Document:

Exhibit 10.1

CREDIT AGREEMENT

This
Credit Agreement (this “Agreement”) is dated as of February 21, 2007 and is
made by and between City National Bancshares Corporation, a New Jersey
corporation and bank holding company under the Bank Holding Company Act of
1956, as amended (the “Borrower”), and The Prudential Insurance Company
of America, a New Jersey stock insurance company (the “Lender”).

STATEMENT
OF PURPOSE:

The Borrower has requested that the Lender extend
credit to the Borrower in the form of a term loan (the “Loan”) in the amount of
$5,000,000, for the purpose of making a subordinated loan to its wholly owned
Subsidiary, City National Bank of New Jersey (“CNB”).

The Lender has agreed to make such extensions of
credit on the terms and conditions set forth therein.

ACCORDINGLY, the parties hereto hereby agree as
follows:

ARTICLE I - DEFINITIONS

1.01 Defined
Terms.

As used in this
Agreement, the following terms have the following meanings:

“Affiliate”:  as to any Person, (a) any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person, including, without limitation, any joint venture of
such Person, or (b) any Person who is a director or officer, or a shareholder
or partner owning at least 25% of the voting equity, (i) of such Person, (ii)
of any Subsidiary of such Person or (iii) of any Person described in the
preceding clause (a).  For purposes of
this definition, “control” of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

“Business Day”:  a day other than a Saturday, Sunday or other
day on which commercial banks in New Jersey are authorized or required by law
to close.

“Capital Stock”:  any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.

“Capitalized
Lease Obligation”:  any rental
obligation which, under GAAP would

 1
 

be required to be
capitalized on the books of the Borrower or any Subsidiary, taken at the amount
thereof accounted for as Indebtedness (net of interest expense) in accordance
with GAAP.

 

“Closing Date”:  the date of this Agreement.

“CNB”: as
defined in the Statement of Purpose.

“Code”:  the Internal Revenue Code of 1986, as amended
from time to time.

“Commonly
Controlled Entity”:  an entity,
whether or not incorporated, which is under common control with the Borrower
within the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under Section
414 of the Code.

“Consolidated
Loss Reserve Allowance”: the consolidated loss reserve allowance of the
Borrower and its Subsidiaries determined in accordance with the Borrower’s
underwriting standards or as required by law or any regulatory agency.

“Consolidated
Operating Profit”: for any period, consolidated net income of the Borrower
and its Subsidiaries for such period, plus all amounts deducted in calculating consolidated
net income in respect of:

(i)            net interest expense (including amortization of debt
discount and imputed interest on Capitalized Lease Obligations) on
Indebtedness,

(ii)           taxes imposed on or measured by income or excess profit,
and

(iii)          all charges for depreciation of fixed assets and
amortization of intangibles, all determined in accordance with GAAP.

“Consolidated
Non-Performing Loans”: Restructured Assets or loans made by the Borrower
and its Subsidiaries which are not accruing or in which either a scheduled
principal payment, interest payment or other anticipated economic return is
past due for more than 90 days after the date originally scheduled for such
payment.

“Consolidated
Tangible Net Worth”: the aggregate amount of (a) capital stock (less any
treasury stock, capital stock subscribed and unissued and other contra-equity
accounts), (b) surplus, and (c) retained earnings of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP,
excluding any (i) intercompany transactions, (ii) the net book value of all
assets which would be treated as intangible under GAAP, and (iii) the
cumulative amount of any net write-up or write-down of asset values after the
date of the audit immediately preceding the Closing Date.

“Consolidated
Total Assets”: the aggregate amount of assets carried on the books of the
Borrower, on a consolidated basis after eliminating all intercompany items, in
accordance with GAAP.

 2
 

 

“Contractual
Obligation”:  as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound, including without limitation any Indebtedness.

“Default”:  any of the events specified in ARTICLE VIII,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.

“Depository
Institution Subsidiary”:  CNB and any
federal or state chartered banking institution in which all of the Capital
Stock is owned, directly or indirectly by the Borrower.

“Dollars”
and “$”:  dollars in lawful
currency of the United States of America.

“ERISA”:  the Employee Retirement Income Security Act
of 1974, as amended from time to time.

“Event of Default”:  any of the events specified in ARTICLE VIII, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.

“FDIC”: the
Federal Deposits Insurance Corporation or any successor agency.

“Federal
Reserve Lender”:  a Federal Reserve
Bank providing credit to the Lender.

“Financing
Lease”:  any lease of property, real
or personal, the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the lessee.

“GAAP”:  generally accepted accounting principles in
the United States of America in effect from time to time.

“Governmental
Authority”:  any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

“Government
Securities”: securities issued by the United Sates Treasury or any United
States government agency.

“Guarantee
Obligation”:  as to any Person, any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations of any other third Person
in any manner, whether directly or indirectly or otherwise to assure or hold
harmless the owner of any primary obligation against loss in respect thereof.

“Indebtedness”:  of any Person at any date, (a) all
indebtedness of such Person for

 3
 

borrowed money or for the
deferred purchase price of property or services (other than current trade liabilities
incurred in the ordinary course of business) or which is evidenced by a note,
bond, debenture or similar instrument, (b) all obligations of such Person under
Financing Leases, (c) all obligations of such Person in respect of letters of
credit or acceptances issued or created for or for the account of such Person,
(d) all obligations of such Person under currency exchange contracts or
interest rate swap agreements, and (e) all liabilities secured by any Lien on
any property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.

 

“Insolvency”:  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

“Insolvent”:  pertaining to a condition of insolvency.

“Investment”:  any advance, loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, notes, debentures or
other securities of or any assets constituting a business unit of, or any other
investment in, any Person; provided, however, that any advance, loan or
extension of credit (including the receipt of any collateral security therefor)
made by a Depository Institution Subsidiary in the normal course of business is
not an Investment under this Agreement.

“Lien”:  any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any Financing Lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing).

“Liquid Assets”:
without duplication, the Borrower’s and each Subsidiary’s consolidated cash and
cash equivalents, other short term Investments, securities available for sale,
Government Securities, loans fully guaranteed by the Small Business
Administration, excluding federal funds purchased and securities sold subject
to repurchase obligations and reserves of the Borrower and each Subsidiary
required by the Federal Reserve Bank.

“Liquidity
Ratio”:  the ratio of Liquid Assets
over Volatile Liabilities.

“Loan”:  as defined in the Statement of Purpose.

“Loan Documents”:  the documents in Section 4.01 whose delivery
is a condition to the effectiveness of this Agreement and all other documents
executed and delivered in connection herewith or therewith, including any
amendments, supplements or other modifications to any of the foregoing.

“Loan Maturity
Date”:  as defined in Section
2.03(a).

“Material
Adverse Effect”:  a material adverse
effect on (a) the business,

 4
 

prospects, operations,
property or financial condition of the Borrower and its Subsidiaries taken as a
whole, (b) the ability of the Borrower to perform its obligations under the
Loan Documents, or (c) the validity or enforceability of the Loan Documents or
the rights or remedies of the Lender hereunder or thereunder.

 

“Multiemployer
Plan”:  a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Non-Excluded
Taxes”:  as defined in Section 2.07.

“Note”:  as defined in Section 2.02.

“OCC”:  the Office of the Comptroller of the Currency
or any successor agency.

“Payment Date”:
as defined in Section 2.03(a).

“PBGC”:  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.

“Person”:  an individual, partnership, corporation,
business trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

“Plan”:  at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

“Regulation U”:  Regulation U of the Board of Governors of the
Federal Reserve System as now and form time to time hereafter in effect.

“Reorganization”:  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.

“Reportable
Event”:  any of the events set forth
in Section 4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Reg. §2615.

“Requirement of
Law”:  as to any Person, (i) the
Articles of Incorporation and By-Laws or other organizational or
governing documents of such Person, and (ii) any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in the case of each of the foregoing clauses (i) and (ii) applicable
to or binding upon such Person or any of its property or to which such Person
or any of its material property is subject.

“Responsible
Officer”:  the chief executive officer,
the president or the chief financial officer of the Borrower.

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“Restricted
Payments”: (i) any dividend or other distribution, direct or indirect, on
account of the Borrower’s Capital Stock now or hereafter outstanding, except a
dividend payable solely on the Borrower’s Capital Stock, and (ii) any
redemption, retirement, purchase or other acquisition, direct or indirect, of
the Borrower’s Capital Stock now or hereafter outstanding, except to the extent
that the consideration therefore consists solely of the Borrower’s Capital
Stock or is funded solely from the proceeds of the substantially concurrent
sale of any of the foregoing.

“Restructured
Asset”:  means any loan in any Person
made by the Borrower or any Subsidiary in which the Borrower or any Subsidiary
has agreed to a change in any payment term, including (a) a change in maturity,
principal amount or allocation of any mandatory or scheduled prepayment or
repayment with respect to principal of, (b) the rate or payment date with
respect to interest on, or (c) a change in any term reducing the anticipated
economic return of, such loan.

“Risk-Weighted
Assets”:  as defined in 12 C.F.R.
Part 3, Appendix A.

“Single
Employer Plan”:  any Plan which is
covered by Title IV of ERISA, but which is not a Multiemployer Plan.

“Subsidiary”:  as to any Person, a corporation, partnership
or other entity of which more than 50% of the shares of stock, or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity, are at the time owned,
directly or indirectly, through one or more intermediaries, or both, by such
Person.

“Taxes”:
any amounts paid by a Person to any Governmental Authority or accrued and which
would be classified as taxes in accordance with GAAP (including, without
limitation, deferred Taxes).

“Tier 1 Capital”:  as defined in 12 C.F.R. Part 3, Appendix A,
§2(a).

“Tier 2 Capital”:  as defined in 12 C.F.R. Part 3, Appendix A,
§2(b).

“Transfer”:
as defined in Section 7.01.

“Transferee”:  as defined in Section 9.07.

“Volatile
Liabilities”: the Borrower’s and each Subsidiaries’ consolidated total
deposits payable to federal and state agencies and municipalities, taxes and
loan note option accounts, excluding insurance premiums payable to the FDIC.

“Well
Capitalized Bank”: as defined at 12 C.F.R. Part 6, Subpart A, §6.4(b)(1).

 6
 

 

1.02 Other
Definitional Provisions.

(a)   Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the Note or any certificate or other document
made or delivered pursuant hereto.

(b)   As
used herein and in the Note, and any certificate or other document made or
delivered pursuant hereto, accounting terms relating to the Borrower not
defined in subsection 1.01 and accounting terms partly defined in subsection
1.01, to the extent not defined, shall have the respective meanings given to
them under GAAP.

(c)   The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, Subsection, Schedule and
Exhibit references are to this Agreement unless otherwise specified.

(d)   The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

ARTICLE II- THE LOAN

2.01 The
Loan.

Subject to the terms and conditions hereof, the Lender hereby agrees to
make a loan to the Borrower in the amount of FIVE MILLION DOLLARS ($5,000,000)
on the Closing Date.

2.02 Note.

The Loan shall be
evidenced by a note substantially in the form of Exhibit A hereto (the “Note”).

2.03 Repayments.

(a)   Beginning
on March 31, 2017 and continuing on the last day of March, June, September and
December of each year (each such date, a “Payment Date”), the Borrower
shall make consecutive payments of principal in the amount of $250,000.   The Borrower shall make a final principal
payment of $250,000, together with any other amounts due under this Agreement
which remain unpaid on February 21, 2022 (the “Loan Maturity Date”).

(b)   The
Borrower may, at any time and from time to time, prepay the Loan, without
premium or penalty.   Any prepayments
with respect to the Loan shall be in an aggregate principal amount of $50,000
or a whole multiple thereof and shall be applied towards satisfaction of the
obligation to make payments under Section 2.03(a) in inverse order of maturity.
Any amounts repaid or prepaid under the Loan may not be reborrowed.

2.04 Interest
Rates and Payment Dates.

(a)   From
the date of this Agreement through February 21, 2017 the Loan will 

 7
 

 

bear interest at a rate per annum of 5%.  From and after February 21, 2017 the Loan
will bear interest at a rate per annum equal to the sum of (i) the yield as of
February 21, 2017 on United States Treasury obligations having a maturity on
about February 21, 2027, plus (ii) 1.50% per annum.  Interest on the Loan shall be payable in
arrears on n the last day of March, June, September and December of each year
and the day the Loan is repaid.

