**Exhibit 10.8**
**BAYLAKE BANK**
**SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN**
**PLAN DOCUMENT**
 

 

**TABLE OF CONTENTS**       **ARTICLE** **DESCRIPTION**    ARTICLE 1 NAME AND PURPOSE  1-1 ARTICLE 2 DEFINITIONS  2-1 ARTICLE 3 ELIGIBILITY AND PARTICIPATION  3-1 ARTICLE 4 SERP CONTRIBUTION AND ACCOUNT  4-1 ARTICLE 5 DEFERRAL ACCOUNT  5-1 ARTICLE 6 VESTING  6-1 ARTICLE 7 FORMS OF BENEFIT PAYMENTS  7-1 ARTICLE 8 BENEFIT PAYMENT EVENTS  8-1 ARTICLE 9 BENEFICIARIES  9-1 ARTICLE 10 RIGHTS OF PARTICIPANTS AND BENEFICIARIES  10-1 ARTICLE 11 TRUST  11-1 ARTICLE 12 CLAIMS PROCEDURE  12-1 ARTICLE 13 ADMINISTRATION  13-1 ARTICLE 14 AMENDMENT AND TERMINATION  14-1 ARTICLE 15 MISCELLANEOUS  15-1 
 

 

**BAYLAKE BANK**
**SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN**
          The Baylake Bank Supplemental Executive Retirement Plan (“the Plan”) is hereby adopted byBaylake Bank, a corporation organized and existing under and by virtue of the laws of the State ofWisconsin (the “Bank”);
**W I T N E S S E T H:**
          WHEREAS, the Bank, in order to reward a select group of management and/or highly compensatedemployees (hereinafter referred to as “Executive(s)”), desires to provide Executives withadditional retirement benefits through a Supplemental Executive Retirement Plan (the “SERP”).
          NOW, THEREFORE, the Bank hereby adopts the Plan, effective March 1, 2005, as follows:
 

 

**ARTICLE 1****NAME ANDPURPOSE**
1.1.  **Name.**The name of the Plan shall be the Baylake Bank Supplemental Executive Retirement Plan. 1.2.  **Purpose.**The purpose of the Plan is to reward certain management and highly compensatedemployees of the Bank who have contributed to the Bank’s success and are expected to continueto contribute to such success in the future. 1.3.  **Plan for a Select Group.**The Plan shall only cover Executives of the Bank (chosen at theBank’s discretion), who are members of a “select group of management or highly compensatedemployees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Bankshall have the authority to take any and all actions necessary or desirable in order for thePlan to satisfy the requirements set forth in ERISA and the regulations thereunder applicableto plans maintained for Executives who are members of a select group of management or highlycompensated employees. 1.4.  **Not a Funded Plan.**It is the intention and purpose of the Bank that the Plan shall be deemedto be “unfunded” for tax purposes and deemed a plan as would properly be described as“unfunded” for purposes of Title I of ERISA. The Plan shall be administered in such a manner,notwithstanding any contrary provision of the Plan, in order that it will be so deemed andwould be so described.
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**ARTICLE 2****DEFINITIONS**
          Unless the context otherwise indicates, the following words used herein shall have thefollowing meanings wherever used in this instrument:
2.1.  **Administrator.**The word “Administrator” shall mean such person or entity as determined bythe Bank, and in absence of such determination, the Bank. 2.2.  **Appeals Committee.**The words “Appeals Committee” shall mean the Executive Committee of theBoard established pursuant to Article 12 herein. 2.3.  **Bank.**The word “Bank” shall mean Baylake Bank and any successor corporation or businessorganization which shall assume the duties and obligations of Baylake Bank, under the Plan. 2.4.  **Beneficiary.**The word “Beneficiary” shall mean any person who receives, or is designated toreceive, payment of any benefit under the terms of the Plan because of the participation of aParticipant in the Plan. 2.5.  **Benefit Commencement Date.**The words “Benefit Commencement Date” shall mean the first dateas of which benefits are to be paid pursuant to the terms of the Plan. 2.6.  **Benefit Payment.**The words “Benefit Payment” shall mean payment of the benefit as set forthin Article 7 and Article 8, as applicable. 2.7.  **Board.**The word “Board” shall mean the board of directors of the Bank. 2.8.  **Bonus.**The word “Bonus” shall mean compensation for services performed for the Bank over aperiod of at least 12 months where the payment or amount of the compensation is contingent onthe satisfaction of organizational or individual performance criteria that are notsubstantially certain to be met when the deferral election with respect to the Bonus issubmitted. 2.9.  **Change in Control.**The “Change in Control” shall mean either a “Change in Ownership,”“Change in Effective Control” or a “Change of Ownership of a Substantial Portion of Assets,”as defined below:
**Change in Ownership**
   A change in the ownership of the Bank occurs on the date that any one person, or more thanone Person Acting as a Group (as defined below), acquires ownership of stock of the Bankthat, together with stock held by such person or Group, constitutes more than 50% of thetotal fair market value or total voting power of the stock of the Bank . However, if anyone person or more than one Person Acting as a Group, is considered to own more than 50% ofthe total fair market value or total voting power of the stock of the Bank, the acquisitionof additional stock by the same person or persons is not considered to cause a change in theownership of the Bank (or to cause a change in the effective control of the
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Bank). An increase in the percentage of stock owned by any one person, or Persons Acting asa Group, as a result of a transaction in which the Bank acquires its stock in exchange forproperty will be treated as an acquisition of stock. This applies only when there is atransfer of stock of the Bank (or issuance of stock of the Bank) and stock in the Bankremains outstanding after the transaction.
**Persons Acting as a Group:**Persons will not be considered to be acting as a group solelybecause they purchase or own stock of the same corporation at the same time, or as a resultof the same public offering. However, persons will be considered to be acting as a group ifthey are owners of a corporation that enters into a merger, consolidation, purchase oracquisition of stock, or similar business transaction with the Bank. If a person, includingan entity, owns stock in both corporations that enter into a merger, consolidation, purchaseor acquisition of stock, or similar transaction, such shareholder is considered to be actingas a group with other shareholders in a corporation prior to the transaction giving rise tothe change and not with respect to the ownership interest in the other corporation.
**Change in Effective Control**
A change in the effective control of a corporation occurs on the date that either -
(i) Any one person, or more than one Person Acting as a Group, acquires (or has acquiredduring the 12-month period ending on the date of the most recent acquisition by such personor persons) ownership of stock of the Bank possessing 35% or more of the total voting powerof the stock of the Bank; or
(ii) a majority of members of the Board is replaced during any 12-month period by directorswhose appointment or election is not endorsed by a majority of the members of the Boardprior to the date of the appointment or election,
In the absence of an event described in paragraph (i) or (ii), a change in the effectivecontrol of a corporation will not have occurred.
