Document:

exv10w1

 

Exhibit 10.1

NORTHFIELD BANK

EMPLOYEE STOCK OWNERSHIP PLAN

(adopted effective January 1, 2007)

 

 

NORTHFIELD BANK

EMPLOYEE STOCK OWNERSHIP PLAN

     This Employee Stock Ownership Plan, executed on the
                     day of
                    , 2007, by
Northfield Bank, a federally chartered stock savings bank (the “Bank”),

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

     WHEREAS, the board of trustees of the Bank has resolved to adopt an employee stock ownership
plan for eligible employees of the Bank and subsidiaries of the Bank, if any, in accordance with
the terms and conditions presented set forth herein;

     NOW, THEREFORE, the Bank hereby adopts the following Plan setting forth the terms and
conditions pertaining to contributions by the Employer and the payment of benefits to Participants
and Beneficiaries.

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

     

	 	 	 	 	 	 	 	 	 
	ATTEST: 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

Secretary

	 	 
	 	 	 	 

Authorized Officer
	 	 

 

 

C O N T E N T S

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page No.	 
	Section 1.	 	 	Plan Identity
	 	 	4	 
	 	1.1	 	 	Name
	 	 	4	 
	 	1.2	 	 	Purpose
	 	 	4	 
	 	1.3	 	 	Effective Date
	 	 	4	 
	 	1.4	 	 	Fiscal Period
	 	 	4	 
	 	1.5	 	 	Single Plan for All Employers
	 	 	4	 
	 	1.6	 	 	Interpretation of Provisions
	 	 	4	 
	Section 2.	 	 	Definitions
	 	 	4	 
	Section 3.	 	 	Eligibility for Participation
	 	 	11	 
	 	3.1	 	 	Initial Eligibility
	 	 	11	 
	 	3.2	 	 	Definition of Eligibility Year
	 	 	12	 
	 	3.3	 	 	Terminated Employees
	 	 	12	 
	 	3.4	 	 	Certain Employees Ineligible
	 	 	12	 
	 	3.5	 	 	Participation and Reparticipation
	 	 	13	 
	 	3.6	 	 	Omission of Eligible Employee
	 	 	13	 
	 	3.7	 	 	Inclusion of Ineligible Employee
	 	 	13	 
	Section 4.	 	 	Contributions and Credits
	 	 	13	 
	 	4.1	 	 	Discretionary Contributions
	 	 	13	 
	 	4.2	 	 	Contributions for Stock Obligations
	 	 	13	 
	 	4.3	 	 	Conditions as to Contributions
	 	 	14	 
	 	4.4	 	 	Rollover Contributions
	 	 	14	 
	Section 5.	 	 	Limitations on Contributions and Allocations
	 	 	14	 
	 	5.1	 	 	Limitation on Annual Additions
	 	 	14	 
	 	5.2	 	 	Effect of Limitations
	 	 	16	 
	 	5.3	 	 	Limitations as to Certain Participants
	 	 	16	 
	 	5.4	 	 	Erroneous Allocations
	 	 	17	 
	Section 6.	 	 	Trust Fund and Its Investment
	 	 	17	 
	 	6.1	 	 	Creation of Trust Fund
	 	 	17	 
	 	6.2	 	 	Stock Fund and Investment Fund
	 	 	17	 
	 	6.3	 	 	Acquisition of Stock
	 	 	17	 
	 	6.4	 	 	Participants’ Option to Diversify
	 	 	18	 
	Section 7.	 	 	Voting Rights and Dividends on Stock
	 	 	19	 
	 	7.1	 	 	Voting and Tendering of Stock
	 	 	19	 
	 	7.2	 	 	Application of Dividends
	 	 	19	 
	Section 8.	 	 	Adjustments to Accounts
	 	 	21	 
	 	8.1	 	 	ESOP Allocations
	 	 	21	 
	 	8.2	 	 	Charges to Accounts
	 	 	21	 
	 	8.3	 	 	Stock Fund Account
	 	 	21	 
	 	8.4	 	 	Investment Fund Account
	 	 	22	 
	 	8.5	 	 	Adjustment to Value of Trust Fund
	 	 	22	 
	 	8.6	 	 	Participant Statements
	 	 	22	 
	Section 9.	 	 	Vesting of Participants’ Interests
	 	 	22	 
	 	9.1	 	 	Deferred Vesting in Accounts
	 	 	22	 
	 	9.2	 	 	Computation of Vesting Years
	 	 	22	 
	 	9.3	 	 	Full Vesting Upon Certain Events
	 	 	23	 
	 	9.4	 	 	Full Vesting Upon Plan Termination
	 	 	24	 
	 	9.5	 	 	Forfeiture, Repayment, and Restoral
	 	 	24	 
	 	9.6	 	 	Accounting for Forfeitures
	 	 	25	 