(b)   If
an Event of Default shall occur and be continuing all amounts due under the
Loan Documents shall bear interest at a rate per annum which is the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this subsection plus 2%, until such amount is paid in full (as well after as
before judgment).  Interest accruing
pursuant to this paragraph shall be payable from time to time on demand.

(c)   Anything
in this Agreement or the Note to the contrary notwithstanding, any payment of
principal or interest on the Note that is due on a date other than a Business
Day is to be made on the next succeeding Business Day.  If the date for any payment is extended to
the next succeeding Business Day by reason of the preceding sentence, the
period of such extension is to be included in the computation of the interest
payable on such Business Day.

2.05 Computation
of Interest.

Interest on the
Loan shall be calculated on the basis of a 360 day year for the actual days
elapsed.  The determination of any
interest rate by the Lender pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower in the absence of manifest
error.  In determining the yield of
United States Treasury obligations, the Lender shall make reference to
financial information services nationally recognized at such time.

2.06 Requirements
of Law.

(a)   If
the adoption of or any change in any Requirement of Law (excluding for purposes
of this Section 2.06 clause (i) of such definition) or in the interpretation or
application thereof or compliance by the Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof shall subject the
Lender to any tax of any kind whatsoever with respect to any Loan Document or
any Loan made by it, or change the basis of taxation of payments to such Lender
in respect thereof (except for Non-Excluded Taxes covered by Section 2.07 and
changes in the rate of tax on the overall net income of the Lender), then from
time to time, after submission by the Lender to the Borrower of a written
request therefor, the Borrower shall pay to the Lender such additional amount
or amounts as will compensate the Lender therefor.

(b)   If
the Lender shall have determined that the adoption of or any change in any
Requirement of Law (excluding for purposes of this Section 2.06 clause (i) of
such definition) regarding capital adequacy or in the interpretation or
application thereof or compliance by the Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) from any Governmental Authority made subsequent
to the date hereof does or shall have the effect of reducing the rate of return
on such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder to a level below that which the Lender or such
corporation could have achieved but for such change or 

 8
 

compliance (taking into consideration the Lender’s or such corporation’s
policies with respect to capital adequacy) by an amount deemed by the Lender to
be material, then from time to time, after submission by the Lender to the
Borrower of a written request therefor, the Borrower shall pay to the Lender
such additional amount or amounts as will compensate the Lender for such
reduction.

 

2.07 Taxes.

All payments made
by the Borrower under any Loan Document shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender
as a result of a present or former connection between the Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, any Loan
Document).  If any such non-excluded
taxes, levies, imposts, duties, charges, fees deductions or withholdings (“Non-Excluded
Taxes”) are required to be withheld from any amounts payable to the Lender
hereunder or under the Note, the amounts so payable to the Lender shall be
increased to the extent necessary to yield to the Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in any Loan Document.  Whenever any Non-Excluded Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Lender a certified copy of an original official receipt received by the
Borrower showing payment thereof.  If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Borrower shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure.  The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Note and all other amounts payable hereunder.

ARTICLE III -
REPRESENTATIONS AND WARRANTIES

To induce the
Lender to enter into this Agreement and to make the Loan the Borrower hereby
represents and warrants to the Lender that:

3.01 Financial
Condition.

The audited
consolidated balance sheets of the Borrower as of December 31, 2005 and the
related audited consolidated statements of operations, stockholders’ equity and
cash flows for the fiscal year ended on such date, reported on by KPMG LLP,
copies of which have heretofore been furnished to the Lender, present fairly
the consolidated financial condition and results of operations of the Borrower
and its Subsidiaries as of such dates. 
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved.

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3.02 No
Change.

Except as set
forth in Schedule 3.02 or as set forth in the financial statements referred to
in Section 3.01, since September 30, 2006 (a) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect, (b) no dividends or other distributions have been declared, paid or
made upon the Capital Stock of the Borrower or any Subsidiary nor has any of
the Capital Stock of the Borrower or any Subsidiary been redeemed, retired,
purchased or otherwise acquired for value by the Borrower or any such
Subsidiary, and there has been no sale, transfer or other disposition by the
Borrower or any Subsidiary of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
capital stock of any other Person).

3.03 Corporate
Existence; Compliance with Law.

The Borrower and
each of its Subsidiaries:

(a)   is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or similar formation;

(b)   has
the corporate or other organizational power and authority to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged;

(c)   is
duly qualified as a foreign corporation or other entity and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except to
the extent that the failure to be so qualified could not, in the aggregate,
have a Material Adverse Effect; and

(d)   is
in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, individually or in the aggregate, have a
Material Adverse Effect.

3.04 Corporate
Power; Authorization; Enforceable Obligations.

The Borrower has
the corporate power and authority to make, deliver and perform its obligations
under each of the Loan Documents, and to borrow thereunder and has taken all
necessary corporate action to authorize the borrowings on the terms and
conditions of the Loan Documents and to authorize the execution, delivery and
performance of the Loan Documents.  No
consent or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person is or will be required in respect of
the Borrower or any Subsidiary  in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents.  This Agreement has been, and each Loan
Document will be, duly executed and delivered on behalf of the Borrower.  This Agreement constitutes, and each Loan
Document when executed and delivered, will constitute, legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in 

 10
 

equity or at law).

 

3.05 No
Legal Bar.

The execution,
delivery and performance of any Loan Document, the borrowings thereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.

3.06 No
Material Litigation.

Except as set
forth in Schedule 3.06, no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or any Subsidiary or against
any of their properties or revenues (a) with respect to the Loan Documents or
any of the transactions contemplated thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.

3.07 No
Default.

Neither the
Borrower nor any Subsidiary is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect.  No
Default or Event of Default has occurred and is continuing.

3.08 No
Burdensome Restrictions.

No Requirement of
Law or Contractual Obligation of the Borrower or any Subsidiary has a Material
Adverse Effect.

3.09 Intellectual
Property.

The Borrower and
each Subsidiary owns, or is licensed to use, all material trademarks,
tradenames, copyrights, technology, know-how and processes necessary for the
conduct of its businesses as currently conducted (“Intellectual Property”).  No claim has been asserted and is pending by
any Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor does
the Borrower know of any valid basis for such claim.  The use of such Intellectual Property by the
Borrower and its Subsidiaries does not infringe the material rights of any
Person.

3.10 Taxes.

The Borrower and
each Subsidiary has filed or caused to be filed all tax returns which are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the

 

 11

Borrower or any such
Subsidiary, as the case may be); no tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.

3.11 Federal
Regulations; Investment Company Act; Other Regulations.

As of the Closing
Date, neither the Borrower nor any Subsidiary is subject to regulation under
any Federal or State statute or regulation which limits its ability to incur
the Indebtedness evidenced by the Note. 
The Borrower is not an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of
1940, as amended. No part of the proceeds of the Loan will be used for “purchasing”
or “carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect or for any
purpose which violates the provisions of the Regulations of such Board of Governors.

3.12 ERISA.

Except as set
forth in Schedule 3.12:

(a)   Each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code and Borrower has filed all reports required to be filed
under ERISA and the Code with respect to each such Plan.  The Borrower has satisfied all material
requirements imposed by ERISA and the Code with respect to the funding of all
Plans.

(b)   Neither
a reportable event (as defined in Section 4043 of ERISA) which requires
notification to the PBGC nor an “accumulated funding deficiency” (within the
meaning of Section 412 of the Code or Section 302 of ERISA) has occurred or is
occurring with respect to any Single Employer Plan established or maintained,
or to which contributions have been made by Borrower or any Commonly Controlled
Entity which would have a Material Adverse Effect.

(c)   No
events or conditions have occurred and are continuing which would permit any
Plan to be terminated under circumstances which would cause the Lien provided
under Section 4068 of ERISA to attach to any assets of the Borrower or any
Commonly Controlled Entity.  The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans), did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits.

(d)   Neither
the Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw partially
or completely from any Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed
made.  No such Multiemployer Plan is in
Reorganization or Insolvent.

 12
 

 

3.13 Subsidiaries.

As of the Closing
Date, the Borrower has no Subsidiaries other than those specifically disclosed
in part (a) of Schedule 3.13 hereto and has no equity investments in any other
corporation or entity other than those specifically disclosed in part (b) of
Schedule 3.13.

3.14 Purpose
of Loan.

The proceeds of the
Loan shall be used by the Borrower to make investments in CNB (i) in the form
of subordinated debt, and (ii) on terms that will permit CNB to treat such
subordinated debt as Tier 2 Capital.

3.15 Insurance.

The Borrower and
each Subsidiary maintains insurance with financially sound and reputable
insurance companies on all of its properties in such amounts and against such
risks as are usually insured against by companies engaged in the same or a
similar business.

3.16 FDIC
Insurance.

The deposits of
CNB are insured by the FDIC and no act has occurred which would adversely
affect the status of CNB as an FDIC insured bank.

3.17 Bank
Holding Company.

Borrower has
complied in all material respects with all federal, state and local laws
pertaining to bank holding companies, including without limitation the Bank
Holding Company Act of 1956, as amended, and to the best of its knowledge there
are no conditions to its engaging in the business of being a registered bank
holding company.

ARTICLE IV - CONDITIONS

4.01 Conditions
to Effectiveness of this Agreement.

The effectiveness
of this Agreement is subject to the satisfaction on or prior to the Closing
Date, of the following conditions precedent:

(a)   Loan Documents.  The
Lender shall have received

(i)    this
Agreement duly executed and delivered by a Responsible Officer of the Borrower,
and

(ii)   the
Note duly executed by a Responsible Officer of the Borrower.

(b)   Corporate Proceedings of the Borrower.  The Lender shall have received a copy of the
resolutions, in form and substance satisfactory to the Lender, of the Board of
Directors of the Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Note and any other Loan Document, and (ii)
the borrowings contemplated hereunder, certified by the Secretary of the
Borrower as of the Closing Date, which certificate

 13
 

 

shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and shall be in
form and substance satisfactory to the Lender. 
The certificate required under this Section 4.01(b) may be combined with
one or more certificates required under Sections 4.01(c), (d) and (e).

(c)   Officer’s Certificate. 
The Lender shall have received an Officer’s Certificate of the Borrower
dated the Closing Date, substantially in the form of Exhibit 4.01 (c) hereto,
executed by a Responsible Officer of the Borrower.

(d)   Incumbency Certificate. 
The Lender shall have received a certificate of the Secretary of the
Borrower dated the Closing Date, as to the incumbency and signatures of the
officers thereof executing the Loan Documents including, in the case of the
Borrower, this Agreement and the Note, together with evidence of the incumbency
of such Secretary.

(e)   Corporate Documents. 
The Lender shall have received, (i) true and complete copies of the
articles of incorporation and by-laws of the Borrower, certified as of
the Closing Date as complete and correct copies thereof by the Secretary of the
Borrower, and (ii) a good standing certificate for the Borrower from its
jurisdiction of organization.

(f)    Subordinated Loan Documents.  The Lender shall have received copies of the
documentation evidencing the subordinated loan made by the Borrower to CNB, together with copies of CNB’s organizational
documents, a borrowing resolution and a secretary certificate.

(g)   No Violation.  The
consummation of the transactions contemplated hereby shall not contravene,
violate or conflict in any material respect with, nor involve the Lender in any
violation of, any Requirement of Law (including, without limitation, section 5
of the Securities Act of 1933, as amended, or Regulation T, X or other rules or
regulations of the Board of Governors of the Federal Reserve System).

(h)   Filings, Registrations and Recordings.  Any documents required to be filed, and any
other actions required to be taken, and the Lender shall have received evidence
satisfactory to it of each such filing, registration, recordation or other
action and satisfactory evidence of the payment of any necessary fee, tax or expense
relating thereto.

(i)    Fees.  The Lender
shall have received reimbursement for all of its expenses related to the
issuance of the Loan, including reasonable expenses and disbursements of its
legal counsel, in an amount not to exceed $15,000.

(j)    Legal Opinions.  The
Lender shall have received the executed legal opinion of Seiden Wayne, LLC,
counsel to the Borrower in form and substance satisfactory to the Lender.

