EXHIBIT 10.1



 Exhibit 10.1 
 FORM OF 
 NEWPORT FEDERAL SAVINGS BANK 
 EMPLOYEE STOCK OWNERSHIP PLAN 
 Effective as of January 1, 2006








 NEWPORT FEDERAL SAVINGS BANK 
 EMPLOYEE STOCK OWNERSHIP PLAN 
 CERTIFICATION 
 I, Kevin McCarthy, President and Chief Executive Officer of Newport Federal Savings Bank hereby certify that the attached Newport Federal Savings Bank
Employee Stock Ownership Plan, effective January 1, 2006, was adopted at a duly held meeting of the Board of Directors of the Bank. 
  

			
	NEWPORT FEDERAL SAVINGS BANK
		
	By:	 	  
		 	Kevin McCarthy
		 	President and Chief Executive Officer









 Newport Federal Savings Bank 
 Employee Stock Ownership Plan 
 Table of Contents 
  

			
	 Section 1 - Introduction
	  	1
		
	 Section 2 - Definitions
	  	1
		
	 Section 3 - Eligibility and Participation
	  	8
		
	 Section 4 - Contributions
	  	10
		
	 Section 5 - Plan Accounting
	  	12
		
	 Section 6 - Vesting and Forfeitures
	  	18
		
	 Section 7 - Distributions
	  	20
		
	 Section 8 - Voting of Company Stock and Tender Offers
	  	25
		
	 Section 9 - The Committee and Plan Administration
	  	26
		
	 Section 10 - Rules Governing Benefit Claims
	  	29
		
	 Section 11 - The Trust
	  	30
		
	 Section 12 - Adoption, Amendment and Termination
	  	31
		
	 Section 13 - General Provisions
	  	33
		
	 Section 14 - Top-Heavy Provisions
	  	34








 SECTION 1 
 Introduction 
 Section 1.01 Nature of the Plan. 
 Effective as of January 1, 2006 (the “Effective Date”), Newport Federal Savings Bank (the “Bank”) hereby establishes the Newport Federal Savings
Bank Employee Stock Ownership Plan (the “Plan”) to enable Eligible Employees (as defined in Section 2.01(o) of the Plan) to acquire stock ownership interests in Newport Bancorp, Inc. (the “Company”), the holding company of
the Bank. The Bank intends this Plan to be a tax-qualified stock bonus plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and an employee stock ownership plan within the meaning of
Section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and Sections 409 and 4975(e)(7) of the Code. The Plan is designed to invest primarily in the common stock of the Company, which stock
constitutes “qualifying employer securities” within the meaning of Section 407(d)(5) of ERISA and Sections 409(l) and 4975(e)(8) of the Code. Accordingly, the Plan and Trust Agreement (as defined in Section 2.01(mm) of the Plan)
shall be interpreted and applied in a manner consistent with the Bank’s intent for it to be a tax-qualified plan designed to invest primarily in qualifying employer securities. 
 The Plan reflects certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”). The provisions related to EGTRRA are intended as good faith compliance with EGTRRA and the
guidance issued thereunder. To the extent any provision of the Plan was operated according to an effective date earlier than as required by law, then such date shall be the effective date with respect to that provision of the Plan. 
 Section 1.02 Employers and Affiliates. 
 The Bank and each
of its Affiliates (as defined in Section 2.01(c) of the Plan) that, with the consent of the Bank, adopt the Plan pursuant to the provisions of Section 12.01 of the Plan are collectively referred to as the “Employers” and
individually as an “Employer.” The Plan shall be treated as a single plan with respect to all participating Employers. 
 SECTION
2 
 Definitions 
 Section 2.01
Definitions. 
 In this Plan, whenever the context so indicates, the singular or the plural number and the masculine or feminine gender shall be
deemed to include the other, the terms “he,” “his,” and “him,” shall refer to a Participant or Beneficiary, as the case may be, and, except as otherwise provided, or unless the context otherwise requires, the
capitalized terms shall have the following meanings: 
  

	(a)	“Account” or “Accounts” mean a Participant’s or Beneficiary’s Company Stock Account and/or his Other Investments Account, as the context
so requires. 

  

 1 









	(b)	“Acquisition Loan” means a loan or other extension of credit, including an installment obligation to a “party in interest” (as defined in
Section 3(14) of ERISA) incurred by the Trustee in connection with the purchase of Company Stock. 

  

	(c)	“Affiliate” means any corporation, trade or business, which, at the time of reference, is together with the Bank, a member of a controlled group of corporations, a
group of trades or businesses (whether or not incorporated) under common control, or an affiliated service group, as described in Sections 414(b), 414(c), and 414(m) of the Code, respectively, or any other organization treated as a single employer
with the Bank under Section 414(o) of the Code; provided, however, that, where the context so requires, the term “Affiliate” shall be construed to give full effect to the provisions of Sections 409(l)(4) and 415(h) of the Code.


  

	(d)	“Bank” means Newport Federal Savings Bank, and any entity that succeeds to the business of the Newport Federal Savings Bank and adopts this Plan in accordance with
the provisions of Section 12.02 of the Plan, or by written agreement assumes the obligations of the Plan. 

  

	(e)	“Beneficiary” means the person(s) entitled to receive benefits under the Plan following a Participant’s death, pursuant to Section 7.03 of the Plan.


  

	(f)	“Change in Control” means any one of the following events occurs: 

  

	 	(i)	Merger: The Company merges into or consolidates with another corporation, or merges another corporation into the Company, and as a result less than a majority of the combined
voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company immediately before the merger or consolidation; 

  

	 	(ii)	Acquisition of Significant Share Ownership: The Company files, or is required to file, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required
under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s voting
securities, but this clause (b) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting
securities; 

  

	 	(iii)	 Change in Board Composition: During any period of two consecutive years, individuals who constitute the Company’s Board of Directors at the beginning of
the two-year period cease for any reason to constitute at least a majority of the Company’s Board of Directors; provided, however, that for purposes of this clause (iii), each director who is first elected by the board (or first nominated by
the board for election by the stockholders) by a vote of at least two-thirds (2/3) of 



  

 2 









	 	 
the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or



  

	 	(iv)	Sale of Assets: The Company sells to a third party all or substantially all of its assets. 

 Notwithstanding anything in this Plan to the contrary, in no event shall the conversion of the Bank from the mutual form of organization to the stock form
of organization constitute a “Change in Control” for purposes of this Agreement. 
  

	(g)	“Code” means the Internal Revenue Code of 1986, as amended. 

  

	(h)	“Committee” means the individual(s) responsible for the administration of the Plan in accordance with Section 9 of the Plan. 

  

	(i)	“Company” means Newport Bancorp, Inc. and any entity which succeeds to the business of Newport Bancorp, Inc. 

  

	(j)	“Company Stock” means shares of the voting common stock or preferred stock, meeting the requirements of Section 409 of the Code and Section 407(d)(5) of
ERISA, issued by the Company or its Affiliates. 

  

	(k)	“Company Stock Account” means the account established and maintained in the name of each Participant or Beneficiary to reflect his share of the Trust Fund invested
in Company Stock. 

  

	(l)	“Compensation” means a Participant’s wages as reported in Box 1 of the Participant’s Form W-2. 

 A Participant’s Compensation shall not exceed the limit set forth in Section 401(a)(17) of the Code ($220,000 for Plan Years beginning
January 1, 2006). If the Plan Year for which a Participant’s Compensation is measured is less than twelve (12) calendar months, then the amount of Compensation taken into account for such Plan Year shall be the adjusted amount for
such Plan Year, as prescribed by the Secretary of the Treasury under Section 401(a)(17) of the Code, multiplied by a fraction, the numerator of which is the number of months taken into account for such Plan Year and the denominator of which is
twelve (12). In determining the dollar limitation hereunder, Compensation received from an Affiliate shall be recognized as Compensation. 
  

	(m)	“Disability” means a physical or mental condition of a Participant resulting from bodily injury, disease, or mental disorder which renders the Participant incapable
of continuing any gainful occupation and which condition constitutes total disability under the federal Social Security Act. The Disability of a Participant shall be determined by the Plan Administrator, in its sole discretion.


  

	(n)	“Effective Date” means January 1, 2006. 

  

 3 









	(o)	“Eligible Employee” means any Employee who is not precluded from participating in the Plan by reason of the provisions of Section 3.02 of the Plan.


  

	(p)	“Employee” means any person who is actually performing services for the Employer or an Affiliate in a common-law, employer-employee relationship as determined under
Sections 31.3121(d)-1, 31.3306(i)-1, or 31.3401(c)-1 of the Treasury Regulations and any “Leased Employee” as defined in Section 3.02(b) of this Plan. 

  

	(q)	“Employer” or “Employers” means the Bank and any of its Affiliates that adopt the Plan in accordance with the provisions of Section 12.01 of
the Plan, and any entity which succeeds to the business of the Bank or its Affiliates and which adopts the Plan in accordance with the provisions of Section 12.02 of the Plan, or by written agreement assumes the obligations under the Plan.


  

	(r)	“Entry Date” means the first day of the month following the date the Employee satisfies the requirements for participation under Section 3.01 of the Plan.


  

	(s)	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

  

	(t)	“Exchange Act” means the Securities Exchange Act of 1934, as amended. 

  


	(u)	“Financed Shares” means shares of Company Stock acquired by the Trustee with the proceeds of an Acquisition Loan, which shall constitute “qualifying employer
securities” under Section 409(l) of the Code and any shares of Company Stock received upon conversion or exchange of such shares. 

  

	(v)	“Highly Compensated Employee” means an Employee who, for a particular Plan Year, satisfies one of the following conditions: 

  

	 	(i)	was a “5-percent owner” (as defined in Section 414(q)(2) of the Code) during the year or the preceding year, or 

  

	 	(ii)	for the preceding year, had “compensation” (as defined in Section 414(q)(4) of the Code) from the Bank and its Affiliates exceeding the limit in
Section 414(q)(1) of the Code ($100,000 for Plan Years beginning January 1, 2006). 