 

 

	 	 	 	 	 	 	 	 	 
	 	9.7	 	 	Vesting and Nonforfeitability
	 	 	25	 
	Section 10.	 	 	Payment of Benefits
	 	 	25	 
	 	10.1	 	 	Benefits for Participants
	 	 	25	 
	 	10.2	 	 	Time for Distribution
	 	 	26	 
	 	10.3	 	 	Marital Status
	 	 	27	 
	 	10.4	 	 	Delay in Benefit Determination
	 	 	27	 
	 	10.5	 	 	Accounting for Benefit Payments
	 	 	27	 
	 	10.6	 	 	Options to Receive and Sell Stock
	 	 	27	 
	 	10.7	 	 	Restrictions on Disposition of Stock
	 	 	28	 
	 	10.8	 	 	Continuing Loan Provisions; Creations of Protections and Rights
	 	 	28	 
	 	10.9	 	 	Direct Rollover of Eligible Distribution
	 	 	28	 
	 	10.10	 	 	Waiver of 30-Day Period After Notice of Distribution
	 	 	29	 
	Section 11.	 	 	Rules Governing Benefit Claims and Review of Appeals
	 	 	29	 
	 	11.1	 	 	Claim for Benefits
	 	 	29	 
	 	11.2	 	 	Notification by Committee
	 	 	29	 
	 	11.3	 	 	Claims Review Procedure
	 	 	30	 
	Section 12.	 	 	The Committee and its Functions
	 	 	30	 
	 	12.1	 	 	Authority of Committee
	 	 	30	 
	 	12.2	 	 	Identity of Committee
	 	 	30	 
	 	12.3	 	 	Duties of Committee
	 	 	30	 
	 	12.4	 	 	Valuation of Stock.
	 	 	31	 
	 	12.5	 	 	Compliance with ERISA
	 	 	31	 
	 	12.6	 	 	Action by Committee
	 	 	31	 
	 	12.7	 	 	Execution of Documents
	 	 	31	 
	 	12.8	 	 	Adoption of Rules
	 	 	31	 
	 	12.9	 	 	Responsibilities to Participants
	 	 	31	 
	 	12.10	 	 	Alternative Payees in Event of Incapacity
	 	 	31	 
	 	12.11	 	 	Indemnification by Employers
	 	 	32	 
	 	12.12	 	 	Nonparticipation by Interested Member
	 	 	32	 
	Section 13.	 	 	Adoption, Amendment, or Termination of the Plan
	 	 	32	 
	 	13.1	 	 	Adoption of Plan by Other Employers
	 	 	32	 
	 	13.2	 	 	Plan Adoption Subject to Qualification
	 	 	32	 
	 	13.3	 	 	Right to Amend or Terminate
	 	 	32	 
	Section 14.	 	 	Miscellaneous Provisions
	 	 	33	 
	 	14.1	 	 	Plan Creates No Employment Rights
	 	 	33	 
	 	14.2	 	 	Nonassignability of Benefits
	 	 	33	 
	 	14.3	 	 	Limit of Employer Liability
	 	 	33	 
	 	14.4	 	 	Treatment of Expenses
	 	 	33	 
	 	14.5	 	 	Number and Gender
	 	 	33	 
	 	14.6	 	 	Nondiversion of Assets
	 	 	33	 
	 	14.7	 	 	Separability of Provisions
	 	 	34	 
	 	14.8	 	 	Service of Process
	 	 	34	 
	 	14.9	 	 	Governing State Law
	 	 	34	 
	 	14.10	 	 	Employer Contributions Conditioned on Deductibility
	 	 	34	 
	 	14.11	 	 	Unclaimed Accounts
	 	 	34	 
	 	14.12	 	 	Qualified Domestic Relations Order
	 	 	34	 
	Section 15.	 	 	Top-Heavy Provisions
	 	 	35	 
	 	15.1	 	 	Top-Heavy Plan
	 	 	35	 
	 	15.2	 	 	Super Top-Heavy Plan
	 	 	35	 
	 	15.3	 	 	Definitions
	 	 	36	 
	 	15.4	 	 	Top-Heavy Rules of Application
	 	 	37	 

