EX-10.4 EMPLOYEE STOCK OWNERSHIP PLAN





Exhibit 10.4



NORTHWEST SAVINGS BANK




EMPLOYEE STOCK OWNERSHIP PLAN




 






As Amended and Restated Effective January 1, 1997




 

















 








NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




          This Employee Stock Ownership Plan, as amended and restated, executed on the 15th day of
November, 2000, by Northwest Savings Bank, a Pennsylvania chartered savings bank (the “Bank”),



W I T N E S S E T H  T H A T




          WHEREAS, the board of directors of the Bank has resolved to amend and restate the Northwest
Savings Bank Employee Stock Ownership Plan (the “Plan”).



          NOW, THEREFORE, the Bank hereby adopts the following amended and restated Plan setting forth
the terms and conditions pertaining to contributions by the Employer and the payment of benefits to
Participants and Beneficiaries, effective January 1, 1997, unless otherwise noted.



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



	 	 	 	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Gregory C. LaRocca
 

Gregory C. LaRocca

	 	 	 	By:
	 	/s/ John O. Hanna
 

John O. Hanna
	 	 
	Secretary

	 	 	 	 	 	Chairman	 	 

















 








CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	Section 1. Plan Identity	 	 	-1-	 
	 
	 	1.1	 	Name	 	 	-1-	 
	 
	 	1.2	 	Purpose	 	 	-1-	 
	 
	 	1.3	 	Effective Date	 	 	-1-	 
	 
	 	1.4	 	Fiscal Period	 	 	-1-	 
	 
	 	1.5	 	Single Plan for All Employers	 	 	-1-	 
	 
	 	1.6	 	Interpretation of Provisions	 	 	-1-	 
	 
	 	 	 	 	 	 	 	 
	Section 2. Definitions	 	 	-2-	 
	 
	 	 	 	 	 	 	 	 
	Section 3.	 	Eligibility for Participation	 	 	-13-	 
	 
	 	3.1	 	Initial Eligibility	 	 	-13-	 
	 
	 	3.2	 	Definition of Eligibility Year	 	 	-14-	 
	 
	 	3.3	 	Terminated Employees	 	 	-14-	 
	 
	 	3.4	 	Certain Employees Ineligible	 	 	-14-	 
	 
	 	3.5	 	Participation and Reparticipation	 	 	-14-	 
	 
	 	 	 	 	 	 	 	 
	Section 4.	 	Employer Contributions and Credits	 	 	-15-	 
	 
	 	4.1	 	Discretionary Contributions	 	 	-15-	 
	 
	 	4.2	 	Contributions for Stock Obligations	 	 	-15-	 
	 
	 	4.3	 	Definitions Related to Contributions	 	 	-16-	 
	 
	 	4.4	 	Conditions as to Contributions	 	 	-16-	 
	 
	 	 	 	 	 	 	 	 
	Section 5.	 	Limitations on Contributions and Allocations	 	 	-17-	 
	 
	 	5.1	 	Limitation on Annual Additions	 	 	-17-	 
	 
	 	5.2	 	Coordinated Limitation With Other Plans	 	 	-20-	 
	 
	 	5.3	 	Effect of Limitations	 	 	-21-	 
	 
	 	5.4	 	Limitations as to Certain Participants	 	 	-21-	 
	 
	 	 	 	 	 	 	 	 
	Section 6.	 	Trust Fund and Its Investment	 	 	-22-	 
	 
	 	6.1	 	Creation of Trust Fund	 	 	-22-	 
	 
	 	6.2	 	Stock Fund and Investment Fund	 	 	-22-	 
	 
	 	6.3	 	Acquisition of Stock	 	 	-23-	 
	 
	 	6.4	 	Participants’ Option to Diversify	 	 	-24-	 
	 
	 	 	 	 	 	 	 	 
	Section 7.	 	Voting Rights and Dividends on Stock	 	 	-26-	 
	 
	 	7.1	 	Voting and Tendering of Stock	 	 	-26-	 
	 
	 	7.2	 	Dividends on Stock	 	 	-27-	 
















 






	 	 	 	 	 	 	 	 	 
	Section 8.	 	Adjustments to Accounts	 	 	-28-	 
	 
	 	8.1    	 	Adjustments for Transactions	 	 	-28-	 
	 
	 	8.2    	 	Valuation of Investment Fund	 	 	-28-	 
	 
	 	8.3    	 	Adjustments for Investment Experience	 	 	-29-	 
	 
	 	 	 	 	 	 	 	 
	Section 9.	 	Vesting of Participants’ Interests	 	 	-29-	 
	 
	 	9.1    	 	Deferred Vesting in Accounts	 	 	-29-	 
	 
	 	9.2    	 	Computation of Vesting Years	 	 	-29-	 
	 
	 	9.3    	 	Full Vesting Upon Certain Events	 	 	-30-	 
	 
	 	9.4    	 	Full Vesting Upon Plan Termination	 	 	-33-	 
	 
	 	9.5    	 	Forfeiture, Repayment, and Restoral	 	 	-33-	 
	 
	 	9.6    	 	Accounting for Forfeitures	 	 	-33-	 
	 
	 	9.7    	 	Vesting and Nonforfeitability	 	 	-34-	 
	 
	 	 	 	 	 	 	 	 
	Section 10.	 	Payment of Benefits	 	 	-34-	 
	 
	 	10.1  	 	Benefits for Participants	 	 	-34-	 
	 
	 	10.2  	 	Time for Distribution	 	 	-35-	 
	 
	 	10.3  	 	Marital Status	 	 	-37-	 
	 
	 	10.4  	 	Delay in Benefit Determination	 	 	-38-	 
	 
	 	10.5  	 	Accounting for Benefit Payments	 	 	-38-	 
	 
	 	10.6  	 	Form of Distribution	 	 	-38-	 
	 
	 	10.7  	 	Restrictions on Disposition of Stock	 	 	-40-	 
	 
	 	10.8  	 	Continuing Loan Provisions; Creations of Protections and Rights	 	 	-40-	 
	 
	 	10.9  	 	Direct Rollover of Eligible Distribution	 	 	-41-	 
	 
	 	10.10	 	Waiver of 30-Day Period After Notice of Distribution	 	 	-42-	 
	 
	 	 	 	 	 	 	 	 
	Section 11.	 	Rules Governing Benefit Claims and Review of Appeals	 	 	-42-	 
	 
	 	11.1  	 	Claim for Benefits	 	 	-42-	 
	 
	 	11.2  	 	Notification by Committee	 	 	-42-	 
	 
	 	11.3  	 	Claims Review Procedure	 	 	-43-	 
	 
	 	 	 	 	 	 	 	 
	Section 12.	 	The Committee and Its Functions	 	 	-43-	 
	 
	 	12.1  	 	Authority of Committee	 	 	-43-	 
	 
	 	12.2  	 	Identity of Committee	 	 	-44-	 
	 
	 	12.3  	 	Duties of Committee	 	 	-44-	 
	 
	 	12.4  	 	Valuation of Stock	 	 	-45-	 
	 
	 	12.5  	 	Compliance with ERISA	 	 	-45-	 
	 
	 	12.6  	 	Action by Committee	 	 	-45-	 
	 
	 	12.7  	 	Execution of Documents	 	 	-45-	 
	 
	 	12.8  	 	Adoption of Rules	 	 	-46-	 
	 
	 	12.9  	 	Responsibilities to Participants	 	 	-46-	 
	 
	 	12.10	 	Alternative Payees in Event of Incapacity	 	 	-46-	 
	 
	 	12.11	 	Indemnification by Employers	 	 	-47-	 
	 
	 	12.12	 	Nonparticipation by Interested Member	 	 	-47-	 
	 
	 	 	 	 	 	 	 	 
	Section 13.	 	Adoption, Amendment, or Termination of the Plan	 	 	-47-	 
	 
	 	13.1  	 	Adoption of Plan by Other Employers	 	 	-47-	 
	 
	 	13.2  	 	Adoption of Plan by Successor	 	 	-47-	 
	 
	 	13.3  	 	Plan Adoption Subject to Qualification	 	 	-48-	 
















 






	 	 	 	 	 	 	 	 	 
	 
	 	13.4   	 	Right to Amend or Terminate	 	 	-48-	 
	 
	 	 	 	 	 	 	 	 
	Section 14.	 	Miscellaneous Provisions	 	 	-49-	 
	 
	 	14.1   	 	Plan Creates No Employment Rights	 	 	-49-	 
	 
	 	14.2   	 	Nonassignability of Benefits	 	 	-49-	 
	 
	 	14.3   	 	Limit of Employer Liability	 	 	-50-	 
	 
	 	14.4   	 	Treatment of Expenses	 	 	-50-	 
	 
	 	14.5   	 	Number and Gender	 	 	-50-	 
	 
	 	14.6   	 	Nondiversion of Assets	 	 	-50-	 
	 
	 	14.7   	 	Separability of Provisions	 	 	-50-	 
	 
	 	14.8   	 	Service of Process	 	 	-51-	 
	 
	 	14.9   	 	Governing State Law	 	 	-51-	 
	 
	 	14.10 	 	Employer Contributions Conditioned on Deductibility	 	 	-51-	 
	 
	 	14.11 	 	Unclaimed Accounts	 	 	-51-	 
	 
	 	14.12 	 	Qualified Domestic Relations Order	 	 	-52-	 
	 
	 	 	 	 	 	 	 	 
	Section 15.	 	Top-Heavy Provisions	 	 	-53-	 
	 
	 	15.1   	 	Top-Heavy Plan	 	 	-53-	 
	 
	 	15.2   	 	Super Top-Heavy Plan	 	 	-54-	 
	 
	 	15.3   	 	Definitions	 	 	-54-	 
	 
	 	15.4   	 	Top-Heavy Rules of Application	 	 	-56-	 
	 
	 	15.5   	 	Top-Heavy Ratio	 	 	-57-	 
	 
	 	15.6   	 	Minimum Contributions	 	 	-58-	 
	 
	 	15.7   	 	Minimum Vesting	 	 	-59-	 
	 
	 	15.8   	 	Top-Heavy Provisions Control in Top-Heavy Plan	 	 	-59-	 

















 








NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




Section 1. Plan Identity.




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




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




          1.3          Effective Date. The initial Effective Date of this Plan is January 1, 1994. The
Effective Date of the amended and restated Plan is January 1, 1997, unless otherwise noted herein.




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




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




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














 





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




Section 2. Definitions.




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




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




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




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




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




          “Break in Service” means any Vesting Year, or, for the initial eligibility computation period
under Section 3.2, the 12-consecutive month period beginning on the first day on which an Employee
has an Hour of Service, in which an Employee has 500 or fewer Hours of Service.




          Solely for this purpose, an Employee shall be considered employed for his normal hours
of paid employment during a Recognized Absence, unless he does not resume his Service at the end
of the




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Recognized Absence. Further, if an Employee is absent for any period beginning on or after
January 1, 1985, (i) by reason of the Employee’s pregnancy, (ii) by reason of the birth of the
Employee’s child, (iii) by reason of the placement of a child with the Employee in connection with
the Employee’s adoption of the child, or (iv) for purposes of caring for such child for a period
beginning immediately after such birth or placement, the Employee shall be credited with the Hours
of Service which would normally have been credited but for such absence, up to a maximum of 501
Hours of Service.




