Exhibit 10.1


HAMPDEN
BANK


EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST


Effective
as of January 1, 2007















 


 


	
  I.

  	
  Introduction

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.1

  	
  Plan Name

  	
  1

  
	
   

  	
   

  	
  1.2

  	
  Effective Date

  	
  1

  
	
   

  	
   

  	
  1.3

  	
  Purpose of Plan

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  Eligibility

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1

  	
  Initial Eligibility

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  Contributions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1

  	
  Contribution Amounts

  	
  2

  
	
   

  	
   

  	
  3.2

  	
  Form of Contributions

  	
  2

  
	
   

  	
   

  	
  3.3

  	
  Minimum Contributions

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  Investment of Trust Assets

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
  Purchase of Employer Stock

  	
  2

  
	
   

  	
   

  	
  4.2

  	
  Purchase Price of Employer Stock

  	
  3

  
	
   

  	
   

  	
  4.3

  	
  Diversification of Investments

  	
  3

  
	
   

  	
   

  	
  4.4

  	
  Borrowing to Acquire Employer Stock

  	
  4

  
	
   

  	
   

  	
  4.5

  	
  Release of Shares

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  Accounting

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1

  	
  Accounting for Trust Assets

  	
  6

  
	
   

  	
   

  	
  5.2

  	
  Treatment of Encumbered Shares

  	
  6

  
	
   

  	
   

  	
  5.3

  	
  Separate Records of Participants

  	
  6

  
	
   

  	
   

  	
  5.4

  	
  Allocation Among Participant Accounts

  	
  6

  
	
   

  	
   

  	
  5.5

  	
  Annual Report to Participants

  	
  8

  
	
   

  	
   

  	
  5.6

  	
  Voting

  	
  8

  
	
   

  	
   

  	
  5.7

  	
  List of Participants

  	
  9

  
	
   

  	
   

  	
  5.8

  	
  Maximum Annual Additions

  	
  9

  
	
   

  	
   

  	
  5.9

  	
  Adjustment for Excessive Additions

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  Vesting

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.1

  	
  Vesting

  	
  12

  
	
   

  	
   

  	
  6.2

  	
  Forfeitures

  	
  13

  
	
   

  	
   

  	
  6.3

  	
  Normal Retirement Age, etc.

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  Distributions

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1

  	
  Form of Distribution

  	
  14

  
	
   

  	
   

  	
  7.2

  	
  Timing of Distribution of Benefits

  	
  15

  
	
   

  	
   

  	
  7.3

  	
  Death Benefits; Designation of Beneficiary

  	
  16

  
	
   

  	
   

  	
  7.4

  	
  Bank Certification

  	
  17

  
	
   

  	
   

  	
  7.5

  	
  Minimum Distribution Requirements

  	
  17

  
	
   

  	
   

  	
  7.6

  	
  Time and Manner of Minimum Required Distributions

  	
  17

  
	
   

  	
   

  	
  7.7

  	
  Required Minimum Distributions During Participant’s
  Lifetime

  	
  18

  
	
   

  	
   

  	
  7.8

  	
  Required Minimum Distributions After Participant’s
  Death

  	
  19

  
	
   

  	
   

  	
  7.9

  	
  Definitions

  	
  20

  
	
   

  	
   

  	
  7.10

  	
  Distribution for Minor Beneficiary

  	
  21

  



 



 i
 






 



 


	
  

  	
   

  	
  7.11

  	
  Location of Participant or Beneficiary Unknown

  	
  21

  
	
   

  	
   

  	
  7.12

  	
  Limitations on Benefits and Distributions

  	
  22

  
	
   

  	
   

  	
  7.13

  	
  Direct Rollovers

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  Trust and Trustees

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.1

  	
  Trust and Trustee

  	
  23

  
	
   

  	
   

  	
  8.2

  	
  General Powers

  	
  23

  
	
   

  	
   

  	
  8.3

  	
  Responsibility of Trustee

  	
  25

  
	
   

  	
   

  	
  8.4

  	
  Compensation and Expenses

  	
  26

  
	
   

  	
   

  	
  8.5

  	
  Continuation of Powers Upon Trust Termination

  	
  26

  
	
   

  	
   

  	
  8.6

  	
  Resignation

  	
  26

  
	
   

  	
   

  	
  8.7

  	
  Removal of the Trustee

  	
  26

  
	
   

  	
   

  	
  8.8

  	
  Duties of Resigning or Removed Trustee and of
  Successor Trustee

  	
  26

  
	
   

  	
   

  	
  8.9

  	
  Filling Trustee Vacancy

  	
  27

  
	
   

  	
   

  	
  8.10

  	
  Disagreement as to Acts

  	
  27

  
	
   

  	
   

  	
  8.11

  	
  Persons Dealing with Trustee

  	
  27

  
	
   

  	
   

  	
  8.12

  	
  Multiple Trustees

  	
  27

  
	
   

  	
   

  	
  8.13

  	
  Dealings with the Administrative Committee

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  Dividends

  	
   

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1

  	
  Payment of Dividends

  	
  28

  
	
   

  	
   

  	
  9.2

  	
  Allocation of Dividends

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  Put Options

  	
  28

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.1

  	
  Application

  	
  28

  
	
   

  	
   

  	
  10.2

  	
  Put Option

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  Right of First Refusal

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.1

  	
  Application

  	
  30

  
	
   

  	
   

  	
  11.2

  	
  Right of First Refusal

  	
  30

  
	
   

  	
   

  	
  11.3

  	
  Endorsement of Certificates

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  Administrative Committee

  	
  31

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.1

  	
  Status

  	
  31

  
	
   

  	
   

  	
  12.2

  	
  Powers

  	
  31

  
	
   

  	
   

  	
  12.3

  	
  Duties

  	
  32

  
	
   

  	
   

  	
  12.4

  	
  Effect of Interpretation or Determination

  	
  32

  
	
   

  	
   

  	
  12.5

  	
  Reliance on Tables, etc.

  	
  32

  
	
   

  	
   

  	
  12.6

  	
  Claims and Review Procedures

  	
  33

  
	
   

  	
   

  	
  12.7

  	
  Indemnification

  	
  33

  
	
   

  	
   

  	
  12.8

  	
  Annual Report

  	
  34

  
	
   

  	
   

  	
  12.9

  	
  Expenses of Plan

  	
  34

  
	
   

  	
   

  	
  12.10

  	
  Limitation of Liability

  	
  34

  
	
   

  	
   

  	
  12.11

  	
  Accounts

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  Amendments and Termination

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.1

  	
  Plan Amendments

  	
  35

  



 



 ii
 






 



 


	
  

  	
   

  	
  13.2

  	
  Termination of Contributions

  	
  35

  
	
   

  	
   

  	
  13.3

  	
  Termination of Plan

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  Top Heavy Provisions

  	
  36

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.1

  	
  Provisions to apply

  	
  36

  
	
   

  	
   

  	
  14.2

  	
  Minimum Contribution

  	
  36

  
	
   

  	
   

  	
  14.3

  	
  Definitions

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
  Definitions

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
  Miscellaneous

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  16.1

  	
  Exclusive Benefit Rule

  	
  45

  
	
   

  	
   

  	
  16.2

  	
  Non-terminable Rights

  	
  45

  
	
   

  	
   

  	
  16.3

  	
  Limitation of Rights

  	
  45

  
	
   

  	
   

  	
  16.4

  	
  Non-alienability of Benefits

  	
  45

  
	
   

  	
   

  	
  16.5

  	
  Adequacy of Delivery

  	
  46

  
	
   

  	
   

  	
  16.6

  	
  Service with Armed Forces

  	
  46

  
	
   

  	
   

  	
  16.7

  	
  Merger or Consolidation

  	
  46

  
	
   

  	
   

  	
  16.8

  	
  Governing Law

  	
  46

  



 



 iii















 


HAMPDEN
BANK


EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST


Effective
as of January 1, 2007


I.
INTRODUCTION


1.1           PLAN NAME


The name of the Plan is the Hampden Bank
Employee Stock Ownership Plan and Trust. 


1.2           EFFECTIVE
DATE


The
Plan is effective as of January 1, 2007.


1.3           PURPOSE OF
PLAN


The
Plan is created for the purpose of providing retirement benefits to Participants
and their beneficiaries in a manner consistent with the requirements of the
Code and Title I of ERISA. The Plan is intended to be, and is hereby designated
as, an employee stock ownership plan within the meaning of Code Section
4975(e)(7), which shall invest primarily in Employer Stock.


II.
ELIGIBILITY


2.1           INITIAL
ELIGIBILITY


(a)           An Eligible Employee
who is an Employee on [insert date of conversion] (the “Conversion Date”) and
who has earned one Hour of Service in each of the 3 months immediately
preceding the Conversion Date will be a Participant as of the Conversion Date.
Any other Eligible Employee will become a Participant in the Plan on the Entry
Date coincident with or next following the date on which he or she first
completes a Year of Service and attains age 21.


(b)           No
contributions shall be made or forfeitures allocated with respect to an
Employee who is not,  or a Participant
who ceases to be, an Eligible Employee. 
If an Employee who is not an Eligible Employee becomes an Eligible
Employee,  such Employee will become a
Participant on the first Entry Date on or after becoming an Eligible
Employee,  if he or she has otherwise satisfied
the requirements of this Article II.


2.2           BREAK IN
SERVICE


Any
Participant who terminates employment but is reemployed by a Participating
Employer before incurring a One Year Break in Service will continue to
participate in the









 



Plan as if such
termination had not occurred, effective as of the date of reemployment. Any
Participant who terminates employment but is reemployed by a Participating
Employer after incurring a One Year Break in Service will be treated as a new
hire, and he or she will participate in the Plan only after again satisfying
the requirements of this Article II.


III.
CONTRIBUTIONS


3.1           CONTRIBUTION
AMOUNTS


Not
later than the time prescribed by law for filing its Federal income tax return
(including extensions thereof) for its current taxable year and each succeeding
taxable year, the Bank will make contributions to the Trust in such amounts as
may be determined by the Board of Directors, provided, however, that the
aggregate contribution of the Bank for any year shall not exceed the maximum amount
which would constitute an allowable deduction to the Bank for such year under
Code Section 404(a). A Participant shall neither be required nor permitted to
make contributions to the Plan and Trust.


3.2           FORM OF
CONTRIBUTIONS


Bank
contributions will be paid in cash or other property, as the Board of Directors
may, from time to time, determine; provided however that the Bank may not make
contributions of Employer Stock to the extent necessary to satisfy a monetary
obligation in violation of U.S. Department of Labor Interpretive Bulletin 93-4
unless the contribution otherwise satisfies the requirements for an exemption
from the ERISA prohibited transaction rules.


3.3           MINIMUM
CONTRIBUTIONS


Consistent
with safe and sound banking practices, the Bank’s annual contribution must be
sufficient to ensure that Trust does not default on the repayment by the Trust
of indebtedness in accordance with the terms of such indebtedness which may be
incurred from time to time for the purpose of the acquisition of Employer Stock.


IV.
INVESTMENT OF TRUST ASSETS


4.1           PURCHASE OF
EMPLOYER STOCK


All
cash contributions to the Trust made by the Bank and any other cash received by
the Trust (excluding dividends received by the Trust on Employer Stock which
are directed by the Bank to be distributed to Plan Participants pursuant to
Section 9.1), will first be applied to outstanding current obligations of the
Trust, and any excess will be used, at the discretion of the Trustee, to repay
obligations of the Trust, to buy Employer Stock from holders of outstanding
stock or newly issued or treasury stock from the Bank, or the Trustee may
invest such funds of the Trust in savings accounts, certificates of deposit,
short-term commercial paper, stocks, bonds, insurance policies, or other investments
deemed to be desirable for the Trust, or such funds may be held temporarily in
cash.



 2
 






 



4.2           PURCHASE
PRICE OF EMPLOYER STOCK


All
purchases of Employer Stock by the Trust will be made at a price, or at prices,
which, in the judgment of the Trustee, do not exceed the fair market value of
such Employer Stock. The fair market value of Employer Stock shall be the price
at which such stock trades on an established securities market, or if such
stock is not readily tradable on an established securities market, the fair market
value of Employer Stock shall be determined by an independent appraiser as
defined in Code Section 401(a)(28). In making such determination, the appraiser
shall consider the following criteria:


(a)           Any current
and historical practices which have been consistently and uniformly utilized to
value Employer Stock in sales transactions between the Bank and the
stockholders, or among and between stockholders.


(b)           Any
restrictions or limitations imposed upon the sale or transfer of Employer Stock
which establish or stipulate the price at which the Bank may or must purchase
such stock under the provisions of its charter of any or written agreements,
provided the same or similar restrictions are applicable to substantially all
of the outstanding Employer Stock and are complied with uniformly and
consistently.


(c)           Such other
information concerning the Bank and its condition and prospects, financial and
otherwise, generally used in the determination of the fair market value of
corporate stock of comparable public or private companies engaged in the same
or similar industries, by independent investment analysts nationally recognized
as having expertise in rendering such evaluations.


4.3           DIVERSIFICATION
OF INVESTMENTS


(a)           Each
Participant in the Plan who has attained age fifty-five (55) and has completed
at least ten (10) years of participation in the Plan shall be permitted to
elect,  as to not more than twenty-five
percent (25%) (reduced by amounts previously diversified) of his or her
Employer Stock Account,  to have Employer
Stock in such amount liquated from his or her Employer Stock Account and
transferred to his or her Other Investment Account.  This election may be made within the period
of ninety (90) days following the end of each Plan Year during the six (6) Plan
Year period beginning with the first Plan Year in which the Participant became
eligible to make the election.  In the
case of the last year to which an election applies,  fifty percent (50%) shall be substituted for twenty-five
percent (25%).


