exv10w12






Exhibit 10.12




THE ONEIDA SAVINGS BANK




EMPLOYEE STOCK OWNERSHIP PLAN



(adopted effective January 1, 1998)





 









 








THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




     This Employee Stock Ownership Plan, executed on the 8th day of December, 1998, by
The Oneida Savings Bank, a New York chartered stock savings bank (the “Bank”),



WITNESSETH THAT




     WHEREAS, the board of directors of the Bank has resolved to adopt an employee stock ownership
plan for eligible employees in accordance with the terms and conditions presented to the directors;



     NOW, THEREFORE, the Bank hereby adopts the following Plan setting forth the terms and
conditions pertaining to contributions by the Employer and the payment of benefits to Participants
and Beneficiaries.



     IN WITNESS WHEREOF, the Bank has adopted this Plan and caused this instrument to be executed
by its duly authorized officers as of the above date.


ATTEST:




	 	 	 	 	 	 	 	 	 	 
	/s/

	 	Patricia A. Zupan
	 	By:
	 	/s/
	 	Michael R. Kallet	 
	Secretary
	 	 	 	President	 






 









 






CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page No.	 
	Section 1.
	 	Plan Identity	 	 	1	 
	1.1.
	 	Name	 	 	1	 
	1.2.
	 	Purpose	 	 	1	 
	1.3.
	 	Effective Date	 	 	1	 
	1.4.
	 	Fiscal Period	 	 	1	 
	1.5.
	 	Single Plan for All Employers	 	 	1	 
	1.6.
	 	Interpretation of Provisions	 	 	1	 
	Section 2.
	 	Definitions	 	 	1	 
	Section 3.
	 	Eligibility for Participation	 	 	7	 
	3.1.
	 	Initial Eligibility	 	 	7	 
	3.2.
	 	Definition of Eligibility Year	 	 	7	 
	3.3.
	 	Terminated Employees	 	 	7	 
	3.4.
	 	Certain Employees Ineligible	 	 	7	 
	3.5.
	 	Participation and Reparticipation	 	 	7	 
	3.6.
	 	Omission of Eligible Employee	 	 	7	 
	3.7.
	 	Inclusion of Ineligible Employee	 	 	7	 
	Section 4.
	 	Contributions and Credits	 	 	8	 
	4.1.
	 	Discretionary Contributions	 	 	8	 
	4.2.
	 	Contributions for Stock Obligations	 	 	8	 
	4.3.
	 	Definitions Related to Contributions	 	 	8	 
	4.4.
	 	Conditions as to Contributions	 	 	9	 
	4.5.
	 	Transfers	 	 	9	 
	Section 5.
	 	Limitations on Contributions and Allocations	 	 	9	 
	5.1.
	 	Limitation on Annual Additions	 	 	9	 
	5.2.
	 	Coordinated Limitation With Other Plans	 	 	11	 
	5.3.
	 	Effect of Limitations	 	 	11	 
	5.4.
	 	Limitations as to Certain Participants	 	 	11	 
	Section 6.
	 	Trust Fund and Its Investment.	 	 	12	 
	6.1.
	 	Creation of Trust Fund	 	 	12	 
	6.2.
	 	Stock Fund and Investment Fund	 	 	12	 
	6.3.
	 	Acquisition of Stock	 	 	12	 
	6.4.
	 	Participants’ Option to Diversify	 	 	13	 
	Section 7.
	 	Voting Rights and Dividends on Stock	 	 	14	 
	7.1.
	 	Voting and Tendering of Stock	 	 	14	 
	7.2.
	 	Dividends on Stock	 	 	14	 
	Section 8.
	 	Adjustments to Accounts	 	 	15	 
	8.1.
	 	Adjustments for Transactions	 	 	15	 
	8.2.
	 	Valuation of Investment Fund	 	 	15	 
	8.3.
	 	Adjustments for Investment Experience	 	 	15	 
	Section 9.
	 	Vesting of Participants’ Interests	 	 	16	 
	9.1.
	 	Deferred Vesting in Accounts	 	 	16	 
	9.2.
	 	Computation of Vesting Years	 	 	16	 
	9.3.
	 	Full Vesting Upon Certain Events	 	 	17	 
	9.4.
	 	Full Vesting Upon Plan Termination	 	 	17	 
	9.5.
	 	Forfeiture, Repayment, and Restoral	 	 	18	 
	9.6.
	 	Accounting for Forfeitures	 	 	18	 
	9.7.
	 	Vesting and Nonforfeitability	 	 	18	 






 









 






	 	 	 	 	 	 	 	 
	 	 	 	 	 	Page No.	 
	Section 
	10.	 	Payment of Benefits	 	 	18	 
	 	10.1.	 	Benefits for Participants	 	 	18	 
	
	10.2.	 	Time for Distribution	 	 	18	 
	 	10.3.	 	Marital Status	 	 	20	 
	 	10.4.	 	Delay in Benefit Determination	 	 	20	 
	 	10.5.	 	Accounting for Benefit Payments	 	 	20	 
	 	10.6.	 	Options to Receive and Sell Stock	 	 	20	 
	 	10.7.	 	Restrictions on Disposition of Stock	 	 	21	 
	 	10.8.	 	Continuing Loan Provisions; Creations of Protections and Rights	 	 	21	 
	 	10.9.	 	Direct Rollover of Eligible Distribution	 	 	21	 
	 	10.10.	 	In Service Distribution of Roll-over Account	 	 	22	 
	 	10.11.	 	Waiver of 30 Day Period After Notice of Distribution	 	 	22	 
	Section 
	11.	 	Rules Governing Benefit Claims and Review of Appeals	 	 	22	 
	 	11.1.	 	Claim for Benefits	 	 	22	 
	 	11.2.	 	Notification by Committee	 	 	22	 
	 	11.3.	 	Claims Review Procedure	 	 	23	 
	Section 
	12.	 	The Committee and Its Functions	 	 	23	 
	 	12.1.	 	Authority of Committee	 	 	23	 
	 	12.2.	 	Identity of Committee	 	 	23	 
	 	12.3.	 	Duties of Committee	 	 	23	 
	 	12.4.	 	Valuation of Stock	 	 	24	 
	 	12.5.	 	Compliance with ERISA.	 	 	24	 
	 	12.6.	 	Action by Committee	 	 	24	 
	 	12.7.	 	Execution of Documents	 	 	24	 
	 	12.8.	 	Adoption of Rules	 	 	24	 
	 	12.9.	 	Responsibilities to Participants	 	 	24	 
	 	12.10.	 	Alternative Payees in Event of Incapacity	 	 	24	 
	 	12.11.	 	Indemnification by Employers	 	 	24	 
	 	12.12.	 	Nonparticipation by Interested Member	 	 	25	 
	Section 
	13.	 	Adoption, Amendment, or Termination of the Plan	 	 	25	 
	 	13.1.	 	Adoption of Plan by Other Employers	 	 	25	 
	 	13.2.	 	Adoption of Plan by Successor	 	 	25	 
	 	13.3.	 	Plan Adoption Subject to Qualification	 	 	25	 
	 	13.4.	 	Right to Amend or Terminate	 	 	25	 
	Section 
	14.	 	Miscellaneous Provisions	 	 	26	 
	 	14.1.	 	Plan Creates No Employment Rights	 	 	26	 
	 	14.2.	 	Nonassignability of Benefits	 	 	26	 
	 	14.3.	 	Limit of Employer Liability	 	 	26	 
	 	14.4.	 	Treatment of Expenses	 	 	26	 
	 	14.5.	 	Number and Gender	 	 	26	 
	 	14.6.	 	Nondiversion of Assets	 	 	26	 
	 	14.7.	 	Separability of Provisions	 	 	27	 
	 	14.8.	 	Service of Process	 	 	27	 
	 	14.9.	 	Governing State Law.	 	 	27	 
	 	14.10.	 	Employer Contributions Conditioned on Deductibility	 	 	27	 
	 	14.11.	 	Unclaimed Accounts	 	 	27	 
	 	14.12.	 	Qualified Domestic Relations Order	 	 	27	 
	Section 
	15.	 	Top-Heavy Provisions	 	 	28	 
	 	15.1.	 	Top-Heavy Plan	 	 	28	 
	 	15.2.	 	Super Top-Heavy Plan	 	 	28	 
	 	15.3.	 	Definitions	 	 	28	 






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	 	 	 	 	Page No.	 
	15.4.
	 	Top-Heavy Rules of Application	 	 	30	 
	15.5.
	 	Top-Heavy Ratio	 	 	31	 
	15.6.
	 	Minimum Contributions	 	 	31	 
	15.7.
	 	Minimum Vesting	 	 	32	 
	15.8.
	 	Top-Heavy Provisions Control in Top-Heavy Plan	 	 	32	 






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THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN



Section 1. Plan Identity.




     1.1. Name. The name of this Plan is “The Oneida Savings Bank Employee Stock
Ownership Plan.”



     1.2. Purpose. The purpose of this Plan is to describe the terms and conditions
under which contributions made pursuant to the Plan will be credited and paid to the Participants
and their Beneficiaries.



     1.3. Effective Date. The Effective Date of this Plan is January 1, 1998.



     1.4. Fiscal Period. This Plan shall be operated on the basis of a January 1 to
December 31 fiscal year for the purpose of keeping the Plan’s books and records and distributing or
filing any reports or returns required by law.



     1.5. Single Plan for All Employers. This Plan shall be treated as a single plan
with respect to all participating Employers for the purpose of crediting contributions and
forfeitures and distributing benefits, determining whether there has been any termination of
Service, and applying the limitations set forth in Section 5.



     1.6. Interpretation of Provisions. The Employers intend this Plan and the Trust
to be a qualified stock bonus plan under Section 401 (a) of the Code and an employee stock
ownership plan within the meaning of Section 407(d)(6) of ERISA and Section 4975(e)(7) of the Code.
The Plan is intended to have its assets invested primarily in qualifying employer securities of one
or more Employers within the meaning of Section 407(d)(3) of ERISA, and to satisfy any requirement
under ERISA or the Code applicable to such a plan.



     Accordingly, the Plan and Trust Agreement shall be interpreted and applied in a manner
consistent with this intent and shall be administered at all times and in all respects in a
nondiscriminatory manner.


Section 2. Definitions.




     The following capitalized words and phrases shall have the meanings specified when used in
this Plan and in the Trust Agreement, unless the context clearly indicates otherwise:



     “Account” means a Participant’s interest in the assets accumulated under this Plan as
expressed in terms of a separate account balance which is periodically adjusted to reflect his
Employer’s contributions, the Plan’s investment experience, and distributions and forfeitures.



     “Active Participant” means any Employee who has satisfied the eligibility requirements of
Section 3 and who qualifies as an Active Participant for a particular Plan Year under Section 4.3.



     “Bank” means The Oneida Savings Bank and any entity which succeeds to the business of The
Oneida Savings Bank and adopts this Plan as its own pursuant to Section 14.2.



 









 





     “Beneficiary” means the person or persons who are designated by a Participant to receive
benefits payable under the Plan on the Participant’s death. In the absence of any designation or if
all the designated Beneficiaries shall die before the Participant dies or shall die before all
benefits have been paid, the Participant’s Beneficiary shall be his surviving Spouse, if any, or
his estate if he is not survived by a Spouse. The Committee may rely upon the advice of the
Participant’s executor or administrator as to the identity of the Participant’s Spouse.



     “Break in Service” means any Plan Year, or, for the initial eligibility computation period
under Section 3.2, the 12-consecutive month period beginning on the first day on which an Employee
has 500 or fewer Hours of Service, in which an Employee has 500 or fewer Hours of Service. Solely
for this purpose, an Employee shall be considered employed for his normal hours of paid employment
during a Recognized Absence (said Employee shall not be credited with more than 501 Hours of
Service to avoid a Break in Service), unless he does not resume his Service at the end of the
Recognized Absence. Further, if an Employee is absent for any period beginning on or after January
l, 1985, (i) by reason of the Employee’s pregnancy, (ii) by reason of the birth of the Employee’s
child, (iii) by reason of the placement of a child with the Employee in connection with the
Employee’s adoption of the child, or (iv) for purposes of caring for such child for a period
beginning immediately after such birth or placement, the Employee shall be credited with the Hours
of Service which would normally have been credited but for such absence, up to a maximum of 501
Hours of Service.



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



     “Committee” means the committee responsible for the administration of this Plan in accordance
with Section 12.



     “Company” means Oneida Financial Corp., the stock holding company of the Bank.



     “Disability” means only a disability which renders the Participant totally unable, as a result
of bodily or mental disease or injury, to perform any duties for an Employer for which he is
reasonably fitted, which disability is expected to be permanent or of long and indefinite duration.
However, this term shall not include any disability directly or indirectly resulting from or
related to habitual drunkenness or addiction to narcotics, a criminal act or attempt, service in
the armed forces of any country, an act of war, declared or undeclared, any injury or disease
occurring while compensation to the Participant is suspended, or any injury which is intentionally
self-inflicted. Further, this term shall apply only if (i) the Participant is sufficiently disabled
to qualify for the payment of disability benefits under the federal Social Security Act or Veterans
Disability Act, or (ii) the Participant’s disability is certified by a physician selected by the
Committee. Unless the Participant is sufficiently disabled to qualify for disability benefits under
the federal Social Security Act or Veterans Disability Act, the Committee may require the
Participant to be appropriately examined from time to time by one or more physicians chosen by the
Committee, and no Participant who refuses to be examined shall be treated as having a Disability.
In any event, the Committee’s good faith decision as to whether a Participant’s Service has been
terminated by Disability shall be final and conclusive.



     “Early Retirement” means retirement on or after a Participant’s attainment of age 60 and the
completion of five years of Service for an Employer or the sum of a Participant’s age and years of
Service equals or exceeds 75. If the Participant separates from Service before satisfying the
age requirement, but has satisfied the Service requirement, the Participant will be entitled to
elect early retirement upon satisfaction of the age requirement.



     “Effective Date” means January l, 1998.



