Exhibit 10.1


 BEACON FEDERAL


 EMPLOYEE STOCK OWNERSHIP PLAN


 (adopted effective January 1, 2007)










 BEACON FEDERAL
 EMPLOYEE STOCK OWNERSHIP PLAN


           This Employee Stock
Ownership Plan has been executed on the _________ day of _______________, 2007,
by Beacon Federal, a federally chartered stock savings association.





	
  
 ATTEST:
  	
  
  
  	
  
 BEACON FEDERAL
  
	   
	   
	   

	
  
  
  	
  
  
  	
  
  
  
	
  


  	
  
  
  	
  


  












 C O N T E N T S

	
    
 	
    
 	
    
 	
  
 Page No.
  
	
  
  
  	

  
	
  
 Section 1.
  	
  
 Plan Identity
  	
  
 1
  
	
  
  
  	
  
 1.1
  	
  
 Name
  	
  
 1
  
	
  
  
  	
  
 1.2
  	
  
 Purpose
  	
  
 1
  
	
    
  	
  
 1.3
  	
  
 Effective Date
  	
  
 1
  
	
  
  
  	
  
 1.4
  	
  
 Fiscal Period
  	
  
 1
  
	
  
  
  	
  
 1.5
  	
  
 Single Plan for All Employers
  	
  
 1
  
	
  
  
  	
  
 1.6
  	
  
 Interpretation of Provisions
  	
  
 1
  
	
  
 Section 2.
  	
  
 Definitions
  	
  
 1
  
	
  
 Section 3.
  	
  
 Eligibility for Participation
  	
  
 8
  
	
    
  	
  
 3.1
  	
  
 Initial Eligibility
  	
  
 8
  
	
  
  
  	
  
 3.2
  	
  
 Definition of Eligibility Year
  	
  
 8
  
	
  
  
  	
  
 3.3
  	
  
 Terminated Employees
  	
  
 8
  
	
  
  
  	
  
 3.4
  	
  
 Certain Employees Ineligible
  	
  
 8
  
	
  
  
  	
  
 3.5
  	
  
 Participation and Reparticipation
  	
  
 9
  
	
    
  	
  
 3.6
  	
  
 Omission of Eligible Employee
  	
  
 9
  
	
  
  
  	
  
 3.7
  	
  
 Inclusion of Ineligible Employee
  	
  
 9
  
	
  
 Section 4.
  	
  
 Contributions and Credits
  	
  
 10
  
	
  
  
  	
  
 4.1
  	
  
 Discretionary Contributions
  	
  
 10
  
	
  
  
  	
  
 4.2
  	
  
 Contributions for Stock Obligations
  	
  
 10
  
	
    
  	
  
 4.3
  	
  
 Conditions as to Contributions
  	
  
 10
  
	
  
  
  	
  
 4.4
  	
  
 Rollover Contributions
  	
  
 11
  
	
  
 Section 5.
  	
  
 Limitations on Contributions and   Allocations
  	
  
 11
  
	
  
  
  	
  
 5.1
  	
  
 Limitation on Annual Additions
  	
  
 11
  
	
  
  
  	
  
 5.2
  	
  
 Effect of Limitations
  	
  
 12
  
	
    
  	
  
 5.3
  	
  
 Limitations as to Certain Participants
  	
  
 12
  
	
  
  
  	
  
 5.4
  	
  
 Erroneous Allocations
  	
  
 13
  
	
  
 Section 6.
  	
  
 Trust Fund and Its Investment.
  	
  
 13
  
	
  
  
  	
  
 6.1
  	
  
 Creation of Trust Fund
  	
  
 13
  
	
  
  
  	
  
 6.2
  	
  
 Stock Fund and Investment Fund
  	
  
 13
  
	
    
  	
  
 6.3
  	
  
 Acquisition of Stock
  	
  
 13
  
	
  
  
  	
  
 6.4
  	
  
 Participants’ Option to Diversify
  	
  
 14
  
	
  
 Section 7.
  	
  
 Voting Rights and Dividends on Stock
  	
  
 15
  
	
  
  
  	
  
 7.1
  	
  
 Voting and Tendering of Stock
  	
  
 15
  
	
  
  
  	
  
 7.2
  	
  
 Application of Dividends
  	
  
 16
  
	
   Section 8.
  	
  
 Adjustments to Accounts
  	
  
 17
  
	
  
  
  	
  
 8.1
  	
  
 ESOP Allocations
  	
  
 17
  
	
  
  
  	
  
 8.2
  	
  
 Charges to Accounts
  	
  
 17
  
	
  
  
  	
  
 8.3
  	
  
 Stock Fund Account
  	
  
 18
  
	
  
  
  	
  
 8.4
  	
  
 Investment Fund Account
  	
  
 18
  
	
  
  
  	
  
 8.5
  	
  
 Adjustment to Value of Trust Fund
  	
  
 18
  
	
    
  	
  
 8.6
  	
  
 Participant Statements
  	
  
 18
  
	
  
 Section 9.
  	
  
 Vesting of Participants’ Interests
  	
  
 19
  
	
  
  
  	
  
 9.1
  	
  
 Deferred Vesting in Accounts
  	
  
 19
  
	
  
  
  	
  
 9.2
  	
  
 Computation of Vesting Years
  	
  
 19
  
	
  
  
  	
  
 9.3
  	
  
 Full Vesting Upon Certain Events
  	
  
 20
  
	
    
  	
  
 9.4
  	
  
 Full Vesting Upon Plan Termination
  	
  
 21
  











	
  
  
  	
  
 9.5
  	
  
 Forfeiture, Repayment, and Restoral
  	
  
 21
  
	
  
  
  	
  
 9.6
  	
  
 Accounting for Forfeitures
  	
  
 21
  
	
  
  
  	
  
 9.7
  	
  
 Vesting and Nonforfeitability
  	
  
 21
  
	
   Section 10.
  	
  
 Payment of Benefits
  	
  
 21
  
	
  
  
  	
  
 10.1
  	
  
 Benefits for Participants
  	
  
 21
  
	
  
  
  	
  
 10.2
  	
  
 Time for Distribution
  	
  
 22
  
	
  
  
  	
  
 10.3
  	
  
 Marital Status
  	
  
 23
  
	
  
  
  	
  
 10.4
  	
  
 Delay in Benefit Determination
  	
  
 23
  
	
    
  	
  
 10.5
  	
  
 Accounting for Benefit Payments
  	
  
 23
  
	
  
  
  	
  
 10.6
  	
  
 Options to Receive and Sell Stock
  	
  
 23
  
	
  
  
  	
  
 10.7
  	
  
 Restrictions on Disposition of Stock
  	
  
 24
  
	
  
  
  	
  
 10.8
  	
  
 Continuing Loan Provisions; Creations of   Protections and Rights
  	
  
 24
  
	
  
  
  	
  
 10.9
  	
  
 Direct Rollover of Eligible Distribution
  	
  
 24
  
	
    
  	
  
 10.10
  	
  
 Waiver of 30-Day Period After Notice of   Distribution
  	
  
 25
  
	
  
 Section 11.
  	