(b)           For the
purpose of facilitating elective diversification hereunder, the Trustee may
make available under the Participant’s Other Investment Account at least three
investment vehicle alternatives to the investment of assets of the Trust in
qualified employer securities that comply with the requirements of Code Section
401(a)(28) and any applicable Regulation. 



 3
 






 



(c)           The Trustee
shall comply with any diversification election under this Section 4.3 within
ninety (90) days following the ninety (90) day election period by (i)
substituting other investment assets for the amount of qualified employer
securities as to which the election is made, or (ii) distributing to the
Participant an amount equal to the amount for which diversification was elected.



4.4           BORROWING TO
ACQUIRE EMPLOYER STOCK


The
Trustee may borrow funds from any lender for the purpose of purchasing Employer
Stock, and may enter into contracts for the purchase of Employer Stock pursuant
to which the purchase price is paid in installments. Any such loan or contract
must be primarily for the benefit of Participants and their Beneficiaries, and
shall comply with the following terms and conditions:


(a)           The interest
rate respecting such loan shall not exceed a reasonable rate of interest. The
Trustee shall consider all relevant factors in determining a reasonable rate of
interest, including the amount and duration of the loan or contract, the
security and guarantee (if any) involved, the credit standing of the Trust and
the Bank (if and to the extent that the Bank acts as guarantor), and the
interest rate prevailing for comparable loans. Upon due consideration of the
foregoing factors, a variable interest rate may be reasonable.


(b)           At the time
that such loan is made or contract entered into, the interest rate and the
price of securities to be acquired should not be such that Plan assets might be
dissipated.


(c)           The terms of
such loan or contract, whether or not between independent parties, must be at
such time at least as favorable to the Trust as the terms of a comparable loan
or contract resulting from arm’s-length negotiations between independent
parties.


(d)           The proceeds
of such loan must be used within a reasonable time after their receipt by the
Trust only to acquire Employer Stock, to repay such loan, or to repay a prior
loan to the Trust.


(e)           Such loan
must be without recourse against the Trust. The only assets of the Trust that
may be given as collateral on such loan are shares of Employer Stock acquired
therewith. No person entitled to payment under such loan shall have any right
to assets of the Trust other than collateral given for such loan, cash
contributions of the Bank made to meet the obligations of the Trust under such
loan, and earnings attributable to such collateral and the investment of such
contributions. The payments made with respect to such loan by the Trust during
a Plan Year must not exceed an amount equal to the sum of such contributions
and earnings received during or prior to the year less such payments in prior
years. Such contributions and earnings must be accounted for separately on the
books of account of the Trust, until the loan is repaid.


(f)            In the event of
default on such loan, the value of Plan assetstransferred in satisfaction of
the loan must not exceed the amount of default.


 



 4
 






 



(g)           Shares of
Employer Stock used as collateral for such loan shall be released from the
encumbrance thereof, in accordance with the provisions of Section 4.5.


(h)           Such loan
shall be for a specific term, and not payable at the demand of any person
(except in the case of default). 


(i)            Except as
otherwise provided under the terms of this Plan and Trust, or as otherwise
required by applicable law, no Employer Stock acquired with the proceeds of
such loan shall be subject to a put, call or other option, or buy-sell or
similar arrangement while held by and when distributed from the Trust, whether
or not the Trust is then an employee stock ownership plan as described in Code
Section 4975(e)(7). 


4.5           RELEASE OF
SHARES


All
shares of Employer Stock acquired by the Trust and pledged as collateral on a
loan described in Section 4.4 shall be credited to the Suspense Account and
shall be released as follows: 


(a)           For each
Plan Year during the duration of the loan, the number of shares of Employer
Stock released shall equal the original number of encumbered shares multiplied
by a fraction in which the numerator is the amount of principal paid to the
lender by the Trust for the year, and the denominator is the original principal
amount outstanding at the commencement of the loan. The foregoing allocation
method shall apply only if the loan 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 ten (10) years. Further shares released
from encumbrance shall be determined solely with reference to principal
payments and interest included in any payments shall be disregarded only to the
extent that the interest would be determined to be interest under standard loan
amortization tables. If at any time, by reason of a renewal, extension, or
refinancing, the sum of the expired duration of the exempt loan, the renewal
period, the extension period, and the duration of a new exempt loan exceeds ten
(10) years, or if, at any time, the other terms and conditions of this Section
4.5(a) are not met, then from such time shares of Employer Stock shall be
released pursuant to Section 4.5(b). 


(b)           If the
allocation method set forth in Section 4.5(a) is not applicable, then shares of
Employer Stock shall be released as follows: For each Plan Year during the
duration of the loan, the number of shares of Employer Stock released shall
equal the number of encumbered shares held immediately before release by a
fraction. The numerator of the fraction is the amount of principal and interest
paid to the lender by the Trust for the year, and the denominator of the
fraction is the sum of the numerator plus the principal and interest to be paid
for all future years. For purposes of the foregoing determination, the number
of future years under the loan must be definitely ascertainable, and shall be
determined without taking into account any possible extensions or renewal
periods. If the interest rate under the loan is variable, the interest to be
paid in future years shall be computed by using the interest rate applicable as
of the end of the Plan Year.



 5
 






 



(c)           To the
extent of the foregoing release from encumbrance pursuant to Sections 4.5(a) or
(b), shares shall be withdrawn from the Suspense Account and shall be allocated
for each Plan Year as provided in Section 5.4.


V.
ACCOUNTING


5.1           ACCOUNTING
FOR TRUST ASSETS


The
Trustee shall keep accurate and detailed accounts of all investments, receipts
and disbursements and other transactions under the Trust. As of the last day of
each Plan Year, the Trustee shall make a determination of the current fair
market value of all Trust assets. In so doing, the Trustee shall:


(i)            Credit to
the Trust all income of the Trust for such year (including dividends on Employer
Stock);


(ii)           Charge to
the Trust all losses and expenses of the Trust for such year;


(iii)          Credit to
the Trust all contributions of the Bank (whether in cash or in kind); and


(iv)          Make a
determination as to the current fair market value of all assets of the Trust,
including Employer Stock in accordance with Section 4.2.


5.2           TREATMENT OF
ENCUMBERED SHARES


In
computing the fair market value of all assets held in the Trust, shares of
encumbered Employer Stock (i.e., those shares standing as collateral for a loan
or loans described at Section 4.4 above) shall be disregarded. 


5.3           SEPARATE
RECORDS OF PARTICIPANTS


The
Trustee shall keep accurate accounts of the respective share of each Participant
in the Trust assets. Each account shall separately state the number of shares
of Employer Stock allocated to the Participants’ accounts each year under
Section 5.4. The share of each Participant in the Trust assets as of any date
of determination shall be the fair market value of such assets as of the preceding
Valuation Date. 


5.4           ALLOCATION
AMONG PARTICIPANT ACCOUNTS


As
of each Anniversary Date, the Trustee shall allocate the Banks contribution
under Section 3.1 to the Account of each Participant who has completed 1,000
Hours of Service during the Plan Year in the same proportion that each such
Participant’s Compensation for such year bears to the aggregate of the
Compensation of all Participants for such year.



 6
 






 



(a)           The Account
of each Participant will be credited as of each Anniversary Date with its
allocable share(s) of Employer Stock (including fractional shares rounded to
the nearest one-hundredth of a share) purchased and paid for by the Plan or
contributed in kind by the Bank and with stock dividends on Employer Stock held
in such Participant’s Account. Employer Stock acquired by the Plan with the
proceeds of a loan described in Section 4.4 above will only be allocated to
each Participant’s Account upon release from encumbrance pursuant to Section
4.5. The Employer Stock received by the Trust during a Plan Year with respect
to a contribution by the Bank for the preceding Plan Year shall be allocated to
the accounts of Participants as of the Anniversary Date at the end of such
preceding Plan Year. Each Participant’s Other Contributions Account will be
credited as of each Anniversary Date with his or her allocable share of the Bank’s
contribution that does not consist of Employer Stock, and shall be debited with
payments made to pay for Employer Stock, or to repay a loan described in
Section 4.4. 


(b)           Net income
(or loss) of the Trust will be determined annually as of each Anniversary Date.
A share thereof will be allocated to each Participant’s Account in the ratio in
which the balance of his or her Account on the preceding Anniversary Date bears
to the sum of the balances for the Accounts of all Participants on that date.
The net income (or loss) includes the increase (or decrease) in the fair market
value of assets of the Trust (other than Employer Stock), interest, dividends,
other income and expenses attributable to assets in the Accounts (other than
Employer Stock) since the preceding Anniversary Date. Net income (or loss) does
not include the interest paid under any installment contract for the purchase
of Employer Stock by the Trust or on any loan used by the Trust to purchase
Employer Stock, nor does it include income received by the Trust with respect
to Employer Stock acquired with the proceeds of a loan described in Section 4.4
to the extent such income is used to repay the loan.


(c)           Shares of
Employer Stock released from encumbrance as a result of dividends paid on
Employer Stock will be allocated to each Participant’s Account in the ratio of
the balance in his or her account on the preceding Anniversary Date to the sum
of the balances for the Accounts of all Participants on that date.


(d)           Despite the
foregoing, any diversification of investments made pursuant to Section 4.3
shall be deemed an earmarked investment made for such Participant’s benefit.
Accordingly, all interest and other earnings attributable to such earmarked
investments shall be allocated and credited exclusively to the Other Investment
Account of the Participant who has made such election. At the time of electing
such diversification of investments, the electing Participant’s Employer Stock
Account shall be reduced by the number of shares of Employer Stock which are
equal in value as of the last Valuation Date to the amount of the diversified
investments or the amount distributed to the Participant pursuant to Section
4.3.


(e)           The Bank
shall establish accounting procedures for the purpose of making the
allocations, valuations and adjustments to Participants’ Accounts provided for
in this Section 5.4.



 7
 






 



(f)            In the case
of a Participant who is entitled to have credited to his or her Account a portion
of the Bank’s contribution for a Plan Year but whose employment is terminated
after the close of such year and before actual contributions have been made to
the Trust, the allocations with respect to such contributions shall be made as
though such Employee’s employment had not terminated. 


5.5           ANNUAL
REPORT TO PARTICIPANTS


As
soon as practicable after each Anniversary Date, the Trustee shall prepare a
written statement for distribution to each Participant reflecting the number of
shares of Employer Stock allocated to such Participant’s Account as of the
Anniversary Date preceding the most recent Anniversary Date, the additional number
of shares of Employer Stock allocated to him or her for the Plan Year ending on
the most recent Anniversary Date, and the aggregate number of shares of
Employer Stock allocated to date to his or her Account. The written statement shall
also indicate the dollar value of the Participant’s shares of Employer Stock,
based upon the most recent revaluation of the assets of the Trust.


5.6           VOTING


The
Trustee shall vote all shares of Employer Stock held in the Trust in accordance
with the following provisions:


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


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


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


(d)           Whenever
voting rights are to be exercised under this Section 5.6, the Bank, the
Administrative Committee, and the Trustee shall see that all Participants and
Beneficiaries are provided with the same notices and other materials as are
provided to



 8
 






 



other
holders of the Employer Stock, and are provided with adequate opportunity to
deliver their instructions to the Trustee regarding the voting of Employer Stock
allocated to their Accounts or deemed allocated to their Accounts for purposes
of voting. The instructions of the Participants with respect to the voting of
shares of Employer Stock shall be confidential.


(e)           In the event
of a tender offer, Employer Stock shall be tendered by the Trustee in the same
manner set forth in subsection (a) through (d) above regarding the voting of
Employer Stock.


5.7           LIST OF
PARTICIPANTS


On
or about each Anniversary Date, the Bank shall deliver to the Trustee a list of
all Eligible Employees to whom Compensation was paid or payable for such year,
together with a statement of the amount of such Compensation.


5.8           MAXIMUM
ANNUAL ADDITIONS


Despite
the foregoing, the maximum annual additions credited to a Participant’s
accounts for any limitation year shall equal the lesser of (i) $40,000, as
adjusted for increases in the cost of living under Code Section 415(c)(3), or
(ii) one hundred percent (100%) of the Participant’s 415 Compensation for such
limitation year; provided, however, that the 415 Compensation percentage
limitation referred to in clause (ii) shall not apply to any contribution for
medical benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is otherwise treated as an annual addition, or
any amount otherwise treated as an annual addition under Code Section
415(l)(1).


(a)           For purposes
of applying the limitations of Code Section 415, “annual additions” means the
sum credited to a Participant’s accounts for any limitation year of:


(i)            Employer
contributions,


(ii)           Employee
contributions,


(iii)          Forfeitures,


(iv)          Amounts
allocated to an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan maintained by the Bank or
any Affiliated Employer, and


(v)           Amounts derived from
contributions paid or accrued, which are attributable to post-retirement
medical benefits allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3) ) under a welfare benefit plan (as defined in
Code Section 419(e)) maintained by the Bank or any Affiliated Employer.


 



 9
 






 



(b)           For purposes
of applying the limitations of Code Section 415, the transfer of funds from one
qualified plan to another is not an annual addition. In addition, the following
are not employee contributions: (i) rollover contributions (as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3), (ii) repayments of
loans made to a Participant from the Plan, (iii) repayments of distributions
received by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs), (iv)
repayments of distributions received by an employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions), and (v) Employee contributions to a
simplified employee pension excludable from gross income under Code Section
408(k)(6).