2









 





     “Employee” means any individual who is or has been employed or self-employed by an Employer.
“Employee” also means an individual employed by a leasing organization who, pursuant to an
agreement between an Employer and the leasing organization, has performed services for the Employer
and any related persons (within the meaning of Section 414(n)(6) of the Code) on a substantially
full-time basis for more than one year, if such services are performed under the primary direction
or control of the Employer. However, such a “leased employee” shall not be considered an Employee
if (i) he participates in a money purchase pension plan sponsored by the leasing organization which
provides for immediate participation, immediate full vesting, and an annual contribution of at
least 10 percent of the Employee’s 415 Compensation, and (ii) leased employees do not constitute
more than 20 percent of the Employer’s total work force (including leased employees, but excluding
Highly Paid Employees and any other employees who have not performed services for the Employer on a
substantially full-time basis for at least one year).



     “Employer” means the Bank or any affiliate within the purview of section 414(b), (c) or (m)
and 415(h) of the Code, any other corporation, partnership, or proprietorship which adopts this
Plan with the Bank’s consent pursuant to Section 13.1, and any entity which succeeds to the
business of any Employer and adopts the Plan pursuant to Section 13.2.



     “Entry Date” means the Effective Date of the Plan and each January 1, April 1, July 1 and
October 1 of each Plan Year after the Effective Date.



     “ERISA” means the Employee Retirement Income Security Act of 1974 (P.L. 93-406, as amended).



     “415 Compensation”




     (a) shall mean wages, as defined in Code Section 3401 (a) for purposes of income tax
withholding at the source.




     (b) For Plan Years beginning after December 31, 1997, any elective deferral as defined
in Code Section 402(g)(3) (any Employer contributions made on behalf of a Participant to the
extent not includible in gross income and any Employer contributions to purchase an annuity
contract under Code Section 403(b) under a salary reduction agreement) and any amount which
is contributed or deferred by the Employer at the election of the Participant and which is
not includible in gross income of the Participant by reason of Code Section 125 (Cafeteria
Plan) shall also be included in the definition of 415 Compensation.




     (c) 415 Compensation in excess of $160,000 (as indexed) shall be disregarded for all
Participants. For purposes of this sub-section, the $160,000 limit shall be referred to as
the “applicable limit” for the Plan Year in question. The $160,000 limit shall be adjusted
for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code,
effective for the Plan Year which begins within the applicable calendar year. For purposes
of the applicable limit, 415 Compensation shall be prorated over short Plan Years.



     “Highly Paid Employee” for any Plan Year means an Employee who, during either of that or the
immediately preceding Plan Year was at any time a five percent owner of the Employer (as defined in
Code Section 416(i)(1)) or had 415 Compensation exceeding $80,000 and was among the most highly
compensated one-fifth of all Employees. For this purpose:



3









 






     (a) “415 Compensation” shall include any amount which is excludable from the Employee’s
gross income for tax purposes pursuant to Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b)
of the Code.




     (b) The number of Employees in “the most highly compensated one-fifth of all Employees”
shall be determined by taking into account all individuals working for all related Employer
entities described in the definition of “Service”, but excluding any individual who has not
completed six months of Service, who normally works fewer than 17-1/2 hours per week or in
fewer than six months per year, who has not reached age 21, whose employment is covered by a
collective bargaining agreement, or who is a nonresident alien who receives no earned income
from United States sources.



     “Hours of Service” means hours to be credited to an Employee under the following rules:




     (a) Each hour for which an Employee is paid or is entitled to be paid for services to
an Employer is an Hour of Service.




     (b) Each hour for which an Employee is directly or indirectly paid or is entitled to be
paid for a period of vacation, holidays, illness, disability, lay-off, jury duty, temporary
military duty, or leave of absence is an Hour of Service. However, except as otherwise
specifically provided, no more than 501 Hours of Service shall be credited for any single
continuous period which an Employee performs no duties. No more than 501 Hours of Service
will be credited under this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Further, no Hours of Service shall be
credited on account of payments made solely under a plan maintained to comply with worker’s
compensation, unemployment compensation, or disability insurance laws, or to reimburse an
Employee for medical expenses.




     (c) Each hour for which back pay (ignoring any mitigation of damages) is either awarded
or agreed to by an Employer is an Hour of Service. However, no more than 501 Hours of
Service shall be credited for any single continuous period during which an Employee would
not have performed any duties. The same Hours of Service will not be credited both under
paragraph (a) or (b) as the case may be, and under this paragraph (c). These hours will be
credited to the employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award agreement or
payment is made.




     (d) Hours of Service shall be credited in any one period only under one of the
foregoing paragraphs (a), (b) and (c); an Employee may not get double credit for the same
period.




     (e) If an Employer finds it impractical to count the 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 pay period in which he has at least one
Hour of Service. However, an Employee shall be credited only for his normal working hours
during a paid absence.




     (f) Hours of Service to be credited on account of a payment to an Employee (including
back pay) shall be recorded in the period of Service for which the payment was made. If the
period overlaps two or more Plan Years, the Hours of Service credit shall be allocated in
proportion to the respective portions of the period included in the several Plan



4









 






Years.
However, in the case of periods of 31 days or less, the Administrator may apply a uniform
policy of crediting the Hours of Service to either the first Plan Year or the second.




     (g) In all respects an Employee’s Hours of Service shall be counted as required by
Section 2530.200b-2(b) and (c) of the Department of Labor’s regulations under Title I of
ERISA.



     “Investment Fund” means that portion of the Trust Fund consisting of assets other than Stock.
Notwithstanding the above, assets from the Investment Fund may be used to purchase Stock in the
open market or otherwise, or used to pay on the Stock Obligation, and shares so purchased will be
allocated to a Participant’s Stock Fund.



     “Normal Retirement” means retirement on or after the later of a Participant’s 65th birthday or
fifth year of Service.



     “Normal Retirement Date” means the later of the date on which a Participant attains age 65 or
completes five years of Service.



     “Participant” means any Employee who is participating in the Plan, or who has previously
participated in the Plan and still has a balance credited to his Account.



     “Plan Year” means the twelve month period commencing January 1 and ending December 31, 1998
and each period of 12 consecutive months beginning on January 1 of each succeeding year.



     “Recognized Absence” means a period for which —




     (a) an Employer grants an Employee a leave of absence for a limited period, but only if
an Employer grants such leave on a nondiscriminatory basis; or




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




     (c) 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 (38 U.S.C. Sec. 2021).



     “Roll Over Account” means the separate account established to hold a Participant’s roll-over
contributions and direct transfers.



     “Service” means an Employee’s period(s) of employment or self-employment with an Employer,
excluding for initial eligibility purposes any period in which the individual was a nonresident
alien and did not receive from an Employer any earned income which constituted income from sources
within the United States. An Employee’s Service shall include any service which constitutes service
with a predecessor employer within the meaning of Section 414(a) of the Code. An Employee’s Service
shall also include any service with an entity which is not an Employer, but only either (i) for a
period after 1975 in which the other entity is a member of a controlled group of corporations or is
under common control with other trades and businesses within the meaning of
Section 414(b) or 414(c) of the Code, and a member of the controlled group or one of the
trades and businesses is an Employer, (ii) for a period after 1979 in which the other entity is a
member of an affiliated service group within the meaning of Section 414(m) of the Code, and a
member of the affiliated service group is an Employer, or (iii) all employers aggregated with the
Employer under



5









 




Section 414(o) of the Code (but not until the Proposed Regulations under Section
414(o) become effective). Notwithstanding any provision of the 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.




     “Spouse” means the individual, if any, to whom a Participant is lawfully married on the date
benefit payments to the Participant are to begin, or on the date of the Participant’s death, if
earlier. A former spouse shall be treated as the Spouse or surviving Spouse to the extent provided
under a qualified domestic relations order as described in section 414(p) of the Code.



     “Stock” means shares of the Company’s voting common stock or preferred stock meeting the
requirements of Section 409(e)(3) of the Code issued by an Employer which is a member of the same
controlled group of corporations within the meaning of Code Section 414(b).



     “Stock Fund” means that portion of the Trust Fund consisting of Stock.



     “Stock Obligation” means an indebtedness arising from any extension of credit to the Plan or
the Trust which satisfies the requirements set forth in Section 6.3 and which was obtained for any
or all of the following purposes:




	 	(i)	 	to acquire qualifying employer securities as defined in Treasury
Regulations §54.4975-12;
	 
	 	(ii)	 	to repay such Stock Obligation; or
	 
	 	(iii)	 	to repay a prior exempt loan.





     “Trust” or “Trust Fund” means the trust fund created under this Plan.



     “Trust Agreement” means the agreement between the Bank and the Trustee concerning the Trust
Fund. If any assets of the Trust Fund are held in a co-mingled trust fund with assets of other
qualified retirement plans, “Trust Agreement” shall be deemed to include the trust agreement
governing that co-mingled trust fund. With respect to the allocation of investment responsibility
for the assets of the Trust Fund, the provisions of Article II of the Trust Agreement are
incorporated herein by reference.



     “Trustee” means one or more corporate persons or individuals selected from time to time by the
Bank to serve as trustee or co-trustees of the Trust Fund.



     “Unallocated Stock Fund” means that portion of the Stock Fund consisting of the Plan’s holding
of Stock which have been acquired in exchange for one or more Stock obligations and which have not
yet been allocated to the Participant’s Accounts in accordance with Section 4.2



     “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 Investment Fund and adjust the
Participants’ Accounts accordingly.



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



6









 





     “Vesting Year” means a unit of Service credited to a Participant pursuant to Section 9.2 for
purposes of determining his vested interest in his Account.


Section 3. Eligibility for Participation.




     3.1. Initial Eligibility. An Employee shall enter the Plan as of the Entry
Date coincident with or next following the later of the following dates:




     (a) the last day of the Employee’s first Eligibility Year, and




     (b) the Employee’s 21st birthday. However, if an Employee is not in active Service with
an Employer on the date he would otherwise first enter the Plan, his entry shall be deferred
until the next day he is in Service.



     3.2. Definition of Eligibility Year. An “Eligibility Year” means an
applicable eligibility period (as defined below) in which the Employee has completed 1,000 Hours of
Service for the Employer. For this purpose:




     (a) an Employee’s first “eligibility period” is the 12-consecutive month period
beginning on the first day on which he has an Hour of Service, and




     (b) his subsequent eligibility periods will be 12-consecutive month periods beginning
on each January 1 after that first day of Service.



     3.3. Terminated Employees. No Employee shall have any interest or rights
under this Plan if he is never in active Service with an Employer on or after the Effective Date.



     3.4. Certain Employees Ineligible. No Employee shall participate in the
Plan while his Service is covered by a collective bargaining agreement between an 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 provide for the Employee’s participation in the Plan.



     3.5. Participation and Reparticipation. Subject to the satisfaction of the
foregoing requirements, an Employee shall participate in the Plan during each period of his Service
from the date on which he first becomes eligible until his termination. For this purpose, an
Employee who returns before five (5) consecutive Breaks in Service who previously satisfied the
initial eligibility requirements or who returns after 5 consecutive one year Breaks in Service with
a vested Account balance in the Plan shall re-enter the Plan as of the date of his return to
Service with an Employer.



     3.6. Omission of Eligible Employee. If, in any Plan Year, any Employee who
should be included as a Participant in the Plan is erroneously omitted and discovery of such
omission is not made until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution with respect to the omitted Employee in the amount
which the said Employer would have contributed shall be made regardless of whether or not it is
deductible in whole or in part in any taxable year under applicable provisions of the Code.



     3.7. Inclusion of Ineligible Employee. If, in any Plan Year, any person who
should not have been included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to the ineligible
person regardless of whether or not



7









 




a deduction is allowable with respect to the ineligible person
shall constitute a forfeiture for the Plan Year in which the discovery is made.



Section 4. Contributions and Credits.




     4.1. Discretionary Contributions. The Employer shall from time to time
contribute, with respect to a Plan Year, such amounts as it may determine from time to time. The
Employer shall have no obligation to contribute any amount under this Plan except as so determined
in its sole discretion. The Employer’s contributions and available forfeitures for a Plan Year
shall be credited as of the last day of the year to the Accounts of the Active Participants in
proportion to their amounts of Cash Compensation.



     4.2. Contributions for Stock Obligations. If the Trustee, upon instructions
from the Committee, incurs any Stock Obligation upon the purchase of Stock, the Employer may
contribute for each Plan Year an amount sufficient to cover all payments of principal and interest
as they come due under the terms of the Stock Obligation. If there is more than one Stock
Obligation, the Employer shall designate the one to which any contribution is to be applied.
Investment earnings realized on Employer contributions and any dividends paid by the Employer on
Stock held in the Unallocated Stock Account, shall be applied to the Stock Obligation related to
that Stock, subject to Section 7.2.



     In each Plan Year in which Employer contributions, earnings on contributions, or dividends on
unallocated Stock are used as payments under a Stock Obligation, a certain number of shares of the
Stock acquired with that Stock Obligation which is then held in the Unallocated Stock Fund shall be
released for allocation among the Participants. The number of shares released shall bear the same
ratio to the total number of those shares then held in the Unallocated Stock Fund (prior to the
release) as (i) the principal and interest payments made on the Stock Obligation in the current
Plan Year bears to (ii) the sum of (i) above, and the remaining principal and interest payments
required (or projected to be required on the basis of the interest rate in effect at the end of the
Plan Year) to satisfy the Stock Obligation.



     At the direction of the Committee, the current and projected payments of interest under a
Stock Obligation may be ignored in calculating the number of shares to be released in each year if
(i) the Stock Obligation provides for annual payments of principal and interest at a cumulative
rate that is not less rapid at any time than level annual payments of such amounts for 10 years,
(ii) the interest included in any payment is ignored only to the extent that it would be determined
to be interest under standard
loan amortization tables, and (iii) the term of the Stock Obligation, by reason of renewal,
extension, or refinancing, has not exceeded 10 years from the original acquisition of the Stock.



     For these purposes, each Stock Obligation, the Stock purchased with it, and any dividends on
such Stock, shall be considered separately. The Stock released from the Unallocated Stock Fund in
any Plan Year shall be credited as of the last day of the year to the Accounts of the Active
Participants in proportion to their amounts of Cash Compensation.