  
 Rules Governing Benefit Claims and Review   of Appeals
  	
  
 25
  
	
  
  
  	
  
 11.1
  	
  
 Claim for Benefits
  	
  
 25
  
	
  
  
  	
  
 11.2
  	
  
 Notification by Committee
  	
  
 25
  
	
  
  
  	
  
 11.3
  	
  
 Claims Review Procedure
  	
  
 26
  
	
   Section 12.
  	
  
 The Committee and its Functions
  	
  
 26
  
	
  
  
  	
  
 12.1
  	
  
 Authority of Committee
  	
  
 26
  
	
  
  
  	
  
 12.2
  	
  
 Identity of Committee
  	
  
 26
  
	
  
  
  	
  
 12.3
  	
  
 Duties of Committee
  	
  
 26
  
	
  
  
  	
  
 12.4
  	
  
 Valuation of Stock.
  	
  
 27
  
	
    
  	
  
 12.5
  	
  
 Compliance with ERISA
  	
  
 27
  
	
  
  
  	
  
 12.6
  	
  
 Action by Committee
  	
  
 27
  
	
  
  
  	
  
 12.7
  	
  
 Execution of Documents
  	
  
 27
  
	
  
  
  	
  
 12.8
  	
  
 Adoption of Rules
  	
  
 27
  
	
  
  
  	
  
 12.9
  	
  
 Responsibilities to Participants
  	
  
 27
  
	
    
  	
  
 12.10
  	
  
 Alternative Payees in Event of Incapacity
  	
  
 27
  
	
  
  
  	
  
 12.11
  	
  
 Indemnification by Employers
  	
  
 28
  
	
  
  
  	
  
 12.12
  	
  
 Nonparticipation by Interested Member
  	
  
 28
  
	
  
 Section 13.
  	
  
 Adoption, Amendment, or Termination of the   Plan
  	
  
 28
  
	
  
  
  	
  
 13.1
  	
  
 Adoption of Plan by Other Employers
  	
  
 28
  
	
    
  	
  
 13.2
  	
  
 Plan Adoption Subject to Qualification
  	
  
 28
  
	
  
  
  	
  
 13.3
  	
  
 Right to Amend or Terminate
  	
  
 28
  
	
  
 Section 14.
  	
  
 Miscellaneous Provisions
  	
  
 29
  
	
  
  
  	
  
 14.1
  	
  
 Plan Creates No Employment Rights
  	
  
 29
  
	
  
  
  	
  
 14.2
  	
  
 Nonassignability of Benefits
  	
  
 29
  
	
    
  	
  
 14.3
  	
  
 Limit of Employer Liability
  	
  
 29
  
	
  
  
  	
  
 14.4
  	
  
 Treatment of Expenses
  	
  
 29
  
	
  
  
  	
  
 14.5
  	
  
 Number and Gender
  	
  
 29
  
	
  
  
  	
  
 14.6
  	
  
 Nondiversion of Assets
  	
  
 29
  
	
  
  
  	
  
 14.7
  	
  
 Separability of Provisions
  	
  
 29
  
	
    
  	
  
 14.8
  	
  
 Service of Process
  	
  
 29
  
	
  
  
  	
  
 14.9
  	
  
 Governing State Law
  	
  
 29
  
	
  
  
  	
  
 14.10
  	
  
 Employer Contributions Conditioned on   Deductibility
  	
  
 30
  
	
  
  
  	
  
 14.11
  	
  
 Unclaimed Accounts
  	
  
 30
  
	
  
  
  	
  
 14.12
  	
  
 Qualified Domestic Relations Order
  	
  
 30
  
	
   Section 15.
  	
  
 Top-Heavy Provisions
  	
  
 31
  
	
  
  
  	
  
 15.1
  	
  
 Top-Heavy Plan
  	
  
 31
  




 (ii)









	
  
  
  	
  
 15.2
  	
  
 Super Top-Heavy Plan
  	
  
 31
  
	
  
  
  	
  
 15.3
  	
  
 Definitions
  	
  
 31
  
	
    
  	
  
 15.4
  	
  
 Top-Heavy Rules of Application
  	
  
 32
  
	
  
  
  	
  
 15.5
  	
  
 Minimum Contributions
  	
  
 33
  
	
  
  
  	
  
 15.6
  	
  
 Minimum Vesting
  	
  
 33
  
	
  
  
  	
  
 15.7
  	
  
 Top-Heavy Provisions Control in Top-Heavy   Plan
  	
  
 34
  




 (iii)










 BEACON FEDERAL
 EMPLOYEE STOCK OWNERSHIP PLAN


 Section 1.  Plan Identity.



          1.1          Name. 
The name of this Plan is “Beacon Federal Employee Stock Ownership
Plan.”



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



          1.3          Effective
Date.  The Effective Date of this Plan is January 1,
2007.



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



          “Bank”
means Beacon Federal and any entity which succeeds to the business of Beacon
Federal and adopts this Plan as its own pursuant to Section 13.1 of the
Plan.










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


           “Break in
Service” means any Plan Year, or, for the initial eligibility
computation period under Section 3.2, the 12-consecutive month period beginning
on the first day of 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 (said Employee shall not be credited with more than
501 Hours of Service to avoid a Break in Service), unless he does not resume his
Service at the end of the Recognized Absence.  Further, if an Employee is
absent for any period (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 Beacon Federal Financial Services, Inc., the holding company of the Bank,
and any successor entity that succeeds to the business of the
Company.



          “Disability”
means the inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.  An individual shall not be
considered to be permanently and totally disabled unless he furnishes proof of
the existence thereof in such form and manner, and at such times, as the
Committee may require.


           “Early
Retirement” means retirement on or after the date a Participant attains
age 50 and has completed 20 years of employment from the date of
hire.


           “Effective
Date” means January 1, 2007.


           “Eligible
Employee” means an Employee, other than an Employee identified in
Section 3.4, who has performed 1,000 Hours of Service in the applicable
Eligibility Year in accordance with Section 3.2 and who has attained age
18.



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


 -2-










 employees, but excluding Highly Compensated Employees and any other Employees
who have not performed services for the Employer on a substantially full-time
basis for at least one year).


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


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



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


           “415 Compensation” shall mean:

	
  
  
  	
  

          (a)          Wages
(including overtime pay, bonuses and commissions), as defined in Code Section
3401(a) for purposes of income tax withholding at the source.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

          (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 (Cafeteria Plan), Code Section 457 or 132(f)(4) shall
also be included in the definition of 415 Compensation.
 
	
    
  	
  
  
  
	
  
  
  	
  

          (c)          415
Compensation in excess of $225,000 (as indexed) shall be disregarded for all
Participants.  For purposes of this sub-section, the $225,000 limit shall
be referred to as the “applicable limit” for the Plan Year in
question.  The $225,000 limit shall be adjusted for increases in the cost
of living in accordance with Section 401(a)(17)(B) of the Code, effective for
the Plan Year which begins within the applicable calendar year.  For
purposes of the applicable limit, 415 Compensation shall be prorated over
short Plan Years and only compensation for the portion of the Plan Year during
which the individual was a Participant shall be taken into account.