  

	(w)	“Hours of Service” means: 

  

	 	(i)	Each hour for which an Employee is paid, or entitled to payment, for performing duties for the Employer during the applicable computation period. 

  

	 	(ii)	Each hour for which an Employee is paid, or entitled to payment, for a period during which no duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. 

  

 4 








 Notwithstanding the preceding sentence, no credit shall be given to the Employee for: 
  

	 	(A)	more than 501 hours under this clause (ii) because of any single continuous period in which the Employee performs no duties (whether or not such period occurs in a single
computation period); 

  

	 	(B)	an hour for which the Employee is directly or indirectly paid, or entitled to payment, because of a period in which no duties are performed if such payment is made or due under a
plan maintained solely for the purpose of complying with applicable worker’s or workmen’s compensation, unemployment, or disability insurance laws; or 

  

	 	(C)	an hour or a payment which solely reimburses the Employee for medical or medically-related expenses incurred by the Employee. 

  

	 	(iii)	Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer; provided, however, that hours credited under either clause
(i) or (ii) above shall not also be credited under this clause (iii). Crediting of hours for back pay awarded or agreed to with respect to periods described in clause (ii) above will be subject to the limitations set forth in that
clause. 

 The crediting of Hours of Service shall be determined by the Committee in accordance with the rules set forth in
Section 2530.200b-2 of the regulations prescribed by the Department of Labor, which rules shall be consistently applied with respect to all Employees within the same job classification. If an Employer finds it impracticable to count actual
Hours of Service for any class or group of non-hourly Employees, each Employee in that class or group shall be credited with 45 Hours of Service for each weekly period in which he has at least one Hour of Service. However, an Employee shall be
credited with Hours of Service only for his normal working hours during a paid absence. Hours of Service shall be credited for employment with an Affiliate. 
 For purposes of determining whether an Employee has incurred a One Year Break in Service and for vesting and participation purposes, if an Employee begins a maternity/paternity leave of absence described in Section 411(a)(6)(E)(i) of
the Code, his Hours of Service shall include the Hours of Service that would have been credited to him if he had not been so absent (or 45 Hours of Service for each week of such absence if the actual Hours of Service cannot be determined). An
Employee shall be credited for such Hours of Service (up to a maximum of 501 Hours of Service) in the Plan Year in which his absence begins (if such crediting will prevent him from incurring a One Year Break in Service in such Plan Year) or, in all
other cases, in the following Plan Year. An absence from employment for maternity or paternity reasons means an absence: 
  

	 	(i)	by reason of pregnancy of the Employee, 

  

	 	(ii)	by reason of the birth of a child of the Employee, 

  

 5 









	 	(iii)	by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee, or 

  

	 	(iv)	for purposes of caring for such child for a period beginning immediately following such birth or placement. 

  

	(x)	“Later Retirement Date” means the first day of the month coincident with or next following a Participant’s date of actual retirement which occurs after his
Normal Retirement Date. 

  

	(y)	“Loan Suspense Account” means that portion of the Trust Fund consisting of Company Stock acquired with an Acquisition Loan which has not yet been allocated to the
Participants’ Accounts. 

  

	(z)	“Named Fiduciary” means the Board of Directors of the Bank. 

  

	(aa)	“Normal Retirement Age” means attainment of age 65. 

  

	(bb)	“Normal Retirement Date” means the first day of the month coincident with or next following the Participant’s attainment of Normal Retirement Age.


  

	(cc)	“One Year Break in Service” means a twelve (12) consecutive month period during which the Participant does not complete more than 500 Hours of Service.


  

	(dd)	“Other Investments Account” means the account established and maintained in the name of each Participant or Beneficiary to reflect his share of the Trust Fund,
other than Company Stock. 

  

	(ee)	“Participant” means any Eligible Employee who has become a Participant in accordance with Section 3.01 of the Plan or any other person with an Account balance
under the Plan. 

  

	(ff)	“Plan” means Newport Federal Savings Bank Employee Stock Ownership Plan, as amended from time to time. 

  

	(gg)	“Plan Year” means the calendar year. 

  

	(hh)	“Recognized Absence” means a period for which: 

  

	 	(i)	an Employer grants an Employee a leave of absence for a limited period of time, but only if an Employer grants such leaves of absence on a nondiscriminatory basis to all Eligible
Employees; or 

  

	 	(ii)	an Employee is temporarily laid off by an Employer because of a change in the business conditions of the Employer; or 

  

 6 









	 	(iii)	an Employee is on active military duty, but only to the extent that his employment rights are protected by the Military Selective Service Act of 1967 and the Uniformed Services
Employment and Reemployment Rights Act of 1994. 

  

	(ii)	“Retirement Date” means a Participant’s Normal or Later Retirement Date, whichever is applicable. 

  

	(jj)	“Service” means employment with the Bank or an Affiliate. 

  

	(kk)	“Termination of Service” means the earlier of (a) the date on which an Employee’s Service is terminated by reason of his resignation, retirement,
discharge, death or Disability or (b) the first anniversary of the date on which such Employee’s service is terminated for disability of a short-term nature or any other reason. Service in the Armed Forces of the United States shall not
constitute a Termination of Service but shall be considered to be a period of employment by the Employer provided (i) such military service is caused by war or other emergency or the Employee is required to serve under the laws of conscription
in time of peace, (ii) the Employee returns to employment with the Employer within six (6) months following discharge from such military service and (iii) such Employee is reemployed by the Employer at a time when the Employee had a
right to reemployment at his former position or substantially similar position upon separation from such military duty in accordance with seniority rights as protected under the laws of the United States. A leave of absence granted to an Employee by
the Employer shall not constitute a Termination of Service provided that the Participant returns to the active service of the Employer at the expiration of any such period for which leave has been granted. Notwithstanding the foregoing, an Employee
who is absent from service with the Employer beyond the first anniversary of the first date of his absence for maternity or paternity reasons set forth in Section 2.01 of the Plan shall incur a Termination of Service for purposes of the Plan on
the second anniversary of the date of such absence. 

  

	(ll)	“Treasury Regulations” mean the regulations promulgated by the Department of the Treasury under the Code. 

  

	(mm)	 “Trust” means the First Federal Savings Bank Employee Stock Ownership Plan Trust created in connection with the establishment of the Plan.


  

	(nn)	“Trust Agreement” means the trust agreement establishing the Trust. 

  

	(oo)	“Trust Fund” means the assets held in the Trust for the benefit of Participants and their Beneficiaries. 

  

	(pp)	“Trustee” means the trustee or trustees from time to time in office under the Trust Agreement. 

  

 7 









	(qq)	“Valuation Date” means the last day of the Plan Year and each other date as of which the Committee shall determine the investment experience of the Trust Fund and
adjust Participants’ Accounts accordingly. 

  

	(rr)	“Valuation Period” means the period following a Valuation Date and ending with the next Valuation Date. 

  

	(ss)	“Year of Service” shall mean a Plan Year in which an Employee is credited with at least 1,000 Hours of Service. 

 SECTION 3 
 Eligibility and
Participation 
 Section 3.01 Participation. 
  

	(a)	All Eligible Employees who are over 21 years of age on the closing date of the Bank’s mutual to stock conversion shall enter the Plan and become Participants as of the
Effective Date. 

  

	(b)	An Eligible Employee who is first employed by an Employer after the closing date of the Bank’s mutual to stock conversion shall become a Participant in the Plan upon satisfying
the following requirements: 

  

	 	(i)	The Eligible Employee is at least 21 years of age; and 

  

	 	(ii)	The Eligible Employee completes 500 Hours of Service in a consecutive six- month period. 

  

	(c)	An Eligible Employee who has satisfied the eligibility requirements of Section 3.01(b) shall enter the Plan and become a Participant on the Entry Date coincident with or next
following the date he satisfies such requirements. 

 Section 3.02 Certain Employees Ineligible. 
 The following Employees are ineligible to participate in the Plan: 
  

	(a)	Employees covered by a collective bargaining agreement between the Employer and the Employee’s collective bargaining representative if: 

  

	 	(i)	retirement benefits have been the subject of good faith bargaining between the Employer and the representative, and 

  

	 	(ii)	the collective bargaining agreement does not expressly provide that Employees of such unit be covered under the Plan; 

  

 8 









	(b)	Employees who are nonresident aliens and who receive no earned income from an Employer which constitutes income from sources within the United States; and 


 

	(c)	Employees of an Affiliate of the Bank that has not adopted the Plan pursuant to Sections 12.01 or 12.02 of the Plan. 

 Section 3.03 Transfer to and from Eligible Employment. 
  

	(a)	If an Employee ineligible to participate in the Plan by reason of Section 3.02 of the Plan transfers to employment as an Eligible Employee, he shall enter the Plan as of the
later of: 

  

	 	(i)	the first Entry Date after the date of transfer, or 

  

	 	(ii)	the first Entry Date on which he could have become a Participant pursuant to Section 3.01 of the Plan. 

  

	(b)	If a Participant transfers to an employment position that makes him ineligible to participate in the Plan as of the date of such transfer, he shall cease active participation in the
Plan as of such date and his transfer shall be treated for all purposes under the Plan in the same manner as any other termination of Service. 

 Section 3.04 Participation after Reemployment. 
  

	(a)	If an Employee incurs a One Year Break in Service prior to satisfying the eligibility requirements of Section 3.01 of the Plan, Service prior to such One Year Break in Service
shall be disregarded and the Employee must satisfy the eligibility requirements of Section 3.01 as a new Employee. 

  

	(b)	If an Employee incurs a One Year Break in Service after satisfying the eligibility requirements of Section 3.01 of the Plan and again performs an Hour of Service, the Employee
shall receive credit for Service prior to his One Year Break in Service and shall be eligible to participate in the Plan immediately upon reemployment, provided the Employee is not excluded from participation under the provisions of
Section 3.02 of the Plan. 