     4.3. Definitions Related to Contributions. For the purposes of this Plan,
the following terms have the meanings specified:



     “Active Participant” means a Participant who has satisfied the eligibility requirements under
Section 3 and who has at least 1000 Hours of Service during the current Plan Year. However, a
Participant shall not qualify as an Active Participant unless (i) he is in active Service with an
Employer as of the last day of the Plan Year, or (ii) he is on a Recognized Absence as of that
date, or (iii) his Service terminated during the Plan Year by reason of Disability, death, Early or
Normal Retirement.



8









 





     “Cash Compensation” means a Participant’s 415 Compensation as defined in Section 2 of the Plan
with respect to that portion of a Plan Year in which he is an Active Participant and shall also
include amounts contributed under a salary reduction agreement pursuant to Section 401(k) or
Section 125 of the Code.



     In the event a Plan Year is a period of less than 12 months for any reason, then Cash
Compensation for the short period shall not exceed the pro rata portion of this limit created by
multiplying a fraction which is the number of months in the short period divided by twelve times
the annual compensation limit.



     4.4. Conditions as to Contributions. Employers’ contributions shall in all
events be subject to the limitations set forth in Section 5. Contributions may be made in the form
of cash, or securities and other property to the extent permissible under ERISA, including Stock,
and shall be held by the Trustee in accordance with the Trust Agreement. In addition to the
provisions of Section 13.3 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 contribution was originally made, 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 Fund in order that the
balance credited to each Participant’s Account is not less that it would have been if the
contribution had never been made.



     4.5. Transfers. This Plan shall accept direct and indirect transfers,
including roll-over contributions from other tax-qualified plans, provided, however, that this Plan
shall not accept any direct or indirect transfers from any other retirement plan that is
tax-qualified under Section 401(a) of the Code and which is subject to the survivor annuity
requirements of section 401(a)(11) and section 417 of the Code.


Section 5. Limitations on Contributions and Allocations.




     5.1. Limitation on Annual Additions. Notwithstanding anything herein to the
contrary, allocation of Employer contributions for any Plan Year shall be subject to the following:




     5.1-1 If allocation of Employer contributions in accordance with Section 4.1
will result in an allocation of more than one-third the total contributions for a Plan Year
to the Accounts of Highly Paid Employees, then allocation of such amount shall be adjusted
so that such excess will not occur.




     5.1-2 After adjustment, if any, required by the preceding paragraph, the
annual additions during any Plan Year to any Participant’s Account under this and any other
defined contribution plans maintained by the Employer or an affiliate (within the purview of
Section 414(b), (c) and (m) and Section 415(h) of the Code, which affiliate shall be deemed
the Employer for this purpose) shall not exceed the lesser of $30,000 (or such other dollar
amount which results from cost-of-living adjustments under Section 415(d) of the Code) or
“25 percent of the Participant’s 415 Compensation for such limitation year. “ In the event
that annual additions exceed the aforesaid limitations, they shall be reduced in the
following priority:




     (i) If the Participant is covered by the Plan at the end of the Plan Year,
any excess amount at the end of the Plan Year that cannot be allocated to the Participant’s
Account shall be



9









 






used to reduce the Employer contribution for such Participant in the next
limitation year and any succeeding limitation years if necessary.




     (ii) If the Participant is not covered by the Plan at the end of the Plan
Year, the excess amount will be held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer contributions for all remaining Participants in
the next limitation year and each succeeding limitation year if necessary.




     (iii) If a suspense account is in existence at any time during a limitation
year, it will not participate in any allocation of investment gains and losses. All amounts
held in suspense accounts must be allocated to Participant’s Accounts before any
contributions may be made to the Plan for the limitation year.




     (iv) If a suspense account exists at the time of Plan termination, amounts
held in the suspense account that cannot be allocated shall revert to the Employer.




     5.1-3 For purposes of this Section 5.1 and the following Section 5.2, the
“annual addition” to a Participant’s accounts means the sum of (i) Employer contributions,
(ii) Employee contributions, if any, and (iii) forfeitures. Annual additions to a defined
contribution plan also include amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(1)(2) of the Internal Revenue Code, which is part
of a pension or annuity plan maintained by the Employer, amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years ending after such date, which are
attributable to postretirement medical benefits allocated to the separate account of a Key
Employee under a welfare benefit fund, as defined in Section 419A(d) of the Internal Revenue
Code, maintained by the Employer. For these purposes, annual additions to a defined
contribution plan shall not include the allocation of the excess amounts remaining in the
Unallocated Stock Fund subsequent to a sale of stock from such fund in accordance with a
transaction described in Section 8.1 of the
Plan. The $30,000 limitations referred to shall, for each limitation year ending after
1988, be automatically adjusted to the new dollar limitations determined by the Commissioner
of Internal Revenue for the calendar year beginning in that limitation year.




     5.1-4 Notwithstanding the foregoing, if no more than one-third of the
Employer contributions to the Plan for a year which are deductible under Section 404(a)(9)
of the Code are allocated to Highly Paid Employees (within the meaning of Section 414(q) of
the Internal Revenue Code), the limitations imposed herein shall not apply to:




     (i) forfeitures of Employer securities (within the meaning of Section 409 of
the Code) under the Plan if such securities were acquired with the proceeds of a loan
described in Section 404(a)(9)(A) of the Code), or




     (ii) Employer contributions to the Plan which are deductible under Section
404(a)(9)(B) and charged against a Participant’s Account.




     5.1-5 If the Employer contributes amounts, on behalf of Employees covered by this
Plan, to other “defined contribution plans” as defined in Section 3(34) of ERISA, the
limitation on annual additions provided in this Section shall be applied to annual additions
in the aggregate to this Plan and to such other plans. Reduction of annual additions, where
required, shall be accomplished first by reductions under such other plan pursuant to the
directions of the named fiduciary for administration of such other plans or under
priorities, if any, established




10











 






under the terms of such other plans and then by allocating
any remaining excess for this Plan in the manner and priority set out above with respect to
this Plan.




     5.1-6 A limitation year shall mean each 12 consecutive month period beginning
each January 1.



     5.2. Coordinated Limitation With Other Plans. Aside from the limitation
prescribed by Section 5.1 with respect to the annual addition to a Participant’s Accounts for any
single limitation year, if a Participant has ever participated in one or more defined benefit plans
maintained by an Employer or an affiliate, then the accrued benefit shall be limited so that the
sum of his defined plan fraction and his defined contribution plan fraction does not exceed one.
For this purpose:




     5.2-1 A Participant’s defined contribution plan fraction with respect to a
Plan Year shall be a fraction, (i) the numerator of which is the sum of the annual additions
to his Accounts through the current year, and (ii) the denominator of which is the sum of
the lesser of the following amounts -A- and -B- determined for the current limitation year
and each prior limitation year of Service with an Employer: -A- is 1.25 times the dollar
limit in effect for the year under Section 415(c)(1)(A) of the Code, or 1.0 times such
dollar limitation if the Plan is super top-heavy, and -B- is 35 percent of the Participant’s
415 Compensation for such year. Further, if the Participant participated in any related
defined contribution plan in any years beginning before 1976, any excess of the sum of the
actual annual additions to the Participant’s Accounts for those years over the maximum
annual additions which could have been made in accordance with Section 5.1 shall be ignored,
and voluntary contributions by the Participant during those years shall be taken into
account as to each such year only to the extent that his average annual voluntary
contribution in those years exceeded 10 percent of his average annual 415 Compensation in
those years.




     5.2-2 A Participant’s defined benefit plan fraction with respect to a
limitation year shall be a fraction, (i) the numerator of which is his projected annual
benefit payable at normal retirement under the Employers’ defined benefit plans, and (ii)
the denominator of which is the lesser of (a) 1.25 times $90,000, or 1.0 times such dollar
limitation if the Plan is super top-heavy, and (b) 1.4 times the Participant’s average 415
Compensation during his highest-paid three consecutive limitation years.



     5.3. Effect of Limitations. The Committee shall take whatever action may be
necessary from time to time to assure compliance with the limitations set forth in Section 5.1 and
5.2. Specifically, the Committee shall see that each Employer restrict its contributions for any
Plan Year to an amount which, taking into account the amount of available forfeitures, may be
completely allocated to the Participants consistent with those limitations. Where the limitations
would otherwise be exceeded by any Participant, further allocations to the Participant shall be
curtailed to the extent necessary to satisfy the limitations. Where an excessive amount is
contributed on account of a mistake as to one or more Participants’ compensation, or there is an
amount of forfeitures which may not be credited in the Plan Year in which it becomes available, the
amount shall be corrected in accordance with Section 5.1-2 of the Plan.



     5.4. Limitations as to Certain Participants. Aside from the limitations set
forth in Section 5.1 and 5.2, if the Plan acquires any Stock in a transaction as to which a selling
shareholder or the estate of a deceased shareholder is claiming the benefit of Section 1042 of the
Code, the Committee shall see that none of such Stock, and no other assets in lieu of such Stock,
are allocated to the Accounts of certain Participants in order to comply with Section 409(n) of the
Code.



11









 





     This restriction shall apply at all times to a Participant who owns (taking into account the
attribution rules under Section 318(a) of the Code, without regard to the exception for employee
plan trusts in Section 318(a)(2)(B)(i) more than 25 percent of any class of stock of a corporation
which issued the Stock acquired by the Plan, or another corporation within the same controlled
group, as defined in Section 409(1)(4) of the Code (any such class of stock hereafter called a
“Related Class”). For this purpose, a Participant who owns more than 25 percent of any Related
Class at any time within the one year preceding the Plan’s purchase of the Stock shall be subject
to the restriction as to all allocations of the Stock, but any other Participant shall be subject
to the restriction only as to allocations which occur at a time when he owns more than 25 percent
of any Related Class.



     Further, this restriction shall apply to the selling shareholder claiming the benefit of
Section 1042 and any other Participant who is related to such a shareholder within the meaning of
Section 267(b) of the Code, during the period beginning on the date of sale and ending on the later
of (1) the date that is ten years after the date of sale, or (2) the date of the Plan allocation
attributable to the final payment of acquisition indebtedness incurred in connection with the sale.



     This restriction shall not apply to any Participant who is a lineal descendant of a selling
shareholder if the aggregate amounts allocated under the Plan for the benefit of all such
descendants do not exceed five percent of the Stock acquired from the shareholder.



Section 6. Trust Fund and Its Investment.




     6.1. Creation of Trust Fund. All amounts received under the Plan from Employers and investments shall be held as the Trust
Fund pursuant to the terms of this Plan and of the Trust Agreement between the Bank and the
Trustee. The benefits described in this Plan shall be payable only from the assets of the Trust
Fund, and none of the Bank, any other Employer, its board of directors or trustees, its
stockholders, its officers, its employees, the Committee, and the Trustee shall be liable for
payment of any benefit under this Plan except from the Trust Fund.



     6.2. Stock Fund and Investment Fund. The Trust Fund held by the Trustee
shall be divided into the Stock Fund, consisting entirely of Stock, and the Investment Fund,
consisting of all assets of the Trust other than Stock. The Trustee shall have no investment
responsibility for the Stock Fund, but shall accept any Employer contributions made in the form of
Stock, and shall acquire, sell, exchange, distribute, and otherwise deal with and dispose of Stock
in accordance with the instructions of the Committee. The Trustee shall have full responsibility
for the investment of the Investment Fund, except to the extent such responsibility may be
delegated from time to time to one or more investment managers pursuant to Section 2.2 of the Trust
Agreement, or to the extent the Committee directs the Trustee to purchase Stock with the assets in
the Investment Fund.



     6.3. Acquisition of Stock. From time to time the Committee may, in its sole
discretion, direct the Trustee to acquire 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 Stock no more than its fair market value, which shall be
determined conclusively by the Committee pursuant to Section 12.4. The Committee may direct the
Trustee to finance the acquisition of Stock by incurring or assuming indebtedness to the seller or
another party which indebtedness shall be called a “Stock Obligation”. The term “Stock Obligation”
shall refer to a loan made to the Plan by a disqualified person within the meaning of Section
4975(e)(2) of the Code, or a loan to the Plan which is guaranteed by a disqualified person. A Stock
Obligation includes a direct loan of cash, a purchase-money transaction, and an assumption of an
obligation of a tax-qualified employee stock ownership plan under Section 4975(e)(7) of the Code
(“ESOP”). For these purposes, the term “guarantee” shall include an unsecured guarantee and the use
of assets of a disqualified person as collateral for a loan,



12









 




even though the use of assets may not be a guarantee under applicable state law. An amendment of a Stock Obligation in order to qualify
as an “exempt loan” is not a refinancing of the Stock Obligation or the making of another Stock
Obligation. The term “exempt loan” refers to a loan that satisfies the provisions of this
paragraph. A “non-exempt loan” fails to satisfy this paragraph. Any Stock Obligation shall be
subject to the following conditions and limitations:





     6.3-1 A Stock Obligation shall be for a specific term, shall not be payable
on demand except in the event of default, and shall bear a reasonable rate of interest.




     6.3-2 A Stock Obligation may, but need not, be secured by a collateral pledge
of either the Stock acquired in exchange for the Stock Obligation, or the Stock previously
pledged in connection with a prior Stock Obligation which is being repaid with the proceeds
of the current Stock Obligation. No other assets of the Plan and Trust may be used as
collateral for a Stock Obligation, and no creditor under a Stock Obligation shall have any
right or recourse to any Plan and Trust assets other than Stock remaining subject to a
collateral pledge.




     6.3-3 Any pledge of Stock to secure a Stock Obligation must provide for the
release of pledged Stock in connection with payments on the Stock obligations in the ratio
prescribed in Section 4.2.




     6.3-4 Repayments of principal and interest on any Stock Obligation shall be
made by the Trustee only from Employer cash contributions designated for such payments, from
earnings on such contributions, and from cash dividends received on Stock, in the last case,
however, subject to the further requirements of Section 7.2.