           “Highly
Compensated Employee” for any Plan Year means an Employee who, during
either 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, during
the immediately preceding Plan Year, had 415 Compensation exceeding $100,000 and
was among the most highly compensated one-fifth of all Employees (the $100,000
amount is adjusted at the same time and in the same manner as under Code Section
415(d)).  For these purposes, “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 171⁄2 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.  The applicable year for which a determination is
being made is called a “determination year” and the preceding 12-month
period is called a look-back year.


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

	
  
  
  	
  

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




 -3-









	
  
  
  	
  

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

for medical expenses.
  
	
    
  	
  
  
  
	
  
  
  	
  

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

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

          (e)          If
an Employer finds it impractical to count the actual Hours of Service for any
class or group of non-hourly Employees, each Employee in that class or group
shall be credited with 90 Hours of Service for each bi-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 the
Hours of Service to either the first Plan Year or the second.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

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




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


           “Normal
Retirement” means retirement on or after the Participant’s Normal
Retirement Date.


           “Normal
Retirement Date” means the date a Participant attains age 55 and has
completed 5 years of Service. 



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


 -4-










           “Period of
Uniformed Service” means the length of time that an Employee serves in
the Uniformed Services. 


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


            “Recognized
Absence” means a period for which --

	
  
  
  	
  

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

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

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




           “Reemployment After a Period of Uniformed Service”



                     (a)          “Reemployment
(or Reemployed) After a Period of Uniformed Service” means that an
Employee returned to employment with a Participating Employer, within the time
frame set forth in subparagraph (b) below, after a Period of Uniformed
Service in the Uniformed Services and the following rules corresponding to
provisions of the Uniformed Services Employment and Reemployment Rights Act of
1994 (“USERRA”) apply:  (i) he or she gives sufficient
notice of leave to the Participating Employer prior to commencing a Period of
Uniformed Service, or is excused from providing such notice; (ii) his or
her employment with the Participating Employer prior to a Period of Uniformed
Service was not of a brief, nonrecurrent nature that would preclude a reasonable
expectation that such employment would continue indefinitely or for a
significant period; (iii) the Participating Employer’s circumstances
have not changed so that reemployment is unreasonable or an undue hardship to
the Participating Employer; and (iv) the applicable cumulative Periods of
Uniformed Service under USERRA equals five years or less, unless service in the
Uniformed Services:


	
  
  
  	
  

                         (1)          in
excess of five years is required to complete an initial Period of Uniformed
Service;
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                         (2)          prevents
the Participant from obtaining orders releasing him or her from such Period of
Uniformed Service prior to the expiration of a five-year period (through no
fault of the Participant);
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                         (3)          is
required in the National Guard for drill and instruction, field exercises or
active duty training, or to fulfill necessary additional training, or to fulfill
necessary additional training requirements certified in writing by the Secretary
of the branch of Uniformed Services  concerned; or
 
	
    
  	
  
  
  
	
  
  
  	
  

                         (4)          for
a Participant is
 





	
  
  
  	
  

                             (A)          required
other than for training under any provisions of  law during a war or
national agency declared by the President or Congress;
 




 -5-









	
  
  
  	
  

                              (B)          required
(other than for training) in support of an operational mission for which
personnel have been ordered to active duty other than during war or national
emergency;
 
	
    
  	
  
  
  
	
  
  
  	
  

                              (C)          required
in support of a critical mission or requirement of the Uniformed Services;
or
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                              (D)          the
result of being called into service as a member of the National Guard by the
President in the case of rebellion or danger of rebellion against the authority
of the United States Government or if the President is unable to execute the
laws of the United States with the regular forces.
 





                    (b)          The
applicable statutory time frames within which an Employee must report to a
Participating Employer after a Period of Uniformed Service are as
follows:



                                   (1)          If
the Period of Uniformed Service was less than 31 days,


	
  
  
  	
  

                            (A)          not
later than the beginning of the first full regularly scheduled work period on
the first full calendar day following the completion of the Period of Uniformed
Service and the expiration of eight hours after a period of time allowing for
the safe transportation of the Employee from the place of service in the
Uniformed Services to the Employee’s residence; or
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                            (B)          as
soon as possible after the expiration of the eight-hour period of time referred
to in Clause (A), if reporting within  the period referred to in such
clause is impossible or unreasonable through no fault of the
Employee.
 





	
  
  
  	
  

                        (2)          In
the case of an Employee whose Period of Uniformed Service was for more than 30
days but less than 181 days, by submitting an application for reemployment with
a Participating Employer not later than 14 days after the completion of the
Period of Uniformed Service or, if submitting such application within such
period is impossible or unreasonable through no fault of the Employee, the next
first full calendar day when submission of such application becomes
reasonable.
 
	
    
  	
  
  
  
	
  
  
  	
  

                        (3)          In
the case of an Employee whose Period of Uniformed Service was for more than 180
days, by submitting an application for reemployment with a Participating
Employer not later than 90 days after the completion of the Period of Uniformed
Service.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                        (4)          In
the case of an Employee who is hospitalized for, or convalescing from, an
illness or injury related to the Period of Uniformed Service the Employee shall
apply for reemployment with a Participating Employer at the end of the period
that is necessary for the Employee to recover.  Such period of recovery
shall not exceed two years, unless circumstances beyond the Employee’s
control make reporting as above unreasonable or impossible.
 





                    (c)          Notwithstanding
subparagraph (a), Reemployment After a Period of Uniformed Service terminates
upon the occurrence of any of the following:

	
    
  	
  

                        (1)          a
dishonorable or bad conduct discharge from the Uniformed Services;


	
  
  
  	
  
  
  
	
  
  
  	
  

                        (2)          any
other discharge from the Uniformed Services under circumstances other than an
honorable condition;
 




 -6-









	
  
  
  	
  

                        (3)          a
discharge of a commissioned officer from the Uniformed Services by court
martial, by commutation of sentence by court martial, or, in time of war, by the
President; or
 
	
  
  
  	
  
  
  
	
    
  	
  

                        (4)          a
demotion of a commissioned officer in the Uniformed Services for absence without
authorized leave of at least 3 months confinement under a sentence by court
martial, or confinement in a federal or state penitentiary after being found
guilty of a crime under a final sentence.
 




           
“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, provided, however, that Service with an acquired entity
shall not be considered Service under the Plan unless required by applicable law
or agreed to by the parties to such transaction.  An Employee’s
Service shall also include any Service with an entity which is not an Employer,
but only either (i) 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) 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.  A former Spouse shall be treated as
the Spouse or surviving Spouse to the extent provided under a qualified domestic
relations order as described in section 414(p) of the Code.



          “Stock”
means shares of the Company’s voting common stock or preferred stock
meeting the requirements of Section 409(e)(3) of the Code issued by an Employer
which is a member of the same controlled group of corporations within the
meaning of Code Section 414(b).  The term “Stock” shall include
fractional shares, unless the context clearly indicates otherwise.


