Document:

EX-10.1

 

Exhibit 10.1

NORTHFIELD BANK

EMPLOYEE STOCK OWNERSHIP PLAN

(adopted effective January 1, 2007)

 

C O N T E N T S

	 	 	 	 	 
	 	 	Page No.	 
	Section 1. Plan Identity
	 	 	1	 
	1.1 Name
	 	 	1	 
	1.2 Purpose
	 	 	1	 
	1.3 Effective Date
	 	 	1	 
	1.4 Fiscal Period
	 	 	1	 
	1.5 Single Plan for All Employers
	 	 	1	 
	1.6 Interpretation of Provisions
	 	 	1	 
	Section 2. Definitions
	 	 	1	 
	Section 3. Eligibility for Participation
	 	 	8	 
	3.1 Initial Eligibility
	 	 	8	 
	3.2 Definition of Eligibility Year
	 	 	9	 
	3.3 Terminated Employees
	 	 	9	 
	3.4 Certain Employees Ineligible
	 	 	9	 
	3.5 Participation and Reparticipation
	 	 	9	 
	3.6 Omission of Eligible Employee
	 	 	10	 
	3.7 Inclusion of Ineligible Employee
	 	 	10	 
	Section 4. Contributions and Credits
	 	 	10	 
	4.1 Discretionary Contributions
	 	 	10	 
	4.2 Contributions for Stock Obligations
	 	 	10	 
	4.3 Conditions as to Contributions
	 	 	11	 
	4.4 Rollover Contributions
	 	 	11	 
	Section 5. Limitations on Contributions and Allocations
	 	 	11	 
	5.1 Limitation on Annual Additions
	 	 	11	 
	5.2 Effect of Limitations
	 	 	13	 
	5.3 Limitations as to Certain Participants
	 	 	13	 
	5.4 Erroneous Allocations
	 	 	14	 
	Section 6. Trust Fund and Its Investment
	 	 	14	 
	6.1 Creation of Trust Fund
	 	 	14	 
	6.2 Stock Fund and Investment Fund
	 	 	14	 
	6.3 Acquisition of Stock
	 	 	14	 
	6.4 Participants’ Option to Diversify
	 	 	15	 
	Section 7. Voting Rights and Dividends on Stock
	 	 	16	 
	7.1 Voting and Tendering of Stock
	 	 	16	 
	7.2 Application of Dividends
	 	 	16	 
	Section 8. Adjustments to Accounts
	 	 	17	 
	8.1 ESOP Allocations
	 	 	17	 
	8.2 Charges to Accounts
	 	 	18	 
	8.3 Stock Fund Account
	 	 	18	 
	8.4 Investment Fund Account
	 	 	19	 
	8.5 Adjustment to Value of Trust Fund
	 	 	19	 
	8.6 Participant Statements
	 	 	19	 
	Section 9. Vesting of Participants’ Interests
	 	 	19	 
	9.1 Deferred Vesting in Accounts
	 	 	19	 
	9.2 Computation of Vesting Years
	 	 	19	 
	9.3 Full Vesting Upon Certain Events
	 	 	20	 
	9.4 Full Vesting Upon Plan Termination
	 	 	21	 

 

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

(ii)

 

	 	 	 	 	 
	 	 	Page No.	 
	Section 15. Top-Heavy Provisions
	 	 	32	 
	15.1 Top-Heavy Plan
	 	 	32	 
	15.2 Definitions
	 	 	32	 
	15.3 Top-Heavy Rules of Application
	 	 	33	 
	15.4 Minimum Contributions
	 	 	34	 
	15.5 Top-Heavy Provisions Control in Top-Heavy Plan
	 	 	34	 

(iii)

 

NORTHFIELD BANK

EMPLOYEE STOCK OWNERSHIP PLAN

Section 1 Plan Identity.

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

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

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

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

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

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

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

Section 2. Definitions.

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

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

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

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

 

 

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

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

     “Break in Service” means any Plan Year, or, for the initial eligibility computation period
under Section 3.2, the 12-consecutive month period beginning on the first day of which an Employee
has an Hour of Service, in which an Employee has 500 or fewer Hours of Service. Solely for this
purpose, an Employee shall be considered employed for his normal hours of paid employment during a
Recognized Absence (said Employee shall not be credited with more than 501 Hours of Service to
avoid a Break in Service), unless he does not resume his Service at the end of the Recognized
Absence. Further, if an Employee is absent for any period (i) by reason of the Employee’s
pregnancy, (ii) by reason of the birth of the Employee’s child, (iii) by reason of the placement of
a child with the Employee in connection with the Employee’s adoption of the child, or (iv) for
purposes of caring for such child for a period beginning immediately after such birth or placement,
the Employee shall be credited with the Hours of Service which would normally have been credited
but for such absence, up to a maximum of 501 Hours of Service.

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

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

     “Company” means Northfield Bancorp, Inc., the holding company of the Bank, and any successor
entity which succeeds to the business of the Company.

     “Compensation” means with respect to a Plan Year, the base compensation receivable by an
Eligible Employee from the Employer for the calendar year prior to any reduction pursuant to a
salary deferral agreement under a 401(k) Plan. Base compensation shall include salary, before-tax
contributions, wages and wage continuation payments to an Employee who is absent due to illness or
disability of a short-term nature, the amount of any Employer contributions under a flexible
benefits program maintained by the Employer under Code Section 125 pursuant to a salary reduction
agreement entered into by the Participant under Code Section 125, or elective amounts that are not
includable in the gross income of the Eligible Employee by reason of Code Section 132(f)(4), and
exclude overtime, commissions, expense allowances, severance pay, fees, bonuses, contributions made
by the Employer to any pension, insurance, welfare or other employee benefit plan other than a Code
Section 125 plan. Compensation shall not exceed $225,000 for the 2007 Plan Year and thereafter
shall be adjusted in multiples of $5,000 for increases in the cost-of-living as prescribed under
Code Section 401(a)(17)(B). For purposes of this definition, if the Plan Year is less than 12
calendar months, the amount of Compensation taken into account for such Plan Year shall be adjusted
by multiplying such Compensation by a fraction, the numerator of which is the number of months in
such Plan Year and the denominator of which is 12.

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

-2-

 

     “Eligible Employee” means an Employee, other than an Employee identified in Section 3.4, who
has both (i) satisfied the age requirement of Section 3.1(ii) and (ii) has performed 1,000 Hours of
Service in the applicable Eligibility Year in accordance with Section 3.2.

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

     “Employer” means the Bank or any Affiliated Employer.

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

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

     “415 Compensation”

     (a) shall mean a Participant’s remuneration as defined in Treasury Regulations Section
1.415-2(d)(2), (3) and (6).

     (b) shall also mean any elective deferral as defined in Code Section 402(g)(3) (any
Employer contributions made on behalf of a Participant to the extent not includible in gross
income and any Employer contributions to purchase an annuity contract under Code Section
403(b) under a salary reduction agreement) and any amount which is contributed or deferred
by the Employer at the election of the Participant and which is not includible in gross
income of the Participant by reason of Code Section 125 (including any “deemed” Code Section
125 compensation) (Cafeteria Plan), Code Section 457 or 132(f)(4) shall also be included in
the definition of 415 Compensation.

     (c) Taxable post-severance payments from a non-qualified, unfunded deferred
compensation plan shall be included in the definition of Section 415 Compensation, but only
if such amounts are paid within the later of (i) 2 1/2 months after severance from employment
or (ii) the end of the limitation year that includes the date of severance that are payments
that, absent a severance from employment, would have been paid to the Participant as regular
compensation for services, or payments from accrued bona-fide sick, vacation, or other
leave. To the extent permitted by Treasury Regulations Section 1.415-1 et seq., such
limitations shall not apply to disabled Participants and to
Participants who severed employment due to qualified military service. “Severance from
employment” shall be interpreted as set forth in Treasury Regulations Section 1.401(k)-1 et
seq.

     (d) 415 Compensation shall include amounts that are includible in income under Code
Section 409A or Code Section 457(f)(1)(A).

     (e) 415 Compensation in excess of $225,000 (as indexed) shall be disregarded for all
Participants. For purposes of this sub-section, the $225,000 limit shall be referred to as
the

-3-

 

“applicable limit” for the Plan Year in question. The $225,000 limit shall be adjusted
for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code,
effective for the Plan Year which begins within the applicable calendar year. For purposes
of the applicable limit, 415 Compensation shall be prorated over short Plan Years in the
same manner as Compensation.

     “Highly Compensated Employee” for any Plan Year means an Employee who, during either that or
the immediately preceding Plan Year was at any time a five percent owner of the Employer (as
defined in Code Section 416(i)(1)) or, during the immediately preceding Plan Year, had 415
Compensation exceeding $100,000 (the $100,000 amount is adjusted at the same time and in the same
manner as under Code Section 415(d)). The applicable year for which a determination is being made
is called a “determination year” and the preceding 12-month period is called a look-back year.