(ii) 

 

	 	 	 	 	 	 	 	 	 
	 	15.5	 	 	Minimum Contributions
	 	 	38	 
	 	15.6	 	 	Top-Heavy Provisions Control in Top-Heavy Plan
	 	 	38	 

(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

(4)

 

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.

(5)

 

     “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.

     “Effective Date” means January 1, 2007.

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

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

(6)

 

     “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.

     (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.

(7)

 

     “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;

(8)

 

          (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.

(9)

 

          (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.

(10)

 

     “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

(11)

 

     (ii) the Eligible Employee’s 21st 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.

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

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

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

Section 4. Contributions and Credits.

     4.1 Discretionary Contributions.

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

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

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

     In each Plan Year in which Employer contributions, earnings on contributions, or dividends on
Stock in the Unallocated Stock Fund are used as payments under a Stock Obligation, a certain number
of shares of the Stock acquired with that Stock Obligation which is then held in the Unallocated
Stock Fund

(13)

 

shall be released for allocation among the Participants. The number of shares released
shall bear the same ratio to the total number of those shares then held in the Unallocated Stock
Fund (prior to the release) as (i) the principal and interest payments made on the Stock Obligation
in the current Plan Year bears to (ii) the sum of (i) above, and the remaining principal and
interest payments required (or projected to be required on the basis of the interest rate in effect
at the end of the Plan Year) to satisfy the Stock Obligation.

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

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

     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

(14)

 

for this purpose) shall not exceed the lesser of $45,000 (or such other dollar
amount which results from cost-of-living adjustments under Section 415(d) of the Code) (the
“dollar limitation”) or 100 percent of the Participant’s 415 Compensation for such
limitation year (the “percentage limitation”). The percentage limitation shall not apply to
any contribution for medical benefits after separation from service (within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise treated as an annual
addition. If, as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant’s annual compensation, a reasonable error in determining the amount
of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with
respect to any individual under the limits of Code Section 415, or under other limited facts
and circumstances that the Commissioner of the Internal Revenue Service finds justify the
availability of the rules set forth in this paragraph, the annual additions under the terms
of the Plan for a particular Participant would cause the limitations of Code Section 415
applicable to that Participant for the limitation year to be exceeded, the excess amounts
shall not be deemed annual additions in that limitation year if they are treated in
accordance with any one of the following:

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

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

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

     (iv) If a suspense account 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

(15)

 

     (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

(16)

 

years after the date of sale, or (2) the date of the Plan allocation
attributable to the final payment of acquisition indebtedness incurred in connection with the sale.

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

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

     Section 6. Trust Fund and Its Investment.

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

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

     6.3 Acquisition of Stock. From time to time the
Committee may, in its sole discretion, direct the Trustee to acquire Stock from the issuing
Employer or from shareholders, including shareholders who are or have been Employees, Participants,
or fiduciaries with respect to the Plan. The Trustee shall pay for such 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

(17)

 

satisfies the provisions of this paragraph. A “non-exempt loan” fails
to satisfy this paragraph. Any Stock Obligation shall be subject to the following conditions and
limitations:

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

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

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

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

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

     6.4 Participants’ Option to Diversify.
The Committee shall provide for a procedure under which each Participant may, during the qualified
election period, elect to “diversify” a portion of the Employer Stock allocated to his Account, as
provided in Section 401(a)(28)(B) of the Code. An election to diversify must be made on the
prescribed form and filed with the Committee within the period specified herein. For each of the
first five (5) Plan years in the qualified election period, the Participant may elect to diversify
an amount which does not exceed 25% of the number of shares allocated to his Account since the
inception of the Plan, less all shares with respect to which an election under this Section has
already been made. For the last year of the qualified election period, the Participant may elect
to have up to 50 percent of the value of his Account committed to other investments, less all
shares with respect to which an election under this Section has already been made. The term
“qualified election period” shall mean the six (6) Plan Year period beginning with the first Plan
Year in which a Participant has both attained age 55 and completed 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.

