participant, or Beneficiary may, except as
otherwise required by law, sell, assign, transfer, convey, hypothecate,
encumber, anticipate, pledge, or otherwise dispose of any interest in this Plan
or in any Account established under this Plan, and any attempt to do so shall be
void.  No portion of any Account shall, prior to receipt thereof, be subject to
the debts, contracts, liabilities, or engagements of any Employee, Participant,
Inactive Participant, or Beneficiary.  Nothing in the preceding sentence shall
prohibit an offset of amounts which the Employee, Participant, Inactive
Participant, or Beneficiary owes to the Company at any time when there is
distribution of his or her Accounts under this Plan; nor shall any provision of
the Plan impede the Company from recovering directly from an Employee,
Participant, Inactive Participant, or Beneficiary, or by offset against payments
being made to them, any payments to which he or she was not entitled under the
Plan.

 

11.          LIMITATION OF RIGHTS

 

Nothing in this Plan document or in any related instrument shall cause this Plan
to be treated as a contract of employment within the meaning of the Federal
Arbitration Act, 9 U.S.C. 1 et. seq., or otherwise shall be construed as
evidence of any agreement or understanding, express or implied, that the Company
(a) will employ any person at any particular position or level of Compensation,
(b) will offer any person initial or continued participation in any commission,
bonus, or other compensation program, or (c) will continue any person’s
employment with the Company.

 

12.          NOTICE UNDER WARN

 

Any amounts paid (i) to any Employee under the Worker Adjustment and Restraining
Notification Act of 1988 (“WARN”) or under any other laws regarding termination
of employment, or (ii) to any third party for the benefit of said Employee or
for the benefit of his or her dependents shall not be offset or reduced by any
amounts paid or determined to be payable by the Company to said Employee or to
his or her dependents under this Plan.

 

7

--------------------------------------------------------------------------------

 

13.          AMENDMENT OR TERMINATION OF PLAN

 

A.             THE BOARD OF DIRECTORS OF THE COMPANY MAY MODIFY, SUSPEND, OR
TERMINATE THE PLAN IN ANY MANNER AT ANY TIME.  SUCH MODIFICATION, SUSPENSION, OR
TERMINATION SHALL BE IN WRITING AND MAY NOT REDUCE ANY ACCRUED VESTED BENEFITS
ALLOCATED TO A PARTICIPANT’S ACCOUNT UNDER THIS PLAN, BUT MAY MODIFY, SUSPEND,
OR TERMINATE FUTURE ACCRUALS OR ALLOCATIONS UNDER THE PLAN AND MAY ALTER ANY
OTHER ASPECTS OF THE PLAN.

 

B.             IN MODIFYING, SUSPENDING, OR TERMINATING THE PLAN, OR IN TAKING
ANY OTHER ACTION WITH RESPECT TO THE IMPLEMENTATION, OPERATION, MAINTENANCE, OR
ADMINISTRATION OF THE PLAN, THE BOARD OF DIRECTORS MAY ACT BY A RESOLUTION OF
THE BOARD OR BY ACTION OF ITS AUTHORIZED REPRESENTATIVE.

 

C.             THIS PLAN SHALL TERMINATE IMMEDIATELY IF AN IMPARTIAL ARBITRATOR
OR COURT OF COMPETENT JURISDICTION FINALLY DETERMINES THAT THIS PLAN IS NOT
EXEMPT FROM THE FIDUCIARY, FUNDING, VESTING, OR PLAN TERMINATION INSURANCE
PROVISIONS OF TITLE I AND TITLE IV OF ERISA.  THE PLAN SHALL TERMINATE AS OF THE
DATE OF THE FINAL DETERMINATION THAT IT CEASED TO BE EXEMPT; AND ALL ACCOUNTS
UNDER THIS PLAN SHALL BE DISTRIBUTED TO PARTICIPANTS, INACTIVE PARTICIPANTS, OR
BENEFICIARIES AT THE TIME AND IN THE MANNER DETERMINED BY THE PLAN
ADMINISTRATOR.