**Acquisition of additional control:**If any one person, or more than one Person Acting as aGroup, is considered to effectively control the Bank, the acquisition of additional controlof the Bank by the same person or persons is not considered to cause a change in theeffective control of the Bank (or to cause a change in the ownership of the Bank.
**Change of Ownership of a Substantial Portion of Assets**
A change in the ownership of a substantial portion of the Bank’s assets occurs on the datethat any one person, or more than one Person Acting as a Group, acquires (or has acquiredduring the 12-month period ending on the date of the most recent acquisition by such personor persons) assets from the Bank that have a total gross fair market value equal to or morethan 40% of the total gross fair market value of all of the assets of the Bank immediatelyprior to such acquisition or acquisitions. For this purpose, gross fair market value meansthe value of the assets of the Bank, or the value of the assets being
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disposed of, determined without regard to any liabilities associated with such assets.
**Transfers to a related person:**There is no Change in Control when there is a transfer to anentity that is controlled by the shareholders of the Bank immediately after the transfer. Atransfer of assets by the Bank is not treated as a change in the ownership of such assets ifthe assets are transferred to -
(i) A shareholder of the Bank (immediately before the asset transfer) in exchange for orwith respect to its stock;
(ii) An entity, 50% or more of the total value or voting power of which is owned, directlyor indirectly, by the Bank;
(iii) A person, or more than one Person Acting as a Group, that owns, directly orindirectly, 50% or more of the total value or voting power of all the outstanding stock ofthe Bank; or
(iv) An entity, at least 50% of the total value or voting power of which is owned, directlyor indirectly, by a person described in paragraph (iii).
A person’s status is determined immediately after the transfer of the assets. For example, atransfer to a corporation in which the Bank has no ownership interest before thetransaction, but which is a majority-owned subsidiary of the Bank after the transaction isnot treated as a change in the ownership of the assets of the Bank.
2.10.  **Code.**The word “Code” shall mean the Internal Revenue Code of 1986 and any regulations orother pronouncements promulgated thereunder. Whenever a reference is made herein to aspecific Code section, such reference shall be deemed to include any successor Code sectionhaving the same or a similar purpose. 2.11.  **Deferral Account.**The words “Deferral Account” shall mean a bookkeeping account maintainedby the Administrator on behalf of each Participant. 2.12.  **Disability**The word “Disability” shall have the following meaning: A Participant shall beconsidered disabled if the Participant:
 (a)  Is unable to engage in any substantial gainful activity by reason of anymedically determinable physical of mental impairment which can be expected to result indeath or can be expected to last for a continuous period of not less than 12 months, or  (b)  Is, by reason of any medically determinable physical or mental impairment whichcan be expected to result in death or can be expected to last for a continuous periodof not less than 12 months, receiving income replacement benefits for a period of notless than three months under a long-term disability plan covering employees of the Bankor under the disability insurance provisions of the Social Security Act.
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2.13.  **Effective Date.**The words “Effective Date” shall mean the date the Plan becomes effective,which is March 1, 2005. 2.14.  **ERISA.**The acronym “ERISA” shall mean the Employee Retirement Income Security Act of 1974,as amended, and any regulations or other pronouncements promulgated thereunder. Whenever areference is made herein to a specific ERISA section, such reference shall be deemed toinclude any successor ERISA section having the same or a similar purpose. 2.15.  **Executive.**The word “Executive” shall mean any common-law employee of the Bank, whether ornot a Board member, but excluding any person serving only in the capacity of Board member. 2.16.  **Executive Committee.**The words “Executive Committee” shall mean the Executive Committee ofthe Board or any successor thereto. 2.17.  **Measurement Funds.**The words “Measurement Funds” shall mean hypothetical investments theParticipant may elect to value his or her SERP Account or Deferral Account balances. 2.18.  **Participant**. The word “Participant” shall mean any eligible Executive who is designated bythe Executive Committee as eligible to participate in the SERP. 2.19.  **Participant Access System.**The words “Participant Access System” shall mean the onlineadministration system that provides Participants with continual access to Account balances andimportant Plan information, as well as the ability to reallocate Measurement Funds. 2.20.  **Plan.**The word “Plan” shall mean the Baylake Bank Supplemental Executive Retirement Plan asset forth herein, effective as of the Effective Date, and as it may be later amended. 2.21.  **Plan Year.**The words “Plan Year” shall mean the 12-month period ending on December 31 ineach calendar year. 2.22.  **SERP Account.**The words “SERP Account” shall mean a bookkeeping account maintained by theAdministrator on behalf of each Participant. 2.23.  **SERP Contribution.**The words “SERP Contribution” shall mean for each Participant an amountdetermined by the Bank and credited to the Participant’s SERP Account. 2.24.  **Termination of Employment.**The words “Termination of Employment” shall mean for anyParticipant the occurrence of any one of the following events:
 (a)  The Participant is discharged by the Bank unless the Participant issubsequently reemployed and given pay back to date of discharge, or  (b)  The Participant voluntarily terminates employment with the Bank.
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2.25.  **Unforeseeable Emergency.**The term “Unforeseeable Emergency” means a severe financialhardship to the Participant resulting from an illness or accident of the Participant, theParticipant’s spouse, or a dependent of the Participant, loss of the Participant’s propertydue to casualty, or other similar extraordinary and unforeseeable circumstances arising as aresult of events beyond the control of the Participant. An unforeseeable emergency is metonly if the amounts paid with respect to an emergency do not exceed the amounts necessary tosatisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a resultof the payment, after taking into account the extent to which such hardship is or may berelieved through reimbursement or compensation by insurance or otherwise or by liquidation ofthe Participant’s assets (to the extent the liquidation of such assets would not itself causesevere financial hardship). 2.26.  **Year of Service.**The words “Year of Service” shall mean each fiscal year commencing fromthe date of hire of the Executive by the Bank.
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**ARTICLE 3****ELIGIBILITY AND PARTICIPATION**
3.1.  **Eligibility.**The Executive Committee may, from time to time, in its discretion, designateone or more Executives as eligible to participate in the Plan. An Executive shall only beconsidered eligible for participation (or to continue to participate) if he or she is part ofa “select group of management and highly compensated employees” within the meaning of ERISASections 201(2), 301(a)(3) and 401(a)(1). 3.2.  **Participation.**Each Executive who has been designated as eligible to participate in the Planshall become a Participant on or as of the date of designation as an Executive eligible toparticipate in the Plan. The Executive shall remain a Participant until the earlier of (a)the date of his or her Termination of Employment, or (b) the cessation of eligible statuspursuant to Article 3.3. 3.3.  **Cessation of Participation Initiated by the Executive Committee.**In the event that theExecutive Committee determines, in its sole discretion, that a Participant is not, or may notbe, a member of a “select group of management or highly compensated employees” as definedabove, then the Executive Committee may, in its sole discretion, terminate such Participant’sparticipation in the Plan. In the event of such termination of participation:
 (a)  Such Participant shall no longer have additional amounts credited to his or herSERP and Deferral Accounts;  (b)  The Executive Committee shall direct that such actions be taken which mostclosely adhere to the terms of the Plan while not putting at risk its status as a planmaintained for a “select group of management or highly compensated employees;” and  (c)  With respect to a Participant whose Plan participation is terminated on orafter January 1, 2006, no payments shall be made to the Participant other than pursuantto Article 7 and Article 8.