     6.3-5 In the event of default of a Stock Obligation, the value of Plan assets
transferred in satisfaction of the Stock Obligation must not exceed the amount of the
default. If the lender is a disqualified person within the meaning of Section 4975 of the
Code, a Stock Obligation must provide for a transfer of Plan assets upon default only upon
and to the extent of the failure of the Plan to meet the payment schedule of said Stock
Obligation. For purposes of this paragraph, the making of a guarantee does not make a person
a lender.



     6.4. Participants’ Option to Diversify. The Committee shall provide for a
procedure under which each Participant may, during the qualified election period, elect to
“diversify” a portion of the Employer Stock allocated to his Account, as provided in Section
401(a)(28)(B) of the Code. An election to diversity must be made on the prescribed form and filed
with the Committee within the period specified herein. For each of the first five (5) Plan years in
the qualified election period, the Participant may elect to diversify an amount which does not
exceed 25% of the number of shares allocated to his Account since the inception of the Plan, less
all shares with respect to which an election under this Section has already been made. For the last
year of the qualified election period, the Participant may elect to have up to 50 percent of the
value of his Account committed to other investments, less all shares with respect to which an
election under this Section has already been made. The term “qualified election period” shall mean
the six (6) Plan Year period beginning with the first Plan Year in which a Participant has both
attained age 55 and completed 10 years of participation in the Plan. A Participant’s election to
diversify his Account may be made within each year of the qualified election period and shall
continue for the 90-day period immediately following the last day of each year in the qualified
election period. Once a Participant makes such election, the Plan must complete diversification in
accordance with such election within 90 days after the end of the period during which the election
could be made for the Plan Year. In the discretion of the Committee, the Plan may satisfy the
diversification requirement by any of the following methods:



13









 






     6.4-1 The Plan may distribute all or part of the amount subject to the
diversification election.




     6.4-2 The Plan may offer the Participant at least three other distinct
investment options, if available under the Plan. The other investment options shall satisfy
the requirements of Regulations under Section 404(c) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).




     6.4-3 The Plan may transfer the portion of the Participant’s Account subject
to the diversification election to another qualified defined contribution plan of the
Employer that offers at least three investment options satisfying the requirements of the
Regulations under Section 404(c) of ERISA.



Section 7. Voting Rights and Dividends on Stock.




     7.1. Voting and Tendering of Stock. The Trustee generally shall vote all
shares of Stock held under the Plan in accordance with the written instructions of the Committee.
However, if any Employer has registration-type class of securities
within the meaning of Section 409(e)(4) of the Code, or if a matter submitted to the holders
of the Stock involves a merger, consolidation, recapitalization, reclassification, liquidation,
dissolution, or sale of substantially all assets of an entity, then (i) the shares of Stock which
have been allocated to Participants’ Accounts shall be voted by the Trustee in accordance with the
Participants’ written instructions, and (ii) the Trustee shall vote any allocated Stock for which
it has received no voting instructions in the same proportions as it votes the allocated Stock for
which it has received instructions from Participants; provided, however, that Participants shall be
given advance notice as to the consequences of any failure to instruct the Trustee as to the voting
of Stock allocated to his or her account; and provided further, that if an exempt loan, as defined
in Section 4975(d) of the Code, is outstanding and the Plan is in default on such exempt loan, as
default is defined in the loan documents, then to the extent that such loan documents require the
lender to exercise voting rights with respect to the unallocated shares, the loan documents will
prevail. The Employer (or an independent fiduciary designated by the Employer) shall direct the
Trustee with respect to the voting of Stock which has not been allocated to the accounts of
Participants or Beneficiaries.



     Notwithstanding any provision hereunder to the contrary, all unallocated shares of Stock must
be voted by the Trustee in a manner determined by the Trustee to be for the exclusive benefit of
the Participants and Beneficiaries. Whenever such voting rights are to be exercised, the Employers
shall provide the Trustee, in a timely manner, with the same notices and other materials as are
provided to other holders of the Stock, which the Trustee shall distribute to the Participants. The
Participants shall be provided with adequate opportunity to deliver their instructions to the
Trustee regarding the voting of Stock allocated to their Accounts. The instructions of the
Participants’ with respect to the voting of allocated shares hereunder shall be confidential.




     7.1-1 In the event of a tender offer, Stock shall be tendered by the Trustee
in the same manner as set forth above with respect to the voting of Stock. Notwithstanding
any provision hereunder to the contrary, Stock must be tendered by the Trustee in a manner
determined by the Trustee to be for the exclusive benefit of the Participants and
Beneficiaries.



     7.2. Dividends on Stock. Dividends on Stock which are received by the
Trustee in the form of additional Stock shall be retained in the Stock Fund, and shall be allocated
among the Participant’s Accounts and the Unallocated Stock Fund in accordance with their holdings
of the Stock on which the dividends have been paid. Dividends on Stock credited to Participants’
Accounts which are received by the Trustee in the form of cash shall, at the direction of the
Employer paying the dividends, either (i) be



14









 




credited to the Accounts in accordance with Section
8.3 and invested as part of the Investment Fund, (ii) be distributed immediately to the
Participants in proportion with the Participants’ Stock Fund Account balance (iii) be distributed
to the Participants within 90 days of the close of the Plan Year in which paid in proportion with
the Participants’ Stock Fund Account balance or (iv) be used to make payments on the Stock
Obligation. If dividends on Stock allocated to a Participant’s Account are used to repay the Stock
Obligation, Stock with a fair market value equal to the dividends so used must be allocated to such
Participant’s Account in lieu of the dividends. Dividends on Stock held in the Unallocated Stock
Fund which are received by the Trustee in the form of cash shall be allocated to Participants’
Investment Fund Accounts (pro rata based on the Participant’s Account balance in relation to all
Participants’ Account balances) and shall be applied as soon as practicable to payments of
principal and interest under the Stock Obligation incurred with the purchase of the Stock.




Section 8. Adjustments to Accounts.




     8.1. Adjustments for Transactions. An Employer contribution pursuant to Section 4.1 shall be credited to the Participants’
Accounts as of the last day of the Plan Year for which it is contributed, in accordance with
Section 4.1. Stock released from the Unallocated Stock Fund upon the Trust’s repayment of a Stock
Obligation pursuant to Section 4.2 shall be credited to the Participants’ Accounts as of the last
day of the Plan Year in which the repayment occurred, pro rata based on the cash applied from such
Participant’s Account relative to the cash applied from all Participants’ Accounts. Any excess
amounts remaining from the use of proceeds of a sale of Stock from the Unallocated Stock Fund to
repay a Stock Obligation shall be allocated as earnings of the Plan as of the last day of the Plan
Year in which the repayment occurred among the Participants’ Accounts in proportion to the opening
balance in each Account. Any benefit which is paid to a Participant or Beneficiary pursuant to
Section 10 shall be charged to the Participant’s Account as of the first day of the Valuation
Period in which it is paid. Any forfeiture or restoral shall be charged or credited to the
Participant’s Account as of the first day of the Valuation Period in which the forfeiture or
restoral occurs pursuant to Section 9.6.



     8.2. Valuation of Investment Fund. As of each Valuation Date, the Trustee
shall prepare a balance sheet of the Investment Fund, recording each asset (including any
contribution receivable from an Employer) and liability at its fair market value. Any liability
with respect to short positions or options and any item of accrued income or expense and unrealized
appreciation or depreciation shall be included; provided, however, that such an item may be
estimated or excluded if it is not readily ascertainable unless estimating or excluding it would
result in a material distortion. The Committee shall then determine the net gain or loss of the
Investment Fund since the preceding Valuation Date, which shall mean the entire income of the
Investment Fund, including realized and unrealized capital gains and losses, net of any expenses to
be charged to the general Investment Fund and excluding any contributions by the Employer. The
determination of gain or loss shall be consistent with the balance sheets of the Investment Fund
for the current and preceding Valuation Dates.



     8.3. Adjustments for Investment Experience. Any net gain or loss of the
Investment Fund during a Valuation Period, as determined pursuant to Section 8.2, shall be
allocated as of the last day of the Valuation Period among the Participants’ Accounts in proportion
to the opening balance in each Account, as adjusted for benefit payments and forfeitures during the
Valuation Period, without regard to whatever Stock may be credited to an Account. Any cash
dividends received on Stock credited to Participant’s Accounts shall be allocated as of the last
day of the Valuation Period among the Participants’ Accounts based on the opening balance in each
Participant’s Stock Fund Account.



15









 





Section 9. Vesting of Participants’ Interests.




     9.1. Deferred Vesting in Accounts. A Participant’s vested interest in his
Account shall be based on his Vesting Years in accordance with the following Table, subject to the
balance of this Section 9:



	 	 	 	 	 
	Vesting	 	Percentage of
	Years	 	Interest Vested
	Fewer than 5

	 	 	0	%
	5

	 	 	100	%






     9.2. Computation of Vesting Years. For purposes of this Plan, a “Vesting
Year” means generally a calendar year in which an Employee has at least 1,000 Hours of Service,
beginning with the first Plan Year in which the Employee has completed an Hour of Service with the
Employer, including Service with other employers as provided in the definition of “Service”.
Notwithstanding the above, an Employee who was employed with The Oneida Savings Bank, a New York
mutual bank (the “Mutual Bank”) which is the predecessor to the Bank, shall receive credit for
vesting purposes for each calendar year of continuous employment with the Mutual Bank in which such
Employee completed 1,000 Hours of Service (such years shall also be referred to as “Vesting
Years”). However, a Participant’s Vesting Years shall be computed subject to the following
conditions and qualifications:




     9.2-1 A Participant’s Vesting Years shall not include any Service prior to
the date on which an Employee attains age 18.




     9.2-2 A Participant’s vested interest in his Account accumulated before five
(5) consecutive Breaks in Service shall be determined without regard to any Service after
such five consecutive Breaks in Service. Further, if a Participant has five (5) consecutive
Breaks in Service before his interest in his Account has become vested to some extent,
pre-Break years of Service shall not be required to be taken into account for purposes of
determining his post-Break vested percentage.




     9.2-3 In the case of a Participant who has 5 or more consecutive 1-year
Breaks in Service, the Participant’s pre-break Service will count in vesting of the
Employer-derived post-break accrued benefit only if either:




     (i) such Participant has any nonforfeitable interest in the accrued benefit
attributable to Employer contributions at the time of separation from Service, or




     (ii) upon returning to Service the number of consecutive 1-year Breaks in
Service is less than the number of years of Service.




     9.2-4 Unless otherwise specifically excluded, a Participant’s Vesting Years
shall include any period of active military duty to the extent required by the Military
Selective Service Act of 1967 (38 U.S.C. Section 2021).




     9.2-5 If any amendment changes the vesting schedule, including an automatic
change to or from a top-heavy vesting schedule, any Participant with three (3) or more
Vesting Years may, by filing a written request with the Employer, elect to have his vested
percentage computed under the vesting schedule in effect prior to the amendment. The
election period must begin not later than the later of sixty (60) days after the amendment
is adopted, the amendment becomes



16









 






effective, or the Participant is issued written notice of the amendment by the Employer or the Committee.




9.3. Full Vesting Upon Certain Events.




     9.3-1 Notwithstanding Section 9.1, a Participant’s interest in his Account
shall fully vest on the Participant’s Normal Retirement Date. The Participant’s interest
shall also fully vest in the event that his Service is terminated by Early Retirement,
Disability or by death.




     9.3-2 The Participant’s interest in his Account shall also fully vest in the
event of a “Change in Control” of the Bank, or the Company. For these purposes, “Change in
Control” shall mean a change in control of a nature that: (i) would be required to be
reported in response to Item 1(a) of the current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
“Exchange Act”); or (ii) results in a Change in Control of the Bank or the Company within
the meaning of the Bank Holding Company Act, as amended (“BHCA”), and applicable rules and
regulations promulgated thereunder, as in effect at the time of the Change in Control; or
(iii) without limitation such a Change in Control shall be deemed to have occurred at such
time as (a) any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 25% or more of the
combined voting power of Company’s outstanding securities except for any securities
purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who
constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to
constitute at least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board, or whose nomination for
election by the Company’s stockholders was approved by the same Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (b), considered as though he
were a member of the Incumbent Board; or (c) a plan of reorganization, merger,
consolidation, sale of all or substantially all the assets of the Bank or the Company or
similar transaction in which the Bank or Company is not the surviving institution occurs; or
(d) a proxy statement soliciting proxies from stockholders of the Company, by someone other
than the current management of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or similar transaction with one or
more corporations as a result of which the outstanding shares of the class of securities
then subject to the Plan are to be exchanged for or converted into cash or property or
securities not issued by the Company; or (e) a tender offer is made for 25% or more of the
voting securities of the Company and the shareholders owning beneficially or of record 25%
or more of the outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted by the
tender offeror.




     9.3-3 Upon a Change in Control described in Section 9.3-2, the Plan shall be
terminated and the Plan Administrator shall direct the Trustee to sell a sufficient amount
of Stock from the Unallocated Stock Fund to repay any outstanding Stock Obligation in full.
The proceeds of such sale shall be used to repay such Stock Obligation. After repayment of
the Stock Obligation, all remaining shares in the Unallocated Stock Fund (or the proceeds
thereof, if applicable) shall be treated as earnings and shall be allocated in accordance
with the requirements of Section 8.1.



     9.4. Full Vesting Upon Plan Termination. Notwithstanding Section 9.1, a
Participant’s interest in his Account shall fully vest upon termination of this Plan or upon the
permanent and complete



17









 




discontinuance of contributions by his Employer. In the event of a partial
termination, the interest of each affected Participant shall fully vest with respect to that part
of the Plan which is terminated.




     9.5. Forfeiture, Repayment, and Restoral. If a Participant’s Service
terminates before his interest in his Account is fully vested, that portion which has not vested
shall be forfeited if he either (i) receives a distribution of his entire vested interest pursuant to Section 10.1, or (ii) incurs five (5) consecutive one year Breaks In
Service. If a Participant’s Service terminates prior to having any portion of his Account become
vested, such Participant shall be deemed to have a received a distribution of his vested interest
as of the Valuation Date next following his termination of Service.