 

14.          LEAVES OF ABSENCE

 

14.1.       PAID LEAVE OF ABSENCE.  IF A PARTICIPANT IS AUTHORIZED BY THE
COMPANY FOR ANY REASON TO TAKE A PAID LEAVE OF ABSENCE, THE PARTICIPANT SHALL
CONTINUE TO BE REGARDED AS AN EMPLOYEE AND THE AMOUNT THAT HE OR SHE ELECTED TO
DEFER SHALL CONTINUE TO BE CONTRIBUTED TO THE PLAN.

 

14.2.       UNPAID LEAVE OF ABSENCE.  IF A PARTICIPANT IS AUTHORIZED BY THE
COMPANY TO TAKE AN UNPAID LEAVE OF ABSENCE FROM THE COMPANY, THE PARTICIPANT
SHALL NOT BE REGARDED AS HAVING A TERMINATION OF EMPLOYMENT BUT SHALL BE EXCUSED
FROM MAKING ANY DEFERRALS PURSUANT TO SECTION 4.1 UNTIL HIS OR HER LEAVE OF
ABSENCE HAS EXPIRED.  UPON SUCH EXPIRATION THE PARTICIPANT DEFERRALS SHALL
RESUME FOR THE REMAINING PORTION OF THE PLAN YEAR IN WHICH THE EXPIRATION OF THE
UNPAID LEAVE OCCURS.  IF THE UNPAID LEAVE OF ABSENCE ENDS IN A SUBSEQUENT YEAR
AND THE PARTICIPANT HAS NO DEFERRAL ELECTION IN EFFECT FOR SUCH SUBSEQUENT YEAR,
HE OR SHE SHALL NOT BE ALLOWED TO MAKE ANY DEFERRAL FOR THE REMAINDER OF SUCH
SUBSEQUENT PLAN YEAR.

 

15.          ADMINISTRATIVE PROCEDURES AND DISPUTE RESOLUTION

 

15.1.       PLAN ADMINISTRATOR.  THE PLAN ADMINISTRATOR SHALL BE THE COMPANY. 
THE BOARD OF DIRECTORS MAY ESTABLISH AN ADMINISTRATIVE COMMITTEE COMPOSED OF ANY
PERSONS, INCLUDING OFFICERS OR EMPLOYEES OF THE COMPANY, WHO ACT ON BEHALF OF
THE COMPANY IN DISCHARGING THE DUTIES OF THE COMPANY IN ADMINISTERING THE PLAN. 
NO ADMINISTRATIVE COMMITTEE MEMBER WHO IS A FULL-TIME OFFICER OR EMPLOYEE OF THE
COMPANY SHALL RECEIVE COMPENSATION WITH RESPECT TO HIS OR HER SERVICE ON THE
ADMINISTRATIVE COMMITTEE.  ANY MEMBER OF THE ADMINISTRATIVE COMMITTEE MAY RESIGN
BY DELIVERING HIS OR HER WRITTEN RESIGNATION TO THE BOARD OF DIRECTORS OF THE
COMPANY.  THE BOARD MAY REMOVE ANY COMMITTEE MEMBER BY PROVIDING HIM OR HER WITH
WRITTEN NOTICE OF THE REMOVAL.

 

8

--------------------------------------------------------------------------------

 

15.2.       COMMITTEE ORGANIZATION AND PROCEDURES.

 

A.             THE PRESIDENT OF THE COMPANY MAY DESIGNATE A CHAIRPERSON FROM THE
MEMBERS OF THE ADMINISTRATIVE COMMITTEE.  THE ADMINISTRATIVE COMMITTEE MAY
APPOINT, ITS OWN SECRETARY, WHO MAY OR MAY NOT BE A MEMBER OF THE ADMINISTRATIVE
COMMITTEE AND MAY OR MAY NOT BE A PERSON DISTINCT FROM THE SECRETARY OF THE
COMPANY.  THE COMMITTEE SECRETARY SHALL HAVE THE PRIMARY RESPONSIBILITY FOR
KEEPING A RECORD OF ALL MEETINGS AND ACTS OF THE ADMINISTRATIVE COMMITTEE AND
SHALL HAVE CUSTODY OF ALL DOCUMENTS, THE PRESERVATION OF WHICH SHALL BE
NECESSARY OR CONVENIENT TO THE EFFICIENT FUNCTIONING OF THE ADMINISTRATIVE
COMMITTEE.  ALL REPORTS REQUIRED BY LAW MAY BE SIGNED BY THE CHAIRPERSON OR
ANOTHER MEMBER OF THE ADMINISTRATIVE COMMITTEE, AS DESIGNATED BY THE
CHAIRPERSON, ON BEHALF OF THE COMPANY.