(c)           For purposes
of applying the limitations of Code Section 415, 415 Compensation shall include
the Participant’s wages, salaries, fees for professional services and other
amounts for personal services actually rendered in the course of employment
with an employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and bonuses and
in the case of a Participant who is an employee within the meaning of Code
Section 401(c)(1) and the accompanying Regulation, the Participant’s earned
income (as described in Code Section 401(c)(2) and the accompanying Regulation)
paid during the limitation year and including any elective deferrals (as
defined in Code Section 402(g)(3)), and any amount which is contributed or deferred
by the Bank or any Bank or any Affiliated Employer at the election of the
employee and which is not currently includible in the gross income of the Employee
by reason of Code Sections 125, 132(f) or 457.


(d)           “415
Compensation” shall exclude (i) any distributions from a plan of deferred
compensation regardless of whether such amounts are includable in the gross
income of the Employee when distributed except any amounts received by an Employee
pursuant to an unfunded non-qualified plan to the extent such amounts are
includable in the gross income of the Employee; (ii) amounts realized from the
exercise of a non-qualified stock option or when restricted stock (or property)
held by an Employee either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture; (iii) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (iv) other amounts which receive special tax benefits, such premiums for
group term life insurance (but only to the extent that the premiums are not
includable in the gross income of the Employee), or contributions made by the
Bank any Affiliated Employer (whether or not under a salary reduction agreement)
towards the purchase of any annuity contract described in Code Section 403(b)
(whether or not the contributions are excludable from the gross income of the
Employee).


(e)           For purposes
of applying the limitations of Code Section 415, the limitation year shall be
the Calendar Year.


(f)            The dollar limitation
under Code Section 415(b)(1)(A) stated in this Section 5.8 shall be adjusted
annually as provided in Code Section 415(d) pursuant to the Regulations. The
adjusted limitation is effective as of January l of each calendar year and is
applicable to limitation years ending with or within those calendar years.



 10
 






 



(g)           For the purpose of this
Section 5.8, all qualified defined benefit plans (whether or not terminated)
every maintained by the Bank shall be treated as one defined benefit plan, and
all qualified defined contribution plans (whether or not terminated) every
maintained by the Bank shall be treated as one defined contribution plan.


(h)           For the
purpose of this Section 5.8, if the Bank is a member of a controlled group of
corporations, trades or businesses under common control (as defined by Code
Section 1563(a) or Code Section 414(b) and Code Section 414(c) as modified by
Code Section 415(h)), is a member of an affiliated service group (as defined by
Code Section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all Employees of
such employers shall be considered to be employed by a single employer.


(i)            If a
Participant participates in more than one defined contribution plan maintained
by the Bank or any Affiliated Employer which have different Anniversary Dates,
the maximum annual additions under the Plan shall equal the maximum annual
additions for the limitation year minus any annual additions previously
credited to such Participant’s accounts during the limitation year.


(j)            If a
Participant participates in both a defined contribution plan subject to Code
Section 412 and a defined contribution plan not subject to Code Section 412
maintained by the Bank or any Affiliated Employer which have the same
Anniversary Date, annual additions will be credited to the Participant’s accounts
under the defined contribution plan subject to Code Section 412 prior to
crediting annual additions to the Participant’s accounts under the defined contribution
plan not subject to Code Section 412.


(k)           If a
Participant participates in more than one defined contribution plan not subject
to Code Section 412 maintained by the Bank or any Affiliated Employer which
have the same Anniversary Date, the maximum annual additions under this Plan
shall equal the product of (A) the maximum annual additions for the limitation
year minus any annual additions previously credited multiplied by (B) a
fraction (i) the numerator of which is the annual additions that would be credited
to such Participant’s accounts under this Plan without regard to the limitations
of Code Section 415 and (ii) the denominator of which is such annual additions
for all plans described in this Section 5.8.


(l)            Despite any
contrary provision of this Section 5.8, the limitations, adjustments and other
requirements prescribed in this Section 5.8 shall at all times comply with the
provisions of Code Section 415 and the Regulation thereunder, the terms of
which are specifically incorporated herein by reference.


5.9           ADJUSTMENT
FOR EXCESSIVE ADDITIONS


If,
as a result of the allocation of Forfeitures, a reasonable error in estimating
a Participant’s Compensation or other facts and circumstances to which
Regulation Section 1.415-6(b)(6) shall be applicable, the annual additions under
the Plan would cause the maximum annual additions to be exceeded for any Participant,
the Administrative Committee shall (i) return any voluntary Employee
contributions credited for the



 11
 






 



limitation
year to the extent that the return would reduce the excess amount in the
Participant’s Account, (ii) hold any excess amount remaining after the return
of any voluntary Employee contributions in a Code Section 415 suspense account
(as defined in Section 5.9(b)), (iii) allocate and reallocate the Code Section
415 suspense account in the next limitation year (and succeeding limitation
years if necessary) to all Participants in the Plan before any employer or
employee contributions which would constitute annual additions are made to the
Plan for such limitation year, and (iv) reduce contributions to the Plan for
such limitation year by the amount of the Code Section 415 suspense account
allocated and reallocated during such limitation year.


(a)           The excess
amount for any Participant for a limitation year shall mean the excess, if any,
of (i) the annual additions that would be credited to his or her account under
the terms of the Plan without regard to the limitations of Code Section 415
over (ii) the maximum annual additions determined pursuant to Section 5.8.


(b)           For purposes
of this Section 5.9, “ Code Section 415 suspense account” means an unallocated
account equal to the sum of excess amounts for all Participants in the Plan
during the limitation year. The Code Section 415 suspense account shall not
share in any earnings or losses of the Fund. 


(c)           The Plan may
not distribute excess amounts, other than voluntary Employee contributions, to
Participants or Former Participants.


VI.
VESTING


6.1           VESTING


In
the event of termination or severance of a Participant’s employment, the Trustee
shall determine the vested portion of the Participant’s Account as of the
immediately preceding Valuation Date in accordance with the following schedule:


	
  YEARS OF SERVICE

  	
   

  	
  VESTED PORTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than One
  Year

  	
   

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  One Year

  	
   

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Two Years

  	
   

  	
  40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Three Years

  	
   

  	
  60

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Four Years

  	
   

  	
  80

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Five Years

  	
   

  	
  100

  	
  %

  



 



 12
 






 



6.2           FORFEITURES


Any
amount not vested under the foregoing vesting schedule shall become a Forfeiture.
As of each Anniversary Date, any amounts which became Forfeitures since the
last Anniversary Date shall first be made available to reinstate previously
forfeited account balances of Former Participants, if any, in accordance with
this Section 6.2. The remaining Forfeitures, if any, shall be added to the
Bank’s discretionary contribution pursuant to Section 3.1 and for the Plan Year
in which such Forfeitures occur allocated among the Accounts of Participants in
the same manner as the Bank’s discretionary contribution for the current year.
Despite the forgoing, if the allocation of Forfeitures causes the annual
addition (as defined in Section 5.8) to any Participant’s Account to exceed the
amount allowable by the Code, the excess shall be reallocated in accordance
with Section 5.9, except that Participants who perform less than a Year of
Service during any Plan Year or are not employed on the last day of the Plan
Year shall not share in Forfeitures for that year.


(a)           The
computation of a Participant’s non-forfeitable percentage of his or her interest
in the Plan shall not be reduced as the result of any direct or indirect
amendment to this Plan. A Participant with at least three (3) Years of Service
as of the election period may elect to have his or her non-forfeitable percentage
computed under the Plan without regard to such new vesting schedule.


(b)           For purposes
of applying this schedule to any Participant who has incurred five (5)
consecutive One-Year Breaks in Service, Years of Service after such period
shall not be taken into account for determining the non-forfeitable percentage
of his or her Account accrued before such period began.


(c)           If any
former Participant shall be reemployed by the Bank before a One-Year Break in
Service occurs, he shall continue to participate in the Plan in the same manner
as if such termination had not occurred.


(d)           If any
former Participant shall be reemployed by the Bank before five (5) consecutive
One-Year Breaks in Service, and such former Participant had received a
distribution of his or her entire vested interest prior to his or her reemployment,
his or her forfeited Account shall be reinstated only if he or she repays the
full amount distributed before the earlier of five (5) years after the first
date on which the Participant is subsequently reemployed by the Bank or the
close of the first period of five (5) consecutive One-Year Breaks in Service
commencing after distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may not end earlier than
five (5) years after the date of separation. If the former Participant does repay
the full amount distributed to him or her, the undistributed portion of the
Participant’s Account must be restored in full, unadjusted by any gains or losses
occurring subsequent to the Anniversary Date or other valuation date first
preceding his or her termination.



 13
 






 



(e)           If any
Former Participant is reemployed after a One-Year Break in Service, Years of
Service shall include Years of Service prior to his or her One-Year Break in
Service subject to the following rules:


(i)            If a Former
Participant has a One- Year Break in Service, his or her pre-Break and
post-Break Service shall be used for computing Years of Service for vesting
purposes only after he or she has been employed for one (1) Year of Service following
the date of his or her reemployment with the Bank;


(ii)           Any Former
Participant who under the Plan does not have a non- forfeitable right to any
interest in the Plan resulting from Bank contributions shall lose credits
otherwise allowable under clause (i) if his or her consecutive One-Year Breaks
in Service equal or exceed the greater of (A) five (5) or (B) the aggregate
number of his or her pre-Break Years of Service; and


(iii)          After five
(5) consecutive One-Year Breaks in Service, a Former Participant’s vested
Account balance attributable to pre-Break Service shall not be increased as a
result of post-Break Service.


6.3           NORMAL
RETIREMENT AGE, ETC


Despite
the provisions of this Article VI, if a Participant’s services are terminated
(i) upon or after he or she attains age 65, or (ii) on account of disability
determined by competent medical authority acceptable to the Administrative
Committee, or (iii) by his or her death, then the forfeiture provisions
contained in Section 6.2 shall not apply.


VII.
DISTRIBUTIONS


7.1           FORM OF
DISTRIBUTION


Distribution
of benefits will be made entirely in whole shares of Employer Stock except that
the value of any fractional share and any portion of the Participant’s Other
Investment Account which has been diversified in accordance with Section 4.3
will be paid in cash. Any non-diversified balance in a Participant’s account
not invested in Employer Stock will be used to acquire for distribution to such
Participant the maximum number of whole shares of Employer Stock at the then
fair market value, and any unexpended balance will be distributed to such
Participant in cash. In lieu of distributing Employer Stock to a Participant,
at the direction of the Bank, the Trustee may distribute all or a portion of a
Participant’s benefit in cash. Prior to commencing such a cash distribution,
the Trustee shall notify the Participant, or his or her Beneficiary, in writing
that he has the right to demand in writing that his or her benefits be distributed
in the form of Employer Stock. Such right shall expire thirty (30) days after
the receipt of such notice by the Participant or his or her Beneficiary.



 14
 






 



7.2           TIMING OF
DISTRIBUTION OF BENEFITS


Distributions
of a Participant’s account balance (whether in the form of Employer Stock
and/or cash) shall be made as follows:


(a)           If the
Participant’s vested interest in the Plan does not exceed One Thousand Dollars
($1,000), the entire vested benefit shall be distributed to the Participant in
a lump sum payment prior to the Second Anniversary Date following his or her
termination of employment. The determination of whether the Participant’s
vested interest in the Plan exceeds One Thousand Dollars ($1,000) shall be made
by including that portion of his or her Account that is attributable to
rollover contributions (and earnings allocable thereto) within the meaning of
Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(a)(ii), and 457(e)(16).


(b)           If the
Participant’s vested interest in the Plan exceeds One Thousand Dollars ($1,000)
but is less than Ten Thousand Dollars ($10,000), then, with the consent of the
Participant, the entire vested benefit shall be distributed to the Participant
in a lump sum payment prior to the Second Anniversary Date following his or her
termination of employment. If a Participant does not consent to such a
distribution, then his or her vested interest shall be distributed to the
Participant in a lump sum payment prior to the Anniversary Date ending the Plan
Year in which the Participant attains the Normal Retirement Age.


(c)           If the
Participant’s vested interest in the Plan is Ten Thousand Dollars ($10,000) or
more, then, with the consent of the Participant, the entire vested benefit
shall be distributed as follows:


(i)            If the
Participant terminates employment after attainment of age 65, or because of
Disability or death, payments will commence no later than the Anniversary Date
ending the Plan Year which follows the Plan Year in which the Participant’s employment
was terminated. Payments will be made in substantially equal annual
installments over a five-year period.


(ii)           If the
Participant terminates employment for any other reason, payments will commence
no later than the Anniversary Date ending the fifth Plan Year following the
Plan Year in which the Participant’s employment was terminated. Payments will
be made in substantially equal annual installments over a five-year period.


(d)           If a
Participant does not consent to the distributions as provided in Sections 7.2(b)
and (c), then his or her vested interest in the Plan will be distributed in
five substantially equal annual installments commencing no later than the latest
of (i) the date on which the Participant attains his or her Normal Retirement
Age, (ii) the 10th anniversary of the year in which the participant
commenced Participation in the Plan, or (iii) the date on which the Participant
terminates service with the Bank.


(e)           Despite the
foregoing:



 15
 






 



(i)            If the
Participant’s vested interest in the Plan is more than Eight Hundred Eighty
Five Thousand Dollars ($885,000) (in 2006), the five-year distribution period
referred to in Section 7.2(c) shall be extended one additional year (but not more
than five additional years) for each One Hundred Seventy Five Thousand Dollars
($175,000) or fraction thereof by which his or her vested interest exceeds
Eight Hundred Eighty Five Thousand Dollars ($850,000). These dollar amounts
shall be adjusted at the same time and in the same manner as provided in Code
Section 415(d) .