ARTICLE
V - AFFIRMATIVE COVENANTS

The Borrower hereby
agrees that, so long as any amount is owing to the Lender, the Borrower shall,
and shall cause each of its Subsidiaries to do the following:

 14
 

 

5.01 Financial Statements.

Subject to Section
9.15, furnish to the Lender:

(a)   as soon as available, but in any event within 110 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such year and
consolidated statements of operations, stockholders’ equity and cash flows for
such year, setting forth in each case in comparative form the figures for the
previous year, reported on without a “going concern” or like qualification or
exception, or qualification arising out of the scope of the audit, by KPMG,
LLP, or other independent certified public accountants of nationally recognized
standing acceptable to the Lender;

(b)   as soon as available, but in any event not later than 52 days
after the end of each of the first three quarterly periods of each fiscal year
of the Borrower, the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such quarter and the related unaudited
consolidated statements of operations, stockholders’ equity and cash flows for
such quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, certified by the Borrower’s chief financial officer as being fairly
stated in all material respects in accordance with GAAP when considered in
relation to the most recent audited consolidated financial statements of the
Borrower (subject to year end adjustments);

all
such financial statements to be complete and correct in all material respects
and to be prepared in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).

5.02 Certificates; Other Information.

Subject to Section
9.15, furnish to the Lender:

(a)   promptly upon transmission thereof, copies of all such financial
statements, notices, reports and filings with the FDIC or the OCC, to the
extent not prohibited by law (or any governmental body or agency succeeding to
the functions of the FDIC or OCC by operation of law or change in designation
of the Borrower as a federally regulated entity) and, if applicable, copies of
all such financial statements, proxy statements, notices and reports as it
sends to its public stockholders and copies of all registration statements
(without exhibits) and all reports which it files with the Securities and
Exchange Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);

(b)   promptly after receipt thereof, a copy of all management letters
from the Borrower’s independent certified public accountants;

(c)   promptly with each delivery of financial statements required by
Section 5.01, the Borrower will deliver to the Lender (a) a Responsible Officer’s
certificate demonstrating (with computations in reasonable detail) compliance
by the Borrower and its Subsidiaries with the provisions of ARTICLE VI and
stating that there exists no Event of Default or Default, or, if any Event of
Default or Default exists, specifying the nature and period of existence
thereof and

 15
 

 

what action the Borrower proposes to take
with respect thereto;

(d)   concurrently with the delivery of the financial statements
referred to in Section 5.01(a), a report reflecting the social impact and related
programmatic accomplishments of the Loan and the Borrower’s and its
Subsidiaries’ other related activities, in a form reasonably satisfactory to
the Lender; and

(e)   promptly, such additional financial and other information and
copies of such documents and instruments as the Lender may from time to time
reasonably request, to the extent not prohibited by law.

5.03 Payment of Obligations.

Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all its material obligations of whatever nature, except where
the amount or validity thereof is currently being contested in good faith,
including by appropriate proceedings, and reserves, in conformity with GAAP
with respect thereto, have been provided on the books of the Borrower.

5.04 Conduct of Business and Maintenance of Existence.

Continue to engage
in business of the same general type as now conducted by it and preserve, renew
and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business; and comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, individually or in the aggregate, have a
Material Adverse Effect.

5.05 Maintenance of Property; Insurance.

Keep all material
property useful and necessary in its business in good working order and
condition; maintain with financially sound and reputable insurance companies
insurance on all its property in such amounts and against such risks (but
including in any event environmental and product liability) as are usually
insured against in the same general area by companies engaged in the same or a
similar business; furnish to the Lender on an annual basis, and at least thirty
days prior to the expiration of any policy of insurance, a certificate
demonstrating the existence of such insurance; and upon written request, full
information as to details of the insurance carried.

5.06 Inspection of Property; Books and Records; Discussions; Audits.

Keep proper books
of records and account in which full, true and correct entries in conformity
with GAAP and all Requirements of Law shall be made in all material respects of
all dealings and transactions in relation to its business and activities;
subject to Section 9.15, permit representatives of the Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
required, including, without limitation, any such visit, inspection or
examination by the Lender in connection with any audit conducted by the Lender,
and at which a

 16
 

 

representative of the
Lender may be present, of the  books and
records of the Borrower and its Subsidiaries from time to time at the Lender’s
discretion, and to discuss the business, operations, properties and financial
and other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower or its Subsidiaries and with its independent certified public
accountants.

5.07 Notices.

Promptly give
notice to the Lender of:

(a)   the occurrence of any Default or Event of Default;

(b)   any (i) default or event of default under any Contractual
Obligation of the Borrower or (ii) litigation, investigation or proceeding
which may exist at any time between the Borrower and any Governmental
Authority, which in either case, if not cured or if adversely determined, as
the case may be, would have a Material Adverse Effect;

(c)   any litigation or proceeding affecting the Borrower in which the
amount involved is $100,000 or more and which is not covered by insurance or in
which injunctive or similar relief is sought which, if granted, could have a
Material Adverse Effect; and

(d)   the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, or any withdrawal from, or the termination, Reorganization or Insolvency
of any Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan.

Each notice pursuant to this subsection shall be
accompanied by a statement of a Responsible Officer setting forth details of
the occurrence referred to therein and stating what action the Borrower
proposes to take with respect thereto.

5.08 Further Assurances.

Subject to Section
9.15, execute any and all further documents, and take all further action which
the Lender may reasonably request in order to effectuate the transactions
contemplated by the Loan Documents.

ARTICLE
VI — FINANCIAL — COVENANTS

6.01 Unencumbered Assets.

The Borrower
covenants that it will at all times maintain assets with a fair  market value of at least $3,000,000, and will
not create, assume or suffer to exist any Lien upon any such assets.

 17
 

 

6.02 Financial Maintenance Covenants.

The Borrower covenants that it will not permit at any time:

(a)   Capital Adequacy. 
CNB or any other Depository Institution Subsidiary to fail to be classified
as a Well Capitalized Bank;

(b)   Asset Quality.  (a)
Consolidated Non-Performing Loans to exceed 2.00% of Consolidated Total Assets,
or (b) Consolidated Loss Reserve Allowance to be less than 25.0% of
Consolidated Non-Performing Loans;

(c)   Liquidity.  The
Liquidity Ratio to be less than 1.25 to 1.00; or

(d)   Earnings.  (a) its
return on assets to be less than 0.50%, or (b) its return on equity to be less
than 10.0%.

ARTICLE
VII- NEGATIVE COVENANTS

The Borrower
hereby agrees that, so long as any amount remains outstanding under this
Agreement, the Borrower shall not, and shall not permit any Subsidiary to:

7.01 Sale of Assets.

Sell, lease, transfer or otherwise dispose of
(a “Transfer”), any assets,
except

(a)   Any Depository Institution Subsidiary  may sell loans in the ordinary course of
business;

(b)   The Borrower or any Subsidiary may Transfer assets that, in its
good faith, reasonable judgment, have no further useful or productive capacity,
are fully used depreciated, are obsolete or are no longer necessary or
productive in the ordinary course of the Borrower’s business;

(c)   Transfers between Subsidiaries and from any Subsidiary to the
Borrower;

(d)   Sales of Investments permitted by Section 7.03; and

(e)   Other Transfers if, after giving effect of such Transfer, (i) no
Default or Event of Default exists and (ii) all assets Transferred during the
then-current fiscal year would not (A) have an aggregate book value, or, if
higher, market value in excess of 10% of Consolidated Tangible Net Worth at the
end of the immediately proceeding fiscal year or (B) have contributed or than
10% of Consolidated Operating Profit for any of the three most recently
completed fiscal years, provided that in no event shall the aggregate
assets Transferred pursuant to this clause (e) have a book value, or, if
higher, market value is excess of 20% of the Consolidated Tangible Net Worth.

 18
 

 

7.02 Merger and Consolidation.

Merge or consolidate with any Person except,
if no Default or Event of Default exists or result therefrom:

(a)   A Subsidiary may merge into the Borrower, if the Borrower is the
surviving corporation;

(b)   A Subsidiary may merge into any other Subsidiary; and

(c)   Any Person may merge into the Borrower or any Subsidiary if the
Borrower or such Subsidiary is the surviving corporation.

7.03 Restricted Investments.

Make any Investment except

(a)   That the Borrower or any Subsidiary may make Investments (i)
permitted by the Borrower’s Investment Policy dated May 20, 2006, a copy of
which has been provided to the Lender, as it maybe amended from time to time, provided
that any amendment affecting the quality standard or the limits per Investment
category will not take effect until 20 days after the Lender has received a
copy of the revised Investment Policy and has not delivered to the Borrower a
written dissent to such amendment within such 20 day period, or (ii) ratified
at the first meeting of the Borrower’s investment committee occurring after
such Investment;

(b)   Investments in stocks, obligations or securities of a Depository Institution
Subsidiary or a corporation or other entity which immediately after such
purchase or acquisition will be a Depository Institution Subsidiary; and

(c)   Investments made in connection with the acquisition of all of any
part of loan portfolios, deposits taking activities, and other banking
functions from another Person or any branch, agency or instrumentality of the
federal government.

7.04 Restrictions on Subsidiaries.

(a)   Sell, assign, pledge or otherwise dispose of or part with control
of, any Indebtedness owing to the Borrower or a Subsidiary, or any Capital
Stock in, any of its Subsidiaries, except to the Borrower or a Subsidiary, provided  that all the Capital Stock and
Indebtedness of a Subsidiary may be sold as an entirety if all the assets of such
Subsidiary could be sold pursuant to Section 7.01;

(b)   In the case of any Subsidiary, (i) issue or sell any Capital Stock
in the Subsidiary to any Person, except to the Borrower or another Subsidiary,
or (ii) enter into, or suffer to exist, any contract or agreement (including
charter provisions) that imposes restrictions on any Subsidiary’s ability to
pay any Restricted Payments.

 19
 

 

7.05 Sale or Discount of Receivables.

Except as
permitted under Section 7.01, discount, pledge, sell with recourse or otherwise
sell any receivable.

7.06 Restricted Payments.

Directly or indirectly, declare, order, pay,
make or set apart any sum or property for any Restricted Payment, except that
the Borrower may make Restricted Payments on any class of Capital Stock if (i) such
Restricted Payment does not violate any law, rule or regulation applicable to
the Borrower, (ii) immediately prior to and after giving effect to all such
payments any Depository Institution Subsidiary is classified as a Well
Capitalized Bank, and (iii) immediately prior to and after giving effect to any
such Restricted Payment, no Default or Event of Default would occur.

7.07 Transactions with Affiliates.

Except as
expressly permitted under Subsection 7.01(c), enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service, with any Affiliate, unless such
transaction is in the ordinary course of, and pursuant to the reasonable
requirements of, the Borrower’s and CNB’s businesses, is in good faith and is
upon fair and reasonable terms no less favorable to the Borrower or CNB, as the
case may be, than it would obtain in a comparable arm’s length transaction with
a Person not an Affiliate.

ARTICLE
VIII- EVENTS OF DEFAULT

8.01 Bankruptcy etc.

If the Borrower or
any Subsidiary shall commence any case, proceeding or other action (a) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (b) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial part
of its assets, or the Borrower or any Subsidiary shall make a general
assignment for the benefit of its creditors; or (c) there shall be commenced
against the Borrower or any Subsidiary any case, proceeding or other action of
a nature referred to in clause (a) or (b) above which (i) results in the entry
of an order for relief or any such adjudication or appointment or (ii) remains
undismissed, undischarged or unbonded for a period of 60 days; or (d) there
shall be commenced against the Borrower or any Subsidiary any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (e) the Borrower or any Subsidiary shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (a), (b), (c), or (d)
above; the Loan hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the Note

 20
 

 

shall immediately become
due and payable without the need for any notice or other action by the Lender.