 Section 3.05 Participation Not Guarantee of Employment. 
 Participation in the Plan does not constitute a guarantee or contract of employment and will not give any Employee the right to be retained in the employ of the Bank or
any of its Affiliates nor any right or claim to any benefit under the terms of the Plan unless such right or claim has specifically accrued under the Plan. 
  

 9 








 SECTION 4 
 Contributions 
 Section 4.01 Employer Contributions. 
  

	(a)	Discretionary Contributions. Each Plan Year, each Employer, in its discretion, may make a contribution to the Trust. Each Employer making a contribution for any Plan
Year under this Section 4.01(a) will contribute to the Trustee cash equal to, or Company Stock or other property having an aggregate fair market value equal to, such amount as the Board of Directors of the Employer shall determine by
resolution. Notwithstanding the Employer’s discretion with respect to the medium of contribution, an Employer shall not make a contribution in any medium which would make such contribution a prohibited transaction (for which no exemption is
provided) under Section 406 of ERISA or Section 4975 of the Code. 

  

	(b)	Employer Contributions for Acquisition Loans. Each Plan Year, the Employers shall, subject to any regulatory prohibitions, contribute an amount of cash sufficient to
enable the Trustee to discharge any indebtedness incurred with respect to an Acquisition Loan pursuant to the terms of the Acquisition Loan. The Employers’ obligation to make contributions under this Section 4.01(b) shall be reduced to the
extent of any investment earnings attributable to such contributions and any cash dividends paid with respect to Company Stock held by the Trustee in the Loan Suspense Account. If there is more than one Acquisition Loan, the Employers shall
designate the one to which any contribution pursuant to this Section 4.01(b) is to be applied. 

 Section 4.02 Limitations on
Contributions. 
 In no event shall an Employer’s contribution(s) made under Section 4.01 of the Plan for any Plan Year exceed the lesser
of: 
  

	(a)	The maximum amount deductible under Section 404 of the Code by that Employer as an expense for Federal income tax purposes; and 

  

	(b)	The maximum amount which can be credited for that Plan Year in accordance with the allocation limitation provisions of Section 5.05 of the Plan. 

 Section 4.03 Acquisition Loans. 
 The Trustee may incur
Acquisition Loans from time to time to finance the acquisition of Company Stock for the Trust or to repay a prior Acquisition Loan. An Acquisition Loan shall be for a specific term, shall bear a reasonable rate of interest, shall not be payable in
demand, except in the event of default, and shall be primarily for the benefit of Participants and Beneficiaries of the Plan. An Acquisition Loan may be secured by a collateral pledge of the Financed Shares so acquired and any other Plan assets
which are permissible securities within the provisions of Section 54.4975-7(b) of the Treasury Regulations. No other assets of the Plan or Trust may be pledged as collateral for an Acquisition Loan, and no lender shall have recourse against any
other 

  

 10 








 
Trust assets. Any pledge of Financed Shares must provide for the release of shares so pledged on a basis equal to the principal and interest (or if the
requirements of Section 54.4975-7(b)(8)(ii) of the Treasury Regulations are met and the Employer so elects, principal payments only), paid by the Trustee on the Acquisition Loan. The released Financed Shares shall be allocated to
Participants’ Accounts in accordance with the provisions of Sections 5.04 or 5.08 of the Plan, whichever is applicable. Payment of principal and interest on any Acquisition Loan shall be made by the Trustee only from the Employer contributions
paid in cash to enable the Trustee to repay such loan in accordance with Section 4.01(b) of the Plan, from earnings attributable to such contributions, and any cash dividends received by the Trustee on Financed Shares acquired with the proceeds
of the Acquisition Loan (including contributions, earnings and dividends received during or prior to the year of repayment less such payments in prior years), whether or not allocated. Financed Shares shall initially be credited to the Loan Suspense
Account and shall be transferred for allocation to the Company Stock Accounts of Participants only as payments of principal and interest (or, if the requirements of Section 54.4975-7(b)(8)(ii) of the Treasury Regulations are met and the
Employer so elects, principal payments only), on the Acquisition Loan are made by the Trustee. The number of Financed Shares to be released from the Loan Suspense Account for allocation to Participants’ Company Stock Account for each Plan Year
shall be based on the ratio that the payments of principal and interest (or, if the requirements of Section 54.4975-7(b)(8)(ii) of the Treasury Regulations are met and the Employer so elects, principal payments only), on the Acquisition Loan
for that Plan Year bears to the sum of the payments of principal and interest on the Acquisition Loan for that Plan Year plus the total remaining payment of principal and interest projected (or, if the requirements of
Section 54.4975-7(b)(8)(ii) of the Treasury Regulations are met and the Employer so elects, principal payments only), on the Acquisition Loan over the duration of the Acquisition Loan repayment period, subject to the provisions of
Section 5.05 of the Plan. 
 Section 4.04 Conditions as to Contributions. 
 In addition to the provisions of Section 12.03 of the Plan for the return of an Employer’s contributions in connection with a failure of the Plan to qualify
initially under the Code, any amount contributed by an Employer due to a good faith mistake of fact, or based upon a good faith but erroneous determination of its deductibility under Section 404 of the Code, shall be returned to the Employer
within one year after the date on which the Employer originally made such contribution, or within one year after its nondeductibility has been finally determined. However, the amount to be returned shall be reduced to take account of any adverse
investment experience within the Trust in order that the balance credited to each Participant Account is not less than it would have been if the contribution had never been made by the Employer. 
 Section 4.05 Employee Contributions. 
 Employee
contributions are neither required nor permitted under the Plan. 
 Section 4.06 Rollover Contributions. 
 Rollover contributions to the Plan of assets from other tax-qualified retirement plans are not permitted under the Plan. 
  

 11 








 Section 4.07 Trustee-to-Trustee Transfers. 
 Trustee-to-trustee transfers of assets from other tax-qualified retirement plans are not permitted under the Plan. 
 SECTION 5 
 Plan Accounting

 Section 5.01 Accounting for Allocations. 
 The Committee shall establish the Accounts (and sub-accounts, if deemed necessary) for each Participant, and the accounting procedures for the purpose of making allocations to Participants’ Accounts as provided for in this
Section 5. The Committee shall maintain adequate records of the cost basis of shares of Company Stock allocated to each Participant’s Company Stock Account. The Committee also shall keep separate records of Financed Shares attributable to
each Acquisition Loan and of contributions made by the Employers (and any earnings thereon) made for the purpose of enabling the Trustee to repay any Acquisition Loan. From time to time, the Committee may modify its accounting procedures for the
purpose of achieving equitable and nondiscriminatory allocations among the Accounts of Participants, in accordance with the provisions of this Section 5 and the applicable requirements of the Code and ERISA. In accordance with Section 9 of
the Plan, the Committee may delegate the responsibility for maintaining Accounts and records. 
 Section 5.02 Maintenance of Participants’
Company Stock Accounts. 
 As of each Valuation Date, the Committee shall adjust the Company Stock Account of each Participant to reflect activity
during the Valuation Period as follows: 
  

	(a)	First, charge to each Participant’s Company Stock Account all distributions and payments made to the Participant that have not been previously charged;


  

	(b)	Next, credit to each Participant’s Company Stock Account the shares of Company Stock, if any, that have been purchased with amounts from the Participant’s Other
Investments Account, and adjust such Other Investments Account in accordance with the provisions of Section 5.03 of the Plan; 

  

	(c)	Next, credit to each Participant’s Company Stock Account the shares of Company Stock representing contributions made by the Employers in the form of Company Stock and the
number of Financed Shares released from the Loan Suspense Account under Section 4.03 of the Plan that are to be allocated and credited as of that date in accordance with the provisions of Section 5.04 of the Plan; and


  

	(d)	Finally, credit to each Participant’s Company Stock Account the shares of Company Stock released from the Loan Suspense Account that are to be allocated in accordance with the
provisions of Section 5.09 of the Plan. 

  

 12 








 Section 5.03 Maintenance of Participants’ Other Investments Accounts. 
 Except as otherwise provided for under Section 5.08 of the Plan, as of each Valuation Date, the Committee shall adjust the Other Investments Account of each
Participant to reflect activity during the Valuation Period as follows: 
  

	(a)	First, charge to each Participant’s Other Investments Account all distributions and payments made to the Participant that have not previously been charged;


  

	(b)	Next, if Company Stock is purchased with assets from a Participant’s Other Investments Account, charge the Participant’s Other Investments Account accordingly;


  

	(c)	Next, subject to the dividend provisions of Section 5.09 of the Plan, credit to the Other Investments Account of each Participant any cash dividends paid to the Trustee on
shares of Company Stock held in that Participant’s Company Stock Account (as of the record date for such cash dividends) and dividends paid on shares of Company Stock held in the Loan Suspense Account that have not been used to repay any
Acquisition Loan. Subject to the provisions of Section 5.09 of the Plan, cash dividends that have not been used to repay any Acquisition Loan and have been credited to a Participant’s Other Investments Account shall be applied by the
Trustee to purchase shares of Company Stock, which shares shall then be credited to the Company Stock Account of such Participant. The Participant’s Other Investments Account shall then be charged by the amount of cash used to purchase such
Company Stock. In addition, any earnings on: 

  

	 	(i)	Participants’ Other Investments Accounts will be allocated to Accounts, pro rata, based on Participants’ Other Investments Account balances as of the first day of the
Valuation Period, and 

  

	 	(ii)	the Loan Suspense Account, other than dividends used to repay the Acquisition Loan, will be allocated to Participants’ Other Investments Accounts, pro rata, based on their
Other Investments Account balances as of the first day of the Valuation Period; 

  

	(d)	Next, allocate and credit the Employer contributions made pursuant to Section 4.01(b) of the Plan for the purpose of repaying any Acquisition Loan, in accordance with
Section 5.04 of the Plan. Such amount shall then be used to repay any Acquisition Loan and such Participant’s Other Investments Account shall be charged accordingly; and 

  

	(e)	Finally, allocate and credit the Employer contributions (other than amounts contributed to repay an Acquisition Loan) that are made in cash (or property other than Company Stock)
for the Plan Year to the Other Investments Account of each Participant in accordance with Section 5.04 of the Plan. 