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


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

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





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


 -7-










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



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



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


            “Uniformed
Service” means the performance of duty on a voluntary or involuntary
basis in the uniformed service of the United States, including the U.S. Public
Health Services, under competent authority and includes active duty, active duty
for training, initial activity duty for training, inactive duty training,
full-time National Guard duty, and the period for which a person is absent from
a position of employment for purposes of an examination to determine the fitness
of the person to perform any such duty.


           “Valuation
Date” means for so long as there is a generally-recognized market for
the Stock each business day.  If at any time there shall be no
generally-recognized market for the Stock, then “Valuation Date” shall
mean 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 Eligible Employee shall enter the Plan as of the
Entry Date coincident with or next following the last day of the Eligible
Employee’s first Eligibility Year and attainment of age 18.



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



             (i)           an
Eligible 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 



             (ii)          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.


 -8-









	
  
  
  	
  

          3.4-1.          No
Employee shall participate in the Plan while his Service is covered by a
collective bargaining agreement between an Employer and the Employee’s
collective bargaining representative if (i) retirement benefits have been the
subject of good faith bargaining between the Employer and the representative and
(ii) the collective bargaining agreement does not provide for the
Employee’s participation in the Plan.
 
	
    
  	
  
  
  
	
  
  
  	
  

          3.4-2.          Leased
Employees are not eligible to participate in the Plan.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

          3.4-3.          Employees
who are nonresident aliens with no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer which constitutes income from sources
within the United States (within the meaning of Code Section
861(a)(3)).
 
	
  
  
  	
  
  
  
	
  
  
  	
  

          3.4-4.          An
Eligible Employee may elect not to participate in the Plan, provided, however,
such election is made solely to meet the requirements of Code Section
409(n).  For an election to be effective for a particular Plan Year, the
Eligible Employee or Participant must file the election in writing with the Plan
Administrator no later than the last day of the Plan Year for which the election
is to be effective.  The Employer may not make a contribution under the
Plan for the Eligible Employee or for the Participant for the Plan Year for
which the election is effective, nor for any succeeding Plan Year, unless the
Eligible Employee or Participant re-elects to participate in the Plan.  The
Eligible Employee or Participant may elect again not to participate, but not
earlier than the first Plan Year following the Plan Year in which the
re-election was first effective.
 




             3.5          Participation
and Reparticipation.  Subject to the satisfaction of the foregoing
requirements, an Eligible 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 Eligible Employee who returns before
five (5) consecutive one year 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.



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



             3.7          Inclusion
of Ineligible Employee.  If, in any Plan Year, any person who
should not have been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be entitled to
recover the contribution made with respect to the ineligible person regardless
of whether or not a deduction is allowable with respect to such
contribution.  In such event, the amount contributed with respect to the
ineligible person shall constitute a forfeiture for the fiscal year in which the
discovery is made.  Any person who, after the close of a Plan Year, is
retroactively treated by the Company, an affiliated company or any other party
as an Employee for such prior Plan Year shall not, for purposes of the Plan, be
considered an Employee for such prior Plan Year unless expressly so treated as
such by the Company.


 -9-










 Section
4.           Contributions
and Credits.



             4.1          Discretionary
Contributions.  
 

             4.1-1.     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 the manner set forth in Section
8.1-2.



             4.1-2.     Upon
a Participant’s Reemployment After a Period of Uniformed Service, the
Employer shall make an additional contribution on behalf of such Participant
that would have been made on his or her behalf during the Plan Year or Years
corresponding to the Participant’s Period of Uniformed Service.



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



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



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



             4.3          Conditions
as to Contributions.  Employers’ contributions shall in all
events be subject to the limitations set forth in Section 5. Contributions may
be made in the form of cash, or securities and other property to the extent
permissible under ERISA, including Stock, and shall be held by the Trustee in
accordance with the Trust Agreement.  In addition to the provisions of
Section 13.3 for the return of an Employer’s contributions in connection
with a failure of the Plan to qualify initially under the Code, any amount
contributed by an Employer due to a good faith mistake of fact, or based upon a
good faith but erroneous determination of its deductibility under Section 404 of
the Code, shall be returned to the Employer within one year after the date on
which the contribution was originally made, or within one year after its
nondeductibility has been finally determined.  However, the amount to be
returned shall be reduced to take account of any adverse investment experience
within the Trust Fund in order that the balance credited to each
Participant’s Account is not less that it would have been if the
contribution had never been made.


 -10-











             4.4         Rollover
Contributions.  This Plan shall not accept a direct rollover or
rollover contribution of an “eligible rollover distribution” as such
term is defined in Section 10.9-1 of the Plan.


 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 Compensated 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 $45,000 (or such other dollar amount which results from cost-of-living
adjustments under Section 415(d) of the Code) (the “dollar
limitation”) or 100 percent of the Participant’s 415 Compensation for
such limitation year (the “percentage limitation”).  The
percentage limitation 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. 
If, as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant’s annual compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any individual under the limits of
Code Section 415, or under other limited facts and circumstances that the
Commissioner of the Internal Revenue Service finds justify the availability of
the rules set forth in this paragraph, the annual additions under the terms of
the Plan for a particular Participant would cause the limitations of Code
Section 415 applicable to that Participant for the limitation year to be
exceeded, the excess amounts shall not be deemed annual additions in that
limitation year if they are treated in accordance with any one of the
following:
 
	
    
  	
  
  
  
	
  
  
  	
  

                (i)              Any
excess amount at the end of the Plan Year that cannot be allocated to the
Participant’s Account shall be reallocated to the remaining Participants
who are eligible for an allocation of Employer contributions for the Plan
Year.  The reallocation shall be made in accordance with Section 4.1 of the
Plan as if the Participant whose Account otherwise would receive the excess
amount is not eligible for an allocation of Employer contributions.


	
  
  
  	
  
  
  
	
  
  
  	
  

                (ii)              If
the allocation or reallocation of the excess amounts causes the limitations of
Code section 415 to be exceeded with respect to each Participant for the
limitation year, then 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 Participants’
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.
 




 -11-









	
  
  
  	
  

               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.  For these purposes,
annual additions to a defined contribution plan shall not include the allocation
of the excess amounts remaining in the Unallocated Stock Fund subsequent to a
sale of stock from such fund in accordance with a transaction described in
Section 8.1 of the Plan.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

               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 Compensated 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 Eligible 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 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 ending on
December 31.
 





             5.2          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 corrected in accordance with Section 5.1-2 of the
Plan.  If it is determined at any time that the Committee and/or Trustee
has erred in accepting and allocating any contributions or forfeitures under
this Plan, or in allocating net gain or loss pursuant to Sections 8.2 and 8.3,
then the Committee, in a uniform and nondiscriminatory manner, shall determine
the manner in which such error shall be corrected and shall promptly advise the
Trustee in writing of such error and of the method for correcting such
error.  The Accounts of any or all Participants may be revised, if
necessary, in order to correct such error.



             5.3          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.