(ii)           The Bank may
modify distribution options in a nondiscriminatory manner as provided in Code
Section 411(d)(6)(C) .


(iii)          The
distribution of that portion of a Participant’s Account that is attributable to
Employer Stock acquired with the proceeds of a loan described in Section 4.4
may be delayed until the close of the Plan Year in which such loan is repaid in
full.


7.3           DEATH
BENEFITS; DESIGNATION OF BENEFICIARY


At
any time and from time to time, each Participant and each Beneficiary shall
have the right to designate the person who shall receive the amount payable
under this Plan on his or her death, and to revoke such designation, as limited
by this Section 7.3.


(a)           Each
designation shall be evidenced by a written instrument filed with the Trustee,
signed by the Participant or Beneficiary. If no such designation is on file
with the Trustee at the time of the death of the Participant or Beneficiary, or
if the designation is not effective for the any of the reasons stated in this
Section or any other reasons, then the person conclusively deemed to be the
person so designated as Beneficiary shall be (i) the surviving spouse of the
Participant or Beneficiary or (ii) if the Participant or Beneficiary has no
surviving spouse, the estate of such Participant or Beneficiary. The
Beneficiary of the death benefit payable pursuant to this Section 7.3 shall be
the Participant’s spouse. A Participant may designate a Beneficiary other than
his or her spouse if:


(i)            The spouse
has waived the right to be the Participant’s Beneficiary,


(ii)           The
Participant is legally separated or has been abandoned (within the meaning of
local law) and the Participant has a court order to such effect (and there is
no “qualified domestic relations order” as defined in Code Section 414(p) (“QDRO”)
that provides otherwise),


(iii)          The
Participant has no spouse, or


(iv)          The spouse
cannot be located.


(b)           A
Participant may at any time revoke his or her designation of a Beneficiary or
change his or her Beneficiary by filing written notice of such revocation or
change with the Committee. However, the Participant’s spouse must again consent
in writing to any



 16
 






 



change
in Beneficiary unless the original consent acknowledged that the spouse had the
right to limit consent only to specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. If no valid designation of Beneficiary exists
at the time of the Participant’s death, the death benefit shall be payable to
his or her estate. Any consent by the Participant’s spouse to waive any rights
to the death benefit must be in writing, must acknowledge the effect of such
waiver, and be witnessed by a Plan representative or a notary public. Further,
the spouse’s consent must be irrevocable and must acknowledge the specific
non-spouse Beneficiary.


7.4           BANK
CERTIFICATION


The
Bank shall certify to the Administrative Committee and the Trustee, in the
event of termination of the employment of any Participant, as to the date of such
termination.


7.5           MINIMUM DISTRIBUTION
REQUIREMENTS


The
requirements of this Section 7.5 and the following Sections 7.6 through 7.9
take precedence over any inconsistent provisions of the Plan. All distributions
required under this Sections 7.6 through 7.9 will be determined and made in
accordance with the Regulations Section 1.401(a)(9).


7.6           TIME AND
MANNER OF MINIMUM REQUIRED DISTRIBUTIONS


(a)           Required
Beginning Date.


The
Participant’s entire interest will be distributed, or begin to be distributed,
to the Participant no later than the Participant’s required beginning date.


(b)           Death of
Participant Before Distributions Begin.


If
the Participant dies before distributions begin, the Participant’s entire
interest will be distributed, or begin to be distributed, no later than as
follows:


(i)            If the
Participant’s surviving spouse is the Participant’s sole designated
beneficiary, then distributions to the surviving spouse will begin by December
31 of the calendar year immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the Participant would
have attained age 70-1/2 , if later.


(ii)           If the
Participant’s surviving spouse is not the Participant’s sole designated
beneficiary, then distributions to the designated beneficiary will begin by
December 31 of the calendar year immediately following the calendar year in which
the Participant died.



 17
 






 



(iii)          If there is
no designated beneficiary as of September 30 of the year following the year of
the Participant’s death, the Participant’s entire interest will be distributed
by December 31 of the calendar year containing the fifth anniversary of the
Participant’s death.


(iv)          If the
Participant’s surviving spouse is the Participant’s sole designated beneficiary
and the surviving spouse dies after the Participant but before distributions to
the surviving spouse begin, this Section 7.6(b), other than Section 7.6(b)(i),
will apply as if the surviving spouse were the Participant.


For purposes of Sections
7.6(a) and (b), unless Section 7.6(b)(iv) applies, distributions are considered
to begin on the Participant’s required beginning date. If Section 7.6(b)(iv)
applies, distributions are considered to begin on the date distributions are
required to begin to the surviving spouse under Section 7.6(b)(i). If
distributions under an annuity purchased from an insurance company irrevocably
commence to the Participant before the Participant’s   required beginning date (or to the
Participant’s surviving spouse) before the date distributions are required to
begin to the surviving spouse under subsection 
(b)(i),  the date distributions
are considered to begin is the date distributions actually commence.


(c)           Forms of
Distribution.


Unless
the Participant’s interest is distributed in the form of an annuity purchased
from an insurance company or in a single sum on or before the required beginning
date, as of the first distribution calendar year, distributions will be made in
accordance with Sections 7.7 and 7.8. If the Participant’s interest is
distributed in the form of an annuity purchased from an insurance company, distributions
thereunder will be made in accordance with the requirements of Code Section
401(a)(9) and applicable Regulations.


7.7           REQUIRED
MINIMUM DISTRIBUTIONS DURING PARTICIPANT’S LIFETIME


(a)           During the Participant’s
lifetime, the minimum amount that will be distributed for each distribution
calendar year is the lesser of:


(i)            the quotient
obtained by dividing the Participant’s account balance by the distribution
period in the Uniform Lifetime Table set forth in Regulation Section
1.401(a)(9)-9, using the Participant’s age as of the Participant’s birthday in
the distribution calendar year; or


(ii)           if the
Participant’s sole designated beneficiary for the distribution calendar year is
the Participant’s spouse, the quotient obtained by dividing the Participant’s
account balance by the number in the Joint and Last Survivor Table set forth in
Regulation Section 1.401(a)(9)-9, using the Participant’s and spouse’s attained
ages as of the Participant’s and spouse’s birthdays in the distribution calendar
year.



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(b)           Required
minimum distributions will be determined beginning with the first distribution
calendar year and up to and including the distribution calendar year that
includes the Participant’s date of death.


7.8           REQUIRED
MINIMUM DISTRIBUTIONS AFTER PARTICIPANT’S DEATH


(a)           Death On or
After Date Distributions Begin.


(i)            Participant Survived
by Designated Beneficiary. If the Participant dies on or after the date
distributions begin and there is a designated beneficiary, the minimum amount
that will be distributed for each distribution calendar year after the year of
the Participant’s death is the quotient obtained by dividing the Participant’s
account balance by the longer of the remaining life expectancy of the Participant
or the remaining life expectancy of the Participant’s designated beneficiary,
determined as follows:


(A)          The
Participant’s remaining life expectancy is calculated using the age of the
Participant in the year of death, reduced by one for each subsequent year.


(B)           If the
Participant’s surviving spouse is the Participant’s sole designated
beneficiary, the remaining life expectancy of the surviving spouse is
calculated for each distribution calendar year after the year of the Participant’s
death using the surviving spouse’s age as of the spouse’s birthday in that
year. For distribution calendar years after the year of the surviving spouse’s
death, the remaining life expectancy of the surviving spouse is calculated
using the age of the surviving spouse as of the spouse’s birthday in the
calendar year of the spouse’s death, reduced by one for each subsequent
calendar year.


(C)           If the
Participant’s surviving spouse is not the Participant’s sole designated
beneficiary, the designated beneficiary’s remaining life expectancy is
calculated using the age of the beneficiary in the year following the year of the
Participant’s death, reduced by one for each subsequent year.


(ii)           No Designated
Beneficiary. If the Participant dies on or after the date distributions begin
and there is no designated beneficiary as of September 30 of the year after the
year of the Participant’s death, the minimum amount that will be distributed
for each distribution calendar year after the year of the Participant’s death
is the quotient obtained by dividing the Participant’s account balance by the Participant’s
remaining life expectancy calculated using the age of the Participant in the
year of death, reduced by one for each subsequent year.



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(b)           Death Before
Date Distributions Begin.


(i)            Participant Survived
by Designated Beneficiary. If the Participant dies before the date
distributions begin and there is a designated beneficiary, the minimum amount
that will be distributed for each distribution calendar year after the year of
the Participant’s death is the quotient obtained by dividing the Participant’s
account balance by the remaining life expectancy of the Participant’s
designated beneficiary, determined as provided in Section 7.8(a).


(ii)           No Designated
Beneficiary. If the Participant dies before the date distributions begin and
there is no designated beneficiary as of September 30 of the year following the
year of the Participant’s death, distribution of the Participant’s entire
interest will be completed by December 31 of the calendar year containing the
fifth anniversary of the Participant’s death.


(iii)          Death of Surviving
Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the
Participant dies before the date distributions begin, the Participant’s
surviving spouse is the Participant’s sole designated beneficiary, and the
surviving spouse dies before distributions are required to begin to the
surviving spouse under Section 7.8(a)(i)(B), this Section 7.8(b)(iii) will
apply as if the surviving spouse were the Participant.


7.9           DEFINITIONS


The
following definitions shall apply for purposes of Sections 7.6 through 7.8.


(a)           Designated
beneficiary. The individual who is designated as the beneficiary under Section
7.3 of the Plan and is the designated beneficiary under Code Section 401(a)(9)
and Regulations Section 1.401(a)(9)-1, Q&A-4, of the Treasury Regulations.


(b)           Distribution
calendar year. A calendar year for which a minimum distribution is required.
For distributions beginning before the Participant’s death, the first
distribution calendar year is the calendar year immediately preceding the
calendar year which contains the Participant’s required beginning date. For
distributions beginning after the Participant’s death, the first distribution calendar
year is the calendar year in which distributions are required to begin under
Section 7.6(b). The required minimum distribution for the Participant’s first
distribution calendar year will be made on or before the Participant’s required
beginning date. The required minimum distribution for other distribution
calendar years, including the required minimum distribution for the distribution
calendar year in which the Participant’s required beginning date occurs, will
be made on or before December 31 of that distribution calendar year.



 20














 


(c)           Life
expectancy. Life expectancy as computed by use of the Single Life Table in
Regulation Section 1.401(a)(9)-9.


(d)           Participant’s
account balance. The account balance as of the last valuation date in the
calendar year immediately preceding the distribution calendar year (valuation
calendar year) increased by the amount of any contributions made and allocated
or forfeitures allocated to the account balance as of dates in the valuation calendar
year after the valuation date and decreased by distributions made in the
valuation calendar year after the valuation date. The account balance for the
valuation calendar year includes any amounts rolled over or transferred to the
Plan either in the valuation calendar year or in the distribution calendar year
if distributed or transferred in the valuation calendar year.


(e)           Required
beginning date. For a Participant who is not a five percent (5%) owner, the
required beginning date is the April 1 of the calendar year following the later
of (i) the calendar year in which the Participant attains age 70-1/2, or (ii)
the calendar year in which the Participant retires. The required beginning date
for a Participant who is a five percent (5%) owner (as defined in Code Section
416(i)) is April 1 of the calendar year following the calendar year in which
the Participant attains age 70- 1/2.


7.10         DISTRIBUTION
FOR MINOR BENEFICIARY


If
a distribution is to be made to a minor, then the Administrative Committee may
direct that such distribution be paid to the legal guardian, or if none, to a
parent of such Beneficiary or a responsible adult with whom the Beneficiary
maintains his or her residence, or to the custodian for such Beneficiary under
the Uniform Gift to Minors Act, if permitted by the laws of the state in which
the Beneficiary resides. A payment to the legal guardian, custodian or parent
of a minor Beneficiary under this Section 7.10 shall fully discharge the
Trustee, the Bank, and the Plan from further liability on account thereof.


7.11         LOCATION OF
PARTICIPANT OR BENEFICIARY UNKNOWN


If
all, or any portion, of the distribution payable to a Participant or Beneficiary
under this Plan shall, at the expiration of five (5) years after it shall
become payable, remain unpaid solely by reason of the inability of the Administrative
Committee, after sending a registered letter, return receipt requested, to the
last known address, and after further diligent effort, to ascertain the
whereabouts of such Participant or his or her Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to the Plan. If a Participant or
Beneficiary is located subsequent to his or her benefit being reallocated under
this Section 7.11, the forfeited benefit shall be restored.



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7.12         LIMITATIONS
ON BENEFITS AND DISTRIBUTIONS.


All
rights and benefits, including elections, provided to a Participant in this
Plan shall be subject to the rights afforded to any alternate payee under a QDRO.
Furthermore, a distribution to an alternate payee shall be permitted if such
distribution is authorized by a QDRO, even if the affected Participant has not
reached the earliest retirement age under the Plan. For the purposes of this Section
7.12, “alternate payee,” “QDRO” and “earliest retirement age” shall have the
meaning set forth under Code Section 414(p).


7.13         DIRECT
ROLLOVERS


Despite
any provision of the Plan to the contrary that would otherwise limit a
distributee’s election under this Article VII, a distributee may elect, at the
time and in the manner prescribed by the Administrative Committee, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. For purposes
of this Section 7.13, the following definitions shall apply:


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


(b)           Eligible
retirement plan: 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
401(a)(3), an annuity contract described in Code Section 403(b), a qualified
trust described in Code Section 401(a), or an eligible plan under Code Section
457(b) which is maintained by 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. 