  

 13 








 Section 5.04 Allocation and Crediting of Employer Contributions. 
  

	(a)	Except as otherwise provided for in Sections 5.08 and 5.09 of the Plan, as of the Valuation Date for each Plan Year: 

  

	 	(i)	Company Stock released from the Loan Suspense Account for that year and shares of Company Stock contributed directly to the Plan shall be allocated and credited to each Active
Participant’s (as defined in paragraph (b) of this Section 5.04) Company Stock Account based on the ratio that each Active Participant’s Compensation bears to the aggregate Compensation of all Active Participants for the Plan
Year, and then 

  

	 	(ii)	The cash contributions not used to repay an Acquisition Loan and any other property contributed for that year shall be allocated and credited to each Active Participant’s Other
Investments Account based on the ratio determined by comparing each Active Participant’s Compensation while a Participant to the aggregate Compensation of all Active Participants for the Plan Year. 

  

	(b)	For purposes of this Section 5.04, the term “Active Participant” means those Eligible Employees who: 

  

	 	(i)	are employed on the last day of the Plan Year; or 

  

	 	(ii)	terminated employment during the Plan Year by reason of death, Disability, or attainment of their Normal or Later Retirement Date. 

 Section 5.05 Limitations on Allocations. 
  

	(a)	In General. Subject to the provisions of this Section 5.05, Section 415 of the Code shall be incorporated by reference into the terms of the Plan. No
allocation shall be made under Section 5.04 of the Plan that would result in a violation of Section 415 of the Code. 

  

	(b)	Code Section 415 Compensation. For purposes of this Section 5.05, Compensation shall be adjusted to reflect the general rule of Section 1.415-2(d) of
the Treasury Regulations. 

  

	(c)	Limitation Year. The “limitation year” (within the meaning of Section 415 of the Code) shall be the calendar year. 

  

	(d)	Multiple Defined Contribution Plans. In any case where a Participant also participates in another defined contribution plan of the Bank or its Affiliates, the
appropriate committee of such other plan shall first reduce the after-tax contributions under any such plan, shall then reduce any elective deferrals under any such plan subject to Section 401(k) of the Code, shall then reduce all other
contributions under any other such plan and, if necessary, shall then reduce contributions under this Plan. 

  

 14 









	(e)	Excess Allocations. If, after applying the allocation provisions under Section 5.04 of the Plan, allocations under Section 5.04 of the Plan would otherwise
result in a violation of Section 415 of the Code, the Committee shall allocate and reallocate employer contributions to other Participants in the Plan for the limitation year or, if such allocation and reallocation causes the limitations of
Section 415 of the Code to be exceeded, shall hold excess amounts in an unallocated suspense account for allocation in a subsequent Plan Year in accordance with Section 1.415-6(b)(6)(i) of the Treasury Regulations. Such suspense account,
if permitted, will be credited before any allocation of contributions for subsequent limitation years. 

  

	(f)	Allocations Pursuant to Section 5.08. For purposes of this Section 5.05, no amount credited to any Participant’s Account pursuant to Section 5.08
of the Plan shall be counted as an “annual addition” for purposes of Section 415 of the Code. In the event any amount cannot be allocated to Affected Participants (as defined in Section 5.08 of the Plan) under the Plan pursuant
to Section 5.08 of the Plan in the year of a Change in Control, the amount which may not be so allocated in the year of the Change in Control shall be treated in accordance with paragraph (e) of this Section 5.05.


 Section 5.06 Other Limitations. 
 Aside from the limitations set forth in Section 5.05 of the Plan, in no event shall more than one-third of the Employer contributions to the Plan be allocated to the Accounts of Highly Compensated Employees. In order to ensure that
such allocations are not made, the Committee shall, beginning with the Participants whose Compensation exceeds the limit then in effect under Section 401(a)(17) of the Code, reduce the amount of Compensation of such Highly Compensated Employees
on a pro-rata basis per individual that would otherwise be taken into account for purposes of allocating benefits under Section 5.04 of the Plan. If, in order to satisfy this Section 5.06, any such Participant’s Compensation must be
reduced to an amount that is lower than the Compensation amount of the next highest paid (based on such Participant’s Compensation) Highly Compensated Employee (the “breakpoint amount”), then, for purposes of allocating benefits under
Section 5.04 of the Plan, the Compensation of all concerned Participants shall be reduced to an amount not to exceed such breakpoint amount. 
 Section 5.07 Limitations as to Certain Section 1042 Transactions. 
 To the extent that a shareholder of Company Stock sells
qualifying Company Stock to the Plan and elects (with the consent of the Bank) nonrecognition of gain under Section 1042 of the Code, no portion of the Company Stock purchased in such nonrecognition transaction (or other dividends or other
income attributable thereto) may accrue or be allocated during the nonallocation period (the ten (10) year period beginning on the later of the date of the sale of the qualified Company Stock, or the date of the Plan allocation attributable to
the final payment of an Acquisition Loan incurred in connection with such sale) for the benefit of: 
  

	(a)	the selling shareholder; 

  

 15 









	(b)	the spouse, brothers or sisters (whether by the whole or half blood), ancestors or lineal descendants of the selling shareholder or descendant referred to in (a) above; or


  

	(c)	any other person who owns, after application of Section 318(a) of the Code, more than twenty-five percent (25%) of: 

  

	 	(i)	any class of outstanding stock of the Company or any Affiliate, or 

  

	 	(ii)	the total value of any class of outstanding stock of the Company or any Affiliate. 

 For purposes of this Section 5.07, Section 318(a) of the Code shall be applied without regard to the employee trust exception of Section 318(a)(2)(B)(i) of the Code. 
 Section 5.08 Allocations Upon Termination Prior to Satisfaction of Acquisition Loan. 
  

	(a)	Notwithstanding any other provision of the Plan, in the event of a Change in Control, the Plan shall terminate as of the effective date of the Change in Control and, as soon as
practicable thereafter, the Trustee shall repay in full any outstanding Acquisition Loan. In connection with such repayment, the Trustee shall: (i) apply cash, if any, received by the Plan in connection with the transaction constituting a
Change in Control, with respect to the unallocated shares of Company Stock acquired with the proceeds of the Acquisition Loan, and (ii) to the extent additionally required to effect the repayment of the Acquisition Loan, obtain cash through the
sale of any stock or security received by the Plan in connection with such transaction, with respect to such unallocated shares of Company Stock. After repayment of the Acquisition Loan, all remaining shares of Company Stock held in the Loan
Suspense Account, all other stock or securities, and any cash proceeds from the sale or other disposition of any shares of Company Stock held in the Loan Suspense Account, shall be allocated among the Accounts of all Participants who were employed
by an Employer on the date immediately preceding the effective date of the Change in Control. Such allocations of shares or cash proceeds shall be credited as earnings for purposes of Section 5.05 of the Plan and Section 415 of the Code,
as of the effective date of the Change in Control, to the Account of each Participant who is either 

 in active
Service with an Employer, or is on a Recognized Absence, on the date immediately preceding the effective date of the Change of Control (each an “Affected Participant”), in proportion to the opening balances in their Company Stock Accounts
as of the first day of the current Valuation Period. As of the effective date of a Change in Control, all Participant Accounts shall be fully vested and nonforfeitable. 
  


	(b)	In the event of a termination of the Plan in connection with a Change in Control, this Section 5.08 shall have no force and effect unless the price paid for the Company Stock
in connection with a Change in Control is greater than the average basis of the unallocated Company Stock held in the Loan Suspense Account as of the date of the Change in Control. 

  

 16 








 Section 5.09 Dividends. 
  

	(a)	Stock Dividends. Dividends on Company Stock which are received by the Trustee in the form of additional Company Stock shall be retained in the portion of the Trust
Fund consisting of Company Stock, and shall be allocated among the Participants’ Accounts and the Loan Suspense Account in accordance with their holdings of the Company Stock on which the dividends have been paid. 

  

	(b)	Cash Dividends on Allocated Shares. Dividends on Company Stock credited to Participants’ Accounts which are received by the Trustee in the form of cash shall, at
the direction of the Bank, either: 

  

	 	(i)	be credited to Participants’ Accounts in accordance with Section 5.03 of the Plan and invested as part of the Trust Fund; 

  

	 	(ii)	be distributed immediately to the Participants; 

  

	 	(iii)	be distributed to the Participants within ninety (90) days of the close of the Plan Year in which paid; or 

  

	 	(iv)	be used to repay principal and interest on the Acquisition Loan used to acquire Company Stock on which the dividends were paid. 

 In addition to the alternatives specified in the preceding paragraph regarding the treatment of cash dividends paid with respect to shares of Company Stock credited to
Participants’ Accounts, if authorized by the Committee for the Plan Year, a Participant may elect that cash dividends paid on Company Stock credited to the Participant’s Account shall either be: 
  

	 	(i)	paid to the Plan, reinvested in Company Stock and credited to the Participant’s Account; 

  

	 	(ii)	distributed in cash to the Participant; or 

  

	 	(iii)	distributed to the Participant within ninety (90) days of the close of the Plan Year in which paid. 

 Dividends subject to an election under this paragraph (and any Company Stock acquired therewith pursuant to a Participant’s election) shall at all times be fully vested. To the extent the Committee authorizes
dividend elections pursuant to this paragraph, the Committee shall establish policies and procedures relating to Participant elections and, if applicable, the reinvestment of cash dividends in Company Stock, which are consistent with guidance issued
under Section 404(k) of the Code. 
  

	(c)	 Cash Dividends on Unallocated Shares. Dividends on Company Stock held in the Loan Suspense Account received by the Trustee in the form of cash shall
be applied as soon as 



  

 17 









	 	 
practicable to payments of principal and interest under the Acquisition Loan incurred with the purchase of Company Stock. 