 -12-











             This
restriction shall apply at all times to a Participant who owns (taking into
account the attribution rules under Section 318(a) of the Code, without regard
to the exception for employee plan trusts in Section 318(a)(2)(B)(i) more
than 25 percent of any class of stock of a corporation which issued the Stock
acquired by the Plan, or another corporation within the same controlled group,
as defined in Section 409(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.



             5.4          Erroneous
Allocations.  No Participant shall be entitled to any annual
additions or other allocations to his Account in excess of those permitted under
Section 5.  If it is determined at any time that the administrator and/or
Trustee have erred in accepting and allocating any contributions or forfeitures
under this Plan, or in allocating investment adjustments, or in excluding or
including any person as a Participant, then the administrator, in a uniform and
nondiscriminatory manner, shall determine the manner in which such error shall
be corrected, after taking into consideration Sections 3.6 and 3.7, if
applicable, and shall promptly advise the Trustee in writing of such error and
of the method for correcting such error.  The Accounts of any or all
Participants may be revised, if necessary, in order to correct such
error.


 Section
6.          Trust
Fund and Its Investment.



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



             6.2         Stock
Fund and Investment Fund.  The Trust Fund held by the Trustee shall
be divided into the Stock Fund, consisting entirely of Stock, and the Investment
Fund, consisting of all assets of the Trust other than Stock.  The Trustee
shall have no investment responsibility for the Stock Fund, but shall accept any
Employer contributions made in the form of Stock, and shall acquire, sell,
exchange, distribute, and otherwise deal with and dispose of Stock in accordance
with the instructions of the Committee.  The Trustee shall have full
responsibility for the investment of the Investment Fund, except to the extent
such responsibility may be delegated from time to time to one or more investment
managers pursuant to Section 2.3 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 


 -13-










 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.
 
	
  
  
  	
  
  
  
	
    
  	
  

              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 diversify
must be made on the prescribed form and filed with the Committee within the
period specified herein.  For each of the first five (5) Plan years in the
qualified election period, the Participant may elect to diversify an amount
which does not exceed 25% of the number of shares allocated to his Account since
the inception of the Plan, less all shares with respect to which an election
under this Section has already been made.  For the last year of the
qualified election period, the Participant may elect to have up to 50 percent of
the value of his Account committed to other investments, less all shares with
respect to which an election under this Section has already been made.  The
term “qualified election period” shall mean the six (6) Plan Year
period beginning with the first Plan Year in which a Participant has both
attained age 55 and completed 


 -14-










 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.
 




 Section 7.        Voting
Rights and Dividends on Stock.



             7.1       Voting
and Tendering of Stock.  

	
  
  
  	
  
            7.1-1.  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, allocated
Stock for which it has received no voting instructions, and Stock for which
Participants vote to “abstain,” 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 shall provide the Trustee, in a
timely manner, with the same notices and other materials as are provided to
other holders of the Stock, which the Trustee shall distribute to the
Participants.  The Participants shall be provided with adequate opportunity
to deliver their instructions to the Trustee regarding the voting of Stock
allocated to their Accounts.  The instructions of the Participants’
with respect to the voting of allocated shares hereunder shall be
confidential.


 -15-









	
  
  
  	
  

               7.1-2 
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          Application of Dividends.
  
	
    
  	
  
  
  
	
  
  
  	
  

               7.2-1          Stock
Dividends.  Dividends on Stock which are received by the Trustee in the
form of additional Stock shall be retained in the Stock Fund, and shall be
allocated among the Participants’ Accounts and the Unallocated Stock Fund
in accordance with their holdings of the Stock on which the dividends are
paid.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

               7.2-2          Cash
Dividends.  The treatment of dividends paid in cash shall be determined
after consideration to whether the cash dividends are paid on Stock held in
Participants’ Accounts or the Unallocated Stock Fund.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                                  (i)          On
Stock in Participants’ Accounts. 
(A)  Employer
Exercises Discretion.  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 8.4(c) and invested as part
of the Investment Fund, (ii) be distributed immediately to the Participants in
proportion with the Participants’ Stock Fund Account balance (iii) be
distributed to the Participants within 90 days of the close of the Plan Year in
which paid in proportion with the Participants’ Stock Fund Account balance
or (iv) be used to make payments on the Stock Obligation.  If dividends on
Stock allocated to a Participant’s Account are used to repay the Stock
Obligation, Stock with a fair market value equal to the dividends so used must
be allocated to such Participant’s Account in lieu of the
dividends.
 
	
    
  	
  
  
  
	
  
  
  	
  

                                  (B)          Participant
Exercises Discretion over Dividend.  In addition, in the sole
discretion of the Employer, the Employer may grant Participants the right to
elect: (I) to have cash dividends paid on shares of Stock credited to such
Participants’ Stock Fund Accounts distributed to the Participant, or (II)
to leave the cash dividends allocated to the Participant’s Account in the
Plan, to be credited to the Stock Fund Account and invested in shares of
Stock.  Dividends on which such election may be made will be fully vested
in the Participant (even if not otherwise vested, absent the ability to make
such election).  Accordingly, the Employer may choose to offer this
election only to Participants who are fully vested in their Account.  In
the event the Employer elects to give Participants the right to determine the
treatment of such dividends, the Participant’s election shall be made by
filing with the Committee the appropriate written direction as provided by the
Committee at such time and in accordance with such procedures and limitations
which the Committee may from time to time establish; provided, however, that the
procedures established by the Committee shall provide a reasonable opportunity
to change the election at least annually, may establish a default election if a
Participant fails to make an affirmative election within the time established
for making elections, may provide that the election is applicable for the Plan
Year and cannot be revoked with respect to such Plan Year, shall otherwise be
implemented in a manner such that the dividends paid or reinvested will
constitute “applicable dividends” which may be deducted under Code
Section 404(k), and are in accordance with applicable guidance issued or to be
issued by the Secretary of the Treasury. If the Employer elects to give
Participants the right to exercise the discretion in this Paragraph 7.2-2(i)(B),
the ability to make such election shall be available to the Participant with
respect to dividends paid for the entire Plan Year.
 
	
    
  	
  
  
  
	
  
  
  	
  

                                  (ii)          On
Stock in the Unallocated Stock Fund.  Dividends received on shares of
Stock held in the Unallocated Stock Fund shall be applied to the repayment of
principal and interest 
 




 -16-









	
  
  
  	
  
 then due on the Stock Obligation used to acquire such shares.  If the
amount of dividends exceeds the amount needed to repay such principal and
interest (including any prepayments of principal and interest deemed advisable
by the Employer), then in the sole discretion of the Committee, the excess
shall:  (A) be allocated to Active Participants on a non-discriminatory
basis, consistent with Section 7.2-2(i) above, and in the discretion of the
Committee, treated as a dividend described in such Section, or (B) be deemed to
be general earnings of the Trust Fund and used for paying appropriate Plan or
Trust related expenditures for the Plan Year.  Notwithstanding the
foregoing, dividends paid on a share of Stock may not be used to make payments
on a particular Stock Obligation unless the share was acquired with the proceeds
of such loan or a refinancing of such loan.
 