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




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




          “Company” means Northwest Bancorp, Inc., the stock holding company of the Bank.




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




-3-









 




Committee’s good faith decision as to whether a
Participant’s Service has been terminated by Disability shall be final and conclusive.




          “Early Retirement” means retirement on or after a Participant’s attainment of age 55
and the completion of fifteen years of Service for an Employer or retirement at any time after
completion of twenty-five years of Service for an Employer.




          “Effective Date.” The initial Effective Date was January 1, 1994. The Effective Date of
this amendment and restatement shall be January 1, 1997, unless otherwise noted herein.




          “Employee” means any individual who is or has been employed or self-employed by an Employer.
“Employee” also means an individual employed by a leasing organization who, pursuant to an
agreement
between an Employer and the leasing organization, has performed services for the Employer and
any related persons (within the meaning of Section 414(n)(6) of the Code) on a substantially
full-time basis for more than one year, and such services are performed under primary direction or
control by the Employer. However, such a “leased employee” shall not be considered an Employee if
(i) he participates in a money purchase pension plan sponsored by the leasing organization which
provides for immediate participation, immediate full vesting, and an annual contribution of at
least 10 percent of the Employee’s Total Compensation, and (ii) leased employees do not constitute
more than 20 percent of the Employer’s total work force (including leased employees, but excluding
Highly Paid Employees and any other employees who have not performed services for the Employer on a
substantially full-time basis for at least one year). Notwithstanding anything herein to the
contrary, no leased employee shall be eligible to participate in the Plan as long as such employee
is employed by a leasing organization.




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




-4-









 







and adopts the Plan pursuant to Section 13.2. In addition, for purposes of crediting “Service”
under the Plan, the Employer shall include those entities set forth on Schedule A attached hereto
but only for the limited purposes, or with respect to the persons designated, therein.




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




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




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





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




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



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





          (a)          Each hour for which an Employee is paid or is entitled to be paid for services to an



-5-









 




Employer is an Hour of Service.





-6-











 






          (b)          Each hour for which an Employee is directly or indirectly paid or is entitled to be paid
for a period of vacation, holidays, illness, disability, lay-off, jury duty, temporary military
duty, or leave of absence is an Hour of Service. However, except as otherwise specifically
provided, no more than 501 Hours of Service shall be credited for any single continuous period
which an Employee performs no duties. Further, no Hours of Service shall be credited on account of
payments made solely under a plan maintained to comply with worker’s compensation, unemployment
compensation, or disability insurance laws, or to reimburse an Employee for medical expenses.




          (c)          Each hour for which back pay (ignoring any mitigation of damages) is either awarded or
agreed to by an Employer is an Hour of Service. However, no more than 501 Hours of Service shall
be credited for any single continuous period during which an Employee would not have performed any
duties.




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




          (e)          If an Employer finds it impractical to count the actual Hours of Service for any class or
group of non-hourly Employees, each Employee in that class or group shall be credited with 45
Hours of Service for each weekly pay period in which he has at least one Hour of Service. However,
an Employee shall be credited only for his normal working hours during a paid absence.




          (f)          Hours of Service to be credited on account of a payment to an Employee (including back
pay) shall be recorded in the period of Service for which the payment was made. If the period
overlaps two or more Plan Years, the Hours of Service credit shall be allocated in proportion to
the respective portions of the period included in the several Plan Years. However, in the case of
periods of 31 days or less, the Administrator may apply a uniform policy of crediting



-7-









 






the Hours of Service to either the first Plan Year or the second.




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




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



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



“Normal Retirement” means retirement on or after the later of a Participant’s attainment of
age 65.



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



“Plan Year” means the plan year commencing January 1, 1994 and ending December 31, 1994, and
each period of 12 consecutive months beginning on January 1 of each succeeding year.



“Recognized Absence” means a period for which —




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




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



-8-









 






          (c)          an Employee is on active military duty, but only to the extent that his employment rights
are protected by the Military Selective Service Act of 1967 (38 U.S.C. Sec. 2021).



“Service” means an Employee’s period(s) of employment or self-employment with an
Employer, excluding for initial eligibility purposes any period in which the individual was a
nonresident alien
and did not receive from an Employer any earned income which constituted income from sources
within the United States. An Employee’s Service shall include any service which constitutes
service with a predecessor employer within the meaning of Section 414(a) of the Code or as set
forth on Schedule A attached hereto. An Employee’s Service shall also include any service with an
entity which is not an Employer, but only either (i) for a period after 1975 in which the other
entity is a member of a controlled group of corporations or is under common control with other
trades and businesses within the meaning of Section 414(b) or 414(c) of the Code, and a member of
the controlled group or one of the trades and businesses is an Employer, (ii) for a period after
1979 in which the other entity is a member of an affiliated service group within the meaning of
Section 414(m) of the Code, and a member of the affiliated service group is an Employer, or (iii)
all employers aggregated with the Employer under Section 414(o) of the Code (but not until the
Proposed Regulations under Section 414(o) become effective). Notwithstanding any provision of this
Plan to the contrary, contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Code.



“Spouse” means the individual, if any, to whom a Participant is lawfully married on the date
benefit payments to the Participant are to begin, or on the date of the Participant’s death, if
earlier.



“Stock” means shares of the Company’s voting common stock or preferred stock meeting the
requirements of Section 409(e)(3) of the Code issued by an Employer or an affiliated corporation.



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



“Stock Obligation” means an indebtedness arising from any extension of credit to the Plan or
the



-9-









 





Trust which satisfies the requirements set forth in Section 6.3 and which was obtained for any or
all of the following purposes:






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





“Total Compensation” (a) shall mean:




          (i)     A Participant’s wages, salaries, fees for professional services and other
amounts received (without regard to whether an amount is paid in cash) for personal
services actually rendered in the course of employment with the Employer while a
Participant in the Plan, (including, but not limited to, commissions paid to
salesmen, compensation for services on the basis of a percentage of profits, and any
deferred compensation contributions made to this or any other Section 401(k) Plan on
behalf of the Participants).




          (ii)     Amounts described in sections 104(a)(3), 105(a), and 105(h), but only to
the extent that these amounts are includable in the gross income of the employee.




          (iii)     Amounts paid or reimbursed by the employer for moving expenses incurred
by an employee, but only to the extent that at the time of payment it is reasonable
to believe that these amounts are not deductible by the employee under section 217.




          (iv)     The value of a non-qualified stock option granted to an employee by the
employer, but only to the extent that the value of the option is includable in the
gross income of the employee for the taxable year in which granted.



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          (v)     The amount includable in the gross income of an employee upon making the
election described in section 83(b).




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



 
         (b)         The term “Total Compensation” does not include items such as:




          (i)     Contributions made by the Employer to a Plan of deferred compensation to
the extent that before the application of Section 415 limitations to the Plan, the
contributions are not includible in the gross income of the Employee for the taxable
year in which contributed, except for deferred compensation contributions made by
the Employer to a Section 401(k) Plan on behalf of the Participant. However, for
Plan Years beginning prior to 1998, for purposes of computing Code Section 415
annual additions, deferred compensation contributions made by the Employer to a
Section 401(k) Plan on behalf of a Participant shall be deducted from Total
Compensation. In addition, Employer contributions made on behalf of an Employee to
a simplified employee pension plan described in Code Section 408(k) are not
considered as compensation for the taxable year in which contributed to the extent
such contributions are deductible by the Employee under Code Section 219(b)(7).
Additionally, any distributions



-11-









 






from a Plan of deferred compensation are not
considered as compensation for Code Section 415 purposes, regardless of whether such
amounts are includible in the gross income of the Employee when distributed.
However, any amounts received by an Employee pursuant to an unfunded non-qualified
Plan may be considered as compensation for Code Section 415 purposes in the year
such amounts are includible 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 tax-qualified stock option.




          (iv)     Other amounts which receive special tax benefits, such as 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
Employer (whether or not under a salary reduction agreement) towards the purchase of
an annuity contract described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the Employee).




 
         (c)          For Plan
years beginning after December 31, 1993, Total Compensation in excess of $150,000
(as indexed) shall be disregarded for all Participants. Such amount shall be adjusted for
increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code, effective for
the Plan Year which begins within the applicable calendar year. For purposes of the $150,000
limit, Total Compensation shall be prorated over short plan years. In determining the Total
Compensation of a Participant for purposes of this limitation, the rules of Code Section 414(q)(6)
shall apply, except as set forth in Section 4.3 hereof. If as a result of the application of such
rules,



-12-









 






the adjusted $150,000 limitation is exceeded, then the limitation shall be prorated among
the affected individuals in proportion to each such individual’s Total Compensation, as determined
under this Section prior to the application of this limitation.



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



“Trust Agreement” means the agreement between the Bank and the Trustee concerning the
Trust Fund. If any assets of the Trust Fund are held in a co-mingled trust fund with assets of
other qualified retirement plans, “Trust Agreement” shall be deemed to include the trust
agreement governing that co-mingled trust fund. With respect to the allocation of investment
responsibility for the assets of the Trust Fund, the provisions of Section 2.4 of the Trust
Agreement are incorporated herein by reference.



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



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



“Valuation Date” means the last day of the Plan Year and each other date as of which the
committee shall determine the investment experience of the Investment Fund and adjust the
Participants’ accounts accordingly.



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



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



Section 3. Eligibility for Participation.




3.1 Initial Eligibility. An Employee shall enter the
Plan as of the Entry Date coinciding with



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or next following the later of the following dates:





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




     (b)     the Employee’s 21st birthday.


However, if an Employee is not in active Service with an Employer on the date he would otherwise
first enter the Plan, his entry shall be deferred until the next day he is in Service.




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




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




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



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



3.4     Certain Employees Ineligible. No
Employee shall participate in the Plan while his Service is covered by a collective bargaining
agreement between an Employer and the Employee’s collective bargaining representative if (i)
retirement benefits have been the subject of good faith bargaining between the Employer and the
representative and (ii) the collective bargaining agreement does not provide for the Employee’s
participation in the Plan. No Employee shall participate in the Plan while he is actually employed
by a leasing organization rather than an Employer.



3.5     Participation and Reparticipation.
Subject to the satisfaction of the foregoing requirements, an Employee shall participate in the
Plan during each period of his Service from the date on which he first becomes eligible until his
termination. For this purpose, an Employee returning within five



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years of his or her termination
who previously satisfied the initial eligibility requirements shall re-enter the Plan as of the
date of his return to Service with an Employer.




Section 4.     Employer Contributions and Credits.




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



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



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




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




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



          “Active Participant” means a Participant who has satisfied the eligibility requirements under
Section 3 and has completed 1,000 Hours of Service with the Employer during the Plan Year. However,
a Participant shall not qualify as an Active Participant unless (i) he is in active Service with an
Employer as of the last day of the Plan Year, or (ii) he is on a Recognized Absence as of that
date, or (iii) his Service terminated during the Plan Year by reason of Normal Retirement, Early
Retirement, Disability or death.