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

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

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

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

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

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

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

-4-

 

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

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

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

     “Normal Retirement Date” means the date on which the Participant attains his 65th
birthday and has completed five years of Service.

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

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

     “Plan Year” means the twelve-month period commencing January 1, 2007 and ending December 31,
2007, and each period of 12 consecutive months beginning on January 1 of each succeeding year.

     “Recognized Absence” means a period for which —

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

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

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

     “Reemployment After a Period of Uniformed Service”

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

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

-5-

 

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

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

          (4) for a Participant is

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

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

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

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

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

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

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

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

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

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

-6-

 

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

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

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

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

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

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

     “Service” means an Employee’s period(s) of employment or self-employment with an Employer,
excluding for initial eligibility purposes any period in which the individual was a nonresident
alien and did not receive from an Employer any earned income which constituted income from sources
within the United States. An Employee’s Service shall include any Service which constitutes
Service with a predecessor Employer within the meaning of Section 414(a) of the Code, provided,
however, that Service with an acquired entity shall not be considered Service under the Plan unless
required by applicable law or agreed to by the parties to such transaction. An Employee’s Service
shall also include any Service with an entity which is not an Employer, but only either (i) in
which the other entity is a member of a controlled group of corporations or is under common control
with other trades and businesses within the meaning of Section 414(b) or 414(c) of the Code, and a
member of the controlled group or one of the trades and businesses is an Employer, (ii) in which
the other entity is a member of an affiliated service group within the meaning of Section 414(m) of
the Code, and a member of the affiliated service group is an Employer, or (iii) all Employers
aggregated with the Employer under Section 414(o) of the Code (but not until the proposed Treasury
Regulations under Section 414(o) become effective). Notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to qualified military service
will be provided in accordance with Section 414(u) of the Code.

     “Spouse” means the individual, if any, to whom a Participant is lawfully married on the date
benefit payments to the Participant are to begin, or on the date of the Participant’s death, if
earlier. A former Spouse shall be treated as the Spouse or surviving Spouse to the extent provided
under a qualified domestic relations order as described in section 414(p) of the Code.

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

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

-7-

 

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

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

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

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

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

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

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

     “Valuation Date” means for so long as there is a generally recognized market for the Stock
each business day. If at any time there shall be no generally recognized market for the Stock,
then “Valuation Date” shall mean the last day of the Plan Year and each other date as of which the
Committee shall determine the investment experience of the Investment Fund and adjust the
Participants’ Accounts accordingly.

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

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

Section 3. Eligibility for Participation.

     3.1 Initial Eligibility. An Eligible Employee shall enter the Plan as of the Entry
Date coincident with or next following the later of the following dates:

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

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     (ii) the Eligible Employee’s 18th birthday. However, if an Eligible
Employee is not in active Service with an Employer on the date he would otherwise first
enter the Plan, his entry shall be deferred until the next day he is in Service.

     Notwithstanding the foregoing, an employee of Liberty Bank who became an Employee of the Bank
on the effective date of the merger of Liberty Bank with the Bank shall receive credit for
eligibility purposes for all periods of service while employed at Liberty Bank.

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

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

     (ii) his subsequent eligibility periods will be 12-consecutive month periods beginning
on the first anniversary of the date on which the Eligible Employee first completed an Hour
of Service for the Employer.

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

     3.4 Certain Employees Ineligible.

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

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

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

     3.4-4. Hourly Employees, i.e., Employees paid on an hourly basis, are not eligible to
participate in the Plan.

     3.4-5. An Eligible Employee may elect not to participate in the Plan, provided,
however, such election is made solely to meet the requirements of Code Section 409(n). For
an election to be effective for a particular Plan Year, the Eligible Employee or Participant
must file the election in writing with the Plan Administrator no later than the last day of
the Plan Year for which the election is
to be effective. The Employer may not make a contribution under the Plan for the
Eligible Employee or for the Participant for the Plan Year for which the election is
effective, nor for any succeeding Plan Year, unless the Eligible Employee or Participant
re-elects to participate in the Plan. The Eligible Employee or Participant may elect again
not to participate, but not earlier than the first Plan Year following the Plan Year in
which the re-election was first effective.

     3.5 Participation and Reparticipation. Subject to the satisfaction of the foregoing
requirements, an Eligible Employee shall participate in the Plan during each period of his Service
from the

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

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

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

Section 4. Contributions and Credits.

     4.1 Discretionary.

     4.1-1. The Employer shall from time to time contribute, with respect to a Plan Year, such
amounts as it may determine from time to time. The Employer shall have no obligation to contribute
any amount under this Plan except as so determined in its sole discretion. The Employer’s
contributions and available forfeitures for a Plan Year shall be credited as of the last day of the
year to the Accounts of the Active Participants in the manner set forth in Section 8.1-2.

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

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

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

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above, and the remaining principal and
interest payments required (or projected to be required on the basis of the interest rate in effect
at the end of the Plan Year) to satisfy the Stock Obligation.

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

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

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

Section 5. Limitations on Contributions and Allocations.

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

     5.1-1 If allocation of Employer contributions in accordance with Sections 4.1 and 8.1-2
will result in an allocation of more than one-third of the total contributions for a Plan
Year to the Accounts of Highly Compensated Employees then, in the sole discretion of the
Employer, the allocation of such amount shall be adjusted so that such excess will not
occur. If the Employer deems such adjustment necessary or desirable in order to take
advantage of the provisions of Section 5.1-4 hereof, then the Employer shall, in a
non-discriminatory manner (as among Highly Compensated Employees), cause
the Compensation taken into consideration under Section 8.1-2 and attributable to such
Highly Compensated Employees to be deemed to be reduced so as to constitute no more than
one-third of the aggregate Compensation of all Eligible Employees on which the Employer
contributions and forfeitures, if any, for such Plan Year are allocated.

     5.1-2 After adjustment, if any, required by the preceding paragraph, the annual
additions during any Plan Year to any Participant’s Account under this and any other defined
contribution plans maintained by the Employer or an affiliate (within the purview of Section
414(b), (c) and (m) and Section 415(h) of the Code, which affiliate shall be deemed the
Employer for this purpose) shall not exceed the lesser of $45,000 (or such other dollar
amount which results from cost-of-living adjustments under Section 415(d) of the Code) (the
“dollar limitation”) or 100 percent of the Participant’s 415 Compensation for such
limitation year (the “percentage limitation”). In the event Stock is released from the
Unallocated Stock Fund and allocated to a Participant’s account for a particular Plan Year,
the Employer may determine for such year that an annual addition shall be

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calculated on the
basis of the fair market value of the Stock so released and allocated (such fair market
value to be based on the value as of the last Valuation Date of the Plan Year for which the
Stock is released) if the annual addition, as so calculated, is lower than the annual
addition calculated on the basis of the Employer contribution. The percentage limitation
shall not apply to any contribution for medical benefits after separation from service
(within the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise
treated as an annual addition. If, as a result of the allocation of forfeitures, a
reasonable error in estimating a Participant’s annual compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3))
that may be made with respect to any individual under the limits of Code Section 415, or
under other limited facts and circumstances that the Commissioner of the Internal Revenue
Service finds justify the availability of the rules set forth in this paragraph, the annual
additions under the terms of the Plan for a particular Participant would cause the
limitations of Code Section 415 applicable to that Participant for the limitation year to be
exceeded, the excess amounts shall not be deemed annual additions in that limitation year if
they are treated in accordance with any one of the following:

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

     (ii) If the allocation or reallocation of the excess amounts causes the limitations of
Code section 415 to be exceeded with respect to each Participant for the limitation year,
then the excess amount will be held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer contributions for all remaining Participants in
the next limitation year and each succeeding limitation year if necessary.

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

     (iv) If a suspense account established under this Section 5.1-2 exists at the time of
Plan termination, amounts held in the suspense account that cannot be allocated shall revert
to the Employer.

     5.1-3 For purposes of this Section 5.1, the “annual addition” to a Participant’s
Accounts means the sum of (i) Employer contributions, (ii) Employee contributions, if any,
and (iii) forfeitures. For these purposes, annual additions to a defined contribution plan
shall not include the allocation of the excess amounts remaining in the Unallocated Stock
Fund subsequent to a sale of stock from such fund in accordance with a transaction described
in Section 8.1 of the Plan.

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

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

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

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

     5.1-6 A limitation year shall mean each 12 consecutive month period ending on
December 31.