8.02 Other Events.

If any of the
following events shall occur and be continuing:

(a)   The Borrower shall fail to pay any principal of or interest on the
Note or any fee or other amount payable hereunder when due in accordance with
the terms thereof or hereof, and such failure continues unremedied for a period
of 10 days; or

(b)   Any representation or warranty made or deemed made by the Borrower
herein or in any other Loan Document or which is contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or other Loan Document shall prove to have been
incorrect as of the date made and the subject of that breach of representation
or warranty has a Material Adverse Effect on or as of the date made or deemed
made; or

(c)   The Borrower shall default in the observance or performance of any
agreement contained in ARTICLE VII of this Agreement; or

(d)   The Borrower shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Documents (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after any Responsible
Officer obtains actual knowledge thereof; or

(e)   The Borrower or any Subsidiary shall (i) default in any payment of
principal of or interest on any Indebtedness, or in the payment of any
Guarantee Obligation (provided that the principal amount of such Indebtedness
or Guarantee Obligation exceeds, individually, or in the aggregate, $100,000),
provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation (provided that the principal amount of
such Indebtedness or Guarantee Obligation exceeds, individually, or in the
aggregate, $100,000) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become payable; or

(f)    (i)  Any Person shall
engage in any “prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, or (ii) any other event or
condition shall occur or exist, with respect to a Plan; and in each case in
clauses (i) and (ii) above, such event or condition, together with all other
such events or conditions, if any, could, in the reasonable judgment of the
Lender, subject the Borrower to any tax, penalty or other liabilities that in
the aggregate could reasonably be expected to have a Material Adverse Effect;
or

 

 21

(g)   One
or more judgments or decrees shall be entered against the Borrower or any
Subsidiary involving in the aggregate a liability (not paid or fully covered by
insurance) of $100,000 or more and (i) all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof or (ii) the judgment creditors with respect to such
judgments or their successors or assigns shall have commenced enforcement
proceedings, which enforcement proceedings shall have remained unstayed for 10
consecutive days; or

(h)   any
Federal Reserve Bank, the FDIC or other regulatory entity shall issue or agree
to enter into any formal enforcement action with or against Borrower or any
Subsidiary (including, but not limited to, a formal written agreement, cease
and desist order, suspension, removal or prohibition order or capital
directive, but excluding a civil money penalty), or any Federal Reserve Bank,
the FDIC or other regulatory entity shall issue or enter into any informal
enforcement action with or against Borrower or any Subsidiary (including, but
not limited to, a commitment letter, memorandum of understanding or any similar
action) or assess a civil money penalty, which in each case has a Material
Adverse Effect on the consolidated assets, financial condition, business or
operations of Borrower or any Subsidiary;

then, and in any such event, the Lender may by notice of default to the
Borrower, declare the Loan hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Note to be due and payable
forthwith, whereupon the same shall immediately become due and payable.

8.03 Other
Events.

Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.

ARTICLE IX -
MISCELLANEOUS

9.01 Amendments
and Waivers.

Neither this
Agreement, the Note, or any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this subsection.  The
Lender and the Borrower may, from time to time, enter into written amendments,
supplements or modifications hereto and to the Note and the other Loan
Documents for the purpose of adding any provisions to this Agreement, the Note
or the other Loan Documents or changing in any manner the rights of the Lender
or of the Borrower hereunder or thereunder. 
The Lender may, from time to time, execute written instruments waiving,
on such terms and conditions as the Lender may specify in such instrument, any
of the requirements of this Agreement, the Note or the other Loan Documents or
any Default or Event of Default and its consequences.  In the case of any waiver, the Borrower or
the Lender shall be restored to their former position and rights hereunder and
under the outstanding Note and any other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.  Lender shall have the right to charge a
reasonable fee with respect to any amendment or waiver granted hereunder.

 22
 

 

9.02 Notices.

All notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing, and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or, in the case
of telecopy notice, when received, or, in the case of a nationally recognized
courier service, one Business Day after delivery to such courier service,
addressed as follows in the case of the Borrower and the Lender or to such
other address as may be hereafter notified by the respective parties hereto and
any future holders of the Note:

	
  The Borrower:

  	
   

  	
  City National Bancshares Corporation

  900 Broad Street

  Newark, New Jersey 07102

  Attention: President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  The Lender:

  	
   

  	
  The Prudential Insurance Company of America

  751 Broad Street

  6th Floor

  Newark, NJ 07102

  Attention: Social Investments

  

 

provided that any notice, request or demand to or
upon the Lender pursuant to Sections 2, 3 or 4 shall not be effective until
received.

9.03 No
Waiver; Cumulative Remedies.

No failure to
exercise and no delay in exercising, on the part of the Lender, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. 
The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

9.04 Survival
of Representations and Warranties.

All
representations and warranties made hereunder or under any other Loan Document
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the Note.

9.05 Payment
of Expenses and Taxes.

The Borrower
agrees (a) to pay or reimburse the Lender for all its out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement,
the Note, and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, provided that any legal fees
of the Lender shall be limited to the reasonable fees and disbursements of
counsel to the Lender (provided that such initial fees incurred with respect to
the development,

 23
 

 

preparation and execution
of the foregoing shall not exceed $15,000), (b) to pay or reimburse the Lender
for all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Note, the other Loan
Documents and any such other documents, provided that any legal fees of the
Lender shall be limited to  the
reasonable fees and disbursements of counsel to the Lender, and (c) to pay,
indemnify, and hold the Lender harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the Note, the 
other Loan Documents and any such other documents.  The agreements in this subsection shall
survive repayment of the Note and all other amounts payable hereunder.

9.06 Indemnification.

The Borrower will
defend, indemnify, and hold harmless the Lender, its subsidiaries,
shareholders, employees, agents, attorneys, officers, and directors, from and
against any and all claims, demands, penalties, causes of action, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, court costs, and litigation
expenses) arising out of, or in any way related to, (a) the execution,
delivery, enforcement, performance and administration of any Loan Document, (b)
the presence, disposal, spillage, discharge, emission, leakage, release, or
threatened release of any materials of environmental concern which is at, in,
on, under, about, from or affecting the Borrower’s property for which the
Borrower is in any way responsible, (c) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to any
such materials, (d) any lawsuit brought or threatened, settlement reached, or
order or directive of or by any Governmental Authority relating to such
materials, or (e) any violation or alleged violation of any environmental laws
or regulations by the Borrower.  The
Borrower shall not, without the prior written consent of the Lender, effect any
settlement of any pending or threatened proceeding, claim or action against the
Lender, in respect of which the Lender or its parent, subsidiaries, affiliates,
employees, agents, officers or directors is a party or would be entitled to
seek indemnification hereunder, unless such settlement includes an unconditional
release of the Lender and its parent, subsidiaries, affiliates, employees,
agents, attorneys, officers or directors from all liability on claims that are
the subject matter of such claim, action or other proceeding and is otherwise
acceptable to the Lender and its counsel, in their sole discretion, provided
that, the Borrower shall have no obligation hereunder to the Lender with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Lender.  The agreements
in this subsection shall survive repayment of the Note and all other amounts
payable hereunder.

9.07 Successors
and Assigns; Purchasing Lender.

(a)   This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lender, all future holders of the Note and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of the
Lender.

 24
 

 

(b)   The
Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more additional banks or financial
institutions (“Purchasing Lender”) all or any part of its rights and
obligations under the Loan Documents.

(c)   The
Borrower authorizes the Lender to disclose to any Purchasing Lender and any
prospective Purchasing Lender any and all financial information in the Lender’s
possession concerning the Borrower and its Subsidiaries which has been
delivered to the Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to the Lender by or on behalf of the
Borrower in connection with the Lender’s credit evaluation of the Borrower and
its Subsidiaries prior to becoming a party to this Agreement, provided that any
such Purchasing Lender agrees to be bound by the provisions of Section 9.15.

(d)   Nothing
herein shall prohibit the Lender from pledging or assigning the Note to any
Federal Reserve Lender in accordance with applicable law.

9.08 Counterparts.

This Agreement may
be executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

9.09 Severability.

Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

9.10 Integration.

This Agreement and
the other Loan Documents represent the agreement of the Borrower and the Lender
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other
Loan Documents.

9.11 GOVERNING
LAW.

THE LOAN
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THE LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW JERSEY.

9.12 Submission
To Jurisdiction; Waivers.

The Borrower
hereby irrevocably and unconditionally:

(a)   submits
for itself and its property in any legal action or proceeding relating to

 25
 

 

the Loan Documents, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New Jersey, the courts of the United States of America
for the District of New Jersey, and appellate courts from any thereof;

(b)   consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

(c)   agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Borrower at its address set
forth in this Agreement or at such other address of which the Lender shall have
been notified pursuant thereto;

(d)   agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

(e)   waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this subsection any
punitive damages.

9.13 Acknowledgements.

The Borrower
hereby acknowledges that:

(a)   it
has been advised by counsel in the negotiation, execution and delivery of the
Loan Documents;

(b)   the
Lender does not have any fiduciary relationship to the Borrower, and the
relationship between the Lender, on one hand, and the Borrower, on the other
hand, is solely that of debtor and creditor; and

(c)   no
joint venture exists between the Lender and the 
Borrower.

9.14 WAIVERS
OF JURY TRIAL.

THE
BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THE LOAN DOCUMENTS AND FOR
ANY COUNTERCLAIM THEREIN.

9.15 Confidentiality
of Certain Information.

The Lender
acknowledges that certain information in the possession of the Borrower and its
Depository Institution Subsidiaries (e.g., personal information of depositors)
is, pursuant to applicable laws, rules and 
regulations, subject to confidentiality requirements.  The Lender agrees that with respect to any
such information delivered to it in compliance with, or obtained as a result of
the provisions of, Sections 5.01, 5.02, 5.06 or 5.08, that it will observe and
maintain

 26
 

 

the confidentiality of
such information as required by all applicable laws, rules and
regulations.  Lender further acknowledges
that it will not have access to information which the Borrower or any of its
Subsidiaries is not permitted to disclose to third parties, under applicable
law.

[signature
page follows]

 27
 

 

IN WITNESS WHEREOF, the parties hereto have caused
this Credit Agreement to be duly executed and delivered in Newark, New Jersey
by their proper and duly authorized officers as of the day and year first above
written.

	
  

  	
   

  	
  City National Bancshares Corporation, 

  	 

	
   

  	
   

  	
  a New Jersey corporation

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   /s/ Edward R. Wright

  
	
   

  	
   

  	
  Name:

  	
  Edward R. Wright

  	 

	
   

  	
   

  	
  Title:

  	
  Senior VP and CFO

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  The Prudential Insurance Company of 

  	 

	
   

  	
   

  	
  America, a New Jersey stock
  insurance  

  	 

	
   

  	
   

  	
  company

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   /s/ Gabriella E. Morris

  	 

	
   

  	
   

  	
  Name:

  	
  Gabriella E. Morris

  	 

	
   

  	
   

  	
  Title:

  	
  Vice President, Community

  	 

	
   

  	
   

  	
   

  	
  Resources

  	 

						

 

 

 28Exhibit 10.27

NEW PLAN
EXCEL REALTY TRUST, INC.

DEFERRED
COMPENSATION PLAN

(Amended and
Restated as of February 26, 2007)

ARTICLE I

ESTABLISHMENT AND PURPOSE

New Plan Excel
Realty Trust, Inc. previously adopted this New Plan Excel Realty Trust, Inc.
Deferred Compensation Plan, effective July 1, 2004.  The purpose of
the Plan is to provide each Participant with an opportunity to defer receipt of
a portion of their salary, bonus, and other specified cash and equity-based
compensation permitted by the Committee.  The Plan is not intended to meet
the qualification requirements of Section 401(a) of the Internal Revenue
Code, but is intended to be an unfunded arrangement providing deferred
compensation to eligible employees who are part of a select group of management
or highly compensated employees of the Company within the meaning of Sections
201(2), 301(a)(3) and 401(a)(1) of ERISA.  The Plan is intended to be
exempt from the requirements of Parts 2, 3 and 4 of Title I of ERISA as a “top
hat” plan, and to be eligible for the alternative method of compliance for
reporting and disclosure available for unfunded “top hat” plans.

The Plan was
amended and restated effective January 1, 2005 to comply with the requirements
of Section 409A of the Code, as enacted into law pursuant to the American Jobs
Creation Act of 2004.  The Plan now is
amended and restated as of February 26, 2007 to make certain clarifying
changes.

ARTICLE II

DEFINITIONS

2.1.                              Account
Balance.  Account Balance means, with respect to the Deferred Compensation
Account, a Stock Unit Account, or an In-Service Account, the total value of all
Company Stock Units and Investment Options in which the Participant deferrals
have been Deemed Invested as of a specific date, taking into account the value
of all distributions from that Account to that date.

2.2.                              Allocation
Election.  Allocation Election means a choice by a Participant of one
or more Investment Options, and the allocation among them, in which future
Participant Cash Deferrals and/or existing Account Balances are Deemed Invested
for purposes of determining earnings in a particular Account.

2.3.                              Allocation
Election Form.  Allocation Election Form means the form (or Website
screen) approved by the Plan Administrator on which the Participant makes an
Allocation Election.

2.4.                              Annual
Valuation Date.  Annual Valuation Date shall mean the anniversary of
the Termination Valuation Date, In Service Distribution Valuation Date, or
Stock Unit Valuation Date utilized to determine the amount of an annual
installment payment.

2.5.                              Beneficiary.
 Beneficiary means a natural person, estate, or trust designated by a
Participant on the form designated by the Plan Administrator to receive
benefits to which a Beneficiary is entitled under and in accordance with
provisions of the Plan.  The Participant’s spouse, or if none (or no
longer living), then the Participant’s estate shall be the Beneficiary if:

a.                  Participant has
not designated a natural person or trust as Beneficiary, or

b.                 the
designated Beneficiary has predeceased the Participant.