          “Cash Compensation” A Participant’s Cash Compensation shall equal a Participant’s Total
Compensation less any bonuses, overtime, commissions or shift pay paid to the participants. Cash
Compensation will include elective contributions made by the employer on the participant’s behalf.



          4.4     Conditions as to Contributions.
Employers’ contributions shall in all events be subject to the limitations set forth in Section 5.
Contributions may be made in the form of cash, or
securities and other property to the extent permissible under ERISA, including Stock, and
shall be held by the Trustee in accordance with the Trust Agreement. In addition to the provisions
of Section 13.3 for the return of an Employer’s contributions in connection with a failure of the
Plan to qualify initially under the Code, any amount contributed by an Employer due to a good faith
mistake of fact, or based upon a good faith but



-16-









 




erroneous determination of its deductibility under Section 404 of the Code, shall be returned to
the Employer within one year after the date on which the contribution was originally made, or
within one year after its nondeductibility has been finally determined. However, the amount to be
returned shall be reduced to take account of any adverse investment experience within the Trust
Fund in order that the balance credited to each Participant’s Account is not less that it would
have been if the contribution had never been made.




Section 5.     Limitations on Contributions and Allocations.




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




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




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




          (i)     If the Participant is covered by the Plan at the end of the Plan Year, any excess
amount at the end of the Plan Year that cannot be allocated to the Participant’s account
shall be used to reduce the Employer contribution for such Participant in the next



-17-









 






     limitation year and any succeeding limitation years, if necessary.




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




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




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




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



-18-









 






determined by the Commissioner of Internal Revenue for the calendar year beginning in that
limitation year.




               In the event Stock is released from the suspense account and allocated to a
Participant’s account for a particular Plan Year, the Employer shall determine for such year that
an annual addition will be calculated on the basis of the fair market value of the Stock so
released and allocated (such fair market value to be based on the valuation as of the Valuation
Date immediately preceding the Plan Year in respect of which the release and allocation are made)
if the annual addition, as so calculated, is lower than the annual addition calculated on the basis
of Employer contributions.




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



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



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



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



-19-









 






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



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




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



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




               5.2-2       A Participant’s defined benefit plan fraction with respect to a limitation year shall be
a fraction, (i) the numerator of which is his projected annual benefit payable at normal retirement
under





-20-









 







the Employers’ defined benefit plans, and (ii) the denominator of which is the lesser of (a)
1.25 times $90,000, or 1.0 times such dollar limitation if the Plan is top-heavy, and (b) 1.4 times
the Participant’s average Total Compensation during his highest-paid three consecutive limitation
years.




             5.2-3      Effective January 1, 2000, Section 5.2 shall be repealed.




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



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



          This restriction shall apply at all times to a Participant who owns (taking into account the
attribution rules under Section 318(a) of the Code, without regard to the exception for employee
plan trusts in Section 318(a)(2)(B)(i) more than 25 percent of any class of stock of a corporation
which issued the Stock acquired by the Plan, or another corporation within the same controlled
group, as defined in Section



-21-









 





409(l)(4) of the Code (any such class of stock hereafter called a
“Related Class”). For this purpose, a Participant who owns more than 25 percent of any Related
Class at any time within the one year preceding the Plan’s purchase of the Stock shall be subject
to the restriction as to all allocations of the Stock, but any other Participant shall be subject
to the restriction only as to allocations which occur at a time when he owns more than 25 percent
of any Related Class.




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



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



Section 6.      Trust Fund and Its Investment.




          6.1        Creation of Trust Fund. All amounts received
under the Plan from Employers and investments shall be held as the Trust Fund pursuant to the terms
of this Plan and of the Trust Agreement between the Bank and the Trustee. The benefits described
in this Plan shall be payable only from the assets of the Trust Fund. The Bank, any other
Employer, its board of directors or trustees, its stockholders, its officers, its employees, the
Committee, and the Trustee shall not be liable for payment of any benefit under this Plan except
from the Trust Fund.



          6.2       Stock Fund and Investment Fund. The
Trust Fund held by the Trustee shall be divided into the Stock Fund, consisting entirely of Stock,
and the Investment Fund, consisting of all assets of the Trust other than Stock. The Trustee shall
have no investment responsibility for the Stock Fund, but shall accept any Employer contributions
made in the form of Stock, and shall acquire, sell, exchange, distribute,



-22-









 





and otherwise deal with
and dispose of Stock in accordance with the instructions of the Committee. The Trustee shall have
full responsibility for the investment of the Investment Fund, except to the extent such
responsibility may be delegated from time to time to one or more investment managers pursuant to
Section 2.3 of the Trust Agreement, or to the extent the Committee directs the Trustee to purchase
Stock with the assets in the Investment Fund.



          6.3       Acquisition of Stock. From time to time
the Committee may, in its sole discretion, direct the Trustee to acquire Stock from the issuing
Employer or from shareholders, including shareholders who are or have been Employees, Participants,
or fiduciaries with respect to the Plan. The Trustee shall pay for such Stock no more than its
fair market value, which shall be determined conclusively by the Committee pursuant to Section
12.4. The Committee may direct the Trustee to finance the
acquisition of Stock by incurring or assuming indebtedness to the seller or another party
which indebtedness shall be called a “Stock Obligation”. The term “Stock Obligation” shall refer
to a loan made to the Plan by a disqualified person within the meaning of Section 4975(e)(2) of the
Code, or a loan to the Plan which is guaranteed by a disqualified person. A Stock Obligation
includes a direct loan of cash, a purchase-money transaction, and an assumption of an obligation of
a tax-qualified employee stock ownership plan under Section 4975(e)(7) of the Code (“ESOP”). For
these purposes, the term “guarantee” shall include an unsecured guarantee and the use of assets of
a disqualified person as collateral for a loan, even though the use of assets may not be a
guarantee under applicable state law. An amendment of a Stock Obligation in order to qualify as
an “exempt loan” is not a refinancing of the Stock Obligation or the making of another Stock
Obligation. The term “exempt loan” refers to a loan that satisfies the provisions of this
paragraph. A “non-exempt loan” fails to satisfy this paragraph. Any Stock Obligation shall be
subject to the following conditions and limitations:



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





-23-











 






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




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




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




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



          6.4    
Participants’ Option to Diversify. The Committee shall provide for a procedure under which each Participant may,
during the qualified election period, elect to “diversify” a portion of the Employer Stock
allocated to his Account, as provided in Section 401(a)(28)(B) of the Code. An election to
diversity must be made on the prescribed form and filed with the Committee within the period
specified herein. For each of the first five (5) Plan years in the qualified election period, the
Participant may elect to



-24-









 







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




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




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




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



-25-









 





Section 7.   
Voting Rights and Dividends on Stock.




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



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



-26-









 





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



          7.2    Dividends on Stock. Dividends on Stock which
are received by the Trustee in the form of additional Stock shall be retained in the Stock Fund,
and shall be allocated among the Participant’s Accounts and the Unallocated Stock Fund in
accordance with their holdings of the Stock on which the dividends have been paid. Dividends on
Stock credited to Participants’ Accounts which are received by the Trustee in the form of cash
shall, at the direction of the Employer paying the dividends, either (i) be credited to the
Accounts in accordance with Section 8.3 and (A) invested as part of the Investment Fund or (B) used
to purchase additional Stock for the Participant’s Account in the open market, (ii) be distributed
immediately to the Participants in proportion with the Participants’ Stock Fund Account balance
(iii) be distributed to the Participants within 90 days of the close of the Plan Year in which paid
in proportion with the Participants’ Stock Fund Account balance or (iv) be used to make payments on
the Stock Obligation. If dividends on Stock allocated to a Participant’s Account are used to repay
the Stock Obligation, Stock with a fair market value equal to the dividends so used must be
allocated to such Participant’s Account in lieu of the dividends. Dividends on Stock held in the
Unallocated Stock Fund which are received by the Trustee in the form of cash shall be allocated to
Participants’ Investment Fund Accounts (pro rata based on the Participant’s Account balance in
relation to all Participants’ Account balances) and shall be applied, at the direction of the
Employer, under one of the methods (i) — (iv) above. The election by the Employer as to the
treatment of dividends may be changed each time dividends are declared and paid. Moreover, each
time dividends are paid the Employer may elect a different treatment for dividends allocated
to Participant’s Accounts than for dividends allocated to the Unallocated Stock Fund, or may
elect to treat such dividends in the same manner.



-27-









 





Section 8.   
  Adjustments to Accounts.




            8.1     Adjustments for Transactions. An
Employer contribution pursuant to Section 4.1 shall be credited to the Participants’ Accounts as of
the last day of the Plan Year for which it is contributed, in accordance with Section 4.1. Stock
released from the Unallocated Stock Fund upon the Trust’s repayment of a Stock Obligation pursuant
to Section 4.2 shall be credited to the Participants’ Accounts as of the last day of the Plan Year
in which the repayment occurred, pro rata based on the cash applied from such Participant’s Account
relative to the cash applied from all Participants’ Accounts. Any excess amounts remaining from
the use of proceeds of a sale of Stock from the Unallocated Stock Fund to repay a Stock Obligation
shall be allocated as earnings of the Plan as of the last day of the Plan Year in which the
repayment occurred among the Participants’ Accounts in proportion to the opening balance in each
Account. Any benefit which is paid to a Participant or Beneficiary pursuant to Section 10 shall be
charged to the Participant’s Account as of the first day of the Valuation Period in which it is
paid. Any forfeiture or restoral shall be charged or credited to the Participant’s Account as of
the first day of the Valuation Period in which the forfeiture or restoral occurs pursuant to
Sections 9.5 and 9.6.



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



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current and preceding Valuation Dates.



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



Section 9.     Vesting of Participants’ Interests.




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



	 	 	 	 	 	 	 
	Vesting	 	 	 	Percentage of
	Years	 	 	 	Interest Vested
	 	 	 	 	 	 	 
	Fewer than 3	 	 
	 	 	0	%
	3	 	 
	 	 	20	%
	4	 	 
	 	 	40	%
	5	 	 
	 	 	60	%
	6	 	 
	 	 	80	%
	7 or more	 	 
	 	 	100	%






          9.2     Computation of Vesting Years. For
purposes of this Plan, a “Vesting Year” generally means a Plan Year in which an Employee has at
least 1,000 Hours of Service, beginning with the first Plan Year in which the Employee has
completed an Hour of Service with the Employer, and including Service with other employers as
provided in the definition of “Service” provided, however, that a Participant shall receive credit
for all Vesting Year of Service if the Participant has 1,000 Hours of Service for the Employer in
any calendar year prior to the adoption of the Plan. However, a Participant’s Vesting Years shall
be computed subject to the following conditions and qualifications:




            (a)    A Participant’s vested interest in his Account accumulated before five (5)



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




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




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




	 	 (i)	 	such Participant has any nonforfeitable interest in the accrued
benefit attributable to Employer contributions at the time of separation from
Service, or
	 
	 	 (ii)	 	upon returning to Service the number of consecutive 1-year
Breaks in Service is less than the number of years of Service.