     5.2 Effect of Limitations. The Committee shall take whatever action may be necessary
from time to time to assure compliance with the limitations set forth in Section 5.1. Specifically,
the Committee shall see that each Employer restrict its contributions for any Plan Year to an
amount which, taking into account the amount of available forfeitures, may be completely allocated
to the Participants consistent with those limitations. Where the limitations would otherwise be
exceeded by any Participant, further allocations to the Participant shall be curtailed to the
extent necessary to satisfy the limitations. Where an excessive amount is contributed on account
of a mistake as to one or more Participants’ compensation, or there is an amount of forfeitures
which may not be credited in the Plan Year in which it becomes available, the amount shall be
corrected in accordance with Section 5.1-2 of the Plan. If it is determined at any time that the
Committee and/or Trustee has erred in accepting and allocating any contributions or forfeitures
under this Plan, or in allocating net gain or loss pursuant to Sections 8.2 and 8.3, then the
Committee, in a uniform and nondiscriminatory manner, shall determine the manner in which such
error shall be corrected and shall promptly advise the Trustee in writing of such error and of the
method for correcting such error. The Accounts of any or all Participants may be revised, if
necessary, in order to correct such error.

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

     This restriction shall apply at all times to a Participant who owns (taking into account the
attribution rules under Section 318(a) of the Code, without regard to the exception for employee
plan trusts in Section 318(a)(2)(B)(i) more than 25 percent of any class of stock of a corporation
which issued the Stock acquired by the Plan, or another corporation within the same controlled
group, as defined in Section 409(l)(4) of the Code (any such class of stock hereafter called a
“Related Class”). For this purpose, a Participant who owns more than 25 percent of any Related
Class at any time within the one year preceding the Plan’s purchase of the Stock shall be subject
to the restriction as to all allocations of the Stock, but any other Participant shall be subject
to the restriction only as to allocations which occur at a time when he owns more than 25 percent
of any Related Class.

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

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

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

Section 6. Trust Fund and Its Investment.

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

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

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

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

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

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

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

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

     6.4 Participants’ Option to Diversify. The Committee shall provide for a procedure
under which each Participant may, during the qualified election period, elect to “diversify” a
portion of the Employer Stock allocated to his Account, as provided in Section
401(a)(28)(B) of the Code. An election to diversify must be made on the prescribed form and
filed with the Committee within the period specified herein. For each of the first five (5) Plan
years in the qualified election period, the Participant may elect to diversify an amount which does
not exceed 25% of the number of shares allocated to his Account since the inception of the Plan,
less all shares with respect to which an election under this Section has already been made. For
the last year of the qualified election period, the Participant may elect to have up to 50 percent
of the value of his Account committed to other investments, less all shares with respect to which
an election under this Section has already been made. The term “qualified election period” shall
mean the six (6) Plan Year period beginning with the first Plan Year in which a Participant has
both attained age 55 and completed 10 years of participation in the Plan. A Participant’s election
to diversify his Account may be made within each year of the qualified election period and shall
continue for the 90-day period immediately following the last day of each year in the qualified
election period. Once a Participant makes such election, the Plan must complete diversification in
accordance with such election within 90 days after the end of the period during which the election
could be made for the Plan Year. In the discretion of the Committee, the Plan may satisfy the
diversification requirement by any of the following methods:

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

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

     6.4-3 The Plan may transfer the portion of the Participant’s Account subject to the
diversification election to another qualified defined contribution plan of the Employer that
offers at

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least three investment options satisfying the requirements of the regulations under
Section 404(c) of ERISA.

Section 7. Voting Rights and Dividends on Stock.

      7.1 Voting and Tendering of Stock.

     7.1-1. The Trustee generally shall vote all shares of Stock held under the Plan in
accordance with the written instructions of the Committee.  However, if any Employer has
registration-type class of securities within the meaning of Section 409(e)(4) of the Code,
or if a matter submitted to the holders of the Stock involves a merger, consolidation,
recapitalization, reclassification, liquidation, dissolution, or sale of substantially all
assets of an entity, then (i) the shares of Stock which have been allocated to Participants’
Accounts shall be voted by the Trustee in accordance with the Participants’ written
instructions, and (ii) the Trustee shall vote any unallocated Stock, allocated Stock for
which it has received no voting instructions, and Stock for which Participants vote to
“abstain,” in the same proportions as it votes the allocated Stock for which it has received
instructions from Participants; provided, however, that if an exempt loan, as defined in
Section 4975(d) of the Code, is outstanding and the Plan is in default on such exempt loan,
as default is defined in the loan documents, then to the extent that such loan documents
require the lender to exercise voting rights with respect to the unallocated shares, the
loan documents will prevail. In the event no shares of Stock have been allocated to
Participants’ Accounts at the time Stock is to be voted and any exempt loan which may be
outstanding is not in default, each Participant shall be deemed to have one share of Stock
allocated to his or her Account for the sole purpose of providing the Trustee with voting
instructions.

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

     7.1-2 In the event of a tender offer, Stock shall be tendered by the Trustee in the
same manner as set forth above with respect to the voting of Stock. Notwithstanding any
provision hereunder to the contrary, Stock must be tendered by the Trustee in a manner
determined by the Trustee to be for the exclusive benefit of the Participants and
Beneficiaries.

     7.2 Application of Dividends.

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

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

          (i) On Stock in Participants’ Accounts. (A) Employer Exercises
Discretion. Dividends on Stock credited to Participants’ Accounts which are received by
the Trustee in the form

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

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

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

Section 8. Adjustments to Accounts.

     8.1 ESOP Allocations. Amounts available for allocation for a particular Plan Year
will be divided into two categories. The first category relates to shares of Stock released from
the Unallocated Stock Fund attributable to using cash dividends to make Stock Obligation payments.
The second category relates to contributions made by the Employer, shares of Stock released from
the Unallocated Stock Fund on the basis of Employer contributions (or on the basis of the complete
repayment of the Stock Obligation

-17-

 

through the sale or other disposition of Stock in the Unallocated
Stock Fund) and amounts forfeited from Stock Fund Accounts pursuant to Section 9.5.

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

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

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

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

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

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

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

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

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

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

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

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

Section 9. Vesting of Participants’ Interests.

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

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

     9.2 Computation of Vesting Years. For purposes of this Plan, a “Vesting Year” means
generally a Plan Year in which an Eligible Employee has performed at least 1,000 Hours of Service,
beginning with the first Plan Year in which the Eligible Employee has completed an Hour of Service
with the Employer, and including Service with other Employers as provided in the definition of
“Service.” Notwithstanding the above, an Eligible Employee who was employed with the Bank, prior
to the Effective Date shall receive credit for vesting purposes for up to six calendar years of
continuous employment with the Bank, in which such Eligible Employee completed 1,000 Hours of
Service (such years shall also be referred to as “Vesting Years”). An employee of Liberty Bank who
became an employee of the Bank on the effective date of the merger of Liberty Bank with the Bank
shall receive credit for purposes of
determining Vesting Years under the Plan for each calendar year in which such person completed
1,000 Hours of Service with Liberty Bank prior to the effective time of said merger, up to a
maximum of six Vesting Years. However, a Participant’s Vesting Years shall be computed subject to
the following conditions and qualifications:

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

     9.2-2 To the extent applicable, a Participant’s vested interest in his Account
accumulated before five (5) consecutive one year Breaks in Service shall be determined
without regard to any Service after such five consecutive Breaks in Service. Further, if a
Participant has five (5) consecutive one year Breaks in Service before his interest in his
Account has become vested to some extent, pre-Break in Service years of Service shall not be
required to be taken into account for purposes of determining his post-Break in Service
vested percentage.

     9.2-3 To the extent applicable, in the case of a Participant who has five (5) or more
consecutive one year Breaks in Service, the Participant’s pre-Break in Service will count in
vesting of the Employer-derived post-Break in Service accrued benefit only if either:

     (i) such Participant has any nonforfeitable interest in the accrued benefit
attributable to Employer contributions at the time of separation from Service, or

     (ii) upon returning to Service the number of consecutive one year Breaks in Service is
less than the number of years of Service.

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

     9.2-5 To the extent applicable, if any amendment changes the vesting schedule,
including an automatic change to or from a top-heavy vesting schedule, any Participant with
three (3) or more Vesting Years may, by filing a written request with the Employer, elect to
have his vested percentage computed under the vesting schedule in effect prior to the
amendment. The election period must begin not later than the later of sixty (60) days after
the amendment is adopted, the amendment becomes effective, or the Participant is issued
written notice of the amendment by the Employer or the Committee.

