Exhibit 10.24

EMPLOYEE STOCK OWNERSHIP PLAN

OF

PEOPLE’S UNITED FINANCIAL, INC.

Effective as of January 1, 2007

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TABLE OF CONTENTS

 

        Page Article I Definitions Section 1.1   Account   1 Section 1.2  
Affiliated Employer   1 Section 1.3   Allocation Compensation   1 Section 1.4  
Bank   2 Section 1.5   Beneficiary   2 Section 1.6   Board   2 Section 1.7  
Change in Control   2 Section 1.8   Code   2 Section 1.9   Committee   2 Section
1.10   Company   2 Section 1.11   Compensation Committee   2 Section 1.12  
Designated Beneficiary   2 Section 1.13   Disability   2 Section 1.14  
Discretionary Contribution   3 Section 1.15   Eligibility Computation Period   3
Section 1.16   Effective Date   3 Section 1.17   Eligible Employee   3 Section
1.18   Eligible Participant   3 Section 1.19   Employee   3 Section 1.20  
Employment Commencement Date   3 Section 1.21   ERISA   3 Section 1.22  
Exchange Act   4 Section 1.23   Fair Market Value   4 Section 1.24   Financed
Share   4 Section 1.25   Five Percent Owner   4 Section 1.26   Forfeitures   4
Section 1.27   Former Participant   4 Section 1.28   415 Compensation   5
Section 1.29   General Investment Account   5 Section 1.30   Highly Compensated
Employee   5 Section 1.31   Hour of Service   5 Section 1.32   Investment
Account   6 Section 1.33   Investment Fund   6 Section 1.34   Loan Repayment
Account   6 Section 1.35   Loan Repayment Contribution   6 Section 1.36  
Maternity or Paternity Leave   6 Section 1.37   Named Fiduciary   6 Section 1.38
  Officer   7

 

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Section 1.39   One Year Break in Service   7 Section 1.40   Participant   8
Section 1.41   Participating Employer   8 Section 1.42   Plan   8 Section 1.43  
Plan Administrator   8 Section 1.44   Plan Year   8 Section 1.45   Qualified
Participant   8 Section 1.46   Retirement   8 Section 1.47   Retroactive
Contribution   8 Section 1.48   Share   8 Section 1.49   Share Acquisition Loan
  8 Section 1.50   Share Investment Account   8 Section 1.51   Tender Offer   8
Section 1.52   Total Compensation   9 Section 1.53   Trust   9 Section 1.54  
Trust Agreement   9 Section 1.55   Trust Fund   9 Section 1.56   Trustee   9
Section 1.57   Valuation Date   9 Section 1.58   Vesting Computation Period   9
Section 1.59   Year of Eligibility Service   9 Section 1.60   Year of Vesting
Service   9 Article II Participation Section 2.1   Eligibility for
Participation.   9 Section 2.2   Commencement of Participation.   10 Section 2.3
  Termination of Participation.   10 Article III Credited Service Section 3.1  
Computation of Credited Service   10 Section 3.2   Service to Acquired Entities.
  11 Section 3.3   Breaks in Service.   11 Section 3.4   Transfer to or From
Employment Within the United States.   12 Article IV Contributions by
Participants Not Permitted Section 4.1   Contributions by Participants Not
Permitted.   12

 

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Article V Contributions by Participating Employers Section 5.1   In General.  
12 Section 5.2   Loan Repayment Contributions.   12 Section 5.3   Discretionary
Contributions.   13 Section 5.4   Retroactive Contributions.   13 Section 5.5  
Time and Manner of Payment.   14 Article VI Share Acquisition Loans Section 6.1
  In General.   14 Section 6.2   Collateral; Liability for Repayment.   14
Section 6.3   Loan Repayment Account.   15 Section 6.4   Release of Financed
Shares.   16 Section 6.5   Restrictions on Financed Shares.   16 Article VII
Allocation of Contributions Section 7.1   Allocation Among Eligible
Participants.   17 Section 7.2   Allocation of Released Shares or Other
Property.   17 Section 7.3   Allocation of Discretionary Contributions.   17
Article VIII Limitations on Allocations Section 8.1   Optional Limitations on
Allocations.   17 Section 8.2   General Limitations on Contributions.   18
Article IX Vesting Section 9.1   Vesting.   20 Section 9.2   Vesting on Death,
Disability, Retirement or Change in Control.   20 Section 9.3   Forfeitures on
Termination of Employment.   20 Section 9.4   Amounts Credited Upon
Re-Employment.   20 Section 9.5   Allocation of Forfeitures.   21

 

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Article X The Trust Fund Section 10.1   The Trust Fund.   21 Section 10.2  
Investments.   21 Section 10.3   Distributions for Diversification of
Investments.   22 Section 10.4   Cost of Administering Plan.   23 Section 10.5  
Use of Commingled Trust Funds.   23 Section 10.6   Management and Control of
Assets.   23 Article XI Valuation of Interests in the Trust Fund Section 11.1  
Establishment of Investment Accounts.   24 Section 11.2   Share Investment
Accounts.   24 Section 11.3   General Investment Accounts.   24 Section 11.4  
Valuation of Investment Accounts.   24 Section 11.5   Annual Statements.   25
Article XII Shares Section 12.1   Specific Allocation of Shares.   25 Section
12.2   Dividends.   25 Section 12.3   Voting Rights.   25 Section 12.4   Tender
Offers.   27 Article XIII Distribution Of Participant Accounts Section 13.1  
Distribution Date.   29 Section 13.2   Method of Distribution.   30 Section 13.3
  Minimum Distributions; 401(a)(9) Compliance.   31 Section 13.4   Vested
Interest Held in Fund.   32 Section 13.5   Distribution of Benefits Upon Death
Prior Benefit Payment.   32 Section 13.6   Manner of Payment.   33 Section 13.7
  Direct Rollovers.   33 Section 13.8   Designation of Beneficiary:   34 Section
13.9   Valuation of Shares Upon Distribution.   35 Section 13.10   Put Options.
  35 Section 13.11   Right of First Refusal.   36

 

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Article XIV Change in Control Section 14.1   Definition of Change in Control;
Pending Change in Control.   37 Section 14.2   Vesting on Change in Control.  
38 Section 14.3   Repayment of Share Acquisition Loan.   38 Section 14.4   Plan
Termination After Change in Control.   38 Section 14.5   Amendment of Section
XIV.   38 Article XV Fiduciary Responsibility Section 15.1   Designation of
Named Fiduciaries.   39 Section 15.2   Allocation of Duties.   39 Section 15.3  
Fiduciary Standards.   40 Section 15.4   Employer as a Fiduciary.   41
Section 15.5   Plan Administrator.   41 Section 15.6   Compensation Committee.  
41 Section 15.7   Delegation of Fiduciary Duties.   42 Section 15.8   No Bond
Except as Required by ERISA.   42 Section 15.9   Limitation of Article XVI.   42
Article XVI Administrative Committee Section 16.1   Appointment and Tenure.   42
Section 16.2   Notification of Trustee.   43 Section 16.3   Action by Committee.
  43 Section 16.4   Documents.   43 Section 16.5   Powers of Committee.   43
Section 16.6   Benefits Payable Under the Plan.   44 Section 16.7   Construction
of the Plan.   44 Section 16.8   Engagement of Assistants and Advisors.   44
Section 16.9   Indemnification of the Committee.   44 Section 16.10  
Designation of Forms by Committee.   45 Section 16.11   Acknowledgment of
Benefits.   45 Section 16.12   Delegation by Committee.   45 Section 16.13  
Information Furnished by Affiliated Employer.   46

 

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Article XVII Amendment, Termination and Tax Qualification Section 17.1   Right
to Amend.   46 Section 17.2   Procedure to Amend.   47 Section 17.3   No
Obligation or Liability.   47 Section 17.4   Continuation of Trust.   47
Section 17.5   Effect of Termination.   47 Section 17.6   Conformity to Internal
Revenue Code.   48 Section 17.7   Contingent Nature of Contributions.   48
Article XVIII Special Rules for Top Heavy Plan Years Section 18.1   In General.
  49 Section 18.2   Definition of Top Heavy Plan.   49 Section 18.3  
Determination Date.   49 Section 18.4   Cumulative Accrued Benefits.   50
Section 18.5   Key Employees.   50 Section 18.6   Required Aggregation Group.  
51 Section 18.7   Permissible Aggregation Group.   51 Section 18.8   Special
Requirements During Top Heavy Plan Years.   52 Article XIX Participating
Employers Section 19.1   Adoption by Affiliated Employer.   52 Section 19.2  
Contributions by Participating Employers.   52 Section 19.3   All Rights
Exercisable by Company.   52 Section 19.4   Amendment by Participating
Employers.   52 Article XX Miscellaneous Provisions Section 20.1   No Employment
Contract.   53 Section 20.2   Non-Alienation of Benefits, QDROs.   53
Section 20.3   Mergers and Consolidations of Company   54 Section 20.4  
Governing Law   54 Section 20.5   Participants Limited to Assets of Fund   54
Section 20.6   Severability of Provisions   54 Section 20.7   Mergers and
Consolidations of Plans   54 Section 20.8   Status as an Employee Stock
Ownership Plan.   55 Section 20.9   Claims Procedure   55

 

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Section 20.10   Agent For Legal Process   57 Section 20.11   Insurance Company  
57 Section 20.12   Dates   57 Section 20.13   Incapacity of Distributee   57
Section 20.14   Limitation Year   58 Section 20.15   Recapture of Erroneous
Payments   58 Section 20.16   Benefits Payable Pursuant to Qualified Domestic
Relations Orders   58 Section 20.17   USERRA   58 Section 20.18   Construction
of Language.   58 Section 20.19   Headings.   59

 

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EMPLOYEE STOCK OWNERSHIP PLAN

OF

PEOPLE’S UNITED FINANCIAL, INC.

Article I

Definitions

The following definitions shall apply for the purposes of the Plan, unless a
different meaning is clearly indicated by the context:

Section 1.1 Account means an account established for each Participant to which
is allocated such Participant’s share, if any, of all Financed Shares and other
property that are released from the Loan Repayment Account in accordance with
Section 6.4, together with his share, if any, of any Discretionary Contributions
that may be made by a Participating Employer.

Section 1.2 Affiliated Employer means the Company; any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b) of
the Code) that includes the Company; any trade or business (whether or not
incorporated) that is under common control (as defined in Section 414(c) of the
Code) with the Company; any organization (whether or not incorporated) that is a
member of an affiliated service group (as defined in Section 414(m) of the Code)
that includes the Company; and any other entity that is required to be
aggregated with the Company pursuant to regulations under Section 414(o) of the
Code.

Section 1.3 Allocation Compensation with respect to any Participant for a Plan
Year means the sum of (i) and (ii) where (i) is the total amount of salary,
wages or compensation paid to such Participant by any Participating Employer
during such Plan Year including overtime pay, commissions, and bonuses, but
excluding any equity based compensation, and earnings thereon, incentive
payments with an accrual or vesting period longer than one year (and such
exclusion shall apply to the year of deferral and year of payment), and
furthermore excluding any fees, credits or benefits under this Plan, the
People’s Bank 401(k) Employee Savings Plan, the People’s Bank Employees’
Retirement Plan and any other plan of deferred compensation to which the Bank
may contribute or credit benefits (whether or not qualified under the Code),
severance pay, payments for reimbursement of business expenses incurred by such
Participant, tuition reimbursement, insurance premiums paid by any Participating
Employer, or other special emoluments; and (ii) to the extent of salary
reductions agreed to by such Participant pursuant to salary reduction
agreements, the total amount contributed or credited by any Participating
Employer to the People’s Bank 401(k) Employee Savings Plan, any other defined
contribution plan of deferred compensation or a plan which meets the
requirements of Section 125 of the Code. The amount of Allocation Compensation
with respect to any Participant shall include Allocation Compensation for the
entire twelve (12) month period ending on the last day of such Plan Year, except
that Allocation

 

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Compensation shall only be recognized for that portion of the Plan Year during
which an Employee was a Participant in the Plan. In no event, however, shall an
Employee’s Allocation Compensation for any calendar year include any
compensation in excess of $225,000, or any such other amount as may be
prescribed in accordance with regulations prescribed under Section 401(a)(17) of
the Code. If there are less than twelve (12) months in the Plan Year, the
$225,000 limitation (as adjusted) shall be prorated by multiplying such
limitation by a fraction, the numerator of which is the number of months in the
Plan Year and the denominator of which is twelve (12).”

Section 1.4 Bank means People’s Bank, a federally chartered savings bank, and
any successor thereto, including the entity which is expected to become a wholly
owned subsidiary of the Company upon the Company’s initial public issuance of
stock.

Section 1.5 Beneficiary means the person or persons designated by a Participant
or Former Participant or other person entitled to a benefit under the Plan, or
otherwise determined to be entitled to a benefit under the Plan. If more than
one person is designated, each shall have an equal share unless the person
making the designation directed otherwise. The word “person” includes an
individual, a trust, an estate or any other person that is permitted to be named
as a Beneficiary.

Section 1.6 Board means the Board of Directors of People’s United Financial,
Inc.

Section 1.7 Change in Control means an event described in Section 14.1.

Section 1.8 Code means the Internal Revenue Code of 1986 (including the
corresponding provisions of any succeeding law).

Section 1.9 Committee means the Administrative Committee described in Article
XVI.

Section 1.10 Company means People’s United Financial, Inc., a Delaware
corporation, and any successor thereto.

Section 1.11 Compensation Committee shall mean the Compensation and Nominating
Committee of the Board or such committee of the Board or of the Board of
Directors of an Affiliated Employer which may be established hereafter and to
which the Board may assign the authority, power and duties of the Compensation
Committee with respect to the Plan.

Section 1.12 Designated Beneficiary means the person designated by a Participant
or Former Participant as a Beneficiary under Section 13.8.

Section 1.13 Disability means any total disability or ill health which has
resulted in a Participant becoming permanently incapacitated provided that such
disability or ill health is established by medical evidence satisfactory to the
Committee, and in order to establish such permanent incapacity and total
disability or ill health, the Committee may designate a physician of its choice
whose conclusion shall be conclusive upon all persons concerned.

 

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Section 1.14 Discretionary Contribution means Shares or amounts of money
contributed to the Plan by the Participating Employers in accordance with
Section 5.3.

Section 1.15 Eligibility Computation Period means, with respect to any person,
(a) the 12-consecutive month period beginning on such person’s Employment
Commencement Date and (b) each Plan Year after such beginning date.

Section 1.16 Effective Date means January 1, 2007.

Section 1.17 Eligible Employee means an Employee who is eligible for membership
in the Plan in accordance with Article II.

Section 1.18 Eligible Participant means, for any Plan Year, an Employee who is a
Participant during all or any part of such Plan Year and either remains a
Participant on the last day of such Plan Year or terminated participation during
such Plan Year on account of termination of employment due to death, Disability
or Retirement; provided, however, that no Employee shall be an Eligible
Participant for the Plan Year that includes the effective date of the
transaction pursuant to which the Bank becomes a wholly owned subsidiary of the
Company if he terminates employment for any reason with all Participating
Employers prior to such effective date.

Section 1.19 Employee shall mean any person employed as an employee by the
Affiliated Employer and paid directly by the Affiliated Employer provided,
however, that any Employee hired on a temporary basis may not be considered an
Employee until the earlier of (a) the date he becomes a permanent employee or
(b) he completes 1000 Hours of Service within twelve months of his date of hire
or any Plan Year commencing after his date of hire. The term “Employee” shall
not include any independent contractor, any leased employee as defined in
Section 414(n) of the Code, or any person paid by one other than the Affiliated
Employer who is loaned to the Affiliated Employer, who furnishes services to the
Affiliated Employer regardless of any arrangement the Affiliated Employer may
have to reimburse or pay the payor of such person for such person’s
compensation, or any person initially hired by the Affiliated Employer to work
outside the United States who is not regularly employed by the Affiliated
Employer as a common law employee within the United States. For purposes of this
Section, an “Employee hired on a temporary basis” shall mean an Employee hired
by the Affiliated Employer to work for a season or other limited period of time.

Section 1.20 Employment Commencement Date means the date on which a person first
performs an Hour of Service, except that if an Employee separates from service
with an Affiliated Employer, incurs a One-Year Break in Service and subsequently
returns to or enters service with an Affiliated Employer, his Employment
Commencement Date shall be the date on which he first performs an Hour of
Service following the One-Year Break in Service.

Section 1.21 ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time (including the corresponding provisions of any
succeeding law).

 

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Section 1.22 Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time (including the corresponding provisions of any succeeding
law).

Section 1.23 Fair Market Value on any date means:

(a) with respect to a Share:

(i) the final quoted sale price on the date in question (or, if there is no
reported sale on such date, on the last preceding date on which any reported
sale occurred) of a Share as reported in the principal consolidated reporting
system with respect to securities listed or admitted to trading on the principal
United States securities exchange on which like Shares are listed or admitted to
trading; or

(ii) if like Shares are not listed or admitted to trading on any such exchange,
the closing bid quotation with respect to a Share on such date on the National
Association of Securities Dealers Automated Quotation System, or, if no such
quotation is provided, on another similar system, selected by the Committee,
then in use; or

(iii) if Sections 1.23(a)(i) and (ii) are not applicable, the fair market value
of a Share as determined by an appraiser independent of any Affiliated Employer
and experienced and expert in the field of corporate appraisal.

(b) with respect to other securities listed or quoted on recognized exchanges or
securities markets, such securities shall be valued at their closing sales
prices on the Valuation Date.