     9.3      Full Vesting Upon Certain Events.




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




     9.3-2    The Participant’s interest in his Account shall also fully vest in
the event of a “Change in Control” of the Bank or the Company. For these purposes, “Change
in Control” shall mean an event of a nature that; (i) would be required to be reported in



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response to Item 1a of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”);
or (ii) results in a Change in Control of the Bank or the Company within the meaning of the
Bank Holding Company Act of 1956, as amended, and applicable rules and regulations
promulgated thereunder as in effect at the time of the Change in Control (collectively, the
“BHCA”); or (iii) without limitation such a Change in Control shall be deemed to have
occurred at such time as (a) any “Person” (as the term is used in Sections 13(d) and 14(d)
of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Bank or the Company
representing 25% or more of the Bank’s or the Company’s outstanding securities except for
any securities of the Bank purchased by the Company in connection with the conversion of the
Bank to the stock form and any securities purchased by the Bank’s employee stock ownership
plan and trust; or (b) individuals who constitute the Board on the date hereof (the
“Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided,
however, that this sub-section (b) shall not apply if the Incumbent Board is replaced by the
appointment by a Federal banking agency of a conservator or receiver for the Bank and,
provided further that any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board or whose nomination for election by the Company’s stockholders was approved
by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes of this clause (b),
considered as though he were a member of the Incumbent Board; or (c) a plan of
reorganization,



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merger, consolidation, sale of all or substantially all the assets of the
Bank or the Company; or (d) a proxy statement soliciting proxies from stockholders of the
Company, by someone other than the current management of the Company, seeking stockholder
approval of a plan of reorganization, merger or consolidation of the Company or Bank or
similar transaction with one or more corporations as a result of which the outstanding
shares of the class of securities then subject to such plan or transaction are exchanged for
or converted into cash or property or securities not issued by the Bank or the Company shall
be distributed and the requisite number of proxies approving such plan of reorganization,
merger or consolidation of the Company or Bank are received and voted in favor of such
transactions; or (e) a tender offer is made for 25% or more of the outstanding securities of
the Bank or Company and shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Bank or Company have tendered or offered to sell their shares
pursuant to such tender offer and such tendered shares have been accepted by the tender
offeror.




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



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          9.4     Full Vesting Upon Plan Termination.
Notwithstanding Section 9.1, a Participant’s interest in his Account shall fully vest
upon termination of this Plan or upon the permanent and complete discontinuance of
contributions by his Employer. In the event of a partial termination, the interest of each
affected Participant shall fully vest with respect to that part of the Plan which is terminated.



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



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



          9.6     Accounting
for Forfeitures. If a
portion of a Participant’s account is forfeited, Stock allocated to said Participant’s account
shall be forfeited only after other assets are forfeited. If interests in more than one class of
Stock have been allocated to a Participant’s account, the Participant must be treated



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as forfeiting
the same proportion of each class of Stock. A forfeiture shall be charged to the Participant’s
Account as of the first day of the first Valuation Period in which the forfeiture becomes certain
pursuant to
Section 9.5. Except as otherwise provided in that Section, a forfeiture shall be added to the
contributions of the terminated Participant’s Employer which are to be credited to other
Participants pursuant to Section 4.1 as of the last day of the Plan Year in which the forfeiture
becomes certain.



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



Section 10.    Payment of Benefits.




          10.1     Benefits for Participants. For a
Participant whose Service ends for any reason, distribution will be made to or for the benefit of
the Participant or, in the case of the Participant’s death, his Beneficiary, by either, or a
combination of the following methods:




10.1.1 By payment in a lump sum, in accordance with Section 10.2; or




10.1.2 By payment in a series of substantially equal annual installments over a
period not to exceed five (5) years, provided the maximum period over which the
distribution of a Participant’s Account may be made shall be extended by 1 year, up
to five (5) additional years, for each $140,000 ($145,000 in 1998) (or fraction
thereof) by which such Participant’s Account balance exceeds $710,000 ($725,000 in
1998) (the aforementioned figures are subject to cost-of-living adjustments
prescribed by the Secretary of the Treasury pursuant to Section 409(o)(2) of the
Code).




          The Participant shall elect the manner in which his vested Account balance will
be distributed to him. If a Participant so desires, he may direct how his benefits are to
be paid to his Beneficiary. If a deceased Participant did not file a direction with the
Committee, the Participant’s benefits shall be distributed to his Beneficiary in a lump sum.
Notwithstanding any provision to



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the contrary, if the value of a Participant’s vested
Account balance at the time of any distribution, does not equal or exceed $3,500 ($5,000 for
Plan Years beginning after August 5, 1997), then such Participant’s vested Account shall be
distributed in a lump sum within 60 days after the end of the Plan year in which employment
terminates. If the value of a Participant’s vested Account balance is, or has ever been, in
excess of $3,500 ($5,000 for Plan Years beginning after August 5, 1997), then his benefits
shall not be paid prior to the later of the time he has attained Normal Retirement or age 62
unless he elects an early payment date in a written election filed with the Committee. A
Participant may modify such an election at any time, provided any new benefit payment date
is at least 30 days after a modified election is delivered to the Committee.




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




     10.2    Time for Distribution.




            10.2.1    Distribution of the balance of a Participant’s Account generally shall commence
as soon as practicable after his termination of Service for Early Retirement, Normal
Retirement, death or Disability, but in no event shall occur later than four full calendar
quarters have elapsed after such Participant terminated Service. Distribution of the
Account Balance of a Participant who terminated employment for any other reason shall not
commence prior to four full calendar quarters have elapsed after such Participant’s
termination of employment. Notwithstanding anything herein to the contrary, the
distribution of a Participant’s Account shall commence no later than one year after the
close of the Plan Year :




            (i)   in which the Participant separates from service by reason of attainment of
his Normal Retirement Date under the Plan, Disability, or death; or



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




            10.2.2 Unless the Participant elects otherwise, the distribution of the balance of a
Participant’s Account shall commence not later than the 60th day after the latest of the
close of the plan year in which -




            (i)      the Participant attains the age of 65;




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




            (iii)    the participant terminates his service with the Employer.




            10.2.3    Notwithstanding anything to the contrary, (1) with respect to a 5-percent
owner (as defined in Code Section 416), distribution of a Participant’s Account shall
commence (whether or not he remains in the employ of the Employer) not later than the April
1 of the calendar year next following the calendar year in which the Participant attains age
70- 1/2, and (2) with respect to all other Participants, payment of a Participant’s benefit
will commence not later than April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2, or, if later, the year in which the Participant
retires. Any Participant (other than a 5-percent owner) attaining age 70 1/2 may elect by
April 1 of the calendar year following the year in which the Participant attained age 70 1/2
to defer distributions until the calendar year following the calendar year in which the
Participant retires. If no such election is made, the Participant will begin receiving
distributions by the April 1 of the calendar year following the year in which the
Participant attained age 70 1/2. A Participant’s benefit from that portion of his Account
committed to the Investment Fund shall be calculated on the basis of the most recent
Valuation Date before the date of payment.




            10.2.4    Distribution of a Participant’s Account balance after his death shall comply
with



-36-









 







the following requirements:




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




            (ii)    If the Participant dies after distribution has commenced pursuant to
Section 10.1.2 but before his entire interest in the Plan has been distributed to
him, then the remaining portion of that interest shall, in accordance with Section
401(a)(9) of the Code, be distributed at least as rapidly as under the method of
distribution being used under Section 10.1.2 at the date of his death.




            (iii)    If a married Participant dies before his benefit payments begin, then
unless he has specifically elected otherwise the Committee shall cause the balance
in his Account to be paid to his Spouse. No election by a married Participant of a
different Beneficiary shall be valid unless the election is accompanied by the
Spouse’s written consent, which (i) must acknowledge the effect of the election,
(ii) must explicitly provide either that the designated Beneficiary may not
subsequently be changed by the Participant without the Spouse’s further consent, or
that it may be changed without such consent, and (iii) must be witnessed by the
Committee, its representative, or a notary public. (This requirement shall not apply
if the Participant establishes to the Committee’s satisfaction that the Spouse may
not be located.)



         10.3    Marital Status. The Committee shall from time
to time take
whatever steps it deems appropriate to keep informed of each Participant’s marital status.
Each Employer shall provide the



-37-









 







Committee with the most reliable information in the Employer’s
possession regarding its Participants’ marital status, and the Committee may, in its discretion,
require a notarized affidavit from any Participant as to his marital status. The Committee, the
Plan, the Trustee, and the Employers shall be fully protected and discharged from any liability to
the extent of any benefit payments made as a result of the Committee’s good faith and reasonable
reliance upon information obtained from a Participant and his Employer as to his marital status.



         10.4    Delay in Benefit Determination. If
the Committee is unable to determine the benefits payable to a Participant or Beneficiary on or
before the latest date prescribed for payment pursuant to Section 10.1 or 10.2, the benefits shall
in any event be paid within 60 days after they can first be determined, with whatever makeup
payments may be appropriate in view of the delay.



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



         10.6    Form of Distribution. A terminated
Participant or the Beneficiary of a deceased Participant may instruct the Committee to distribute
the Participant’s entire vested interest in his Account in the form of cash or Stock. If the
terminated Participant elects distribution in cash, his vested interest in both the Stock Fund and
the Investment Fund shall be distributed in cash. If the terminated Participant elects
distribution in Stock, and provided ownership of virtually all Stock is not restricted to active
Employees and qualified retirement plans for the benefit of Employees pursuant to the certificates
of incorporation or by-laws of the Employers issuing Stock, the Committee shall apply the
Participant’s vested interest in the Investment Fund to purchase sufficient Stock from the Stock
Fund or from any owner of stock to make the required distribution. In all other cases, the
Participant’s vested interest in the Stock Fund shall be distributed in shares of Stock, and his
vested interest in the Investment Fund shall be distributed in cash.



         Any Participant who receives Stock pursuant to Section 10.1, and any person who has received



-38-









 







Stock from the Plan or from such a Participant by reason of the Participant’s death or
incompetency, by reason of divorce or separation from the Participant, or by reason of a rollover
contribution described in Section 402(a)(5) of the Code, shall have the right to require the
Employer which issued the Stock to purchase the Stock for its current fair market value
(hereinafter referred to as the “put right”). The put right shall be exercisable by written notice
to the Committee during the first 60 days after the Stock is distributed by the Plan, and, if not
exercised in that period, during the first 60 days in the following Plan Year after the Committee
has communicated to the Participant its determination as to the Stock’s current fair market value.
However, the put right shall not apply to the extent that the Stock, at the time the put right
would otherwise be exercisable, may be sold on an established market in accordance with federal and
state securities laws and regulations. Similarly, the put right shall not apply with respect to
the portion of a Participant’s account which the employee elected to have reinvested under Code
Section 401(a)(28)(B). If the put right is exercised, the Trustee may, if so directed by the
Committee in its sole discretion, assume the Employer’s rights and obligations with respect to
purchasing the Stock. Notwithstanding anything herein to the contrary, in the case of a plan
established by a Bank (as defined in Code Section 581), the put right shall not apply if prohibited
by a federal or state law and Participant are entitled to elect their benefits be distributed in
cash.



         If a Participant elects to receive his distribution in the form of a lump sum pursuant to
Section 10.1.1 of the Plan, the Employer or the Trustee, as the case may be, may elect to pay for
the Stock in equal periodic installments, not less frequently than annually, over a period not
longer than five years from the day after the put right is exercised, with adequate security and
interest at a reasonable rate on the unpaid balance, all such terms to be set forth in a
promissory note delivered to the seller with normal terms as to acceleration upon any uncured
default.