(c)           Distributee:
A distributee includes an Employee or former Employee. In addition, the Employee’s
or former Employee’s surviving spouse and the Employee’s or former Employee’s
spouse or former spouse who is the alternate payee under a QDRO are
distributees with regard to the interest of the spouse or former spouse.


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



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VIII.        TRUST AND
TRUSTEES


8.1           TRUST AND
TRUSTEE


(a)           There is
hereby established a trust for sole purpose of holding and investing the Fund
in accordance with the requirements of ERISA Section 403(a) and the terms of
this instrument. The trust shall consist of contributions under this Plan, as
adjusted for interest, gains and losses, less payments to Participants. By
executing this instrument, the Trustee hereby accepts appointment as such and
agrees to carry out its duties and obligations under this Plan.


(b)           The Trustee
shall discharge its duties hereunder solely in the interest of the Participants
and their Beneficiaries, and for the exclusive purpose of providing benefits to
Participants and Beneficiaries and Defraying reasonable expenses of
administering the Plans, (ii) with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, (iii) in accordance with the
documents and instruments governing the Plan unless, in the good faith judgment
of the Trustee, the documents and instruments are not consistent with the
provisions of ERISA, and (iv) in a manner that does not constitute a non-exempt
prohibited transaction under Code Section 4975 of the Code or ERISA Sections
406 or 407.


8.2           GENERAL
POWERS


The
Trustee shall have the following powers, rights and duties with respect to the
Fund in addition to those provided elsewhere in this instrument or by law.


(a)           To receive
and to hold all contributions paid to it under the Plan; provided, however,
that the Trustee shall have no duty to require any contributions to be made to
it, or to determine that the contributions received by it comply with the
provisions of the Plan or with any resolution of the Board of Directors
providing for such contribution.


(b)           To retain in
cash (pending investment, reinvestment or the distribution of dividends) such
reasonable amount as may be required for the proper administration of the Trust
and to invest such cash as provided in Article IV.


(c)           As directed
by the Administrative Committee, to make distributions from the Fund to such
persons or trusts, in such manner, at such times and in such forms as directed
without inquiring as to, whether a payee is entitled to the payment, or as to
whether a payment is proper, and without liability for a payment made in good
faith without actual notice or knowledge of the changed condition or status of
the payee. If any payment of benefits directed to be made from the Fund by the
Trustee is not claimed, the Trustee shall notify the Administrative Committee
of that fact promptly. The Administrative Committee shall make a diligent
effort to ascertain the whereabouts of the payee or distributee of benefits
returned unclaimed. The Trustee shall dispose of such payments as the
Administrative Committee shall direct. The Trustee shall have no obligation to
search for or ascertain the whereabouts of any payee or distributee of benefits
from the Fund.



 23
 






 



(d)           To vote or
exercise other rights with respect to any Employer Stock in the Fund at its
discretion, except to the extent provided in the Plan, and to vote or exercise
other rights with regard to any other stocks, bonds or other securities held in
the Trust, or otherwise consent to or request any action on the part of the
issuer in person, by proxy or power of attorney.


(e)           To contract
or otherwise enter into transactions between the Trust and the Bank or any Bank
shareholder or other person, for the purpose of acquiring, selling, or
exchanging Employer Stock and, to retain in the Fund any Employer Stock so
acquired.


(f)            To
compromise, contest, arbitrate, settle or abandon claims and demands by or
against the Fund.


(g)           To begin,
maintain or defend any litigation necessary in connection with the investment,
reinvestment and administration of the Trust.


(h)           To report to
the Bank as of the last day of each Plan Year or at such other times as may be
required under the Plan, the then current fair market value of all property
held in the Fund, reduced by any liabilities other than liabilities to
Participants, as determined by the Trustee.


(i)            To furnish
to the Bank such other information as the Trustee may possess, which the
Administrative Committee requires in order to comply with the reporting and
disclosure requirements of ERISA. The Trustee shall keep accurate accounts of
all investments, earnings thereon. All accounts, books and records related to
such investments shall be open to inspection by any person designated from
time-to-time by the Bank or the Administrative Committee. All accounts of the
Trustee shall be kept on an accrual basis. The Bank may approve such accounting
by written notice of approval delivered to the Trustee or by failure to express
objection to such accounting in writing delivered to the Trustee within one
hundred twenty (120) days from the date upon which the accounting was delivered
to the Bank. Upon the receipt of a written approval of the accounting, or upon
the passage, of the period of time within which objection may be filed without
written objections having been delivered to the Trustee, such accounting shall
be deemed to be approved, and the Trustee shall be released and discharged as
to all items, matters and things set forth in such account as fully as if such
accounting had been settled and allowed by decree, of a court of competent jurisdiction
in an action or proceeding in which the Trustee, the Bank and all persons
having or claiming to have any interest in the Fund or under the Plan were
parties.


(j)            As directed
by the Administrative Committee, to pay any estate, inheritance, income or
other tax, charge or assessment attributable to any benefit which it shall or
may be required to pay out of such benefit; and to require before making any
payment such release or other document from any taxing authority and such
indemnity from the intended payee as the Trustee shall deem necessary for its
protection.



 24
 






 



(k)           To employ
and to reasonably rely upon information and advice furnished by agents,
attorneys, appraisers, accountants or other persons of its choice for such
purposes as the Trustee considers necessary for the proper administration of
the Trust.


(l)            To assume,
until advised to the contrary, that the Trust established and maintained under
this Article VIII is qualified under Code Section 401(a) and is entitled to
tax-exempt status under Code Section 501(a).


(m)          To invest
and reinvest the assets of the Fund in personal property of any kind,
including, but not limited to bonds, notes, debentures, mortgages, equipment
trust certificates, investment trust certificates, guaranteed investment
contracts, preferred or common stock, and registered investment companies.


(n)           To exercise
any options, subscription rights and other privileges with respect to Trust
assets.


(o)           To register
ownership of any securities or other property held by it in its own name or in
the name of a nominee, with or without the addition of words indicating that
such securities are held in a fiduciary capacity, and may hold any securities
in bearer form, but the books and records of the Trustee shall at all times
reflect that all such investments are part of the Trust.


(p)           To borrow
such sum or sums from time to time as the Trustee considers necessary or
desirable and in the best interest of the Fund, and for that purpose to
mortgage or pledge any part of the Fund.


(q)           To deposit
securities with a clearing corporation as defined in Article 8 of the Uniform
Commercial Code. The certificates representing securities, including those in
bearer form, may be held in bulk form with, and may be merged into,
certificates of the same class of the same issuer which constitute assets of
other accounts or owners, without certification as to the ownership attached.
Utilization of a book-entry system may be made for the transfer or pledge of
securities held by the Trustee or by a clearing corporation. The Trustee shall
at all times, however, maintain a separate and distinct record of the
securities owned by the Trust.


(r)            To
participate in and use the Federal Book-Entry Account System, a service
provided by the Federal Reserve Bank for its member banks for deposit of Treasury
securities.


(s)           To perform
any and all other acts which are necessary or appropriate for the proper
management, investment and distribution of the Fund.


8.3           RESPONSIBILITY
OF TRUSTEE.


The
Trustee shall not be responsible in any way for the adequacy of the Fund to
meet and discharge any or all liabilities under the Plan or for the proper
application of distributions made or other action taken upon the direction of
the Administrative Committee.



 25
 






 



8.4           COMPENSATION
AND EXPENSES.


The
Trustee shall be entitled to reasonable compensation for services, as agreed to
between the Bank and the Trustee from time to time in writing and to reimbursement
of all reasonable expenses incurred by it in the administration of the Trust.
The Trustee is authorized to pay from the Fund all expenses of administering
the Plan and Trust, including its compensation, compensation to any agents
employed by the Trustee and any accounting, legal and valuation expenses, to
the extent they are not paid directly by the Bank or any Affiliated Employers.
The Trustee shall be fully protected in making payments of administrative
expenses pursuant to the written directions of the Administrative Committee.


8.5           CONTINUATION
OF POWERS UPON TRUST TERMINATION.


Upon
termination of the Trust, the powers, rights and duties of the Trustee hereunder
shall continue until all Fund assets have been liquidated.


8.6           RESIGNATION.


The
Trustee may resign at any time by giving thirty (30) days’ advance written
notice to the Bank and the Administrative Committee.


8.7           REMOVAL OF
THE TRUSTEE.


The
Bank may remove the Trustee for any reason or for no reason by giving thirty
(30) days advance written notice to the Trustee, subject to providing the removed
Trustee with satisfactory written evidence of the appointment of a successor
Trustee and of the successor Trustee’s acceptance of the trusteeship.


8.8           DUTIES OF
RESIGNING OR REMOVED TRUSTEE AND OF SUCCESSOR TRUSTEE.


If
the Trustee resigns or is removed, the Trustee shall promptly transfer and
deliver the assets of the Fund to the successor Trustee(s). Within 120 days, the
resigned or removed Trustee shall furnish to the Bank and the successor Trustees)
an account of its administration of the Trust from the date of its last
account. Each successor Trustee shall succeed to the title to the Fund vested
in its predecessor without the signing or filing of any further instrument, but
any resigning or removed Trustee shall execute all documents and do all acts
necessary to vest such title or record in any successor Trustee. Each successor
shall have all the powers, rights and duties conferred by this Trust as if
originally named Trustee. No successor Trustee shall be personally liable for
any act or failure to act of a predecessor Trustee. With the approval of the
Administrative Committee, a successor Trustee may accept the account rendered
and the property delivered to it by its predecessor Trustee as a full and
complete discharge to the predecessor Trustee without incurring any liability
or responsibility for so doing.



 26
 






 



8.9           FILLING
TRUSTEE VACANCY.


The
Bank may fill a vacancy in the office of Trustee as soon as practicable by a
writing filed with the person or entity appointed to fill the vacancy.


8.10         DISAGREEMENT
AS TO ACTS.


If
there is a disagreement between the Trustee and anyone as to any act or transaction
reported in any accounting, the Trustee shall have the right to have its
account settled by a court of competent jurisdiction.


8.11         PERSONS
DEALING WITH TRUSTEE.


No
person dealing with the Trustee shall be required to see to the application of
any money paid or property delivered to the Trustee, or to determine whether or
not the Trustee is acting pursuant to any authority granted to it under or the
Plan.


8.12         MULTIPLE
TRUSTEES.


In
the event that more than one person shall serve as co-trustees hereunder, then
the action of a majority of the co-trustees serving at any time shall be deemed
to be the action of the Trustee.


8.13         DEALINGS
WITH THE ADMINISTRATIVE COMMITTEE


The
Administrative Committee may authorize one or more individuals to sign all
communications between the Administrative Committee and Trustee and shall at all
times keep the Trustee advised of the names of the members of the Administrative
Committee and the individuals authorized to sign on behalf of the Administrative
Committee. With the Trustee’s prior written consent, the Administrative
Committee may authorize the Trustee to act, without specific directions or
other directions or instructions from the Administrative Committee, on any
matter or class of matters with respect to which directions or, instructions
from the Administrative Committee may be required. The Trustee shall be fully
protected in relying on any communication sent by any authorized person and
shall not be required to verify the accuracy or validity of any signature
unless the Trustee has reasonable ground to doubt the authenticity of any
signature. If the Trustee requests any directions hereunder with respect to a
matter that is not within the Trustee’s sole discretion and does not receive them,
the Trustee shall act or refrain from acting, as it may determine, with no liability
for such action or inaction. If at any time person(s) serving as members of the
Administrative Committee and person(s) serving as the Trustee are the same,
then there shall be no need for written instructions from the Administrative
Committee to the Trustee, and all actions taken by the Trustee shall be deemed
to have been properly authorized by the Administrative Committee.


8.14         INDEMNIFICATION OF TRUSTEES, ETC.


The
Bank will indemnify and hold the Trustee harmless against any and all costs,
damages, expenses and liabilites including, but not limited to attorneys’ fees
and disbursements, reasonably incurred by or imposed on the Trustee in connection
with any claim made against the Trustee or in which it or the Trustee may be
involved by reason of being, or having been, a Trustee, except liability which
is adjudicated to have resulted from the gross negligence or willful misconduct
of the Trustee.



 27
 






 



IX.
DIVIDENDS


9.1           PAYMENT OF
DIVIDENDS.


All
dividends paid with respect to Employer Stock owned by the Trust shall, in the
discretion of the Bank:


(i)            Be retained
by the Trustee and added to the corpus of the Trust,


(ii)           Be paid in
cash directly to the Participants, 


(iii)          Be paid to
the Trustee and distributed in cash to the Participants not later than ninety
(90) days after the close of the Plan Year in which the dividend was paid, or


(iv)          Be used to
repay a loan described in Section 4.4, the proceeds of which were used to
acquire the Employer Stock with respect to which the dividend was paid.


9.2           ALLOCATION
OF DIVIDENDS.


In
the event of a distribution or payment of dividends to the Participants, each
Participant shall receive that portion of dividends paid in the ratio in which
the balance of his or her Account on the preceding Anniversary Date bears to
the sum of the balances for the Accounts of all Participants on that date. In the
event the Trustee uses dividends paid on Employer Stock to repay a loan described
in Section 4.4, then for that Plan Year, Employer Stock must be allocated to
each Participant’s account that has a fair market value of not less than the
amount of such dividend that would otherwise have been allocated to that
Participant if the dividend had been distributed to the Participants. If a Participant
is prohibited from having certain Employer Stock allocated to his or her Account
because of Code Section 409(n), then the Trustee shall pay directly to such
Participant his or her proportionate share of the dividend in cash rather than applying
said dividend to the repayment of a loan described in Section 4.4.