(c) with respect to property other than Shares and securities described in
(b) of this Section, the fair market value determined in the manner selected by
the Trustee.

Section 1.24 Financed Share means: (a) a Share that has been purchased with the
proceeds of a Share Acquisition Loan, that has been allocated to the Loan
Repayment Account in accordance with Section 6.3 and that has not been released
in accordance with Section 6.4; or (b) a Share that constitutes a dividend paid
with respect to a Share described in Section 1.24(a), that has been allocated to
the Loan Repayment Account in accordance with Section 6.3 and that has not been
released in accordance with Section 6.4.

Section 1.25 Five Percent Owner means, for any Plan Year, a person who, during
such Plan Year, owned (or was considered as owning for purposes of Section 318
of the Code): (a) more than 5% of the value of all classes of outstanding stock
of any Affiliated Employer; or (b) stock possessing more than 5% of the combined
voting power of all classes of outstanding stock of any Affiliated Employer.

Section 1.26 Forfeitures means the amounts forfeited by Participants and Former
Participants on termination of employment prior to full vesting, pursuant to
Section 9.3, less amounts credited because of re-employment, pursuant to
Section 9.4.

Section 1.27 Former Participant means a Participant whose participation in the
Plan has terminated pursuant to Section 2.3.

 

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Section 1.28 415 Compensation with respect to any Participant means such
Participant’s wages as defined in Code Section 3401(a) and all other payments of
compensation by any Affiliated Employer (in the course of such Employer’s trade
or business) for a Plan Year for which such Affiliated Employer is required to
furnish the Participant a written statement under Code Sections 6041(d),
6051(a)(3) and 6052. “415 Compensation” must be determined (i) without regard to
any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Code
Section 3401(a)(2)) and (ii) by also including amounts which are contributed by
a Participating Employer pursuant to a salary reduction agreement and are not
includable in the gross income of the Participant under Section 125, 132(f)(4),
402(e)(3), 402(h), or 457 of the Code.

Section 1.29 General Investment Account means an Investment Account established
and maintained in accordance with Article XI.

Section 1.30 Highly Compensated Employee means, for any Plan Year, an Employee
who:

(i) was a Five Percent Owner at any time during such Plan Year or the preceding
Plan Year; or

(ii) received Total Compensation during the immediately preceding Plan Year
(A) in excess of $100,000 (adjusted at the same time and in the same manner as
under Section 415(d) of the Code, except that the base period shall be the
calendar quarter ending September 30, 1996); and (B) if elected by the Plan
Administrator in such form and manner as the Secretary of the Treasury may
prescribe, in excess of the Total Compensation received for such preceding Plan
Year by at least 80% of the Employees.

The determination of who is a Highly Compensated Employee will be made in
accordance with Section 414(q) of the Code and the regulations thereunder. The
Company has not elected to use the top 20% election mentioned in subparagraph
(ii)(B) of this Section.

Section 1.31 Hour of Service shall mean and include:

(a) Each hour for which an Employee is directly or indirectly paid or entitled
to payment by an Affiliated Employer for the performance of duties. These hours
shall be credited to the Employee for the computation period or periods in which
the duties are performed; and

(b) Each hour for which an Employee is directly or indirectly paid or entitled
to payment by an Affiliated Employer for reasons (such as vacation, sickness or
disability, but not including payments made or due under a plan maintained
solely for complying with applicable workmen’s compensation or unemployment
compensation or disability insurance laws) other than for the performance of
duties. These hours shall be credited to the Employee for the computation period
or periods to which the payment pertains rather than the computation period or
periods in which payment is made or becomes due; and

 

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(c) Each hour not otherwise credited for which back pay, irrespective of
mitigation of damage, has been either awarded or agreed to by an Affiliated
Employer. These hours shall be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment was made, but no
more than five hundred one (501) hours shall be credited to the extent such back
pay is agreed to or awarded for a period of time during which such Employee did
not or would not have performed duties for the Affiliated Employer.

(d) In determining the number of Hours of Service for any period for which
Salary is paid but for which no work has been performed by the Employee, the
number of Hours of Service shall be computed by (a) dividing the payment made to
an hourly paid (or other non-salaried) Employee by his most recent basic hourly
rate (or if not hourly paid, his average hourly rate of compensation during his
last pay period) or (b) by dividing the payment to a salaried Employee by a rate
obtained by dividing his last preceding regular weekly, bi-weekly or monthly
salary by the number of hours (exclusive of overtime) generally worked by such
Employee during a period of such duration.

(e) Hours of Service shall, except for those described in Subsection (c) of this
Section, be based on the records of the Affiliated Employer.

(f) The foregoing provisions shall be administered in accordance with Department
of Labor regulations 2530.200b-2 which are incorporated herein by reference.

Section 1.32 Investment Account means either a General Investment Account or a
Share Investment Account.

Section 1.33 Investment Fund means any one of the three or more funds as may be
established from time to time by the Committee which, together with any and all
Shares and other investments held under the Plan, constitute part of the Trust
Fund.

Section 1.34 Loan Repayment Account means an account established and maintained
in accordance with Section 6.3.

Section 1.35 Loan Repayment Contribution means amounts of money contributed to
the Plan by the Participating Employers in accordance with Section 5.2.

Section 1.36 Maternity or Paternity Leave means a person’s absence from work for
all Affiliated Employers: (a) by reason of the pregnancy of such person; (b) by
reason of the birth of a child of such person; (c) by reason of the placement of
a child with the person in connection with the adoption of such child by such
person; or (d) for purposes of caring for a child of such person immediately
following the birth of the child or the placement of the child with such person.

Section 1.37 Named Fiduciary means any person, committee, corporation or
organization described in Section 15.1.

 

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Section 1.38 Officer means an Employee who is an administrative executive in
regular and continued service with any Affiliated Employer; provided, however,
that at no time shall more than the lesser of (a) 50 Employees or (b) the
greater of (i) 3 Employees or (ii) 10% of all Employees be treated as Officers.
The determination of whether an Employee is to be considered an Officer shall be
made in accordance with Section 416(i) of the Code.

Section 1.39 One Year Break in Service shall have the following meanings when
used in the Plan:

(a) When applied to determine eligibility to become a Participant, a “One Year
Break in Service” means the applicable computation period set forth in
Section 2.1 or 3.3 during which an Employee does not receive credit for more
than five hundred (500) Hours of Service.

(b) When applied to determine vesting and benefit accrual, a “One Year Break in
Service” means any consecutive twelve (12) month period during which a
Participant does not render one (1) Hour of Service, commencing from the earlier
of the date the Employee resigns, quits, is discharged or retires or twelve
(12) months after the date the period described in clause (a), (b) or (c) of
Section 3.1 commenced, subject to the terms of Section 3.1 with respect to any
Participant who reaches his 65th birthday or becomes subject to a Disability
during an approved absence. Whenever the number of One Year Breaks in Service in
a period is computed for purposes of this paragraph (b), such number shall be
determined by a fraction which takes into account each day which elapses during
the period on which the initial One Year Break in Service of such period
commenced to the date of rehire.

(c) Solely for purposes of determining whether a One Year Break in Service has
occurred, Hours of Service shall be credited for the period of a Maternity or
Paternity Leave. For purposes of determining eligibility, Hours of Service shall
be credited for the computation period in which the absence from work begins,
only if credit therefor is necessary to prevent the Employee from incurring a
One Year Break in Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a Maternity or Paternity
Leave for eligibility purposes shall be those which would normally have been
credited but for such absence, or, in any case in which the Hours of Service
normally credited cannot be determined, eight (8) Hours of Service per day and
shall not exceed 501. For vesting and benefit accrual purposes a One Year Break
in Service shall not include the first twenty-four (24) consecutive months of a
Maternity or Paternity Leave, but any period of a Maternity or Paternity Leave
in excess of the first twenty-four (24) consecutive months with respect to any
child (or children of the same multiple birth) shall be included in a One Year
Break in Service if, but for this sentence, it would be so included. The terms
of this paragraph (c) shall not be construed to require that an absence from
work for maternity or paternity reasons be included in computing the number of
an Employee’s Years of Eligibility Service, Years of Vesting Service or
determining that the Participant is in service at the end of a Plan Year or be
credited for any other purpose under this Plan other than determining whether a
One Year Break in Service has occurred. The Plan Administrator may, in its
discretion reasonably require an Employee to furnish timely information to
establish that an absence from work is a maternity or paternity absence and the
number of days for which there was such an absence. No credit shall be given
pursuant to this Subsection to any Employee who fails to provide such
information after having been requested to do so.

 

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Section 1.40 Participant means any person who has satisfied the eligibility
requirements set forth in Section 2.1, who has become a Participant in
accordance with Section 2.2, and whose participation has not terminated under
Section 2.3.

Section 1.41 Participating Employer means the Company, and any successor thereto
and any other Affiliated Employer which, with the prior written approval of the
Board and subject to such terms and conditions as may be imposed by the Board,
shall adopt this Plan.

Section 1.42 Plan means the Employee Stock Ownership Plan of People’s United
Financial, Inc., as amended from time to time.

Section 1.43 Plan Administrator means the Bank or any person, committee,
corporation or organization designated in Section 15.5, or appointed pursuant to
Section 15.5, to perform the responsibilities of that office.

Section 1.44 Plan Year means the period commencing on January 1, 2007 and ending
on December 31, 2007 and each calendar year ending on each December 31st
thereafter.

Section 1.45 Qualified Participant means a Participant who has attained age 55
and who has been a Participant of the Plan for at least 10 years.

Section 1.46 Retirement means any termination of employment with all Affiliated
Employers at or after the attainment of age 65.

Section 1.47 Retroactive Contribution means a contribution made on a retroactive
basis in accordance with Section 5.4.

Section 1.48 Share means a share of any class of stock issued by any Affiliated
Employer; provided, however, that such share is a “qualifying employer security”
within the meaning of Section 409(l) of the Code and Section 407(d)(5) of ERISA.

Section 1.49 Share Acquisition Loan means a loan obtained by the Trustee in
accordance with Article VI.

Section 1.50 Share Investment Account means an Investment Account established
and maintained in accordance with Article XI.

Section 1.51 Tender Offer means a tender offer made to holders of any one or
more classes of Shares generally, or any other offer made to holders of any one
or more classes of Shares generally to purchase, exchange, redeem or otherwise
transfer Shares, whether for cash or other consideration whether or not such
offer constitutes a “tender offer” or an “exchange offer” for purposes of the
Exchange Act.

 

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Section 1.52 Total Compensation during any period means an Employee’s 415
Compensation paid by any Affiliated Employer with respect to such period. In no
event, however, shall an Employee’s Total Compensation for any calendar year
include any compensation in excess of $225,000 (or such other amount as may be
permitted under Section 401(a)(17) of the Code).

Section 1.53 Trust means the trust created pursuant to the Trust Agreement.

Section 1.54 Trust Agreement means the agreement between the Company and the
Trustee therein named or its successors pursuant to which the Trust Fund shall
be held in trust.

Section 1.55 Trust Fund means the corpus (consisting of contributions paid over
to the Trustee and investments thereof), and all earnings, appreciation or
additions thereof and thereto, held by the Trustee under the Trust Agreement in
accordance with the Plan, less any depreciation thereof and any payments made
therefrom pursuant to the Plan.

Section 1.56 Trustee means the Trustee of the Trust Fund from time to time in
office. The Trustee shall serve as Trustee until it is removed or resigns from
office and is replaced by a successor Trustee appointed in accordance with the
terms of the Trust Agreement.

Section 1.57 Valuation Date means the last business day of each Plan Year and
such other dates as the Plan Administrator may prescribe.

Section 1.58 Vesting Computation Period means, with respect to any person, the
Plan Year including periods prior to the Effective Date of the Plan.

Section 1.59 Year of Eligibility Service means an Eligibility Computation Period
during which the Employee completed at least 1,000 Hours of Service.

Section 1.60 Year of Vesting Service means an elapsed twelve (12) month period
beginning with the date on which a Participant first became or becomes an
Employee (or if later attains age 18) or, after a One Year Break in Service
first again becomes an Employee (or if later attains age 18) during all of which
he receives Credited Service as computed and defined in accordance with the
provisions of Article III hereof. The number of Years of Service shall be
determined by a fraction which gives credit for each day which elapses during
the period from such date of hire or anniversary thereof to the date of
reference.

Article II

Participation

Section 2.1 Eligibility for Participation.

(a) Only Eligible Employees may be or become Participants. An Employee shall be
an Eligible Employee if he (i) is employed by one or more Participating
Employers; (ii) has attained age 18; (iii) has completed at least one Year of
Eligibility Service; and (iv) is not excluded under Section 2.1(b).

 

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(b) An Employee is not an Eligible Employee if he:

(i) does not receive Allocation Compensation from at least one Participating
Employer; or

(ii) is an Employee who has waived any claim to participation in the Plan.

Section 2.2 Commencement of Participation.

Every Employee who is an Eligible Employee on the effective date of the
transaction whereby the Bank becomes a wholly owned subsidiary of the Company
shall automatically become a Participant as of the Effective Date, or if later
as of the first date which is the first day of a month on which he is an
Employee and has attained age 18. An Employee who becomes an Eligible Employee
after the Effective Date shall automatically become a Participant on the first
day of the month coincident with or next following the Eligibility Computation
Period in which he becomes an Eligible Employee.

Section 2.3 Termination of Participation.

Participation in the Plan shall cease, and a Participant shall become a Former
Participant, after termination of his Credited Service when he is entitled to no
benefits hereunder or all such benefits have been distributed.

Article III

Credited Service

Section 3.1 Computation of Credited Service.

An Employee’s Credited Service shall terminate upon his death, disability,
retirement or termination of service with all Affiliated Employers for any
reason. The following types of absences shall not be deemed to terminate an
Employee’s Credited Service and the periods elapsed during such absences shall
be included in computing the length of an Employee’s Credited Service:

(a) Leave of absence granted by an Affiliated Employer for sickness, injury,
disability, government, civic or charitable service or any other specific
reason, for not more than two (2) years.

(b) Absence for military service under leave of absence granted by the
Affiliated Employer or when required by law, provided he returns to service as
an Employee with the Affiliated Employer within ninety (90) days of his release
from active military duty or any longer period during which his right to
re-employment is protected by law.

(c) Lay off not in excess of two (2) years until employment is terminated either
by the Employee or the Affiliated Employer.

 

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In no event shall the powers of any Affiliated Employer pursuant to Subsections
(a), (b) or (c) of this Section 3.1 be exercised so as to discriminate in favor
of Employees who are Highly Compensated. Any Participant who has an absence
described in this Section 3.1 and who does not return to active employment with
the Bank at the end of the period described in clause (a), (b) or (c), as the
case may be, shall be credited with Credited Service and Years of Eligibility
Service and Years of Vesting Service solely on the basis of service being
recognized for such purposes only to the earlier of (A) the date such person
attains age 65, dies, resigns, quits or is discharged, or (B) twelve (12) months
after the date that such period commenced. For purposes of determining whether a
Participant has a One Year Break in Service, such Participant shall be deemed to
have rendered one (1) Hour of Service on the date described in (A) or (B) of the
preceding sentence, whichever is earlier.

Section 3.2 Service to Acquired Entities.

The Compensation Committee, the Executive Committee of the Board or the Board
may determine to extend for eligibility and/or vesting purposes Credited
Service, for specified service or all service to any other party to acquisition
for any period or periods designated by either such committee or the Board upon
such conditions as such committee or the Board may establish. For purposes of
this Section 3.2, the term “party to acquisition” means any entity (i) from
which any Affiliated Employer acquires assets in the form of ongoing operations
and related assets, or (ii) stock or other equity interests of which is acquired
by any Affiliated Employer, or (iii) which merges with or is a party to a
consolidation to which, any Affiliated Employer is a party. Service to other
corporations or entities for which credit for eligibility purposes under any
pension or profit sharing plan maintained by a party to acquisition may if so
determined by either such Committee or the Board be treated as service to such
party to acquisition.

Section 3.3 Breaks in Service.

For purposes of determining a person’s Years of Eligibility Service and Years of
Vesting Service, (combined “Years of Service”) or any other benefit or right
under the Plan, following a One Year Break in Service, service prior to such One
Year Break in Service shall be taken into account subject to the following
limitations:

(i) In the case of an Employee who is vested in his Account or an Employee who
is not vested in his Account, but whose number of consecutive One Year Breaks in
Service is less than the greater of five (5) or the number of his Years of
Service prior to a One Year Break in Service, Years of Service completed before
the One Year Break in Service shall be restored upon reemployment.

(ii) In the case of any Employee who is not vested in his Account on the date of
his termination of employment, his Years of Service prior to such date shall be
disregarded in computing his Years of Service after his return if the number of
consecutive One Year Breaks in Service equals or exceed the greater of five
(5) or his Years of Service prior to such Break in Service.

 

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(iii) In no event shall there be taken into the computation of Years of Service
after a One Year Break in Service years of service which were previously
disregarded on account of an earlier One Year Break in Service under the terms
of this Section 3.3.

Section 3.4 Transfer to or From Employment Within the United States.

Any person initially hired by the Affiliated Employer to work outside the United
States who becomes an Employee shall become a Participant in accordance with the
terms of Section 2.1(a) applied by giving credit for eligibility purposes for
service to any Affiliated Employer outside the United States. The service of
such Participant for the Bank as an employee outside of the United States shall
be included in computing such Participant’s Years of Service for vesting
purposes to the same extent it would be if such service had been rendered as an
Employee. In any event, the period of any such Participant’s employment outside
the United States shall be excluded for all purposes of his entitlement to have
any contributions made on his behalf or credited to him under this Plan.