         If a Participant elects to receive his distribution in the form of an installment
payment pursuant to Section 10.1.2 of the Plan, the Employer or the Trustee, as the case may be,
shall pay for the Stock




-39-











 




distributed in the installment distribution over a period which shall not exceed 30 days after
the exercise of the put right.




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



          10.7      Restrictions on Disposition of Stock. Except in the case of Stock which is
traded on an established market, a Participant who receives Stock pursuant to Section 10.1, and any
person who has received Stock from the Plan or from such a Participant by reason of the
Participant’s death or incompetency, by reason of divorce or separation from the Participant, or by
reason of a rollover contribution described in Section 402(a)(5) of the Code, shall, prior to any
sale or other transfer of the Stock to any other person, first offer the Stock to the issuing
Employer and to the Plan at the greater of (i) its current fair market value, or (ii) the purchase
price offered in good faith by an independent third party purchaser. This restriction shall apply
to any transfer, whether voluntary, involuntary, or by operation of law, and whether for
consideration or gratuitous. Either the Employer or the Trustee may accept the offer within 14
days after it is delivered. Any Stock distributed by the Plan shall bear a conspicuous legend
describing the right of first refusal under this Section 10.7, as well as any other restrictions
upon the transfer of the Stock imposed by federal and state securities laws and regulations.



          10.8      Continuing Loan Provisions; Creations of Protections and Rights. Except
as otherwise provided in Sections 10.6 and 10.7 and this Section, no shares of Employer Stock held
or distributed by the Trustee may be subject to a put, call or other option, or buy-sell
arrangement. The provisions of this



-40-









 







Section shall continue to by applicable to such Stock even if
the Plan ceases to be an employee stock ownership plan under Section 4975(e)(7) of the Code.



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




               10.9-1  An “eligible rollover” is any distribution that does not include: any
distribution that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the Participant and the Participant’s
Beneficiary, or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); any hardship distribution
described in Section 401(k)(2)(B)(i)(IV) of the Code; and the portion of any distribution
that is not included in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).




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




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




               10.9-4  The term “distributee” shall refer to a deceased Participant’s spouse or
a Participant’s former spouse who is the alternate payee under a qualified domestic
relations order, as



-41-









 







defined in Code Section 414(p).



          10.10      Waiver of 30-Day Period After Notice of Distribution. If a distribution is one
to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution may commence less
than 30 days after the notice required under Section 411(a)-11(c) of the Income Tax Regulations is
given, provided that:




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

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





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




          11.1      Claim for Benefits. Any Participant or Beneficiary who qualifies for the payment
of benefits shall file a claim for his benefits with the Committee on a form provided by the
Committee. The claim, including any election of an alternative benefit form, shall be filed at
least 30 days before the date on which the benefits are to begin. If a Participant or Beneficiary
fails to file a claim by the day before the date on which benefits become payable, he shall be
presumed to have filed a claim for payment for the Participant’s benefits in the standard form
prescribed by Sections 10.1 or 10.2



          11.2      Notification by Committee. Within 90 days after receiving a claim for
benefits (or within 180 days, if special circumstances require an extension of time and written
notice of the extension is given to the Participant or Beneficiary within 90 days after receiving
the claim for benefits), the Committee shall notify the Participant or Beneficiary whether the
claim has been approved or denied. If the Committee



-42-









 







denies a claim in any respect, the Committee
shall set forth in a written notice to the Participant or Beneficiary:




                   (i)       each specific reason for the denial;




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




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




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



          11.3      Claims Review Procedure. Within 60 days after a Participant or Beneficiary
receives notice from the Committee that his claim for benefits has been denied in any
respect, he may file with the Committee a written notice of appeal setting forth his reasons
for disputing the Committee’s determination. In connection with his appeal the Participant or
Beneficiary or his representative may inspect or purchase copies of pertinent documents and records
to the extent not inconsistent with other Participants’ and Beneficiaries’ rights of privacy.
Within 60 days after receiving a notice of appeal from a prior determination (or within 120 days,
if special circumstances require an extension of time and written notice of the extension is given
to the Participant or Beneficiary and his representative within 60 days after receiving the notice
of appeal), the Committee shall furnish to the Participant or Beneficiary and his representative,
if any, a written statement of the Committee’s final decision with respect to his claim, including
the reasons for such decision and the particular Plan provisions upon which it is based.


Section 12.    The Committee and Its Functions.




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



-43-









 







the Employers, or the Trustee under the Plan and Trust Agreement, (ii)
delegated in writing to other persons by the Bank, the Employers, the Committee, or the Trustee, or
(iii) allocated to other parties by operation of law. The Committee shall have exclusive
responsibility regarding decisions concerning the payment of benefits under the Plan. The
Committee shall have no investment responsibility with respect to the Investment Fund except to the
extent, if any, specifically provided in the Trust Agreement. In the discharge of its duties, the
Committee may employ accountants, actuaries, legal counsel, and other agents (who also may be
employed by an Employer or the Trustee in the same or some other capacity) and may pay their
reasonable expenses and compensation.



          12.2      Identity of Committee. The Committee shall consists of three or more individuals
selected by the Bank. Any individual, including a director, trustee, shareholder, officer, or
employee of an Employer, shall be eligible to serve as a member of the Committee. The Bank shall
have the power to remove any individual serving on the Committee at any time without cause upon 10
days written notice, and any individual may resign from the Committee at any time upon 10 days
written notice to the Bank. The Bank shall notify the Trustee of any change in membership of the
Committee.



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



          Further, the Committee shall have exclusive responsibility and authority with respect
to the Plan’s holdings of Stock and shall direct the Trustee in all respects regarding the
purchase, retention, sale, exchange, and pledge of Stock and the creation and satisfaction of Stock
Obligations. The Committee shall at all times act consistently with the Bank’s long-term intention
that the Plan, as an employee stock ownership plan, be invested primarily in Stock. Subject to the
direction of the Board as to the application



-44-









 







of Employer contributions to Stock Obligations, and
subject to the provisions of Sections 6.4 and 10.6 as to Participants’ rights under certain
circumstances to have their Accounts invested in Stock or in assets other than Stock, the Committee
shall determine in its sole discretion the extent to which assets of the Trust shall be used to
repay Stock Obligations, to purchase Stock, or to invest in other assets to be selected by the
Trustee or an investment manager. No provision of the Plan relating to the allocation or vesting
of any interests in the Stock Fund or the Investment Fund shall restrict the Committee from
changing any holdings of the Trust, whether the changes involve an increase or a decrease in the
Stock or other assets credited to Participants’ Accounts. In determining the proper extent of the
Trust’s investment in Stock, the Committee shall be authorized to employ investment counsel, legal
counsel, appraisers, and other agents to pay their reasonable expenses and compensation.



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



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



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



          12.7      Execution of Documents. Any instrument executed by the Committee shall be
signed by



-45-









 







any member or employee of the Committee.



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



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



          12.10      Alternative Payees in Event of Incapacity. If the Committee finds at any time
that an individual qualifying for benefits under this Plan is a minor or is incompetent, the
Committee may direct the benefits to be paid, in the case of a minor, to his parents, his legal
guardian, a custodian for him under the Uniform Gifts to Minors Act, or the person having actual
custody of him, or, in the case of an incompetent, to his spouse, his legal guardian, or the person
having actual custody of him, the payments to be used for the individual’s benefit. The Committee
and the Trustee shall not be obligated to inquire as to the actual use of the funds by the person
receiving them under this Section 12.10, and any such payment shall completely discharge the
obligations of the Plan, the Trustee, the Committee, and the Employers to the extent of the
payment.



-46-









 





          12.11      Indemnification by Employers. Except as separately agreed in writing,
the Committee, and any member or employee of the Committee, shall be indemnified and held harmless
by the Employer, jointly and severally, to the fullest extent permitted by law against any and all
costs, damages, expenses, and liabilities reasonably incurred by or imposed upon it or him in
connection with any claim made against it or him or in which it or he may be involved by reason of
its or his being, or having been, the Committee, or a member or employee of the Committee, to the
extent such amounts are not paid by insurance.



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


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




          13.1      Adoption of Plan by Other Employers. With the consent of the Bank, any entity
may become a participating Employer under the Plan by (i) taking such action as shall be necessary
to adopt the Plan, (ii) becoming a party to the Trust Agreement establishing the Trust Fund, and
(iii) executing and delivering such instruments and taking such other action as may be necessary or
desirable to put the Plan into effect with respect to the entity’s Employees.



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



-47-









 







of complete
liquidation other than in connection with a reorganization, the Plan shall be automatically
terminated with respect to Employees of the Employer as of the close of business on the 90th day
following the effective date of the reorganization, or as of the close of business on the
date of adoption of a plan of complete liquidation, as the case may be.



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



          13.4      Right to Amend or Terminate. The Bank intends to continue this Plan as a
permanent program. However, each participating Employer separately reserves the right to suspend,
supersede, or terminate the Plan at any time and for any reason, as it applies to that Employer’s
Employees, and the Bank reserves the right to amend, suspend, supersede, merge, consolidate, or
terminate the Plan at any time and for any reason, as it applies to the Employees of each Employer.
No amendment, suspension,
supersession,



-48-









 







merger, consolidation, or termination of the Plan shall (i) reduce any
Participant’s or Beneficiary’s proportionate interest in the Trust Fund, (ii) reduce or restrict,
either directly or indirectly, the benefit provided any Participant prior to the amendment, or
(iii) divert any portion of the Trust Fund to purposes other than the exclusive benefit of the
Participants and their Beneficiaries prior to the satisfaction of all liabilities under the Plan.
Moreover, there shall not be any transfer of assets to a successor plan or merger or consolidation
with another plan unless, in the event of the termination of the successor plan or the surviving
plan immediately following such transfer, merger, or consolidation, each participant or beneficiary
would be entitled to a benefit equal to or greater than the benefit he would have been entitled to
if the plan in which he was previously a participant or beneficiary had terminated immediately
prior to such transfer, merger, or consolidation. Following a termination of this Plan by the
Bank, the Trustee shall continue to administer the Trust and pay benefits in accordance with the
Plan as amended from time to time and the Committee’s instructions.



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


Section 14.    Miscellaneous Provisions.




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



          14.2      Nonassignability of Benefits. No assignment, pledge, or other
anticipation of benefits



-49-









 







from the Plan will be permitted or recognized by the Employer, the
Committee, or the Trustee. Moreover, benefits from the Plan shall not be subject to attachment,
garnishment, or other legal process for debts or liabilities of any Participant or Beneficiary, to
the extent permitted by law. This prohibition on assignment or alienation shall apply to any
judgment, decree, or order (including approval of a property settlement agreement) which relates to
the provision of child support, alimony, or property rights to a present or former spouse, child or
other dependent of a Participant pursuant to a State domestic relations or community property law,
unless the judgment, decree, or order is determined by the Committee to be a qualified domestic
relations order within the meaning of Section 414(p) of the Code, as more fully set forth in
Section 14.2 hereof.