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

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

Section 7. Voting Rights and Dividends on Stock.

     7.1 Voting and Tendering of Stock.

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

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

     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

(19)

 

Participants’ Accounts and the Unallocated Stock Fund in accordance with their
holdings of the Stock on which the dividends are paid.

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

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

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

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

(20)

 

payments on a particular Stock Obligation unless the share was
acquired with the proceeds of such loan or a refinancing of such loan.

Section 8. Adjustments to Accounts.

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

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

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

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

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

     8.1-2. Shares of Stock or cash attributable to the second category (i.e., Employer
contributions, Stock released from the Unallocated Stock Fund on the basis of Employer
contributions, and amounts forfeited) will be allocated to the Stock Fund Accounts or
Investment Fund Accounts, as the case may be, pro rata, in proportion to the 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

(21)

 

during that
year; and (d) any stock dividends declared and paid during that year on Stock credited to the
Participant’s Stock Fund Account.

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

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

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

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

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,

(22)

 

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:

     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 Events.

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

(23)

 

     9.3-2 The Participant’s interest in his Account shall also fully vest in the event of a
“Change in Control” of the Bank, or the Company. For these purposes, “Change in Control”
shall mean an event of a nature that (i) would be required to be reported in response to
Item 5.01 of the Current Report on Form 8K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); or (ii)
results in a Change in Control of the Bank or the Company within the meaning of the Home
Owners’ Loan Act, as amended, and applicable rules and regulations promulgated thereunder as
in effect at the time of the Change in Control (collectively, the “HOLA”); or (iii) without
limitation such a Change in Control shall be deemed to have occurred at such time as (a) any
“Person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank or the Company representing 25% or more of the Bank’s
or the Company’s outstanding securities
except for any securities purchased by the Bank’s employee stock ownership plan or
trust; or (b) individuals who constitute the Board on the date hereof (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof, provided, however,
that this sub-section (b) shall not apply if the Incumbent Board is replaced by the
appointment by a Federal banking agency of a conservator or receiver for the Bank and,
provided further that any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board or whose nomination for election by the Company’s stockholders was approved
by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of
this clause (b), considered as though he were a member of the Incumbent Board; or (c) a
reorganization, merger, consolidation, sale of all or substantially all the assets of the
Bank or the Company, or similar transaction in which the Bank or Company is not the
surviving institution occurs; or (d) a proxy statement is distributed soliciting proxies
from stockholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or consolidation
of the Company or similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to the Plan are to be exchanged
for or converted into cash or property or securities not issued by the Company; or (e) a
tender offer is made for 25% or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the outstanding securities of
the Company have tendered or offered to sell their shares pursuant to such tender offer and
such tendered shares have been accepted by the tender offeror. 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

(24)

 

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

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

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

Section 10. Payment of Benefits.

     10.1 Benefits for Participants. For a
Participant whose Service ends for any reason, distribution will be made to or for the benefit of
the Participant or, in the case of the Participant’s death, his Beneficiary, by payment in a lump
sum, in accordance with Section 10.2. Notwithstanding any provision to the contrary, if the value
of a Participant’s vested Account balance at the time of any distribution does not exceed $1,000,
then such Participant’s vested Account shall be distributed in a lump sum within 60 days after the
end of the Plan Year in which employment terminates without the Participant’s consent. If the
value of a Participant’s vested Account balance is in excess of $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.

(25)

 

     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.

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

     (i) the Participant attains the age of 65;

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

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

     10.2-3 Notwithstanding anything to the contrary, (1) with respect to a 5-percent owner
(as defined in Code Section 416), distribution of a Participant’s Account shall commence
(whether or not he remains in the employ of the Employer) not later than the April 1 of the
calendar year next following the calendar year in which the Participant attains age 701/2, and
(2) with respect to all other Participants, payment of a Participant’s benefit will commence
not later than April 1 of the calendar year following the calendar year in which the
Participant attains age 702, or, if later, the year in which the Participant retires. A
Participant’s benefit from that portion of his Account committed to the Investment Fund
shall be calculated on the basis of the most recent Valuation Date before the date of
payment.