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**ARTICLE 4****SERP CONTRIBUTION AND ACCOUNT**
4.1.  **SERP Contribution.**The Bank in its discretion shall make an annual SERP Contribution to eachParticipant’s SERP Account. 4.2.  **Establishment of SERP Account.**The Administrator or designated representative shallestablish a SERP Account in the name of each Participant on its books and records. Allamounts credited to the SERP Account of any Participant, or Beneficiary shall constitute ageneral, unsecured liability of the Bank, as applicable, to such person. 4.3.  **Crediting of SERP Contributions.**SERP Contributions shall be credited to the Participant’sSERP Account as of March 1 of the Plan Year. 4.4.  **Adjustment of SERP Account.**The SERP Account shall be adjusted for earnings, gains andlosses as if such SERP Account held actual assets and such assets were invested in MeasurementFunds in accordance with Article 4.5. The value of each Participant’s SERP Account shall bedeterminable on a daily basis as follows, using the terms and methods in the order definedbelow:
 (a)  **Beginning Balance.**The balance at the beginning of the day. This equals theEnding Balance (as described below) as of the end of the most recent business day,which for purposes of this Plan shall mean those days on which the New York StockExchange was open for trading.  (b)  **Sub-Ending Balance.**The Beginning Balance, plus SERP Contribution credits,less any Benefit Payments and forfeitures (as provided in Article 8.6), which are madeon or occur as of such date.  (c)  **Investment Earnings.**Investment earnings, gains and losses determined pursuantto this Article will be credited to each Participant’s SERP Account as of each businessday.  (d)  **Ending Balance.**The Sub-Ending Balance plus Investment Earnings.
4.5.  **Measurement Funds.**The Bank shall designate Measurement Funds for the valuation of eachParticipant’s SERP Account as if such SERP Account held actual assets. The Measurement Fundsmay include but shall not be limited to the following types of funds as determined by theBank:
 (a)  mutual funds, including without limitation, equity funds, money market funds,fixed income funds and balanced funds,  (b)  any insurance company’s general account, or  (c)  any special account established and maintained by any insurance company.
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   The Bank shall have the sole discretion to determine the number of Measurement Funds to bedesignated hereunder and the nature of the funds and may change or eliminate the MeasurementFunds designated hereunder from time to time.
   Participants shall direct the allocation of his or her SERP Account among the MeasurementFunds designated by the Bank as though such SERP Account held actual assets. Any suchdirections of investment shall be subject to such rules as the Bank and Administrator mayprescribe, including, but not limited to, rules concerning the manner of providinginvestment directions and the frequency of changing such investment directions. In theevent a Participant does not direct the investment of any portion of a Participant’s SERPAccount, such undirected portion shall be deemed to be invested in the money market fund.
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**ARTICLE 5****DEFERRAL ACCOUNT**
5.1.  **Deferral Elections.**A Participant in the Plan has the right to make certain elections withrespect to the deferral of salary and/or Bonus. If a Participant makes a deferral electionunder the Plan for a Plan Year, then a portion of the salary and/or Bonus which would normallybe paid to the Participant by the Bank shall be retained by the Bank, as applicable, and, inlieu thereof, an amount equal thereto, shall constitute a deferral amount hereunder and shallbe credited to the Participant’s Deferral Account pursuant to Article 5.7. 5.2.  **Salary Deferral.**With respect to each Plan Year, a Participant may elect to defer all or aportion of salary by making a deferral election via the Participant Access System or inwriting, as required by the Administrator. A Participant’s deferral election shall specify astated percentage or dollar amount of the Participant’s salary, which specified percentage ordollar amount shall not exceed 100% of the Participant’s salary, less amounts necessary tosatisfy employee tax obligations or elections made as part of the Bank’s other benefit plans.The amount so elected under the deferral election shall be credited to the Participant’sDeferral Account under the Plan. Except as provided in Article 5.4, no salary deferralelection shall be effective with respect to salary earned before the first day of the PlanYear commencing after the applicable deferral election is provided to the Administrator in aform acceptable to the Administrator. 5.3.  **Bonus Deferral.**A Participant may elect to defer all or a portion of his or her potentialBonus award for any 12-month award period by making a deferral election via the ParticipantAccess System or in writing, as required by the Administrator, at least six months prior tothe end of such period. A Participant’s deferral election shall specify a stated percentageor dollar amount of the Participant’s Bonus, which specified percentage or dollar amount shallnot exceed 100% of the Participant’s Bonus, less amounts necessary to satisfy employee taxobligations or elections made as part of the Bank’s other benefit plans. The amount soelected under the deferral election shall be credited to the Participant’s Deferral Accountunder the Plan. 5.4.  **General Deferral Election Rules.**A Participant’s deferral election shall be irrevocable forthe entire Plan Year for which it is made. All deferral elections under the Plan, and allresulting deferrals, shall be subject to the rules as set forth in Code Section 409A. In thePlan Year in which the Participant is first eligible to make a deferral election or in whichthe Plan first becomes effective, a deferral election may be made within 30 days after theParticipant is first eligible or the Plan’s effective date, as applicable, which electionshall apply to salary or Bonus for services rendered after the date of election.Notwithstanding the foregoing, a Participant may elect to defer all or a portion of his or herpotential Bonus award for any award period by submitting a deferral election at least sixmonths prior to the end of such period. Subsequent deferral elections shall be made asprovided in Articles 5.2 and 5.3. The Administrator may establish other procedures, limitsand restrictions from time to time. The minimum annual deferral amount shall be $5,000.
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5.5.  **Establishment of Deferral Accounts.**The Administrator or designated representative shallestablish one or more Deferral Accounts in the name of each Participant on its books andrecords. All amounts credited to the Deferral Account of any Participant, or Beneficiaryshall constitute a general, unsecured liability of the Bank, as applicable, to such person. 5.6.  **Crediting of Deferral Amounts.**Amounts shall be credited to the Participant’s DeferralAccount as of the date the salary or Bonus would have otherwise been paid to the Participant,absent the deferral election. 5.7.  **Adjustment of Deferral Account.**The Deferral Account shall be adjusted for earnings, gainsand losses as if such Deferral Account held actual assets and such assets were invested inMeasurement Funds in accordance with Article 5.8. The value of each Participant’s DeferralAccount shall be determinable on a daily basis as follows, using the terms and methods in theorder defined below:
 (a)  **Beginning Balance.**The balance at the beginning of the day. This equals theEnding Balance (as described below) as of the end of the most recent business day.  (b)  **Sub-Ending Balance.**The Beginning Balance, plus deferral amounts, less anyBenefit Payments and forfeitures (as provided in Article 8.6), which are made on oroccur as of such date.  (c)  **Investment Earnings.**Investment earnings, gains and losses determined pursuantto this Article will be credited to each Participant’s Deferral Account as of eachbusiness day.  (d)  **Ending Balance.**The Sub-Ending Balance plus Investment Earnings.