     If a Participant who has received his entire vested interest returns to Service before he has
five (5) consecutive Breaks in Service, he may repay to the Trustee an amount equal to the
distribution. The Participant may repay such amount at any time within five years after he has
returned to Service. The amount shall be credited to his Account at the time it is repaid; an
additional amount equal to that portion of his Account which was previously forfeited shall be
restored to his Account at the same time from other Employees’ forfeitures and, if such forfeitures
are insufficient, from a special contribution by his Employer for that year. A Participant who was
deemed to have received a distribution of his vested interest in the Plan shall have his Account
restored as of the first day on which he performs an Hour of Service after his return.



     9.6. Accounting for Forfeitures. If a portion of a Participant’s Account is
forfeited, Stock allocated to said Participant’s Account shall be forfeited only after other assets
are forfeited. If interests in more than one class of Stock have been allocated to a Participant’s
account, the Participant must be treated as forfeiting the same proportion of each class of Stock.
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 9.5. Except as
otherwise provided in that Section, 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 4.1 as of the last day of the Plan Year in which the forfeiture becomes certain.



     9.7. Vesting and Nonforfeitability. A Participant’s interest in his Account
which has become vested shall be nonforfeitable for any reason.



Section 10. Payment of Benefits.




     10.1. Benefits for Participants. For a Participant whose Service ends for
any reason, distribution will be made to or for the benefit of the Participant or, in the case of
the Participant’s death, his Beneficiary, by payment in a lump sum, in accordance with Section
10.2.



     Notwithstanding the foregoing, if the balance credited to his Account exceeds $5,000, 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. 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, subject to the provisions of Section 10.11 hereof.



     All distributions under this section shall be determined and made in accordance with the
regulations under Code Section 401(a)(9), including 1.401(a)(9)-2. The provisions reflecting
Section 401(a)(9) override any distribution options in the Plan inconsistent with Section
401(a)(9).



     10.2. Time for Distribution.



18









 






     10.2-1 Distribution of the balance of a Participant’s Account generally shall
commence as soon as practicable after the last day of the Plan Year next following his
termination of Service for any reason, but no later than one year after the close of the
Plan Year:




     (i) in which the Participant separates from Service by reason of Normal
Retirement, Disability, or death; or




     (ii) which is the fifth Plan Year following the year in which the Participant
resigns or is dismissed, unless he is reemployed before such date.




     10.2-2 Unless the Participant elects otherwise, the distribution of the
balance of a Participant’s Account shall commence not later than the 60th day after the
latest of the close of the Plan Year in which —




     (i) the Participant attains the age of 65;




     (ii) occurs the tenth anniversary of the year in which the Participant
commenced participation in the Plan; or




     (iii) the Participant terminates his Service with the Employer.




     10.2-3 Notwithstanding anything to the contrary, (1) with respect to a
5-percent owner (as defined in Code Section 416), distribution of a Participant’s Account
shall commence (whether or not he remains in the employ of the Employer) not later than the
April 1 of the calendar year next following the calendar year in which the Participant
attains age 70-1/2, and (2) with respect to all other Participants, payment of a
Participant’s benefit will commence not later than April 1 of the calendar year following
the calendar year in which the Participant attains age 70-1/2, or, if later, the year in
which the Participant retires. A Participant’s benefit from that portion of his Account
committed to the Investment Fund shall be calculated on the basis of the most recent
Valuation Date before the date of payment.




     10.2-4 Distribution of a Participant’s Account balance after his death shall
comply with the following requirements:




     (i) If a Participant dies before his distributions have commenced,
distribution of his Account to his Beneficiary shall commence not later than one year after
the end of the Plan Year in which the Participant died, however, if the Participant’s
Beneficiary is his surviving Spouse, distributions may commence on the date on which the
Participant would have attained age 70-1/2.




     (ii) 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
Account to be paid to his Spouse. No election by a married Participant of a different
Beneficiary shall be valid unless the election is accompanied by the Spouse’s written
consent, which (i) must acknowledge the effect of the election, (ii) must 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.)



19









 





     10.3. Marital Status. 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 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
and his Employer as to his marital status.



     10.4. 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 Section 10.1 or 10.2, the benefits shall in any event be paid
within 60 days after they can first be determined, with whatever makeup payments may be appropriate
in view of the delay.



     10.5. Accounting for Benefit Payments. Any benefit payment shall be charged
to the Participant’s Account as of the first day of the Valuation Period in which the payment is
made.



     10.6. Options to Receive and Sell Stock. Unless ownership of virtually all
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 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 Account in the form of Stock. In that
event, the Committee shall apply the Participant’s vested interest in the Investment Fund to
purchase sufficient Stock from the Stock Fund or from any owner of Stock to make the required
distribution. Alternatively, a terminated Participant or the Beneficiary of a deceased Participant
may instruct the Committee to distribute the Participant’s entire vested interest in his Account in
cash. In all other cases, the Participant’s vested interest in the Stock Fund shall be distributed
in shares of Stock, and his vested interest in the Investment Fund shall be distributed in cash.



     Any Participant who receives Stock pursuant to Section 10.1, and any person who has received
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
contribution described in Section 402(a)(5) of the Code, shall have the right to require the
Employer which issued the Stock to purchase the 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 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 Stock’s current fair market value.
However, the put right shall not apply to the extent that the 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. Similarly, the put option shall not apply with respect to
the portion of a Participant’s Account which the Employee elected to have reinvested under Code
Section 401(a)(28)(B). 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 Stock. Notwithstanding anything herein to the contrary, in the case of a plan
established by a Bank (as defined in Code Section 581), the put option shall not apply if
prohibited by a federal or state law and Participants are entitled to elect their benefits be
distributed in cash.



     The Employer or the Trustee, as the case may be, may elect to pay for the Stock in equal
periodic installments, not less frequently than annually, over a period not longer than five years
from the day after the put right is exercised, with adequate security and interest at a reasonable
rate on the



20









 




unpaid balance, all such terms to be set forth in a promissory note delivered to the
seller with normal terms as to acceleration upon any uncured default.




     Nothing contained herein shall be deemed to obligate any Employer to register any Stock under
any federal or state securities law or to create or maintain a public market to facilitate the
transfer or disposition of any Stock. The put right described herein may only be exercised by a
person described in the second preceding paragraph, and may not be transferred with any Stock to
any other person. As to all Stock purchased by the Plan in exchange for any Stock Obligation, the
put right shall be nonterminable. The put right for Stock acquired through a Stock Obligation shall
continue with respect to such Stock after the Stock Obligation is repaid or the Plan ceases to be
an employee stock ownership plan.



     10.7. Restrictions on Disposition of Stock. Except in the case of Stock
which is traded on an established market, a Participant who receives Stock pursuant to Section
10.1, and any person who has received 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 contribution described in Section 402(a)(5) of the Code, shall, prior to
any sale or other transfer of the Stock to any other person, first offer the Stock to the issuing
Employer and to the Plan at the greater of (i) its current fair market value, or (ii) the purchase
price offered in good faith by an independent third party purchaser. 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 Stock distributed by the Plan shall bear a conspicuous legend describing
the right of first refusal under this Section 10.7, as well as any other restrictions upon the
transfer of the Stock imposed by federal and state securities laws and regulations.



     10.8. Continuing Loan Provisions; Creations of Protections and Rights.
Except as otherwise provided in Sections 10.6 and 10.7 and this Section, no shares of Employer
Stock held or distributed by the Trustee may be subject to a put, call or other option, or buy-sell
arrangement. The provisions of this Section shall continue to be applicable to such Stock even if
the Plan ceases to be an employee stock ownership plan under Section 4975(e)(7) of the Code.



     10.9. Direct Rollover of Eligible Distribution. A Participant or
distributee may elect, at the time and in the manner prescribed by the Trustee or the Committee, to
have any portion of an eligible rollover distribution paid directly to an eligible retirement plan
specified by the Participant or distributee in a direct rollover.




     10.9-1 An “eligible rollover” is any distribution that does not include: any
distribution that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the Participant and the Participant’s
Beneficiary, or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); and the portion of any
distribution that is not included in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to employer securities).




     10.9-2 An “eligible retirement plan” is an individual retirement account
described in Code Section 401(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee’s eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving Spouse, an eligible
retirement plan is an individual retirement account or individual retirement annuity.



21









 






     10.9-3 A “direct rollover” is a payment by the Plan to the eligible
retirement plan specified by the distributee.




     10.9-4 The term “distributee” shall refer to a deceased Participant’s Spouse
or a Participant’s former Spouse who is the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p).



     10.10. In Service Distribution of Roll-over Account. Upon the written
election of a Participant delivered to the Committee, all or any portion of the amounts held in the
Participant’s Roll-over Account, shall be distributed to the Participant at any time within 30 days
or as soon thereafter as is reasonably practicable.



     10.11. Waiver of 30 Day Period After Notice of Distribution. If a
distribution is one to which Sections 401(a)(11) and 417 of the Code do not apply, such
distribution may commence less than 30 days after the notice required under Section 1.411(a)-11(c)
of the Income Tax Regulations is given, provided that:




     (i) the Trustee or Administrative Committee, as applicable, clearly informs
the Participant that the Participant 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 option), and




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



Section 11. Rules Governing Benefit Claims and Review of Appeals.




     11.1. Claim for Benefits. Any Participant or Beneficiary who qualifies for
the payment of benefits shall file a claim for his 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 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 Sections 10.1 or 10.2.



     11.2. 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:




     (i) each specific reason for the denial;




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




     (iii) 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




     (iv) an explanation of the claims review procedures set forth in Section
11.3.



22









 





     11.3. 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 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 12. The Committee and Its Functions.




     12.1. Authority of Committee. 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. The Committee shall have
exclusive responsibility regarding decisions concerning the payment of benefits under the Plan. The
Committee shall have no investment responsibility with respect to the Investment Fund except to the
extent, if any, specifically provided in the Trust Agreement. 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 their
reasonable expenses and compensation.



     12.2. Identity of Committee. The Committee shall consists 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 10 days written notice, and any individual may resign from the Committee at any time
upon 10 days written notice to the Bank. The Bank shall notify the Trustee of any change in
membership of the Committee.



     12.3. Duties of Committee. The Committee shall keep whatever records may be necessary to implement the Plan and shall
furnish whatever reports may be required from time to time by the Bank. The Committee shall furnish
to the Trustee whatever information may be necessary to properly administer the Trust. The
Committee shall see to the filing with the appropriate government agencies of all reports and
returns required of the Plan Committee under ERISA and other laws.



     Further, the Committee shall have exclusive responsibility and authority with respect to the
Plan’s holdings of Stock and shall direct the Trustee in all respects regarding the purchase,
retention, sale, exchange, and pledge of Stock and the creation and satisfaction of Stock
Obligations. 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 Stock. Subject to the
direction of the Board as to the application of Employer contributions to Stock Obligations, and
subject to the provisions of Sections 6.4 and 10.6 as to Participants’ rights under certain
circumstances to have their Accounts invested in Stock or in assets other than Stock, the Committee
shall determine in its sole discretion the extent to which assets of the Trust shall be used to
repay Stock Obligations, to purchase Stock, or to invest in other assets to be selected by the
Trustee or an investment manager. No provision of the Plan relating to the allocation or vesting of
any interests in the Stock Fund or the Investment Fund shall restrict the Committee from



23









 




changing any holdings of the Trust, whether the changes involve an increase or a decrease in the Stock or
other assets credited to Participants’ Accounts. In determining the proper extent of the Trust’s
investment in Stock, the Committee shall be authorized to employ investment counsel, legal counsel,
appraisers, and other agents to pay their reasonable expenses and compensation.




     12.4. Valuation of Stock. If the valuation of any Stock is not established
by reported trading on a generally recognized public market, the valuation of such Stock shall be
determined by an independent appraiser. For purposes of the preceding sentence, the term
“independent appraiser” means any appraiser meeting requirements similar to the requirements of the
regulations prescribed under Section 170(a)(1) of the Code.



     12.5. Compliance with ERISA. The Committee shall perform all acts necessary
to comply with ERISA. Each individual member or employee of the Committee shall discharge his
duties in good faith and in accordance with the applicable requirements of ERISA.



     12.6. Action by Committee. All actions of the Committee shall be governed
by the affirmative vote-of a number of members which is a majority of the total number
of members currently appointed, including vacancies. The members of the Committee may meet
informally and may take any action without meeting as a group.



     12.7. Execution of Documents. Any instrument executed by the Committee
shall be signed by any member or employee of the Committee.



     12.8. Adoption of Rules. The Committee shall adopt such rules and
regulations of uniform applicability as it deems necessary or appropriate for the proper
administration and interpretation of the Plan.



     12.9. Responsibilities to Participants. The Committee shall determine which
Employees qualify to enter the Plan. The Committee shall furnish to each eligible Employee whatever
summary plan descriptions, summary annual reports, and other notices and information 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 is otherwise
appropriate) to enable the Participant or Beneficiary to make whatever elections may be available
pursuant to Sections 6 and 10, and the Committee shall provide for the payment of benefits in the
proper form and amount from the assets of the Trust Fund. The Committee may decide in its sole
discretion to permit modifications of elections and to defer or accelerate benefits to the extent
consistent with applicable law and the best interests of the individuals concerned.



     12.10. 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, or a custodian for him under the Uniform Gifts to Minors Act, or, in the case of an
incompetent, to his spouse, or his legal guardian, the payments to be used for the individual’s
benefit. 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 12.10, 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.



     12.11. Indemnification by Employers. Except as separately agreed in
writing, the Committee, and any member or employee of the Committee, shall be indemnified and held
harmless by the Employer, jointly and severally, to the fullest extent permitted by law against any
and all costs, damages, expenses, and liabilities reasonably incurred by or imposed upon it or him
in connection with any claim made



24









 




against it or him or in which it or he may be involved by reason
of its or his being, or having been, the Committee, or a member or employee of the Committee, to
the extent such amounts are not paid by insurance.




     12.12. Nonparticipation by Interested Member. Any member of the Committee
who also is a Participant in the Plan shall take no part in any determination specifically relating
to his own participation or benefits, unless his abstention would leave the Committee incapable of
acting on the matter.



Section 13. Adoption, Amendment, or Termination of the Plan.