Article IV

Contributions by Participants Not Permitted

Section 4.1 Contributions by Participants Not Permitted.

Participants shall not be required, nor shall they be permitted, to make
contributions to the Plan.

Article V

Contributions by Participating Employers

Section 5.1 In General.

Subject to the limitations of Article VIII, for each Plan Year, the
Participating Employers shall contribute to the Plan the amount, if any,
determined by the Board, but in no event less than the amount described in
Section 5.2(a). The amount contributed for any Plan Year shall be treated as a
Loan Repayment Contribution, a Discretionary Contribution, or a combination
thereof, in accordance with the provisions of this Article V.

Section 5.2 Loan Repayment Contributions.

For each Plan Year, a portion of the Participating Employers’ contributions, if
any, to the Plan equal to the sum of:

(a) the minimum amount required to be added to the Loan Repayment Account in
order to provide adequate funds for the payment of the principal and interest
then required to be repaid under the terms of any outstanding Share Acquisition
Loan obtained by the Trustee; plus

 

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(b) the additional amount, if any, designated by the Committee to be applied to
the prepayment of principal or interest under the terms of any outstanding Share
Acquisition Loan obtained by the Trustee;

shall be treated as a Loan Repayment Contribution for such Plan Year. A Loan
Repayment Contribution for a Plan Year shall be allocated to the Loan Repayment
Account and shall be applied by the Trustee, in the manner directed by the
Board, to the payment of accrued interest and to the reduction of the principal
balance of any Share Acquisition Loan obtained by the Trustee that is
outstanding on the date on which the Loan Repayment Contribution is made. To the
extent that a Loan Repayment Contribution for a Plan Year results in a release
of Financed Shares in accordance with Section 6.4, such Shares shall be
allocated among the Accounts of Eligible Participants for such Plan Year in
accordance with Section 7.2.

Section 5.3 Discretionary Contributions.

In the event that the amount of the Participating Employers’ contributions to
the Plan for a Plan Year exceeds the amount of the Loan Repayment Contributions
for such Plan Year, such excess shall be treated as a Discretionary Contribution
and shall be allocated among the Accounts of the Eligible Participants for such
Plan Year in accordance with Section 7.3.

Section 5.4 Retroactive Contributions.

A Participating Employer shall make a Retroactive Contribution in respect of any
individual previously employed by it who is re-employed by any Affiliated
Employer following the completion of a period of Qualified Military Service.
Such Retroactive Contribution shall be made in the following manner for each
Plan Year that includes any part of the period of Qualified Military Service:

(a) An allocation percentage shall be computed by dividing (i) the sum of the
Fair Market Value of all Financed Shares allocated to Eligible Participants for
such Plan Year plus the dollar amount of all Discretionary Contributions made in
cash for such Plan Year plus the Fair Market Value of all Discretionary
Contributions made in Shares for such Plan Year, divided by (ii) the aggregate
amount of Allocation Compensation used in the allocation for such Plan Year.
Fair Market Value for such purposes shall be determined as of the last day of
the Plan Year.

(b) A notional allocation shall be determined by multiplying (A) the percentage
determined under Section 5.4(a) by (B) the Allocation Compensation which the
individual would have had for such Plan Year if he had remained in the service
of his Participating Employer in the same capacity and earning Allocation
Compensation and Total Compensation at the annual rates in effect immediately
prior to the commencement of the Qualified Military Leave (or, if such rates are
not reasonably certain, at an annual rate equal to the actual Allocation
Compensation and Total Compensation, respectively, paid to him for the 12-month
period immediately preceding the Qualified Military Service).

(c) An actual Retroactive Contribution for the Plan Year shall be determined by
computing the excess of (A) the notional allocation determined under
Section 5.4(b) over (B) the sum of the dollar amount of any Discretionary
Contribution in cash, the Fair Market Value of any Discretionary Contribution in
Shares and the Fair Market Value of any Financed Shares actually allocated to
such individual for such Plan Year.

 

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Section 5.5 Time and Manner of Payment.

(a) Payment of contributions made pursuant to this Article V shall be made:
(i) in cash, in the case of a Loan Repayment Contribution; and (ii) in cash, in
Shares, or in a combination of cash and Shares, in the case of a Discretionary
Contribution or a Retroactive Contribution.

(b) Contributions made pursuant to this Article V for a Plan Year shall be
allocated to the Accounts of the Eligible Participants in the case of a
Discretionary Contribution, to the Account of the Participant for whom it is
made in the case of a Retroactive Contribution, and to the Loan Repayment
Account in the case of a Loan Repayment Contribution, as soon as is practicable
following the payment thereof to the Trust Fund. Contributions for any Plan Year
shall be made at any time during such Plan Year or the next subsequent Plan
Year.

Article VI

Share Acquisition Loans

Section 6.1 In General.

The Board may direct the Trustee to obtain a Share Acquisition Loan on behalf of
the Plan, the proceeds of which shall be applied on the earliest practicable
date:

(a) to purchase Shares; or

(b) to make payments of principal or interest, or a combination of principal and
interest, with respect to such Share Acquisition Loan; or

(c) to make payments of principal and interest, or a combination of principal
and interest, with respect to a previously obtained Share Acquisition Loan that
is then outstanding.

Any such Share Acquisition Loan shall be obtained on such terms and conditions
as the Compensation Committee may approve; provided, however, that such terms
and conditions shall provide for the payment of interest at no more than a
reasonable rate and shall permit such Share Acquisition Loan to satisfy the
requirements of Section 4975(d)(3) of the Code and Section 408(b)(3) of ERISA.

Section 6.2 Collateral; Liability for Repayment.

(a) The Board may direct the Trustee to pledge, at the time a Share Acquisition
Loan is obtained, the following assets of the Plan as collateral for such Share
Acquisition Loan:

(i) any Shares purchased with the proceeds of such Share Acquisition Loan and
any earnings attributable thereto;

 

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(ii) any Financed Shares then pledged as collateral for a prior Share
Acquisition Loan which is repaid with the proceeds of such Share Acquisition
Loan and any earnings attributable thereto; and

(iii) pending the application thereof to purchase Shares or repay a prior Share
Acquisition Loan, the proceeds of such Share Acquisition Loan and any earnings
attributable thereto.

Except as specifically provided in this Section 6.2(a), no assets of the Plan
shall be pledged as collateral for the repayment of any Share Acquisition Loan.

(b) No person entitled to payment under a Share Acquisition Loan shall have any
right to the assets of the Plan except for:

(i) Financed Shares that have been pledged as collateral for such Share
Acquisition Loan pursuant to Section 6.2(a);

(ii) Loan Repayment Contributions made pursuant to Section 5.2; and

(iii) earnings attributable to Financed Shares described in Section 6.2(b)(i)
and to Loan Repayment Contributions described in Section 6.2(b)(ii).

Except in the event of a default or a refinancing pursuant to which an existing
Share Acquisition Loan is repaid or as provided in Section 14.3, the aggregate
amount of all payments of principal and interest made by the Trustee with
respect to all Share Acquisition Loans obtained on behalf of the Plan shall at
no time exceed the aggregate amount of all Loan Repayment Contributions
theretofore made plus the aggregate amount of all earnings (other than dividends
paid in the form of Shares) attributable to Financed Shares and to such Loan
Repayment Contributions.

(c) Any Share Acquisition Loan shall be without recourse against the Plan and
Trust.

Section 6.3 Loan Repayment Account.

In the event that one or more Share Acquisition Loans shall be obtained, a Loan
Repayment Account shall be established under the Plan. The Loan Repayment
Account shall be credited with all Shares acquired with the proceeds of a Share
Acquisition Loan, all Loan Repayment Contributions and all earnings (including
dividends paid in the form of Shares) or appreciation attributable to such
Shares and Loan Repayment Contributions. The Loan Repayment Account shall be
charged with all payments of principal and interest made by the Trustee with
respect to any Share Acquisition Loan, all Shares released in accordance with
Section 6.4 and all losses, depreciation or expenses attributable to Shares or
to other property credited thereto. The Financed Shares, as well as any earnings
thereon, shall be allocated to such Loan Repayment Account and shall be
accounted for separately from all other amounts or property contributed under
the Plan.

 

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Section 6.4 Release of Financed Shares.

As of the last day of each Plan Year during which a Share Acquisition Loan is
outstanding, a portion of the Financed Shares purchased with the proceeds of
such Share Acquisition Loan and allocated to the Loan Repayment Account shall be
released. The number of Financed Shares released in any such Plan Year shall be
equal to the amount determined according to one of the following methods:

(a) by computing the product of: (i) the number of Financed Shares purchased
with the proceeds of such Share Acquisition Loan and allocated to the Loan
Repayment Account immediately before the release is effected; multiplied by
(ii) a fraction, the numerator of which is the aggregate amount of the principal
and interest payments (other than payments made upon the refinancing of a Share
Acquisition Loan as contemplated by Section 6.1(c)) made with respect to such
Share Acquisition Loan during such Plan Year, and the denominator of which is
the aggregate amount of all principal and interest remaining to be paid with
respect to such Share Acquisition Loan as of the first day of such Plan Year; or

(b) by computing the product of: (i) the number of Financed Shares purchased
with the proceeds of such Share Acquisition Loan and allocated to the Loan
Repayment Account immediately before the release is effected; multiplied by
(ii) a fraction, the numerator of which is the aggregate amount of the principal
payments (other than payments made upon the refinancing of a Share Acquisition
Loan as contemplated by Section 6.1(c)) made with respect to such Share
Acquisition Loan during such Plan Year, and the denominator of which is the
aggregate amount of all principal remaining to be paid with respect to such
Share Acquisition Loan as of the first day of such Plan Year; provided, however,
that the method described in this Section 6.4(b) may be used only if the Share
Acquisition Loan does not extend for a period in excess of 10 years after the
date of origination and only to the extent that principal payments on such Share
Acquisition Loan are made at least as rapidly as under a loan of like principal
amount with a like interest rate and term requiring level amortization of
principal and interest.

The method to be used shall be specified in the documents governing the Share
Acquisition Loan or, if not specified therein, prescribed by the Compensation
Committee, in its discretion. In the event that property other than, or in
addition to, Financed Shares shall be held in the Loan Repayment Account and
pledged as collateral for a Share Acquisition Loan, then the property to be
released pursuant to this Section 6.4 shall be property having a Fair Market
Value determined by applying the method to be used to the Fair Market Value of
all property pledged as collateral for such Share Acquisition Loan; provided,
however, that no property other than Financed Shares shall be released pursuant
to this Section 6.4 unless all Financed Shares have previously been released.

Section 6.5 Restrictions on Financed Shares.

Except to the extent required under any applicable law, rule or regulation, no
Shares purchased with the proceeds of a Share Acquisition Loan shall be subject
to a put, call or other option, or to any buy-sell or similar arrangement, while
held by the Trustee or when distributed from the Plan. The provisions of this
Section 6.5 shall continue to apply in the event that this Plan shall cease to
be an employee stock ownership plan, within the meaning of Section 4975(e)(7) of
the Code.

 

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Article VII

Allocation of Contributions

Section 7.1 Allocation Among Eligible Participants.

Subject to the limitations of Article VIII, Discretionary Contributions for a
Plan Year made in accordance with Section 5.3 and Financed Shares and other
property that are released from the Loan Repayment Account for a Plan Year in
accordance with Section 6.4 shall be allocated among the Eligible Participants
for such Plan Year, in the manner provided in this Article VII.

Section 7.2 Allocation of Released Shares or Other Property.

Subject to the limitations of Article VIII, in the event that Financed Shares or
other property are released from the Loan Repayment Account for a Plan Year in
accordance with Section 6.4, such released Shares or other property shall be
allocated among the Accounts of the Eligible Participants for the Plan Year in
the proportion that each such Eligible Participant’s Allocation Compensation for
the portion of such Plan Year during which he was a Participant bears to the
aggregate of such Allocation Compensation of all Eligible Participants for such
Plan Year.

Section 7.3 Allocation of Discretionary Contributions.

Subject to the limitations of Article VIII, in the event that the Participating
Employers make Discretionary Contributions for a Plan Year, such Discretionary
Contributions shall be allocated among the Accounts of the Eligible Participants
for such Plan Year in the proportion that each such Eligible Participant’s
Allocation Compensation for the portion of such Plan Year during which he was a
Participant bears to the aggregate of such Allocation Compensation of all
Eligible Participants for such Plan Year.

Article VIII

Limitations on Allocations

Section 8.1 Optional Limitations on Allocations.

If, for any Plan Year, the application of Sections 7.2 and 7.3 would result in
more than one-third of the number of Shares or of the amount of money or
property to be allocated thereunder being allocated to the Accounts of Eligible
Participants for such Plan Year who are also Highly Compensated Employees for
such Plan Year, then the Compensation Committee may, but shall not be required
to, direct that this Section 8.1 shall apply in lieu of Sections 7.2 and 7.3. If
the Compensation Committee gives such a direction, then the Compensation
Committee shall impose a maximum dollar limitation on the amount of Allocation
Compensation that may be taken into account for each Eligible Participant. The
dollar limitation which shall be

 

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imposed shall be the limitation which produces the result that the aggregate
Allocation Compensation taken into account for Eligible Participant who are
Highly Compensated Employees, constitutes exactly one-third of the aggregate
Allocation Compensation taken into account for all Eligible Participants.

Section 8.2 General Limitations on Contributions.

(a) No amount shall be allocated to a Participant’s Account under this Plan for
any Limitation Year to the extent that such an allocation would result in an
Annual Addition of an amount greater than the lesser of (i) $45,000 (or such
other amount as is permissible under Section 415(c)(1)(A) of the Code), or
(ii) 100% of the Participant’s Total Compensation for such Limitation Year.

(b) For purposes of this Section 8.2, the following special definitions shall
apply:

(i) Annual Addition means the sum of the following amounts allocated on behalf
of a Participant for a Limitation Year:

(A) all contributions by the Employer (including contributions made under a
salary reduction agreement pursuant to Sections 401(k), 408(k) or 403(b) of the
Code) under any qualified defined contribution plan or simplified employee
pension (other than this Plan) maintained by the Employer, as well as the
Participant’s allocable share, if any, of any forfeitures under such plans as
well as amounts allocated to an individual medical benefit account, as defined
in Section 415(l)(2) of the Code, which is part of a pension or annuity plan
maintained by the Employer; plus

(B) the sum of all of the nondeductible voluntary contributions under any other
qualified defined contribution plan (whether or not terminated) maintained by
the Employer; plus

(C) all Discretionary Contributions under this Plan; plus

(D) except as hereinafter provided in this Section 8.2(b)(i), a portion of the
Employer’s Loan Repayment Contributions to the Plan for such Limitation Year
which bears the same proportion to the total amount of the Employer’s Loan
Repayment Contributions for the Limitation Year that the number of Shares (or
the Fair Market Value of property other than Shares) allocated to the
Participant’s Account pursuant to Section 7.2 or 8.1, whichever is applicable,
bears to the aggregate number of Shares (or Fair Market Value of property other
than Shares) so allocated to all Participants for such Limitation Year.

Notwithstanding Section 8.2(b)(i)(D), if, for any Limitation Year, the aggregate
amount of Discretionary Contributions allocated to the Accounts of the
individuals who are Highly Compensated Employees for such Limitation Year, when
added to such Highly Compensated Employees’ allocable share of any Loan
Repayment Contributions for such Limitation Year, does not exceed one-third of
the total of all Discretionary Contributions and Loan Repayment Contributions
for

 

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such Limitation Year, then that portion, if any, of the Loan Repayment
Contributions for such Limitation Year that is applied to the payment of
interest on a Share Acquisition Loan shall not be included as an Annual
Addition. In no event shall any Financed Shares, any dividends or other earnings
thereon, any proceeds of the sale thereof or any portion of the value of the
foregoing be included as an Annual Addition. No catch-up elective deferrals
under Section 414(v) of the Code shall be included as an Annual Addition.

(ii) Employer means the Company, and all members of a controlled group of
corporations, as defined in Section 414(b) of the Code, as modified by
Section 415(h) of the Code, all commonly controlled trades or businesses, as
defined in Section 414(c) of the Code, as modified by Section 415(h) of the
Code, all affiliated service groups, as defined in Section 414(m) of the Code,
of which the Company is a member that employs any person who is considered an
employee under Section 20.7 and any other entity that is required to be
aggregated with the Employer pursuant to regulations under Section 414(o) of the
Code.

(iii) Limitation Year means the Plan Year.

(c) When an individual’s Annual Addition to this Plan must be reduced to satisfy
the limitations of Section 8.2(a), such reduction shall be applied to
Discretionary Contributions and to Shares allocated as a result of a Loan
Repayment Contribution which are included as an Annual Addition in such order as
shall result in the smallest reduction in the number of Shares allocable to the
Individual’s Account. The amount by which any individual’s Annual Addition to
this Plan is reduced shall be allocated in accordance with Articles V and VII as
a contribution by the Participating Employers in the next succeeding Limitation
Year.

(d) Prior to determining an individual’s actual Total Compensation for a
Limitation Year, the Participating Employer may determine the limitations under
this Section 8.2 for an individual on the basis of a reasonable estimation of
the individual’s Total Compensation for the Limitation Year that is uniformly
determined for all individuals who are similarly situated. As soon as it is
administratively feasible after the end of the Limitation Year, the limitations
of this Section 8.2 shall be determined on the basis of the individual’s actual
Total Compensation for the Limitation Year.