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

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

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

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

(26)

 

(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).

     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

(27)

 

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 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

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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. In the
case of an eligible rollover distribution to a surviving Spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.

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

     10.9-4 The term “distributee” shall refer to a deceased Participant’s Spouse or a
Participant’s former Spouse who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p).

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

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     (i) each specific reason for the denial;

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

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

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

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

Section 12. The Committee and its Functions.

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

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     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 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

(31)

 

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.

     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

(32)

 

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.

     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.

(33)

 

     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 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

(34)

 

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.

Section 15. Top-Heavy Provisions.

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

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

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

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

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

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

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

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

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     15.3 Definitions.

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

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

     15.3-2 A “Key Employee” means any employee or former employee (including any deceased
employee) who at any time during the plan year that includes the determination date was an
officer of the employer having annual compensation greater than $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.

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

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

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

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     15.4 Top-Heavy Rules of Application.

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

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

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

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

     15.4-4 Employer contributions attributable to a salary reduction or similar arrangement
will be taken into account. Employer matching contributions also shall be taken into
account for purposes of satisfying the minimum contribution requirements of Section
416(c)(2) of the Code and the Plan.

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

     15.4-6 The present values of accrued benefits and the amounts of account balances of an
employee as of the determination date shall be increased by the distributions made with
respect to the employee under the plan and any plan aggregated with the plan under Section
416(g)(2) of the Code during the 1-year period ending on the determination date. The
preceding sentence shall also apply to distributions under a terminated plan which, had it
not been terminated, would have been aggregated with the plan under Section 416(g)(2)(A)(i)
of the Code. In the case of a distribution made for a reason other than separation from
service, death, or disability, this provision shall be applied by substituting “five (5)
year period” for “one (1) year period.”

     15.4-7 Accrued benefits and Account balances of an individual shall not be taken into
account for purposes of determining the top-heavy ratios if the individual has performed no
services for the Employer during the one (1) year period ending on the applicable
Determination Date. Compensation for purposes of this subparagraph shall not include any
payments made to an individual by the Employer pursuant to a qualified or non-qualified
deferred compensation plan.

     15.4-8 The present value of the accrued benefits or the amount of the Account balances
of any Employee participating in this Plan shall not include any rollover contributions or
other transfers voluntarily initiated by the Employee except as described below. If this
Plan transfers or rolls over funds to another Plan in a transaction voluntarily initiated by
the Employee, then this Plan shall count the distribution for purposes of determining
Account balances or the present value of accrued benefits. A transfer incident to a merger
or consolidation of two or more Plans of the Employer (including Plans of related Employers
treated as a single Employer under Code Section 414), or a transfer or rollover between
Plans of the Employer, shall not be considered as voluntarily initiated by the Employee.

(37)

 

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

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

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

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

     15.6 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.

(38)exv10w2

 

Exhibit 10.2

NORTHFIELD SAVINGS BANK

EMPLOYMENT AGREEMENT

     This Agreement (this “Agreement”) is made effective as of the 1st day of July, 2006 (the
“Effective Date”), by and between Northfield Savings Bank (the “Bank”), a New York-chartered
savings bank with its principal offices at 1731 Victory Boulevard, Staten Island, New York
10314-3598, and John W. Alexander (“Executive”).