 Section 8.        Adjustments to Accounts.



             8.1         ESOP
Allocations.  Amounts available for allocation for a particular
Plan Year will be divided into two categories.  The first category relates
to shares of Stock released from the Unallocated Stock Fund attributable to
using cash dividends to make Stock Obligation payments.  The second
category relates to contributions made by the Employer, shares of Stock released
from the Unallocated Stock Fund on the basis of Employer contributions (or on
the basis of the complete repayment of the Stock Obligation through the sale or
other disposition of Stock in the Unallocated Stock Fund) and amounts forfeited
from Stock Fund Accounts pursuant to Section 9.5.

	
  
  
  	
  

           8.1-1.          Shares
of Stock attributable to the first category will be allocated to the Stock Fund
Accounts of eligible Participants as follows:
 
	
  
  
  	
  
  
  
	
  
  
  	
  
  
  	
  

                    (i)          first,
if dividends paid on shares of Stock held in Participants’ Stock Fund
Accounts are used to make payments on an Stock Obligation, there shall be
allocated to each such account a number of shares of Stock released from the
Unallocated Stock Fund with a fair market value (determined as of the Valuation
Date coincident with or immediately preceding the loan payment date) that
at least equals the amount of dividends so used,
 
	
    
  	
  
  
  	
  
  
  
	
  
  
  	
  
  
  	
  

                    (ii)          second,
if necessary, any remaining shares of Stock shall be applied to reinstate
amounts forfeited from Stock Fund Accounts of former employees who are entitled
to a reinstatement under Section 9.5, and
 
	
  
  
  	
  
  
  	
  
  
  
	
  
  
  	
  
  
  	
  

                    (iii)          finally,
any remaining shares of Stock shall be allocated as a general investment gain in
proportion to the number of shares held in the Active Participants’ Stock
Fund Accounts as of the last Valuation Date of the Plan Year for which they are
allocated in the same manner as described in Section 7.2-2(i).
 
	
  
  
  	
  
  
  	
  
  
  
	
    
  	
  

           8.1-2.          Shares
of Stock or cash attributable to the second category (i.e., Employer
contributions, Stock released from the Unallocated Stock Fund on the basis of
Employer contributions, and amounts forfeited) will be allocated to the Stock
Fund Accounts or Investment Fund Accounts, as the case may be, pro rata, in
proportion to the 415 Compensation of each Active Participant for the portion of
the year during which he was a Participant, as compared to total 415
Compensation for all Active Participants.
 
	
  
  
  	
  
  
  	
  
  
  
	
  
  
  	
  

           8.1-3.          Shares
of Stock or cash attributable to contributions made under Section 4.1-2
shall be allocated specifically to the Participants on whose behalf such
contributions were made.
 





             8.2          Charges
to Accounts.  When a Valuation Date occurs, any distributions made
to or on behalf of any Participant or Beneficiary since the last preceding
Valuation Date shall be charged to the proper Accounts maintained for that
Participant or Beneficiary.
 
 -17-











             8.3          Stock
Fund Account.  Subject to the provisions of Sections 5 and
8.1, as of the last day of each Plan Year, the Trustee shall credit to each
Participant’s Stock Fund Account:  (a) the Participant’s
allocable share of Stock purchased by the Trustee or contributed by the Employer
to the Trust Fund for that year; (b) the Participant’s allocable share of
the Stock that is released from the Unallocated Stock Fund for that year; (c)
the Participant’s allocable share of any forfeitures of Stock arising under
the Plan during that year; and (d) any stock dividends declared and paid during
that year on Stock credited to the Participant’s Stock Fund
Account.



             If,
in any Plan Year during which an outstanding Stock Obligation exists, the
Employer directs the Trustee to sell or otherwise dispose of a number of shares
of Stock in the Unallocated Stock Fund sufficient to repay, in its entirety, the
Stock Obligations, and following such repayment, there remains Stock or other
assets in the Unallocated Stock Fund, such Stock or other assets shall be
allocated as of the last day of the Plan Year in which the repayment occurred as
earnings of the Plan to Active Participants, in proportion to the number of
shares held in Active Participants’ Stock Fund Accounts.



             8.4          Investment
Fund Account.  Subject to the provisions of Sections 5 and 8.1 as
of the last day of each Plan Year, the Trustee shall credit to each
Participant’s Investment Fund Account:  (a) the Participant’s
allocable share of any contribution for that year made by the Employer in cash
or in property other than Stock that is not used by the Trustee to purchase
Employer Stock or to make payments due under a Stock Obligation; (b) the
Participant’s allocable share of any forfeitures from the Investment Fund
Accounts of other Participants arising under the Plan during that year; (c) any
cash dividends paid during that year on Stock credited to the Participant’s
Stock Fund Account, other than dividends which are paid directly to the
Participant and other than dividends which are used to repay Stock Obligation;
and (d) the share of the net income or loss of the Trust Fund properly allocable
to that Participant’s Investment Fund Account, as provided in Section
8.5.



             8.5          Adjustment
to Value of Trust Fund.  As of the last day of each Plan Year, the
Trustee shall determine: (i) the net worth of that portion of the Trust Fund
which consists of properties other than Stock (the “Investment Fund”);
and (ii) the increase or decrease in the net worth of the Investment Fund since
the last day of the preceding Plan Year.  The net worth of the Investment
Fund shall be the fair market value of all properties held by the Trustee under
the Trust Agreement other than Stock, net of liabilities other than liabilities
to Participants and their beneficiaries.  The Trustee shall allocate to the
Investment Fund Account of each Participant that percentage of the increase or
decrease in the net worth of the Investment Fund equal to the ratio which the
balances credited to the Participant’s Investment Fund Account bear to the
total amount credited to all Participants’ Investments Fund Accounts. 
This allocation shall be made after application of Section 7.2, but before
application of Sections 8.1, 8.4 and 5.1.



             8.6          Participant
Statements.  Each Plan Year, the Trustee will provide each
Participant with a statement of his or her Account balances as of the last day
of the Plan Year.


 -18-










 Section
9.          Vesting
of Participants’ Interests.