 

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Article IX

Vesting

Section 9.1 Vesting.

Subject to the provisions of Sections 9.2 and 14.2, the balance credited to each
Participant’s Account shall become vested in accordance with the following
schedule:

 

    

Complete Years of Vesting Service

 

Vested Percentage

     

less than 2 years

  0%    

2 years

  25%    

3 years

  50%    

4 years

  75%    

5 or more years

  100%  

Section 9.2 Vesting on Death, Disability, Retirement or Change in Control.

Any previously unvested portion of the remainder of the balance credited to the
Account of a Participant or of a person who is a Former Participant solely
because he is excluded from membership under Section 2.1(b) shall become fully
vested immediately upon his Retirement, or, if earlier, upon the termination of
his employment with all Affiliated Employers by reason of death, Disability or
upon the occurrence of a Change in Control.

Section 9.3 Forfeitures on Termination of Employment.

Upon the termination of employment of a Participant or Former Participant for
any reason other than death, Disability or Retirement, that portion of the
balance credited to his Account which is not vested at the date of such
termination shall be forfeited upon the earliest of (a) full distribution of the
vested portion of the Account or (b)completion of five consecutive One Year
Breaks in Service following the date of such termination of employment. The
proceeds of such forfeited amounts, reduced by any amounts required to be
credited because of re-employment pursuant to Section 9.4, shall be treated as
Forfeitures and shall be disposed of as provided in Section 9.5. If no portion
of the balance credited to an Account of a Participant or Former Participant is
vested as of the date of his termination of employment, a distribution of $0,
representing full distribution of the Account, shall be deemed to have been made
to the Participant or Former Participant on such date.

Section 9.4 Amounts Credited Upon Re-Employment.

If an Employee forfeited any amount of the balance credited to his Account upon
his termination of employment, and is re-employed by any Affiliated Employer
prior to the occurrence of five consecutive One-Year Breaks in Service, then:

(i) an amount equal to the Fair Market Value of the Shares forfeited, determined
as of the date of Forfeiture; and

 

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(ii) the amount credited to his General Investment Account that was forfeited,
determined as of the date of Forfeiture;

shall be credited back to his Account; provided however, that the Employee
repays the amount distributed to him from his Account as a result of such
termination no later than the fifth anniversary of his re-employment or the date
he incurs five consecutive One Year Breaks in Service after such distribution,
whichever is earlier. Such amounts to be re-credited shall be obtained from the
proceeds of the forfeited amounts redeemed pursuant to Section 9.3 during the
Plan Year in which the repayment is made, unless such proceeds are insufficient,
in which case the Employee’s Employer shall make an additional contribution in
the amount of such deficiency. For purposes of this Section 9.4, a Participant
or Former Participant who received a distribution of $0, shall be deemed to have
made repayment on the date of re-employment with an Employer.

Section 9.5 Allocation of Forfeitures.

Any Forfeitures that occur during a Plan Year shall be used to reduce the
contributions required of the Participating Employers under the Plan in the next
Plan Year and shall be treated as Loan Repayment Contributions and Discretionary
Contributions in the proportions designated by the Committee in accordance with
Article V.

Article X

The Trust Fund

Section 10.1 The Trust Fund.

The Trust Fund shall be held and invested under the Trust Agreement with the
Trustee. The provisions of the Trust Agreement shall vest such powers in the
Trustee as to investment, control and disbursement of the Trust Fund, and such
other provisions not inconsistent with the Plan, including provision for the
appointment of one or more “investment managers” within the meaning of
Section 3(38) of ERISA to manage and control (including acquiring and disposing
of) all or any of the assets of the Trust Fund, as the Compensation Committee
may from time to time authorize.

Section 10.2 Investments.

Except to the extent provided to the contrary in Section 10.3, the Trust Fund
shall be invested in:

(i) Shares;

(ii) such Investment Funds as may be established from time to time by the
Compensation Committee; and

 

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(iii) such other investments as may be permitted under the Trust Agreement;

in such proportions as shall be determined by the Compensation Committee or, if
so provided under the Trust Agreement, as directed by one or more investment
managers or by the Trustee, in its discretion; provided, however, that the
investments of the Trust Fund shall consist primarily of Shares. Notwithstanding
the immediately preceding sentence, the Trustee may temporarily invest the Trust
Fund in short-term obligations of, or guaranteed by, the United States
Government or an agency thereof, or may retain uninvested, or sell investments
to provide, amounts of cash required for purposes of the Plan.

Section 10.3 Distributions for Diversification of Investments.

(a) Notwithstanding Section 10.2, each Qualified Participant may:

(i) during the first 90 days of each of the first five Plan Years to begin after
the Plan Year in which he first becomes a Qualified Participant, elect that such
percentage of the balance credited to his Account as he may specify, but in no
event may he during such five Plan Years withdraw more than 25% of the balance
credited to his Account, be either distributed to him pursuant to this
Section 10.3(a)(i) or transferred to the 401(k) Plan maintained by the Bank to
the extent permitted by such plan, no later than 90 days after the last day that
such election may be made; and

(ii) during the first 90 days of the sixth Plan Year to begin after the Plan
Year in which he first becomes a Qualified Participant, elect that such
percentage of the balance credited to his Account as he may specify, but in no
event more than 50% of the balance credited to his Account, be either
distributed to him pursuant to this Section 10.3(a)(ii) or transferred to the
401(k) Plan maintained by the Bank to the extent permitted by such plan, no
later than 90 days after the last day that such election may be made.

For purposes of an election under this Section 10.3, the balance credited to a
Participant’s Account shall be the balance credited to his Account determined as
of the last Valuation Date to occur in the Plan Year immediately preceding the
Plan Year in which such election is made and the 25% and 50% limitations shall
apply to the balance obtained by adding the sum of all amounts withdrawn by such
Participant pursuant to the provisions of this Section 10.3 to the balance after
it has been reduced by the amount of all amounts distributed or transferred to
the 401(k) Plan maintained by the Bank under this Section 10.3.

(b) An election made under Section 10.3(a) shall be made in writing, in the form
and manner prescribed by the Plan Administrator, and shall be filed with the
Plan Administrator during the election period specified in Section 10.3(a). As
soon as is practicable, and in no case later than 90 days following the end of
the election period during which such election is made, the Plan Administrator
shall take such actions as are necessary to cause the specified percentage of
the balance credited to the Account of the Qualified Participant making the
election to be distributed to such Qualified Participant.

(c) An election made under Section 10.3(a) may be changed or revoked at any time
during the election period described in Section 10.3(a) during which it is
initially made. In

 

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no event, however, shall any election under this Section 10.3 result in more
than 25% of the balance credited to the Participant’s Account being distributed
to the Participant or transferred to the 401(k) Plan maintained by the Bank, if
such election is made during a Plan Year to which Section 10.3(a)(i) applies, or
result in more than 50% of the balance distributed to the Participant or
transferred to the 401(k) Plan maintained by the Bank, if such election is made
during the Plan Year to which Section 10.3(a)(ii) applies or thereafter.

Section 10.4 Cost of Administering Plan.

To the extent not paid by any Participating Employer, all costs of administering
the Plan and all Trustee’s fees will be paid by the Trust from the General
Investment Account and if not sufficient from the Share Investment Account.

Section 10.5 Use of Commingled Trust Funds.

Subject to the provisions of the Trust Agreement, amounts held in the Trust Fund
may be invested in:

(a) any commingled or group trust fund described in Section 401(a) of the Code
and exempt under Section 501(a) of the Code; or

(b) any common trust fund exempt under Section 584 of the Code maintained
exclusively for the collective investment of the assets of trusts that are
exempt under Section 501(a) of the Code; provided that the trustee of such
commingled, group or common trust fund is a bank or trust company.

Section 10.6 Management and Control of Assets.

All assets of the Plan shall be held by the Trustee in trust for the exclusive
benefit of Participants, Former Participants and their Beneficiaries. No part of
the corpus or income of the Trust Fund shall be used for, or diverted to,
purposes other than for the exclusive benefit of Participants, Former
Participants and their Beneficiaries, and for defraying reasonable
administrative expenses of the Plan and Trust Fund. No person shall have any
interest in or right to any part of the earnings of the Trust Fund, or any
rights in, to or under the Trust Fund or any part of its assets, except to the
extent expressly provided in the Plan.

 

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Article XI

Valuation of Interests in the Trust Fund

Section 11.1 Establishment of Investment Accounts.

The Plan Administrator shall establish, or cause to be established, for each
person for whom an Account is maintained a Share Investment Account and a
General Investment Account. Such Share Investment Accounts and General
Investment Accounts shall be maintained in accordance with this Article XI.

Section 11.2 Share Investment Accounts.

The Share Investment Account established for a person in accordance with
Section 11.1 shall be credited with: (a) all Shares allocated to such person’s
Account; (b) all Shares purchased with amounts of money or property allocated to
such person’s Account; (c) all dividends paid in the form of Shares with respect
to Shares credited to his Account; and (d) all Shares purchased with amounts
credited to such person’s General Investment Account. Such Share Investment
Account shall be charged with all Shares that are sold or exchanged to acquire
other investments or to provide cash and with all Shares that are distributed in
kind.

Section 11.3 General Investment Accounts.

The General Investment Account that is established for a person in accordance
with Section 11.1 shall be credited with: (a) all amounts, other than Shares,
allocated to such person’s Account; (b) all dividends paid in a form other than
Shares with respect to Shares credited to such person’s Share Investment
Account; (c) the proceeds of any sale of Shares credited to such person’s Share
Investment Account; and (d) any earnings attributable to amounts credited to
such person’s General Investment Account. Such General Investment Account shall
be charged with all amounts credited thereto that are applied to the purchase of
Shares, any losses or depreciation attributable to amounts credited thereto, any
expenses allocable thereto and any distributions of amounts credited thereto.

Section 11.4 Valuation of Investment Accounts.

(a) The Plan Administrator shall determine, or cause to be determined, the
aggregate value of each person’s Share Investment Account as of each Valuation
Date by multiplying the number of Shares credited to such Share Investment
Account on such Valuation Date by the Fair Market Value of a Share on such
Valuation Date.

(b) As of each Valuation Date, the Accounts of each Participant shall be
separately adjusted to reflect their proportionate share of any appreciation or
depreciation in the fair market value of the General Investment Account, any
income earned by the General Investment Account and any expenses incurred by the
General Investment Account, as well as any contributions, withdrawals or
distributions and investment transfers not posted as of the last Valuation Date.

 

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Section 11.5 Annual Statements.

There shall be furnished, by mail or otherwise, at least once in each Plan Year
to each person who would then be entitled to receive all or part of the balance
credited to any Account if the Plan were then terminated, a statement of his
interest in the Plan as of such date as shall be selected by the Plan
Administrator, which statement shall be deemed to have been accepted as correct
and be binding on such person unless the Plan Administrator receives written
notice to the contrary within 30 days after the statement is mailed or furnished
to such person.

Article XII

Shares

Section 12.1 Specific Allocation of Shares.

All Shares purchased under the Plan shall be specifically allocated to the Share
Investment Accounts of Participants, Former Participants and their Beneficiaries
in accordance with Section 11.2, with the exception of Financed Shares, which
shall be allocated to the Loan Repayment Account.

Section 12.2 Dividends.

(a) Dividends paid with respect to Shares held under the Plan shall be credited
to the Loan Repayment Account, if paid with respect to Financed Shares. Such
dividends shall be: (i) applied to the payment of principal and accrued interest
with respect to any Share Acquisition Loan, if paid in cash; or (ii) held in the
Loan Repayment Account as Financed Shares for release in accordance with
Section 6.4, if paid in the form of Shares.

(b) Dividends paid with respect to Shares allocated to a person’s Share
Investment Account shall be credited to such person’s Share Investment Account.
Cash dividends credited to a person’s General Investment Account shall be, at
the direction of the Committee, either: (i) held in such General Investment
Account and invested in accordance with Sections 10.2 and 11.3; (ii) distributed
immediately to such person; (iii) distributed to such person within 90 days of
the close of the Plan Year in which such dividends were paid; (iv) used to make
payments of principal or interest on a Share Acquisition Loan; provided,
however, that the Fair Market Value of Financed Shares released from the Loan
Repayment Account as a result of such payment equals or exceeds the amount of
the dividend; or (v) either held as provided in Section 12.2(b)(i) or
distributed as provided in Section 12.2(b)(ii), as each person shall elect for
his own Account.

Section 12.3 Voting Rights.

(a) Each person shall direct the manner in which all voting rights appurtenant
to Shares allocated to his Share Investment Account will be exercised, provided
that such Shares were allocated to his Share Investment Account as of the
applicable record date. Such person shall, for such purpose, be deemed a “named
fiduciary” within the meaning of Section 402(a)(2) of ERISA. Such a direction
shall be given by completing and filing with the inspector of elections, the
Trustee or such other person who shall be independent of the Participating

 

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Employers as the Committee shall designate, at least 10 days prior to the date
of the meeting of holders of Shares at which such voting rights will be
exercised, a written direction in the form and manner prescribed by the
Committee. The inspector of elections, the Trustee or such other person
designated by the Committee shall tabulate the directions given on a strictly
confidential basis, and shall provide the Committee with only the final results
of the tabulation. The final results of the tabulation shall be followed by the
Committee in directing the Trustee as to the manner in which such voting rights
shall be exercised. The Plan Administrator shall make a reasonable effort to
furnish, or cause to be furnished, to each person for whom a Share Investment
Account is maintained all annual reports, proxy materials and other information
known by the Plan Administrator to have been furnished by the issuer of the
Shares, or by any solicitor of proxies, to the holders of Shares.

(b) To the extent that any person shall fail to give instructions with respect
to the exercise of voting rights appurtenant to Shares allocated to his Share
Investment Account:

(i) the Trustee shall, with respect to each matter to be voted upon: (A) cast a
number of affirmative votes equal to the product of (I) the number of allocated
Shares for which no written instructions have been given, multiplied by (II) a
fraction, the numerator of which is the number of allocated Shares for which
affirmative votes will be cast in accordance with written instructions given as
provided in Section 12.3(a) and the denominator of which is the aggregate number
of affirmative and negative votes which will be cast in accordance with written
instructions given as aforesaid, and (B) cast a number of negative votes equal
to the excess (if any) of (I) the number of allocated Shares for which no
written instructions have been given over (II) the number of affirmative votes
being cast with respect to such allocated Shares pursuant to
Section 12.3(b)(i)(A); or

(ii) if the Trustee shall determine that it may not, consistent with its
fiduciary duties, vote the allocated Shares for which no written instructions
have been given in the manner described in Section 12.3(b)(i), it shall vote
such Shares in such manner as it, in its discretion, may determine to be in the
best interests of the persons to whose Share Investment Accounts such Shares
have been allocated.

(c)    (i) The voting rights appurtenant to Financed Shares shall be exercised
as follows with respect to each matter as to which holders of Shares may vote:

(A) a number of votes equal to the product of (I) the total number of votes
appurtenant to Financed Shares allocated to the Loan Repayment Account on the
applicable record date; multiplied by (II) a fraction, the numerator of which is
the total number of affirmative votes cast by Participants, Former Participants
and the Beneficiaries of deceased Former Participants with respect to such
matter pursuant to Section 12.3(a) and the denominator of which is the total
number of affirmative and negative votes cast by Participants, Former
Participants and the Beneficiaries of deceased Former Participants, shall be
cast in the affirmative; and

 

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(B) a number of votes equal to the excess of (I) the total number of votes
appurtenant to Financed Shares allocated to the Loan Repayment Account on the
applicable record date, over (II) the number of affirmative votes cast pursuant
to Section 12.3(c)(i)(A) shall be cast in the negative.

To the extent that the Financed Shares consist of more than one class of Shares,
this Section 12.3(c)(i) shall be applied separately with respect to each class
of Shares.

(ii) If voting rights are to be exercised with respect to Financed Shares as
provided in Section 12.3(c)(i)(A) and (B) at a time when there are no Shares
allocated to the Share Investment Accounts of Participants, Former Participants
and the Beneficiaries of deceased Former Participants, then the voting rights
appurtenant to Financed Shares shall be exercised as follows with respect to
each matter as to which holders of Shares may vote:

(A) Each person who is a Participant on the applicable record date will be
granted a number of votes equal to the quotient, rounded to the nearest integral
number, of (I) such Participant’s Allocation Compensation for the Plan Year
ending on or immediately prior to such record date (or for the portion of such
Plan Year during which he was a Participant); divided by (II) $1,000.00; and

(B) a number of votes equal to the product of (I) the total number of Financed
Shares allocated to the Loan Repayment Account on the applicable record date;
multiplied by (II) a fraction, the numerator of which is the total number of
votes that are cast in the affirmative with respect to such matter pursuant to
Section 12.3(c)(ii)(A) and the denominator of which is the total number of votes
that are cast either in the affirmative or in the negative with respect to such
matter pursuant to Section 12.3(c)(ii)(A), shall be cast in the affirmative; and

(C) a number of votes equal to the excess of (I) the total number of Financed
Shares allocated to the Loan Repayment Account on the applicable record date,
over (II) the number of affirmative votes cast with respect to such matter
pursuant to Section 12.3(c)(ii)(B), shall be cast in the negative.

To the extent that the Financed Shares consist of more than one class of Shares,
this Section 12.3(c)(ii) shall be applied separately with respect to each class
of Shares.

Section 12.4 Tender Offers.