5.8.  **Measurement Funds.**The Bank shall designate Measurement Funds for the valuation of eachParticipant’s Deferral Account as if such Deferral Account held actual assets. The MeasurementFunds may include but shall not be limited to the following types of funds as determined bythe Bank:
 (a)  mutual funds, including without limitation, equity funds, money market funds,fixed income funds and balanced funds,  (b)  any insurance company’s general account, or  (c)  any special account established and maintained by any insurance company.
   The Bank shall have the sole discretion to determine the number of Measurement Funds to bedesignated hereunder and the nature of the funds and may change or eliminate the MeasurementFunds designated hereunder from time to time.
5.9.  Participants shall direct the allocation of their Deferral Account among the MeasurementFunds designated by the Bank as though such Deferral Account heldactual assets. Any such directions of investment shall be subject to such rules as the Bank and Administratormay prescribe, including, but not limited to, rules concerning the manner of providinginvestment directions and the frequency of changing such investment directions. In theevent a Participant does not direct the investment of any portion of a Participant’sDeferral Account, such undirected portion shall be deemed to be invested in the money marketMeasurement Fund.
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**ARTICLE 6****VESTING**
6.1.  **Vesting of SERP Account.**A Participant becomes 100% vested in his or her SERP Account uponthe completion of 10 Years of Service and attaining age 55. 6.2.  **Vesting of Deferral Account.**A Participant will always be 100% vested in his or her DeferralAccount. 6.3.  **Vesting Upon Certain Events for SERP Account.**A Participant shall be considered vested inhis or her SERP Account upon the occurrence of certain events including, but not limited to,the following:
 (a)  the Participant’s death;  (b)  the Participant’s Termination of Employment due to Disability; or  (c)  the date of a Change in Control.
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**ARTICLE 7****FORMS OF BENEFIT PAYMENTS**
7.1.  **Normal Form.**Unless elected to the contrary, a Participant’s Deferral and SERP Accounts, tothe extent vested under Article 6, shall be paid pursuant to Form 1 as described in Article7.3. 7.2.  **Election of Benefit Payment Forms.**Subject to certain restrictions described herein, in lieuof receiving Benefit Payments in accordance with Form 1, a Participant may elect in his or herinitial deferral election to receive Benefit Payments pursuant to Form 2 as described inArticle 7.3. Such election shall be in a form provided by the Administrator, shall indicatethe number of annual installments (not to exceed 30), and shall be signed by the Participant. 7.3.  **Forms.**The forms of Benefit Payments are as follows:
 (a)  **Form 1. Lump Sum Payment.**The Participant shall receive a single sum paymenton the Benefit Commencement Date.  (b)  **Form 2. Installments.**The Participant shall receive payments commencing onthe Benefit Commencement Date of up to 30 annual installments, as elected by theParticipant pursuant to Article 7.2.
7.4.  **Terms and Conditions of Forms.**The forms of Benefit Payments described in Article 7.3 shallbe subject to the following conditions:
 (a)  Benefit Payments under Form 2 shall be paid annually during the first month ofthe Plan Year;  (b)  If Benefit Payments under Form 2 have commenced and the Participant dies beforehis or her SERP Account (if vested) and Deferral Account have been paid in full, andthe Participant’s surviving spouse is the named Beneficiary, then any remaining BenefitPayments shall be paid to the surviving spouse as a continuation under Form 2 aselected by the Participant; if Benefit Payments have not commenced, or if BenefitPayments under Form 2 have commenced but the Participant’s surviving spouse is not thenamed Beneficiary, the SERP Account (if vested) and Deferral Account balances shall bepaid to the named Beneficiary under Form 1 within 60 days following the date of theParticipant’s death;  (c)  If any Participant is receiving Benefit Payments under Form 2 and theParticipant’s Beneficiary dies after the Benefit Commencement Date, but prior to thedeath of the Participant, such Participant shall be entitled to designate a newBeneficiary;  (d)  For purposes of Benefit Payments under Form 2, such Benefit Payments shall becalculated on the basis of the values of the Participant’s SERP Account (if vested) andDeferral Account determined as of the December 31st preceding the paymentdate, except that the final Benefit Payment shall use the current value; and
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 (e)  If at any time the remaining SERP Account (if vested) or Deferral Accountbalance is less than $10,000, then such remaining balance shall be paid in one lump sumas soon as administratively feasible.
7.5.  **Modification of Elected Forms.**A Participant may change from Form 1 to Form 2, or may changethe period of installment payments elected under Form 2, by written notice filed with theAdministrator. Any such modified election must adhere to the following requirements:
 (a)  Such election may not shorten or otherwise accelerate the period of installmentpayments initially elected under Form 2;  (b)  Such election may not take effect until at least 12 months after the date onwhich the election is made;  (c)  The first Benefit Payment with respect to such election must be deferred for aperiod of not less than five years from the date such Benefit Payment would otherwisehave been made; and  (d)  Such election is not made less than 12 months prior to the date of the firstscheduled or actual Benefit Payment.
7.6.  **Correction of Amounts Payable.**Anything contained in this Article 7 to the contrarynotwithstanding, if, after a Participant’s Termination of Employment, the SERP or DeferralAccount balance which would have been payable under the Plan is subject to any deduction,change, offset or correction, then the amount payable to such Participant or Beneficiary shallbe adjusted to reflect any such deduction, change, offset or correction. 7.7.  **Timing of Payments.**Payments under the Plan shall be made as of the time specified elsewherein the Plan. Notwithstanding the foregoing provisions of this Article 7 and such otherprovisions to the contrary, the requirement that a Benefit Payment commence on or before aparticular date shall not apply if the Administrator is unable to locate the Participant orthe Beneficiary after making reasonable efforts to do so, provided that, within 60 days afterthe Participant or the Beneficiary is located, a Benefit Payment is made retroactive to suchdate.