X.
PUT OPTIONS


10.1         APPLICATION


The
provisions of this Article apply only if (i) the Employer Stock is not, or
ceases to be, traded on an established securities market or (ii) is subject to
a restriction under any Federal or state securities law, or regulation thereunder,
which would make the security not as freely tradable as one not subject to such
restriction.


10.2         PUT OPTION


Upon
the distribution of shares of Employer Stock to a Participant, the distributee
shall have the right to require the Bank to purchase such shares, at their then
fair market value (herein referred to as the “put option”), in accordance with
the following terms and conditions:



 28
 






 



(a)           The put
option must be exercised only by the Participant, or by the Participant’s
donees, or by a person (including an estate or its distributee) to whom the
shares pass by reason of a Participant’s death. For this purpose, “Participant”
shall mean a Participant in the Plan and Trust, and any Beneficiary of such
Participant.


(b)           Although the
put option is binding upon the Bank, and not upon the Plan and Trust, the Plan
and Trust shall retain the option to assume the rights and obligations of the
Bank at the time of exercise of the put option.


(c)           If it is
known at the time that a loan is made to the Trust for the purpose of the
acquisition of Employer Stock, that Federal or state law will be violated by
the Bank’s honoring of the put option, the Employer Stock involved may be put
(in a manner consistent with such law) to a third party (e.g., an affiliate of
the Bank or a shareholder other than the Plan and Trust) that has substantial
net worth at the time the loan is made, and whose net worth is reasonably
expected to remain substantial.


(d)           The put
option is exercisable during the period of fifteen (15) months which begins on
the date the Employer Stock is distributed to the Participant by the Plan and
Trust, and must be exercised (if at all) by written notification to the Bank.


(e)           The price to
be paid by the Bank upon exercise of the put option shall be the then fair
market value of the shares, determined by the Trustee as of the Valuation Date
coinciding with or immediately preceding the date of distribution; provided,
however, that if the fair market value of shares of Employer Stock is
determined after such Valuation Date but prior to the date of distribution of
the shares, the fair market value as determined as of the more recent valuation
shall control. For this purpose, fair market value shall be determined in
accordance with the provisions of Section 4.2, respecting the valuation of
shares of Employer Stock held in the Trust.


(f)            If the
balance to the credit of a Participant’s account is distributed within one (1)
taxable year, the purchase price for the shares of Employer Stock shall be paid
in substantially equal annual, quarterly or monthly payments over a period
beginning not later than thirty (30) days after the exercise of the put option
and not exceeding five (5) years. Interest on the unpaid balance shall accrue
and shall be paid with each payment of principal, at a reasonable rate of
interest. Adequate security shall be provided for the obligations. If a
Participant’s account balance is distributed to him or her in installments, the
purchase price for the shares of Employer Stock shall be paid in cash no later
than thirty (30) days after the exercise of the put option.


(g)           The terms of
the put option and the administration of the Employer Stock purchase provisions
of this Plan and Trust shall be conducted according to a uniform,
nondiscriminatory policy established by the Bank with respect to Participants
similarly situated.



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XI.
RIGHT OF FIRST REFUSAL


11.1         APPLICATION


The
provision of Sections 11.2 and 11.3 below apply only if the Employer Stock is
not, or ceases to be, traded on an established securities market.


11.2         RIGHT OF
FIRST REFUSAL


Any
Participant or transferee who desires to transfer (whether by sale, gift or
bequest) any shares of Employer Stock shall first offer in writing such shares
for sale to the Bank at the same price and upon the same terms offered to such
shareholder by a bona fide prospective purchaser of such shares. In the case of
gifts or bequests, such shares shall first be offered for sale to the Bank at
the fair market value of shares as determined under Section 4.2. Such written
offer must be presented to the Bank and the option periods set forth below must
have expired prior to the making of any gift or prior to the transfer out of a
Participant’s or transferee’s estate. The Bank shall have the option for seven
(7) days after the later of (i) the death of the Participant or transferee, or
(ii) the Bank’s receipt of such written offer, to accept such offer. If, within
such seven-day period, the Bank fails to accept such offer in its entirety, its
option hereunder as to such offer shall terminate. Thereupon, immediately
following the termination of said offer as to the Bank, the said same offer
shall be deemed without further writing to have been renewed and reinstated as
to the Trust, and the Trust shall have the option for three (3) days after the
termination of the Bank’s option to purchase such part or all of the stock
which the offering shareholder desires to transfer. If the option is not
exercised within the seven (7)-day period, then the shareholder so desiring to
transfer part or all of his or her Employer Stock shall have the right for a period
ending on the thirtieth (30th) day after the expiration of the aforesaid seven
(7)-day period, to transfer such stock to, and only to, the donee or beneficiary
or in the case of a sale, to the aforesaid bona fide prospective purchaser in
the same quantity, at the same price, and upon the same terms as were offered
to the Bank and/or the Trust. In the case of gifts or bequests, if the option
is not exercised by the Bank or the Trustee then such shares may be transferred
to the donees, legatees or heirs of the transferor. In case of any transfer by
reason of gift or death under this Section 11.2, the legatees, heirs, next of
kin, donees or other transferees shall receive and hold such stock subject to
the restrictions on encumbrance and disposition set forth in this Article XI.


11.3         ENDORSEMENT
OF CERTIFICATES


Prior
to the distribution of any shares of Employer Stock to a Participant, the
Trustee shall have the Bank endorse such shares as follows:


“The shares represented
by this certificate are subject to a Right of First Refusal as set forth in
Section 11.2 of the Hampden Bank Employee Stock Ownership Plan and Trust, as
amended from time to time, restricting the free transferability of said shares.
The Bank will mail to the holder of this



 30
 






 



certificate, without
charge, a copy of the terms of such Right of First Refusal within five (5) days
after receiving a written request therefor.”


XII.
ADMINISTRATIVE COMMITTEE


12.1         STATUS


The
Administrative Committee (i) is a “named fiduciary” for purposes of ERISA
Section 402(a)(1) with authority to control and manage the operation and administration
of the Plan, (ii) is responsible for complying with all of the reporting and
disclosure requirements of Part 1 of Subtitle B of Title I of ERISA, and (iii)
has the power and authority in its sole, absolute and uncontrolled discretion
to control or manage the operation and administration of the Plan, including
all powers necessary to accomplish these purposes. The Administrative Committee
will not, however, have any authority over the investment of assets of the
Trust in its capacity as such.


12.2         POWERS


The
Administrative Committee has full discretionary power to administer the Plan in
all of its details in accordance with the requirements of ERISA and other
applicable laws. For this purpose the Administrative Committee’s discretionary
powers include, but are not be limited to, the following:


(i)            To make and
enforce such rules and regulations as it deems necessary or proper for the
efficient administration of the Plan or required to comply with applicable law;


(ii)           To interpret
the Plan;


(iii)          To decide
all questions concerning the Plan and the eligibility of any person to
participate in the Plan;


(iv)          To compute
the amounts to be distributed under the Plan, and to determine the person or
persons to whom such amounts will be distributed;


(v)           To authorize
the payment of distributions;


(vi)          To keep such
records and submit such filings, elections, applications, returns or other
documents or forms as may be required under the Code and applicable
regulations, or under other federal, state or local law and regulations;


(vii)         To allocate
and delegate its ministerial duties and responsibilities and to appoint such
agents, counsel, accountants and consultants as may be required or desired to
assist in administering the Plan; and


(viii)        By written
instrument, to allocate and delegate its fiduciary responsibilities in
accordance with ERISA Section 405.



 31
 






 



12.3         DUTIES


The
Administrative Committee shall decide any disputes which may arise relative to
the rights of Participants and/or Employees, past and present, and their
Beneficiaries, under the terms of this Plan, shall give instructions and directions
to the Trustee as necessary and, in general, shall direct the administration of
the Plan; provided that the Administrative Committee may not, through
interpretation of or action under the Plan (including amendment or termination
under Article XIII), increase the burden imposed upon the Trustee without the
Trustee’s consent. The Administrative Committee shall keep records containing
all relevant data pertaining to any person affected hereby and his or her rights
under the Plan and shall ascertain that such person receives the benefits to
which he or she is entitled. No member of the Administrative Committee shall have
any right to vote or decide upon any matter relating solely to himself or any
of his or her rights or benefits under this Plan.


(a)           The
Administrative Committee shall establish accounting procedures for the purpose
of making the allocations, valuations, and adjustments to both the Account and
Employer Stock Account of each Participant and it shall maintain adequate
records of the cost basis of Employer Stock allocated to each Participant’s
Employer Stock Account.


(b)           The
Administrative Committee shall determine the eligibility of Participants,
according to the provision of this Plan, from the information furnished to it
by the Bank.


(c)           Wherever,
under the provisions of this Plan, discretion is granted to the Administrative
Committee which affects the benefits, rights and privileges of Participants,
such discretion shall be exercised uniformly so that all Participants similarly
situated shall be similarly treated.


12.4         EFFECT OF
INTERPRETATION OR DETERMINATION


Any
interpretation of the Plan or other determination with respect to the Plan by
the Administrative Committee will be final, conclusive and binding on all
persons in the absence of clear and convincing evidence that the committee acted
arbitrarily and capriciously.


12.5         RELIANCE ON
TABLES, ETC.


In
administering the Plan, the Administrative Committee is entitled, to the extent
permitted by law, to rely conclusively on all tables, valuations, certificates,
opinions and reports which are furnished by any accountant, trustee, counsel or
other expert who is employed or engaged by the Administrative Committee or by
the Bank on the committee’s behalf.



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12.6         CLAIMS AND
REVIEW PROCEDURES.


The
following claims procedure is intend to conform the requirements of ERISA
Section 503.


(a)           If any
person believes he or she is being denied any rights or benefits under the
Plan, such person may file a claim in writing with the Administrative Committee
.. If any such claim is wholly or partially denied, the Administrative Committee
will notify such person of its decision in writing. Such notification will
contain (i) specific reasons for the denial, (ii) specific reference to
pertinent plan provisions, (iii) a description of any additional material or
information necessary for such person to perfect such claim and an explanation
of why such material or information is necessary and (iv) information as to the
steps to be taken if the person wishes to submit a request for review. Such
notification will be given within 90 days after the claim is received by the
Administrative Committee (or within 180 days, if special circumstances require
an extension of time for processing the claim, and if written notice of such
extension and circumstances is given to such person within the initial 90 day
period). If such notification is not given within such period, the claim will
be considered denied as of the last day of such period and such person may
request a review of his or her claim.


(a)           Within 60
days after the date on which a person receives a written notice of a denied
claim (or, if applicable, within 60 days after the date on which such denial is
considered to have occurred) such person (or his or her duly authorized
representative) may (a) file a written request with the Administrative
Committee for a review of his or her denied claim by the Administrative
Committee, (b) submit written issues and comments to the Administrative
Committee and (c) review pertinent documents. The Administrative Committee will
notify such person of its decision in writing. Such notification will be
written in a manner calculated to be understood by such person and will contain
specific reasons for the decision as well as specific references to pertinent
plan provisions. The decision on review will be made within 60 days after the
request for review is received by the Administrative Committee (or within 120
days, if special circumstances require an extension of time for processing the
request, such as an election by the Administrative Committee to hold a hearing,
and if written notice of such extension and circumstances is given to such
person within the initial 60 day period). If the decision on review is not made
within such period, the claim will be considered denied.


12.7         INDEMNIFICATION
OF ADMINISTRATIVE COMMITTEE.


The
Bank agrees to indemnify and defend to the fullest extent of the law any
Employee, officer or director of the Bank (i) who serves or has served on the
Administrative Committee, (ii) who assists the Administrative Committee in administering
the Plan as part of his or her employment duties with the Bank, or (iii) to
whom the Administrative Committee has delegated any of its duties or responsibilities,
including any former Employee, officer or director described in (i) or (ii)
against any liabilities, damages, costs and expenses (including attorneys’ fees
and amounts paid in settlement of any claims approved by the Bank occasioned by
any act or omission to act



 33
 






 



in
connection with the Plan, if such act or omission to act is in good faith and without
gross negligence.


12.8         ANNUAL
REPORT


The
Administrative Committee shall submit annually to the Bank a report showing in
reasonable summary form, the financial position of the Trust and giving a brief
account of the operations of the Plan for the past year, and such further
information as the Bank may reasonably require.


12.9         EXPENSES OF
PLAN


The
Administrative Committee may direct a Trustee to pay from the Fund any or all
expenses of administering the Plan, to the extent such expenses are reasonable.
The Administrative Committee will determine what constitutes a reasonable
expense of administering the Plan, and whether such expenses shall be paid from
the Trust. The Administrative Committee may also allocate administrative
charges attributable to specific plan expenses, including but not limited to
determinations regarding QDROs and plan loan origination fees, to the affected Participant
or Beneficiary’s Account. Any such expense not paid out of the Trust shall be
paid by the Bank or the Affiliated Employers; provided, however, that to the
extent permitted by ERISA, the Administrative Committee may direct a Trustee to
reimburse the Bank or the Affiliated Employers, as the case may be, out of the
Trust for a reasonable expense of administering the Plan which is paid prior to
a determination with respect to such expense.