  

	(d)	Financed Shares. Financed Shares released from the Loan Suspense Account by reason of dividends paid with respect to Company Stock shall be allocated under Sections
5.03 and 5.04 of the Plan as follows: 

  

	 	(i)	First, Financed Shares with a fair market value at least equal to the dividends paid with respect to the Company Stock allocated to Participants’ Accounts shall be allocated
among and credited to the Accounts of such Participants, pro rata, according to the number of shares of Company Stock held in such accounts on the date the dividend is declared by the Company; and 

  

	 	(ii)	Next, any remaining Financed Shares released from the Loan Suspense Account by reason of dividends paid with respect to Company Stock held in the Loan Suspense Account shall be
allocated among and credited to the Accounts of all Participants, pro rata, according to each Participant’s Compensation. 

 SECTION 6 
 Vesting and Forfeitures 
 Section 6.01 Deferred Vesting in Accounts. 
  

	(a)	A Participant shall be 100% vested in his Account after five Years of Service. 

  

	(b)	For purposes of determining a Participant’s Years of Service under this Section 6.01, all Years of Service shall be included, beginning with the Employee’s initial
service with the Employer. Participants who are former employees of Westerly Savings Bank and became Employees of the Bank as a result of the merger of Westerly Savings Bank and the Bank will be given prior Service credit for their employment with
Westerly Savings Bank. 

 Section 6.02 Immediate Vesting in Certain Situations. 
  

	(a)	Notwithstanding Section 6.01(a) of the Plan, a Participant shall become fully vested in his Accounts upon the earlier of: 

  

	 	(i)	termination of the Plan or upon the permanent and complete discontinuance of contributions by the Employer to the Plan; provided, however, that in the event of a partial termination
of the Plan, the interest of each Participant shall fully vest only with respect to that part of the Plan which is terminated; 

  

	 	(ii)	the Participant’s Normal Retirement Date; 

  

	 	(iii)	a Change in Control; or 

  

	 	(iv)	Termination of Service by reason of death or Disability. 

  

 18 








 Section 6.03 Treatment of Forfeitures. 
  

	(a)	If a Participant who is not fully vested in his Accounts terminates employment, that portion of his Accounts in which he is not vested shall be forfeited upon the earlier of:


  

	 	(i)	the date the Participant receives a distribution of his entire vested benefits under the Plan, or 

  

	 	(ii)	the date at which the Participant incurs five (5) consecutive One Year Breaks in Service. 

  

	(b)	If a Participant who has terminated employment and has received a distribution of his entire vested benefits under the Plan is subsequently reemployed by an Employer prior to
incurring five (5) consecutive One Year Breaks in Service, he shall have the portion of his Accounts which was previously forfeited restored to his Accounts, provided he repays to the Trustee within five (5) years of his subsequent
employment date an amount equal to the previous distribution. The amount restored to the Participant’s Account shall be credited to his Account as of the last day of the Plan Year in which the Participant repays the distributed amount to the
Trustee and the restored amount shall come from other Employees’ forfeitures and, if such forfeitures are insufficient, from a special contribution by the Employer for that year. If a Participant’s employment terminates prior to his
Account having become vested, such Participant shall be deemed to have received a distribution of his entire vested interest as of the Valuation Date next following his termination of employment. 

  

	(c)	If a Participant who has terminated employment but has not received a distribution of his entire vested benefits under the Plan is subsequently reemployed by an Employer subsequent
to incurring five (5) consecutive One Year Breaks in Service, any undistributed balance of his Accounts from his prior participation which was not forfeited shall be maintained as a fully vested subaccount within his Account.


  

	(d)	If a portion of a Participant’s Account is forfeited, assets other than Company Stock must be forfeited before any Company Stock may be forfeited. 

  

	(e)	Forfeitures shall be reallocated among the other Participants in the Plan. 

 Section 6.04 Accounting for Forfeitures. 
 A forfeiture shall be charged to the Participant’s Account as of the first day of
the first Valuation Period in which the forfeiture becomes certain pursuant to Section 6.03 of the Plan. Except as otherwise provided in Section 6.03 of the Plan, a forfeiture shall be added to the contributions of the terminated
Participant’s Employer which are to be credited to other Participants pursuant to Section 5 as of the last day of the Plan Year in which the forfeiture becomes certain. 
  

 19 








 Section 6.05 Vesting Upon Reemployment. 
 If a Participant incurs a One Year Break in Service and again performs an Hour of Service, such Participant shall receive credit, for purposes of Section 6.01 of the Plan, for his Years of Service prior to his
One Year Break in Service. 
 SECTION 7 
 Distributions 
 Section 7.01 Distribution of Benefit Upon a Termination of Employment. 

 

	(a)	A Participant whose employment terminates for any reason shall receive the entire vested portion of his Accounts in a single payment on a date selected by the Committee; provided,
however, that such date shall be on or before the 60th day after the end of the Plan Year in which the Participant’s employment terminated. The benefits from that portion of the Participant’s Other Investments Account shall be calculated
on the basis of the most recent Valuation Date before the date of payment. Subject to the provisions of Section 7.05 of the Plan, if the Committee so provides, a Participant may elect that his benefits be distributed to him in the form of
Company Stock, cash, or some combination thereof. 

  

	(b)	Notwithstanding paragraph (a) of this Section 7.01, if the balance credited to a Participant’s Accounts exceeds, at the time such benefit was distributable, $1,000,
his benefits shall not be paid before the latest of his 65th birthday or the tenth anniversary of the year in which he commenced participation in the Plan, unless he elects an early payment date in a written election filed with the Committee. Such
an election is not valid unless it is made after the Participant has received the required notice under Section 1.411(a)-11(c) of the Treasury Regulations that provides a general description of the material features of a lump sum distribution
and the Participant’s right to defer receipt of his benefits under the Plan. The notice shall be provided no less than 30 days and no more than 90 days before the first day on which all events have occurred which entitle the Participant to such
benefit. Written consent of the Participant to the distribution generally may not be made within 30 days of the date the Participant receives the notice and shall not be made more than 90 days from the date the Participant receives the notice.
However, a distribution may be made less than 30 days after the notice provided under Section 1.411(a)-11(c) of the Treasury Regulations is given, if: 

  

	 	(i)	the Committee clearly informs the Participant that he has a right to a period of at least 30 days after receiving the notice to consider the decision of whether or not to elect a
distribution (and if applicable, a particular distribution option), and 

  

	 	(ii)	the Participant, after receiving the notice, affirmatively elects a distribution. 

 A Participant may modify such an election at any time, provided any new benefit payment date is at least 30 days after a modified election is delivered to the Committee. 
  

 20 








 Section 7.02 Minimum Distribution Requirements. 
 With respect to all Participants, other than those who are “5% owners” (as defined in Section 416 of the Code), benefits shall be paid on the required
beginning date which is no later than the April 1st of the later of: 
  

	 	(i)	the calendar year following the calendar year in which the Participant attains age 70-1/2, or 

  

	 	(ii)	the calendar year in which the Participant retires. 

 With respect to all
Participants who are 5% owners within the meaning of Section 416 of the Code, such Participants’ benefits shall be paid no later than the April 1st of the calendar year following the calendar year in which the Participant attains age
70-1/2. 
 Section 7.03 Benefits on a Participant’s Death. 
  

	(a)	If a Participant dies before his benefits are paid pursuant to Section 7.01 of the Plan, the balance credited to his Accounts shall be paid to his Beneficiary in a single
distribution on or before the 60th day after the end of the Plan Year in which the Participant died. If the Participant has not named a Beneficiary or his named Beneficiary should not survive him, then the balance in his Accounts shall be paid to
his estate. The benefits from that portion of the Participant’s Other Investments Account shall be calculated on the basis of the most recent Valuation Date before the date of payment. 

  

	(b)	If a married Participant dies before his benefit payments begin, then, unless he has specifically elected otherwise, the Committee shall cause the balance in his Accounts to be paid
to his spouse, as Beneficiary. A married Participant may name an individual other than his spouse as Beneficiary provided that such election is accompanied by the spouse’s written consent which must: 

  

	 	(i)	acknowledge the effect of the election; 

  

	 	(ii)	explicitly provide either that the designated Beneficiary may not subsequently be changed by the Participant without the spouse’s further consent or that it may be changed
without such consent; and 

  

	 	(iii)	must be witnessed by the Committee, its representative, or a notary public. 

 This requirement shall not apply if the Participant establishes to the Committee’s satisfaction that the spouse may not be located. 
  

	(c)	 The Committee shall, from time to time, take whatever steps it deems appropriate to keep informed of each Participant’s marital status. Each Employer shall
provide the Committee with the most reliable information in the Employer’s possession regarding its Participants’ marital status, and the Committee may, in its discretion, require a notarized 



  

 21 









	 	 
affidavit from any Participant as to his marital status. The Committee, the Plan, the Trustee, and the Employers shall be fully protected and discharged from
any liability to the extent of any benefit payments made as a result of the Committee’s good faith and reasonable reliance upon information obtained from a Participant as to the Participant’s marital status. 



Section 7.04 Delay in Benefit Determination. 
 If the
Committee is unable to determine the benefits payable to a Participant or Beneficiary on or before the latest date prescribed for payment pursuant to this Section 7, the benefits shall in any event be paid within 60 days after they can first be
determined. 
 Section 7.05 Options to Receive and Sell Company Stock. 
  

	(a)	Unless ownership of virtually all Company Stock is restricted to active Employees and qualified retirement plans for the benefit of Employees pursuant to the certificates of
incorporation or by-laws of the Employers issuing Company Stock, a terminated Participant or the Beneficiary of a deceased Participant may instruct the Committee to distribute the Participant’s entire vested interest in his Accounts in the form
of Company Stock. In that event, the Committee shall apply the Participant’s vested interest in his Other Investments Account to purchase sufficient Company Stock to make the required distribution. 