     9.3 Full Vesting Upon Certain.

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

     9.3-2 The Participant’s interest in his Account shall also fully vest in the event of a
“Change in Control” of the Bank, or the Company. For these purposes, “Change in Control”
shall mean an event of a nature that (i) would be required to be reported in response to
Item 5.01 of the Current Report on Form 8K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii)
results in a Change in Control of the Bank or the Company within the meaning of the Home
Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder as
in effect at the time of the Change in Control (collectively, the “HOLA”); or (iii) without
limitation such a Change in Control shall be deemed to have occurred at
such time as (a) any “Person” (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Bank or the Company representing
25% or more of the Bank’s or the Company’s outstanding securities except for any securities
purchased by the Bank’s employee stock ownership plan or trust; or (b) individuals who
constitute the Board on the

-20-

 

date hereof (the “Incumbent Board”) cease for any reason to
constitute at least a majority thereof, provided, however, that this sub-section (b) shall
not apply if the Incumbent Board is replaced by the appointment by a Federal banking agency
of a conservator or receiver for the Bank and, provided further that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of at least
two-thirds of the directors comprising the Incumbent Board or whose nomination for election
by the Company’s stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (b), considered as though he were a
member of the Incumbent Board; or (c) a reorganization, merger, consolidation, sale of all
or substantially all the assets of the Bank or the Company, or similar transaction in which
the Bank or Company is not the surviving institution occurs; or (d) a proxy statement is
distributed soliciting proxies from stockholders of the Company, by someone other than the
current management of the Company, seeking stockholder approval of a plan of reorganization,
merger or consolidation of the Company or similar transaction with one or more corporations
as a result of which the outstanding shares of the class of securities then subject to the
Plan are to be exchanged for or converted into cash or property or securities not issued by
the Company; or (e) a tender offer is made for 25% or more of the voting securities of the
Company and the shareholders owning beneficially or of record 25% or more of the outstanding
securities of the Company have tendered or offered to sell their shares pursuant to such
tender offer and such tendered shares have been accepted by the tender offeror.
Notwithstanding anything herein to the contrary, the reorganization of the Company by way of
a second step conversion shall not be considered a “Change in Control.”

     9.3-3 Upon a Change in Control described in 9.3-2, the Plan shall be terminated and the
Plan Administrator shall direct the Trustee to sell a sufficient amount of Stock from the
Unallocated Stock Fund to repay any outstanding Stock Obligation in full. The proceeds of
such sale shall be used to repay such Stock Obligation. After repayment of the Stock
Obligation, all remaining shares in the Unallocated Stock Fund (or the proceeds thereof, if
applicable) shall be deemed to be earnings and shall be allocated in accordance with the
requirements of Section 8.3.

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

     9.5 Forfeiture, Repayment, and Restoral. If a Participant’s Service terminates before
his interest in his Account is fully vested, that portion which has not vested shall be forfeited
if he either (i) receives a distribution of his entire vested interest pursuant to Section 10.1, or
(ii) incurs a one-year Break in Service. If a Participant’s Service terminates prior to having any
portion of his Account become vested, such Participant shall be deemed to have received a
distribution of his vested interest immediately upon his termination of Service.

     If a Participant who has suffered a forfeiture of the nonvested portion of his Account returns
to Service before he has five (5) consecutive one-year Break in Service, the nonvested portion
shall be restored, provided that, if the Participant had received a distribution of his vested
Account balance, the amount distributed shall be repaid prior to such restoral. The Participant
may repay such amount at any time within five years after he
has returned to Service. The amount repaid shall be credited to his Account at the time it is
repaid; an additional amount equal to that portion of his Account which was previously forfeited
shall be restored to his Account at the same time from other Employees’ forfeitures and, if such
forfeitures are insufficient, then from amounts allocated in accordance with Section 8.1-1(ii), and
if insufficient, then from a special contribution by his Employer for that year. If the
Participant did not receive a distribution of his vested
Account balance, any forfeiture restored
shall include earnings that would have been credited to the Account but for the forfeiture. A
Participant who was deemed to have received a distribution of his vested

-21-

 

interest in the Plan shall
have his Account restored as of the first day on which he performs an Hour of Service after his
return.

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

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

Section 10. Payment of Benefits.

     10.1 Benefits for Participants. For a Participant whose Service ends for any reason,
distribution will be made to or for the benefit of the Participant or, in the case of the
Participant’s death, his Beneficiary, by payment in a lump sum, in accordance with Section 10.2.
Prior to any such distribution, any Participant entitled to a distribution will receive a form
upon which the Participant can elect the manner of such distribution (e.g., whether to receive the
distribution directly or transfer such distribution to an individual retirement account or other
tax-qualified plan), a notice regarding the consequences of such distribution, and if applicable,
that the Participant has the right not to consent to a distribution at such time. Effective
January 1, 2007, notice to the Participant with regard to having the right to elect the manner in
which his vested Account balance will be distributed to him may be given up to 180 days before the
first day of the first period for which an amount is payable. Notwithstanding any provision to the
contrary, if the value of a Participant’s vested Account balance at the time of any distribution
does not exceed $1,000, then such Participant’s vested Account shall be distributed, without regard
to whether the Participant consents, in a lump sum within 60 days after the end of the Plan Year in
which employment terminates. If the value of a Participant’s vested Account balance is in excess
of $5,000, then his benefits shall not be paid prior to his Normal Retirement Date unless he elects
an early payment date in a written election filed with the Committee. A Participant may modify
such an election at any time, provided any new benefit payment date is at least 30 days after a
modified election is delivered to the Committee. Failure of a Participant to consent to a
distribution prior his Normal Retirement Date shall be deemed to be an election to defer
commencement of payment of any benefit under this section. Notwithstanding the foregoing, unless a
Participant elects to receive a distribution, the Plan administrator shall transfer accounts of
$1,000 or more, but not in excess of $5,000, in a direct rollover to an individual retirement plan
designated by the Plan administrator in accordance with Code Section 401(a)(31)(B) and the
regulations promulgated thereunder. All distributions of $5,000 or less that are made pursuant to
this Section without the Participant’s consent shall be made in cash.

     10.2 Time for Distribution.

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

-22-

 

     10.2-2 Unless the Participant elects otherwise, the distribution of the balance of a
Participant’s Account shall commence not later than the 60th day after the latest of the
close of the Plan Year in which -

     (i) the Participant attains the age of 65;

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

     (iii) the Participant terminates his Service with the Employer.

     10.2-3 Notwithstanding anything to the contrary, (1) with respect to a 5-percent owner
(as defined in Code Section 416), distribution of a Participant’s Account shall commence
(whether or not he remains in the employ of the Employer) not later than the April 1 of the
calendar year next following the calendar year in which the Participant attains age 701/2, and
(2) with respect to all other Participants, payment of a Participant’s benefit will commence
not later than April 1 of the calendar year following the calendar year in which the
Participant attains age 701/2, or, if later, the year in which the Participant retires. A
Participant’s benefit from that portion of his Account committed to the Investment Fund
shall be calculated on the basis of the most recent Valuation Date before the date of
payment.

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

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

     (ii) If the Participant dies after distribution has commenced pursuant to Section 10.1
but before his entire interest in the Plan has been distributed to him, then the remaining
portion of that interest shall, in accordance with Section 401(a)(9) of the Code, be
distributed at least as rapidly as under the method of distribution being used under Section
10.1 at the date of his death.

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

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

-23-

 

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

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

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

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

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

     The Employer or the Trustee, as the case may be, may elect to pay for the Stock in equal
periodic installments, not less frequently than annually, over a period beginning not later than 30
days after the exercise of the put right and not exceeding five years, with adequate security and
interest at a reasonable rate on the unpaid balance, all such terms to be set forth in a promissory
note delivered to the seller with normal terms as to acceleration upon any uncured default.

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

-24-

 

right for Stock acquired through a Stock Obligation
shall continue with respect to such Stock after the Stock Obligation is repaid or the Plan ceases
to be an employee stock ownership plan.

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

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

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

     10.9-1 An “eligible rollover” is any distribution that does not include: any
distribution that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the Participant and the Participant’s
Beneficiary, or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); any hardship distribution
described in Section 401(k)(2)(B)(i)(IV) of the Code; and the portion of any distribution
that is not included in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities). A portion of a distribution
shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such portion may
be transferred only to an individual retirement account or annuity described in section
408(a) or (b) of the Code, or to a qualified defined contribution plan described in section
401(a) or 403(a) of the Code that agrees to separately accounting for the portion of such
distribution which is includible in gross income and the portion of such distribution which
is not so includible.

     10.9-2 An “eligible retirement plan” is an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified trust described in Code
Section 401(a), that accepts the distributee’s eligible rollover distribution. An eligible
retirement plan shall also include an annuity contract described in Section 403(b) of the
Code and an eligible plan under Section 457(b) of the Code which is maintained by a state,
or any agency or instrumentality of a state or political subdivision of a state and which
agrees to separately account for amounts transferred into such plan from this Plan.

-25-

 

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

     10.9-4 The term “distributee” shall refer to a deceased Participant’s Spouse or a
Participant’s former Spouse who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), and effective January 1, 2007, shall include
non-spouse Beneficiaries pursuant to Code Section 402(c)(11).