(a) Each person shall direct whether Shares allocated to his Share Investment
Account will be delivered in response to any Tender Offer. Such person shall,
for such purpose, be deemed a “named fiduciary” within the meaning of
Section 402(a)(2) of ERISA. Such a direction shall be given by completing and
filing with the Trustee or such other person who shall be independent of the
Participating Employers as the Committee shall designate, at least 10 days prior
to the latest date for exercising a right to deliver Shares pursuant to such
Tender Offer, a written direction in the form and manner prescribed by the
Committee. The Trustee or other person designated by the Committee shall
tabulate the directions given on a strictly confidential basis, and shall
provide the Committee with only the final results of the tabulation. The final

 

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results of the tabulation shall be followed by the Committee in directing the
number of Shares to be delivered. The Plan Administrator shall make a reasonable
effort to furnish, or cause to be furnished, to each person for whom a Share
Investment Account is maintained, all information known by the Plan
Administrator to have been furnished by the issuer or by or on behalf of any
person making such Tender Offer, to the holders of Shares in connection with
such Tender Offer.

(b) To the extent that any person shall fail to give instructions with respect
to Shares allocated to his Share Investment Account:

(i) the Trustee shall (A) tender or otherwise offer for purchase, exchange or
redemption a number of such Shares equal to the product of (I) the number of
allocated Shares for which no written instructions have been given, multiplied
by (II) a fraction, the numerator of which is the number of allocated Shares
tendered or otherwise offered for purchase, exchange or redemption in accordance
with written instructions given as provided in Section 12.4(a) and the
denominator of which is the aggregate number of allocated Shares for which
written instructions have been given as aforesaid, and (B) withhold a number of
Shares equal to the excess (if any) of (I) the number of allocated Shares for
which no written instructions have been given over (II) the number of Shares
being tendered or otherwise offered pursuant to Section 12.4(b)(i)(A); or

(ii) if the Trustee shall determine that it may not, consistent with its
fiduciary duties, exercise the tender or other rights appurtenant to allocated
Shares for which no written instructions have been given in the manner described
in Section 12.4(b)(i), it shall tender, or otherwise offer, or withhold such
Shares in such manner as it, in its discretion, may determine to be in the best
interests of the persons to whose Share Investment Accounts such Shares have
been allocated.

(c) In the case of any Tender Offer, any Financed Shares held in the Loan
Repayment Account shall be dealt with as follows:

(i) If such Tender Offer occurs at a time when there are no Shares allocated to
the Share Investment Accounts of Participants, Former Participants and the
Beneficiaries of deceased Former Participants, then the disposition of the
Financed Shares shall be determined as follows:

(A) each person who is a Participant on the applicable record date will be
granted a number of tender rights equal to the quotient, rounded to the nearest
integral number, of (I) such Participant’s Allocation Compensation for the Plan
Year ending on or immediately prior to such record date (or for the portion of
such Plan Year during which he was a Participant), divided by (II) $1,000.00;
and

(B) on the last day for delivering Shares or otherwise responding to such Tender
Offer, a number of Shares equal to the product of (I) the total number of
Financed Shares allocated to the Loan Repayment Account on the last day of the
effective period of such Tender Offer; multiplied by (II) a fraction, the
numerator of which is the total number of tender rights exercised in favor of
the delivery of Shares in response to the Tender Offer pursuant to
Section 12.4(c)(i)(A) and the denominator of

 

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which is the total number of tender rights that are exercisable in response to
the Tender Offer pursuant to Section 12.4(c)(i)(A), shall be delivered in
response to the Tender Offer; and

(C) a number of Shares equal to the excess of (I) the total number of Financed
Shares allocated to the Loan Repayment Account on the last day of the effective
period of such Tender Offer; over (II) the number of Shares to be delivered in
response to the Tender Offer pursuant to Section 12.4(c)(i)(B), shall be
withheld from delivery.

(ii) If such Tender Offer occurs at a time when the voting rights appurtenant to
such Financed Shares are to be exercised in accordance with Section 12.3(c)(i),
then:

(A) on the last day for delivering Shares or otherwise responding to such Tender
Offer, a number of Financed Shares equal to the product of (I) the total number
of Financed Shares allocated to the Loan Repayment Account on the last day of
the effective period of such Tender Offer; multiplied by (II) a fraction, the
numerator of which is the total number of Shares delivered from the Share
Investment Accounts of Participants, Former Participants and the Beneficiaries
of deceased Former Participants in response to such Tender Offer pursuant to
Section 12.4(a), and the denominator of which is the total number of Shares
allocated to the Share Investment Accounts of Participants, Former Participants
and Beneficiaries of deceased Former Participants immediately prior to the last
day for delivering Shares or otherwise responding to such Tender Offer, shall be
delivered; and

(B) a number of Financed Shares equal to the excess of (I) the total number of
Financed Shares allocated to the Loan Repayment Account on the last day for
delivering Shares or otherwise responding to such Tender Offer; over (II) the
number of Financed Shares to be delivered pursuant to Section 12.4(c)(ii)(A),
shall be withheld from delivery.

To the extent that the Financed Shares consist of more than one class of Shares,
this Section 12.4(c) shall be applied separately with respect to each class of
Shares.

Article XIII

Distribution Of Participant Accounts

Section 13.1 Distribution Date.

(a) Except as elsewhere specifically provided, no portion of the Fund shall be
distributed to any Participant, Former Participant or Beneficiary until such
Participant’s employment with all Affiliated Employers has been terminated.
Notwithstanding any provision in the Plan to the contrary, the distribution of a
Participant’s benefits shall be made in compliance with the provisions of
Section 13.3 hereof, Section 401(a)(9) of the Code and the Treasury regulations
thereunder, the provisions of which are incorporated herein by reference.

 

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(b) The benefits to which a Participant who attains age 70  1/2 is entitled
hereunder shall be distributed or commence to be distributed no later than
April 1 of the calendar year following the later of (i) the calendar year in
which the Participant attains age 70 1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this clause (ii) shall not apply in
the case of a Participant who is a five (5) percent owner at any time during the
Plan Year ending with or within the calendar year in which such owner attains
age 70 1/2. Once distributions have begun to a five (5) percent owner under this
Subsection (b), they must continue to be distributed, even if the Participant
ceases to be a five (5) percent owner in a subsequent year. The period over
which distribution is made shall not be longer than the life of the Participant
or the lives of the Participant and his designated beneficiary (or the life
expectancy of the Participant or the life expectancies of the Participant and
his designated beneficiary).

Section 13.2 Method of Distribution.

(a) In the event a Participant’s employment with all Affiliated Employers has
been terminated, distribution of his vested Accounts shall be made in one lump
sum. The time at which payment is to be made or commence to be made pursuant to
this Section 13.2 shall be designated by the Participant and is subject to the
notice requirements of Section 13.3 hereof. Under all options, unless the
Participant otherwise elects, payment shall be made not later than the sixtieth
(60 th) day after the close of the Plan Year in which the latest of the
following occurs: (i) the Participant attains age 65; (ii) the tenth anniversary
of the year in which the Participant commenced participation in the Plan; or
(iii) the Participant terminates his service with all Affiliated Employers.
Subject to the terms of Section 13.1 hereof, a Participant’s failure or delay in
electing a distribution option shall be considered an election to defer
distribution. In any event payment under any option shall not be required to
commence earlier than 30 days following termination of such Participant’s
employment with all Affiliated Employers for any reason.

(b) Notwithstanding anything in this Article XIII to the contrary, if a
Participant’s employment with all Affiliated Employers is terminated, and the
total value of his vested Account as of the most recent Valuation Date
immediately preceding his Distribution Date does not exceed $5,000, the
Committee shall cause to be distributed a single sum equal to the value of the
entire vested portion of his Account to such Participant as soon as
administratively practicable; and the non-vested portion, if any, will be
forfeited. If a Participant would have received a distribution under the
preceding sentence but for the fact that the total value of the Participant’s
vested Account exceeds $5,000 on the applicable Valuation Date and if at a later
time the value of such Account is reduced such that it is not greater than
$5,000, the Participant will receive a distribution of such Account as soon as
administratively practicable; and the non-vested portion will be treated as a
forfeiture.

(c) In the event a single sum distribution greater than $1,000 is to be made to
a Participant in accordance with the provisions of Subsection 13.2(b), and such
Participant does not elect to have such distribution paid directly to an
eligible retirement plan specified by such Participant in a direct rollover in
accordance with Section 13.7 or to receive the distribution directly in cash in
accordance with Subsection 13.2(b), then the Plan Administrator shall direct
payment of the distribution in a direct rollover to an individual retirement
plan designated by the Plan Administrator.

 

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Section 13.3 Minimum Distributions; 401(a)(9) Compliance.

Any method of distribution must comply with the requirements of this
Section 13.3.

(a) General Rules.

(i) Precedence. The requirements of this Section will take precedence over any
inconsistent provisions of the Plan.

(ii) Requirements of Treasury Regulations. All distributions required under this
Section shall be determined and made in accordance with the Treasury Regulations
under Section 401(a)(9) of the Internal Revenue Code.

(b) Time and Manner of Distribution.

(i) Required Beginning Date. The Participant’s entire interest will be
distributed to the Participant no later than the Participant’s Required
Beginning Date.

(ii) Death of Participant Before Distributions Begin. If the Participant dies
before distributions begin, the Participant’s entire interest will be
distributed no later than as follows:

(A) If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary, then distributions to the surviving spouse will be made by
December 31st of the calendar year immediately following the calendar year in
which the Participant died, or by December 31st of the calendar year in which
the Participant would have attained age 70  1/2 , if later.

(B) If the Participant’s surviving spouse is not the Participant’s sole
Designated Beneficiary, then distributions to the Designated Beneficiary will be
made by December 31st of the calendar year immediately following the calendar
year in which the Participant died.

(C) If there is no Designated Beneficiary as of September 30th of the year
following the year of the Participant’s death, the Participant’s entire interest
will be distributed by December 31st of the calendar year containing the fifth
anniversary of the Participant’s death.

(D) If the Participant’s surviving spouse is the Participant’s sole Designated
Beneficiary and the surviving spouse dies after the Participant but before
distributions to the surviving spouse begin, this Subsection 13.3(b)(ii), other
than Subsection 13.3(b)(ii)(A), will apply as if the surviving spouse were the
Participant.

(c) Definitions. As used in this Section 13.3 the following terms have the
meanings set forth in this Subsection.

 

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(i) Designated Beneficiary. The individual or non-individual who is designated
as the Beneficiary under this Article XIII of the Plan.

(ii) Required Beginning Date. The date by which distributions to the Participant
are required to begin pursuant to the applicable provisions of Section 13.1.

Section 13.4 Vested Interest Held in Fund.

Any part of the interest of a Former Participant or Beneficiary held for future
distribution shall continue to be invested in accordance with Article X as part
of the Trust Fund. The balance of such Account shall continue to fluctuate with
investment results to the same extent as they would if such Former Participant
or Beneficiary had continued to be a Participant. Distribution from such
Accounts shall be made in accordance with the provisions of this Article XIII.

Section 13.5 Distribution of Benefits Upon Death Prior to Benefit Payment.

(a) The vested Account balance of a Participant or Former Participant who dies
prior to the Distribution Date shall be paid to his surviving spouse if such
Participant or Former Participant is married, but if there is no surviving
spouse, or if the surviving spouse has consented as provided in Section 13.8,
then to the Participant’s designated Beneficiary. Such vested Account balance
shall be payable in a lump sum. Such payment shall be made or commence to be
made as soon as administratively practicable following the Beneficiary’s request
for payment, subject to the terms of Subsection (d) and (e) hereof, but shall
not be required to commence earlier than 30 days following the date of the
Participant’s death. For purposes of this Section 13.5, the term “spouse” shall
mean the spouse to whom the Participant is married on the date of his death.

(b) Such Participant or Former Participant may waive the spousal death benefit
described in this Section 13.5 at any time provided that no such waiver shall be
effective unless the spouse consents to such waiver and the spouse’s consent
satisfies the requirements of Section 13.8.

(c) In the event a Participant or Former Participant dies prior to commencing
distribution of his Account, his vested Account balance shall be paid in
accordance with Subsection (a) hereof to the Participant’s surviving spouse or
other Beneficiary in one lump-sum payment in cash or in property;

(d) Notwithstanding any provision in the Plan to the contrary, distributions
upon the death of a Participant shall be made in accordance with the following
requirements and shall otherwise comply with Section 13.3 and Section 401(a)(9)
of the Code and the regulations thereunder. If a Participant or Former
Participant dies before he has begun to receive any distributions of his
interest under the Plan or before distributions have begun pursuant to
regulations, then distribution of such person’s interest in his Accounts (or
applicable portion thereof) shall be distributed to his Beneficiaries by
December 31 of the calendar year in which the fifth anniversary of his date of
death occurs.

 

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(e) Notwithstanding the provisions of this Section 13.5, if a Participant or
Former Participant dies and the total value of such Participant’s vested
interest in his Account, does not exceed $5,000 an amount equal to the total
value of such vested interest shall be distributed to his Beneficiary or
Beneficiaries in a single sum as soon as administratively practicable. If a
Beneficiary or Beneficiaries would have received a distribution under the
preceding sentence but for the fact that the Participant’s vested account
balance exceeded $5,000 on the Participant’s date of death and if at a later
time such account balance is reduced such that it is not greater than $5,000,
the Beneficiary or Beneficiaries will receive a distribution of such account
balance as soon as administratively practicable.

Section 13.6 Manner of Payment.

Distributions made pursuant to the provisions of this Article XIII shall be
made, in accordance with the written direction of the person requesting the
payment, in whole Shares, in cash, or in a combination of cash and whole Shares.
Such written direction shall be given in such form and manner as the Plan
Administrator may prescribe. If no such direction is given, then payment shall
be made in the maximum number of whole Shares that may be acquired with the
amount of the payment, plus, if necessary, an amount of money equal to any
remaining amount of the payment that is less than the Fair Market Value of a
whole Share.

Section 13.7 Direct Rollovers.

Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee’s election under this Article XIII, a distributee may elect,
at the time and in the manner prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. The following
definitions shall apply for purposes of this Section:

(a) Eligible rollover distribution: An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee’s designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities); any other distribution which when added to the total distributions
expected to be made on behalf of the distributee for the calendar year is
reasonably expected to total less than $200.

(b) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, plans described in Sections 403(b) or
457(b) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee’s eligible rollover distribution. However, in
the case of an eligible rollover distribution to a surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.

 

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(c) Distributee: A distributee includes an Employee or former Employee. In
addition, the Employee’s or former Employee’s surviving spouse and the
Employee’s or former Employee’s spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.

(d) Direct rollover: A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.

Section 13.8 Designation of Beneficiary:

(a) Subject to the provisions of Subsection (b) of this Section, each
Participant or Former Participant may from time to time designate any person or
persons (who may be designated primarily, contingently or successively and who
may be an entity other than a natural person) as his Beneficiary or
Beneficiaries to whom his Plan benefits are paid if he dies before receipt of
all such benefits. Each Beneficiary designation shall be in a form prescribed by
the Committee and will be effective only when filed with the Committee during
the Participant’s lifetime.

If a married Participant wishes to designate a Beneficiary other than the
Participant’s spouse, the Plan Administrator shall provide the Participant with
a notice explaining that the entire vested benefits of the Participant will,
upon the Participant’s death, be distributed to the Participant’s spouse, unless
the spouse has consented, as provided in Subsection (b), to the Beneficiary
designation. Each Beneficiary designation filed with the Committee will
supersede all previously filed Beneficiary designations. The revocation of a
Beneficiary designation shall not require the consent of any designated
Beneficiary except as provided in Subsection (b) below.

(b) No Beneficiary designation by a married Participant shall be effective
unless the Participant’s spouse consents to the Beneficiary designation. The
spouse’s consent must:

(i) be in writing and acknowledge the beneficiary the Participant designated
including any class of beneficiaries or any contingent beneficiaries, which may
not be changed without spousal consent (unless the spouse expressly permits
designations by the Participant without any further spousal consent);

(ii) acknowledge that without the spouse’s consent the spouse would receive upon
the Participant’s death the Participants entire vested Account;

(iii) acknowledge that the consent cannot be revoked; and

(iv) be witnessed by a notary public.

Notwithstanding the foregoing, spousal consent to a Participant’s Beneficiary
designation shall not be required if:

(i) the spouse is designated as the sole primary beneficiary by the Participant,
or

 

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(ii) it is established to the satisfaction of the Plan Administrator that
spousal consent cannot be obtained because there is no spouse, because the
spouse cannot be located or because of such other circumstances as may be
prescribed in regulations issued by the Secretary of the Treasury.

Any consent by a spouse obtained under this provision (or establishment that
consent of a spouse may not be obtained) shall be effective only with respect to
such spouse.

(c) If any Participant or Former Participant fails to designate a Beneficiary in
the manner provided in this Section, or no Beneficiary designated by him
survives, then such Participant’s benefits shall be paid to his surviving
spouse, and if no spouse survives, then to his surviving children, including
adopted children, in equal shares, but if none survives then to his Legal
Representative. Payments may be made in any form allowable hereunder and the
Code (without loss of tax qualified status) and ERISA.

Section 13.9 Valuation of Shares Upon Distribution.

Notwithstanding any contrary provision in this Article XIII, in the event that
all or a portion of a payment of a distribution is to be made in cash, the
recipient shall only be entitled to receive the proceeds of the Shares allocated
to his Account that are sold in connection with such distribution and which are
valued as of the date of such sale.

Section 13.10 Put Options.