WITNESSETH:

     WHEREAS, the Bank is a wholly-owned subsidiary of Northfield Holdings Corp., a corporation
organized under the laws of the State of New York (the “Company”). The Company is a wholly-owned
subsidiary of NSB Holding Corp., a New York-chartered mutual holding company (the “Mutual Holding
Company”). The Bank wishes to assure itself of the services of Executive for the period provided
in this Agreement; and

     WHEREAS, Executive is willing to serve in the employ of the Bank on a full-time basis as its
Chairman and Chief Executive Officer on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the mutual premises and covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:

1. POSITION AND RESPONSIBILITIES.

     During the term of Executive’s employment hereunder, Executive agrees to serve as the Chairman
of the Board and Chief Executive Officer of the Bank. Executive shall perform administrative and
management services for the Bank which are customarily performed by persons in a similar executive
officer capacity. Executive shall be responsible for the overall management of the Company and the
Bank and shall be responsible for establishing the business objectives, policies and strategic plan
of the Company and the Bank. Executive shall also be responsible for providing leadership and
direction to all departments or divisions of the Company and the Bank, and shall be the primary
contact between the Board of Directors and the staff of the Company and the Bank. During said
period, Executive also agrees to serve as a director of the Company and the Bank and, if elected,
as an officer and director of any subsidiary of the Bank or the Company. Executive’s principal
place of employment shall be at the Bank’s principal executive offices. The Bank shall provide
Executive, at his principal place of employment, with support services and facilities suitable to
his position with the Bank and necessary or appropriate in connection with the performance of his
duties under this Agreement.

2. TERM OF EMPLOYMENT.

     (a) The term of Executive’s employment under this Agreement shall commence as of the Effective
Date and shall continue thereafter for a period of three (3) years. Commencing on the first
anniversary date of this Agreement (the “Anniversary Date”) and continuing on each Anniversary Date
thereafter, the term of this Agreement shall renew for an additional year such that the remaining
term of this Agreement is always three (3) years, unless written notice of 

 

 

non-renewal (a “Non-Renewal Notice”) is provided to Executive at least thirty (30) days and not
more than sixty (60) days prior to such Anniversary Date, in which case the term of this Agreement
shall become fixed and shall end three (3) years following such Anniversary Date. The
disinterested members of the Board of Directors (the “Board”) of the Bank will conduct a
performance evaluation and review of Executive annually for purposes of determining whether to give
notice not to extend the term of this Agreement, and the results thereof shall be included in the
minutes of the Board’s meeting.

     (b) Notwithstanding anything contained in this Agreement to the contrary, either Executive or
the Bank may terminate Executive’s employment with the Bank at any time during the term of this
Agreement, subject to the terms and conditions of this Agreement.

3. COMPENSATION AND REIMBURSEMENT.

     (a) The compensation specified under this Agreement shall constitute consideration paid by the
Bank in exchange for duties described in Section 1 of this Agreement. The Bank shall pay
Executive, as compensation, a salary of not less than $ 676,000 per year (“Base Salary”). Base
Salary shall include any amounts of compensation deferred by Executive under any employee benefit
plan or deferred compensation arrangement maintained by the Bank. Such Base Salary shall be
payable bi-weekly or, if different, in accordance with the Bank’s customary payroll practices.
During the term of this Agreement, Executive’s Base Salary shall be reviewed at least annually by
the 31st day of each January. Such review shall be conducted by the Board or by a
committee designated by the Board. The committee or the Board may increase (but not decrease)
Executive’s Base Salary at any time. Any increase in Base Salary shall become the “Base Salary”
for purposes of this Agreement. The Board may engage the services of an independent consultant to
determine the appropriate Base Salary. In addition to the Base Salary provided in this Section,
the Bank shall also provide Executive with all such other benefits as are provided uniformly to
full-time employees of the Bank, on the same basis (including cost) that such benefits are provided
to other senior officers of the Bank.

     (b) In addition to the Base Salary provided for in Section 3(a), the Bank will provide
Executive with the opportunity to participate in employee benefit plans, arrangements and
perquisites substantially equivalent to those in which Executive was participating or otherwise
deriving a benefit from immediately prior to the beginning of the term of this Agreement, and any
other employee benefit plans, arrangements and perquisites suitable for the Bank’s senior
executives adopted by the Bank subsequent to the Effective Date, and the Bank will not, without
Executive’s prior written consent, make any changes in such plans, arrangements or perquisites
which would adversely affect Executive’s rights or benefits thereunder, without separately
providing for an arrangement that ensures Executive receives or will receive the economic value
that Executive would otherwise lose as a result of such adverse effect, unless such changes apply
equally to all other employees or senior officers of the Bank. Without limiting the generality of
the foregoing provisions of this Section 3(b), Executive shall be entitled to participate in or
receive benefits under any employee benefit plans, whether tax-qualified or otherwise, including,
but not limited to, retirement plans, supplemental retirement plans, deferred compensation plans,
pension plans, profit-sharing plans, employee stock ownership plans, stock award or stock option
plans, health-and-accident plans, medical coverage or any other employee benefit plan or
arrangement made available by the Bank in the future to its senior executives and key