     10.9-5 The Administrator shall provide Participants or other distributes of eligible
rollover distributions with a written notice designed to comply with the requirements of
Code Section 402(f). Such notice shall be provided within a reasonable period of time
before making an eligible rollover distribution. Effective January 1, 2007, such notice may
be provided up to 180 days before the first day of the first period for which an amount is
payable.

     10.10 Waiver of 30-Day Period After Notice of Distribution. If a distribution is one
to which Sections 401(a)(11) and 417 of the Code do not apply, such distribution may commence less
than 30 days after the notice required under Section 1.411(a)-11(c) of the Treasury Regulations is
given, provided that:

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

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

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

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

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

     (i) each specific reason for the denial;

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

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

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

     11.3 Claims Review Procedure. Within 60 days after a Participant or Beneficiary
receives notice from the Committee that his claim for benefits has been denied in any respect, he
may file with the Committee a written notice of appeal setting forth his reasons for disputing the
Committee’s determination.  In

-26-

 

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

Section 12. The Committee and its Functions.

     12.1 Authority of Committee. The Committee shall be the “plan administrator” within
the meaning of ERISA and shall have exclusive responsibility and authority to control and manage
the operation and administration of the Plan, including the interpretation and application of its
provisions, except to the extent such responsibility and authority are otherwise specifically (i)
allocated to the Bank, the Employers, or the Trustee under the Plan and Trust Agreement, (ii)
delegated in writing to other persons by the Bank, the Employers, the Committee, or the Trustee, or
(iii) allocated to other parties by operation of law. The Committee shall have exclusive
responsibility regarding decisions concerning the payment of benefits under the Plan. The
Committee shall have no investment responsibility with respect to the Investment Fund except to the
extent, if any, specifically provided in the Trust Agreement. In the discharge of its duties, the
Committee may employ accountants, actuaries, legal counsel, and other agents (who also may be
employed by an Employer or the Trustee in the same or some other capacity) and may pay their
reasonable expenses and compensation.

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

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

     Further, the Committee shall have exclusive responsibility and authority with respect to the
Plan’s holdings of Stock and shall direct the Trustee in all respects regarding the purchase,
retention, sale, exchange, and pledge of Stock and the creation and satisfaction of Stock
Obligations. The Committee shall at all times act consistently with the Bank’s long-term intention
that the Plan, as an employee stock ownership plan, be invested primarily in Stock. Subject to the
direction of the board as to the application of Employer contributions to Stock Obligations, and
subject to the provisions of Sections 6.4 and 10.6 as to Participants’ rights under certain
circumstances to have their Accounts invested in Stock or in assets other than Stock, the Committee
shall determine in its sole discretion the extent to which assets of the Trust shall be used to
repay Stock Obligations, to purchase Stock, or to invest in other assets to be selected by the
Trustee or an investment manager. No provision of the Plan relating to the allocation or vesting
of any interests in the Stock Fund or the Investment Fund shall restrict the Committee from
changing any holdings of the Trust, whether the changes involve an increase or a decrease in the
Stock or other assets credited to Participants’ Accounts. In determining the proper extent of the
Trust’s investment in Stock, the Committee shall be

-27-

 

authorized to employ investment counsel, legal
counsel, appraisers, and other agents and to pay their reasonable expenses and compensation.

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

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

     12.6 Action by Committee. All actions of the Committee shall be governed by the
affirmative vote of a number of members which is a majority of the total number of members
currently appointed, including vacancies.

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

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

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

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

     12.11 Indemnification by Employers. Except as separately agreed in writing, the
Committee, and any member or employee of the Committee, shall be indemnified and held harmless by
the Employer, jointly and severally, to the fullest extent permitted by ERISA, and subject to and
conditioned upon compliance with 12 C.F.R. Section 545.121, to the extent applicable, against any
and all costs, damages, expenses, and liabilities reasonably incurred by or imposed upon it or him
in connection with any claim made against it or him or in which it or he may be involved by reason
of its or his being, or having been, the Committee, or a member or employee of the Committee, to
the extent such amounts are not paid by insurance.

-28-

 

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

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

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

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

     13.3 Right to Amend or Terminate. The Bank intends to continue this Plan as a
permanent program. However, each participating Employer separately reserves the right to suspend,
supersede, or terminate the Plan at any time and for any reason, as it applies to that Employer’s
Employees, and the Bank reserves the right to amend, suspend, supersede, merge, consolidate, or
terminate the Plan at any time and for any reason, as it applies to the Employees of each Employer.
No amendment, suspension, supersession, merger, consolidation, or termination of the Plan shall
(i) reduce any Participant’s or Beneficiary’s proportionate interest in the Trust Fund, (ii) reduce
or restrict, either directly or indirectly, the benefit provided any Participant prior to the
amendment, or (iii) divert any portion of the Trust Fund to purposes other than the exclusive
benefit of the Participants and their Beneficiaries prior to the satisfaction of all liabilities
under the Plan. Moreover, there shall not be any transfer of assets to a successor plan or merger
or consolidation with another plan unless, in the event of the termination of the successor plan or
the surviving plan immediately following such transfer, merger, or consolidation, each participant
or beneficiary would be entitled to a benefit equal to or greater than the benefit he would have
been entitled to if the plan in which he was previously a participant or beneficiary had terminated
immediately prior to such transfer, merger, or consolidation. Following a termination of this Plan
by the Bank, the Trustee shall continue to administer the Trust and pay benefits in accordance with
the Plan as amended from time to time and the Committee’s instructions.

Section 14. Miscellaneous Provisions.

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

-29-

 

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

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

     14.4 Treatment of Expenses. All expenses incurred by the Committee and the Trustee in
connection with administering this Plan and Trust Fund shall be paid by the Trustee from the Trust
Fund to the extent the expenses have not been paid or assumed by the Employer or by the Trustee.
The Committee may determine that, and shall inform the Trustee when, reasonable expenses may
be charged directly to the Account or Accounts of a Participant or group of Participants to
whom or for whose benefit such expenses are allocable, subject to the guidelines set forth in Field
Assistance Bulletin 2003-03, to the extent not superseded, or any successor directive issued by the
Department of Labor.

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

     14.6 Nondiversion of Assets. Except as provided in Sections 5.2 and 14.12, under no
circumstances shall any portion of the Trust Fund be diverted to or used for any purpose other than
the exclusive benefit of the Participants and their Beneficiaries prior to the satisfaction of all
liabilities under the Plan.

     14.7 Separability of Provisions. If any provision of this Plan is held to be invalid
or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if
the invalid or unenforceable provision had not been included in the Plan.

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

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

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

     14.11 Unclaimed Accounts. Neither the Employer nor the Trustees shall be under any
obligation to search for, or ascertain the whereabouts of, any Participant or Beneficiary. The
Employer or the Trustees, by certified or registered mail addressed to his last known address of
record with the Employer, shall notify any Participant or Beneficiary that he is entitled to a
distribution under this Plan, and the notice shall quote the provisions of this Section. If the
Participant or Beneficiary fails to claim his benefits or make his whereabouts

-30-

 

known in writing to
the Employer or the Trustees within seven (7) calendar years after the date of notification, the
benefits of the Participant or Beneficiary under the Plan will be disposed of as follows:

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

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

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

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

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

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

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

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

     14.13 Use of Electronic Media to Provide Notices and Make Participant Elections.
Pursuant to Treasury Regulations Section 1.401(a)-21, the Plan may elect to use electronic media to
provide notices required to be provided to Participants under the Plan and will accept elections
from Participants communicated to the Plan using such electronic media.

-31-

 

Section 15. Top-Heavy Provisions.

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

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

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

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

     15.2. Definitions.

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

     15.2-1 The “Determination Date,” with respect to the first Plan Year of any plan,
means the last day of that Plan Year, and with respect to each subsequent Plan Year, means
the last day of the preceding Plan Year. If any other plan has a Determination Date which
differs from this Plan’s Determination Date, the top-heaviness of this Plan shall be
determined on the basis of the other plan’s Determination Date falling within the same
calendar years as this Plan’s Determination Date.

     15.2-2 A “Key Employee” means any employee or former employee (including any deceased
employee) who at any time during the plan year that includes the determination date was an
officer of the employer having annual compensation greater than $145,000 (as adjusted under
section 416(i)(1) of the Code), a 5-percent owner of the employer, or a 1-percent owner of
the employer having annual compensation of more than $150,000. For this purpose, annual
compensation means compensation within the meaning of section 415(c)(3) of the Code. The
determination of who is a key employee will be made in accordance with section 416(i)(1) of
the Code and the applicable regulations and other guidance of general applicability issued
thereunder.

     15.2-3 A “Non-key Employee” means an Employee who at any time during the five years
ending on the top-heavy Determination Date for the Plan Year has received compensation from
an Employer and who has never been a Key Employee, and the Beneficiary of any such Employee.