     13.1. Adoption of Plan by Other Employers. With the consent of the Bank,
any entity may become a participating Employer under the Plan by (i) taking such action as shall be
necessary to adopt the Plan, (ii) becoming a party to the Trust Agreement establishing the Trust
Fund, and (iii) 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.



     13.2. 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.



     13.3. 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), the Plan may be amended retroactively to the earliest date
permitted by U.S. Treasury Regulations in order to secure qualification under Section 401(a). If
this Plan is held by the Internal Revenue Service not to qualify initially under Section 401(a)
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), the amendment may be modified
retroactively to the earliest date permitted by U.S. Treasury Regulations in order to secure
approval of the amendment under Section 401(a).



     13.4. Right to Amend or Terminate. 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 each Employer. No amendment, suspension,



25









 




supersession, merger, consolidation, or termination of the Plan shall (i) reduce any Participant’s or Beneficiary’s proportionate interest in the Trust
Fund, (ii) reduce or restrict, either directly or indirectly, the benefit provided any Participant
prior to the amendment, or (iii) 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. 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 as amended from time to time and the Committee’s instructions.




Section 14. Miscellaneous Provisions.




     14.1. Plan Creates No Employment Rights. Nothing in this Plan shall be
interpreted as giving any Employee the right to be retained as an Employee by an Employer, or as
limiting or affecting the rights of an Employer to control its Employees or to terminate the
Service of any Employee at any time and for any reason, subject to any applicable employment or
collective bargaining agreements.



     14.2. Nonassignability of Benefits. No assignment, pledge, or other
anticipation of benefits from the Plan will be permitted or recognized by the Employer, the
Committee, or the Trustee. Moreover, benefits from the Plan shall not be subject to attachment,
garnishment, or other legal process for debts or liabilities of any Participant or Beneficiary, to
the extent permitted by law. This prohibition on assignment or alienation shall apply to any
judgment, decree, or order (including approval of a property 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 State domestic relations or community property law,
unless the judgment, decree, or order is determined by the Committee to be a qualified domestic
relations order within the meaning of Section 414(p) of the Code, as more fully set forth in
Section 14.12 hereof.



     14.3. Limit of Employer Liability.



     The liability of the Employer with respect to Participants under this Plan shall be limited to
making contributions to the Trust from time to time, in accordance with Section 4.



     14.4. Treatment of Expenses. All expenses incurred by the Committee and the
Trustee in connection with administering this Plan and Trust Fund shall be paid by the Trustee from
the Trust Fund to the extent the expenses have not been paid or assumed by the Employer or by the
Trustee.



     14.5. Number and Gender. Any use of the singular shall be interpreted to
include the plural, and the plural the singular. Any use of the masculine, feminine, or neuter
shall be interpreted to include the masculine, feminine, or neuter, as the context shall require.



     14.6. Nondiversion of Assets. Except as provided in Sections 5.3 and 13.3,
under no circumstances shall any portion of the Trust Fund be diverted to or used for any purpose
other than the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan.



26









 





     14.7. Separability of Provisions. If any provision of this 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.



     14.8. Service of Process. The agent for the service of process upon the Plan shall be the president of the Bank, or such
other person as may be designated from time to time by the Bank.



     14.9. Governing State Law. This Plan shall be interpreted in accordance
with the laws of the State of New York to the extent those laws are applicable under the provisions
of ERISA.



     14.10. Employer Contributions Conditioned on Deductibility. Employer
Contributions to the Plan are conditioned on deductibility under Code Section 404. In the event
that the Internal Revenue Service shall determine that all or any portion of an Employer
Contribution is not deductible under that Section, the nondeductible portion shall be returned to
the Employer within one year of the disallowance of the deduction.



     14.11. Unclaimed Accounts. Neither the Employer nor the Trustees shall be
under any obligation to search for, or ascertain the whereabouts of, any Participant or
Beneficiary. The Employer or the Trustees, by certified or registered mail addressed to his last
known address of record with the Employer, shall notify any Participant or Beneficiary that he is
entitled to a distribution under this Plan, and the notice shall quote the provisions of this
Section. If the Participant or Beneficiary fails to claim his benefits or make his whereabouts
known in writing to the Employer or the Trustees within seven (7) calendar years after the date of
notification, the benefits of the Participant or Beneficiary under the Plan will be disposed of as
follows:




     (a) If the whereabouts of the Participant is unknown but the whereabouts of the
Participant’s Beneficiary is known to the Trustees, distribution will be made to the
Beneficiary.




     (b) If the whereabouts of the Participant and his Beneficiary are unknown to the
Trustees, the Plan will forfeit the benefit, provided that the benefit is subject to a claim
for reinstatement if the Participant or Beneficiary make a claim for the forfeited benefit.



     Any payment made pursuant to the power herein conferred upon the Trustees shall operate as a
complete discharge of all obligations of the Trustees, to the extent of the distributions so made.



     14.12. Qualified Domestic Relations Order. Section 14.2 shall not apply to
a “qualified domestic relations order” defined in Code Section 414(p), and such other domestic
relations orders permitted to be so treated by Administrator under the provisions of the Retirement
Equity Act of 1984. Further, to the extent provided under a “qualified domestic relations order”, a
former Spouse of a Participant shall be treated as the Spouse or surviving Spouse for all purposes
under the Plan.


In the case of any domestic relations order received by the Plan:





     (a) The Employer or the Plan Committee shall promptly notify the Participant and any
other alternate payee of the receipt of such order and the Plan’s procedures for determining
the qualified status of domestic relations orders, and




     (b) Within a reasonable period after receipt of such order, the Employer or the Plan
Committee shall determine whether such order is a qualified domestic relations order and
notify the Participant and each alternate payee of such determination. The Employer or the
Plan



27









 






Committee shall establish reasonable procedures to determine the qualified status of
domestic relations orders and to administer distributions under such qualified orders.



     During any period in which the issue of whether a domestic relations order is a qualified
domestic relations order is being determined (by the Employer or Plan Committee, by a court of
competent jurisdiction, or otherwise), the Employer or the Plan Committee shall segregate in a
separate account in the Plan or in an escrow account the amounts which would have been payable to
the alternate payee during such period if the order had been determined to be a qualified domestic
relations order. If within eighteen (18) months the order (or modification thereof) is determined
to be a qualified domestic relations order, the Employer or the Plan Committee shall pay the
segregated amounts (plus any interest thereon) to the person or persons entitled thereto. If within
eighteen (18) months it is determined that the order is not a qualified domestic relations order,
or the issue as to whether such order is a qualified domestic relations order is not resolved, then
the Employer or the Plan Committee shall pay the segregated amounts (plus any interest thereon) to
the person or persons who would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is made after the close
of the eighteen (18) month period shall be applied prospectively only. The term “alternate payee”
means any Spouse, former Spouse, child or other dependent of a Participant who is recognized by a
domestic relations order as having a right to receive all, or a portion of, the benefit payable
under a Plan with respect to such Participant.



Section 15. Top-Heavy Provisions.




     15.1. Top-Heavy Plan. For any Plan Year beginning after December 31, 1983,
this Plan is top-heavy if any of the following conditions exist:




     (a) If the top-heavy ratio for this Plan exceeds sixty percent (60%) and this Plan is
not part of any required aggregation group or permissive aggregation group;




     (b) If this Plan is a part of a required aggregation group (but is not part of a
permissive aggregation group) and the aggregate top-heavy ratio for the group of Plans
exceeds sixty percent (60%); or




     (c) If this Plan is a part of a required aggregation group and part of a permissive
aggregation group and the aggregate top-heavy ratio for the permissive aggregation group
exceeds sixty percent (60% ).



     15.2. Super Top-Heavy Plan. For any Plan Year beginning after December 31,
1983, this Plan will be a super top-heavy Plan if any of the following conditions exist:




     (a) If the top-heavy ratio for this Plan exceeds ninety percent (90% ) and this Plan is
not part of any required aggregation group or permissive aggregation group.




     (b) If this Plan is a part of a required aggregation group (but is not part of a
permissive aggregation group) and the aggregate top-heavy ratio for the group of Plans
exceeds ninety percent (90% ), or




     (c) If this Plan is a part of a required aggregation group and part of a permissive
aggregation group and the aggregate top-heavy ratio for the permissive aggregation group
exceeds ninety percent (90%).



     15.3. Definitions.



28









 




In making this determination, the Committee shall use the following definitions and principles:





     15.3-1 The “Determination Date”, with respect to the first Plan Year of any
plan, means the last day of that Plan Year, and with respect to each subsequent Plan Year,
means the last day of the preceding Plan Year. If any other plan has a Determination Date
which differs from this Plan’s Determination Date, the top-heaviness of this Plan shall be
determined on the basis of the other plan’s Determination Date falling within the same
calendar years as this Plan’s Determination Date.




     15.3-2 A “Key Employee”, with respect to a Plan Year, means an Employee who
at any time during the five years ending on the top-heavy Determination Date for the Plan
Year has received compensation from an Employer and has been (i) an officer of the Employer
having 415 Compensation greater than 50 percent of the limit then in effect under Section
415(b)(1)(A) of the Code, (ii) one of the 10 Employees owning the largest interests in the
Employer having 415 Compensation greater than the limit then in effect under Section
415(c)(1)(A), (iii) an owner of more than five percent of the outstanding equity interest or
the outstanding voting interest in any Employer, or (iv) an owner of more than one percent
of the outstanding equity interest or the outstanding voting interest in an Employer whose
annual compensation exceeds $150,000. For purposes of determining whether an Employee is a
Key Employee, annual compensation means compensation as defined in Section 415(c)(3) of the
Code, but including amounts contributed by the Employee pursuant to a salary reduction
agreement which are excludable from the Employee’s gross income under Section 125, Section
402(e)(3), Section 402(H)(1)(B) or Section 403(b) of the Code. The Beneficiary of a Key
Employee shall also be considered a Key Employee.




     15.3-3 A “Non-key Employee” means an Employee who at any time during the five
years ending on the top-heavy Determination Date for the Plan Year has received compensation
from an Employer and who has never been a Key Employee, and the Beneficiary of any such
Employee.




     15.3-4 A “required aggregation group” includes (a) each qualified Plan of the
Employer in which at least one Key Employee participates in the Plan Year containing the
Determination Date and any of the four (4) preceding Plan Years, and (b) any other qualified
Plan of the Employer which enables a Plan described in (a) to meet the requirements of Code
Sections 401(a)(4) or 410. For purposes of the preceding sentence, a qualified Plan of the
Employer includes a terminated Plan maintained by the Employer within the five (5) year
period ending on the Determination Date. In the case of a required aggregation group, each
Plan in the group will be considered a top-heavy Plan if the required aggregation group is a
top-heavy group. No Plan in the required aggregation group will be considered a top-heavy
Plan if the required aggregation group is not a top-heavy group. All Employers aggregated
under Code Sections 414(b), (c) or (m) or (o) (but only after the Code Section 414(o) regulations
become effective) are considered a single Employer.




     15.3-5 A “permissive aggregation group” includes the required aggregation
group of Plans plus any other qualified Plan(s) of the Employer that are not required to be
aggregated but which, when considered as a group with the required aggregation group,
satisfy the requirements of Code Sections 401(a)(4) and 410 and are comparable to the Plans
in the required aggregation group. No Plan in the permissive aggregation group will be
considered a top-heavy Plan if the permissive aggregation group is not a top-heavy group.
Only a Plan that is part of the required aggregation group will be considered a top-heavy
Plan if the permissive aggregation group is top-heavy.



29









 





     15.4. Top-Heavy Rules of Application.



     For purposes of determining the value of Account balances and the present value of accrued
benefits the following provisions shall apply:




     15.4-1 The value of Account balances and the present value of accrued
benefits will be determined as of the most recent Valuation Date that falls within or ends
with the twelve (12) month period ending on the Determination Date.




     15.4-2 For purposes of testing whether this Plan is top-heavy, the present
value of an individual’s accrued benefits and an individual’s Account balances is counted
only once each year.




     15.4-3 The Account balances and accrued benefits of a Participant who is not
presently a Key Employee but who was a Key Employee in a Plan Year beginning on or after
January l, 1984 will be disregarded.




     15.4-4 Employer contributions attributable to a salary reduction or similar
arrangement will be taken into account.




     15.4-5 When aggregating Plans, the value of Account balances and accrued
benefits will be calculated with reference to the Determination Dates that fall within the
same calendar year.




     15.4-6 The present value of the accrued benefits or the amount of the Account
balances of an Employee shall be increased by the aggregate distributions made to such
Employee from a Plan of the Employer. No distribution, however, made from the Plan to an
individual (other than the beneficiary of a deceased Employee who was an Employee within the
five (5) year period ending on the Determination Date) who has not been an Employee at any
time during the five (5) year period ending on the Determination Date shall be taken into
account in determining whether the Plan is top-heavy. Also, any amounts recontributed by an
Employee upon becoming a Participant in the Plan shall no longer be counted as a
distribution under this paragraph.




     15.4-7 The present value of the accrued benefits or the amount of the Account
balances of an Employee shall be increased by the aggregate distributions made to such
Employee from a terminated Plan of the Employer, provided that such Plan (if not terminated)
would have been required to be included in the aggregation group.




     15.4-8 Accrued benefits and Account balances of an individual shall not be
taken into account for purposes of determining the top-heavy ratios if the individual has
performed no services for the Employer during the five (5) year period ending on the
applicable Determination Date. Compensation for purposes of this subparagraph shall not
include any payments made to an individual by the Employer pursuant to a qualified or
non-qualified deferred compensation plan.




     15.4-9 The present value of the accrued benefits or the amount of the Account
balances of any Employee participating in this Plan shall not include any rollover
contributions or other transfers voluntarily initiated by the Employee except as described
below. If a rollover was received by this Plan after December 31, 1983, the rollover or
transfer voluntarily initiated by the Employee was received prior to January 1, 1984, then
the rollover or transfer shall be considered



30









 






as part of the accrued benefit by the Plan receiving such rollover or transfer. If this Plan transfers or rolls over funds to another
Plan in a transaction voluntarily initiated by the Employee after December 31, 1983, then
this Plan shall count the distribution for purposes of determining Account balances or the
present value of accrued benefits. A transfer incident to a merger or consolidation of two
or more Plans of the Employer (including Plans of related Employers treated as a single
Employer under Code Section 414), or a transfer or rollover between Plans of the Employer,
shall not be considered as voluntarily initiated by the Employee.