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



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



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



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



          14.7      Separability of Provisions. If any provision of this Plan is held to be invalid
or




-50-










 




unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if
the invalid or unenforceable provision had not been included in the Plan.




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




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




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




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





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




            (b)          If the whereabouts of the Participant and his beneficiary are unknown to the
Trustees, but the whereabouts of one (1) or more relatives of the Participants by adoption,
blood or



-51-









 







marriage is known to the Trustees, the Trustees shall distribute the Participant’s
benefits to any one (1) or more of such relatives and in such proportions as the Trustees
shall determine.




               (c)          If the Trustees do not know the whereabouts of any of the above persons,
they shall then notify the Social Security Administration of the Participant’s (or
beneficiary’s) failure to claim the distribution to which he is entitled. The Trustees
shall request the Social Security Administration to notify the Participant (or beneficiary)
in accordance with the procedures it has established for this purpose.



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




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




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





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




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



         During any period in which the issue of whether a domestic relations order is a
qualified domestic



-52-









 







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


Section 15.          Top-Heavy Provisions.




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



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



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



                            (c)          If this Plan is a part of a required aggregation group and part of a permissive



-53-









 







aggregation group and the aggregate top-heavy ratio for the permissive aggregation group exceeds
sixty percent (60%).



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



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



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



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



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



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



                            15.3-2  A “Key Employee,” with respect to a Plan Year, means an Employee who at any time
during the five years ending on the top-heavy Determination Date for the Plan Year has received
compensation from an Employer and has been (i) an officer of the Employer having Total Compensation
greater than 50 percent of the limit then in effect under Section 415(b)(1)(A) of the Code, (ii)
one of the 10 Employees owning the largest interests in the Employer having Total Compensation
greater than the limit



-54-









 







then in effect under Section 415(c)(1)(A), (iii) an owner of more than five
percent of the outstanding equity interest or the outstanding voting interest in any Employer, or
(iv) an owner of more than one percent of the outstanding equity interest or the outstanding voting
interest in an Employer whose Total Compensation exceeds $150,000. In determining which individuals
are Key Employees, the rules of Section 415(i) of the Code and Treasury Regulations promulgated
thereunder shall apply. The Beneficiary of a Key Employee shall also be considered a Key Employee.



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



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



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



-55-









 







permissive aggregation group will be considered a top-heavy Plan if the permissive
aggregation group is not a top-heavy group. Only a Plan that is part of the required aggregation
group will be considered a top-heavy Plan if the permissive aggregation group is top-heavy.



                            15.4     Top-Heavy Rules of Application. For purposes of determining the value of
account balances and the present value of accrued benefits, the following provisions shall apply:



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



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



                            15.4-3   The account balances and accrued benefits of a Participant who is not presently a Key
Employee but who was a Key Employee in a Plan Year beginning on or after January 1, 1984, will be
disregarded.



                            15.4-4   For years beginning after December 31, 1984, non-deductible Voluntary Employee
Contributions will be taken into account for purposes of computing the top-heavy ratio. Employer
contributions attributable to a salary reduction or similar arrangement will be taken into account.



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



                            15 .4-6   The present value of the accrued benefits or the amount of the account balances of an
Employee shall be increased by the aggregate distributions made to such Employee from a Plan of the
Employer. No distribution, however, made from the Plan to an individual (other than the beneficiary
of a deceased Employee who was an Employee within the five (5) year period ending on the
Determination Date) who has not been an Employee at any time during the five (5) year period ending
on the Determination Date shall be taken into account in determining whether the Plan is top-heavy.
Also, any



-56-









 







amounts recontributed by an Employee upon becoming a Participant in the Plan shall no
longer be counted as a distribution under this paragraph.



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



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



                            15.4-9   The present value of the accrued benefits or the amount of the account balances of any
Employee participating in this Plan shall not include any rollover contributions or other transfers
voluntarily initiated by the Employee except as described below. If a rollover was received by this
Plan after December 31, 1983, the rollover or transfer voluntarily initiated by the Employee was
received prior to January 1, 1984, then the rollover or transfer shall be considered as part of the
accrued benefit by the Plan receiving such rollover or transfer. If this Plan transfers or rolls
over funds to another Plan in a transaction voluntarily initiated by the Employee after December
31, 1983, then this Plan shall count the distribution for purposes of determining account balances
or the present value of accrued benefits. A transfer incident to a merger or consolidation of two
or more Plans of the Employer (including Plans of related Employers treated as a single Employer
under Code Section 414), or a transfer or rollover between Plans of the Employer, shall not be
considered as voluntarily initiated by the Employee.



       
                     15.5     Top-Heavy Ratio.  If the Employer maintains one (1) or more defined
contribution plans (including any simplified Employee pension plan) and the Employer has never



-57-









 







maintained any defined benefit plans which have covered or could cover a Participant in this Plan,
the top-heavy ratio is a fraction, the numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date, and the denominator of which is the sum of the account
balances of all Employees as of the Determination Date. Both the numerator and denominator of the
top-heavy ratio shall be increased to reflect any contribution which is due but unpaid as of the
Determination Date.



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



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



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



                (ii)         the highest ratio of such allocation to Total Compensation received by any Key Employee
for that year. For purposes of the special contribution of this Section 15.2, a Key Employee’s
Total Compensation shall include amounts the Key Employee elected to defer under a qualified 401(k)
arrangement. Such a special contribution shall be made on behalf of each Participant who is
employed by an Employer on the last day of the Plan Year, regardless of the number of his Hours of
Service, and shall be allocated to his Account. For any Plan Year when (1) the Plan is top-heavy
and (2) a Non-key Employee is a Participant in both this Plan and a defined benefit plan included
in the plan aggregation group which is top heavy, the sum of the Employer contributions and
forfeitures allocated to the Account of each such



-58-









 







Non-key Employee shall be equal to at least five
percent (5%) of such Non-key Employee’s Total Compensation for that year.



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



	 	 	 	 	 
	Vesting
	 	Percentage of
	Years
	 	Interest Vested
	 
	 	 	 	 
	Fewer than 2
	 	 	0	%
	2
	 	 	20	%
	3
	 	 	40	%
	4
	 	 	60	%
	5
	 	 	80	%
	6
	 	 	100	%







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




-59-











 




SCHEDULE A



With respect to those persons whose employment commenced with the Bank on October 20, 1998 as a
result of the merger of Corry Savings Bank with and into the Bank, the term “Employer” shall
include, for purposes of eligibility and vesting under the Plan, Corry Savings Bank.



Effective January 1, 2001, with respect to those persons whose employment commenced with the Bank on
November 3, 2000, as a result of the acquisition of eight branch offices of Sovereign Bank, the term
“Employer” shall include, for purposes of eligibility and vesting under the Plan, Sovereign Bank.
















 





NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 



Amendment Number One




 



             The Northwest Savings Bank Employee Stock Ownership Plan (the ”Plan”) is hereby amended
effective January 1, 1997, unless otherwise stated, in accordance with the following:



          1.     Section 3.5 of the Plan shall be amended by replacing its second sentence with the
following:




“For this purpose, an Employee who returns before five (5) consecutive Breaks in
Service who previously satisfied the initial eligibility requirements or who returns
after five (5) consecutive one-year Breaks in Service with a vested Account balance
in the Plan shall re-enter the Plan as of the date of his return to Service with an
Employer.”



          2.     Section 9.2(a) shall be amended in its entirety to read as follows:




“If a Participant has five (5) consecutive Breaks in Service before his interest in
his Account has become vested to some extent, post-break years of Service shall not
be required to be taken into account for purposes of determining the Participant’s
pre-Break vested percentage.”



          3.     Section 10.2-3 of the Plan shall be amended by revising it in its entirety to read as
follows:




          10.2.3 (i) Notwithstanding any other provision in this Section 10.2 to
the contrary, prior to January 1, 1997, distribution of a Participant’s Account
shall commence (whether or not he remains in the employ of the Employer) not later
than the April 1 of the calendar year next following the calendar year in which the
Participant attains age 70 1/2 years. On or after January 1, 1997, (1) with respect to
a 5-percent owner (as defined in Code Section 416), distribution of a Participant’s
Account shall commence (whether or not he remains in the employ of the Employer) not
later than the April 1 of the calendar year next following the calendar year in
which the Participant attains age 70 1/2, and (2) with respect to all other
Participants, payment of a Participant’s benefit will commence not later than April
1 of the calendar year following the calendar year in which the Participant attains
age 70 1/2,



 









 





Northwest Savings Bank

Employee Stock Ownership Plan

Amendment Number One

Page 2






or, if later, the year in which the Participant retires, subject to
the provisions in sub-section (iii) below. Any Participant (other than a
5-percent owner) attaining age 70 1/2 after 1995 may elect by April 1 of the calendar
year following the year in which the Participant attained age 70 1/2 (or by December
31, 1997, in the case of a participant attaining age 70 1/2 in 1996) to defer
distributions until the calendar year following the calendar year in which the
Participant retires. If no such election is made, the Participant will begin
receiving distributions by the April 1 of the calendar year following the year in
which the Participant attained age 70 1/2 (or by December 31, 1997, in the case of a
participant attaining age 70 1/2 in 1996). A Participant’s benefit from that portion
of his Account committed to the Investment Fund shall be calculated on the basis of
the most recent Valuation Date before the date of payment.




              (ii) Any Participant attaining age 70 1/2 in years prior to 1997 may elect to
stop distributions during employment, which distributions shall not recommence until
retirement, but no later than the April 1 of the calendar year following the
calendar year in which the participant retires. There is a new annuity starting
date upon commencement.




              (iii) The preretirement age 70 1/2 distribution option is only eliminated with
respect to employees who reach age 70 1/2 in or after a calendar year that begins
after the later of December 31, 1998, or the adoption date of the amendment. The
preretirement age 70 1/2 distribution option is an optional form of benefit under
which benefits payable in a particular distribution form (including any
modifications that may be elected after benefit commencement) commence at a time
during the period that begins on or after January 1 of the calendar year in which an
employee attains age 70 1/2 and ends April 1 of the immediately following year.




4.     Section 15.3-4 of the Plan shall be amended by replacing “Code Sections 401(a)(4) and 410”
with “Code Sections 401(a)(4) or 410.”





         IN WITNESS WHEREOF, this Amendment Number One has been executed by the duly authorized
officers of Northwest Savings Bank as of the ___ day of                      , 2001.



	 	 	 	 	 	 	 
	ATTEST:	 	NORTHWEST SAVINGS BANK


	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

Secretary

	 	 	 	 

President
	 	 






 









 





NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN

AS AMENDED AND RESTATED




 



 Amendment Number Two




 



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




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






 



Model Amendments for

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

and

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




 





	 	  2.	 	CRA: Model Language for Section 415(c)(3) Compensation Definition
	 
	 	 	 	For limitation years beginning on and after January 1, 2001, for purposes of
applying the limitations described in Section 2 of the Plan, definition of “Total
Compensation,” compensation paid or made available during such limitation years
shall include elective amounts that are not includible in the gross income of the
Employee by reasons of Code Section 132(f)(4).