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**ARTICLE 8****BENEFIT PAYMENT EVENTS**
8.1.  **Termination of Employment.**A Participant who has a Termination of Employment shall be paidhis or her SERP (if vested) and Deferral Accounts, in such form as provided under Article 7.The Benefit Commencement Date for a Participant whose Termination of Employment occurs afterattaining age 65 shall be the date elected by the Participant in his or her initial deferralelection, not to exceed the January 1st immediately following the Participant’s75th birthday. If such an election has not be made or the Participant’sTermination of Employment occurs before attaining age 65, then the Benefit Commencement Dateshall be as soon as administratively feasible but not later than 60 days following the date ofsuch Termination of Employment. 8.2.  **Key Employees.**Except for any payments pursuant to Articles 8.3, 8.4, 8.5, 8.7 or 8.8, theBenefit Commencement Date of a Participant who is a “key employee” of the Bank as defined inCode Section 416(i) (generally, an officer having annual compensation of more than $135,000,as adjusted; a 5% owner; or a 1% owner having annual compensation of more than $150,000) shallnot be earlier than the date that is six months after the Participant’s Termination ofEmployment. 8.3.  **Death.**A Participant who dies prior to receipt of any unpaid SERP Account or DeferralAccount balance shall have the remaining balance paid to his or her Beneficiaries inaccordance with Article 7.4(b). 8.4.  **Disability.**A Participant who suffers a Disability shall receive his or her Deferral andSERP Accounts pursuant to Article 7.2, or if applicable, Article 7.3, which Benefit Paymentsshall commence as of the first day of the month following Termination due to Disability. 8.5.  **Fixed Date.**A Participant may elect in his or her initial deferred election to receive aspecified percentage of, or dollar amount from, his or her Deferral Account as of a specificBenefit Commencement Date, which may be any date prior to Termination of Employment. 8.6.  **Forfeiture**. Notwithstanding anything to the contrary in this Plan, a current or formervested and unvested Participant’s SERP Account and/or Benefit Payments from his or her SERPAccount shall be forfeited if the Bank determines at any time that the current or formerParticipant has (i) been convicted of, or entered a plea of nolo contendre to, a felony orother crime involving moral turpitude; (ii) embezzled or misappropriated the Bank’s funds orproperty; or (iii) breached any fiduciary duty owed to the Bank or engaged in any act ofself-dealing that is detrimental to the Bank. 8.7.  **Change in Control.**Upon a Change in Control, the Bank shall make a payment to theParticipants in lieu of his or her other rights with respect to the SERP Account. The amountof the Change in Control SERP Benefit Payment shall be the greater of:
 (a)  The Participant’s SERP Account balance, or
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 (b)  The lump sum present value, at the time of Change in Control, of 20 annualpayments, beginning at age 65, of the Change in Control SERP benefit amount, discountedat 6%. This Change in Control SERP benefit amount is equal to:
 (i)  60% of the Participant’s base salary at the time of the Changein Control, projected to age 65 at a 4.5% annual growth rate, less  (ii)  the Bank’s portion of the projected age 65 annual SocialSecurity benefit, less  (iii)  the annual payment provided by the Bank’s portion of theParticipant’s 401(k) plan value at the time of the Change in Control,accumulated at 8% to age 65, and paid over 20 annual installments using a 6%annual interest rate.
 The Change in Control Deferral Account benefit to be paid immediately will be the value ofthe Deferral Account at the time of the payment.  Notwithstanding the foregoing, if the payment required to be made under this Article 8.7(b),when considered alone and not aggregated with other payments to the Participant from theBank that would be deemed “excess parachute payments” under Code Section 280G(b)(1), isdeemed by the Bank to be a “parachute payment” under Code Section 280G(b)(2), then theChange in Control SERP benefit amount shall be automatically reduced to an amount equal to$1.00 less than three times the “base amount” (as defined in Code Section 280G(b)(3)) (the“Reduced Amount”). Provided, however, the preceding sentence shall notapply if the sum of (A) the amount of the Change in Control SERP benefit amount less (B) theamount of excise tax payable by the Participant under Code Section 4999 with respect to suchChange in Control SERP benefit amount (not aggregated with any other payments to theParticipant from the Bank), is greater than the Reduced Amount. The decision of the Bank(based upon the recommendations of its tax counsel and accountants) as to thecharacterization of payments as parachute payments, the value of parachute payments, theamount of excess parachute payments, and the payment of the Reduced Amount shall be final.
8.8.  **Hardship Withdrawal.**In the event that the Administrator, upon application of a Participant,determines that the Participant has suffered an Unforeseeable Emergency, the Bank shall pay tothe Participant an amount, not in excess of the sum of the Participant’s vested Accountbalances, necessary to satisfy the emergency. Such payment shall be made in Form 1 pursuantto Article 7.3. To the extent of such withdrawal, the Participant’s Account balances shall becanceled. 8.9.  **Change of Benefit Commencement Date.**A Participant shall elect the Benefit Commencement Dateat the time the initial deferral election is submitted. A Participant may subsequently changesuch election as long as:
 (a)  Such election does not accelerate the time or schedule of any Benefit Payment;
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 (b)  Such election does not take effect until at least 12 months after the date onwhich the election is made;  (c)  The first Benefit Payment with respect to such election must be deferred for aperiod of not less than five years from the date such Benefit Payment would otherwisehave been made; and  (d)  Such election is not made less than 12 months prior to the date of the firstscheduled or actual Benefit Payment.
   Such election shall be in a form prescribed for this purpose by the Administrator and signedby the Participant. Such election shall be deemed to be made when it shall have beenreceived by the Administrator or designated representative.
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**ARTICLE 9****BENEFICIARIES**
9.1.  **Automatic Beneficiary.**Unless a Participant has designated a Beneficiary in accordance withthe provisions of Article 9.2, the Beneficiary shall be deemed to be the person or persons inthe first of the following classes in which there are any survivors of such Participant:
 (a)  spouse at the time of Participant’s death,  (b)  issue, per stirpes,  (c)  parents, or  (d)  executor or administrator of Participant’s estate.
9.2.  **Designated Beneficiary or Beneficiaries.**A Participant may designate the Beneficiary orBeneficiaries to receive any benefit payable under Article 8.3, using a form provided by theAdministrator. In the event a Participant dies at a time when a designation is on file whichdoes not dispose of the total benefit payable under Article 8.3, then the portion of suchbenefit payable on behalf of said Participant, the disposition of which was not determined bythe deceased’s designation, shall be paid to a Beneficiary determined under Article 9.1. Anyambiguity in a Beneficiary designation shall be resolved by the Administrator.