2.6.                              Cash
Compensation.  Cash Compensation means Compensation that is paid in
cash, such as base salary (including any Company contributions made of behalf
of a Participant to any qualified plan maintained by the Company or to any
cafeteria plan under Section 125 of the Code), annual bonus, other cash
awards and dividend-equivalent bonuses, and such other Cash Compensation (if
any) approved by the Committee as Compensation for purposes of this Plan.

2.7.                              Cash
Deferral.  Cash Deferral means a deferral of base salary, bonus, or
other cash Compensation (if any) permitted to be deferred by the Committee and
properly deferred by a Participant in accordance with provisions in
Section 4.1 of this Plan.

2.8.                              Cash
Deferral Account.  Cash Deferral Account shall mean part of the
Deferred Compensation Account maintained to track Cash Deferrals and Deemed
Investments thereon.

2.9.                              Chief
Executive Officer.  Chief Executive Officer means the individual who
performs the functions of a Chief Executive Officer for the Company.

2.10.                        Code.  Code means
the Internal Revenue Code of 1986, as amended from time to time.

2.11.                        Company.  Company
means New Plan Excel Realty Trust, Inc.

2.12.                        Company Stock.
 Company Stock shall mean shares of New Plan Excel Realty Trust, Inc.
common stock.

2.13.                        Company Stock Units.
 Company Stock Units shall mean notional shares of Company Stock resulting
from a Deemed Investment in Company Stock.

2.14.                        Compensation.
 Compensation shall mean, for purposes of this Plan, Cash Compensation and
Company Stock Units.

2.15.                        Compensation Deferral
Agreement.  Compensation Deferral Agreement shall mean the deferral
election form, or such other forms furnished by the Plan Administrator (or
screens on the Participant Website approved by the Plan Administrator), on
which a Participant elects Cash Deferrals by designating: (a) the amount of
deferral and type of Cash Compensation to be deferred; (b) any In Service
Distribution Dates for that year’s, or a portion of that year’s, Cash
Deferrals; and (c) the Form of Payment elections for Cash Deferral Termination
Benefits and In Service Distributions.  The Allocation Election Form may
be part of the Compensation Deferral Agreement, in the discretion of the Plan
Administrator.

2.16.                        Death Benefit.
 Death Benefit shall mean a distribution of the total amount of the
Participant’s Deferred Compensation Account Balance, including any remaining
unpaid In Service Account and Stock Unit Account balances, to the Participant’s
Beneficiary(ies) in accordance with Article V of the Plan.

2.17.                        Deemed Investment.
 A Deemed Investment (or “Deemed Invested”) shall mean the notional
conversion of a dollar amount of deferred Compensation credited to a
Participant’s Deferred Compensation Account into shares or units (or a fraction
of such measures of ownership, if applicable) of Company Stock Units and/or the
underlying investment (e.g.,  mutual fund or other investment) which is
referred to by the Investment Option(s) selected by the Participant.  The
conversion shall occur as if shares (or units) of the designated investment
were being purchased (or sold, for a distribution) at the purchase price as of
the close of business of the day on which the Deemed Investment occurs. 
At no time shall a Participant have any real or beneficial ownership in the
actual investment to which the Company Stock Unit or Investment Option refers,
irrespective of whether such a Deemed Investment is mirrored by an actual
identical investment by the Company or a trustee acting on behalf of the Company.

2.18.                        Deferral Period.
 Deferral Period shall mean the number of years specified by the
Participant on the Restricted Stock Deferral Agreement between a Restricted
Stock Deferral and the date elected by the Participant to receive (or to begin
to receive) distribution of his or her Stock Unit Benefit.

 2
 

2.19.                        Deferred Compensation
Account (“Account’).  A Participant’s Deferred Compensation Account
shall mean the aggregate of all Cash Deferral Accounts, and Stock Unit
Accounts, together with a record of Deemed Investments, minus any withdrawals
or distributions from said Account.  The Account, and all component
Accounts, shall be a bookkeeping account utilized solely as a device for the
measurement of amounts to be paid to the Participant under the Plan.  The
Account shall not constitute or be treated as an escrow, trust fund, or any
other type of funded account for Code or ERISA purposes and, moreover, amounts
credited thereto shall not be considered “plan assets” for ERISA purposes.

2.20.                        Deferred Compensation
Committee or “Committee.”  Deferred Compensation Committee, or “Committee”
means a committee of at least three (3) officers of the Company appointed by
the Compensation Committee of the Board or the Chief Executive Officer, who
shall serve until the earlier of termination of service or appointment of a
replacement by the Compensation Committee of the Board or the Chief Executive
Officer.

2.21.                        Effective Date.
 Effective Date means the date upon which the Initial Plan Year begins.

2.22.                        Eligible Employee.
 Eligible Employee means an Employee who is part of a select group of
management or highly compensated employees of the Company within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and who is selected by the
Committee to participate in the Plan.

2.23.                        Employee.  Employee
means a full-time salaried employee of the Company.

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

2.25.                        Grandfathered Subaccount.  Grandfathered Subaccount means that portion
of an Account that is earned and vested as of December 31, 2004, including
earnings and losses thereon that occur prior to, or on or after, December 31,
2004.

2.26.                        Initial Plan Year.
 Initial Plan Year means July 1, 2004 - December 31, 2004.

2.27.                        In Service Account.
 In Service Account shall mean a separate Account of the Cash Deferral
Account and the Stock Unit Account, created whenever a Participant elects a new
In Service Distribution Date (not already established with an Account) with
respect to a portion, or all, of his or her Cash or Restricted Stock Deferrals,
to which such portion of the deferral as is specified by the Participant is
credited.

2.28.                        In Service Distribution.
 In Service Distribution shall mean a payment by the Company to the
Participant following a date elected by the Participant (the In Service
Distribution Date) of the amount represented by the account balance in the In
Service Account pertaining to that In Service Distribution.  In Service
Distributions shall be made in accordance with Participants’ In Service
Distribution form of payment election.

2.29.                        In Service Distribution Date. 
In Service Distribution Date shall mean the date selected by the Participant,
following which the In Service Distribution Account Balance shall be
distributed in accordance with the Plan.

2.30.                        In Service Distribution
Valuation Date.  In Service Distribution Valuation Date shall mean the
last business day of the calendar month in which the In Service Distribution
Date occurs.

2.31.                        Investment Option. 
Investment Option shall mean a security or other investment such as a mutual
fund, life insurance account, or other investment approved by the Plan
Administrator for use as part of an Investment Option menu, which a Participant
may elect as a measuring device to determine Deemed Investment earnings
(positive or negative) to be valued in the Participant’s Cash Deferral
Account(s).  The Participant has no real or beneficial ownership in the
security or other investment, represented by the Investment Option.

 3
 

2.32.                        Participant. 
Participant means an Eligible Employee who: (1) is selected to participate in
this Plan in accordance with Section 3.1 and has elected to defer
Compensation in accordance with the Plan in any Plan Year; or (2) has an Account
Balance in his or her Deferred Compensation Account greater than zero prior to
his or her death.  A Participant’s continued participation in the Plan
shall be governed by Section 3.2 of the Plan.

2.33.                        Plan.  Plan means
the New Plan Excel Realty Trust, Inc. Deferred Compensation Plan as documented
herein and as may be amended from time to time hereafter.

2.34.                        Plan Administrator. 
Plan Administrator shall mean an employee or group of employees appointed by
the Deferred Compensation Committee who is(are) responsible for those items of
plan administration (e.g., the day-to-day decision making, record keeping) as
are delegated to him, her, or them by the Committee.  The Plan
Administrator may further delegate duties of the Plan Administrator to employees
or others (e.g., an outside record keeper) to assist in the administration of
the Plan.

2.35.                        Plan Year.  Plan
Year means January 1 through December 31 (see also Initial Plan
Year).

2.36.                        Restricted Stock.
 Restricted Stock shall mean a share or shares of New Plan Excel Realty
Trust, Inc. common stock that has(have) been issued by the Company to an
employee, with certain legally binding restrictions in place on the exercise of
ownership rights and disposition of the stock that are imposed for a period of time
(“vesting period”) which restrictions qualify as a substantial risk of
forfeiture that results in the delay of inclusion in income of the value of the
Restricted Stock until the restrictions, by their terms, are no longer
effective (the shares “vest” “on the “vesting date”).

2.37.                        Restricted Stock Deferral.
 Restricted Stock Deferral shall mean the election by a Participant to
defer the receipt of Company Stock Units in accordance with Section 4.2 of
this Plan.

2.38.                        Restricted Stock Deferral
Agreement.  Restricted Stock Deferral Agreement shall mean the form
(or, when available and authorized by the Plan Administrator, the screen(s) on
the Participant web site) on which a Participant may elect: (a) the number or
percentage of shares of Restricted Stock to be deferred in accordance with the
provisions of Section 4.2 of this Plan; (b) any In Service Distribution
Dates for that year’s, or a portion of that year’s, Restricted Stock Deferrals;
and (c) the Form of Payment elections for Stock Unit Termination Benefits and
In Service Distributions.  If the
Participant’s Restricted Stock Deferral Agreement identifies a percentage of
shares of Restricted Stock to be deferred and application of such percentage
results in a fractional share, any such fractional share will not be treated as
deferred under this Plan.

2.39.                        Retirement.
 Retirement shall mean the voluntary termination of employment with the
Company upon reaching age 65, or after reaching age 50 with ten (10) years of
service with the Company.  Retirement shall also mean such involuntary
terminations as are designated as a Retirement for purposes of this Plan in the
sole discretion of the Committee.

2.40.                        Retirement/Termination
Benefit.  Retirement/Termination Benefit (“Cash Retirement/Termination
Benefit” and “Stock Unit Retirement/Termination Benefit”) shall mean a
distribution to the Participant of the Participant’s Cash Deferral Account
Balance and the Participant’s Stock Unit Account Balance, including all unpaid
In Service Account Balances, in accordance with the Participant’s payment
schedule election for Retirement/Termination Benefit or as specified in
Article V of the Plan.

2.41.                        Retirement/Termination
Account.  Retirement/Termination Account (“Cash Retirement/Termination
Account” and “Stock Unit Retirement/Termination Account”) shall mean that
portion of the Cash Deferral Account and the Restricted Stock Deferral Account
not allocated to In Service Accounts.

 4
 

2.42.                        Stock Unit Benefit. 
Stock Unit Benefit shall mean the distribution by the Company of the Stock Unit
Deferral Account Balance to a Participant, or if applicable, his or her
Beneficiary, on (or beginning on) an In Service Distribution Date or on, or
beginning on, the applicable distribution date following Termination of
Employment with respect to such Account and in accordance with his or her
payment schedule election applicable to such Account.  Such
distribution shall be made solely in Company Stock.

2.43.                        Stock Unit Deferral Account.
 Stock Unit Deferral Account shall mean a portion of the Deferred
Compensation Account created each time a Participant makes a Restricted Stock
Deferral, that is maintained to track the amount and value of the Restricted
Stock Deferral and Deemed Investment in Company Stock Units together with
distributions from such Account.

2.44.                        Stock Unit Valuation Date. 
Stock Unit Valuation Date shall mean the last business day of the month in
which the In Service Distribution Date, elected by the Participant with respect
to a Restricted Stock Deferral, occurs. 
In the case of Restricted Stock Deferrals that are to be paid upon
Termination of Employment, Stock Unit Valuation Date shall mean six months
following Termination of Employment.

2.45.                        Termination of Employment.
 Termination of Employment shall mean the termination of a Participant’s
employment with the Company for any reason other than death.  With regard to non-Grandfathered Subaccounts,
a Termination of Employment shall not be deemed to have occurred unless the
Participant has terminated employment with the Company and all members of its
controlled group, and shall have the same meaning as separation from service
under Section 409A of the Code

2.46.                        Termination Valuation Date.
 Termination Valuation Date shall mean, with regard to Grandfathered
Subaccounts, the last business day of the calendar month in which Termination
of Employment occurs. Termination Valuation Date shall mean, with regard to
non-Grandfathered Subaccounts, six months following the last business day of
the calendar month in which Termination of Employment occurs.

2.47.                        Valuation Date.
 Valuation Date means the applicable Termination Valuation Date, the Stock
Unit Valuation Date or the In-Service Distribution Valuation Date.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1.                              Eligibility
and Participation.  Each Eligible Employee, determined in the sole
discretion of the Committee, shall be eligible to participate in this Plan.