     15.2-4 A “required aggregation group” includes (a) each qualified Plan of the Employer
in which at least one Key Employee participates in the Plan Year containing the
Determination Date and (b) any other qualified Plan of the Employer which enables a Plan
described in (a) to meet the requirements of Code Sections 401(a)(4) or 410. For purposes
of the preceding sentence, a qualified Plan of the Employer includes a terminated Plan
maintained by the Employer within the period ending on the Determination Date. In the case
of a required aggregation group, each Plan in the group will be considered a top-heavy Plan
if the required aggregation group is a top-heavy group. No Plan in the required aggregation
group will be considered a top-heavy Plan if the required aggregation group is not a
top-heavy group. All Employers aggregated under Code Sections 414(b), (c) or (m) or (o)
(but only after the Code Section 414(o) regulations become effective) are considered a
single Employer.

-32-

 

     15.2-5 A “permissive aggregation group” includes the required aggregation group of
Plans plus any other qualified Plan(s) of the Employer that are not required to be
aggregated but which, when considered as a group with the required aggregation group,
satisfy the requirements of Code Sections 401(a)(4) and 410 and are comparable to the Plans
in the required aggregation group. No Plan in the permissive aggregation group will be
considered a top-heavy Plan if the permissive aggregation group is not a top-heavy group.
Only a Plan that is part of the required aggregation group will be considered a top-heavy
Plan if the permissive aggregation group is top-heavy.

     15.3 Top-Heavy Rules of Application .

               For purposes of determining the value of Account balances and the present value of accrued
benefits the following provisions shall apply:

     15.3-1 The value of Account balances and the present value of accrued benefits will be
determined as of the most recent Valuation Date that falls within or ends with the twelve
(12) month period ending on the Determination Date.

     15.3-2 For purposes of testing whether this Plan is top-heavy, the present value of an
individual’s accrued benefits and an individual’s Account balances is counted only once each
year.

     15.3-3 The Account balances and accrued benefits of a Participant who is not presently
a Key Employee but who was a Key Employee in a Plan Year beginning on or after January 1,
1984 will be disregarded.

     15.3-4 Employer contributions attributable to a salary reduction or similar arrangement
will be taken into account. Employer matching contributions also shall be taken into
account for purposes of satisfying the minimum contribution requirements of Section
416(c)(2) of the Code and the Plan.

     15.3-5 When aggregating Plans, the value of Account balances and accrued benefits will
be calculated with reference to the Determination Dates that fall within the same calendar
year.

     15.3-6 The present values of accrued benefits and the amounts of account balances of an
employee as of the determination date shall be increased by the distributions made with
respect to the employee under the plan and any plan aggregated with the plan under Section
416(g)(2) of the Code during the 1-year period ending on the determination date. The
preceding sentence shall also apply to distributions under a terminated plan which, had it
not been terminated, would have been aggregated with the plan under Section 416(g)(2)(A)(i)
of the Code. In the case of a distribution made for a reason other than separation from
service, death, or disability, this provision shall be applied by substituting “five (5)
year period” for “one (1) year period.”

     15.3-7 Accrued benefits and Account balances of an individual shall not be taken into
account for purposes of determining the top-heavy ratios if the individual has performed no
services for the Employer during the one (1) year period ending on the applicable
Determination Date. Compensation for purposes of this subparagraph shall not include any
payments made to an individual by the Employer pursuant to a qualified or non-qualified
deferred compensation plan.

     15.3-8 The present value of the accrued benefits or the amount of the Account balances
of any Employee participating in this Plan shall not include any rollover contributions or
other transfers voluntarily initiated by the Employee except as described below. If this
Plan transfers or rolls over funds to another Plan in a transaction voluntarily initiated by
the Employee, then this Plan shall count the distribution for purposes of determining
Account balances or the present value of accrued

-33-

 

benefits. A transfer incident to a merger
or consolidation of two or more Plans of the Employer (including Plans of related Employers
treated as a single Employer under Code Section 414), or a transfer or rollover between
Plans of the Employer, shall not be considered as voluntarily initiated by the Employee.

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

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

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

     If the Employer maintains a qualified plan in addition to this Plan and more than one such
plan is determined to be Top-Heavy, a minimum contribution or a minimum benefit shall be provided
in one of such other plans, including a plan that consists solely of a cash or deferred arrangement
which meets the requirements of Section 401(k)(12) of the Code and matching contributions with
respect to which the requirements of Section 401(m)(11) of the Code are met.

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

-34-EX-10.4

 

Exhibit 10.4

NORTHFIELD BANK

NON-QUALIFIED SUPPLEMENTAL

EMPLOYEE STOCK OWNERSHIP PLAN

Adopted Effective January 1, 2007

 

 

NORTHFIELD BANK

NON-QUALIFIED SUPPLEMENTAL

EMPLOYEE STOCK OWNERSHIP PLAN

     1. Purpose

          This Non-Qualified Supplemental Employee Stock Ownership Plan (“Plan”) is intended to provide
Participants (as defined herein) or their Beneficiaries with the economic value of the annual
allocations credited to such Participant’s account under The Northfield Bank Employee Stock
Ownership Plan (“ESOP”) which may not be accrued under said ESOP due to the limitations imposed by
Section 415 of the Internal Revenue Code (the “Code”) and the limitation on includible compensation
imposed by Section 401(a)(17) of the Code. The benefits provided under this Plan (as described
below) are intended to constitute deferred compensation for “a select group of management or highly
compensated employees” for purposes of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”). This Plan is intended to comply with Section 409A of the Internal Revenue Code
(“Code”) and the regulatory guidance and other guidance issued thereunder.

     2. Definitions

          Where the following words and phrases appear in the Plan, they shall have the respective
meaning as set forth below unless the context clearly indicates the contrary. Except to the extent
otherwise indicated herein, and to the extent inconsistent with the definitions provided below, the
definitions contained in the ESOP are applicable under the Plan.

          2.1 “Account” means the bookkeeping account to which a Participant’s Annual ESOP
Credits and earnings thereon are credited.

          2.2 “Annual ESOP Credit” means the amount credited to the Participant’s account in the
Plan, determined as set forth in Section 4.1 hereof.

          2.3 “Applicable Limitations” means one or more of the following, as applicable: (i)
the maximum limitations on annual additions to a tax-qualified defined contribution plan under
Section 415(c) of the Code; or (ii) the maximum limitation on the annual amount of compensation
that may, under Section 401(a)(17) of the Code, be taken into account in determining contributions
to and benefits under tax-qualified plans.

          2.4 “Bank” means Northfield Bank.

          2.5 “Beneficiary” means the person designated by the Participant under the ESOP to
receive the Supplemental ESOP Benefit in the event of the Participant’s death.

          2.6 “Board of Directors” means the Board of Directors of Northfield Bank.

          2.7 “Change in Control” shall mean (1) a change in ownership of the Company or the
Bank under paragraph (i) below, or (2) a change in effective control of the

 

 

Company or the Bank under paragraph (ii) below, or (3) a change in the ownership of a
substantial portion of the assets of the Company or the Bank under paragraph (iii) below:

	 	i.	 	Change in the ownership of the Bank. A change in
the ownership of the Bank shall occur on the date that any one person, or
more than one person acting as a group (as defined in Treasury Regulation
Section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the
corporation that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting
power of the stock of such corporation; or
	 
	 	ii.	 	Change in the effective control of the Bank. A
change in the effective control of the Bank shall occur on the date that
either (i) any one person, or more than one person acting as a group (as
defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)(D)), acquires
(or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of stock of
the Bank possessing 30% or more of the total voting power of the stock of
the Bank; or (ii) a majority of members of the Bank’s board of Directors
is replaced during any 12-month period by Directors whose appointment or
election is not endorsed by a majority of the members of the
corporation’s board of Directors prior to the date of the appointment or
election, provided that this sub-section (ii) is inapplicable where a
majority shareholder of the Bank is another corporation; or
	 
	 	iii.	 	Change in the ownership of a substantial portion of
the Bank’s assets. A change in the ownership of a substantial portion of
the Bank’s assets shall occur on the date that any one person, or more
than one person acting as a group (as defined in Treasury Regulation
Section 1.409A-3(i)(5)(vii)(C)), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or persons) assets from the Bank that have a total gross fair
market value equal to or more than 40% of the total gross fair market
value of all of the assets of the corporation immediately prior to such
acquisition or acquisitions. For this purpose, gross fair market value
means the value of the assets of the corporation, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets. There is no Change in Control event under
this paragraph (iii) when there is a transfer to an entity that is
controlled by the shareholders of the transferring corporation
immediately after the transfer; or
	 
	 	iv.	 	For all purposes hereunder, the definition of
Change in Control shall be construed to be consistent with the
requirements of Treasury Regulation Section 1.409A-3(i)(5), except to the
extent modified herein. Notwithstanding anything herein to the contrary,
a Change in Control shall not be deemed to occur as the result of the
reorganization and second step conversion of the Company to a fully
converted stock holding company.

