409A Amendment

to the

Osage Federal Savings and Loan Association of Pawhuska

Director Supplemental Income Plan Agreement for

Gary Strahan

 

Osage Federal Bank, successor in interest to Osage Federal Savings and Loan
Association of Pawhuska (“Institution”), and Gary Strahan (“Director”)
originally entered into the Osage Federal Savings and Loan Association of
Pawhuska Director Supplemental Income Plan Agreement (“Agreement”) on April 19,
2004. Pursuant to Subparagraph XI (C) of the Agreement, the Institution and the
Director hereby adopt this 409A Amendment, effective January 1, 2005.

 

RECITALS

 

This Amendment is intended to bring the Agreement into compliance with the
requirements of Internal Revenue Code Section 409A. Accordingly, the intent of
the parties hereto is that the Agreement shall be operated and interpreted
consistent with the requirements of Section 409A. Therefore, the following
changes shall be made:

 

1.

Subparagraph III (A), “Benefit Date”, shall be deleted in its entirety and
replaced with the following Subparagraph III (A):

 

Benefit Date:

 

For purposes of this plan, if the Director continuously serves the Institution,
the Director shall qualify for Supplemental Income benefits on the later of the
December 31st nearest the Director’s sixty-fifth (65th) birthday or such other
date as the Director may actually retire.

 

2.

The following provision regarding “Separation from Service” distributions shall
be added as a new Subparagraph (E) under Section III, as follows:

 

Separation from Service: 

 

Notwithstanding anything to the contrary in this Agreement, to the extent that
any benefit under this Agreement is payable upon a “Termination of Employment,”
“Termination of Service,” or other event involving the Director’s cessation of
services, such payment(s) shall not be made unless such event constitutes a
“Separation from Service” as defined in Treasury Regulations Section
1.409A-1(h).

 

3.

Subparagraph IV (A), “Normal Benefit”, shall be amended to delete the words “or
in equal monthly installments (1/12th of the annual benefit), at the discretion
of the Institution”, from the second sentence.

 

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4.

Subparagraph IV (B), “Early Benefit”, shall be amended to insert the words “but
prior to Normal Benefit Age” after the words “[Subparagraph III (C)]” in the
first sentence; to insert the words “the month following” after the second
occurrence of the word “with” in the second sentence; and to delete the words
“or in equal monthly installments (1/12th of the annual benefit), at the
discretion of the Institution” from the third sentence.

 

5.

Subparagraph IV (C), “Disability Benefit”, shall be deleted in its entirety and
replaced with the following Subparagraph IV (C):

 

Disability Benefit:

 

In the event the Director becomes Disabled, the Director shall be one hundred
percent (100%) vested in the accrued liability account. Within thirty (30) days
of said Disability, the Director shall receive a lump sum distribution in the
amount of said account as of the date of Disability.

 

“Disability” shall mean Director: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering directors of the Institution. Medical determination of Disability may
be made by either the Social Security Administration or by the provider of an
accident or health plan covering employees of the Institution, provided that the
definition of Disability applied under such Disability insurance program
complies with the requirements of Section 409A. Upon the request of the Plan
Administrator, the Director must submit proof to the Plan Administrator of
Social Security Administration’s or the provider’s determination.

 

6.

Section V, “Death Benefit Prior to Age 65”, shall be amended to delete the words
“(or such later date as may be agreed upon)” and “or in equal monthly
installments (1/12th of the annual benefit) for a period of one hundred twenty
(120) months, at the discretion of the Institution” from the first sentence.

 

7.

Section VIII, “Other Termination of Service”, Subparagraph A, shall be amended
to delete the words “Early Benefit Date” and to replace them with the words
“Director attaining age sixty-two (62)”.

 

8.

Section VIII, “Other Termination of Service”, Subparagraph B, shall be amended
to insert the words “in the same form and with the same timing as provided in
Subparagraph IV (B), commencing on the first day of the month following said
termination” after the word “benefits” in the first paragraph.

 

9.

Section IX, “Change of Control”, shall be deleted in its entirety and
intentionally left blank.