 

B.             THE ADMINISTRATIVE COMMITTEE SHALL ACT BY A MAJORITY OF ITS
MEMBERS IN OFFICE AND MAY ADOPT SUCH RULES AND REGULATIONS AS IT DEEMS DESIRABLE
FOR THE CONDUCT OF ITS AFFAIRS.

 

15.3.       ADMINISTRATIVE AUTHORITY.  THE COMPANY AND THE COMMITTEE HAVE
COMPLETE DISCRETIONARY AUTHORITY TO PERFORM ALL FUNCTIONS NECESSARY OR
APPROPRIATE TO THE OPERATION OF THE PLAN, INCLUDING, WITHOUT LIMITATION,
AUTHORITY TO (A) CONSTRUE AND INTERPRET THE PROVISIONS OF THE PLAN DOCUMENT AND
ANY RELATED INSTRUMENT AND DETERMINE ANY QUESTION ARISING UNDER THE PLAN
DOCUMENT OR RELATED INSTRUMENT, OR IN CONNECTION WITH THE ADMINISTRATION OR
OPERATION THEREOF, (B) DETERMINE IN ITS SOLE DISCRETION ALL FACTS AND RELEVANT
CONSIDERATIONS AFFECTING THE ELIGIBILITY OF ANY EMPLOYEE TO BE OR BECOME A
PARTICIPANT; (C) DECIDE ELIGIBILITY (SUBJECT TO SECTION 3) FOR, AND THE AMOUNT
OF, BENEFITS FOR ANY PARTICIPANT, INACTIVE PARTICIPANT, OR BENEFICIARY;
(D) AUTHORIZE AND DIRECT ALL DISBURSEMENTS UNDER THE PLAN; AND (E) EMPLOY AND
ENGAGE SUCH PERSONS, COUNSEL, AND AGENTS AND TO OBTAIN SUCH ADMINISTRATIVE,
CLERICAL, MEDICAL, LEGAL, AUDIT, AND ACTUARIAL SERVICES AS IT MAY DEEM NECESSARY
IN CARRYING OUT THE PROVISIONS OF THE PLAN.  THE COMPANY SHALL BE THE
“ADMINISTRATOR” AS DEFINED IN SECTION 3(16)(A) OF ERISA FOR PURPOSES OF THE
REPORTING AND DISCLOSURE REQUIREMENTS OF ERISA AND THE CODE.  THE PRESIDENT OF
THE COMPANY, OR IN HIS OR HER ABSENCE, THE GENERAL COUNSEL OF THE COMPANY, SHALL
BE THE AGENT FOR SERVICE OF PROCESS ON THE PLAN.

 