2

 

          2.8 “Code” means the Internal Revenue Code of 1986, as amended from time to time.
Reference to a specific provision of the Code shall include such provision, any valid regulation or
ruling promulgated thereunder and any comparable provision of future law that amends, supplements
or supersedes such provision.

          2.9 “Committee” means the Compensation Committee of the Board of Directors.

          2.10 “Company” means Northfield Bancorp, Inc..

          2.11 “Effective Date” means January 1, 2007.

          2.12 “Employee” means an employee of the Employer on whose behalf benefits are payable
under the ESOP.

          2.13 “Employer” means the Bank or the Company, as applicable, and any successors by
merger, purchase, reorganization or otherwise. If a subsidiary or affiliate of the Employer adopts
the Plan, it shall be deemed the Employer with respect to its employees.

          2.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a specific provision of ERISA shall include such provision, any
valid regulation or ruling promulgated thereunder and any comparable provision of future law that
amends, supplements or supersedes such provision.

          2.15 “ESOP” means the tax-qualified Northfield Bank Employee Stock Ownership Plan, and
any successor thereto.

          2.16 “Participant” means an Employee who has been designated for participation in this
Plan pursuant to Section 3.1.

          2.17 “Plan” means Northfield Bank Non-Qualified Supplemental Employee Stock Ownership
Plan, as set forth herein and as may be amended from time to time.

          2.18 “Plan Year” means the period from January 1 to December 31.

          2.19 “Separation from Service” means the Employee’s death, Retirement or other
termination of employment with the Bank within the meaning of Code Section 409A. No Separation
from Service shall be deemed to occur due to military leave, sick leave or other bona fide leave of
absence if the period of such leave does not exceed six months or, if longer, so long as the
Employee’s right to reemployment is provided by law or contract. If the leave exceeds six months
and the Employee’s right to reemployment is not provided by law or by contract, then the Employee
shall have a Separation from Service on the first date immediately following such six-month period.

          Whether a termination of employment has occurred is determined based on whether the facts and
circumstances indicate that the Employer and Employee reasonably anticipated that no further
services would be performed after a certain date or that the level of bona fide services the
employee would perform after such date (whether as an employee or as an

3

 

independent contractor) would permanently decrease to no more than 20% of the average level of
bona fide services performed over the immediately preceding 36 months (or such lesser period of
time in which the Participant performed services for the Bank). The determination of whether a
Participant has had a Separation from Service shall be made by applying the presumptions set forth
in the Treasury Regulations under Code Section 409A.

          2.20 “Specified Employee” means any Participant who also satisfies the definition of
“key employee” as such term is defined in Code Section 416(i) (without regard to paragraph 5
thereof). In the event a Participant is a Specified Employee, no distribution shall be made to
such Participant upon Separation from Service (other than due to death or Disability) prior to the
first day of the seventh month following Separation from Service.

          2.21 “Stock” means the common stock of the Company, par value $.01 per share.

          2.22 “Supplemental ESOP Benefit” means the benefit provided for a Participant under
this Plan.

          2.23 “Surviving Spouse” means the legal spouse of a Participant, living at the time of
the death of the Participant.

     3. Participation

          3.1 Designation to Participate. Upon the designation of the Committee, and subject to
the approval of the Board of Directors, Employees may become Participants at any time during the
Plan Year. Each Employee initially selected by the Committee to participate in the Plan shall be
set forth on Exhibit A attached hereto and made a part hereof.

          3.2 Continuation of Participation. An Employee who has become a Participant shall
remain a Participant so long as benefits are payable to or with respect to such Participant under
the Plan.

     4. Benefit Requirements and Payments

          4.1 Supplemental ESOP Benefits. A Participant shall be entitled to receive as a
benefit from this Plan the Supplemental ESOP Benefit determined as set forth herein. In the event
of the death of a Participant prior to the commencement of payment of the Supplemental ESOP
Benefit, the Surviving Spouse of the Participant shall be entitled to receive as a benefit from
this Plan an amount equal to 100% of the Supplemental ESOP Benefit that would have been payable to
the Participant at the time of his death. The Supplemental ESOP Benefit shall be that benefit
earned by a Participant upon the investment of the Annual ESOP Credits allocated to his Account.
The Annual ESOP Credit is equal to the sum of the difference (expressed in dollars) between “(a)”
and “(b),” where:

	 	(a)	 	is the number of shares of Stock that would
have been allocated to the account of the Participant for a Plan Year
under the ESOP and the dividends and earnings thereon paid during the
Plan Year, but for the Applicable Limitations, multiplied by the fair
market value

4

 

	 		 	of such Stock on the last day of the Plan Year for which the
allocation is made; and

	 	(b)	 	is the number of shares of Stock actually
allocated to the account of the Participant for the relevant ESOP Plan
Year, multiplied by the fair market value of such Stock on the last day
of the Plan Year for which the allocation is made, and the dividends
and earnings thereon paid during the Plan Year.

          4.2 Investment of Annual ESOP Credits. Participants shall be entitled to invest the
Annual ESOP Credits allocated to their Account among a select group of broadly diversified mutual
funds selected by the Committee. For these purposes, an investment shall be deemed to be made to a
mutual fund (whether or not actually made) when the Participant gives such instruction to the
Committee that such investment shall be made. The frequency with which such investment instruction
may be given to the Committee shall be determined by the Committee in its sole discretion. If the
Employer establishes a rabbi trust and sets aside assets to informally fund the benefit obligation
under this Plan, the Committee may permit Participants the opportunity to direct the investment of
their Account under the rabbi trust, but the Committee is not obligated to do so. If the Employer
establishes a rabbi trust but the Participants are not permitted to actually invest their Accounts
through investment in the rabbi trust, the value of a Participant’s Account shall nonetheless be
determined on the basis of such Participant’s deemed investments.

          4.3 Incidents of Supplemental ESOP Payments. Benefits under this Section 4 shall be
payable to the Participant in a lump sum within 90 days of the first to occur of:

	 	(a)	 	the Participant’s “Separation from Service,”
other than due to death or Disability;
	 
	 	(b)	 	the Participant’s Disability;
	 
	 	(c)	 	the Participant’s death; or
	 
	 	(d)	 	a Change in Control of the Bank or the Company.

          Notwithstanding anything herein to the contrary, if the Participant is a Specified Employee
and the distribution under this Section is due to the Participants Separation from Service, the
distribution should occur on the first day of the seventh month following Separation from Service.

          4.4 Form of Supplemental ESOP Payments. A Participant’s supplemental ESOP benefits
under Section 4.1 of this Plan shall be a benefit paid in cash equal to the value of the
Participant’s Account. The Participant’s Account shall be paid to the Participant upon the
occurrence of the event and at the time specified in Section 4.3 above.

5

 

     5. Administration of the Plan

          5.1 Committee; Duties. This Plan shall be administered by the Committee which shall
consist of not less than three (3) persons appointed by the Board of Directors. The Committee shall
have the authority to make, amend, interpret and enforce all appropriate rules and regulations for
the administration of the Plan and decide or resolve any and all questions, including
interpretations of this Plan, that may arise in connection with the administration of the Plan;
provided, however, that any such interpretations, rules and/or regulations shall be consistent with
the requirements of Code Section 409A and any Treasury Regulations or other guidance issued
thereunder. A majority vote of the Committee members shall control any decision. Members of the
Committee may be Participants under the Plan, so long as a majority of the members are not
Participants.

          5.2 Agents. The Committee may, from time to time, employ other agents and delegate to
them such administrative duties as it sees fit, and may from time to time consult with counsel who
may be counsel to the Employer.

          5.3 Binding Effect of Decisions. The decision or action of the Committee regarding of
any question arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Plan.

          5.4 Indemnity of Committee. The Employer shall indemnify and hold harmless the members
of the Committee against any and all claims, loss, damage, expense or liability arising from any
action or failure to act with respect to this Plan, except in the case of gross negligence or
willful misconduct.

     6. Claims Procedure

          6.1 Claim. Any person claiming a benefit, requesting an interpretation or ruling under
the Plan, or requesting information under the Plan shall present the request in writing to the
Committee which shall respond in writing within thirty (30) days.

          6.2 Denial of Claim. If the claim or request is denied, the written notice of denial
shall state:

	 	(a)	 	the reason for denial, with specific reference
to the Plan provisions on which the denial is based.
	 
	 	(b)	 	a description of any additional material or
information required and an explanation of why it is necessary.
	 
	 	(c)	 	an explanation of the Plan’s claim review
procedure.