             9.1          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
   Years
  	
    
 	
  
 Percentage of
   Interest Vested
  
	
  


  	
    
 	
  


  
	
  
 Fewer than 1
  	
    
 	
  
 0%
  
	
   1
  	
    
 	
  
 20%
  
	
  
 2
  	
    
 	
  
 40%
  
	
  
 3
  	
    
 	
  
 60%
  
	
  
 4
  	
    
 	
  
 80%
  
	
  
          5 or more
  	
    
 	
  
 100%
  








             9.2          Computation
of Vesting Years.  For purposes of this Plan, a “Vesting
Year” means  generally a Plan Year in which an Eligible Employee has
performed at least 1,000 Hours of Service, beginning with the first Plan Year in
which the Eligible Employee has completed an Hour of Service with the Employer,
and including Service with other Employers as provided in the definition of
“Service.”   Notwithstanding the above, an Eligible Employee
employed with the Bank or Beacon Comprehensive Services Corp. or Marcy Federal
Credit Union shall receive credit for vesting purposes for each calendar year of
total employment with the Bank, Beacon Comprehensive Services Corp. or Marcy
Federal Credit Union, prior to the adoption of the Plan, in which such Eligible
Employee completed at least 1,000 Hours of Service (such years shall also be
referred to as “Vesting Years”), up to a maximum of  5 Vesting
Years.  However, a Participant’s Vesting Years shall be computed
subject to the following conditions and qualifications:


	
  
  
  	
  

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

               9.2-2     To
the extent applicable, a Participant’s vested interest in his Account
accumulated before five (5) consecutive one year 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 one year
Breaks in Service before his interest in his Account has become vested to some
extent, pre-Break in Service years of Service shall not be required to be taken
into account for purposes of determining his post-Break in Service vested
percentage.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

               9.2-3     To
the extent applicable, in the case of a Participant who has five (5) or more
consecutive one year Breaks in Service, the Participant’s pre-Break in
Service will count in vesting of the Employer-derived post-Break in Service
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 one year Breaks in Service  is less than the
number of years of Service.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

               9.2-4     Notwithstanding
any provision of the Plan to the contrary, calculation of service for
determining Vesting Years with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.
 




 -19-









	
  
  
  	
  

               9.2-5     To
the extent applicable, 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.
 





             9.3      Full
Vesting Upon Certain Events.

	
  
  
  	
  

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


          9.3-2          The
Participant’s interest in his Account shall also fully vest in the event of
a “Change in Control” of the Bank, or the Company.  For these
purposes, “Change in Control” shall mean an event of a nature that (i)
would be required to be reported in response to Item 5.01 of the Current Report
on Form 8K, 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 Home Owners’ Loan Act, as amended, and applicable rules and regulations
promulgated thereunder as in effect at the time of the Change in Control
(collectively, the “HOLA”); 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 purchased by the Bank’s
employee stock ownership plan or trust; or (b) individuals who constitute the
Board on the date hereof (the “Incumbent Board”) cease for any reason
to constitute at least a majority thereof, provided, 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
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Bank or the Company, or similar transaction in which the Bank or
Company is not the surviving institution occurs; or (d) a proxy statement is
distributed soliciting proxies from stockholders of the Company, by someone
other than the current management of the Company, seeking stockholder approval
of a plan of reorganization, merger or consolidation of the Company or similar
transaction with one or more corporations as a result of which the outstanding
shares of the class of securities then subject to the Plan are to be exchanged
for or converted into cash or property or securities not issued by the Company;
or (e) a tender offer is made for 25% or more of the voting securities of the
Company and the shareholders owning beneficially or of record 25% or more of the
outstanding securities of the Company have tendered or offered to sell their
shares pursuant to such tender offer and such tendered shares have been accepted
by the tender offeror.
 
	
    
  	
  
  
  
	
  
  
  	
  

          9.3-3          Upon
a Change in Control described in 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

 




 -20-









	
  
  
  	
  
 in the Unallocated Stock Fund (or the proceeds thereof, if applicable) shall be
deemed to be earnings and shall be allocated in accordance with the requirements
of Section 8.3.
 





             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 after a one-year break 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 received a
distribution of his vested interest immediately upon his termination of
Service.   



             If
a Participant who has suffered a forfeiture of the nonvested portion of his
Account returns to Service before he has five (5) consecutive one-year Breaks in
Service, the nonvested portion shall be restored, provided that, if the
Participant had received a distribution of his vested Account balance, the
amount distributed shall be repaid prior to such restoral.   The
Participant may repay such amount at any time within five years after he has
returned to Service.  The amount repaid 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, then from amounts allocated in accordance with Section 8.1-1(ii),
and if insufficient, then from a special contribution by his Employer for that
year.  If the Participant did not receive a distribution of his vested
Account balance, any forfeiture restored shall include earnings that would have
been credited to the Account but for the forfeiture.  A Participant who was
deemed to have received a distribution of his vested interest in the Plan shall
have his Account restored as of the first day on which he performs an Hour of
Service after his return.



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

Year in which the forfeiture becomes certain.  



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


 Section 10.          Payment of Benefits.




             10.1          Benefits
for Participants.  For a Participant whose Service ends for any
reason, distribution will be made to or for the benefit of the Participant or,
in the case of the Participant’s death, his Beneficiary, by  payment
in a lump sum, in accordance with Section 10.2.  Notwithstanding 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 without the
Participant’s consent.  If the value of a Participant’s vested
Account balance is in excess of $1,000, then his benefits shall not be paid
prior to the later of age 62 or his Normal Retirement Date 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


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 at least 30 days after a modified election is delivered to the Committee. 
Failure of a Participant to consent to a distribution prior his Normal
Retirement Date shall be deemed to be an election to defer commencement of
payment of any benefit under this section.  



             10.2          Time
for Distribution.


	
  
  
  	
  

                 10.2-1          If the Participant and, if applicable, with the consent of the
Participant’s spouse, elects the distribution of the Participant’s
Account balance in the Plan, distribution shall commence as soon as practicable
following his termination of Service, but no later than one year after the close
of the Plan Year in which the Participant separates from service by reason of
attainment of Normal Retirement Age under the Plan, Disability, or
death.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                 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 701⁄2, 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 702, or, if later, the year in which the Participant
retires.  A Participant’s benefit from that portion of his Account
committed to the Investment Fund shall be calculated on the basis of the most
recent Valuation Date before the date of payment.
 
	
    
  	
  
  
  
	
  
  
  	
  




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

                 (i)                 If
a Participant dies before his distributions have commenced, distribution of his
Account to his Beneficiary shall commence not later than one year after the end
of the Plan Year in which the Participant died; however, if the
Participant’s Beneficiary is his surviving Spouse, distributions may
commence on the date on which the Participant would have attained
age 701⁄2.  In either case, distributions shall be completed within
five years after they commence.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                 (ii)                If
the Participant dies after distribution has commenced pursuant to Section 10.1
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 at the date of his death.


	
    
  	
  
  
  
	
  
  
  	
  

                 (iii)               If
a married Participant dies before his benefit payments begin, then the Committee
shall cause the balance in his Account to be paid to his Beneficiary, provided,
however, that no election by a married Participant of a different Beneficiary
than his surviving Spouse shall be valid unless the election is accompanied by
the Spouse’s written consent, which (i) must acknowledge the 






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 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.


	
  
  
  	
  
  
  
	
  
  
  	
  

                 10.2-5 
All distributions under this section shall be determined and made in accordance
with Code Section 401(a)(9) and final Treasury Regulations Sections
1.401(a)(9)-1 through 1.401(a)(9)-9, including the minimum distribution
incidental benefit requirements of Code Section 401(a)(9)(G).  These
provisions override any distribution options in the Plan inconsistent with Code
Section 401(a)(9).
 