3.2.                              Duration.
 Once an Employee becomes a Participant, such Employee shall continue to
be a Participant so long as he or she is entitled to receive benefits
hereunder, notwithstanding any subsequent Termination of Employment.

3.3.                              Revocation
of Future Participation.  Notwithstanding the provisions of
Section 3.2, the Committee may revoke such Participant’s eligibility to
make future deferrals under this Plan. 
Such revocation will not affect in any manner a Participant’s Deferred
Compensation Account.

3.4.                              Notification.  Each newly Eligible Employee shall be
notified by the Plan Administrator, in writing, of his or her eligibility to
participate in this Plan.

 5
 

ARTICLE IV

DEFERRAL ELECTIONS AND PARTICIPANT ACCOUNT VALUATION

4.1.                              Cash
Deferral Elections.

(a)                          Procedure
for Making Cash Deferral Elections. 
A Participant shall make Cash Deferral elections under the Plan by
completing and submitting to the Plan Administrator a written Compensation
Deferral Agreement provided by the Plan Administrator (or completing and
electronically submitting the deferral election screen on the Participant
website, when made available by the Plan Administrator).  Except as otherwise provided in this Section
4.1, Cash Deferral elections shall be made during an annual enrollment period
which shall end no later than the last day of the month prior to the beginning
of the Plan Year in which the services giving rise to the compensation are
performed.  Cash Deferral elections for
the Initial Plan Year shall be made during an enrollment period which shall end
no later than the Effective Date. 
Notwithstanding the foregoing, an Eligible Employee who becomes eligible
to be a Participant during any Plan Year (including all Eligible Employees in
the initial year of the Plan) may, in the initial year of eligibility only,
make deferral elections with respect to Cash Compensation which will be earned
and paid during the balance of such Plan Year but after such elections in such
Plan Year, within 30 days of the date of notification of eligibility as
required in Section 3.4 of the Plan.

(b)                         Special
One-Time Election for 2005 Bonuses. 
Notwithstanding subsection 4.1(a) above, a Participant may make a
special one-time Cash Deferral election on or prior to March 15, 2005 to defer
the portion of the Participant’s Cash Compensation that consists of his or her
bonus that will be earned based on the Participant’s performance in 2005 and
would otherwise be payable in 2006.

(c)                          Performance-Based
Bonuses.  Notwithstanding subsection
4.1(a) above, to the extent the Plan Administrator determines that a
Participant is eligible to receive a cash bonus that will qualify as
performance-based within the meaning of Section 409A of the Code, a Participant
may make a Cash Deferral election with regard to such bonus no later than June
30 of the Plan Year in which the bonus will be earned.

(d)                         Changes
to Cash Deferral Elections.   Cash
Deferral elections shall be for a Plan Year (or, in the Initial Plan Year, for
the balance of the Plan Year), and shall remain in effect from Plan Year to
Plan Year unless modified or revoked by the Participant in writing on such
forms as may be prescribed by the Plan Administrator (or by following such
procedures as are set by the Plan Administrator regarding using the Participant
website, when available) during an enrollment period.  Such modification or revocation shall become
effective on the first day of the Plan Year following the date of the
modification or revocation.

(e)                          Percentage
of Cash Compensation that May be Deferred. 
A Cash Deferral election shall designate the amount of Cash Compensation
to be deferred in dollar amounts or whole percentages.  A Participant may
defer up to 75% of base salary, and up to 100% of his or her bonus or other
Cash Compensation declared eligible by the Committee to be paid during the Plan
Year to which the election refers.  A Participant may elect different
percentages for each form of Cash Compensation. 
The foregoing notwithstanding, in the event a Participant’s deferral
election results in insufficient non-deferred Cash Compensation from which to
withhold taxes in accordance with applicable law, the deferral election shall
be reduced as necessary to allow the Company to satisfy tax withholding
requirements.

(f)                            Application
of Cash Deferral Elections.   Deferrals
pertaining to base salary shall be deducted on a pro rata basis from a
Participant’s base salary for each pay period during the Plan Year, and
deferrals pertaining to bonus and other Cash Compensation (if any), shall be
deducted from the Participant’s bonus or other Cash Compensation on the date
the bonus or other Cash Compensation would otherwise be paid to the Participant. 
In each case the amount deferred shall be credited to the Participant’s
Retirement/Termination Account or In Service Account(s), and a Deemed
Investment shall be made in the investment(s) represented by the Investment
Option(s) elected by the Participant, as of the close of business on the date
it would otherwise have been paid as Compensation to the Participant.

 6
 

(g)                         Election
of Payment Schedule.  The
Compensation Deferral Agreement shall indicate the Participant’s election of a
payment schedule for his or her Retirement/Termination Benefit.  A
Participant shall elect to have such Retirement/Termination Benefit
distributed: (i) a portion, or all, in a single lump sum payable as soon as
administratively practicable following the Termination Valuation Date; and/or
(ii) the balance (assuming it is at least $25,000) in up to fifteen (15) annual
installment payments payable at the time described in Section 5.3.  An election of a payment schedule for a
Participant’s Retirement/Termination Benefit shall pertain to the entire
Deferred Compensation Account Balance.

(h)                         Changes
to Payment Schedule.  This paragraph
applies only to the portion of a Participant’s Account that is not a
Grandfathered Subaccount.  A Participant
shall be permitted to change his or her payment schedule election at any
time by filing a new Compensation Deferral Agreement (or by following such
procedures as are set by the Plan Administrator regarding using the Participant
website, when available), provided that the request is made at least twelve
(12) months prior to the Participant’s Termination of Employment and the change
must delay the payment or commencement of payment by at least five (5)
years.  Any payment
schedule election made within twelve (12) months of Termination of
Employment shall be null and void, and the most recent payment
schedule election which is dated at least twelve months prior to
Termination of Employment will be in effect.

This paragraph applies only to Grandfathered Subaccounts.  A Participant shall be permitted to change
his or her payment schedule election at any time by filing a new
Compensation Deferral Agreement (or by following such procedures as are set by
the Plan Administrator regarding using the Participant website, when
available), provided such election is made at least thirteen (13) months prior
to the Participant’s date of Termination of Employment.  Any payment
schedule election made within thirteen months of Termination of Employment
shall be null and void, and the most recent payment schedule election
which is dated at least thirteen months prior to Termination of Employment will
be in effect.

4.2                                 Restricted
Stock Deferrals.

(a)                          The
rules in this Section 4.2(a) apply to deferrals made on or prior to March 15,
2005.  A Participant shall make Restricted
Stock Deferral elections under the Plan by completing and submitting to the
Plan Administrator a written Restricted Stock Deferral Agreement provided by
the Plan Administrator (or completing and electronically submitting the
deferral election screen on the Participant website, when made available by the
Plan Administrator) during the Restricted Stock Deferral enrollment
period.  The Restricted Stock Deferral election period shall occur during
the Plan Year preceding the Plan Year to which the deferral elections pertain,
and shall end no later than June 30.  Restricted Stock Deferral
elections must be made at least six (6) months prior to the “vesting date” of
the unvested shares of Restricted Stock to which the deferral election refers,
and must refer to unvested shares of Restricted Stock that have a “vesting date”
during the Plan Year which begins after the date of the Restricted Stock
Deferral election.

(b)                         Except
as provided in Section 4.2(c), the rules in this Section 4.2(b) apply to
deferrals made after March 15, 2005.  A
Participant shall make Restricted Stock Deferral elections under the Plan by
completing and submitting to the Plan Administrator a written Restricted Stock
Deferral Agreement provided by the Plan Administrator (or completing and electronically
submitting the deferral election screen on the Participant website, when made
available by the Plan Administrator) during the Restricted Stock Deferral
enrollment period.

(i)                                             A
Restricted Stock Deferral election may be made at any time that is no later
than December 15 of the year prior to the year in which the Restricted Stock is
granted (a “Pre-Grant Restricted Stock Election”).

(ii)                                          In
the case of a Restricted Stock grant, a Restricted Stock Deferral election may
be made on or before the 30th day after the date of grant, provided that the
election is made at least twelve (12) months in advance of the earliest vesting
date under the Restricted Stock grant.

 7
 

(iii)                                       A Restricted
Stock Deferral election that cannot conform to the requirements of Section
4.2(b)(ii) may nevertheless be made later than the year prior to the year in
which the Restricted Stock is granted (a “Post-Grant Restricted Stock Election”).  In such a case, the Restricted Stock Deferral
election period shall occur during the period which is at least twelve (12)
months prior to the date on which the Restricted Stock becomes vested (except
as provided in Section 4.2(b)(iv) below with regard to a Performance-Based
Restricted Stock Election) and may only apply to Restricted Stock that vests at
least twelve (12) months following the date the Restricted Stock Deferral
election is filed with the Plan Administrator. 
Any Post-Grant Restricted Stock Election must indicate an In-Service
Distribution Date that is at least five years later than the vesting date of
the related Restricted Stock.

(iv)                                      A
Restricted Stock Deferral Election that is made with regard to Restricted Stock
that qualifies as performance-based under Code Section 409A (a “Performance-Based
Restricted Stock Election”) shall be made no later than six months prior to the
vesting date of the Restricted Stock.

(c)                          The rule
in this Section 4.2(c) is the exclusive rule applicable in the case of
Restricted Stock that is issuable pursuant to a written agreement or
arrangement to award Restricted Stock following achievement of performance
criteria measured over a performance period of at least twelve (12) months (the
“Performance Period”) and that otherwise qualifies as performance-based under
Code Section 409A.  In addition, the rule
in this Section 4.2(c) may be used to make a deferral election with respect to
Common Stock issuable under a written agreement or arrangement of the kind just
described, and any such deferral election shall be treated as a Restricted
Stock Deferral under this Plan.  In cases
to which this Section 4.2(c) applies, the Restricted Stock Deferral election
period shall close no later than six (6) months prior to the end of the
Performance Period used as the measure for the award of Restricted Stock or
Common Stock, as applicable.

(d)                         Except
as provided in this Section 4.2 regarding changing a payment
schedule election and except as provided in Section 4.3 regarding In
Service Distribution Date changes, Restricted Stock Deferral elections are
irrevocable.   When a Participant makes a
Restricted Stock Deferral election, such Participant shall continue to hold (or
otherwise be credited with ownership of) the shares of Restricted Stock which
are subject to the Restricted Stock Deferral election, and remains able to
exercise all rights of ownership accorded to owners of unvested Restricted
Stock with respect to such shares until the day immediately prior to the “vesting
date” of such deferred Restricted Stock shares.  During such period, any
dividends declared with respect to such deferred Restricted Stock shares shall
be distributed in accordance with the provisions of the plan pursuant to which
the Restricted Stock is granted (e.g.,  paid in cash to the owner of
unvested Restricted Stock, or reinvested in Company Stock, including pursuant
to the terms of the Company’s Dividend Reinvestment Plan (“DRIP”)), as provided
in the Company Restricted Stock agreement.

(e)                          On
the day immediately prior to the “vesting date” of the shares subject to the
Restricted Stock Deferral election, the deferred Restricted Stock shares are
deemed to be surrendered to the Company by the Participant, and exchanged for
Company Stock Units which are simultaneously “deferred” (credited to the Stock
Unit Account pursuant to provisions of this Plan).  Thereafter, any
dividends declared with respect to Company Stock shall be treated as additional
cash compensation to Participants with Stock Unit Accounts in the amount that
would have been paid (or reinvested) as a dividend if the Participant had not
made the Restricted Stock Deferral election (“dividend equivalent compensation”),
and shall be disposed of in accordance with the Participant’s election for “dividend
equivalent compensation.”

(f)                            The
Restricted Stock Deferral Agreement shall indicate: (i) the number of shares of
Company Stock Units a Participant elects to defer; (ii) the disposition of “dividend
equivalent compensation”; and (iii) the Participant’s election of a payment
schedule for his or her Stock Unit Retirement/Termination Account.  A Participant may elect to have their “dividend
equivalent compensation” distributed: 
(a) in cash in accordance with procedures for payment of dividends
established by the Company; or (b) credited to their Stock Unit Account. 
The number of Company Stock Units into which dividend equivalent compensation
is converted will be calculated on the same basis as the Company’s DRIP or, if
the DRIP has been terminated, on the basis of the closing price of Company
Stock on the day the dividend is paid.