  

	(b)	Any Participant who receives Company Stock pursuant to this Section 7.05, and any person who has received Company Stock from the Plan or from such a Participant by reason of
the Participant’s death or incompetency, by reason of divorce or separation from the Participant, or by reason of a rollover distribution described in Section 402(c) of the Code, shall have the right to require the Employer which issued
the Company Stock to purchase the Company Stock for its current fair market value (hereinafter referred to as the “put right”). The put right shall be exercisable by written notice to the Committee during the first 60 days after the
Company Stock is distributed by the Plan, and, if not exercised in that period, during the first 60 days in the following Plan Year after the Committee has communicated to the Participant its determination as to the Company Stock’s current fair
market value. If the put right is exercised, the Trustee may, if so directed by the Committee in its sole discretion, assume the Employer’s rights and obligations with respect to purchasing the Company Stock. However, the put right shall not
apply to the extent that the Company Stock, at the time the put right would otherwise be exercisable, may be sold on an established market in accordance with federal and state securities laws and regulations. 

  

	(c)	 With respect to a put right, the Employer or the Trustee, as the case may be, may elect to pay for the Company Stock in equal periodic installments, not less
frequently than annually, over a period not longer than five (5) years from the 30th day after the put right is exercised pursuant to paragraph (b) of this Section 7.05, with adequate security and interest at a reasonable rate on the
unpaid balance, all such terms to be set forth in a 



  

 22 









	 	 
promissory note delivered to the seller with normal terms as to acceleration upon any uncured default. 


  

	(d)	Nothing contained in this Section 7.05 shall be deemed to obligate any Employer to register any Company Stock under any federal or state securities law or to create or maintain
a public market to facilitate the transfer or disposition of any Company Stock. The put right described in this Section 7.05 may only be exercised by a person described in paragraph (b) of this Section 7.05, and may not be transferred
with any Company Stock to any other person. As to all Company Stock purchased by the Plan in exchange for any Acquisition Loan, the put right must be nonterminable. The put right for Company Stock acquired through an Acquisition Loan shall continue
with respect to such Company Stock after the Acquisition Loan is repaid or the Plan ceases to be an employee stock ownership plan. Except as provided above, in accordance with the provisions of Sections 54.4975-7(b)(4) of the Treasury Regulations,
no Company Stock acquired with the proceeds of an Acquisition Loan may be subject to any put, call or other option or buy-sell or similar arrangement while held by, and when distributed from, the Plan, whether or not the Plan is then an employee
stock ownership plan. 

 Section 7.06 Restrictions on Disposition of Company Stock. 
 Except in the case of Company Stock which is traded on an established market, a Participant who receives Company Stock pursuant to this Section 7, and any person who
has received Company Stock from the Plan or from such a Participant by reason of the Participant’s death or incompetency, divorce or separation from the Participant, or a rollover distribution described in Section 402(c) of the Code,
shall, prior to any sale or other transfer of the Company Stock to any other person, first offer the Company Stock to the issuing Employer and to the Plan at its current fair market value. This restriction shall apply to any transfer, whether
voluntary, involuntary, or by operation of law, and whether for consideration or gratuitous. Either the Employer or the Trustee may accept the offer within 14 days after it is delivered. Any Company Stock distributed by the Plan shall bear a
conspicuous legend describing the right of first refusal under this Section 7.06, as applicable, as well as any other restrictions upon the transfer of the Company Stock imposed by federal and state securities laws and regulations. 

Section 7.07 Direct Transfer of Eligible Plan Distributions. 
  

	(a)	Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee’s election under this Section, a distributee (as defined below) may elect to
have any portion of an eligible rollover distribution (as defined below) paid directly to an eligible retirement plan (as defined below) specified by the distributee in a direct rollover (as defined below). A “distributee” includes a
Participant or former Participant. In addition, the Participant’s or former Participant’s surviving spouse and the Participant’s or former Participant’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. For purposes of this Section 7.07 a “direct rollover” is a payment by the Plan to
the eligible retirement plan specified by the distributee. 

  

 23 









	(b)	To effect such a direct transfer, the distributee must notify the Committee that a direct rollover is desired and provide to the Committee sufficient information regarding the
eligible retirement plan to which the payment is to be made. Such notice shall be made in such form and at such time as the Committee may prescribe. Upon receipt of such notice, the Committee shall direct the Trustee to make a trustee-to-trustee
transfer of the eligible rollover distribution to the eligible retirement plan so specified. 

  

	(c)	For purposes of this Section 7.07, an “eligible rollover distribution” shall have the meaning set forth in Section 402(c)(4) of the Code and any Treasury
Regulations promulgated thereunder. To the extent such meaning is not inconsistent with the above references, an eligible rollover distribution shall mean any distribution of all or any portion of the Participant’s Account, except that such
term shall not include any distribution which is one of a series of substantially equal periodic payments (not less frequently than annually) made (i) for the life (or life expectancy) of the Participant or the joint lives (or joint life
expectancies) of the Participant and a designated Beneficiary, or (ii) for a period of ten years or more. Further, the term “eligible rollover distribution” shall not include any distribution required to be made under
Section 401(a)(9) of the Code or, the portion of any distribution that is not includible in gross income (determined without regard to the exclusions for net unrealized appreciation with respect to Company Stock). To the extent applicable under
the Plan, “eligible rollover distributions” shall also not include any hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code. 

  

	(d)	For purposes of this Section 7.07, an “eligible retirement plan” shall have the meaning set forth in Section 402(c)(8) of the Code and any Treasury Regulations
promulgated thereunder. To the extent such meaning is not consistent with the above references, an eligible retirement plan shall mean: (i) an individual retirement account described in Section 408(a) of the Code, (ii) an individual
retirement annuity described in Section 408(b) of the Code, (iii) an annuity or annuity plan described in Section 403(a) or Section 403(b) of the Code, (iv) a qualified trust described in Section 401(a) of the Code, or
(v) a governmental plan under Section 457 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 means an
individual retirement account or individual retirement annuity. 

  

	(e)	An eligible retirement plan shall also mean an annuity contract described in Section 403(b) of the Code and an eligible plan under Section 457(b) of the Code which is
maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state which agrees to separately account for amounts transferred into such plan from this Plan. The definition of
eligible retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relation order as defined in Section 414(p) of the Code.


  

 24 








 SECTION 8 
 Voting of Company Stock and Tender Offers 
 Section 8.01 Voting of Company Stock. 
  

	(a)	In General. The Trustee shall generally vote all shares of Company Stock held in the Trust in accordance with the provisions of this Section 8.01.


  

	(b)	Allocated Shares. Shares of Company Stock which have been allocated to Participants’ Accounts shall be voted by the Trustee in accordance with the
Participants’ written instructions. 

  

	(c)	Uninstructed and Unallocated Shares. Shares of Company Stock which have been allocated to Participants’ Accounts but for which no written instructions have been
received by the Trustee regarding voting shall be voted by the Trustee in a manner calculated to most accurately reflect the instructions the Trustee has received from Participants regarding voting shares of allocated Company Stock. Shares of
unallocated Company Stock shall also be voted by the Trustee in a manner calculated to most accurately reflect the instructions the Trustee has received from Participants regarding voting shares of allocated Company Stock. Notwithstanding the
preceding two sentences, all shares of Company Stock which have been allocated to Participants’ Accounts and for which the Trustee has not timely received written instructions regarding voting and all unallocated shares of Company Stock must be
voted by the Trustee in a manner determined by the Trustee to be solely in the best interests of the Participants and Beneficiaries. 

  

	(d)	Voting Prior to Allocation. In the event no shares of Company Stock have been allocated to Participants’ Accounts at the time Company Stock is to be voted, each
Participant shall be deemed to have one share of Company Stock allocated to his Accounts for the sole purpose of providing the Trustee with voting instructions. 

  

	(e)	Procedure and Confidentiality. Whenever such voting rights are to be exercised, the Employers, the Committee, and the Trustee shall see that all Participants and
Beneficiaries are provided with the same notices and other materials as are provided to other holders of the Company Stock, and are provided with adequate opportunity to deliver their instructions to the Trustee regarding the voting of Company Stock
allocated to their Accounts or deemed allocated to their Accounts for purposes of voting. The instructions of the Participants with respect to the voting of shares of Company Stock shall be confidential. 

 Section 8.02 Tender Offers. 
 In the event of a tender
offer, Company Stock shall be tendered by the Trustee in the same manner set forth in Section 8.01 of the Plan regarding the voting of Company Stock. 
  

 25 








 SECTION 9 
 The Committee and Plan Administration 
 Section 9.01 Identity of the Committee. 
 The Committee shall consist of three or more individuals selected by the Bank. Any individual, including a director, trustee, shareholder, officer, or Employee of an
Employer, shall be eligible to serve as a member of the Committee. The Bank shall have the power to remove any individual serving on the Committee at any time without cause upon ten (10) days’ written notice to such individual and any
individual may resign from the Committee at any time without reason upon ten (10) days’ written notice to the Bank. The Bank shall notify the Trustee of any change in membership of the Committee. 
 Section 9.02 Authority of Committee. 
  

	(a)	The Committee shall be the “plan administrator” within the meaning of ERISA and shall have exclusive responsibility and authority to control and manage the operation and
administration of the Plan, including the interpretation and application of its provisions, except to the extent such responsibility and authority are otherwise specifically: 

  

	 	(i)	allocated to the Bank, the Employers, or the Trustee under the Plan and Trust Agreement; 

  

	 	(ii)	delegated in writing to other persons by the Bank, the Employers, the Committee, or the Trustee; or 

  

	 	(iii)	allocated to other parties by operation of law. 

  

	(b)	The Committee shall have exclusive responsibility regarding decisions concerning the payment of benefits under the Plan. 

  

	(c)	The Committee shall have full investment responsibility with respect to the Investment Fund except to the extent, if any, specifically provided for in the Trust Agreement.


  

	(d)	In the discharge of its duties, the Committee may employ accountants, actuaries, legal counsel, and other agents (who also may be employed by an Employer or the Trustee in the same
or some other capacity) and may pay such individuals reasonable compensation and expenses for their services rendered with respect to the operation or administration of the Plan, to the extent such payments are not otherwise prohibited by law.