15.4.       EXPENSES  ALL EXPENSES (INCLUDING FEES DESIGNATED BY COMMITTEE)
WHICH ARE NECESSARY TO OPERATE AND ADMINISTER THE PLAN, INCLUDING BUT NOT
LIMITED TO EXPENSES INCURRED IN CONNECTION WITH THE PROVISIONS OF SECTION 15.3,
SHALL BE PAID DIRECTLY BY THE COMPANY.  SUCH EXPENSES MAY NOT BE CHARGED AGAINST
PARTICIPANT ACCOUNTS OR REDUCE THE AMOUNT OF COMPENSATION OR INTEREST ACCRUALS
ALLOCATED TO PARTICIPANT ACCOUNTS UNDER THE PLAN. ALL REASONABLE COSTS INCURRED
BY A COMMITTEE MEMBER IN THE DISCHARGE OF THE COMPANY’S OR HIS OR HER DUTIES
UNDER THE PLAN SHALL BE PAID OR REIMBURSED BY THE COMPANY.  SUCH COSTS SHALL
INCLUDE FEES OR EXPENSES ARISING FROM THE COMMITTEE’S RETENTION, WITH THE
CONSENT OF THE COMPANY, OF ANY ATTORNEYS, ACCOUNTANTS, ACTUARIES, CONSULTANTS OR
RECORDKEEPERS REQUIRED BY THE COMMITTEE TO DISCHARGE ITS DUTIES UNDER THE PLAN. 
NOTHING IN THE PRECEDING TWO SENTENCES OR IN ANY OTHER PROVISIONS OF THE PLAN
SHALL REQUIRE THE COMPANY TO PAY OR REIMBURSE ANY COMMITTEE MEMBER OR ANY OTHER
PERSON FOR THE COST, LIABILITY, LOSS, FEE, OR EXPENSE INCURRED BY THE COMMITTEE
MEMBER OR OTHER PERSON IN ANY DISPUTE WITH THE COMPANY; NOR MAY ANY COMMITTEE
MEMBER OR OTHER PERSON REIMBURSE HIMSELF, HERSELF, OR ITSELF FROM ANY PLAN
CONTRIBUTIONS FOR ANY SUCH COST, LIABILITY, LOSS, FEE, OR EXPENSE.

 

9

--------------------------------------------------------------------------------

 

15.5.       INSURANCE.  THE COMPANY MAY, BUT NEED NOT, OBTAIN LIABILITY
INSURANCE TO PROTECT ITS DIRECTORS, OFFICERS, EMPLOYEES, OR REPRESENTATIVES
AGAINST LIABILITY IN THE OPERATION OF THE PLAN.

 

15.6.       CLAIMS PROCEDURE.

 

A.             A CLAIM FOR BENEFITS SHALL BE CONSIDERED FILED ONLY WHEN ACTUALLY
RECEIVED BY THE PLAN ADMINISTRATOR.

 

B.             ANY TIME A CLAIM FOR BENEFITS IS WHOLLY OR PARTIALLY DENIED, THE
PARTICIPANT, INACTIVE PARTICIPANT, OR BENEFICIARY (HEREINAFTER “CLAIMANT”) SHALL
BE GIVEN WRITTEN NOTICE OF SUCH DENIAL WITHIN 90 DAYS AFTER THE CLAIM IS FILED,
UNLESS SPECIAL CIRCUMSTANCES REQUIRE AN EXTENSION OF TIME FOR PROCESSING THE
CLAIM.  IF THERE IS AN EXTENSION, THE CLAIMANT SHALL BE NOTIFIED OF THE
EXTENSION AND THE REASON FOR THE EXTENSION WITHIN THE INITIAL 90-DAY PERIOD. 
THE EXTENSION SHALL EXPIRE WITHIN 180 DAYS AFTER THE CLAIM IS FILED.  SUCH
NOTICE WILL INDICATE THE REASON FOR DENIAL, THE PERTINENT PROVISIONS OF THE PLAN
ON WHICH THE DENIAL IS BASED, AN EXPLANATION OF THE CLAIMS APPEAL PROCEDURE AND
APPEAL TIME LIMITS SET FORTH HEREIN, AND A DESCRIPTION OF ANY ADDITIONAL
MATERIAL OR INFORMATION NECESSARY TO PERFECT THE CLAIM, AND AN EXPLANATION OF
WHY SUCH MATERIAL OR INFORMATION IS NECESSARY.  THE DENIAL WILL ALSO INCLUDE A
STATEMENT DESCRIBING THE CLAIMANT’S RIGHT TO BRING AN ACTION UNDER
SECTION 502(A) OF ERISA FOLLOWING AN ADVERSE DETERMINATION ON REVIEW.