 8
 

(g)                         A
Participant may elect to have his or her Stock Unit Retirement/Termination
Account Balance distributed: (a) a portion, or all, in a single lump sum
payable as soon as administratively practicable following the applicable
Valuation Date; and/or (b) the balance (assuming it is valued at $10,000 or
more) in up to fifteen (15) annual installment payments payable at the time
described in Section 5.3.  An
election of a payment schedule for a Participant’s Stock Unit
Retirement/Termination Account Balance shall pertain to the entire Stock Unit
Retirement/Termination Account Balance.

(h)                         This
paragraph applies only to the portion of the Account that is a Post-Grant
Restricted Stock Election.  A
Participant shall be permitted to change his or her payment
schedule election at any time, but only in accordance with Section 4.3
(In-Service Distribution Date Election).

This paragraph applies only to the portion of the
Account that is a Pre-Grant Restricted Stock Election or a Performance-Based
Restricted Stock Election. 
A Participant shall be permitted to change his or her payment
schedule election at any time by filing a new Restricted Stock Deferral
Agreement (or by following such procedures as are set by the Plan Administrator
regarding using the Participant website, when available), provided such
election is made in accordance with Section 4.3, or prior to the time at which
the deferral election must be made pursuant to Section 4.2(b)(i) (Pre-Grant
Restricted Stock Election), 4.2(b)(iv) (Performance-Based Restricted Stock
Election) or Section 4.2(c), as applicable.

(i)                             Restricted
Stock Deferrals shall be credited to the Stock Unit Account as soon as
administratively practicable following the day immediately prior to the “vesting
date” of the shares subject to the Restricted Stock Deferral election, in the
sole discretion of the Plan Administrator.  A Deemed Investment shall be
made in Company Stock Units on the date so credited.

(j)                             The
Stock Unit Deferral Account Balance shall be fully vested from inception.

4.3                                 In
Service Distribution Date Election.

(a)                          The
Compensation Deferral Agreement and Restricted Stock Deferral Agreement shall
also indicate the Participant’s election of In Service Distribution Date(s) (if
any).  An In Service Distribution
election shall pertain to such portion of deferred Cash Compensation or
Restricted Stock for the Plan Year as elected by the Participant.  The
Plan Administrator shall create a new In Service Account for each distinct In
Service Distribution Date (unless such Account already exists), to which such
portion of deferred Compensation shall be credited.  In the event an In
Service Account has already been established for the In Service Distribution
Date referred to in the deferral election, such portion of deferred
Compensation (Cash or Stock Units) shall be credited to the existing In Service
Account.

(b)                         A
Participant may maintain up to five (5) In Service Accounts for Cash
Compensation, and up to five (5) In Service Accounts for Stock Unit Accounts.

(c)                          A
Participant may change or cancel an In Service Distribution Date, as follows:

(i)                     An
In Service Distribution Date change may be made by submitting a new
Compensation Deferral Agreement, Restricted Stock Deferral Agreement, or such
other form as may be provided for In Service Distribution Date changes by the
Plan Administrator (or completing and electronically submitting the appropriate
screen on the Participant website, when available) at any time, so long as the
date that such form is submitted to the Plan Administrator is, in the case of
Grandfathered Subaccounts, at least thirteen (13) months prior to the In
Service Distribution Date being changed and in the case of non-Grandfathered
Subaccounts, at least twelve (12) months prior to the In Service Distribution
Date and has the effect of delaying payment. 
The In Service Distribution Date may be changed only once for a
Grandfathered Subaccount, but may be changed more than once for a
non-Grandfathered Subaccount.

 9
 

(ii)                  The
In Service Distribution Date may be extended to a subsequent year (and must be
extended by at least one year in the case of Grandfathered Subaccounts and five
years in the case of non-Grandfathered Subaccounts), but it may not be made to
occur sooner than the original date.

(iii)               With regard to Grandfathered Accounts
only, the In Service Distribution Date may be cancelled, even after a
change.  A cancellation of an In Service
Distribution Date shall cause the In Service Account associated with it to be
merged into the Cash or Stock Unit Retirement/Termination Account, as
applicable.

(iv)              Making
an In Service Distribution Date change or cancellation in accordance with the
Plan is specific to the In Service Distribution to which it refers, and shall
not affect other In Service Distributions or the ability of the Participant to
make new In Service Distribution elections with respect to new deferral
contributions.

(d)                         Any
portion of a Cash or Restricted Stock Deferral not credited to an In Service
Distribution Account will be credited to the appropriate Retirement/Termination
Account (either Cash or Stock Unit).

(e)                           The Compensation Deferral
Agreement/Restricted Stock Deferral Agreement shall also indicate the
Participant’s election of payment schedule for each In Service
Distribution Date.  Permitted payment schedules for In Service Distributions
are a single lump sum or (assuming the In Service Distribution Account Balance
is at least $10,000) from two (2) to five (5) annual installment
payments.  A Participant shall be permitted to change his or her payment
schedule election for an In Service Distribution at any time by filing a
new Compensation Deferral Agreement (or by following such procedures as are set
by the Plan Administrator regarding using the Participant website, when
available), provided that:

(i)                     In
the case of Grandfathered Subaccounts, such election is made at least thirteen
(13) months prior to the In Service Distribution Date.

(ii)                  In
the case of Non-Grandfathered Subaccounts, such election is made at least
twelve (12) months prior to the In Service Distribution Date, and such election
delays payment, or commencement of payment, at least five (5) years.

4.4                                 Cash
Deferral Allocation Elections and Valuation of Accounts.

(a)                          For
Cash Deferrals credited to Cash Deferral Accounts, a Participant shall elect
Investment Options from a menu provided by the Plan Administrator.  The
initial election shall be made on the Allocation Election form approved by the
Plan Administrator (or Allocation Election Screen on the Participant website
approved by the Plan Administrator) and shall specify the allocations among the
Investment Options elected.  A Participant may make different Allocation
Elections for each In Service Account and for the Cash Retirement/Termination
Account.  A Participant’s Accounts shall be valued as the sum of the value
of all Deemed Investments minus any withdrawals or distributions from said
Account.  Investment Options shall be utilized to determine the earnings
attributable to the Account.  Elections of Investment Options do not
represent actual ownership of, or any ownership rights in or to, the securities
or other investments to which the Investment Options refer, nor is the Company
in any way bound or directed to make actual investments corresponding to Deemed
Investments.

 10
 

(b)                         The
Committee, in its sole discretion, shall be permitted to add or remove
Investment Options provided that any such additions or removals of Investment
Options shall not be effective with respect to any period prior to the
effective date of such change.  Any unallocated portion of an Account or
any unallocated portion of new deferrals shall be Deemed Invested in an
Investment Option referring to a money market fund.

(c)                           A Participant may make a new
Allocation Election with respect to future Cash Deferrals or existing Account
Balances, provided that such new allocation elections must be in increments of
one percent (1%).  Allocation elections pertaining to existing Account
Balances apply to the entire Account Balance.  New Allocation Elections
may be made on any business day and will become effective on the same business
day or, in the case of Allocation Elections received after a cut-off time
established by the Plan Administrator, the following business day.

(d)                         Stock
Unit Accounts shall not be eligible for the election of Investment
Options.  Such Account Balances will, during the entire Deferral Period,
be Deemed Invested in Company Stock Units.

(e)                           Notwithstanding anything in this
Section to the contrary, the Company shall have the sole and exclusive
authority to invest any or all amounts deferred in any manner, regardless of
any Allocation Elections by any Participant.  A Participant’s Allocation
Election shall be used solely for purposes of determining the value of such
Participant’s Accounts and the amount of the corresponding liability of the
Company in accordance with this Plan.

4.5                                 Prohibition
Against Modifications to Deferral Elections.  A Participant may not
modify or revoke a Cash Deferral election during a Plan Year by changing the
amount of the Compensation deferral except in the case of severe financial
hardship and then only to the extent permissible under Code Section 409A and
with the approval of the Plan Administrator in its sole discretion.

ARTICLE V

DISTRIBUTIONS
AND WITHDRAWALS 

5.1                                 In
Service Distributions.

(a)                   In Service Distributions shall be paid
in accordance with the payment schedule election made with respect
thereto, beginning as soon as administratively practicable following the In
Service Distribution Valuation Date.   In
the event a Participant has elected installment payments for an In Service
Distribution, the installment payments shall be determined as set forth in
Section 5.3 of the Plan.

(b)                 Notwithstanding
a Participant’s election to receive an In Service Distribution, to the extent
permitted by Code Section 409A, all In Service Distribution Account Balances
shall be distributed as part of a Retirement/Termination or Death Benefit (and
in accordance with the Retirement/Termination payment schedule election,
if applicable) if such Retirement, Termination of Employment or Death occurs
prior to the completion of payment(s) elected in connection with any In Service
Distribution Date.

(c)                  Stock
Unit In Service Accounts shall be distributed in shares of Company Stock, equal
in number to Company Stock Units credited to the Stock Unit In Service Account
Balance.

5.2                                 Retirement/Termination
Benefit Distribution.  The Cash
Retirement/Termination Benefit and the Stock Unit Retirement/Termination
Benefit will be paid (or the first payment will be made) in accordance with the
Participant payment schedule election as soon as administratively
practicable following the Termination Valuation Date.

 11

 

5.3                                 Installment
Payments. If the Participant has elected installment payments, annual
payments will be made beginning as soon as administratively practicable
following the applicable Valuation Date or, in the event of a partial lump sum
election, following the first anniversary of the partial lump sum payment made
following Retirement or the end of a Deferral Period.  Such payments shall continue annually on or
about the anniversary of the previous installment payment until the number of
installment payments elected has been paid.  The installment payment
amount shall be determined annually as the result of a calculation, performed
on the applicable Annual Valuation Date, where (i) is divided by (ii):

(i)                             equals
the value of the applicable Account (or number of Company Stock Units credited
to the Stock Unit Account) on the Annual Valuation Date; and

(ii)                           equals the remaining number of
installment payments.

5.5                                  Small Account Balance Lump Sum
Payment. In the event that a Participant’s Retirement/Termination Account
Balance is less than $25,000 or a Participant’s In Service Distribution Account
Balance or Stock Unit Account Balance is less than $10,000 on the applicable
Valuation Date, the In Service Distribution, Stock Unit Benefit, or Retirement
Benefit, as applicable, shall be paid in a lump sum and any form of payment
election to the contrary shall be null and void.

5.6                                  Death Benefit.  In the event of a Participant’s death either
before Termination of Employment or before complete distribution of installment
payments elected by the Participant in connection with any In Service
Distribution, Retirement/Termination Benefit, or Stock Unit Benefit, such
Participant’s Beneficiary, named on the most recently filed Beneficiary
Designation Form, shall be paid a Death Benefit in the amount of the remaining
Deferred Compensation Account Balance in a single lump sum as soon as
practicable following the end of the month in which the Participant’s death
occurred.  The Valuation Date for
purposes of determining the Death Benefit shall be the last day of the month in
which the Participant’s death occurs.

5.7                                  Unforeseeable Emergency. 
A Participant may request, in writing to the Plan Administrator, a withdrawal
from his or her Deferred Compensation Account if the Participant experiences an
“unforeseeable emergency.”

An unforeseeable emergency is a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of a dependent (as defined in section 152(a)) of the Code),
loss of the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, as defined in Reg. 1.457-2(h)(4).  The Plan Administrator, in its sole
discretion, shall determine whether a Participant has experienced an
unforeseeable emergency.  Withdrawals of
amounts because of an unforeseeable emergency are limited to the extent
reasonably needed to satisfy the emergency need, which cannot be met with other
resources of the Participant.  The amount
of such unforeseeable emergency withdrawal shall be subtracted first from the
vested portion of the Participant’s Cash Deferral Retirement/Termination
Account until depleted and then from the Cash Deferral In Service Distribution
Accounts (if any) beginning with the most distant, and then from the Stock Unit
Retirement/Termination Account, and finally from the Stock Unit In Service
Accounts (if any) on a pro-rata basis. 
Values for purposes of administering this Section shall be
determined on the date the Plan Administrator approves the amount of the
unforeseeable emergency withdrawal, or such other date determined by the Plan
Administrator.