(a) Except as provided otherwise in this Section 13.10, each Participant or
Former Participant to whom Shares are distributed under the Plan, each
Beneficiary of a deceased Participant or Former Participant, including the
estate of a deceased Participant or Former Participant, to whom Shares are
distributed under the Plan, and each person to whom such a Participant, Former
Participant or Beneficiary gives Shares that have been distributed under the
Plan shall have the right to require the Company to purchase from him all or any
portion of such Shares. A person shall exercise such right by delivering to the
Company a written notice, in such form and manner as the Company may by written
notice to such person prescribe, setting forth the number of Shares to be
purchased by the Company, the number of the stock certificate evidencing such
person’s ownership of such Shares (if represented by certificates), and the
effective date of the purchase. Such notice shall be given at least 30 days in
advance of the effective date of purchase, and the effective date of purchase
specified therein shall be, either within the 60 day period that begins on the
date on which the Shares to be purchased by the Company were distributed from
the Plan or within the 60 day period that begins on the first day of the Plan
Year immediately following the Plan Year in which the Shares to be purchased by
the Company are distributed from the Plan. As soon as practicable following its
receipt of such a notice, the Company shall take such actions as are necessary
to purchase the Shares specified in such notice at a price per Share equal to
the Fair Market Value of a Share determined as of the Valuation Date coincident
with or immediately preceding the effective date of the purchase.

 

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(b) The Company shall have no obligation to purchase any Share (i) pursuant to a
notice that is not timely given, or on an effective date of purchase that is not
within the periods prescribed in Section 13.11(a), or (ii) during a period in
which Shares are publicly traded on an established market.

Section 13.11 Right of First Refusal.

(a) For any period during which Shares are not publicly traded on an established
market, no person who owns Shares that were distributed from the Plan, other
than a person to whom such Shares were sold in compliance with this
Section 13.11, shall sell such Shares to any person other than the Company
without first offering to sell such Shares to The Company in accordance with
this Section 13.11.

(b) In the event that a person to whom this Section 13.11 applies shall receive
and desire to accept from a person other than the Company an offer to purchase
Shares to which this Section 13.11 applies, he shall furnish to the Company a
written notice which shall:

(i) include a copy of such offer to purchase;

(ii) offer to sell to the Company the Shares subject to such offer to purchase
at a price per Share that is equal to the greater of:

(A) the price per Share specified in such offer to purchase; or

(B) the Fair Market Value of a Share as of the Valuation Date coincident with or
immediately preceding the date of such notice;

and otherwise upon the same terms and conditions as those specified in such
offer to purchase; and

(iii) include an indication of his intention to accept such offer to purchase if
the Company does not accept his offer to sell.

Such person shall refrain from accepting such offer to purchase for a period of
fourteen days following the date on which such notice is given.

(c) The Company shall have the right to purchase the Shares covered by the offer
to sell contained in a notice given pursuant to Section 13.11(b), on the terms
and conditions specified in such notice, by written notice given to the party
making the offer to sell not later than the fourteenth day after the notice
described in Section 13.11(b) is given. If the Company does not give such a
notice during the prescribed fourteen day period, then the person owning such
Shares may accept the offer to purchase described in the notice.

 

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Article XIV

Change in Control

Section 14.1 Definition of Change in Control; Pending Change in Control.

(a) A Change in Control shall be deemed to have occurred upon the happening of
any of the following events:

(i) the consummation of a reorganization, merger or consolidation of the Company
with one or more other persons, other than a transaction following which:

(A) at least 51% of the equity ownership interests of the entity resulting from
such transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act in substantially the same relative
proportions by persons who, immediately prior to such transaction, beneficially
owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership interests in the Company; and

(B) at least 51% of the securities entitled to vote generally in the election of
directors of the entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who, immediately prior to
such transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the securities entitled to
vote generally in the election of directors of the Company;

(ii) the acquisition of all or substantially all of the assets of the Company or
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the outstanding securities of the Company
entitled to vote generally in the election of directors by any person or by any
persons acting in concert;

(iii) a complete liquidation or dissolution of the Company;

(iv) the occurrence of any event if, immediately following such event, at least
50% of the members of the Board do not belong to any of the following groups:

(A) individuals who were members of the Board on the Effective Date; or

(B) individuals who first became members of the Board after the Effective Date
either:

upon election to serve as a member of the Board by affirmative vote of
three-quarters of the members of such Board, or of a nominating committee
thereof, in office at the time of such first election; or

 

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upon election by the shareholders of the Board to serve as a member of such
Board, but only if nominated for election by affirmative vote of three-quarters
of the members of the Board, or of a nominating committee thereof, in office at
the time of such first nomination;

provided, however, that such individual’s election or nomination did not result
from an actual or threatened election contest or other actual or threatened
solicitation of proxies or consents other than by or on behalf of the Board; or

(v) any event which would be described in Section 14.1(a)(i), (ii), (iii) or
(iv) if the term “Bank” were substituted for the term “Company” therein and the
term “Board” meant the Board of Directors of the Bank.

In no event, however, shall a Change in Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this Section 14.1(a), the term “person” shall have the meaning
assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

Section 14.2 Vesting on Change in Control.

Notwithstanding any other provision of the Plan, upon the effective date of a
Change in Control, the Account of each person who would then, upon termination
of the Plan, be entitled to a benefit, shall be fully vested and nonforfeitable.

Section 14.3 Repayment of Share Acquisition Loan.

Notwithstanding any other provision of the Plan, upon the occurrence of a Change
in Control, the Committee shall direct the Trustee to sell a sufficient number
of Shares to repay any outstanding Share Acquisition Loan, all remaining Shares
which had been unallocated (or the proceeds from the sale thereof, if
applicable) shall be allocated among the accounts of all individuals with
undistributed Account balances on the effective date of such Change in Control
who are employed by the Company or Bank on the effective date of such Change in
Control. Such allocation of Shares or proceeds shall be in proportion to the
balance credited to their Accounts immediately prior to such allocation.

Section 14.4 Plan Termination After Change in Control.

Notwithstanding any other provision of the Plan, after repayment of the loan and
allocation of Shares or proceeds as provided in Section 14.3, the Plan shall be
terminated and all amounts shall be distributed as soon as practicable.

Section 14.5 Amendment of Section XIV.

Notwithstanding any other provision of the Plan, this Article XIV of the Plan
may not be amended after the earliest date on which a Change in Control or
Pending Change in

 

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Control occurs, except (i) to the extent any amendment is required by the
Internal Revenue Service as a condition to the continued treatment of the Plan
as a tax-qualified plan under Section 401(a) of the Code or (ii) to the extent
that the Company, in its sole discretion, determines than any such amendment is
necessary in order to permit any transaction to which the Company, and/or its
parent or affiliate, is or proposes to be a party to qualify for “pooling of
interests” accounting treatment.

Article XV

Fiduciary Responsibility

Section 15.1 Designation of Named Fiduciaries.

The following persons are named fiduciaries within the provisions of
Section 402(a)(2) of the Act and are so designated by the Company:

(a) the Plan Administrator;

(b) the Administrative Committee;

(c) the Company;

(d) the Bank;

(e) any Investment Manager appointed pursuant to the provisions of the Trust
Agreement; and

(f) the Compensation Committee.

Section 15.2 Allocation of Duties.

(a) The Trustee shall be responsible and liable for only those fiduciary duties
relating to the Trustee’s duties under the Trust Agreement.

(b) The Plan Administrator shall have such duties as are imposed by any
provision of ERISA or by any provisions of the Code upon plan administrators.
The Committee, the Trustee, or, at any time at which the Company is not the Plan
Administrator, the Company, shall have no duty or responsibility for seeing that
the Plan Administrator carries out his duties in accordance with the provisions
of law.

(c) The Administrative Committee shall be responsible for carrying out the
duties assigned to it by any specific provisions of the Plan including the
provisions of Article XVI hereof. The Committee shall not be responsible for any
failure of the Trustee or any other fiduciary or other person in carrying out
their duties or their failure or errors in carrying out instructions of the
Committee.

 

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(d) The duties of any Investment Manager shall be as such duties are as set
forth in the documents governing such Investment Manager’s relationship to the
Trustee and the Trust Fund, the portion thereof which such Investment Manager is
responsible and to carry out such duties in accordance with the provisions of
ERISA and the Code as they relate to such Investment Manager’s responsibility
and as they may be construed or interpreted by the U.S. Department of Labor, the
Internal Revenue Service or judicial decisions.

(e) The Company shall not be liable for any errors or failure to perform duties
of the Committee, the Trustee, any Investment Manager or, at any time at which
the Company is not the Plan Administrator, the Plan Administrator, except
insofar as the Company may have violated the standards set forth in Section 15.3
hereof in choosing any other such fiduciary.

(f) Subject to any limitation on the application of this Section 15.7(c)
pursuant to ERISA, neither the Plan Administrator, nor any member of the
Committee, nor any officer or employee of the Affiliated Employer to whom
fiduciary responsibilities are allocated by a Named Fiduciary, shall be liable
for any act of omission or commission by himself or by another person, except
for his own individual willful and intentional malfeasance.

(g) Any person or group of persons, committee or entity may serve in more than
one fiduciary capacity with respect to the Plan.

Section 15.3 Fiduciary Standards.

(a) Each named fiduciary and any other person who is a fiduciary under the
provisions of ERISA with respect to the Plan, shall discharge his duties with
respect to the Plan solely in the interest of the Participants, Former
Participants and Beneficiaries and shall so discharge them for the exclusive
purpose of (i) providing benefits to Participants, Former Participants and their
Beneficiaries; and (ii) defraying reasonable expenses of administering the Plan.

(b) Such duties shall be carried forth in accordance with the standards of care,
skill, prudence and diligence under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with like aims.

(c) Any Plan assets held in the Fund shall, to the extent required by ERISA, the
Code, or any other applicable law, be invested by the fiduciary having control
of the same in a diversified manner so as to minimize the risk of large losses,
unless under the circumstances it is clearly prudent not to do so. In each case,
such diversification shall be deemed to exist when held by any Insurance Company
in a separate investment account, the assets of which are diversified and the
Plan’s interest shares in all such diversified investments and such
diversification requirement may also be satisfied by purchase of shares of stock
in investment companies registered under the Investment Company Act of 1940 or
in a pooled trust fund (to the extent permissible under ERISA and the Code and
regulations and rulings pursuant to either) the assets of which are diversified.

 

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(d) Each named fiduciary and any other fiduciary shall discharge his duties with
respect to the Plan and Trust in accordance with the documents and instruments
governing the Plan and Trust Agreement and any common trust agreement or
declaration governing any common, commingled or pooled trust fund in which Trust
Fund assets are invested insofar as such documents and instruments are
consistent with the provisions of ERISA.

Section 15.4 Employer as a Fiduciary.

The Company and each other Participating Employer is a named fiduciary to the
extent it exercises control over assets of the Plan and to the extent it selects
fiduciaries, but it shall not be responsible for the actions of any such
fiduciaries selected by it in accordance with the standards set forth in
Section 16.3. The Company shall not be deemed a fiduciary in exercising its
power to amend the Plan or to terminate it or to discontinue contributions
hereunder. No Participating Employers shall be deemed a fiduciary in adopting or
withdrawing from the Plan.

Section 15.5 Plan Administrator.

(a) Except as provided pursuant to this Section 15.5, the Bank shall be the Plan
Administrator and shall, except as provided under the Plan, perform all of the
duties and functions of the “Plan Administrator” under ERISA and the Code. The
Bank may delegate any duties, responsibilities, functions and powers of the Plan
Administrator or any of its other duties, responsibilities, functions or powers
to such persons specified by name, title or other description as it acting by
the Compensation Committee as its delegee, the Board or the Executive Committee
may determine for the efficient administration of the Plan. Until further action
by the Compensation Committee, the Board or its Executive Committee, the
Compensation Committee shall be responsible for overseeing the performance of
officers and other employees of the Bank in carrying out compliance with the
notice, reporting, and disclosure requirements of ERISA and the Code and other
duties imposed under either or both imposed on the Plan or administrators.

(b) The Bank may designate one or more persons, by name or title, to act as the
Plan Administrator, and from the effective date of such appointment, the Bank
shall not be the Plan Administrator but such appointees shall be the Plan
Administrator and shall perform all of the duties and functions of the Plan
Administrator and have all of the powers thereof. Any such person or persons may
delegate such duties, functions and powers of the Plan Administrator as it deems
advisable, all in accordance with the provisions of Section 15.7.

(c) The Company may assign any and all rights and any and all responsibilities
assigned to the Bank by any or all of the provisions of this Article XV to any
one or more Affiliated Employers or Committee thereof or individuals.

Section 15.6 Compensation Committee.

The Compensation Committee shall as set forth in Article XVIII, have the power
to amend and terminate the Plan or the Trust or both, to the extent the Company
has such powers. In exercising such powers to amend or terminate, the
Compensation Committee shall not be deemed to be a fiduciary. Further, the
Compensation Committee shall have the power and authority to remove and replace
the Trustee, and in so doing, it shall act as a fiduciary with respect to the
Plan in that it shall make such decisions with respect to removal and
replacement

 

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in accordance with the standards set forth in Section 15.3. Further, it shall
receive reports from the Administrative Committee with respect to the
performance of the Trustee, and review such performance in accordance with
carrying out its duties hereunder in accordance with the standards set forth in
Section 15.3. Any right, power or duty and authority of the Company or the Bank
to appoint or remove any Trustee or to take any actions with respect to the Plan
or its assets shall be exercisable by the Compensation Committee without further
action by the Company or the Bank.

Section 15.7 Delegation of Fiduciary Duties.

Any fiduciaries named or described in Section 15.1 hereof shall have the right
to delegate their duties to one or more persons provided that such delegation is
consistent with the standards and provisions of Section 15.3 hereof and such
delegating fiduciary shall not be liable for any error or omission by any such
delegates in carrying forth such duties provided such delegation was made in
accordance with the standards of such Section 15.3 hereof and such delegating
fiduciary monitor the performance of such delegate from time to time as required
by the standards of Section 15.3 hereof.

Section 15.8 No Bond Except as Required by ERISA.

No bond or other security shall be required of a member of the Committee, the
Plan Administrator, or any officer or employee of the Affiliated Employer to
whom fiduciary responsibilities are allocated by a Named Fiduciary or any other
Plan fiduciary or service provider, except as may be required by ERISA.

Section 15.9 Limitation of Article XV.

Nothing in this Article XV shall be deemed to expand the scope of fiduciary
responsibility or liability as otherwise set forth in and limited by provisions
of ERISA and regulations, administrative interpretations or rulings or judicial
decisions thereunder. In particular, no named fiduciary shall have any
responsibility or liability for any loss or by reason of any breach which
results from the exercise of control of over any or all accounts of any
Participant to the extent such fiduciary would not be liable or responsible
pursuant to U.S. Department of Labor Regulations §2550.404c-1.

Article XVI

Administrative Committee

Section 16.1 Appointment and Tenure.

The President and Chief Executive Officer of the Bank shall appoint an
Administrative Committee (the “Committee”) to oversee the operations of the
Plan. The Committee shall consist of one (1) member or such greater number as
such President and Chief Executive Officer shall determine from time to time.
Each member of the Administrative Committee shall serve at the pleasure of such
President and Chief Executive Officer or until such time as such member resigns
or dies. Members of the Committee may, but need not, be officers or Employees,
Participants or directors of an Affiliated Employer. Vacancies due to any cause

 

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may be promptly filled by such officer, but the Committee may act
notwithstanding the existence of any number of vacancies. Members of the
Committee who are employees of any Participating Employer shall serve without
compensation, but their reasonable expenses shall be paid by the Bank as shall
any compensation and any expenses of any member of the Committee who is not an
Employee. In the event that at any time the same individual does not hold the
office and title of President and Chief Executive Officer of the Company, then
the officer exercising authority granted under any provision of the Plan shall
be determined by resolution of the Compensation Committee, the Executive
Committee or the Board, and in the absence of such resolution, either such
officer may exercise any of such powers.

Section 16.2 Notification of Trustee.

The Bank shall notify the Trustee of the membership of the Committee and any
change in such membership and shall supply the Trustee with specimen
administrative signatures of all such members. The Trustee shall be entitled to
rely on any such notice as to the membership of the Committee and shall be
entitled to assume conclusively that any signatures so supplied are genuine.

Section 16.3 Action by Committee.

The Committee shall act by majority vote of its members at the time in office
and such action may be taken either by a vote at a meeting duly called or in
writing without a meeting. The Committee may, by such majority vote, authorize
one or more of its members to execute documents on its behalf, in which event
the Committee shall notify the Trustee in writing, and the Trustee thereafter
may accept and rely upon such authorization until written notification that it
has been revoked by the Committee.

Section 16.4 Documents.

The Committee shall keep on file a copy of this Plan (together with any
subsequent amendments) and copies of all annual reports of the Trustee, which
shall be made available for inspection by Participants, Former Participants and
Beneficiaries during normal business hours of the Bank. Upon written request of
any Participant, Former Participant, or Beneficiary, the Committee shall furnish
such person with a statement of his interest in the Fund as determined as of the
most recent Valuation Date.

Section 16.5 Powers of Committee.

The Committee shall have general responsibility to oversee the ordinary
operation of the Plan and the execution of the funding and investment policies
and alternatives recommended and adopted pursuant to an action of the
Compensation Committee or the Board. The Committee shall report to the
Compensation Committee, as provided in Section 15.6. The Committee shall further
review from time to time the operations of a Plan and provisions of the Plan and
Trust Agreement for compliance with applicable legal requirements including
those imposed by ERISA and the Code and regulations and rulings thereunder as
the same may be amended or otherwise developed from time to time. The Committee
shall have all powers necessary or convenient to enable it to fulfill its duties
hereunder, except that the Committee shall have no responsibility for the
performance of those duties for which the Plan Administrator

 

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is responsible under ERISA or the Code or any other provision of law. The
Committee shall further have the power and authority to incur all reasonable
expenses deemed advisable by it in the performance of its duties under the Plan.