 

15.7.       APPEAL PROCEDURES

 

A.             ANY PERSON WHO HAS HAD A CLAIM FOR BENEFITS DENIED BY THE PLAN
ADMINISTRATOR, OR IS OTHERWISE ADVERSELY AFFECTED BY THE ACTION OR INACTION OF
THE PLAN ADMINISTRATOR, SHALL HAVE THE RIGHT TO REQUEST A REVIEW BY THE PLAN
ADMINISTRATOR.  SUCH REQUEST MUST BE IN WRITING AND MUST BE RECEIVED BY THE PLAN
ADMINISTRATOR WITHIN 60 DAYS AFTER SUCH PERSON RECEIVES NOTICE OF THE PLAN
ADMINISTRATOR’S ACTION.  IF WRITTEN REQUEST FOR A REVIEW IS NOT MADE WITHIN SUCH
60-DAY PERIOD, THE CLAIMANT SHALL FORFEIT HIS OR HER RIGHT TO A REVIEW.  THE
CLAIMANT OR A DULY AUTHORIZED REPRESENTATIVE OF THE CLAIMANT MAY REVIEW ALL
PERTINENT DOCUMENTS AND SUBMIT ISSUES AND COMMENTS IN WRITING.

 

B.             THE PLAN ADMINISTRATOR SHALL THEN REVIEW THE CLAIM.  THE PLAN
ADMINISTRATOR MAY ISSUE A WRITTEN DECISION REAFFIRMING, MODIFYING, OR SETTING
ASIDE ITS FORMER ACTION WITHIN 60 DAYS AFTER RECEIPT OF THE WRITTEN REQUEST FOR
A REVIEW, OR 120 DAYS IF SPECIAL CIRCUMSTANCES REQUIRE AN EXTENSION.  THE
CLAIMANT SHALL BE NOTIFIED IN WRITING OF ANY SUCH EXTENSION WITHIN 60 DAYS
FOLLOWING THE REQUEST FOR A REVIEW.  AN ORIGINAL OR COPY OF THE DECISION SHALL
BE FURNISHED TO THE CLAIMANT.  A NOTIFICATION OF ADVERSE BENEFIT DETERMINATION
SHALL SET FORTH, IN A MANNER CALCULATED TO BE UNDERSTOOD BY THE CLAIMANT (I) THE
SPECIFIC REASON OR REASONS FOR THE ADVERSE DETERMINATION; (II) REFERENCES TO THE
SPECIFIC PLAN PROVISIONS ON WHICH THE BENEFIT DETERMINATION IS BASED; (III) A
STATEMENT THAT THE CLAIMANT IS ENTITLED TO RECEIVE, UPON REQUEST AND FREE OF
CHARGE, REASONABLE ACCESS TO, AND COPIES OF, ALL DOCUMENTS, RECORDS, AND OTHER
INFORMATION RELEVANT TO THE CLAIM FOR BENEFITS; AND (IV) DESCRIBE THE CLAIMANT’S
RIGHT TO BRING AN ACTION UNDER SECTION 502(A) OF ERISA.  THE DECISION SHALL BE
FINAL AND BINDING UPON THE CLAIMANT AND THE PLAN ADMINISTRATOR AND ALL OTHER
PERSONS HAVING OR CLAIMING TO HAVE AN INTEREST IN THE PLAN OR IN ANY ACCOUNT
ESTABLISHED UNDER THE PLAN.

 

10

--------------------------------------------------------------------------------

 

15.8.       NOTICES.  ANY NOTICE FROM THE COMPANY OR THE COMMITTEE TO AN
EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT, OR BENEFICIARY REGARDING THIS PLAN
MAY BE ADDRESSED TO THE LAST KNOWN RESIDENCE OF SAID PERSON AS INDICATED IN THE
RECORDS OF THE COMPANY.  ANY NOTICE TO, OR ANY SERVICE OF PROCESS UPON, THE
COMPANY OR THE COMMITTEE WITH RESPECT TO THIS PLAN MAY BE ADDRESSED AS FOLLOWS:

 

Chief Financial Officer

First Financial Bank

100 E. Lancaster Avenue

Downington, PA 19335

 