 

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10.

A new Subparagraph XI (K) shall be added as follows:

 

Restriction on Timing of Distribution: 

 

Notwithstanding any provision of this Agreement to the contrary, distributions
under this Agreement may not commence earlier than six (6) months after the date
of a Separation from Service (as described under the “Separation from Service”
provision herein) if, pursuant to Internal Revenue Code Section 409A, the
participant hereto is considered a “specified employee” (under Internal Revenue
Code Section 416(i)) of the Institution if any stock of the Institution is
publicly traded on an established securities market or otherwise. In the event a
distribution is delayed pursuant to this Section, the originally scheduled
distribution shall be delayed for six (6) months, and shall commence instead on
the first day of the seventh month following Separation from Service. If
payments are scheduled to be made in installments, the first six (6) months of
installment payments shall be delayed, aggregated, and paid instead on the first
day of the seventh month, after which all installment payments shall be made on
their regular schedule. If payment is scheduled to be made in a lump sum, the
lump sum payment shall be delayed for six (6) months and instead be made on the
first day of the seventh month.

 

11.

A new Subparagraph XI (L) shall be added as follows:

 

Certain Accelerated Payments:

 

The Institution may make any accelerated distribution permissible under Treasury
Regulation 1.409A-3(j)(4) to the Director of deferred amounts, provided that
such distribution(s) meets the requirements of Section 1.409A-3(j)(4).

 

12.

Subparagraph XIV (A), “Deferral Election”, shall be amended to delete the second
sentence in its entirety.

 

13.

Subparagraph XIV (A) (i) shall be added relating to the rules regarding deferral
elections, as follows:

 

Deferral Elections – In General:

 

In any Plan Year during which Director defers compensation (as defined herein),
Director shall file a Deferral Election Form for any compensation deferred. Such
form shall be filed with the Plan Administrator no later than the close of the
Director’s taxable year next preceding the service year, and such election and
is effective only to defer compensation that has not yet been earned by the
Director at the time of the election.

 

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A deferral election submitted for a particular year may continue to be valid for
succeeding years until changed or modified. Deferral elections, once made,
however, are irrevocable as of the last permissible date on which such deferral
elections may be made.

 

Initial Deferral Election(s):

 

Upon notification of eligibility in this Agreement during the initial Plan Year,
and if Director elects to defer compensation, Director shall deliver to the Plan
Administrator:

 

(a) a Deferral Election Form, signed and dated;

 

(b) a Beneficiary Form, signed and dated; and

 

(c) a Distribution Election Form, signed and dated.

 

Director shall deliver such forms to the Plan Administrator within thirty (30)
days of notification of eligibility, and shall set forth on the forms the amount
of compensation to be deferred and the distributions elected.

 

Subsequent Changes to Time and Form of Payment:

 

The Institution may permit a subsequent change to form and timing of payments (a
“subsequent deferral election”). Any such change shall be considered made only
when it becomes irrevocable under the terms of the Agreement. Any subsequent
deferral election will be considered irrevocable not later than thirty (30) days
following acceptance of the change by the Plan Administrator, subject to the
following rules:

 

 

(1)

the subsequent deferral election may not take effect until at least twelve (12)
months after the date on which the election is made;

 

(2)

the payment (except in the case of death, disability, or unforeseeable
emergency) upon which the subsequent deferral election is made is deferred for a
period of not less than five years from the date such payment would otherwise
have been paid; and

 

(3)

in the case of a payment made at a specified time, the election must be made not
less than twelve (12) months before the date the payment is scheduled to be
paid.

 

14.

Subparagraph XIV (C), “Benefit, Termination of Service or Death”, shall be
amended to delete the words “one (1) year prior to receiving said benefit” from
the first sentence and to replace them with the words “on the aforementioned
Distribution Election Form”.

 

 

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Therefore, the foregoing changes are agreed to.

 

 

/s/ Mark S. White

 

/s/ Gary Strahan

For the Institution

 

Gary Strahan

 

 

 

 

 

 

Date January 17, 2008

 

Date January 17, 2008

 

 

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