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






 









 





Northwest Savings Bank

Employee Stock Ownership Plan

As Amended and Restated

Amendment Number Two

Page 2





	 	3.	 	EGTRRA






	 	  A.	 	PREAMBLE
	 
	 	 	 	Adoption and effective date of amendment. This amendment of the Plan is
adopted to reflect certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA). This amendment is intended as good
faith compliance with the requirements of EGTRRA and is to be construed in
accordance with EGTRRA and guidance issued thereunder. Except as otherwise
provided, this amendment shall be effective as of the first day of the first
Plan Year beginning after December 31, 2001.

	 
	 	 	 	Supersession of inconsistent provisions. This amendment shall supersede the
provisions of the Plan to the extent those provisions are inconsistent with
the provisions of this amendment.

	 
	 	  B.	 	Section 5 of the Plan. LIMITATIONS ON CONTRIBUTIONS






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




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







	 	1.	 	$40,000, as adjusted for increases in the cost-of-living
under section 415(d) of the Code, or

	 
	 	2.	 	100 percent of the
Participant’s compensation, within the meaning of
section 415(c)(3) of the Code, for the limitation year.







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




 









 





Northwest Savings Bank

Employee Stock Ownership Plan

As Amended and Restated

Amendment Number Two

Page 3





	 	C.	 	Section 2 of the Plan. INCREASE IN COMPENSATION LIMIT

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

	 
	 	D.	 	Section 15 of the Plan. MODIFICATION OF TOP-HEAVY RULES






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

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

	 
	 	2.2	 	Determination of present values and amounts.
This section 2.2 shall apply for purposes of determining the present
values of accrued benefits and the amounts of account balances of Employees as of the






 









 





Northwest Savings Bank

Employee Stock Ownership Plan

As Amended and Restated

Amendment Number Two

Page 4





    determination date.




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

	 
	 	2.2.2	 	Employees not performing services during year
ending on the determination date. The accrued benefits and accounts of
any individual who has not performed services for the Employer during
the 1-year period ending on the determination date shall not be taken
into account.

	 
	 	3.	 	Minimum benefits.
	 
	 	3.1	 	Matching contributions. Employer matching
contributions shall be taken into account for purposes of satisfying
the minimum contribution requirements of section 416(c)(2) of the Code
and the Plan. The preceding sentence shall apply with respect to
matching contributions under the Plan or, if the Plan provides that the
minimum contribution requirement shall be met in another plan, such
other plan. Employer matching contributions that are used to satisfy
the minimum contribution requirements shall be treated as matching
contributions for purposes of the actual contribution percentage test
and other requirements of section 401(m) of the Code.

	 
	 	3.2	 	Contributions under other plans. If the Employer maintains a
qualified plan in addition to this Plan and more than one such plan is
determined to be Top-Heavy, a minimum contribution or a minimum benefit
shall be provided in one of such other plans (including another plan
that consists solely of a cash or deferred arrangement which






 









 





Northwest Savings Bank

Employee Stock Ownership Plan

As Amended and Restated

Amendment Number Two

Page 5





meets the requirements of section 401(k)(12) of the
Code and matching contributions with respect to which the
requirements of section 401(m)(11) of the Code are met).





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






	 	1.	 	Effective date. This section shall apply to distributions made after
December 31, 2001.

	 
	 	2.	 	Modification of definition of eligible retirement plan. For purposes of the
direct rollover provisions in section 10.9 of the Plan, an eligible
retirement plan shall also mean an annuity contract described in
section 403(b) of the Code and an eligible plan under section 457(b) of
the Code which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political
subdivision of a state and which agrees to separately account for
amounts transferred into such plan from this Plan. The definition of
eligible retirement plan shall also apply in the case of a distribution
to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a qualified domestic relation order, as defined
in section 414(p) of the Code.

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





 









 











Northwest Savings Bank

Employee Stock Ownership Plan

As Amended and Restated

Amendment Number Two

Page 6




          IN WITNESS WHEREOF, this Amendment Number Two has been executed by the duly authorized
officers of Northwest Savings Bank as of the ___ day of                     , 2001.




	 	 	 	 	 	 	 
	ATTEST:	 	NORTHWEST SAVINGS BANK


	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

Secretary

	 	 	 	 

President
	 	 







 











 





NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number Three




 






              The Northwest Savings Bank Employee Stock Ownership Plan (the ”Plan”) is hereby amended
effective January 1, 2002, unless otherwise stated, in accordance with the following:




	 	13.	 	The definition of “Entry Date” at Section 2 of the Plan shall be amended in its entirety to
provide as follows:






“Entry Date” means the Effective Date of the Plan and the first day of the
month coincident with or immediately following an Employee’s satisfaction of
the eligibility requirements under Section 3 of the Plan.




	 	14.	 	Section 9.1 of the Plan is amended in its entirety provide as follows:






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





	 	 	 	 
	Vesting	 	Percentage of
	Years 	 	Interest Vested
	Fewer than 2 	 	 	0%     
	           2
	 	 	20%     
	           3
	 	 	40%     
	           4
	 	 	60%     
	           5
	 	 	80%     
	           6
	 	 	100%     






              IN WITNESS WHEREOF, this Amendment Number Three has been executed by the duly authorized
officers of Northwest Savings Bank as of the 3rd day of April, 2002.



	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	NORTHWEST SAVINGS BANK	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Gregory C. LaRocca

	 	 	 	By:	 	/s/ William J. Wagner	 	 
	  

Secretary

	 	 	 	 	 	 

President
	 	 



















 





NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN





 






Amendment Number Four

 






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




	 	1.	 	Section 7.2 of the Plan shall be amended by adding the following paragraph at
the end thereof:






“Effective April 1, 2004, in the sole discretion of the Employer, the
Employer may grant Participants the right either: (A) to receive cash
dividends paid on shares of Stock credited to such Participants’ ESOP
Stock Accounts in accordance with alternative “(ii)” or “(iii)” above (the
decision whether such distribution would be made in accordance with
alternative “(ii)” or “(iii)” would be made by the Employer or could be
provided to the Participant, in the Employer’s sole discretion), or (B) to
leave the cash dividends in the Plan to be credited to the ESOP Stock
Account and invested shares of Stock. Dividends on which such election
may be made will be fully vested in the Participant. Accordingly, the
Employer may elect to offer such fifth election only to Participants who
are fully vested in their Account.”



          IN WITNESS WHEREOF, this Amendment Number Four has been executed by the duly authorized
officers of Northwest Savings Bank as of the                      day of                     , 2004.



	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	NORTHWEST SAVINGS BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

Secretary

	 	 	 	 	 	 

President
	 	 



















 





NOTHWEST SAVINGS BANK




 






Resolutions of the Board of Directors




 






          WHEREAS, the Board of Directors (the “Board”) of Northwest Savings Bank (the “Bank”)
maintains the Northwest Savings Bank Employee Stock Ownership Plan (the “Plan”); and



          WHEREAS, the Board desires to provide participants in the Plan the opportunity to elect, if
given the opportunity by the Committee, to have dividends on ESOP shares paid to the participant
or retained in the Plan and reinvested in qualifying employer securities; and



          WHEREAS, Section 13.4 of the Plan permits the Bank to amend the Plan from time to time.



          NOW, THEREFORE, BE IT RESOLVED, that the Plan shall be, and hereby is, amended in accordance
with Amendment Number Four attached hereto and made a part hereof, effective as set forth therein;
and be it



          RESOLVED, FURTHER, that the Plan Committee shall be, and the same hereby is, authorized,
empowered and directed to take any and all action necessary for the implementation of the
aforesaid amendment.



SECRETARY’S CERTIFICATE




          I, Gregory C. LaRocca, Secretary of Northwest Savings Bank, do hereby certify
that the above resolutions were adopted by the Board of Directors at a meeting duly held on
                          
                          
         , 2004.


Dated:              
                        
                       , 2004


 


	 	 	 	 	 
	 

	 	 

Secretary
	 	 







 









 








NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




Election Form

For Distribution of Dividends for the Year 200         




          Please Return this
 Election Form to                        
                           
                       



     by             
                      
  , 200     .




         I,           
                          
                          
                           
                           
    , elect the following for any
dividends allocable to my ESOP account (check one):




	 	1.     o	 	dividends allocable to my account should be retained in the
ESOP and reinvested in employer securities;

	 
	 	2.     o	 	dividends allocable to my account should be paid to me in
cash;

	 
	 	3.     o	 	dividends allocable to my account should be paid to me in
cash within 90 days of the close of the Plan Year in which paid.






        I understand that if I fail to return this Election Form by the deadline indicated above, the
dividends allocable to my ESOP account will be automatically reinvested in the ESOP.




        I understand that I will have an opportunity to change my election at least annually.




ESOP PARTICIPANT




 






Received by NORTHWEST SAVINGS BANK:





				
	 	By:	 	
 







				
	 	Date:	 	
 







 











 





NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number Five




 






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



          1.      Section 10.1 of the Plan shall be amended in its entirety, effective as of March 28, 2005,
to read as follows:




	 	 	 	“For a Participant whose Service ends for any reason, distribution will be
made to or for the benefit of the Participant or, in the case of the
Participant’s death, his Beneficiary, by either, or a combination of the
following methods:







	 	10.1.1	 	By payment in a lump sum in accordance with Section 10.2; or

	 
	 	10.1.2	 	By payment in a series of substantially equal annual installments
over a period not to exceed five (5) years, provided the maximum period
over which the distribution of a Participant’s Account may be made
shall be extended by 1 years, up to five (5) additional years, for each
$140,000 ($145,000 in 1998) (or fraction thereof) by which such
Participant’s Account balance exceeds $710,000 ($725,000 in 1998) (the
aforementioned figures are subject to cost-of-living adjustments
prescribed by the Secretary of the Treasury pursuant to Section
409(o)(2) of the Code).







	 	 	 	The Participant shall elect the manner in which his vested Account balance
will be distributed to him. If a Participant so desires, he may direct how
his benefits are to be paid to his Beneficiary. If a deceased Participant
did not file a direction with the Committee, the Participant’s benefits
shall be distributed to his Beneficiary in a lump sum. Notwithstanding any
provision to the contrary, if the value of a Participant’s vested Account
balance at the time of any distribution, does not exceed $1,000, then such
Participant’s vested Account shall be distributed in a lump sum within 60
days after the end of the Plan Year in which employment terminates. If the
value of a Participant’s vested Account balance is, or has ever been, in
excess of $1,000, then his benefits shall not be paid prior to the later of
the time he has attained Normal Retirement or age 62 unless he elects an
early payment date in a written election filed with the Committee. A
Participant may modify such an election at any time, provided any new
benefit payment date is at least 30





 









 











Northwest Savings Bank

ESOP Amendment Number Five

Page 2





	 	 	 	days after a modified election is delivered to the Committee. Failure of a
Participant to consent to a distribution prior to the later of Normal
Retirement or age 62 shall be deemed to be an election to defer commencement
of payment of any benefit under this section.

	 
	 	 	 	All distributions under this section shall be determined and made in
accordance with final and temporary regulations Sections 1.401(a)(9)-1
through 1.401(a)(9)-9, as promulgated under Code Section 401(a)(9),
including the minimum distribution incidental benefit requirements of Code
Section 401(a)(9)(G) and Section 1.401(a)(9)-2 of the proposed regulations.
These provisions override any distribution options in the Plan inconsistent
with Code Section 401(a)(9).”