 Section 9.03 Duties of Committee. 
  

	(a)	 The Committee shall keep whatever records may be necessary in connection with the maintenance of the Plan and shall furnish to the Employers whatever reports may be
required from time to time by the Employers. The Committee shall furnish to the Trustee whatever information may be necessary to properly administer the Trust. The Committee 



  

 26 









	 	 
shall see to the filing with the appropriate government agencies of all reports and returns required with respect to the Plan under ERISA, the Code and other
applicable laws and regulations. 


  

	(b)	The Committee shall have exclusive responsibility and authority with respect to the Plan’s holdings of Company Stock and shall direct the Trustee in all respects regarding the
purchase, retention, sale, exchange, and pledge of Company Stock and the creation and satisfaction of any Acquisition Loan to the extent such responsibilities are not set forth in the Trust Agreement. 

  

	(c)	The Committee shall at all times act consistently with the Bank’s long-term intention that the Plan, as an employee stock ownership plan, be invested primarily in Company
Stock. Subject to the direction of the Committee with respect to any Acquisition Loan pursuant to the provisions of Section 4.03 of the Plan, and subject to the provisions of Sections 7.05 and 11.04 of the Plan as to Participants’ rights
under certain circumstances to have their Accounts invested in Company Stock or in assets other than Company Stock, the Committee shall determine, in its sole discretion, the extent to which assets of the Trust shall be used to repay any Acquisition
Loan, to purchase Company Stock, or to invest in other assets selected by the Committee or an investment manager. No provision of the Plan relating to the allocation or vesting of any interests in Company Stock or investments other than Company
Stock shall restrict the Committee from changing any holdings of the Trust Fund, whether the changes involve an increase or a decrease in the Company Stock or other assets credited to Participants’ Accounts. In determining the proper extent of
the Trust Fund’s investment in Company Stock, the Committee shall be authorized to employ investment counsel, legal counsel, appraisers, and other agents and to pay their reasonable compensation and expenses to the extent such payments are not
prohibited by law. 

  

	(d)	If the valuation of any Company Stock is not established by reported trading on a generally recognized public market, then the Committee shall have the exclusive authority and
responsibility to determine the value of the Company Stock for all purposes under the Plan. Such value shall be determined as of each Valuation Date and on any other date as of which the Trustee purchases or sells Company Stock in a manner
consistent with Section 4975 of the Code and the Treasury Regulations issued thereunder. The Committee shall use generally accepted methods of valuing stock of similar corporations for purposes of arm’s length business and investment
transactions, and in this connection the Committee shall obtain, and shall be protected in relying upon, the valuation of Company Stock as determined by an independent appraiser (as defined in Section 401(a)(28)(c) of the Code).


 Section 9.04 Compliance with ERISA and the Code. 
 The Committee shall perform all acts necessary to ensure the Plan’s compliance with ERISA and the Code. Each individual member of the Committee shall discharge his duties in good faith and in accordance with the
applicable requirements of ERISA and the Code. 
  

 27 








 Section 9.05 Action by Committee. 
 All actions of the Committee shall be governed by the affirmative vote of a majority of the total number of Committee members. The members of the Committee may meet informally and may take any action without meeting
as a group. 
 Section 9.06 Execution of Documents. 
 Any instrument to be executed by the Committee may be signed by any member of the Committee. 
 Section 9.07 Adoption of Rules.

 The Committee shall adopt such rules and regulations of uniform applicability as it deems necessary or appropriate for the proper operation,
administration and interpretation of the Plan. 
 Section 9.08 Responsibilities to Participants. 
 The Committee shall determine which Employees qualify to participate in the Plan. The Committee shall furnish to each Eligible Employee whatever summary plan
descriptions, summary annual reports, and other notices and information that may be required under ERISA. The Committee also shall determine when a Participant or his Beneficiary qualifies for the payment of benefits under the Plan. The Committee
shall furnish to each such Participant or Beneficiary whatever information is required under ERISA or the Code (or is otherwise appropriate) to enable the Participant or Beneficiary to make whatever elections may be available pursuant to
Section 7, and the Committee shall provide for the payment of benefits in the proper form and amount from the Trust. The Committee may decide in its sole discretion to permit modifications of elections and to defer or accelerate benefits to the
extent consistent with the terms of the Plan, applicable law, and the best interests of the individuals concerned. 
 Section 9.09 Alternative
Payees in Event of Incapacity. 
 If the Committee finds at any time that an individual qualifying for benefits under this Plan is a minor or is
incompetent, the Committee may direct the benefits to be paid, in the case of a minor, to his parents, his legal guardian, a custodian for him under the Uniform Transfers to Minors Act, or the person having actual custody of him, or, in the case of
an incompetent, to his spouse, his legal guardian, or the person having actual custody of him. The Committee and the Trustee shall not be obligated to inquire as to the actual use of the funds by the person receiving them under this
Section 9.09, and any such payment shall completely discharge the obligations of the Plan, the Trustee, the Committee, and the Employers to the extent of the payment. 
 Section 9.10 Indemnification by Employers. 
 Except as separately agreed upon in writing, the Committee,
and any member or employee of the Committee, shall be indemnified and held harmless by the Employers, jointly and severally, to the fullest extent permitted by law, against any and all costs, damages, expenses, and liabilities 

  

 28 








 
reasonably incurred by or imposed upon the Committee or such individual in connection with any claim made against the Committee or such individual, or in
which the Committee or such individual may be involved by reason of being, or having been, the Committee, or a member or employee of the Committee, to the extent such amounts are not paid by insurance. 
 Section 9.11 Abstention by Interested Member. 
 Any member
of the Committee who is also a Participant in the Plan shall take no part in any determination specifically relating to his own participation or benefits under the Plan, unless an abstention would render the Committee incapable of acting on the
matter. 
 SECTION 10 
 Rules Governing Benefit Claims 
 Section 10.01 Claim for Benefits. 
 Any Participant or Beneficiary who qualifies for the payment of benefits shall file a claim for benefits with the Committee on a form provided by the Committee. The
claim, including any election of an alternative benefit form, shall be filed at least 30 days before the date on which the benefits are to begin. If a Participant or Beneficiary fails to file a claim by the 30th day before the date on which benefits
become payable, he shall be presumed to have filed a claim for payment for the Participant’s benefits in the standard form prescribed by Section 7 of the Plan. 
 Section 10.02 Notification by Committee. 
 Within 90 days after receiving a claim for benefits (or within
180 days, if special circumstances require an extension of time and written notice of the extension is given to the Participant or Beneficiary within 90 days after receiving the claim for benefits), the Committee shall notify the Participant or
Beneficiary whether the claim has been approved or denied. If the Committee denies a claim in any respect, the Committee shall set forth in a written notice to the Participant or Beneficiary: 
  

	(a)	each specific reason for the denial; 

  

	(b)	specific references to the pertinent Plan provisions on which the denial is based; 

  

	(c)	a description of any additional material or information which could be submitted by the Participant or Beneficiary to support his claim, with an explanation of the relevance of such
information; and 

  

	(d)	an explanation of the claims review procedures set forth in Section 10.03 of the Plan. 

 Section 10.03 Claims Review Procedure. 
 Within 60 days after a Participant or Beneficiary receives notice
from the Committee that his claim for benefits has been denied in any respect, he may file with the Committee a written 

  

 29 








 
notice of appeal setting forth his reasons for disputing the Committee’s determination. In connection with his appeal, the Participant or Beneficiary or
his representative may inspect or purchase copies of pertinent documents and records to the extent not inconsistent with other Participants’ and Beneficiaries’ rights of privacy. Within 60 days after receiving a notice of appeal from a
prior determination (or within 120 days, if special circumstances require an extension of time and written notice of the extension is given to the Participant or Beneficiary and his representative within 60 days after receiving the notice of
appeal), the Committee shall furnish to the Participant or Beneficiary and his representative, if any, a written statement of the Committee’s final decision with respect to his claim, including the reasons for such decision and the particular
Plan provisions upon which it is based. 
 SECTION 11 
 The Trust 
 Section 11.01 Creation of Trust Fund. 
 All amounts received under the Plan from an Employer and investments shall be held in a Trust Fund pursuant to the terms of this Plan and the Trust Agreement. The
benefits described in this Plan shall be payable only from the assets of the Trust Fund. Neither the Bank, any other Employer, its board of directors or trustees, its stockholders, its officers, its employees, the Committee, nor the Trustee shall be
liable for payment of any benefit under this Plan except from the Trust Fund. 
 Section 11.02 Company Stock and Other Investments.

 The Trust Fund held by the Trustee shall be divided into Company Stock and investments other than Company Stock. The Trustee shall have no investment
responsibility for the portion of the Trust Fund consisting of Company Stock, but shall accept any Employer contributions made in the form of Company Stock, and shall acquire, sell, exchange, distribute, and otherwise deal with and dispose of
Company Stock in accordance with the instructions of the Committee. 
 Section 11.03 Acquisition of Company Stock. 
 From time to time the Committee may, in its sole discretion, direct the Trustee to acquire Company Stock from the issuing Employer or from shareholders, including
shareholders who are or have been Employees, Participants, or fiduciaries with respect to the Plan. The Trustee shall pay for such Company Stock no more than its fair market value, which shall be determined conclusively by the Committee pursuant to
Section 9.03(d) of the Plan. The Committee may direct the Trustee to finance the acquisition of Company Stock through an Acquisition Loan subject to the provisions of Section 4.03 of the Plan. 
 Section 11.04 Participants’ Option to Diversify. 
 The Committee shall establish a procedure under which each Participant may, during the first five years of a certain six-year period, elect to have up to 25 percent of the value of his Accounts committed to alternative investment options
within an “Investment Fund.” For the sixth year in 

  

 30 








 
this period, the Participant may elect to have up to 50 percent of the value of his Accounts committed to other investments. The six-year period shall begin
with the Plan Year following the first Plan Year in which the Participant has both reached age 55 and completed 10 years of participation in the Plan; a Participant’s election to diversify his Accounts must be made within the 90-day period
immediately following the last day of each of the six Plan Years. The Committee shall see that the Investment Fund includes a sufficient number of investment options to comply with Section 401(a)(28)(B) of the Code. The Committee may, in its
discretion, permit a transfer of a portion of the Participant’s Accounts to the First Federal Savings Bank Retirement Plan in order to satisfy this Section 11.04, provided such investments comply with Section 401(a)(28)(B) of the Code
and such transfer is not otherwise prohibited under the Code or ERISA. The Trustee shall comply with any investment directions received from Participants in accordance with the procedures adopted from time to time by the Committee under this
Section 11.04. 
 SECTION 12 
 Adoption, Amendment and Termination 
 Section 12.01 Adoption of Plan by Other Employers. 
 With the consent of the Bank, any entity may become a participating Employer under the Plan by: 
  

	(a)	taking such action as shall be necessary to adopt the Plan; 

  

	(b)	becoming a party to the Trust Agreement establishing the Trust Fund; and 

  

	(c)	executing and delivering such instruments and taking such other action as may be necessary or desirable to put the Plan into effect with respect to the entity’s Employees.