5.8                                 Voluntary
Withdrawal.  Voluntary withdrawals shall be available only with regard
to Grandfathered Subaccounts.  A
Participant who is an active employee may request, in writing to the Plan
Administrator, to have up to 100% of the vested portion of his or her Deferred
Compensation Account Balance at any time and for any reason, subject to a
penalty of 10% of the amount distributed.  The penalty shall be forfeited
to the Company.  There is a minimum
withdrawal amount of $5,000.  Deferral elections
shall be deemed revoked for the balance of the Plan Year in which such withdrawal
election is made and not permitted for the following Plan Year.  The amount of such voluntary withdrawal shall
be subtracted first from the vested portion of the Participant’s
Retirement/Termination Account until depleted, then from the In Service
Accounts (if any) beginning with the most distant, and finally from a
Participant’s Stock Unit Deferral Account on a pro-rata basis.  Values for
purposes of administering this Section shall be determined on the date the
Plan Administrator approves the amount of the withdrawal, or such other date
determined by the Plan Administrator.

 12
 

5.9                                 Change
in Control.  In the event a Participant shall have a Termination of
Employment (including a Retirement) within two (2) years following a Change in
Control, such Participant shall receive his or her Deferred Compensation
Account Balance (including all In Service Accounts) in a lump sum paid as soon
as administratively practicable following the Valuation Date, which for this
purpose shall be the end of the month in which the Change in Control
occurs.  All payment
schedule elections to the contrary shall be ignored.  In the case of non-Grandfathered Subaccounts,
payment to key employees shall be delayed six months following Termination of
Employment to the extent necessary to avoid the imposition of the penalty tax
under Code Section 409A.

5.10                           Court
Order.  In the event a Court of competent jurisdiction orders a
division of a Participant’s Account or portion thereof pursuant to a valid
Judgment, the Plan Administrator may make a distribution to the Participant or
other recipient named in the Court order in the amount necessary to satisfy the
judgment.

ARTICLE VI

ADMINISTRATION

6.1.                              Plan
Administration.  This Plan shall be administered by the Committee,
which shall have discretionary authority to make, amend, interpret and enforce
all appropriate rules and regulations for the administration of this Plan and
to utilize its discretion to decide or resolve any and all questions, including
but not limited to eligibility for benefits and interpretations of this Plan
and its terms, as may arise in connection with the Plan.  Certain of these
administrative functions may be delegated by the Committee to the Plan
Administrator.  Claims for benefits shall be filed with the Plan Administrator
and resolved in accordance with the claims procedures in Article IX.

6.2.                              Withholding. 
The Company shall have the right to withhold from any payment made under the
Plan (or any amount deferred into the Plan) any taxes required by law to be
withheld in respect of such payment (or deferral).  In addition, the
Company shall have the right to require such payments from a Participant, or
withhold such amounts from other payments due to a Participant from the Company
or any affiliate.

6.3.                              Indemnification. 
The Company shall indemnify and hold harmless each employee, officer, director,
agent or organization, to whom or to which is delegated duties,
responsibilities, and authority with respect to administration of the Plan,
against all claims, liabilities, fines and penalties, and all expenses
reasonably incurred by or imposed upon him or it (including but not limited to
reasonable attorney fees) which arise as a result of his or its actions or
failure to act in connection with the operation and administration of the Plan
to the extent lawfully allowable and to the extent that such claim, liability,
fine, penalty, or expense is not paid for by liability insurance purchased or
paid for by the Company.  Notwithstanding the foregoing, the Company shall
not indemnify any person or organization if his or its actions or failure to
act are due to gross negligence or willful misconduct or for any such amount
incurred through any settlement or compromise of any action unless the Company
consents in writing to such settlement or compromise.

6.4.                              Expenses. 
The expenses of administering the Plan shall be paid by the Company.

6.5.                              Delegation
of Authority.  In the administration of this Plan, the Plan
Administrator may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit, and may from time to time consult with
legal counsel who may be legal counsel to the Company.

6.6.                              Binding
Decisions or Actions.  The decision or action of the Plan
Administrator in respect of any question arising out of or in connection with
the administration, interpretation and application of the Plan and the rules
and regulations thereunder shall be final and conclusive and binding upon all
persons having any interest in the Plan.

 13
 

ARTICLE VII

AMENDMENT AND TERMINATION

7.1.                              Amendment
and Termination.  The Plan is intended to be permanent, but the
Committee may at any time modify, amend, or terminate the Plan, provided that
such modification, amendment or termination shall not cancel, reduce, or
otherwise adversely affect the amount of benefits of any Participant accrued
(and any form of payment elected) as of the date of any such modification,
amendment, or termination, without the consent of the Participant. 
Notwithstanding the foregoing, the Committee shall be permitted upon Plan
termination to instruct the Plan Administrator to pay each Participant (without
such Participant’s consent) a lump sum in the amount of such Participant’s
Account Balance as of the date of such Plan termination, but only to the extent
such payment would not result in the imposition of the excise tax under Code
Section 409A.

7.2.                              Adverse
Income Tax Determination.  Notwithstanding anything to the contrary in
the Plan, if any Participant receives a deficiency notice from the United
States Internal Revenue Service asserting constructive receipt of amounts
payable under the Plan, or if legislation is passed which causes current income
taxation of deferred amounts, Company contributions, and/or the investment
earnings attributed thereto due to any Participant withdrawal right or other
Plan provision, the Committee, in its sole discretion, may terminate the Plan
or such Participant’s participation in the Plan, and/or may declare null and
void any Plan provision with respect to affected Participants, and/or may make
distributions in cash or Company Stock in an amount equal to the amount that
would otherwise be subject to the claim of constructive receipt or otherwise
includable in income when deferred.  In addition, it is intended that this
Plan comply with all provisions of the Internal Revenue Code, including  Code Section 409A and regulations and rulings
in effect from time to time regarding the permissible deferral of compensation
and taxes thereon, and it is understood that this Plan does so comply.  If the laws of the United States or of any
relevant state are amended or construed in such a way as to make this Plan (or
its intended deferral of compensation and taxes) in whole or in part void, then
the Deferred Compensation Committee, in its sole discretion, may choose to
terminate the Plan or it may (to the extent it deems practicable) give effect
to the Plan in such a manner as it deems will best carry out the purposes and
intentions of this Plan.

ARTICLE VIII

INFORMAL FUNDING

8.1.                              General
Assets.  All benefits in respect of a Participant under this Plan
shall be paid directly from the general funds of the Company, or a Rabbi Trust
created by the Company and funded by the Employers for the purpose of
informally funding the Plan, and other than such Rabbi Trust, if created, no
special or separate fund shall be established and no other segregation of
assets shall be made to assure payment.  No Participant, spouse or
Beneficiary shall have any right, title or interest whatever in or to any investments
which an Company may make to aid the Company in meeting its obligation
hereunder.  Nothing contained in this Plan, and no action taken pursuant
to its provisions, shall create or be construed to create a trust of any kind,
or a fiduciary relationship, between the Company or any if its subsidiaries or
affiliated companies and any Employee, spouse, or Beneficiary.  To the
extent that any person acquires a right to receive payments from the Company
hereunder, such rights are no greater than the right of an unsecured general
creditor of the Company.

8.2.                              Rabbi
Trust.  The Company may, at its sole discretion, establish a grantor
trust, commonly known as a Rabbi Trust, as a vehicle for accumulating the
assets needed to pay the promised benefit, but the Company shall be under no
obligation to establish any such trust or any other informal funding vehicle.

 14
 

ARTICLE IX

CLAIMS

9.1.                              Filing
a Claim.  Any controversy or claim arising out of or relating to the
Plan shall be filed with the Plan Administrator which shall make all
determinations concerning such claim.  Any decision by the Plan
Administrator denying such claim shall be in writing and shall be delivered to
the Participant or Beneficiary filing the claim (“Claimant”).  Such
decision shall set forth the reasons for denial in plain language. 
Pertinent provisions of the Plan document shall be cited and, where
appropriate, an explanation as to how the Claimant can perfect the claim will
be provided, including a description of any additional material or information
necessary to complete the claim, and an explanation of why such material or
information is necessary.  The claim denial also shall include an
explanation of the claims review procedures and the time limits applicable to
such procedures, including a statement of the Claimant’s right to bring a civil
action under Section 502(a) of ERISA following an adverse decision on
review.  This notice of denial of benefits will be provided within 90 days
of the Plan Administrator’s receipt of the Claimant’s claim for benefits. 
If the Plan Administrator fails to notify the Claimant of its decision
regarding the Claimant’s claim, the claim shall be considered denied.  If
the Plan Administrator determines that it needs additional time to review the
claim, the Plan Administrator will provide the Claimant with a notice of the
extension before the end of the initial 90-day period.  The extension will
not be more than 90 days from the end of the initial 90-day period and the
notice of extension will explain the special circumstances that require the
extension and the date by which the Plan Administrator expects to make a
decision.

9.2.                              Appeal. 
Claimant who has been completely or partially denied a benefit shall be
entitled to appeal this denial of his claim by filing a written appeal with the
Committee no later than sixty (60) days after: (a) receipt of the written
notification of such claim denial, or (b) the lapse of ninety (90) days without
an announced decision notice of extension.  A Claimant who timely requests
a review of his or her denied claim (or his or her authorized representative)
may review, upon request and free of charge, copies of all documents, records
and other information relevant to the denial and may submit written comments,
documents, records and other information relevant to the claim to the Plan
Administrator.  The Committee may, in its sole discretion and if it deems
appropriate or necessary, decide to hold a hearing with respect to the claim
appeal.  Following its review of any additional information submitted by
the Claimant, the Committee shall render a decision on its review of the denied
claim in the following manner:

(a)                          The
Committee shall make its decision regarding the merits of the denied claim
within 60 days following its receipt of the appeal (or within 120 days after
such receipt, in a case where there are special circumstances requiring
extension of time for reviewing the appealed claim).  It shall deliver the
decision to the Claimant in writing.  If an extension of time for reviewing
the appeal is required because of special circumstances, written notice of the
extension shall be furnished to the Claimant prior to the commencement of the
extension.  The notice will indicate the special circumstances requiring
the extension of time and the date by which the Committee expects to render the
determination on review.

(b)                         The
review will take into account comments, documents, records and other
information submitted by the Claimant relating to the claim without regard to
whether such information was submitted or considered in the initial benefit
determination.

(c)                          The
decision on review shall set forth a specific reason for the decision, and
shall cite specific references to the pertinent Plan provisions on which the
decision is based.

(d)                         The
decision on review will include a statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access to and copies of
all documents, records, or other information relevant to the Claimant’s claim
for benefits.

(e)                          The
decision on review will include a statement describing any voluntary appeal
procedures offered by the plan and a statement of the Claimant’s right to bring
an action under Section 502(a) of ERISA.

(f)                            A
Claimant may not bring any legal action relating to a claim for benefits under
the Plan unless and until the Claimant has followed the claims procedures under
the Plan and exhausted his or her administrative remedies under such claims
procedures.

 15
 

ARTICLE X

GENERAL CONDITIONS

10.1.                        Anti-assignment Rule. 
No interest of any Participant, spouse or Beneficiary under this Plan and no
benefit payable hereunder shall be assigned as security for a loan, and any
such purported assignment shall be null, void and of no effect, nor shall any
such interest or any such benefit be subject in any manner, either voluntarily
or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by
or through any Participant, spouse or Beneficiary.

10.2.                        No Legal or Equitable Rights
or Interest.  No Participant or other person shall have any legal or
equitable rights or interest in this Plan that are not expressly granted in
this Plan.  Participation in this Plan does not give any person any right
to be retained in the service of the Company or any of its subsidiaries or affiliated
companies.  The right and power of the Company to dismiss or discharge an
Employee is expressly reserved.

10.3.                        No Employment Contract. 
Nothing contained herein shall be construed to constitute a contract of
employment between an Employee and the Company or any of its subsidiaries or
affiliated companies.

10.4.                        Headings.  The
headings of Sections are included solely for convenience of reference, and if
there is any conflict between such headings and the text of this Plan, the text
shall control.

10.5.                        Invalid or Unenforceable
Provisions.  If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof and the Plan Administrator may elect in its sole discretion
to construe such invalid or unenforceable provisions in a manner that conforms
to applicable law or as if such provisions, to the extent invalid or
unenforceable, had not been included.

10.6.                        Governing Law.  To
the extent not preempted by ERISA, the laws of the State of New York shall
govern the construction and administration of the Plan.

10.7.                        Successors.  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform the Plan
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.

SIGNATURES
ON NEXT PAGE

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IN
WITNESS WHEREOF, the Company has caused this Plan to be
amended and restated effective as of February 26, 2007.

 

	
  

  	
   

  	
  NEW PLAN REALTY TRUST, INC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/  Steven F.
  Siegel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
  Executive Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ATTEST:

  	
   

  	
  John B. Roche

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
										

 

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