15.9.       INDEMNIFICATION.  TO THE EXTENT PERMITTED BY LAW, THE COMPANY SHALL,
AND HEREBY DOES, INDEMNIFY AND HOLD HARMLESS ANY DIRECTOR, OFFICER, OR EMPLOYEE
OF THE COMPANY WHO IS OR MAY BE DEEMED TO BE RESPONSIBLE FOR THE OPERATION OF
THE PLAN, FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, OR LIABILITIES
(INCLUDING ATTORNEYS’ FEES AND AMOUNTS PAID, WITH THE APPROVAL OF THE BOARD, IN
SETTLEMENT OF ANY CLAIM) ARISING OUT OF OR RESULTING FROM A DUTY, ACT, OMISSION,
OR DECISION WITH RESPECT TO THE PLAN, SO LONG AS SUCH DUTY, ACT, OMISSION, OR
DECISION DOES NOT INVOLVE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF
SUCH DIRECTOR, OFFICER, OR EMPLOYEE.  ANY INDIVIDUAL SO INDEMNIFIED SHALL,
WITHIN 10 DAYS AFTER RECEIPT OF NOTICE OF ANY ACTION, SUIT, OR PROCEEDING,
NOTIFY THE PRESIDENT OF THE COMPANY (OR IN THE PRESIDENT’S ABSENCE, OR THE CHIEF
FINANCIAL OFFICER OF THE COMPANY) AND OFFER IN WRITING TO THE PRESIDENT (OR IN
THE PRESIDENT’S ABSENCE, OR THE CHIEF FINANCIAL OFFICER OF THE COMPANY) THE
OPPORTUNITY, AT THE COMPANY’S EXPENSE, TO HANDLE AND DEFEND SUCH ACTION, SUIT,
OR PROCEEDING, AND THE COMPANY SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO
CONDUCT THE DEFENSE IN ANY SUCH ACTION, SUIT, OR PROCEEDING.  AN INDIVIDUAL’S
FAILURE TO GIVE THE PRESIDENT (OR IN THE PRESIDENT’S ABSENCE, OR THE CHIEF
FINANCIAL OFFICER OF THE COMPANY) SUCH NOTICE AND OPPORTUNITY SHALL RELIEVE THE
COMPANY OF ANY LIABILITY TO SAID INDIVIDUAL UNDER THIS SECTION 15.9.  THE
COMPANY MAY SATISFY ITS OBLIGATIONS UNDER THIS PROVISION (IN WHOLE OR IN PART)
BY THE PURCHASE OF INSURANCE.  ANY PAYMENT BY AN INSURANCE CARRIER TO OR ON
BEHALF OF SUCH INDIVIDUAL SHALL, TO THE EXTENT OF SUCH PAYMENT, DISCHARGE ANY
OBLIGATION OF THE COMPANY TO THE INDIVIDUAL UNDER THIS INDEMNIFICATION.

 

16.          MISCELLANEOUS

 

16.1.       ALTERNATIVE ACTS AND TIMES.  IF IT BECOMES IMPOSSIBLE OR BURDENSOME
FOR THE COMPANY OR THE COMMITTEE TO PERFORM A SPECIFIC ACT AT A SPECIFIC TIME
REQUIRED BY THIS PLAN, THE COMPANY OR COMMITTEE MAY PERFORM SUCH ALTERNATIVE ACT
WHICH MOST NEARLY CARRIES OUT THE INTENT AND PURPOSE OF THIS PLAN AND MAY
PERFORM SUCH REQUIRED OR ALTERNATIVE ACT AT A TIME AS CLOSE AS ADMINISTRATIVELY
FEASIBLE TO THE TIME SPECIFIED IN THIS PLAN FOR SUCH PERFORMANCE.

 

16.2.       MASCULINE AND FEMININE, SINGULAR AND PLURAL.  WHENEVER USED HEREIN,
PRONOUNS SHALL INCLUDE ALL GENDERS, AND THE SINGULAR SHALL INCLUDE THE PLURAL,
AND THE PLURAL SHALL INCLUDE THE SINGULAR, WHENEVER THE CONTEXT SHALL PLAINLY SO
REQUIRE.