          6.3 Review of Claim. Any person whose claim or request is denied or who has not
received a response within thirty (30) days may request review by notice given in writing to the
Committee. The claim or request shall be reviewed by the Committee who may, but shall not

6

 

be required to, grant the claimant a hearing. On review, the claimant may have representation,
examine pertinent documents, and submit issues and comments in writing.

          6.4 Final Decision. The decision on review shall normally be made within sixty (60)
days. If an extension of time is required for a hearing or other special circumstances, the
claimant shall be notified and the time limit shall be one hundred twenty (120) days. The decision
shall be in writing and shall state the reason and the relevant plan provisions. All decisions on
review shall be final and bind all parties concerned.

     7. Amendment or Termination

          7.1 Amendment of Plan. A majority of the Board of Directors may amend this Plan at any
time or from time to time. However, no such amendment shall adversely affect the benefits of the
Participant which have accrued prior to such action.

          7.2 Plan Termination.

(a) Partial Termination. The Board may partially terminate the Plan by
freezing future accruals if, in its judgment, the tax, accounting, or other
effects of the continuance of the Plan, or potential payments thereunder,
would not be in the best interests of the Bank.

(b) Complete Termination. Subject to the requirements of Code Section 409A,
in the event of complete termination of the Plan, the Plan shall cease to
operate and the Bank shall pay out to the Participant his benefit as if the
Participant had terminated employment as of the effective date of the
complete termination. Such complete termination of the Agreement shall
occur only under the following circumstances and conditions:

	 	(i)	 	The Administrator may terminate the Plan
within 12 months of a corporate dissolution taxed under Code Section
331, or with approval of a bankruptcy court pursuant to 11 U.S.C.
§503(b)(1)(A), provided that the amounts deferred under the Plan are
included in the Participant’s gross income in the latest of (i) the
calendar year in which the Plan terminates; (ii) the calendar year
in which the amount is no longer subject to a substantial risk of
forfeiture; or (iii) the first calendar year in which the payment is
administratively practicable.
	 
	 	(ii)	 	The Board may terminate the Plan by Board
action taken within the 30 days preceding a Change in Control (but
not following a Change in Control), provided that the Plan shall
only be treated as terminated if all substantially similar
arrangements sponsored by the Bank are terminated so that the
Participant and all participants under substantially similar
arrangements are required to receive all amounts of compensation
deferred under the terminated arrangements

7

 

	 	 	 	within 12 months of the date of the termination of the
arrangements. For these purposes, “Change in Control” shall be
defined in accordance with the Treasury Regulations under Code
Section 409A.

	 	(iii)	 	The Board may terminate the Plan
provided that (A) the termination and liquidation does not occur
proximate to a downturn in the financial health of the Bank or
Company, (B) all arrangements sponsored by the Bank that would be
aggregated with this Plan under Treasury Regulations Section
1.409A-1(c) if the Participant covered by this Plan was also covered
by any of those other arrangements are also terminated; (C) no
payments other than payments that would be payable under the terms
of the arrangement if the termination had not occurred are made
within 12 months of the termination of the arrangement; (D) all
payments are made within 24 months of the termination of the
arrangements; and (E) the Bank does not adopt a new arrangement that
would be aggregated with any terminated arrangement under Treasury
Regulations Section 1.409A-1(c) if the Participant participated in
both arrangements, at any time within three years following the date
of termination of the arrangement.

     8. Miscellaneous

          8.1 Unfunded Plan. This Plan is intended to be an unfunded plan maintained primarily
to provide deferred compensation benefits for a select group of management or highly compensated
employees. However, the Employer may elect to fund for the benefits of Participants as described in
Section 8.3 below. This Plan will continue to be unfunded for tax purposes and Title I of ERISA
even if benefits are funded by the Employer under Section 8.3 below.

          8.2 Unsecured General Creditor. The Participant and his Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interest or claims in any property
or assets of the Employer, nor shall they be beneficiaries of, or have any rights, claims or
interests in any life insurance policies, annuity contracts or the proceeds therefrom owned or
which may be acquired by the Employer. Such policies or other assets of the Employer shall not be
held under any trust for the benefit of Participants, their Beneficiaries, heirs, successors or
assigns, or held in any way as collateral security for the fulfilling of the obligations of
Employer under this Plan. Any and all of the Employer’s assets shall be, and remain, the general,
unpledged, unrestricted assets of the Employer. The Employer’s obligation under the Plan shall be
that of an unfunded and unsecured promise of the Employer to pay money in the future.

          8.3 Trust Fund. The Employer shall be responsible for the payment of all benefits
provided under the Plan. At its discretion, the Employer may establish one (1) or more rabbi
trusts, with such trustees as the Board may approve, for the purpose of providing for

8

 

payment of such benefits. Such trust or trusts may be irrevocable, but the assets thereof
shall be subject to the claims of the Employer’s creditors. To the extent any benefits provided
under the Plan are actually paid from any such rabbi trust, the Employer shall have no further
obligation with respect thereto, but to the extent not so paid, such benefits shall remain the
obligation of, and shall be paid by, the Employer.

          8.4 Nonassignability. Neither the Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be
unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be
subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by operation of law in
the event of a Participant’s or any other person’s bankruptcy or insolvency.

          8.5 Expenses of Plan. All expenses of the Plan will be paid by the Employer.

          8.6 Payment of Employment and Code Section 409A Taxes. Any distribution under this
Plan shall be reduced by the amount of any taxes required to be withheld from such distribution.
This Plan shall permit the acceleration of the time or schedule of a payment to pay employment
related taxes as permitted under Treasury regulation Section 1.409A-3(j) or to pay any taxes that
may become due at any time that the arrangement fails to meet the requirements of Code Section 409A
and the regulations and other guidance promulgated thereunder. In the latter case, such payments
shall not exceed the amount required to be included in income as the result of the failure to
comply with the requirements of Code Section 409A.

          8.7 Acceleration of Payments. Except as specifically permitted herein or in other
sections of this Plan, no acceleration of the time or schedule of any payment may be made
hereunder. Notwithstanding the foregoing, payments may be accelerated hereunder by the Bank, in
accordance with the provisions of Treasury Regulation Section 1.409A-3(j)(4) and any subsequent
guidance issued by the United States Treasury Department. Accordingly, payments may be
accelerated, in accordance with requirements and conditions of the Treasury Regulations (or
subsequent guidance) in the following circumstances: (i) as a result of certain domestic relations
orders; (ii) in compliance with ethics agreements with the Federal government; (iii) in compliance
with ethics laws or conflicts of interest laws; (iv) in limited cash-outs (but not in excess of the
limit under Code Section 402(g)(1)(B)); (v) in the case of certain distributions to avoid a
non-allocation year under Code Section 409(p); (vi) to apply certain offsets in satisfaction of a
debt of the Participant to the Bank; (vii) in satisfaction of certain bona fide disputes between
the Participant and the Bank; or (viii) for any other purpose set forth in the Treasury Regulations
and subsequent guidance.

          8.8 Participation by Subsidiaries and Affiliates. If any employer is now or hereafter
becomes a subsidiary or affiliated company of the Employer and its employees participate in the
ESOP, the Board of Directors may authorize such subsidiary or affiliated company to participate in
this Plan upon appropriate action by such employer necessary to adopt the Plan.

9

 

          8.9 Delivery of Elections to Committee. All elections, designation, requests, notices,
instructions and other communications required or permitted under the Plan from the Employer, a
Participant, Beneficiary or other person to the Committee shall be on the appropriate form, shall
be mailed by first-class mail or delivered to such address as shall be specified by such Committee,
and shall be deemed to have been given or delivered only upon actual receipt thereof by such
Committee at such location.

          8.10 Delivery of Notice to Participants. All notices, statements, reports and other
communications required or permitted under the Plan from the Employer or the Committee to any
Officer, Participant, Beneficiary or other person, shall be deemed to have been duly given when
delivered to, or when mailed by first-class mail, postage prepaid, and addressed to such person at
this address last appearing on the records of the Committee.

     9. Construction of the Plan

          9.1 Construction of the Plan. The provisions of this Plan shall be construed,
regulated, and administered according to the laws of the State of New York, to the extent not
superseded by Federal law.

          9.2 Counterparts. This Plan has been established by the Employer in accordance with
the resolutions adopted by the Board of Directors and may be executed in any number of
counterparts, each of which shall be deemed to be an original. All the counterparts shall
constitute one instrument, which may be sufficiently evidenced by any one counterpart.

          9.3 Validity. In case any provision of this Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal or invalid provision had never been
inserted herein.

10

 

NORTHFIELD BANK

Exhibit A

	 	 	 
	Participant	 	Date of Participation
	John W. Alexander

	 	November 7, 2007
	Kenneth J. Doherty

	 	November 7, 2007
	Steven M. Klein

	 	November 7, 2007

A-1

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