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**ARTICLE 10****RIGHTS OF PARTICIPANTS AND BENEFICIARIES**
10.1.  **Creditor Status of Participant and Beneficiary.**The Plan constitutes the unfunded, unsecuredpromise of the Bank to make Benefit Payments to each Participant and Beneficiary in the futureand shall be a liability solely against the general assets of the Bank. The Bank shall not berequired to segregate, set aside or escrow any amounts for the benefit of any Participant orBeneficiary. Each Participant and Beneficiary shall have the status of a general unsecuredcreditor of the Bank and may look only to the Bank and their general assets for BenefitPayments under the Plan. 10.2.  **Rights with Respect to a Trust.**Any trust and any assets held thereby to assist the Bank inmeeting their obligations under the Plan shall in no way be deemed to controvert theprovisions of Article 10.1. 10.3.  **Investments.**In its sole discretion, the Bank may acquire insurance policies, annuities orother financial vehicles for the purpose of providing future assets of the Bank to meet theiranticipated liabilities under the Plan. Such policies, annuities or other investments shallat all times be and remain unrestricted general property and assets of the Bank or property ofa trust. Participants and Beneficiaries shall have no rights, other than as generalcreditors, with respect to such policies, annuities or other acquired assets.
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**ARTICLE 11****TRUST**
11.1.  **Establishment of Trust.**Notwithstanding any other provision or interpretation of the Plan,the Bank may establish a trust in which to hold cash, insurance policies or other assets to beused to make, or reimburse the Bank, as applicable, for Benefit Payments to the Participantsor Beneficiaries. Any trust assets shall at all times remain subject to the claims of generalcreditors of the Bank in the event of their insolvency as more fully described in the trust. 11.2.  **Obligations of the Bank.**Notwithstanding the fact that a trust may be established underArticle 11.1, the Bank shall remain liable for paying the benefits under the Plan. However,any payment of benefits to a Participant or a Beneficiary made by such a trust shall satisfythe Bank’s obligation to make such payment to such person. 11.3.  **Trust Terms.**A trust established under Article 11.1 may be revocable by the Bank provided;however, that such a trust may become irrevocable in accordance with its terms in the event ofa Change in Control. Such a trust may contain such other terms and conditions as the Bank maydetermine to be necessary or desirable. The Bank may terminate or amend a trust establishedunder Article 11.1 at any time, and in any manner it deems necessary or desirable, subject tothe preceding sentence and the terms of any agreement under which any such trust isestablished or maintained.
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**ARTICLE 12****CLAIMS PROCEDURE**
12.1.  **Claim for Benefits.**Any claim for benefits under the Plan shall be made in writing to theAdministrator in such a manner as the Administrator shall reasonably prescribe. TheAdministrator shall process each such claim and determine entitlement to benefits within 30days following the receipt of a completed application for benefits unless specialcircumstances require an extension of time for processing the claim. If such an extension oftime for processing is required, written notice of the extension shall be furnished to theclaimant prior to the termination of the initial 30-day period. In no event shall suchextension exceed a period of 30 days from the end of such initial period. The extensionnotice shall indicate the special circumstances requiring an extension of time and the date asof which the Administrator expects to render the final decision. 12.2.  **Denial of a Claim**. If such a claim is wholly or partially denied by the Administrator, theAdministrator shall notify the claimant of the denial of the claim in writing, delivered inperson or mailed by first class mail to the claimant’s last known address. Such notice ofdenial shall contain:
 (a)  the specific reason or reasons for denial of the claim,  (b)  a reference to the relevant Plan provisions upon which the denial is based,  (c)  a description of any additional material or information necessary for theclaimant to perfect the claim, together with an explanation of why such material orinformation is necessary and  (d)  an explanation of the Plan’s claim review procedure.
 If no such notice is provided, and if the claim has not been granted within the timespecified above for approval of the claim, the claim shall be deemed denied and subject toreview as described below. The interpretations, determinations and decisions of theAdministrator shall be final and binding upon all persons with respect to any right, benefitand privilege hereunder, subject to the review procedures set forth in this Article 12. 12.3.  **Request for Review of a Denial of a Claim for Benefits.**Any claimant or authorizedrepresentative of the claimant whose claim for benefits under the Plan has been denied ordeemed denied, in whole or in part, by the Administrator may upon written notice delivered tothe Appeals Committee request a review by the Appeals Committee of such denial ofParticipant’s claim for benefits. Such claimant shall have 60 days from the date the claim isdeemed denied, or 180 days from receipt of the notice denying the claim, as the case may be,in which to request such a review. The claimant’s notice must specify the relief requestedand the reason such claimant believes the denial should be reversed. 12.4.  **Appeals Procedure.**The Appeals Committee is hereby authorized to review the facts andrelevant documents, including the Plan document, to interpret the Plan and other relevantdocuments and to render a decision on the appeal of the claimant. Such review
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   may be made bywritten briefs submitted by the claimant and the Administrator or at a hearing, or by both, asshall be deemed necessary by the Appeals Committee. Upon receipt of a request for review, theAppeals Committee shall schedule a hearing to be held (subject to reasonable schedulingconflicts) not less than 30 nor more than 45 days from the receipt of such request. The dateand time of such hearing shall be designated by the Appeals Committee upon not less than 15days notice to the claimant and the Administrator unless both accept shorter notice. Thenotice shall specify that such claimant must indicate, in writing, at least five days inadvance of the time established for such hearing, claimant’s intention to appear at theappointed time and place, or the hearing will automatically be canceled. The reply shallspecify any other persons who will accompany claimant to the hearing, or such other personswill not be admitted to the hearing. The Appeals Committee shall make every effort toschedule the hearing on a day and at a time which is convenient to both the claimant and theAdministrator. The hearing will be scheduled at the Bank’s headquarters unless the AppealsCommittee determines that another location would be more appropriate. The Bank shall providethe claimant, upon request and free of charge, reasonable access to and copies of alldocuments, records and other information relevant (as defined in applicable ERISA regulations)to the claimant’s claim for benefits and claimant may submit issues and comments in writingprior to or during the hearing.
12.5.  **Decision upon Review of Denial of Claim for Benefits.**After the review has been completed,the Appeals Committee shall render a decision, in writing, a copy of which shall be sent toboth the claimant and the Administrator. In making its decision, the Appeals Committee shallhave full power, authority, and discretion to determine any and all questions of fact, resolveall questions of interpretation of this instrument or related documents which may arise underany of the provisions of the Plan or such documents as to which no other provision fordetermination is made hereunder, and exercise all other powers and discretions necessary to beexercised under the terms of the Plan which it is herein given or for which no contraryprovision is made and to determine the right to benefits of, and the amount of benefits, ifany, payable to, any person in accordance with the provisions of the Plan. The AppealsCommittee shall render a decision on the claim review promptly, but not more than 45 daysafter the receipt of the claimant’s request for review, unless a hearing is held, in whichcase the 45-day period shall be extended to 30 days after the date of the hearing. Suchdecision shall include specific reasons for the decision, written in a manner calculated to beunderstood by the claimant, shall contain specific references to the pertinent provisions ofthe Plan and related documents upon which the decision is based, and shall state that theclaimant is entitled to receive, upon request and free of charge, reasonable access to andcopies of all documents, records and other information relevant (as defined in applicableERISA regulations) to the claimant’s claim for benefits. The decision on review shall befurnished to the claimant within the appropriate time described above. If the decision onreview is not furnished within such time, the claim shall be deemed denied on review at theend of such period. There shall be no further appeal from a decision rendered by the AppealsCommittee. The decision of the Appeals Committee shall be final and binding in all respectson the Administrator, the Bank and the claimant. Except as otherwise provided by law, thereview procedures of this Article 12 shall be the claimant’s sole and exclusive remedy andshall be in lieu of all actions at law, in equity, pursuant to arbitration or otherwise.