     15.5. Top-Heavy Ratio.



     If the Employer maintains one (1) or more defined contribution plans (including any simplified
Employee pension plan) and the Employer has never maintained any defined benefit plans which have
covered or could cover a Participant in this Plan, the top-heavy ratio is a fraction, the numerator
of which is the sum of the Account balances of all Key Employees as of the Determination Date, and
the denominator of which is the sum of the Account balances of all Employees as of the
Determination Date. Both the numerator and denominator of the top-heavy ratio shall be increased to
reflect any contribution which is due but unpaid as of the Determination Date.



     If the Employer maintains one (1) or more defined contribution plans (including any simplified
Employee pension plan) and the Employer maintains or has maintained one (1) or more defined benefit
plans which have covered or could cover a Participant in this Plan, the top-heavy ratio is a
fraction, the numerator of which is the sum of Account balances under the defined contribution
plans for all Key Employees and the present value of accrued benefits under the defined benefit
plans for all Key Employees, and the denominator of which is the sum of the Account balances under
the defined contribution plans for all Employees and the present value of accrued benefits under
the defined benefit plans for all Employees.



     For these purposes, the accrued benefit of a Participant other than a Key Employee in a
defined benefit plan shall be determined under (a) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the Employer, or (b) if there is no
such method, as if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C).



     15.6. Minimum Contributions. For any Top-Heavy Year, each Employer shall
make a special contribution on behalf of each Participant to the extent that the total allocations
to his Account pursuant to Section 4 is less than the lesser of:




     (i) three percent of his 415 Compensation for that year, or




     (ii) the highest ratio of such allocation to 415 Compensation received by any
Key Employee for that year. For purposes of the special contribution of this Section 15.2,
a Key Employee’s 415 Compensation shall include amounts the Key Employee elected to defer
under a qualified 401(k) arrangement. Such a special contribution shall be made on behalf
of each Participant who is employed by an Employer on the last day of the Plan Year,
regardless of the number of his Hours of Service, and shall be allocated to his Account.



     For any Plan Year when (1) the Plan is top-heavy and (2) a Non-key Employee is a Participant
in both this Plan and a defined benefit plan included in the plan aggregation group which is top
heavy, the sum of the Employer contributions and forfeitures allocated to the Account of each such
Non-key Employee shall be equal to at least five percent (5%) of such Non-key Employee’s 415
Compensation for that year.



31









 





     15.7. Minimum Vesting. If a participant’s vested interest in his Account is
to be determined in a Top-Heavy Year, it shall be based on the following “top-heavy table”:



	 	 	 	 	 
	Vesting	 	Percentage of
	Years	 	Interest Vested
	Fewer than 3

	 	0	%
	More than 3

	 	100	%






     15.8. Top-Heavy Provisions Control in Top-Heavy Plan. In the event this
Plan becomes to-heavy and a conflict arises between the top-heavy provisions herein set forth and
the remaining provisions set forth in this Plan, the top-heavy provisions shall control.




32











 





THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number One

 





     The Oneida Savings Bank Employee Stock Ownership Plan (the “Plan”) is hereby
amended in accordance with the following:




	1.	 	The definition of “Hours of Service” at Section 2 of the Plan shall be amended
by adding the following subsection (h) immediately after subsection (g) thereof:






     (h) Solely for purposes of determining whether a Break in Service for
vesting purposes has occurred in a computation period, the Hours of Service
credited to an individual who is absent from work for maternity or paternity
reasons shall be credited (1) in the computation period in which the absence
begins if the crediting is necessary to prevent a Break in Service in that
period, or (2) in all other cases, in the following computation period.




	2.	 	Section 5.2 of the Plan and all references thereto in the Plan shall be
deleted, effective January 1, 2000, and Sections 5.3 and 5.4 of the Plan and all
references thereto shall be renumbered Sections 5.2 and 5.3, respectively.






	3.	 	Section 5 of the Plan shall be amended by adding a new subsection 5.4 at the
end thereof to provide as follows:






	 	5.4	 	Erroneous Allocations. No Participant shall be
entitled to any annual additions or other allocations to his Account in
excess of those permitted under Section 5. If it is determined at any
time that the administrator and/or Trustee have erred in accepting and
allocating any contributions or forfeitures under this Plan, or in
allocating investment adjustments, or in excluding or including any
person as a Participant, then the administrator, in a uniform and
nondiscriminatory manner, shall determine the manner in which such
error shall be corrected and shall promptly advise the Trustee in
writing of such error and of the method for correcting such error. The
Accounts of any or all Participants may be revised, if necessary, in
order to correct such error.






	4.	 	Section 8.1 of the Plan shall be amended by replacing “Section 9.6” with
“Sections 9.5 and 9.6” in its last sentence.






	5.	 	Section 10.2.3 of the Plan shall be amended by inserting the following text
between its first and second sentences:






Any Participant (other than a 5-percent owner) attaining age 701/2 may elect
by April 1 of the calendar year following the year in which the Participant
attained age 701/2 to defer distributions until the calendar year following
the calendar year in which the Participant retires. If no such election is
made, the Participant will



 









 





The Oneida Savings Bank

Employee Stock Ownership Plan

Amendment Number One

Page 2





begin receiving distributions by the April 1 of the calendar year following
the year in which the Participant attained age 701/2.




	6.	 	Section 10.9-1 of the Plan shall be amended, effective January 1, 1999, by
adding the following clause after the words “Code Section 401(a)(9);”:






“a hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the
Code;”




	7.	 	Section 10.9-2 of the Plan shall be amended by replacing the first sentence
with the following:






An “eligible retirement plan” is an individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that accepts the
distributee’s eligible rollover distribution.




	8.	 	Section 15.5 of the Plan shall be deleted effective January 1, 2000. Section
15.5 shall be reserved for future use.





      




Model Amendments for

the Community Renewal Tax Relief Act of 2000 (“CRA”)

and

the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”)




      





	9.	 	CRA: Model Language for Section 415(c)(3) Compensation Definition






	 	 	For limitation years beginning on and after January 1, 2001, for purposes of
applying the limitations described in Section 2 of the Plan, definition of “415
Compensation,” compensation paid or made available during such limitation years
shall include elective amounts that are not includible in the gross income of the
Employee by reasons of Code Section 132(f)(4).






	 	 	This amendment shall also apply to the definition of compensation for purposes of
Sections 2 of the Plan, definition of “Highly Paid Employee” and definition of
“Service,” and Section 15.3-2 of the Plan, definition of “Key Employee,” for Plan
Years beginning on and after January 1, 2001.





10. EGTRRA





	 	A.	 	PREAMBLE
	 
	 	 	 	Adoption and effective date of amendment. This amendment of the Plan is
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA). This amendment is intended as good





 









 










The Oneida Savings Bank

Employee Stock Ownership Plan

Amendment Number One

Page 3





	 	 	 	faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and guidance issued thereunder. Except as otherwise
provided, this amendment shall be effective as of the first day of the first
Plan Year beginning after December 31, 2001.
	 
	 	 	 	Supersession of inconsistent provisions. This amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with
the provisions of this amendment.
	 
	 	B.	 	Section 5 of the Plan. LIMITATIONS ON CONTRIBUTIONS




This section shall be effective for limitation years beginning after December 31, 2001.





	 	1.	 	Maximum annual addition. Except to the extent
permitted under section 414(v) of the Code, if applicable, the annual
addition that may be contributed or allocated to a Participant’s
account under the Plan for any limitation year shall not exceed the
lesser of:






	 	1.	 	$40,000, as adjusted for
increases in the cost-of-living under section 415(d) of the
Code, or
	 
	 	2.	 	100 percent of the Participant’s
compensation, within the meaning of section 415(c)(3) of the
Code, for the limitation year.






	 	 	 	The compensation limit referred to in 2. shall not apply to any contribution
for medical benefits after separation from service (within the meaning of
section 401(h) or section 419A(f)(2) of the Code) which is otherwise treated
as an annual addition.






	 	C.	 	Section 2 of the Plan. INCREASE IN COMPENSATION LIMIT
	 
	 	 	 	The annual compensation of each Participant taken into account in
determining allocations for any Plan Year beginning after December 31, 2001,
shall not exceeds $200,000, as adjusted for cost-of-living increases in
accordance with section 401(a)(17)(B) of the Code. Annual compensation
means compensation during the Plan Year or such other consecutive 12-month
period over which compensation is otherwise determined under the Plan (the
determination period). The cost-of-living adjustment in effect for a
calendar year applies to annual compensation for the determination period
that begins with or within such calendar year.
	 
	 	D.	 	Section 15 of the Plan. MODIFICATION OF TOP-HEAVY RULES






	 	1.	 	Effective date. This section shall apply for
purposes of determining whether the Plan is a top-heavy plan under
section 416(g) of the Code for Plan Years beginning after December 31,
2001, and whether the Plan satisfies the minimum benefits requirements
of section 416(c) of the Code for such years. This section amends
section 15 of the Plan.




 









 











The Oneida Savings Bank

Employee Stock Ownership Plan

Amendment Number One

Page 4





	 	2.	 	Determination of top-heavy status.
	 
	 	2.1	 	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-percent owner of the
Employer, or a 1-percent 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.
	 
	 	2.2	 	Determination of present values and amounts.
This section 2.2 shall apply for purposes of determining the present
values of accrued benefits and the amounts of account balances of
Employees as of the determination date.
	 
	 	2.2.1	 	Distributions during year ending on the
determination date. The present values of accrued benefits and the
amounts of account balances of an Employee as of the determination date
shall be increased by the distributions made with respect to the
Employee 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.
	 
	 	2.2.2	 	Employees not performing services during 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.
	 
	 	3.	 	Minimum benefits.
	 
	 	3.1	 	Matching contributions. Employer matching
contributions shall be taken into account for purposes of satisfying
the minimum contribution requirements of section 416(c)(2) of the Code
and the Plan. The preceding sentence shall apply with respect to
matching contributions under the Plan or, if the Plan provides that the
minimum contribution requirement shall be met in another plan, such
other plan. Employer matching contributions that are used to satisfy
the minimum contribution





 









 










The Oneida Savings Bank

Employee Stock Ownership Plan

Amendment Number One

Page 5





	 	 	 	requirements shall be treated as matching contributions for purposes
of the actual contribution percentage test and other requirements of
section 401(m) of the Code.
	 
	 	3.2	 	Contributions under other plans. If the
Employer maintains a qualified plan in addition to this Plan and more
than one such plan is determined to be Top-Heavy, a minimum
contribution or a minimum benefit shall be provided in one of such
other plans (including another plan that consists solely of a cash or
deferred arrangement which meets the requirements of section 401(k)(12)
of the Code and matching contributions with respect to which the
requirements of section 401(m)(11) of the Code are met).






	 	E.	 	Section 10.9 of the Plan. DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS






	 	1.	 	Effective date. This section shall apply to
distributions made after December 31, 2001.
	 
	 	2.	 	Modification of definition of eligible
retirement plan. For purposes of the direct rollover provisions in
section 10.9 of the Plan, 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 and
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.
	 
	 	3.	 	Modification of definition of eligible rollover
distribution to include after-tax employee contributions. For purposes
of the direct rollover provisions in section 10.9 of the Plan, a
portion of a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax employee
contributions which are not includible in gross income. However, such
portion may be transferred only to an individual retirement account or
annuity described in section 408(a) or (b) of the Code, or to a
qualified defined contribution plan described in section 401(a) or
403(a) of the Code that agrees to separately account for amounts so
transferred, including separately accounting for the portion of such
distribution which is includible in gross income and the portion of
such distribution which is not so includible.




 









 











The Oneida Savings Bank

Employee Stock Ownership Plan

Amendment Number One

Page 6




     IN WITNESS WHEREOF, this Amendment Number One has been executed by the duly authorized
officers of The Oneida Savings Bank as of the 11th day of December, 2001.



	 	 	 	 	 	 
	ATTEST: 	 	THE ONEIDA SAVINGS BANK

 	 
	/s/ Eric E. Stickels 	 	By:  	/s/ Michael R. Kallet
 	 
	Secretary 	 	 	President 	 
	 	 	 	 	 



 









 





THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 





Amendment Number Two



 





     The Oneida Savings Bank Employee Stock Ownership Plan (the “Plan”) is hereby amended,
effective as of June 1, 2002, in accordance with the following:



     1. The definition of “Entry Date” at Section 2 of the Plan shall be amended by adding the
following at the end thereof:




“Notwithstanding the foregoing, former employees of State Bank of
Chittenango who were employed by State Bank of Chittenango on May 31, 2002
(the date of the merger of said bank with The Oneida Savings Bank) who
became Employees of the Bank on such date shall have an Entry Date of June
1, 2002 into the Plan.”



     2. The definition of “Active Participant” at Section 2 of the Plan shall be amended by
inserting the following after the first sentence of said definition:




“The Hours of Service definition for persons who were employees of State
Bank of Chittenango on May 31, 2002 who became Employees of the Bank on
such date shall include such persons’ hours of service with State Bank of
Chittenango during the 2002 calendar year.”



     3. Section 4.3 of the Plan shall be amended by adding the following paragraph at the end
thereof:




Cash Compensation of Participants who are former employees of State Bank
of Chittenango who become Employees of the Bank on May 31, 2002, refers
only to 415 Compensation earned on and after June 1, 2002.



     4. Section 9.2 of the Plan, first paragraph, shall be amended by inserting the following
sentence after its second sentence:




An Employee who was employed with State Bank of Chittenango and who
becomes an Employee of the Bank on May 31, 2002, shall receive credit for
vesting purposes for each calendar year



 









 







during which the employee had 1,000 hours of service with State Bank for
Chittenango.



     IN WITNESS WHEREOF, this Amendment Number Two has been executed by the duly authorized
officers of The Oneida Savings Bank as of the 8th day of April, 2003.