Section 16.6 Benefits Payable Under the Plan.

The Bank shall give the Trustee written notification with respect to all
benefits which become payable under the terms and conditions of the Plan and
shall direct the Trustee to pay such benefits from the Fund. The Committee shall
review and oversee such procedures.

Section 16.7 Construction of the Plan.

The Committee shall have full power to construe, interpret and apply this Plan
and to supply implied or interstitial provisions. Further, the Committee shall
determine all questions of fact that may arise hereunder, including, but not
limited to, what persons are Employees as defined herein, the identity of any
Participant’s Beneficiary or Beneficiaries, the periods of any Employee’s
Credited Service, the amount of any Employee’s Compensation, and the rights of
persons who are, or claim to be Employees, Participants, Former Participants,
Beneficiaries or Alternate Payees. Any discretionary actions to be taken under
this Plan by the Committee, with respect to the classification of Employees or
determination of benefits, shall be uniform in nature and applicable to all
Employees similarly situated. The Committee shall have absolute discretion in
carrying out its responsibilities. The conclusions and determinations of the
Committee as to the construction, interpretation or application of the Plan, or
any question arising in connection with the Plan shall be final and conclusive
upon all persons claiming an interest in the Fund.

Section 16.8 Engagement of Assistants and Advisors.

The Committee may employ and retain legal counsel, agents, administrators,
accountants, actuaries, and such clerical, medical, accounting and bookkeeping
services as it may reasonably require to carry out the provisions of the Plan.
The Committee may delegate any or all of its administrative functions, including
reporting to Participants, Former Participants, Beneficiaries and Alternate
Payees and other similar record keeping functions, to any one or more service
providers as it deems appropriate or advisable. All fees, costs and expenses
charged by any persons so employed or retained shall be paid from the Trust
unless sooner paid by one or more Participating Employers.

Section 16.9 Indemnification of the Committee.

The Participating Employers shall indemnify and hold harmless the Committee,
each member thereof, counsel, accountants, employees, and the officers and
trustees of Participating Employers, from any and all liability, claim, or
demand asserted against them with respect to their respective acts or omissions
with respect to the Plan provided that with respect to any person who is a
fiduciary under any provision of the Code or ERISA, such act or omission to act
was not the result of such person’s bad faith. As part of such indemnification
and holding harmless, the Company shall provide counsel chosen by it and shall
pay all expenses in connection with opposing any such claim, demand or asserted
liability. Nothing herein shall be deemed a limitation upon any other protection
which any such fiduciary may be entitled under

 

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any provision hereof or any doctrine of common law, any relevant statutory
provision or the terms of the Charter, Certificate of Incorporation, or By-laws
of any Affiliated Employer or any resolution or other action of the Board or its
Executive Committee. The provisions of this Section 16.9 shall not be deemed to
be applicable with respect to any action by any fiduciary claiming the benefits
of this provision unless such person acted in good faith and in a manner he
reasonably believed to be in the best interests of any Affiliated Corporation
or, in the best interest of the Participants, Former Participants or
Beneficiaries and consistent with the provisions of the Plan.

Section 16.10 Designation of Forms by Committee.

The Committee may designate forms for all documents, instruments and
communications (which forms it may change from time to time) which it deems
reasonable for the designation of Beneficiaries, the election of optional modes
of distribution, and any other forms which it deems necessary or advisable for
proper administration of the Plan. The Committee may also accept any other forms
of documents, instruments or communications as it deems reasonable, but shall be
under no obligation to accept any other forms of documents, instruments or
communications and may refuse or refrain to act upon or give effect to any such
other forms of documents, instruments or communications. No document, instrument
or communication shall be effective under the Plan unless it is in a form
designated or otherwise accepted by and filed with the Committee. The Committee
may treat any document, instrument or communication filed with an Affiliated
Employer, or a service provider designated by an Affiliated Employer for such
purposes, or accepted by an Affiliated Employer, or any such service provider,
as having been filed or accepted, or both, as the case may be, with the
Committee.

Section 16.11 Acknowledgment of Benefits.

If requested by the Committee, the Trustee, or any Participating Employer, a
Participant, Former Participant or Beneficiary or other person shall be required
as a condition of receiving any benefits hereunder to acknowledge the
correctness of the computation of such benefits and to release any other claim
which he might have. If such person fails to execute any such requested
acknowledgment or release, no benefits shall be distributed to him until there
is a judicial determination as to the amount of his benefits, or until the party
or parties requesting such acknowledgment or release withdraw such request.
Nothing herein shall be deemed in any way to limit the power and authority of
the Committee and the Trustee under this Plan.

Section 16.12 Delegation by Committee.

The Committee may, upon approval of a majority of its members:

(a) allocate among any of the members of the Committee any of the
responsibilities of the Committee under the Plan or;

(b) designate any person, firm or corporation that is not a member of the
Committee to carry out any of the responsibilities of the Committee under the
Plan. Any such allocation or designation shall be made pursuant to a written
instrument executed by a majority of the members of the Committee.

 

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Section 16.13 Information Furnished by Affiliated Employer.

The Company shall cause each Affiliated Employer to furnish to the Committee or
any service provider approved by it all information and data necessary for the
Committee to administer the Plan, including but not limited to, a list of
Employees eligible to become Participants, notification of each Employee
becoming so eligible, the Allocation Compensation and Total Compensation of all
Participants, the date of hire of all Participants, the age of all Participants
and any other information requested by the Committee and reasonably determined
by it to be advisable in discharging its duties hereunder. The Committee shall
be entitled to rely on such information as being accurate and complete unless
such information is challenged by any Employee in a writing addressed to the
Committee, in which event the Committee shall determine the accuracy of such
information to the extent that such questions raised by such Employee are within
the scope of the Committee’s powers and authority under this Article XVI. The
Company or its delegees or delegees (including any service provider) shall be
responsible for all record keeping including the allocations and investment
results allocable to accounts.

Article XVII

Amendment, Termination and Tax Qualification

Section 17.1 Right to Amend.

The Company reserves the right at any time, and from time to time, to modify or
amend the Plan and Trust Agreement or both in whole or in part; provided,
however, that no such amendment or modification:

(a) shall have the effect of vesting in any Affiliated Employer any portion of
the principal or income of the Trust Fund; or

(b) shall cause or permit any portion of the principal or income of the Trust
Fund to be diverted to purposes other than for the exclusive benefit of present
or future Participants and their Beneficiaries and to defray the reasonable
expenses of administering the Plan; or

(c) shall increase the duties or liabilities of the Trustee without its written
consent; or

(d) shall reduce any amounts credited to any Account unless such reduction
appears to the Company, the Compensation Committee or the Committee to be
necessary or reasonably advisable in order to conform with any statute,
regulation, ruling or other official promulgation by any agency of the United
States of America or any judicial decision compliance with which is necessary or
reasonably advisable in order that the Trust, the Plan, the Participating
Employers and the Participants be entitled to the tax benefits to which they are
entitled at the Effective Date the Code if the Plan is a plan described as a
qualified plan in Sections 401(a) of the Code and as an employee stock ownership
plan (as described in Section 20.8), or that the Trust, the Plan and the
Participating Employers not be in violation of any provision of ERISA.

 

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Section 17.2 Procedure to Amend.

(a) The Company’s power to amend the Plan may be exercised in any way and to any
extent by the Compensation Committee without further action by or on behalf of
the Bank to authorize such amendment, and any such amendment may be executed
consistent with the effective dates, if any, set forth in the action of the
Compensation Committee by any officer of the Bank authorized by or pursuant to
any action taken by the Compensation Committee. Notwithstanding the foregoing,
the Executive Committee of the Board may also exercise such power of amendment
to the extent either deem it appropriate to do so.

(b) The power of the Company to amend the Plan may further be exercised by its
President and Chief Executive Officer with respect to provisions dealing with
matters of administration, including compliance with any legal requirements
described in Section 10.1(d), provided that such amendments are recommended by
the Committee and such officer determines that such amendments are not likely to
result in substantial expense to one or more Participating Employers by way of
additional contributions to the Plan. The reasonable determination of the
President and Chief Executive Officer as to any amendment being within the scope
of his authority hereunder shall be conclusive. In the event of the absence or
other unavailability of the President and Chief Executive Officer, any member of
the Committee so authorized by the President and Chief Executive Officer may
execute any amendment provided for in this Subsection (b).

Section 17.3 No Obligation or Liability.

The Company has established and each Participating Employer has adopted and will
adopt the Plan with the intention and expectation that it will continue to make
contributions to the Trust indefinitely, but neither Company shall not be under
any obligation or liability whatsoever to continue such contributions or to
maintain the Plan and may, in its sole discretion, discontinue such
contributions or terminate the Plan or Trust at any time without incurring any
liability whatsoever for such discontinuance. The Plan may be terminated by
formal action of the Board or its Executive Committee or the Compensation
Committee without further authority.

Section 17.4 Continuation of Trust.

The Plan and Trust shall terminate upon dates or times specified in a notice of
termination executed by the Bank and delivered to the Trustee. Unless it is
specified in such notice that the Trust shall terminate upon a date certain, or
described therein, the Trust shall continue until all interests are distributed
in accordance with the provisions of the Plan including the provisions of this
Article XVII.

Section 17.5 Effect of Termination.

In the event of complete termination or any partial termination of the Plan or
complete discontinuance of contributions under the Plan, all unallocated
contributions shall be allocated, and the total Accounts of all Participants
shall become nonforfeitable, as of the date thereof; provided, however, that in
the event of a partial termination only the Accounts of Participants subject to
the partial termination shall become nonforfeitable. In the event of termination
of the Trust coincident with or following the termination of the Plan, the
balance of each Account shall

 

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be distributed as promptly as practicable Participants and Beneficiaries;
(ii) if the Participant consents, in a lump sum, or (iii) as otherwise provided
under the Code and regulations thereunder. To the extent not paid by any
Participating Employer, all expenses of administration ordinarily payable by
Participating Employers and of termination, after the date of termination, shall
be apportioned to each Account in the proportion which the balance of such
Account bears on the date of such termination to the balances of all such
Accounts with appropriate adjustments to reflect any partial distribution of any
Account.

Section 17.6 Conformity to Internal Revenue Code.

The Participating Employers have established the Plan with the intent that the
Plan and Trust will at all times be qualified under Section 401(a) and exempt
under Section 501(a) of the Code and constitute a qualified employer stock
ownership plan as described in Section 20.8 and with the intent that
contributions under the Plan will be allowed as deductions in computing the net
income of the Participating Employers for federal income tax purposes, and the
provisions of the Plan and Trust Agreement shall be construed to effectuate such
intentions. Accordingly, notwithstanding anything to the contrary hereinbefore
provided, the Plan and the Trust Agreement may be amended at any time without
prior notice to Participants, Former Participants, Beneficiaries or any other
persons entitled to benefits, if such amendment is deemed by the Board to be
necessary or appropriate to effectuate such intent.

Section 17.7 Contingent Nature of Contributions.

(a) All Discretionary Contributions to the Plan are conditioned upon the
issuance by the Internal Revenue Service of a determination that the Plan and
Trust are qualified under section 401(a) of the Code and exempt under section
501(a) of the Code. If the Participating Employers apply to the Internal Revenue
Service for such a determination within 90 days after the date on which it files
its federal income tax return for its taxable year that includes the last day of
the Plan Year in which the Plan is adopted, and if the Internal Revenue Service
issues a determination that the Plan and Trust are not so qualified or exempt,
all Discretionary Contributions made by the Participating Employers prior to the
date of receipt of such a determination may, at the election of the
Participating Employers, be returned to the Participating Employers within one
year after the date of such determination.

(b) All Discretionary Contributions and Loan Repayment Contributions to the Plan
are made upon the condition that such Discretionary Contributions and Loan
Repayment Contributions will be allowed as a deduction in computing the net
income of an Affiliated Employer for federal income tax purposes. To the extent
that any such deduction is disallowed, the amount disallowed may, at the
election of the Participating Employers, be returned to the Participating
Employers within one year after the deduction is disallowed.

(c) Any contribution to the Plan made by the Participating Employers as a result
of a mistake of fact may, at the election of the Participating Employers, be
returned to the Participating Employers within one year after such contribution
is made.

 

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Article XVIII

Special Rules for Top Heavy Plan Years

Section 18.1 In General.

As of the Determination Date for each Plan Year, the Plan Administrator shall
determine whether the Plan is a Top Heavy Plan in accordance with the provisions
of this Article XVIII. If, as of such Determination Date, the Plan is a Top
Heavy Plan, then the Plan Year immediately following such Determination Date
shall be a Top Heavy Plan Year and the special provisions of this Article XVIII
shall be in effect; provided, however, that if, as of the Determination Date for
the Plan Year in which the Effective Date occurs, the Plan is a Top Heavy Plan,
such Plan Year shall be a Top Heavy Plan Year, and the provisions of this
Article XVIII shall be given retroactive effect for such Plan Year.

Section 18.2 Definition of Top Heavy Plan.

(a) Subject to Section 18.2(c), the Plan is a Top Heavy Plan if, as of a
Determination Date: (i) it is not a member of a Required Aggregation Group, and
(ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees exceeds
60% of (B) the sum of the Cumulative Accrued Benefits of all Employees
(excluding former Key Employees), former Employees (excluding former Key
Employees and other former Employees who have not performed any services for the
Employer or any Affiliated Employer during the immediately preceding Plan Year),
and their Beneficiaries.

(b) Subject to Section 18.2(c), the Plan is a Top Heavy Plan if, as of a
Determination Date: (i) the Plan is a member of a Required Aggregation Group,
and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees
under all plans that are members of the Required Aggregation Group exceeds 60%
of (B) the sum of the Cumulative Accrued Benefits of all Employees (excluding
former Key Employees), former Employees (excluding former Key Employees and
other former Employees who have not performed any services for the Employer or
any Affiliated Employer during the immediately preceding Plan Year), and their
Beneficiaries under all plans that are members of the Required Aggregation
Group.

(c) Notwithstanding Sections 18.2(a) and 18.2(b), the Plan is not a Top Heavy
Plan if, as of a Determination Date: (i) the Plan is a member of a Permissible
Aggregation Group, and (ii)(A) the sum of the Cumulative Accrued Benefits of all
Key Employees under all plans that are members of the Permissible Aggregation
Group does not exceed 60% of (B) the sum of the Cumulative Accrued Benefits of
all Employees (excluding former Key Employees), former Employees (excluding
former Key Employees and other former Employees who have not performed any
services for the Employer or any Affiliated Employer during the immediately
preceding Plan Year), and their Beneficiaries under all plans that are members
of the Permissible Aggregation Group.

Section 18.3 Determination Date.

The Determination Date for the Plan Year in which the Effective Date occurs
shall be the last day of such Plan Year, and the Determination Date for each
Plan Year beginning

 

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after the Plan Year in which the Effective Date occurs shall be the last day of
the preceding Plan Year. The Determination Date for any other qualified plan
maintained by the Employer for a plan year shall be the last day of the
preceding plan year of each such plan, except that in the case of the first plan
year of such plan, it shall be the last day of such first plan year.

Section 18.4 Cumulative Accrued Benefits.

(a) An individual’s Cumulative Accrued Benefits under this Plan as of a
Determination Date are equal to the sum of:

(i) the balance credited to such individual’s Account under this Plan as of the
most recent Valuation Date preceding the Determination Date;

(ii) the amount of any Discretionary Contributions or Loan Repayment
Contributions made after such Valuation Date but on or before the Determination
Date; and

(iii) the amount of any distributions of such individual’s Cumulative Accrued
Benefits under the Plan (including distributions under terminated plans that
would have been included in the Required Aggregation Group if not terminated)
during the five-year period (for in-service distributions) or one-year period
(for all distributions other than in-service distributions) ending on the
Determination Date.

For purposes of this Section 18.4(a), the computation of an individual’s
Cumulative Accrued Benefits, and the extent to which distributions, rollovers
and transfers are taken into account, will be made in accordance with
Section 416 of the Code and the regulations thereunder.

(b) For purposes of this Plan, the term “Cumulative Accrued Benefits” with
respect to any other qualified plan, shall mean the cumulative accrued benefits
determined for purposes of Section 416 of the Code under the provisions of such
plans.

(c) For purposes of determining the top heavy status of a Required Aggregation
Group or a Permissible Aggregation Group, the Cumulative Accrued Benefits under
this Plan and the Cumulative Accrued Benefits under any other plan shall be
determined as of the Determination Date that falls within the same calendar year
as the Determination Dates for all other members of such Required Aggregation
Group or Permissible Aggregation Group.

Section 18.5 Key Employees.

(a) For purposes of the Plan, the term Key Employee means any employee or former
employee of the Employer or any Affiliated Employer who is at any time during
the current Plan Year:

(i) a Five Percent Owner;

 

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(ii) a person who would be described in Section 1.25 if the number “1%” were
substituted for the number “5%” in Section 1.25 and who has an annual Total
Compensation from the Employer and any Affiliated Employer of more than
$150,000; or

(iii) an Officer of the Employer or any Affiliated Employer who has an annual
Total Compensation greater than $135,000 (or any greater amount as specified in
Section 416(i)(1)(A)(i) of the Code) for the Plan Year.