12.10       LIMITATION
OF LIABILITY


No
bond or other security shall be required of any member of the Administrative
Committee, unless the member handles funds or other property of the Plan. A
member of the committee shall not be liable or responsible for the acts of
commission or omission of another fiduciary unless (i) the member knowingly
participates or knowingly attempts to conceal the act or omission of another
fiduciary and the member knows the act or omission is a breach of fiduciary
responsibility by the other fiduciary, (ii) the member has knowledge of a
breach by another fiduciary and shall not make reasonable effort to remedy the
breach, (iii) the member’s breach of his or her own fiduciary responsibility permits
another fiduciary to commit a breach.


(a)           Neither the
Trustee nor any member of the Administrative Committee shall be liable for any
loss or damage or depreciation which may result in connection with the
execution of their duties or the exercise of its discretion or from any other
act or omission hereunder, except when due to gross negligence or willful misconduct.
At the request of the Administrative Committee, the Trustee is authorized to
purchase insurance for the Trustee and the members of the Administrative
Committee to cover liability or loss resulting from their acts or omissions. To
the extent not covered by insurance, the Trust shall pay all cost and expenses
(including legal fees) that a member of the Administrative Committee or Trustee
may incur as a result of serving as such unless it is



 34
 






 



determined
by a court of competent jurisdiction that such acts or omissions were due to
gross negligence or willful misconduct.


(b)           No fee or
compensation shall be paid to any member of the Administrative Committee for
his or her services as a committee member. Any expenses properly incurred by
the Administrative Committee shall be reimbursed or paid by the Trust.


12.11       ACCOUNTS


The
Administrative Committee shall establish and maintain separate individual
Employer Stock Accounts and Other Investment Accounts for each Participant, as
well as for each Former Participant who has an interest in the Plan. Such
separate Employer Stock Accounts and Other Investment Accounts shall not
require a segregation of the Trust assets and no Participant shall acquire a specific
asset of the Trust as a result of the allocations provided for in the Plan.


XIII.
AMENDMENTS AND TERMINATION


13.1         PLAN
AMENDMENTS


The
Bank may amend this Plan in any manner and at any time, provided, however, that
no amendment shall prejudice a Participant’s or Beneficiary’s existing rights
nor revert any interest in the Trust assets, income or principal, to the Bank.
An amendment shall be made by resolution of the Board of Directors and shall be
effective upon delivery of a written instrument, executed by order of the Board
of Directors to the Trustee. No amendment which affects the rights,
responsibilities or duties of the Trustee may be made without the written
consent of the Trustee.


13.2         TERMINATION
OF CONTRIBUTIONS


The
Bank has established this Plan with the bona fide intention and expectation
that from year to year it will be able to and will deem it advisable to make
its contributions as herein provided. The Bank, however, realizes that circumstances
not now foreseen or circumstances beyond its control may make it either
impossible or inadvisable to continue to make its contributions as herein provided.
In the event the Board of Directors decides it is impossible or inadvisable for
the Bank to continue to make its contributions as herein provided, the Board of
Directors shall have the power to terminate the Bank’s contributions by
appropriate resolutions. A certified copy of such resolution or resolutions
shall be delivered to the Administrative Committee, and as soon as possible
thereafter, the Administrative Committee shall send or deliver to each Participant
and Beneficiary a copy of the same. After the date specified in such resolution
or resolutions, the Bank shall make no further contributions under this Plan.
In the event of such termination of contributions by the Bank, the Plan and
Trust shall remain in existence, and all of the provisions of the Plan and the
Trust shall remain in force which are necessary, in the opinion of the Administrative
Committee, other than the provisions for contributions by the Bank, and all of
the assets in the Trust on the date specified in such resolution or resolutions
shall be held, administered and distributed by the Administrative Committee and
the Trustee, in the manner provided herein. Despite any



 35
 






 



other
provisions of the Plan, upon complete discontinuance of contributions to the
Plan, Participants will be fully vested in their Account balances.


13.3         TERMINATION
OF PLAN


If
the Board of Directors shall terminate the Bank’s contributions, in accordance
with Section 13.2, the Board of Directors shall also have the power to
terminate the Plan and Trust completely or partially, by appropriate resolution
specifying the date of such termination, certified copies of which shall be
delivered to the Administrative Committee, provided, however, that upon complete
or partial termination of the Plan or complete discontinuance of contributions
by the Bank to the Trust, the rights of each Participant to the amounts
credited to his or her Account, at such time, are non-forfeitable and fully
vested in each such Participant. Upon complete or partial termination of the
Plan and Trust, after payment of all expenses and after adjustment of Participants’
and Beneficiaries’ shares for expenses, profits, losses and any other necessary
adjustments, there shall be paid to each Participant and each Beneficiary the
amount of his or her share in the Trust, in a lump sum.


XIV.
TOP HEAVY PROVISIONS


14.1         PROVISIONS
TO APPLY


The
provisions of this Article XIV shall apply for any top-heavy Plan Year notwithstanding
anything to the contrary in the Plan. All determinations under this Article XIV
will be made in accordance with the provisions of Code Section 416 and the
Regulation promulgated thereunder, which are specifically interpreted herein by
reference.


14.2         MINIMUM
CONTRIBUTION


For
any Plan Year which is a top-heavy plan year, Participating Employers shall
contribute to the Trust a minimum contribution on behalf of each Participant
who is not a key employee for such year and who has not experienced a severance
from employment with Participating Employers by the end of the Plan Year. The
minimum contribution shall, in general, equal 3% of each such Participant’s
Compensation, but shall be subject to the following special rules:


(a)           If the
largest contribution on behalf of a key employee for such year is equal to less
than 3% of the key employee’s Compensation, such lesser percentage shall be the
minimum contribution percentage for Participants who are not key employees.
This special rule shall not apply, however, if the Plan is required to be
included in an aggregation group and enables a defined benefit plan to meet the
requirements of Code Sections 401(a)(4) or 410.


(b)           No minimum
contribution will be required with respect to a Participant who is also covered
by another top-heavy defined contribution plan of the Bank or a Participating
Employer which meets the vesting requirements of Code Section 416(b) and under
which the Participant receives the top-heavy minimum contribution.



 36
 






 



(c)           If a
Participant is also covered by a top-heavy defined benefit plan of the Bank or
an Participating Employer, “5%” shall be substituted for “3%” above in
determining the minimum contribution.


(d)           The minimum
contribution with respect to any Participant who is not a key employee for the
particular year will be offset by any Bank contributions under Section 3.1, and
qualified non-elective contributions (within the meaning of Code Section
401(m)(4)(c)) and qualified matching contributions (within the meaning of
Regulation Section 1.401(k)-1(a)(6)) if any, under another plan of Participating
Employers. Matching Contributions that are used to satisfy the minimum
contribution requirements shall be treated as matching contributions for purposes
of the actual contribution percentage test and other requirements of Code
Section 401(m).


(e)           If
additional minimum contributions are required under this Section, such
contributions shall be credited to the Participant’s Account.


(f)            A minimum
contribution required under this Section shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation for the year because of the Participant’s failure to complete 1,000
Hours of Service.


14.3         DEFINITIONS


For
purposes of this Article XIV, the following terms have the following meanings:


(a)           “Key
employee” means a key employee described in Code Section 416(i)(I) and “non-key
employee” means any employee who is not a key employee (including employees who
are former key employees);


(b)           “Top-heavy
plan year” means a Plan Year if any of the following conditions exist:


(i)            The
top-heavy ratio for the Plan exceeds 60 percent and the Plan is not part of any
required aggregation group or permissive aggregation group of plans; 


(ii)           This Plan is
a part of a required aggregation group of plans but not part of a permissive
aggregation group and the top-heavy ratio for the group of plans exceeds 60
percent; or


(iii)          The Plan is
part of a required aggregation group and part of a permissive aggregation group
of plans and the top-heavy ratio for the permissive aggregation group exceeds
60 percent.



 37
 






 



(c)           “Top-heavy
ratio”


(i)            If any
Participating Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Participating Employer
has not maintained any defined benefit plan which during the 5-year period
ending on the determination date(s) has or has had accrued benefits, the
top-heavy ratio for the Plan alone or for the required or permissive
aggregation group as appropriate is a fraction, the numerator of which is the
sum of the account balances of all key employees on the determination date(s),
and the denomination of which is the sum of all account balances, both computed
in accordance with Code Section 416. Account balances shall be increased by
distributions made during the 1-year period ending on the determination date(s)
(including distributions under a terminated plan which, had it not been terminated,
would have been aggregated with the Plan under Code Section 416(g)(2)(A)(i));
provided, however, that with respect to distributions made for a reason other
than severance from employment, death or disability, the preceding clause shall
be applied by substituting “1-year period” for “1-year period.” Both the
numerator and the denominator of the top-heavy ratio are increased to reflect
any contribution not actually made as of the determination date, but which is required
to be taken into account on that date under Code Section 416.


(ii)           If a
Participating Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Participating Employer
maintains or has maintained one or more defined benefit plans which during the 5-year
period ending on the determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive aggregation group as
appropriate is a fraction, the numerator of which is the sum of the account balances
under the aggregated defined contribution plan or plans for all key employees,
determined in accordance with Section 14.3(c)(i), and the present value of
accrued benefits under the aggregated defined benefit plan or plans for all key
employees as of the determination date(s), and the denominator of which is the
sum of the account balances under the aggregated defined contribution plan or
plans for all participants, determined in accordance with Section 14.3(c)(i),
and the present value of all accrued benefits under the defined benefit plan or
plans for all participants as of the determination date(s), all determined in
accordance with Code Section 416. The accrued benefits under a defined benefit
plan in both the numerator and denominator of the top-heavy ratio are increased
for any distribution of an accrued benefit in the manner described in Section 14.3(c)(i).



 38
 






 



(iii)          For purposes
of Sections 14.3(c) (i) and (ii), 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 12-month period ending on the determination
date, except as provided in Code Section 416 for the first and second plan
years of a defined benefit plan. The account balances and accrued benefits of a
participant (A) who is not a key employee but who was a key employee in a prior
year, or (B) who has not been credited with at least one Hour of Service with
any employer maintaining the plan at any time during the 1-year period ending
on the determination date will be disregarded. The calculation of the top-heavy
ratio, and the extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Code Section 416. Deductible
employee contributions will not be taken into account for purposes of computing
the top-heavy ratio. 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. 


(iv)          The accrued
benefit of a Participant other than a key employee 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 Code Section 411(b)(1)(C).


(d)           The “permissive
aggregation group” is the required aggregation group of plans plus any other
plan or plans of the employer which, when considered as a group with the
required aggregation group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410.


(e)           The “required
aggregation group” is (i) each qualified plan of the employer in which at least
one key employee participates or participated at any time during the
determination period (regardless of whether the plan has terminated), and (ii)
any other qualified plan of the employer which enables a plan described in
clause (i) to meet the requirements of Code Sections 401 (a)(4) and 410(b).


(f)            For purposes
of computing the top-heavy ratio, the “valuation date” shall be the last day of
the applicable plan year.


(g)           For purposes
of establishing present value to compute the top-heavy ratio, any benefit shall
be discounted only for mortality and interest based on the interest and
mortality rates specified in the defined benefit plan(s), if applicable.


(h)           The term “determination
date” means, with respect to the initial plan year of a plan, the last day of
such plan year and, with respect to any other plan year of a plan, the last day
of the preceding plan year of such plan. The term “applicable determination



 39
 






 



date”
means, with respect to the Plan, the determination date for the Plan Year of
reference and, with respect to any other plan, the determination date for any plan
year of such plan which falls within the same calendar year as the applicable
determination date of the Plan.


XV.
DEFINITIONS


As
used in this instrument, the following terms shall mean the following:


(a)           ACCOUNT
means, with respect to each Participant, the aggregate value of his or her
Employer Stock Account and Other Investment Account.


(b)           ADMINISTRATIVE
COMMITTEE means the person or persons designated by the Board of Directors to
act as such under Article XIII, provided, however, that if the Board of
Directors fails to appoint the Administrative Committee, the executive
committee of the Board of Directors will serve as the Administrative Committee.


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


(d)           ANNIVERSARY
DATE means the 31st day of December each year.


(e)           BANK means
Hampden Bank.


(f)            BENEFICIARY
means a person entitled to benefits hereunder as beneficiary of a deceased
Participant or as beneficiary of a deceased Beneficiary.


(g)           BOARD OF
DIRECTORS means the Board of Directors of the Bank, as from time to time
constituted.


(h)           CODE means
the Internal Revenue Code of 1986, as amended or replaced from time to time.


(i)            COMPENSATION
means, with respect to any Participant, total remuneration paid by the Employer
for a Plan Year. Compensation in excess of $220,000, as adjusted for increases
in the cost of living at the same time and in such manner as permitted under
Code Section 401(a)(17)(B), shall be disregarded. The cost-of-living adjustment
in effect for a calendar year applies to any period, not exceeding 12 months,
over which compensation is determined (determination period) beginning with or
within such calendar year. If a determination period consists of fewer than 12
months, the annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12. Compensation shall include any amount which is
contributed by the Bank pursuant to a salary reduction agreement



 40
 






 



and
which is not includible in the gross income of the Employee under Code Sections
124, 132(f), 401(k), 402(h) and 403(b).


(j)            EMPLOYER
STOCK means shares of the stock Hampden Bancorp, Inc. having a combined voting
power and dividend rights equal to or exceeding that class of the common stock of
Hampden Bancorp, Inc. having the greatest voting power and dividend rights.


(k)           EMPLOYER
STOCK ACCOUNT means the account of a Participant which is credited with the
shares of Employer Stock purchased and paid for by the Trust or contributed to
the Trust.