	 	 	 	 	 	 	 

	ATTEST:	 	THE ONEIDA SAVINGS BANK	 	 
	 
	 	 	 	 	 	 
	/s/ Eric E. Stickels
 

Eric E. Stickels, 

Secretary

	 	By:
	 	/s/ Michael R. Kallet
 

Michael R. Kallet,

 President
and Chief Executive Officer
	 	 






 









 






	 	 	 	 	 



THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 





Amendment Number Three



 






     The Oneida Savings Bank Employee Stock Ownership Plan (the “Plan”) is hereby amended,
effective as of January 1, 2005, in accordance with the following:




	 	1.	 	The definition of “Service” in Section 2 of the Plan shall be amended to add
the following sentence at the end thereof:
	 
	 	 	 	“Notwithstanding anything to the contrary herein, with respect to persons employed by
Bailey & Haskell Associates, Inc. on January 1, 2005, “Service” shall include only the
period of employment from January 1, 2000.”
	 
	 	2.	 	Section 3.1 of the Plan shall be amended by adding the following at the end,
as follows:
	 
	 	 	 	“Notwithstanding the foregoing, any person who is employed by Bailey & Haskell
Associates, Inc. on January 1, 2005 who satisfies the eligibility requirements of
Section 3.1 hereof on the basis of service with Bailey & Haskell Associates, Inc.,
shall be eligible to enter the Plan on January 1, 2005.”
	 
	 	3.	 	Section 9.2 of the Plan, first paragraph, shall be amended by inserting the following
sentence after its third sentence:
	 
	 	 	 	“Any person who is employed with Bailey & Haskell Associates, Inc. on January 1,
2005, shall receive credit for vesting purposes for each calendar year of continuous
Service during which the individual has 1,000 Hours of Service, provided, however, that
Service prior to a Break in Service occurring on or after January 1, 2000 and before
January 1, 2005 shall not be counted for vesting purposes.”




 









 











     IN WITNESS WHEREOF, this Amendment Number Three has been executed by the duly authorized
officers of The Oneida Savings Bank as of the 11th day of January, 2005.



	 	 	 	 	 	 	 

	ATTEST:	 	THE ONEIDA SAVINGS BANK	 	 
	 
	 	 	 	 	 	 
	/s/ Eric E. Stickels
 

Secretary

	 	By:
	 	/s/ Michael R. Kallet
 

Michael R. Kallet,
 President
and Chief Executive Officer
	 	 






 









 






	 	 	 	 	 



THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 





Amendment Number Four



 






     The Oneida Savings Bank Employee Stock Ownership Plan (the “Plan”) is hereby amended in
accordance with the following:



     Section 10.1 of the Plan shall be amended by inserting after the second paragraph in that
Section the following paragraph:




“Notwithstanding the foregoing, effective as of March 28, 2005, if a Participant’s vested
Account balance does not exceed $1,000 and the Participant fails to return his distribution
election form, the Plan Administrator shall distribute the vested portion of his Account
balance to the Participant in a lump sum, in cash or stock or a combination of cash and
stock, in the sole discretion of the Plan Administrator, as soon as practicable but in no
event later than 60 days after the end of the Plan Year in which employment terminates. If
the terminated Participant’s vested Account balance exceeds $1,000 but is not greater than
$5,000, and the Participant fails to consent to the distribution, then the Plan
Administrator shall liquidate the Participant’s Stock Fund Account and pay the
Participant’s vested Account balance, in cash, in a direct rollover to an individual
retirement plan designated by the Plan Administrator in accordance with Code Section
401(a)(31)(B) and the regulations promulgated thereunder.”



     IN WITNESS WHEREOF, this Amendment Number Four has been executed by the duly authorized
officers of The Oneida Savings Bank as of the 13th day of December, 2005.



	 	 	 	 	 

	ATTEST:

	 	THE ONEIDA SAVINGS BANK	 	 
	 
	 	 	 	 
	/s/ Deresa Rich
 


	 	/s/ Eric E. Stickels
 

Authorized Officer
	 	 







 











 





THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number Five



 





     The Oneida Savings Bank Employee Stock Ownership Plan (the “Plan”) is hereby amended in
accordance with the following:



     1. Section 3.1 of the Plan shall be amended by adding the following at the end thereof:




“Notwithstanding the foregoing, employees of Benefit Consulting Group,
Inc. shall be eligible to enter the Plan as of January 1, 2007.”



     2. Section 7.2 of the Plan shall be amended in its entirety to read as follows:




“7.2 Dividends on Stock. Dividends on Stock which are received by
the Trustee in the form of additional Stock shall be retained in the Stock
Fund, and shall be allocated among the Participants’ Accounts and the
Unallocated Stock Fund in accordance with their holdings of the Stock on
which the dividends have been paid. Dividends on Stock credited to
Participants’ Accounts which are received by the Trustee in the form of
cash shall, at the direction of the Employer paying the dividends, either
(i) be credited to the Accounts in accordance with Section 8.3 and
invested as part of the Investment Fund, (ii) be distributed immediately
to the Participants in proportion with the Participants’ Stock Fund
Account balance, (iii) be distributed to the Participants within 90 days
of the close of the Plan Year in which paid in proportion to the
Participants’ Stock Fund Account balance or (iv) be used to make payments
on the Stock Obligation. If dividends on Stock allocated to a
Participant’s Account are used to repay the Stock Obligation, Stock with a
fair market value equal to the dividends so used must be allocated to such
Participant’s Account in lieu of the dividends. Dividends on Stock held
in the Unallocated Stock Fund which are received by the Trustee in the
form of cash shall be allocated to Participants’ Investment Fund Accounts
(pro rata based on the Participant’s Account balance in relation to all
Participants’ Account balances) and shall be applied (in the same
proportion as the allocation made) as soon as practicable to payments of
principal and interest under the Stock Obligation incurred with the
purchase of the Stock.



 









 





The Oneida Savings Bank

Employee Stock Ownership Plan

Amendment Number Five

Page 2





     Effective January 1, 2008, Participants or their Beneficiaries may
elect to have dividends on Stock credited to Participants’ Accounts
either: (i) distributed immediately to the Participants in proportion to
with the Participants’ Stock Fund Account balance, or (ii) paid to the
Plan and reinvested in qualifying employer securities. Such dividends on
Stock shall be “applicable dividends” for purposes of Code Section
404(k)(2)(A). All dividends on Stock for which Participants may make an
election shall be fully vested, regardless of whether the Participant is
vested in the underlying securities. Accordingly, the Committee can
determine to provide the dividend election to all Participants or only to
those Participants who are fully vested. Such determination shall be set
forth in writing and communicated to Participants. The Committee shall
give Participants a reasonable opportunity before a dividend is paid or
distributed to make the election, and must also give Participants an
opportunity to change their dividend election at least annually. If there
is a change in the Plan terms that govern the way distributions are
distributed, Participants must be afforded a reasonable opportunity to
make an election under the new Plan terms before the first dividend
subject to the new Plan terms is paid or distributed. In the event that a
Participant fails to make an election, dividends paid on Stock allocated
to a Participant’s account shall remain in the Plan and shall be
reinvested in qualifying employer securities. ”



     IN WITNESS WHEREOF, this Amendment Number Five has been executed by the duly authorized
officers of The Oneida Savings Bank as of the 13th day of November, 2007.



	 	 	 	 	 

	ATTEST:	 	THE ONEIDA SAVINGS BANK
	 
	 	 	 	 
	/s/ Eric E. Stickels

	 	By:
	 	/s/ Michael R. Kallet
	 

	 	 	 	 
	Secretary

	 	 	 	President






 









 






THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number Six




 






     The Oneida Savings Bank Employee Stock Ownership Plan (the “Plan”) is hereby amended in
accordance with the following:



     1. Section 9.1 of the Plan shall be amended by adding the following at the end thereof:




“Effective as of January 1, 2008, for Participants who have one Hour of Service
under the Plan on or after January 1, 2008, the Participant’s vested interest in
his Account shall be based on his Vesting Years in accordance with the following
table:



	 	 	 	 	 
	Vesting	 	Percentage of
	Years	 	Interest Vested
	Fewer than 1

	 	 	0	%
	1

	 	 	20	%
	2

	 	 	40	%
	3

	 	 	60	%
	4

	 	 	80	%
	5 or more

	 	100%”







     2. Section 10.9-4 of the Plan shall be amended to provide as follows:




“10.9-4 The term “distributee” shall refer to a deceased Participant’s
Spouse or a Participant’s former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in Code Section 414(p), and
effective for distributions after December 31, 2006, a distributee shall
refer to any designated Beneficiary of the Participant.”



     3. Section 15.2 of the Plan shall be deleted. Section 15.2 shall be reserved for future use.



     4. Section 15.7 of the Plan shall be deleted. Section 15.7 shall be reserved for future use.



     IN WITNESS WHEREOF, this Amendment Number Six has been executed by the duly authorized
officers of The Oneida Savings Bank as of the 12th day of February, 2008.



	 	 	 	 	 

	ATTEST:	 	THE ONEIDA SAVINGS BANK
	 
	 	 	 	 
	/s/ Eric E. Stickels

	 	By:
	 	/s/ Michael R. Kallet
	 

	 	 	 	 
	Secretary

	 	 	 	President






 









 






THE ONEIDA SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number Seven



 





     This Amendment Number Seven (the “Amendment”) to The Oneida Savings Bank Employee Stock
Ownership Plan (the “Plan”) is made by The Oneida Savings Bank (the “Employer”). Capitalized terms
which are not defined herein shall have the same meaning as set forth in the Plan.



     WHEREAS, the Employer adopted the Plan, effective January 1, 1998;



     WHEREAS, the Employer wishes to further amend the Plan to comply with the Pension Protection
Act of 2006, the final regulations issued under Section 415 of the Internal Revenue Code of 1986,
as amended, the Heroes Earnings Assistance and Relief Tax Act of 2008 (the “HEART Act”), and the
Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”); and



     WHEREAS, the Employer reserves the right under Section 13.4 of the Plan to amend the Plan.



     NOW, THEREFORE, the Amendment is hereby adopted as follows:



     Section 1. Amendment to Section 2 of the Plan. The following paragraphs are hereby
added to the definition of “415 Compensation” in Section 2 of the Plan to read in its entirety as
follows:




     “(d) For limitation years beginning on or after July 1, 2007, 415 Compensation shall
also include the following types of compensation paid after a Participant’s severance from
employment with the Employer, provided that amounts described in paragraphs (i) or (ii)
below shall only be included as 415 Compensation to the extent such amounts are paid by the
later of 21/2 months after severance from employment, or by the end of the limitation year
that includes the date of such severance from employment.




     (i) Regular Pay. 415 Compensation shall include regular pay after severance
from employment if (a) the payment is for regular compensation for services during
the Participant’s regular working hours, or compensation for services outside of
the Participant’s regular working hours (such as overtime or shift differential),
commissions, bonuses, or other similar payments, and (b) the payment would have
been paid to the Participant prior to severance from employment if the Participant
had continued in employment with the Employer.




     (ii) Leave Cashouts. 415 Compensation shall include leave cashouts if those
amounts would have been included in the definition of 415 Compensation if they were
earned prior to the Participant’s severance from employment, and the amounts are
payment for unused accrued bona fide sick, vacation or other leave,



 









 






but only if the Participant would have been able to use the leave if his employment had continued.




     (e) Effective on the first day of the Plan Year beginning on or after January 1, 2009,
415 Compensation shall also include differential wage payments (as defined in Code Section
3401(h)) paid by the Employer to a former Employee who is performing qualified military
services (as defined in Code Section 414(u)(1)) but only to the extent that those
differential wage payments do not exceed the amounts the individual would have received if
the individual had continued to perform services for the Employer rather than entering
qualified military service.”



     Section 2. Amendment to Section 5.1-2 of the Plan. The following paragraph is hereby
added to the end of Section 5.1-2 of the Plan to read in its entirety as follows:




“Notwithstanding the foregoing, for limitation years beginning on or after July 1, 2007,
in the event the annual additions exceed the aforesaid limitations described above, the
annual additions for such year shall be reduced and reallocated in accordance with the
Employee Plans Compliance Resolution System (EPCRS) as set forth in Rev. Proc. 2008-50 or
any subsequent guidance issued by the Internal Revenue Service.”



     Section 3. Amendment to Section 5.1-3 of the Plan. The following paragraph is hereby
added to the end of Section 5.1-3 of the Plan to read in its entirety as follows:




“For limitation years beginning on or after July 1, 2007, annual additions to the
Participant’s accounts shall not include a restorative payment in accordance with Treasury
Regulation Section 1.415(c)-1(b)(2)(C) that is made to restore losses to the Plan resulting
from actions by a fiduciary for which there is a reasonable risk of liability for breach of
fiduciary duty under ERISA or other applicable federal and state law.”



     Section 4. New Section 9.3-4 of the Plan. Section 9.3-4 is hereby added to the Plan
to read in its entirety as follows:




“9.3-4 Notwithstanding the foregoing, effective January 1, 2007, Participants who die or
suffer a Disability while performing qualified military service (as defined in accordance
with Code Section 414(u)(1)) shall be deemed to be fully vested, in accordance with the
HEART Act of 2008.”



     Section 5. Amendment to Section 10.9-2 of the Plan. The following sentence is hereby
added to the end of Section 10.9-2 of the Plan to read in its entirety as follows:




“Effective January 1, 2009, an “eligible retirement plan” shall include a deemed individual
retirement account described in Code Section 408(q) and a Roth individual retirement
account in accordance with Code Section 408A(e).”



2









 





     Section 6. Governing Law. This Amendment and the rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the State of New York except to
the extent preempted by the laws of the United States of America.



[Signature Page Follows]





3









 








     IN WITNESS WHEREOF, this Amendment has been executed by the duly authorized officers of the
Employer as of the date provided below.



	 	 	 	 	 
	 	THE ONEIDA SAVINGS BANK

 	 
	Date 8/11/09 	By: 	/s/ Eric E. Stickels
 	 
	 	 	Print Name: 	Eric E. Stickels 	 
	 	 	Title: EVP	 	 
	 




4