 

16.3.       GOVERNING LAW AND SEVERABILITY.  THIS PLAN SHALL, EXCEPT AS
EXPRESSLY PROVIDED FOR HEREUNDER, BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF PENNSYLVANIA (EXCLUSIVE OF ITS PROVISIONS REGARDING
CONFLICTS OF LAW) TO THE EXTENT THAT SUCH LAWS ARE NOT PREEMPTED BY ERISA OR
OTHER FEDERAL LAWS.  IF ANY PROVISION OF THIS PLAN SHALL BE HELD ILLEGAL OR

 

11

--------------------------------------------------------------------------------

 

INVALID FOR ANY REASON, SUCH DETERMINATION SHALL NOT AFFECT THE REMAINING
PROVISIONS OF THIS PLAN WHICH SHALL BE CONSTRUED AS IF SAID ILLEGAL OR INVALID
PROVISIONS HAD NEVER BEEN INCLUDED.

 

16.4.       FACILITY OF PAYMENT.  IF THE PLAN ADMINISTRATOR, IN ITS SOLE
DISCRETION, DETERMINES THAT ANY EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT, OR
BENEFICIARY BY REASON OF INFIRMITY, MINORITY, OR OTHER DISABILITY, IS
PHYSICALLY, MENTALLY, OR LEGALLY INCAPABLE OF GIVING A VALID RECEIPT FOR ANY
PAYMENT DUE HIM OR HER OR IS INCAPABLE OF HANDLING HIS OR HER OWN AFFAIRS AND IF
THE PLAN ADMINISTRATOR IS NOT AWARE OF ANY LEGAL REPRESENTATIVE APPOINTED ON HIS
OR HER BEHALF, THEN THE PLAN ADMINISTRATOR, IN ITS SOLE DISCRETION, MAY DIRECT
(A) PAYMENT TO OR FOR THE BENEFIT OF THE EMPLOYEE, PARTICIPANT, INACTIVE
PARTICIPANT, OR BENEFICIARY; (B) PAYMENT TO ANY PERSON OR INSTITUTION
MAINTAINING CUSTODY OF THE EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT, OR
BENEFICIARY; OR (C) PAYMENT TO ANY OTHER PERSON SELECTED BY THE PLAN
ADMINISTRATOR TO RECEIVE, MANAGE, AND DISBURSE SUCH PAYMENT FOR THE BENEFIT OF
THE EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT, OR BENEFICIARY.  THE RECEIPT BY
ANY SUCH PERSON OF ANY SUCH PAYMENT SHALL BE A COMPLETE ACQUITTANCE THEREFOR;
AND ANY SUCH PAYMENT, TO THE EXTENT THEREOF, SHALL DISCHARGE THE LIABILITY OF
THE COMPANY, THE COMMITTEE, AND THE PLAN FOR ANY AMOUNTS OWED TO THE EMPLOYEE,
PARTICIPANT, INACTIVE PARTICIPANT, OR BENEFICIARY HEREUNDER.  IN THE EVENT OF
ANY CONTROVERSY OR UNCERTAINTY REGARDING WHO SHOULD RECEIVE OR WHOM THE PLAN
ADMINISTRATOR SHOULD SELECT TO RECEIVE ANY PAYMENT UNDER THIS PLAN, THE PLAN
ADMINISTRATOR MAY SEEK INSTRUCTION FROM A COURT OF PROPER JURISDICTION OR MAY
PLACE THE PAYMENT (OR ACCOUNT) INTO SUCH COURT WITH FINAL DISTRIBUTION TO BE
DETERMINED BY SUCH COURT.