(l)            ERISA means the
Employee Retirement Income Security Act of 1974, as amended from time to time.


(m)          ELIGIBLE
EMPLOYEE means any Employee other than (i) an Employee covered by a collective
bargaining agreement as to which retirement benefits were the subject of good
faith bargaining, (ii) an Employee who is a nonresident alien and who receives
no U.S. source income (iii) an individual who is not characterized by or
treated by the Bank as a common law employee of the Participating Employer, and
(iv) an individual hired on a temporary basis through a staffing or temporary
agency. If an individual described in clause (iii) is reclassified or deemed to
be reclassified as a common law employee of a Participating Employer and meets
the definition of an Eligible Employee, the individual will be eligible to
participate in the Plan as of the actual date of such reclassification (to the
extent such individual otherwise qualifies as an Eligible Employee). If the
effective date of reclassification is prior to the actual date of such reclassification,
in no event will the reclassified individual be eligible to participate in the
Plan retroactively to the effective date of such reclassification. In no event
shall a Leased Employee within the meaning of Code Section 414(n) become an
Eligible Employee until he or she is actually employed by a Participating
Employer.


(n)           EMPLOYEE
means any individual employed by the Bank, (i) excluding independent
contractors and (ii) including a Leased Employee and any other individual
required to be treated as an employee pursuant to Code Sections 414(n) and
414(o).


(o)           ENTRY DATE
means January 1 and July 1 of each Plan Year.


(p)           FIDUCIARY
means any person who (i) exercises any discretionary authority or discretionary
control respecting management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (ii) renders investment
advise for a fee or other compensation, direct or indirect, with respect to any
monies or other property of the Plan or has any authority or responsibility to
do so, or (iii) has any discretionary authority or discretionary responsibility
in the administration of the Plan, including, but not limited to, the Trustee,
the Employer and its representative body, and the Committee.


(q)           FORFEITURE means
that portion of a Participant’s Account that is not vested, and occurs on the
earlier of (i) the distribution of the entire vested portion of a Participant’s
Account, or (ii) the last day of the Plan Year in which the Participant incurs



 41
 






 



five
(5) consecutive One-Year Breaks in Service. In the event of a distribution under
clause (i), in the case of a terminated Participant whose vested benefit is
zero, such Terminated Participant shall be deemed to have received a distribution
of his or her vested benefit upon his or her termination of employment. In addition,
the term Forfeiture shall also include amounts deemed to be Forfeitures
pursuant to any other provision of this Plan.


(r)            FORMER
PARTICIPANT means a person who has been a Participant, but who has ceased to be
a Participant for any reason.


(s)           FUND means
the assets of the Plan as from time-to-time constituted.


(t)            HIGHLY
COMPENSATED EMPLOYEE means any Employee who (i) was a five percent (5%) owner
(as defined in Code Section 416(I)(1)) of the Employer at any time during the
current or the preceding Plan Year, or (ii) for the preceding Plan Year, (A)
had compensation from the Employer in excess of $100,000 (as adjusted by the
Secretary pursuant to Code Section 415(d), and (B) if the Employer elects the
application of this clause for such preceding year, was in the top-paid group
of Employees for such preceding year. For this purpose, an Employee is in the
top-paid group of Employees for any year if such Employee is in the group
consisting of the top twenty percent (20%) of the Employees when ranked on the
basis of compensation paid during such year. A Former Employee shall be treated
as a highly compensated employee if he or she was a highly compensated employee
when he or she separated from service, or was a highly compensated employee at
any time after attaining age 55.


(u)           HIGHLY
COMPENSATED PARTICIPANT means a Highly Compensated Employee who is eligible to
participate in the Plan.


(v)           HOUR OF
SERVICE means:


(i)            each hour
for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer for the performance of duties during the
applicable computation period;


(ii)           each hour
for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period;


(iii)          each hour
for which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. 


The
same Hours of Service shall not be credited both under (i) or (ii), as the case
may be, and under (iii).



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Despite
the forgoing, (x) no more than 501 Hours of Service are required to be credited
to an Employee on account of any single continuous period during which the
Employee performs no duties (whether or not such period occurs in a single
computation period); (y) an hour for which an Employee is directly or indirectly
paid, or entitled to payment, on account of a period during which no duties are
performed is not required to be credited to the Employee if such payment is
made or due under a plan maintained solely for the purpose of complying with
applicable worker’s compensation, or unemployment compensation or disability
insurance laws; and (z) Hours of Service are not required to be credited for a
payment which solely reimburses an Employee for medical or medically related
expenses incurred by the Employee.


An
Hour of Service must be counted for purpose of determining a Year of Service, a
year of participation for purposes of accrued benefits, a One-Year Break in
Service, and employment commencement date (or reemployment commencement date).
The provisions of Department of Labor regulations Sections 2530.200b-2(b) and
(c) are incorporated herein by reference.


(w)          NON-HIGHLY
COMPENSATED PARTICIPANT means any Participant who is not a Highly Compensated
Employee.


(x)            NORMAL RETIREMENT
DATE means the Anniversary Date coinciding with or next following the date on
which the Participant attains age 65 (his or her “Normal Retirement Age”). A Participant
shall become fully Vested in his or her Account upon attaining his or her Normal
Retirement Age.


(y)           ONE-YEAR
BREAK IN SERVICE shall mean the applicable computation period during which an
Employee has not completed more than 500 Hours of Service with the Employer.
Further, solely for the purpose of determining whether a Participant has
incurred a One-Year Break in Service, Hours of Service shall be recognized for “authorized
leaves of absence” and “maternity and paternity leaves of absence.” An
authorized leave of absence means an unpaid, temporary cessation from active
employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason. A
“maternity or paternity leave of absence” shall mean an absence from work for
any period by reason of the Employee’s pregnancy, birth of the Employee’s
child, placement of a child with the Employee in connection with the adoption
of such child, or any absence for the purpose of caring for such child for a
period immediately following such birth or placement. For this purpose, Hours
of Service shall be credited for the computation period in which the absence
from work begins, only if credit therefore is necessary to prevent the Employee
from incurring a One-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited for a “maternity
or paternity leave of absence” shall be those which would normally have been
credited but for such absence, or, in any case in which the Committee is unable
to determine such hours normally credited, eight (8) Hours of Service per day.
The total Hours of Service required to be credited for a “maternity or
paternity leave of absence” shall not exceed 501.



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(z)            OTHER
INVESTMENT ACCOUNT means the account of a Participant which is credited with
his or her share of the net gain (or loss) of the Plan, Forfeitures, and Employer
contributions in other than Employer Stock and which is debited with payments
made to pay for Employer Stock.


(aa)         PARTICIPANT
means an Eligible Employee who participates in the Plan as provided in Article
II, and has not for any reason become ineligible to participate further in the
Plan.


(bb)         PARTICIPATING
EMPLOYER means the Bank and any other Affiliated Employer that adopts this Plan
with the consent of the Board of Directors.


(cc)         PLAN means
the Hampden Bank Employee Stock Ownership Plan and Trust as set forth in this
instrument and as subsequently amended and/or restated.


(dd)         PLAN YEAR
means the calendar year.


(ee)         REGULATION
means the Income Tax Regulations as promulgated by the Secretary of the
Treasury or his or her delegate, and as amended from time to time.


(ff)           SUSPENSE
ACCOUNT means the separate account to which is credited shares of Employer
Stock pledged as collateral on a loan described in Section 4.4 prior to their
allocation to Participants’ Accounts.


(gg)         DISABILITY
means a physical or mental condition of a Participant resulting from bodily
injury, disease, or mental disorder which renders him incapable of continuing
his or her usual and customary employment with the Employer. The disability of
a Participant shall be determined by a licensed physician chosen by the
Committee. The determination shall be applied uniformly to all Participants


(hh)         TRUST means
the trust established under Article VIII.


(ii)           TRUSTEE
means the trustee of the Trust.


(jj)           VESTED means
the non-forfeitable portion of a Participant’s Account.


(kk)         VALUATION
DATE means the last day of the Plan Year and each other date as of which the
Administrative Committee determines the investment experience of the Trust and
adjust Participants’ Accounts accordingly.


(ll)           YEAR OF
SERVICE means the computation period of twelve (12) consecutive months
specified below during which an Employee has at least 1,000 Hours of Service
with the Bank or any Affiliated Employer.


(i)            For purposes
of eligibility for participation in the Plan, the computation periods shall be
measured from the date on which the Employee first performs an Hour of Service
and anniversaries thereof. The participation computation periods beginning
after



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a
One-Year Break in Service shall be measured from the date on which an Employee again
performs an Hour of Service and anniversaries thereof.


(ii)           For vesting
purposes, the computation period shall be the Plan Year including periods prior
to the Effective Date of the Plan.


(iii)          For all
other purposes, the computation period shall be the Plan Year.


XVI.
MISCELLANEOUS


16.1         EXCLUSIVE
BENEFIT RULE


No
part of the corpus or income of the Trust allocable to the Plan will be used
for or diverted to purposes other than for the exclusive benefit of each Participant
and Beneficiary, except as otherwise provided under the provisions of the Plan
relating to QDROs, the payment of reasonable expenses of administering the
Plan, the return of contributions upon non-deductibility or mistake of fact,
the return of certain excess contributions or the failure of the Plan to
qualify initially.


16.2         NON-TERMINABLE
RIGHTS


The
protections and rights afforded Participants under Section 4.4 pertaining to
certain restrictions on Employer Stock acquired with the proceeds of a loan and
Section 10.2 pertaining to put options shall be non-terminable. The protections
and rights with respect to Employer Stock acquired with the proceeds of an
exempt loan shall continue and not be abridged notwithstanding the eventual
repayment of the loan or the discontinuance of the Plan as an ESOP.


16.3         LIMITATION
OF RIGHTS.


Neither
the establishment of the Plan, nor any amendment thereof, nor the creation of
any fund or account, nor the payment of any benefits, will be construed as
giving to any Participant or other person any legal or equitable right against
the Bank, any Participating Employer, the Administrative Committee or the
Trustee, except as provided in this Plan, and in no event will the terms of
employment or service of any Participant be modified or in any way be affected
by his or her eligibility for or participation in the Plan. It is a condition
of the Plan, and each Participant expressly agrees by his or her participation,
that each Participant will look solely to the assets held in the Trust for the
payment of any benefit to which he or she is entitled under the Plan.


16.4         NON-ALIENABILITY
OF BENEFITS


No
benefit provided under this Plan is subject to the voluntary or involuntary
alienation, assignment, garnishment, attachment, execution or levy of any kind,
and any attempt to cause such benefits to be so subjected will not be
recognized, unless (i) required by law, or (ii) the Administrative Committee receives
a QDRO that requires the payment of Plan benefits or the segregation of any
Account. In the case of a QDRO that is determined to be valid under the Plan’s
QDRO processing procedures, the



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Participant’s
Account will be segregated, and benefits will be paid, accord to its terms.
Benefits provided to a Participant may be offset pursuant to a judgment, order,
decree, or settlement agreement that satisfies the conditions of Code Section
401(a)(13)(C) and any applicable spousal consent requirements under Code
Sections 401(a)(13)(C) and (D) are satisfied.


16.5         ADEQUACY OF
DELIVERY


Any
payment to be made under the Plan by the Trustee may be made by the Trustee’s
check. Mailing to a person or persons entitled to distributions hereunder at
the addresses designated by the Participating Employer or Administrative
Committee shall be adequate delivery by the Trustee of such distributions for
all purposes. If the whereabouts of a person entitled to benefits under the
Plan cannot be determined after diligent search by the Administrative Committee,
the committee may place the benefits in a federally insured, interest-bearing
bank account opened in the name of such person. Such action shall constitute a
full distribution of such benefits under the terms of the Plan.


16.6         SERVICE WITH
ARMED FORCES


If
any Participant leaves a Participating Employer to enter the Armed Forces of
the United States or the Merchant Marines of the United States, and he or she
is entitled to reemployment rights under the laws of the United States, his or
her departure will not be deemed a termination of his or her employment for the
purposes of this Plan, and he or she will be presumed to be on leave of absence,
provided he or she returns to work with a Participating Employer within the
period of time prescribed by laws after his or her discharge, without other intervening
employment. If the Participant fails to return and the Bank terminates his or
her employment, the Bank shall notify the Administrative Committee, and the
Participant’s employment shall be deemed to have terminated on the date of
receipt by the Administrative Committee of such notice. Despite any contrary
provision of the Plan, loans, contributions, benefits and service credit with
respect to qualified military service will be administered in accordance with
Code Section 414(u).


16.7         MERGER OR
CONSOLIDATION


In
case of any merger or consolidation of this Plan Trust with, or transfer of the
assets or liabilities of this Plan to any other plan and/or trust, the terms of
such merger, consolidation or transfer shall be such that each Participant
would receive (in the event of termination of this Plan or its successor
immediately thereafter) a benefit which is no less than he or she would have
received in the event of termination of this Plan immediately before such
merger, consolidation or transfer.


16.8         GOVERNING
LAW


The
Plan is construed, administered and enforced according to the laws of the
Commonwealth of Massachusetts to the extent not preempted by ERISA.



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IN
WITNESS WHEREOF,  the Bank has executed
the Plan and the Trustee(s)  has or have
executed the Trust as of this 1st day of
December 2006.


	
   

  	
  HAMPDEN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas R.
  Burton

  	
   

  
	
   

  	
   

  	
  Thomas R.
  Burton, President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST BANKERS
  TRUST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda Shultz

  	
   

  
	
   

  	
   

  	
  Linda Shultz,
  Trust Officer

  	
   

  



 



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