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12.6.  **Establishment of Appeals Committee.**The Board shall appoint the members of an AppealsCommittee which shall consist of three or more members. The members of the Appeals Committeeshall remain in office at the will of the Board, and the Board, from time to time, may removeany of said members of the Appeals Committee with or without cause. A member of the AppealsCommittee may resign upon written notice to the remaining member or members of the AppealsCommittee and to the Board, respectively. The fact that a person is a Participant shall notdisqualify them from acting as a member of the Appeals Committee, nor shall any member of theAppeals Committee be disqualified from acting on any question because of Participant’sinterest therein, except that no member of the Appeals Committee may act on any claim whichsuch member has brought as a Participant or Beneficiary under the Plan. In the case of death,resignation or removal of any member of the Appeals Committee, the remaining members shall actuntil a successor-member shall be appointed by the Board. At the Administrator’s request, theSenior Vice President of Human Resources of the Bank shall notify the Administrator in writingof the names of the original members of the Appeals Committee, of any and all changes in themembership of the Appeals Committee, of the member designated as Chairman, and the memberdesignated as Secretary, and of any changes in either office. Until notified of a change, theAdministrator shall be protected in assuming that there has been no change in the membershipof the Appeals Committee or the designation of Chairman or of Secretary since the lastnotification was filed with it. The Administrator shall be under no obligation at any time toinquire into the membership of the Appeals Committee or its officers. All communications tothe Appeals Committee shall be addressed to its Secretary at the address of the Bank. Unlessthe Board shall appoint others as the Appeals Committee, the three Board members with thelongest period of active service on the Board shall constitute such Appeals Committee. 12.7.  **Operations of Appeals Committee.**On all matters and questions, a decision of a majority ofthe members of the Appeals Committee shall govern and control. Meetings may be held in personor by electronic means. In lieu of a meeting, decisions may be made by unanimous writtenconsent. The Appeals Committee shall appoint one of its members to act as its Chairman andanother member to act as Secretary. The terms of office of these members shall be determinedby the Appeals Committee, and either or both the Secretary and Chairman may be removed by theother members of the Appeals Committee for any reason which such other members may deem justand proper. The Secretary shall do all things directed by the Appeals Committee. Althoughthe Appeals Committee shall act by decision of a majority of its members as above provided,nevertheless in the absence of written notice to the contrary, every person may deal with theSecretary and consider the Secretary’s acts as having been authorized by the AppealsCommittee. Any notice served or demand made on the Secretary shall be deemed to have beenserved or made upon the Appeals Committee.
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**ARTICLE 13****ADMINISTRATION**
13.1.  **Appointment of Administrator.**The Board shall appoint the Administrator which shall be anyperson(s), corporation or partnership (including the Bank itself) as the Board shall deemdesirable in its sole discretion. The Administrator may be removed or resign upon 30 dayswritten notice or such lesser period of notice as is mutually agreeable. Unless the Boardappoints another Administrator, the Executive Committee shall be the Administrator. 13.2.  **Powers and Duties of the Administrator.**Except as expressly otherwise set forth herein, theAdministrator shall have the authority and responsibility granted or imposed on an“administrator” by ERISA. The Administrator shall determine any and all questions of fact,resolve all questions of interpretation of the Plan which may arise under any of theprovisions of the Plan as to which no other provision for determination is made hereunder, andexercise all other powers and discretions necessary to be exercised under the terms of thePlan which it is herein given or for which no contrary provision is made. The Administratorshall have full power and discretion to interpret the Plan and related documents, to resolveambiguities, inconsistencies and omissions, to determine any question of fact, and todetermine the rights and benefits, if any, of any Participant, or other applicant, inaccordance with the provisions of the Plan. Subject to the provisions of any claims procedurehereunder, the Administrator’s decision with respect to any matter shall be final and bindingon all parties concerned, and neither the Administrator nor any of its directors, officers,employees or delegates nor, where applicable, the directors, officers or employees of anydelegate, shall be liable in that regard except for gross abuse of the discretion given it andthem under the terms of the Plan. All determinations of the Administrator shall be made in auniform, consistent and nondiscriminatory manner with respect to all Participants andBeneficiaries in similar circumstances. The Administrator, from time to time, may designateone or more persons or agents to carry out any or all of its duties hereunder. 13.3.  **Engagement of Advisors.**The Administrator may employ actuaries, attorneys, accountants,brokers, employee benefit consultants, and other specialists to render advice concerning anyresponsibility the Administrator, Appeals Committee or Executive Committee has under the Plan.Such persons may also be advisors to the Bank. 13.4.  **Payment of Costs and Expenses.**The costs and expenses incurred in the administration of thePlan shall be paid in either of the following manners as determined by the Bank in its solediscretion:
 (a)  The expenses may be paid directly by the Bank; or  (b)  The expenses may be paid out of the trust, if any (subject to any restrictioncontained in such trust or required by law).
 Such costs and expenses include those incident to the performance of the responsibilities ofthe Administrator, Appeals Committee or Executive Committee, including but not limited to,claims, administration fees and costs, fees of accountants, legal counsel and otherspecialists, bonding expenses, and other costs of administering the Plan. Notwithstandingthe foregoing, in no event will any person serving in the capacity of Administrator, AppealsCommittee member or Executive Committee member who is a full-time employee of the Bank beentitled to any compensation for such services.
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**ARTICLE 14****AMENDMENT AND TERMINATION**
14.1.  **Power to Amend or Terminate.**Except as otherwise provided herein following a Change inControl, the Plan may be amended by the Bank at any time, and may be terminated by the Bank atany time, but no such amendment, modification or termination shall reduce the amounts creditedto the SERP and Deferral Accounts of any Participant, determined as of the date of suchamendment, modification or termination. Such amendment or termination shall be in writing,executed by two or more Board members whose actions are authorized or ratified by the Board.The Plan may not be amended (but may be terminated) during the two-year period following aChange in Control except that amendments may be made as required by law. Notwithstanding theforegoing, the Bank may amend this Plan in any manner that it deems necessary to comply withCode Section 409A or Department of the Treasury guidance published with respect thereto. 14.2.  **Effects of Plan Termination.**If the Plan is terminated, then, on and after the effectivedate of such termination, all deferrals and allocations hereunder shall cease.Notwithstanding the Plan’s termination, each Participant’s SERP Account (if vested) andDeferral Account balances shall be paid solely in accordance with Articles 7.1 through 7.4 andArticles 8.1 through 8.7 and with the then current Benefit Payment election of eachParticipant, as if the Plan had continued in effect. 14.3.  **No Liability for Plan Amendment or Termination.**Neither the Bank, nor any officer, nor anyBoard member thereof shall have any liability as a result of the amendment or termination ofthe Plan. Without limiting the generality of the foregoing, the Bank shall have no liabilityfor terminating the Plan notwithstanding the fact that a Participant may have expected to havefuture allocations made on Participant’s behalf hereunder had the Plan remained in effect.