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


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


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


              10.6          Options to Receive Stock.  Unless ownership of virtually all Stock is restricted to active Employees and qualified retirement plans for the benefit of Employees pursuant to the certificates of incorporation or by-laws of the Employers issuing Stock, a terminated Participant or the Beneficiary of a deceased Participant may instruct the Committee to distribute the Participant’s entire vested interest in his Account in the form of Stock.  In that event, the Committee shall apply the Participant’s vested interest in the Investment Fund to purchase sufficient Stock from the Stock Fund or from any owner of Stock to make the required distribution.  In all other cases, other than as specifically set forth in Section 10.1, the Participant’s vested interest in the Stock Fund shall be
distributed in shares of Stock, and his vested interest in the Investment Fund shall be distributed in cash.


              Any Participant who receives Stock pursuant to Section 10.1, and any person who has received Stock from the Plan or from such a Participant by reason of the Participant’s death or incompetence, by reason of divorce or separation from the Participant, or by reason of a rollover contribution described in Section 402(a)(5) of the Code, shall have the right to require the Employer which issued the Stock to purchase the Stock for its current fair market value (hereinafter referred to as the “put right”).  The put right shall be exercisable by written notice to the Committee during the first 60 days after the Stock is distributed by the Plan, and, if not exercised in that period, during the first 60 days in the following Plan Year after the Committee has communicated to the Participant its determination as to the Stock’s current fair market
value.  However, the put right shall not apply to the extent that the Stock, at the time the put right would otherwise be exercisable, may be sold on an established market in accordance with federal and state securities laws and regulations.  Similarly, the put option shall not apply with respect to the portion of a Participant’s Account which the Employee elected to have reinvested under Code Section 401(a)(28)(B).  If the put right is exercised, the Trustee may, if so directed by the Committee in its sole discretion, assume the Employer’s rights and obligations with respect to purchasing the Stock.  Notwithstanding anything herein to the contrary, in the case of a plan established by a bank (as defined in Code Section 581), the put option shall not apply if prohibited by a federal or state law and Participants are entitled to elect their benefits be distributed in cash.


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              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 beginning not later than 30 days after the exercise of the put right and not exceeding five years, 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.


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


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


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

	
  
  
  	
  
                  10.9-1          An   “eligible rollover” is any distribution that does not include: any   distribution that is one of a series of substantially equal periodic payments   (not less frequently than annually) made for the life (or life expectancy) of   the distributee or the joint lives (or joint life expectancies) of the Participant   and the Participant’s Beneficiary, or for a specified period of ten years or   more; any distribution to the extent such distribution is required under Code   Section 401(a)(9); 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).  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 
  



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 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.
  
	
  
  
  	
  
  
  
	
  
  
  	
  
                  10.9-2          An   “eligible retirement plan” is an individual retirement account described in   Code Section 408(a), an individual retirement annuity described in Code   Section 408(b), an annuity plan described in Code Section 403(a), or a   qualified trust described in Code Section 401(a), that accepts the   distributee’s eligible rollover distribution. An eligible retirement plan   shall also include 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, 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. In the case of an eligible   rollover distribution to a 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 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 1.411(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 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;
  




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                 (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, 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 consist of two 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 under ERISA and other laws.


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


 -26-










 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
and 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. 


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


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


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


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


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              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 ERISA, and subject to and conditioned upon compliance with 12 C.F.R. Section 545.121, to the extent applicable, 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          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).


              13.3          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, 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 


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 Trust and pay benefits in accordance with the Plan as amended from time to time and the Committee’s instructions.


 Section 14.          Miscellaneous Provisions.


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


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


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


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


              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 5.2 and 14.12, 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 unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.


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


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


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              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:

	
  
  
  	
  

                (i)          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.
 
	
    
  	
  
  
  
	
  
  
  	
  

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





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

             14.12       Qualified
Domestic Relations Order.  Section 14.2 shall not apply to a
“qualified domestic relations order” defined in Code Section 414(p),
and such other domestic relations orders permitted to be so treated 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:

	
  
  
  	
  

                (i)          The
Employer or the 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


	
    
  	
  
  
  
	
  
  
  	
  

                (ii)         Within
a reasonable period after receipt of such order, the Employer or the 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 Committee shall establish reasonable procedures to determine the
qualified status of domestic relations orders and to administer distributions
under such qualified orders.
 





             During
any period in which the issue of whether a domestic relations order is a
qualified domestic relations order is being determined (by the Employer or
Committee, by a court of competent jurisdiction, or otherwise), the Employer or
the 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 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 Committee shall pay the segregated amounts (plus any interest thereon) to
the person or persons who would 


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 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.  This Plan is top-heavy if any of the following conditions
exist: 

	
  
  
  	
  

                (i)          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;
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                (ii)         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
 
	
  
  
  	
  
  
  
	
  
  
  	
  

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



              15.2          Super Top-Heavy Plan This Plan will be a super top-heavy Plan if any of the following conditions exist:

	
  
  
  	
  

                (i)          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.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                (ii)         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
 
	
  
  
  	
  
  
  
	
  
  
  	
  


                (iii)        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” 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 $135,000 (as adjusted under section 416(i)(1) of the Code), 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 
 



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 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.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

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

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





             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          Employer
contributions attributable to a salary reduction or similar arrangement will be
taken into account.  Employer matching contributions also shall be taken
into account for purposes of satisfying the minimum contribution requirements of
Section 416(c)(2) of the Code and the Plan.
 
	
    
  	
  
  
  
	
  
  
  	
  

                  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.
 




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                  15.4-6          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 “five (5) year period” for “one (1) year
period.”
 
	
  
  
  	
  
  
  
	
    
  	
  

                  15.4-7          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 one (1) 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.
 
	
  
  
  	
  
  
  
	
  
  
  	
  

                  15.4-8          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 this Plan transfers or rolls over funds to another
Plan in a transaction voluntarily initiated by the Employee, 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          Minimum
Contributions.  For any Top-Heavy Year, each Employer shall make a
special contribution on behalf of each Participant to the extent that the total
allocations to his Account pursuant to Section 4 is less than the lesser
of:


	
  
  
  	
  

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

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





             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 a plan that
consists solely of a cash or deferred arrangement which meets the requirements
of Section 401(k)(12) of the Code and matching contributions with respect to
which the requirements of Section 401(m)(11) of the Code are met.  If the
Employer has both a Top-Heavy defined benefit plan and a Top-Heavy defined
contribution plan and a minimum contribution is to be provided only in the
defined contribution plan, then the sum of the Employer contributions and
forfeitures allocated to the Account of each Non-key Employee shall be equal to
at least five percent (5%) of such Non-key Employee’s 415 Compensation for
that year.



             15.6          Minimum
Vesting  For any Plan Year in which this Plan is Top-Heavy,
Participant’s vested interest in his Account shall be based on the
following “top-heavy table”:


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 Vesting
   Years
  	
    
 	
  
 Percentage of
   Interest Vested
  
	
  


  	
    
 	
  


  
	
  
 Fewer than 2 years
  	
    
 	
  
   0%
  
	
  
 2 years
  	
    
 	
  
  20%
  
	
  
 3 years
  	
    
 	
  
  40%
  
	
   4 years
  	
    
 	
    60%
  
	
   5 years
  	
    
 	
   100%
  







             15.7          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.

 -34-