2

 

management employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements (including designation by the Board of
eligibility to participate, if applicable). Executive shall also be entitled to incentive
compensation and bonuses as provided in any plan or arrangement of the Bank in which Executive is
eligible to participate (and he shall be entitled to a pro rata distribution under any incentive
compensation or bonus plan as to any year in which a termination of employment occurs, other than
Termination for Just Cause). Nothing paid to Executive under any such plans or arrangements will
be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.

     (c) In addition to the Base Salary provided for by Section 3(a) and other compensation and
benefits provided for by Section 3(b), the Bank shall pay or reimburse Executive for all reasonable
expenses incurred by Executive in performing his obligations under this Agreement in accordance
with the Bank’s reimbursement policies.

     (d) The Bank shall continue to sponsor and pay for the non-qualified supplemental retirement
income plan(s) in effect on the date hereof for the benefit of Executive and shall provide
Executive with a life insurance policy owned by Executive or a family trust for which the Bank pays
all premiums, provided that Executive shall recognize income on such coverage at the rates
determined pursuant to applicable federal and state tax laws. The Bank shall also pay or reimburse
Executive for the annual dues associated with Executive’s membership in a country club of
Executive’s choice located in the market area served by the Bank. In addition, during the term of
this Agreement the Bank shall reimburse Executive for the expense of leasing an automobile for use
by Executive under a 36-39 month lease provided the monthly lease payment does not exceed $1,500,
and provided further that the monthly lease allowance shall be reviewed by the Board at the end of
each three-year lease term. The Bank shall also reimburse Executive for the reasonable expenses
associated with the use of such automobile, including gasoline, maintenance expenses and insurance.

     (e) Executive shall be entitled to paid time off in accordance with the standard policies of
the Bank for senior executive officers, but in no event less than thirty (30) days paid time off
during each year of employment. Executive shall receive his Base Salary and other benefits during
periods of paid time off. Executive shall also be entitled to paid legal holidays in accordance
with the policies of the Bank. Executive shall also be entitled to sick leave in accordance with
the policies of the Bank, but in no event less than the number of days of sick leave per year to
which Executive was entitled at the Effective Date of this Agreement.

4. OUTSIDE ACTIVITIES

     During the term of his employment hereunder, except for periods of absence occasioned by
illness, reasonable vacation periods and reasonable leaves of absence approved by the Board,
Executive shall devote substantially all his business time, attention, skill, and efforts to the
faithful performance of his duties hereunder. Executive also may serve as a member of the board of
directors of business, trade association, community and charitable organizations subject to the
annual approval of the Board; provided that in each case such service shall not materially
interfere with the performance of his duties under this Agreement or present any conflict of
interest. Executive shall provide to the Board annually a list of all organizations for which

3

 

Executive serves as a director or in a similar capacity for purposes of obtaining the Board’s
approval of Executive’s service on the boards of such organizations. Such service to and
participation in outside organizations shall be presumed for these purposes to be for the benefit
of the Bank, and the Bank shall reimburse Executive his reasonable expenses associated therewith,
except for such items that are tax deductible by the Executive as charitable contributions.

5. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the occurrence of an Event of Termination (as herein defined) during Executive’s term
of employment under this Agreement, the provisions of this Section 5 shall apply. As used in this
Agreement, an “Event of Termination” shall mean and include any of the following:

	 	(i)	 	the termination by the Bank of Executive’s full-time employment
hereunder for any reason other than termination governed by Section 6
(Termination for Just Cause) or termination governed by Section 7 (termination
due to Disability or death); or
	 
	 	(ii)	 	Executive’s resignation from the Bank’s employ for any of the
following reasons:

	 	(A)	 	the failure to elect or reelect or to appoint
or reappoint Executive to the position set forth under Section 1, or
the failure to nominate or renominate Executive as a Director of the
Bank or the Company;
	 