        2.      Section 14.4 of the Plan shall be amended, effective as of August 1, 2005, by adding the
following sentence at the end thereof:




	 	 	 	“The Committee may determine that, and shall inform the Trustee when,
reasonable expenses may be charged directly to the Account or Accounts of a
Participant or group of Participants to whom or for whose benefit such
expenses are allocable, subject to the guidelines set forth in Field
Assistance Bulletin 2003-03, to the extent not superceded, or any successor
directive issued by the Department of Labor.”






        IN WITNESS WHEREOF, this Amendment Number Five has been executed by the duly authorized
officers of Northwest Savings Bank as of the                      day of                      2005.



	 	 	 	 	 
	ATTEST:	 	NORTHWEST SAVINGS BANK
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	Secretary	 	Title:







 











 





NORTHWEST SAVINGS BANK



 





Resolutions of the Board of Directors



 





        WHEREAS, Northwest Savings Bank (the “Bank”) sponsors the Northwest Savings Bank
Employee Stock Ownership Plan (the “Plan”); and



        WHEREAS, the Bank desires to amend the Plan in order to reduce the amount that can be
distributed from the Plan without participant consent from a maximum amount of $5,000 to a
maximum amount of $1,000; and



        WHEREAS, the Bank also desires to amend the Plan to permit the Committee to charge
reasonable expenses to the account or accounts of a participant or group of participants to
whom or for whose benefit such expenses are allocable, subject to the guidelines set forth
in Field Assistance Bulletin 2003-03 issued by the U.S. Department of Labor.



        WHEREAS, Section 13.4 of the Plan permits the Plan to be amended from time to time.



        NOW, THEREFORE, BE IT RESOLVED, that the Plan shall be, and hereby is,
amended in accordance with Amendment Number Five attached hereto and made a part hereof;
and



        RESOLVED, FURTHER, that the Bank or its designee shall be, and the same hereby is,
authorized, empowered and directed to take any and all action necessary for the
implementation of the aforesaid amendment.



SECRETARY’S CERTIFICATE




        I,                                        , Secretary of Northwest Savings Bank, do
hereby certify that the above resolutions were adopted by the Board of Directors at a meeting
duly held on the                      day of                        , 2005.



          



        Dated:                        , 2005.



          Secretary                         


















 





NORTHWEST SAVINGS BANK

EMPLOYEE STOCK OWNERSHIP PLAN




 






Amendment Number Six




 






        WHEREAS, Northwest Savings Bank (the “Bank”) maintains the Northwest Savings Bank Employee
Stock Ownership Plan (the “Plan”); and



        WHEREAS, the Board of Directors of the Bank (the “Board”) desires to update the Plan to comply
with the changes in the law made by the Pension Protection Act of 2006 (“PPA”); the 2007 Final
Treasury Regulations published under Internal Revenue Code Section 415 (“415 Regulations”); the
Heroes Earnings Assistance and Relief Tax Act of 2008 (“HEART Act”); and the Worker, Retiree, and
Employer Recovery Act of 2008 (“WRERA”); and



        WHEREAS, Section 13.4 of the Plan allows the Bank to amend the Plan from time to time.



        NOW, THEREFORE, the Plan is hereby amended as follows:



        1. The definition of “Total Compensation” in Section 2 is hereby amended to read as follows:




        “Total Compensation” shall mean:




        (a)   Wages as defined in Code Section 3401(a) for purposes of income tax withholding at
the source, but excluding overtime pay, bonuses commissions, severance pay (except to the
extent payable under subsection (c) below), dividends and taxable income on restricted stock
awards (RRPs) and other pay such as holiday bonuses and management bonuses. Only wages paid
during the portion of the Plan Year in which the Employee was a Participant shall count as
Compensation for all Plan purposes (i.e., for a Participant’s initial year of participation
in the Plan, Compensation shall be counted from the date the Participant entered the Plan
through the end of that Plan Year and for re-hired Participants, Compensation shall be
counted as of the date the Participant re-entered the Plan through the end of that Plan
Year).




        (b)   Any elective deferral as defined in Code Section 402(g)(3) (any Employer
contributions made on behalf of a Participant to the extent not includible in gross income
and any Employer contributions to purchase an annuity contract under Code Section 403(b)
under a salary reduction agreement) and any amount which is contributed or deferred by the
Employer at the election of the Participant and which is not includible in gross income of
the Participant by reason of Code Section 125 (including any “deemed” Code Section 125
compensation), Code Section 457 or 132(f)(4) shall also be included in the definition of
Total Compensation.



 









 






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




        (i)   Regular Pay. Total Compensation shall include regular pay after
severance from employment if (a) the payment is for regular compensation for
services during the Participant’s regular working hours, and (b) the payment would
have been paid to the Participant prior to severance from employment if the
Participant had continued in employment with the Employer.




        (ii)   Leave Cash Outs. Total Compensation shall include leave cash outs
if those amounts would have been included in the definition of Total Compensation if
they were earned prior to the Participant’s severance from employment, and the
amounts are payment for unused accrued bona fide sick, vacation or other leave, but
only if the Participant would have been able to use the leave if his employment had
continued.




        (iii)   Deferred Compensation. Total Compensation shall include deferred
compensation if the deferred compensation would have been included in the definition
of Total Compensation if it had been paid prior to the Participant’s severance from
employment, and the compensation is received pursuant to a nonqualified unfunded
deferred compensation plan, but only if the payment would have been paid at the same
time if the Participant had continued in employment with the Employer and only to
the extent that the payment is includible in the Participant’s gross income.




           (d)      Effective on the first day of the Plan Year beginning after December 31, 2008,
Total Compensation includes differential wage payments (as defined in Code Section 3401(h))
paid by the Employer to a former Employee who is performing qualified military services (as
defined in Code Section 414(u)(1)) but only to the extent that those differential wage
payments do not exceed the amounts the individual would have received if the individual had
continued to perform services for the Employer rather than entering qualified military
service.




           (e)      For limitation years beginning on or after July 1, 2007, Total Compensation shall
not include compensation paid to a Participant who has incurred a Disability.




           (f)      For limitation years beginning on or after July 1, 2007, Total Compensation shall
exclude amounts earned but not paid during the limitation year solely because of the timing
of the pay periods and pay dates if: (1) these amounts are paid during the first few



2









 







weeks of the next limitation year; (2) the amounts are included in the definition of
Total Compensation on a uniform and consistent basis with respect to all similarly situated
employees; and (3) these amounts are not included in the definition of Total Compensation
for more than one limitation year.




          (g)   Total Compensation in excess of $245,000 (as indexed) shall be disregarded for all
Participants. For purposes of this sub-section, the $245,000 limit shall be referred to as
the “applicable limit” for the Plan Year in question. The $245,000 limit shall be adjusted
for increases in the cost of living in accordance with Code Section 401(a)(17)(B), effective
for the Plan Year which begins within the applicable calendar year. For purposes of the
applicable limit, Total Compensation shall be prorated over short Plan Years and only
compensation for the portion of the Plan Year during which the individual was a Participant
shall be taken into account.



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




          Notwithstanding the foregoing, effective for limitation years beginning on or after
July 1, 2007, in the event that annual additions exceed the aforesaid limitations as a
result of allocation of forfeitures, a reasonable error in estimating a Participant’s Total
Compensation, a reasonable error in determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)), or under other limited facts and circumstances that the
Commissioner of the Internal Revenue Service finds justify the availability of these rules,
the Plan may only correct such excess in accordance with the Employee Plans Compliance
Resolution System (EPCRS) as set forth in Revenue Procedure 2008-50 or any subsequent
guidance.



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




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




          For limitation years beginning on or after July 1, 2007, in the event Stock is released
from the Unallocated Stock Fund and allocated to a Participant’s account for a particular
Plan Year, the Employer may determine for such year that an annual addition shall be
calculated on the basis of the fair market value of the Stock so released and allocated
(such fair market value to be based on the valuation as of the Valuation Date immediately
preceding the Plan Year in respect of which the release and allocation are made) if the
annual addition, as so calculated, is lower than the annual addition calculated on the basis
of Employer contributions.



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4. The following sentence is hereby added to the end of Section 9.3-1 to read as follows:




          Effective on the first day of the Plan Year beginning after December 31, 2008, for
purposes of this Section 9.3-1, benefits payable in the event of a Participant’s death or
Disability while performing qualified military service shall fully vest in accordance with
Code Section 414(u)(9).



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




          Effective January 1, 2008, an “eligible retirement plan” shall include a deemed
individual retirement account described in Code Section 408(q) and a Roth individual
retirement account in accordance with Code Section 408A(e).



6. The following sentence is hereby added to the end of Section 10.9-4 to read as follows:




          Effective January 1, 2007, a “distributee” shall include a Participant’s non-spouse
Beneficiary.



7. Section 10.10(i) is hereby revised to read as follows:




          (i) the Trustee or Committee, as applicable, clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if applicable, a
particular option); provided, however, that effective January 1, 2007, the written notice
requirements subject to Code Section 402(f) may be provided up to 180 days before the first
day of the first period for which an amount is payable; and



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          IN WITNESS WHEREOF, this Amendment Number Six has been executed by a duly authorized officer
of Northwest Savings Bank on the date set forth below.



	 	 	 	 	 
	 	 	NORTHWEST SAVINGS BANK
	 
	 	 	 	 
	6-17-09

	 	By:
	 	/s/ Julia W. McTavish
	 

	 	 	 	 
	Date	 	Title: SVP, Human Resources






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NORTHWEST SAVINGS BANK




 






Resolutions of the Board of Directors




 






          WHEREAS, Northwest Savings Bank (the “Bank”) maintains the Northwest Savings Bank Employee
Stock Ownership Plan (the “Plan”); and



          WHEREAS, the Board of Directors of the Bank (the “Board”) desires to adopt Amendment Three in
substantially the form attached hereto, in order to update the Plan to comply with the changes in
the law made by the Pension Protection Act of 2006 (“PPA”); the 2007 Final Treasury Regulations
published under Internal Revenue Code Section 415 (“415 Regulations”); the Heroes Earnings
Assistance and Relief Tax Act of 2008 (“HEART Act”); and the Worker, Retiree, and Employer Recovery
Act of 2008 (“WRERA”); and



          WHEREAS, Section 13.3 of the Plan allows the Bank to amend the Plan from time to time.



          NOW, THEREFORE, BE IT RESOLVED, that that the Plan is hereby amended in accordance with
Amendment Number Six attached hereto and made a part hereof, effective as set forth therein; and be
it



          RESOLVED FURTHER, that the Plan Committee shall be, and the same hereby is, authorized,
empowered and directed to take any and all action necessary for the implementation of the aforesaid
amendment.



SECRETARY’S CERTIFICATE




          I, Julia W. McTavish, do
hereby certify that the above resolutions were adopted by the Board of Directors the Compensation Committee meeting duly
held on June 17, 2009.



	 	 	 
	6-17-09

	 	/s/ Julia W. McTavish
	 

	 	 
	Date

	 	Julia W. McTavish
	 

	 	SVP, Human Resources







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