(b) For purposes of Section 18.5(a):

(i) for purposes of Section 18.5(a)(iii), in the event the Employer or any
Affiliated Employer has more officers than are considered Officers, the term Key
Employee shall mean those officers, up to the maximum number, with the highest
annual compensation in any one of the five consecutive Plan Years ending on the
Determination Date; and

(ii) for purposes of Section 18.5(a)(ii), if two or more persons have equal
ownership interests in the Employer, each such person shall be considered as
having a larger ownership interest than any such person with a lower annual
compensation from the Employer or any Affiliated Employer.

(c) For purposes of Section 18.5(a): (i) a person’s compensation from Affiliated
Employers shall be aggregated, but his ownership interests in Affiliated
Employers shall not be aggregated; (ii) an employee shall only be deemed to be
an officer if he has the power and responsibility of a person who is an officer
within the meaning of Section 416 of the Code; and (iii) the term Key Employee
shall also include the Beneficiary of a deceased Key Employee.

Section 18.6 Required Aggregation Group.

For purposes of this Article XVIII, a Required Aggregation Group shall consist
of (a) this Plan; (b) any other qualified plans currently maintained (or
previously maintained and terminated within the five year period ending on the
Determination Date) by the Employer and any Affiliated Employers that cover Key
Employees; and (c) any other qualified plans currently maintained (or previously
maintained and terminated within the five year period ending on the
Determination Date) by the Employer or any Affiliated Employers that cover Key
Employees that are required to be aggregated for purposes of satisfying the
requirements of Sections 401(a)(4) or 410(b) of the Code.

Section 18.7 Permissible Aggregation Group.

For purposes of this Article XVIII, a Permissible Aggregation Group shall
consist of (a) the Required Aggregation Group and (b) any other qualified plans
maintained by the Employer and any Affiliated Employers; provided, however, that
the Permissible Aggregation Group must satisfy the requirements of Sections
401(a)(4) and 410(b) of the Code.

 

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Section 18.8 Special Requirements During Top Heavy Plan Years.

Notwithstanding any other provision of the Plan to the contrary, for each Top
Heavy Plan Year, in the case of a Participant (other than a Key Employee) on the
last day of such Top Heavy Plan Year who is not also a participant in another
qualified plan which satisfies the minimum contribution and benefit requirements
of Section 416 of the Code with respect to such Participant, the sum of the
Discretionary Contributions and Loan Repayment Contributions made with respect
to such Participant, when expressed as a percentage of his Total Compensation
for such Top Heavy Plan Year, shall not be less than 3% of such Participant’s
Total Compensation for such Top Heavy Plan Year or, if less, the highest
combined rate, expressed as a percentage of Total Compensation at which
Discretionary Contributions and Loan Repayment Contributions were made on behalf
of a Key Employee for such Top Heavy Plan Year. The Employer shall make an
additional contribution to the Account of each Participant to the extent
necessary to satisfy the foregoing requirement. Such minimum contribution shall
be made under this Plan rather than requiring additional contributions under the
People’s Bank 401(k) Employee Savings Plan or the People’s Bank Employees’
Retirement Plan or any successor to either such Plan pursuant to the Top Heavy
provisions of either such Plan or any such successor.

Article XIX

Participating Employers

Section 19.1 Adoption by Affiliated Employer.

The Plan is subject to adoption (with or without retroactive effect) by any
Affiliated Employer provided the Company consents to such adoption.

Section 19.2 Contributions by Participating Employers.

Subject to the provisions of Section 19.4 hereof, the contributions under the
Plan to be made by Participating Employers for a Plan Year shall be made in the
proportions to which they agree.

Section 19.3 All Rights Exercisable by Company.

Except as provided in Section 19.4 hereof, all rights under the Plan (including
this Article XIX) of the Company or Bank (whether acting by its respective Board
of Directors or Committee thereof) and of the Compensation Committee
respectively, shall be exercisable by such entity or committee. Any amendments
made by it shall be fully effective with respect to each plan which then
includes this Plan pursuant to this Article.

Section 19.4 Amendment by Participating Employers.

At any time any Participating Employer (other than the Company) (a) may amend or
terminate the Plan as to its employees so as to no longer include them in the
Plan, and (b) shall so amend the Plan upon thirty (30) days notice so to do from
the Company. Any such employer shall nevertheless be considered a Participating
Employer with respect to the period preceding and during which its plan
incorporated the Plan.

 

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Article XX

Miscellaneous Provisions

Section 20.1 No Employment Contract.

Neither the adoption and maintenance of the Plan, nor the establishment of the
Trust, shall be deemed to be a contract between any Participating Employer and
its Employees. Nothing herein contained shall be deemed to give any Employee the
right to be retained in the employ of any Participating Employer or to interfere
with the right of any Participating Employer to discharge any Employee at any
time, or to give any Participating Employer the right to require any Employee to
remain in its employ or to interfere with any Employee’s right to terminate his
employment at any time.

Section 20.2 Non-Alienation of Benefits, QDROs.

(a) The Plan and Trust have been established to provide for the support of
Participants and their Beneficiaries. Therefore, the interest hereunder of any
Participant, Former Participant or Beneficiary shall not be subject to being
assigned or alienated by any method and shall not be subject to attachment by or
otherwise available by an process whatsoever to his creditors.

(b) If any Participant, Former Participant or Beneficiary is adjudicated
bankrupt, or attempts to anticipate, alienate, sell, transfer, assign, encumber
or charge any benefit under the Plan, or if such benefit is made the subject of
any garnishment, attachment or other similar legal process, then such benefit
shall, in the discretion of the Committee, cease and terminate, and in that
event the Trustee shall hold or apply the same, or any part thereof, to or for
the benefit of such Participant, Former Participant or Beneficiary in such
manner as the Trustee may determine.

(c) This Section 20.2 shall not prohibit the Plan Administrator from recognizing
a Domestic Relations Order that is determined to be a Qualified Domestic
Relations Order in accordance with Section 20.16.

(d) Notwithstanding anything in the Plan to the contrary, a Participant’s,
Former Participant’s or Beneficiary’s Accounts under the Plan may be offset by
any amount such Participant, Former Participant or Beneficiary is required or
ordered to pay to the Plan if:

(i) the order or requirement to pay arises: (A) under a judgment issued on or
after August 5, 1997 of conviction for a crime involving the Plan; (B) under a
civil judgment (including a consent order or decree) entered by a court on or
after August 5, 1997 in an action brought in connection with a violation (or
alleged violation) of part 4 of subtitle B of title I of ERISA; or (C) pursuant
to a settlement agreement entered into on or after August 5, 1997 between the
Participant, Former Participant or Beneficiary and one or both of the United
States Department of Labor and the Pension Benefit Guaranty Corporation in
connection with a violation (or alleged violation) of part 4 of subtitle B of
title I of ERISA by a fiduciary or any other person; and

 

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(ii) the judgment, order, decree or settlement agreement expressly provides for
the offset of all or part of the amount ordered or required to be paid to the
Plan against the Participant’s, Former Participant’s or Beneficiary’s benefits
under the Plan.

Section 20.3 Mergers and Consolidations of Company

In the event that the Company shall merge or consolidate into or sell
substantially all of its operating assets (whether or not the Company is
liquidated or dissolved as part of the same transaction or subsequent thereto)
to another corporation (hereinafter “Successor Corporation”), such Successor
Corporation may assume the Plan. In the event that any Successor Corporation
assumes the Plan, then after consummation of any such merger, consolidation, or
sale, the Plan and Trust shall continue and each reference to the Company or
People’s United Financial, Inc. (a) shall be deemed to refer to such Successor
Corporation, and (b) shall no longer be deemed to refer to People’s United
Financial, Inc. except that each such reference (i) shall be deemed to include
references to People’s United Financial, Inc., or (ii) shall be deemed to
exclude reference to any Successor Corporation, or (iii) both (i) and (ii),
whenever such inclusion or exclusion is necessary so as to avoid depriving any
Participant or any Employee of any rights or interest accrued hereunder, or any
right to participate in the Plan once the eligibility requirements of the Plan
are met, or failing to give full credit for all services to the any Affiliated
Employer prior to such merger, consolidation or sale or diminishing or adversely
affecting such rights of such Employees in any way whatsoever.

Section 20.4 Governing Law

The Plan shall be governed by the law of the State of Connecticut including
federal law to the extent it is part of or preempts such state law.

Section 20.5 Participants Limited to Assets of Fund

In the event of any termination or partial termination of the Plan, complete
discontinuance of contributions under the Plan or any suspension or curtailment
of such contributions, the remedies of all Participants, Former Participants and
Beneficiaries and any other person claiming an interest shall be limited to the
assets of the Fund for provision of their benefits under the Plan, and they
shall be entitled to no other remedy from any Affiliated Employer.

Section 20.6 Severability of Provisions

Should any provision of the Plan be found invalid under the laws of the State of
Connecticut, such provision shall be deemed null and void, but all of the
provisions not so found invalid shall remain in full force and effect.

Section 20.7 Mergers and Consolidations of Plans

In the event this Plan is merged or consolidated with any other employee
retirement plan or this Plan’s assets or liabilities are transferred to any
other employee retirement plan, each Participant, Former Participant,
Beneficiary and other person entitled to benefits shall, if the Plan is then
terminated, receive a benefit immediately after such merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before such merger, consolidation or transfer,
if the Plan had then been terminated.

 

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Section 20.8 Status as an Employee Stock Ownership Plan.

It is intended that the Plan constitute an “employee stock ownership plan,” as
defined in Section 4975(e)(7) of the Code and Section 407(d)(6) of ERISA. The
Plan shall be construed and administered to give effect to such intent.

Section 20.9 Claims Procedure

(a) If a Participant, Former Participant or Beneficiary disagrees with the
computation of the benefits to which he is entitled under the Plan and wishes to
claim benefits or additional benefits, he must file his claim in writing with
the Committee. (If no claim is received by the Committee within 60 days after he
receives notice of his benefits, no claim will be permitted and the Committee’s
determination shall be final.)

The claimant may designate any other person, at his own expense, to act on his
behalf in pursuing a benefit claim or appealing the denial of a benefit claim.
The term “claimant” as used in this claims procedure includes any other person
he designates to represent him as well as after his death, his beneficiary.

When a claim for benefits is made under Plan, the Committee is required to
notify the claimant within 90 days after the claim is received if the claim for
benefits has been denied. In special cases where the Committee needs more time
to decide, the Committee may notify the claimant in writing prior to the end of
the initial 90 day period and may take up to 90 additional days.

If the claim is denied in whole or in part, the Committee will send to the
claimant a written or electronic notice including:

(i) one or more specific reasons for the denial;

(ii) specific reference to the Plan provisions on which the denial is based;

(iii) a description of any additional material or information that would be
necessary to perfect the claim and an explanation of why such material or
information is necessary;

(iv) information regarding what steps should be taken if the claimant wants to
submit a request for review; and

(v) a description of the Plan’s review procedures and the time limits applicable
to the procedures including a statement of the claimant’s rights to bring a
civil action under Section 502(a) of ERISA following a determination upon
completion of your appeal adverse to your position.

 

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(b) If the claim for benefits is denied, the claimant may file an appeal in
writing with the Committee.

(i) The written claim for review must be filed within 60 days after the claimant
has received the notice described above that the claim was denied. If a written
claim for review is not filed within 60 days after the claimant receives the
notice that the claim was denied, the claimant is deemed to have accepted the
Committee’s decision.

(ii) The claimant may submit written comments, documents, records and other
information relating to your claim for benefits.

(iii) The claimant will be provided upon request and free of charge reasonable
access to, and copies of, all documents, records, and other information relevant
to your claim.

(iv) The Committee will take into account all comments, documents, records and
other information the claimant submits relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.

After receiving a request for review, the Committee will review the claim within
60 days and will give the claimant a written or electronic notice of its
decision, which is final. In special cases where the Committee needs more time
to decide, the Committee will notify the claimant in writing prior to the end of
the initial 60 day period and may take up to 60 additional days. If the claim is
denied, the notice will include:

(i) one or more specific reasons for the denial;

(ii) specific reference to the Plan provisions on which the denial 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 your claim for benefits; and

(iv) a statement of the claimant’s right to bring a civil action under
Section 502(a) of ERISA.

(c) Notwithstanding any other provisions of this Plan to the contrary, the terms
of Subsections (a) and (b) of this Section 20.9 shall apply until such time as
the Committee shall adopt revised claims procedures; provided, however, that the
Committee may make any such revisions in such procedures as it deems necessary
to assure compliance with the applicable provisions of Section 503 of the Act
and the regulations thereunder.

(d) Any person whose claim has been denied in whole or in part must exhaust the
administrative review procedures provided in this Section 20.9 or pursuant to
subsection (c) hereof prior to initiating any claim for judicial review.

 

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(e) Any action taken or omitted by any fiduciary with respect to the Plan,
including any decision, interpretation, claim denial or review on appeal, shall
be conclusive and binding on all interested parties and shall be subject to
judicial modification or reversal only to the extent it is determined by a court
of competent jurisdiction that such action or omission was arbitrary and
capricious and contrary to the terms of the Plan.

(f) Any action taken or omitted by any fiduciary with respect to the Plan,
including any decision, interpretation, claim denial or review on appeal, shall
be conclusive and binding on all interested parties and shall be subject to
judicial modification or reversal only to the extent it is determined by a court
of competent jurisdiction that such action or omission was arbitrary and
capricious and contrary to the terms of the Plan.

Section 20.10 Agent For Legal Process

The Bank shall act as agent for legal process of the Plan subject to (a) the
right of the Company to designate another such agent (which may be the Company)
and (b) the Company’s or the Bank’s right to designate an individual or agent as
such agent.

Section 20.11 Insurance Company

No Insurance Company shall be considered a party to the Plan or Trust, nor shall
any Insurance Company have any responsibility for the validity of the Plan or
the Trust. The duty and liability of any Insurance Company is only as stated in
any contract it may issue.

Section 20.12 Dates

Whenever any action by the Trustee, the Compensation Committee, the Committee,
the Bank, a Participant, a Former Participant or a Beneficiary or any other
person must be taken within a period ending on a Saturday, Sunday or legal
holiday, such period shall be extended to the first day following the end of
such period which is not a Saturday, Sunday or legal holiday.

Section 20.13 Incapacity of Distributee

In the event the Committee or the Trustee deem any person incapable of receiving
benefits to which he is entitled by reason of minority, illness, infirmity or
other legal incapacity, the Committee may direct the Trustee, or the Trustee may
determine, to make payment by applying the same directly for the benefit of any
such person or by paying the same to any person selected by the Committee or the
Trustee which person has agreed in writing to use and apply the same for the
benefit of such person. Any such payments made, to the extent thereof, shall
discharge the liability of any Affiliated Employer, the Committee and the
Trustee under the Plan to the person entitled to receive such benefit, and none
of the Affiliated Employers, the Committee and the Trustee shall have any
responsibility for seeing that such agreement to use such sums for such person
are actually carried out.

 

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Section 20.14 Limitation Year

For purposes of Section 415 of the Code and the regulations thereunder, the Plan
Year shall be deemed to be the Plan Limitation Year.

Section 20.15 Recapture of Erroneous Payments

In the event that, for any reason, it is discovered that amounts have been paid
to a Participant, Former Participant, or Beneficiary in excess of the amounts
owed to him as a result of erroneous allocations to his Account, failure to
recognize events classified as a partial termination, clerical or computational
errors or otherwise, the Plan shall have a right against such payee to recover
the amount of such excess; provided, however, that the Committee may determine
that as a result of the administrative problems and costs and expenses of
collection involved, such rights shall not be enforced.

Section 20.16 Benefits Payable Pursuant to Qualified Domestic Relations Orders

Any prohibition in Section 20.2 of the Plan against the assignment or alienation
of benefits shall not apply to the creation, assignment or recognition of a
right to any benefit payable with respect to a Participant pursuant to (i) a
qualified domestic relations order entered on or after January 1, 1985, (ii) any
domestic relations order entered before January 1, 1985, provided benefits are
being paid pursuant to such order as of such date; or (iii) any domestic
relations order entered before January 1, 1985, provided the Plan Administrator
determines to treat such order as a qualified domestic relations order. To the
extent consistent with such a qualified domestic relations order so affecting
any benefit under the Plan, an alternate payee may withdraw all or any part of
such benefit so assigned or granted to him and such benefit shall not be payable
to any other person under this Plan, notwithstanding any other provisions of
this Plan, except to the extent provided in such qualified domestic relations
order. The terms “qualified domestic relations order” and “domestic relations
order” shall have the meaning set forth in Section 414(p) of the Code. To the
extent consistent with a qualified domestic relations order or domestic
relations order so affecting any benefit under the Plan effective January 1,
1995, an alternate payee may withdraw all or any part of such benefits assigned
or granted to him.

Section 20.17 USERRA

Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.

Section 20.18 Construction of Language.

Wherever appropriate in the Plan, words used in the singular may be read in the
plural, words used in the plural may be read in the singular, and words
importing the masculine gender may be read as referring equally to the feminine
and the neuter. Any reference to an Article or Section number shall refer to an
Article or Section of the Plan, unless otherwise indicated.

 

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Section 20.19 Headings.

The headings of Articles and Sections are included solely for convenience of
reference. If there is any conflict between such headings and the text of the
Plan, the text shall control.

 

People’s United Financial, Inc. By:  

/s/ Philip R. Sherringham

  Philip R. Sherringham   Chief Financial Officer April 16, 2007

 

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