 

16.5.       CORRECTION OF ERRORS.  ANY CREDITING OF COMPENSATION OR INTEREST
ACCRUALS TO THE ACCOUNTS OF ANY EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT, OR
BENEFICIARY UNDER A MISTAKE OF FACT OR LAW SHALL BE RETURNED TO THE COMPANY.  IF
AN EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT, OR BENEFICIARY IN AN APPLICATION
FOR A BENEFIT OR IN RESPONSE TO ANY REQUEST BY THE COMPANY OR THE PLAN
ADMINISTRATOR FOR INFORMATION, MAKES ANY ERRONEOUS STATEMENT, OMITS ANY MATERIAL
FACT, OR FAILS TO CORRECT ANY INFORMATION PREVIOUSLY FURNISHED INCORRECTLY TO
THE COMPANY OR THE PLAN ADMINISTRATOR, OR IF THE PLAN ADMINISTRATOR MAKES AN
ERROR IN DETERMINING THE AMOUNT PAYABLE TO AN EMPLOYEE, PARTICIPANT, INACTIVE
PARTICIPANT, OR BENEFICIARY, THE COMPANY OR THE PLAN ADMINISTRATOR MAY CORRECT
ITS ERROR AND ADJUST ANY PAYMENT ON THE BASIS OF CORRECT FACTS.  THE AMOUNT OF
ANY OVERPAYMENT MAY BE DEDUCTED FROM OR ADDED TO THE NEXT SUCCEEDING PAYMENTS,
OR THE PLAN ADMINISTRATOR MAY MAKE A REQUEST FOR REIMBURSEMENT FROM THE
EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT OR BENEFICIARY AS DIRECTED BY THE
PLAN ADMINISTRATOR.  THE PLAN ADMINISTRATOR AND THE COMPANY RESERVE THE RIGHT TO
MAINTAIN ANY ACTION, SUIT, OR PROCEEDING TO RECOVER ANY AMOUNTS IMPROPERLY OR
INCORRECTLY PAID TO ANY PERSON UNDER THE PLAN OR IN SETTLEMENT OF A CLAIM OR
SATISFACTION OF A JUDGMENT INVOLVING THE PLAN.

 

16.6.       MISSING PERSONS.  IN THE EVENT A DISTRIBUTION OF A PART OR ALL OF AN
ACCOUNT IS REQUIRED TO BE MADE FROM THE PLAN TO AN EMPLOYEE, PARTICIPANT,
INACTIVE PARTICIPANT, OR BENEFICIARY, AND SUCH PERSON CANNOT BE LOCATED, THE
RELEVANT PORTION OF THE ACCOUNT SHALL REMAIN SUBJECT TO THE PLAN AND, IF TREATED
AS A FORFEITURE, SHALL BE USED TO DEFRAY THE COMPANY’S CONTRIBUTION OBLIGATION
UNDER THIS PLAN.  IF THE AFFECTED EMPLOYEE, PARTICIPANT, INACTIVE PARTICIPANT,
OR BENEFICIARY LATER CONTACTS THE COMPANY, HIS OR HER PORTION OF THE ACCOUNT
SHALL BE REINSTATED AND DISTRIBUTED AS SOON AS ADMINISTRATIVELY FEASIBLE.  PRIOR
TO FORFEITING ANY ACCOUNT, THE COMPANY SHALL ATTEMPT TO CONTACT THE EMPLOYEE,
PARTICIPANT, INACTIVE PARTICIPANT, OR

 

12

--------------------------------------------------------------------------------

 

BENEFICIARY BY RETURN RECEIPT MAIL (OR OTHER CARRIER) AT HIS OR HER LAST KNOWN
ADDRESS ACCORDING TO THE COMPANY’S RECORDS AND, WHERE PRACTICAL, BY
LETTER-FORWARDING SERVICES OFFERED THROUGH THE INTERNAL REVENUE SERVICE, OR THE
SOCIAL SECURITY ADMINISTRATION, OR SUCH OTHER MEANS AS THE PLAN ADMINISTRATOR
DEEMS APPROPRIATE.

 

IN WITNESS WHEREOF, the designated officer has executed this document on the
date set forth adjacent to his or her signature below.

 

 

First Financial Bank

 

 

Dated:

January 22, 2003

 

By:

/s/ Albert S. Randa

 

 

 

 

Title:

Chief Financial Officer

 

 

13

--------------------------------------------------------------------------------