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**ARTICLE 15****MISCELLANEOUS**
15.1.  **Non-Alienation.**No benefits or amounts credited to any SERP or Deferral Account under thePlan shall be subject in any manner to be anticipated, alienated, sold, transferred, assigned,pledged, encumbered, attached, garnished or charged in any manner (either at law or inequity), and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,attach, garnish or charge the same shall be void; nor shall any such benefits or amounts inany manner be liable for or subject to the debts, contracts, liabilities, engagements or tortsof the person entitled to such benefits or amounts as are herein provided to Participant. 15.2.  **Tax Withholding.**The Bank may withhold from a Participant’s compensation or any paymentmade by it under the Plan such amount or amounts as may be required for purposes of complyingwith the tax withholding or other provisions of the Code or the Social Security Act or anystate or local income or employment tax act or for purposes of paying any estate, inheritanceor other tax attributable to any amounts payable hereunder. 15.3.  **Incapacity.**If the Administrator determines that any Participant or other person entitledto payments under the Plan is incompetent by reason of physical or mental disability and isconsequently unable to give a valid receipt for payments made hereunder, or is a minor, theAdministrator may order the payments becoming due to such person to be made to another personfor the Participant’s benefit, without responsibility on the part of the Administrator tofollow the application of amounts so paid. Payments made pursuant to this Article shallcompletely discharge the Administrator, the Bank and the Appeals Committee with respect tosuch payments. 15.4.  **Administrative Forms.**All applications, elections and designations in connection with thePlan made by a Participant or other person shall become effective only when duly executed onforms or via the Plan’s Participant Access System as provided by the Administrator and filedwith the Administrator. 15.5.  **Independence of Plan.**Except as otherwise expressly provided herein, the Plan shall beindependent of, and in addition to, any other benefit agreement or plan of the Bank or anyrights that may exist from time to time thereunder. 15.6.  **No Employment Rights Created.**The Plan shall not be deemed to constitute a contractconferring upon any Participant the right to remain employed by the Bank for any period oftime. 15.7.  **Responsibility for Legal Effect.**Neither the Bank, the Administrator, the ExecutiveCommittee, Appeals Committee, nor any officer, member, delegate or agent of any of them, makesany representations or warranties, express or implied, or assumes any responsibilityconcerning the legal, tax, or other implications or effects of the Plan. Without limiting thegenerality of the foregoing, the Bank shall not have any liability for the tax liability whicha Participant may incur resulting from participation in the Plan or the payment of benefitshereunder.
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15.8.  **Limitation of Duties.**The Bank, the Executive Committee, the Administrator, the AppealsCommittee, and their respective officers, members, employees and agents shall have no duty orresponsibility under the Plan other than the duties and responsibilities expressly assigned tothem herein or delegated to them pursuant hereto. None of them shall have any duty orresponsibility with respect to the duties or responsibilities assigned or delegated to anotherof them. 15.9.  **Limitation of Sponsor Liability.**Any right or authority exercisable by the Bank, pursuantto any provision of the Plan, shall be exercised in the Bank’s capacity as sponsor of thePlan, or on behalf of the Bank in such capacity, and not in a fiduciary capacity, and may beexercised without the approval or consent of any person in a fiduciary capacity. Neither theBank, nor any of its respective officers, members, employees, agents and delegates, shall haveany liability to any party for its exercise of any such right or authority. 15.10.  **Successors.**The terms and conditions of the Plan shall inure to the benefit of and bind theBank and their successors, the Participants, their Beneficiaries and the personalrepresentatives of the Participants and their Beneficiaries. 15.11.  **Controlling Law.**The Plan shall be construed in accordance with the laws of the State ofWisconsin to the extent not preempted by laws of the United States. 15.12.  **Notice.**Any notice or filing required or permitted to be given to the Committee under thePlan shall be sufficient if in writing and hand-delivered, or sent by registered or certifiedmail, to the address below:       Baylake Bank  217 North 4th Avenue  P. O. Box 9  Sturgeon Bay, Wisconsin 54235 Attn: Administrator, Baylake Bank   Supplemental Executive Retirement Plan
15.13.  **Headings and Titles.**The Article headings and titles of Articles used in the Plan are forconvenience of reference only and shall not be considered in construing the Plan. 15.14.  **General Rules of Construction.**The masculine gender shall include the feminine and neuter,and vice versa, as the context shall require. The singular number shall include the plural,and vice versa, as the context shall require. The present tense of a verb shall include thepast and future tenses, and vice versa, as the context may require. 15.15.  **Severability.**In the event that any provision or term of the Plan, or any agreement orinstrument required by the Administrator, is determined by a judicial, quasi-judicial oradministrative body to be void or not enforceable for any reason, all other provisions orterms of the Plan or such agreement or instrument shall remain in full force and effect andshall be enforceable as if such void or nonenforceable provision or term had never been a partof the Plan, or such agreement or instrument except as to the extent the
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   Administratordetermines such result would have been contrary to the intent of the Bank in establishing andmaintaining the Plan.
15.16.  **Indemnification.**The Bank shall indemnify, defend, and hold harmless any Executive, officeror Board member of the Bank for all acts taken or omitted in carrying out the responsibilitiesof the Bank, Executive Committee, Administrator or Appeals Committee under the terms of thePlan. This indemnification for all such acts taken or omitted is intentionally broad, butshall not provide indemnification for any civil penalty that may be imposed by law, nor shallit provide indemnification for embezzlement or diversion of Plan funds for the benefit of anysuch individual. The Bank shall indemnify any such individual for expenses of defending anaction by a Participant, Beneficiary, service provider, government entity or other person,including all legal fees and other costs of such defense. The Bank shall also reimburse anysuch individual for any monetary recovery in a successful action against such individual inany federal or state court or arbitration. In addition, if a claim is settled out of courtwith the concurrence of the Bank, the Bank shall indemnify any such individual for anymonetary liability under any such settlement, and the expenses thereof. Such indemnificationwill not be provided to any person who is not a present or former Executive, officer or Boardmember of the Bank nor shall it be provided for any claim by a participating Bank against anysuch individual.
IN WITNESS WHEREOF, Baylake Bank, by its appropriate officers duly authorized, has caused the Planto be executed and adopted as of March 1, 2005.
Baylake Bank       By   Date:       Chief Executive Officer    
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