 Section 12.02 Adoption of Plan by Successor. 
 In the event that any Employer shall be reorganized by way of merger, consolidation, transfer of assets or otherwise, so that an entity other than an Employer shall succeed to all or substantially all of the
Employer’s business, the successor entity may be substituted for the Employer under the Plan by adopting the Plan and becoming a party to the Trust Agreement. Contributions by the Employer shall be automatically suspended from the effective
date of any such reorganization until the date upon which the substitution of the successor entity for the Employer under the Plan becomes effective. If, within 90 days following the effective date of any such reorganization, the successor entity
shall not have elected to become a party to the Plan, or if the Employer shall adopt a plan of complete liquidation other than in connection with a reorganization, the Plan shall be automatically terminated with respect to Employees of the Employer
as of the close of business on the 90th day following the effective date of the reorganization, or as of the close of business on the date of adoption of a plan of complete liquidation, as the case may be. 
  

 31 








 Section 12.03 Plan Adoption Subject to Qualification. 
 Notwithstanding any other provision of the Plan, the adoption of the Plan and the execution of the Trust Agreement are conditioned upon their being determined initially
by the Internal Revenue Service to meet the qualification requirements of Section 401(a) of the Code, so that the Employers may deduct currently for federal income tax purposes their contributions to the Trust and so that the Participants may
exclude the contributions from their gross income and recognize income only when they receive benefits. In the event that this Plan is held by the Internal Revenue Service not to qualify initially under Section 401(a) of the Code, the Plan may
be amended retroactively to the earliest date permitted by the Code and the applicable Treasury Regulations in order to secure qualification under Section 401(a) of the Code. If this Plan is held by the Internal Revenue Service not to qualify
initially under Section 401(a) of the Code either as originally adopted or as amended, each Employer’s contributions to the Trust under this Plan (including any earnings thereon) shall be returned to it and this Plan shall be terminated.
In the event that this Plan is amended after its initial qualification, and the Plan, as amended, is held by the Internal Revenue Service not to qualify under Section 401(a) of the Code, the amendment may be modified retroactively to the
earliest date permitted by the Code and the applicable Treasury Regulations in order to secure approval of the amendment under Section 401(a) of the Code. 
 Section 12.04 Right to Amend or Terminate. 
  

	(a)	The Bank intends to continue this Plan as a permanent program. However, each participating Employer separately reserves the right to suspend, supersede, or terminate the Plan at any
time and for any reason, as it applies to that Employer’s Employees, and the Bank reserves the right to amend, suspend, supersede, merge, consolidate, or terminate the Plan at any time and for any reason, as it applies to the Employees of all
Employers. 

  

	(b)	No amendment, suspension, supersession, merger, consolidation, or termination of the Plan shall reduce any Participant’s or Beneficiary’s proportionate interest in the
Trust Fund, or shall divert any portion of the Trust Fund to purposes other than the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan. Except as is required for purposes of
compliance with the Code or ERISA, neither the provisions of Section 5.04 relating to the crediting of contributions, forfeitures and shares of Company Stock released from the Loan Suspense Account, nor any other provision of the Plan relating
to the allocation of benefits to Participants, may be amended more frequently than once every six months. Moreover, there shall not be any transfer of assets to a successor plan or merger or consolidation with another plan unless, in the event of
the termination of the successor plan or the surviving plan immediately following such transfer, merger, or consolidation, each participant or beneficiary would be entitled to a benefit equal to or greater than the benefit he would have been
entitled to if the plan in which he was previously a participant or beneficiary had terminated immediately prior to such transfer, merger, or consolidation. Following a termination of this Plan by the Bank, the Trustee shall continue to administer
the Trust and pay benefits in accordance with the Plan and the Committee’s instructions. 

  

 32 









	(c)	In the event of a Change in Control, the Plan shall be terminated and allocations made to Participants in accordance with the provisions of Section 5.08 of the Plan.


 SECTION 13 
 General Provisions 
 Section 13.01 Nonassignability of Benefits. 
 The interests of Participants and other persons entitled to benefits under the Plan shall not be subject to the claims of their creditors and may not be voluntarily or
involuntarily assigned, alienated, pledged, encumbered, sold, or transferred. The prohibitions set forth in this Section 13.01 shall also apply to any judgment, decree, or order (including approval of a property or settlement agreement) which
relates to the provision of child support, alimony, or property rights to a present or former spouse, child, or other dependent of a Participant pursuant to a domestic relations order, unless such judgment, decree or order is determined to be a
“qualified domestic relations order” as defined in Section 414(p) of the Code. 
 Section 13.02 Limit of Employer Liability.

 The liability of the Employers with respect to Participants and other persons entitled to benefits under the Plan shall be limited to making
contributions to the Trust from time to time, in accordance with Section 4 of the Plan. 
 Section 13.03 Plan Expenses. 

All expenses incurred by the Committee or the Trustee in connection with administering the Plan and Trust shall be paid by the Trustee from the Trust Fund to the
extent the expenses have not been paid or assumed by the Employer. 
 Section 13.04 Nondiversion of Assets. 
 Except as provided in Sections 5.05 and 12.03 of the Plan, under no circumstances shall any portion of the Trust Fund be diverted to or used for any purpose other than
the exclusive benefit of Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan. 
 Section 13.05
Separability of Provisions. 
 If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be
affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan. 
 Section 13.06 Service of
Process. 
 The agent for the service of process upon the Plan shall be the Chairman of the Board of the Bank and the Trustee, or such other person as
may be designated from time to time by the Bank. 
  

 33 








 Section 13.07 Governing Law. 
 The Plan is established under, and its validity, construction and effect shall be governed by the laws of the State of Rhode Island to the extent those laws are not preempted by federal law, including the provisions
of ERISA. 
 Section 13.08 Special Rules for Persons Subject to Section 16(b) Requirements. 
 Notwithstanding anything herein to the contrary, any former Participant who is subject to the provisions of Section 16(b) of the Securities Exchange Act of 1934, who
becomes eligible to again participate in the Plan, may not become a Participant prior to the date that is six months from the date such former Participant terminated participation in the Plan. In addition, any person subject to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 Act receiving a distribution of Company Stock from the Plan must hold such Company Stock for a period of six months, commencing with the date of distribution. However, this restriction will
not apply to Company Stock distributions made in connection with death, retirement, Disability or termination of employment, or made pursuant to the terms of a qualified domestic relations order. 
 Section 13.09 Military Service. 
 Notwithstanding any
other 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 14 
 Top-Heavy Provisions

 Section 14.01 Top-Heavy Provisions. 
  

	 	(i)	Key employee. Key employee means any employee or former employee (including any deceased employee) who at any time during the Plan Year that includes the Determination Date
was an officer of the Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5% owner of the Employer or a 1% owner of the Employer
having annual compensation of more than $150,000. For this purpose, annual compensation means compensation within the meaning of Section 415(c)(3) of the Code. The determination of who is a key employee will be made in accordance with
Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability issued thereunder. 

  

	 	(ii)	Determination of present values and amounts. This section (ii) shall apply for purposes of determining the present values of accrued benefits and the amounts of account
balances of Participants as of the distribution date. 

  

 34 









	 	(A)	Distributions during year ending on the Determination Date. The present values of accrued benefits and the amounts of account balances of a Participant as of the
Determination Date shall be increased by the distributions made with respect to the Participant under the Plan and any Plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1-year period ending on the Determination Date.
The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a
reason other than separation from service, death or disability, this provision shall be applied by substituting “5-year period” for “1-year period”. 

  

	 	(B)	Participants not performing services during the year ending on the Determination Date. The accrued benefits and accounts of any individual who has not performed services for
the Employer during the 1-year period ending on the Determination Date shall not be taken into account.” 

 Section 14.02 Plan
Modifications Upon Becoming Top-Heavy. 
  

	(a)	Minimum Accruals. Section 5.04 of the Plan will be modified to provide that the aggregate amount of Employer contributions allocated in each Plan Year to the
Accounts of each Participant who is a non-Key Employee (as defined under Section 416(i)(1) of the Code), and who is employed by an Employer as of the last day of the Plan Year, may not be less than the lesser of: 

  

	 	(i)	three percent (3%) of his Compensation for the Plan Year; and 

  

	 	(ii)	a percentage of his Compensation equal to the largest percentage obtained by dividing the sum of the amount credited to the Accounts of any Key Employee by that Key Employee’s
Compensation. 

  

	(b)	The preceding provision will remain in effect for the period in which the Plan is top-heavy. If, for any particular year thereafter, the Plan is no longer top-heavy, the provisions
contained in this Section 14.02 shall cease to apply, except that any previously vested portion of any Account balance shall remain nonforfeitable. 

  

 35