	 	(B)	 	a material change in Executive’s functions,
duties, or responsibilities with the Bank, which change would cause
Executive’s position to become one of lesser responsibility,
importance, or scope from the position and attributes thereof described
in Section 1, above;
	 
	 	(C)	 	a relocation of Executive’s principal place of
employment by more than 30 miles from the main office of the Bank on
Staten Island and the Rahway branch of the Bank in Rahway, New Jersey;
	 
	 	(D)	 	a material reduction in the benefits and
perquisites to Executive from those being provided as of the Effective
Date of this Agreement, other than a reduction that is part of a
Bank-wide reduction in pay or benefits;
	 
	 	(E)	 	a liquidation or dissolution of the Company or
the Bank, other than a liquidation or dissolution that is caused by a
reorganization or a mutual-to-stock conversion of the Mutual Holding
Company which does not affect the status of Executive; or
	 
	 	(F)	 	a material breach of this Agreement by the
Bank.

4

 

	 	 	 	Upon the occurrence of any event described in clauses (A), (B), (C), (D),
(E) or (F), above, Executive shall have the right to elect to terminate his
employment under this Agreement by resignation upon not less than sixty (60)
days prior written Notice of Termination, as defined in Section 9(a), given
within six (6) full calendar months after the event giving rise to said
right to elect. Notwithstanding the preceding sentence, in the event of a
continuing breach of this Agreement by the Bank, Executive, after giving due
notice within the prescribed time frame of an initial event specified above,
shall not waive any of his rights under this Agreement and this Section
solely by virtue of the fact that Executive has submitted his resignation,
provided Executive has remained in the employment of the Bank and is engaged
in good faith discussions to resolve any occurrence of an event described in
clauses (A), (B), (C), (D) or (F) above.
	 
	 	(iii)	 	Executive’s voluntary resignation from the Bank’s employ on
the effective date of, or at any time following, a Change in Control of the
Bank or the Company during the term of this Agreement. For these purposes, a
Change in Control of the Bank or the Company shall mean a change in control of
a nature that: (i) would be required to be reported in response to Item 5.01 of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”); or (ii) 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), other than the Mutual Holding Company, is
or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of 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 of Directors of the Company
on the date hereof (the “Incumbent Board”) cease for any reason to constitute
at least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
a majority of the directors shall be, for purposes of this clause (b),
considered as though he were a member of the Incumbent Board; or (c) a plan of
reorganization, 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 or financial institutions, and as a
result of such proxy solicitation, a plan of reorganization, merger,
consolidation or similar transaction involving the Company is approved by the
requisite vote of the Company’s stockholders; or (e) a tender offer is

5

 

	 	 	 	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 to the contrary herein, a
Change in Control shall not be deemed to have occurred in the event that (i)
the Company sells less than 50% of its outstanding common stock in one or
more stock offerings, or (ii) the Company or the Mutual Holding Company
converts to stock form by reorganizing into the stock holding company
structure.

     (b) Upon the occurrence of an Event of Termination, on the Date of Termination, as defined in
Section 9(b), the Bank shall be obligated to pay Executive, or, in the event of his subsequent
death, his beneficiary or beneficiaries, or his estate, as the case may be, as severance pay or
liquidated damages, or both, an amount equal to the sum of: (i) his earned but unpaid salary as of
the date of his termination of employment with the Bank; (ii) the benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs and compensation plans
and programs maintained for the benefit of the Bank’s or Company’s officers and employees; (iii)
the remaining payments that Executive would have earned, in accordance with Sections 3(a) and 3(b),
if he had continued his employment with the Bank for a thirty-six (36) month period following his
termination of employment, and had earned a bonus and/or incentive award in each year equal in
amount to the average bonus and/or incentive award earned by him over the three calendar years
preceding the year in which the termination occurs in the case of a termination pursuant to Section
5(a)(i) or 5(a)(ii), or the highest annual bonus and/or incentive award earned by him in any of the
three calendar years preceding the year in which the termination occurs in the case of a
termination pursuant to Section 5(a)(iii); and (iv) the annual contributions or payments that would
have been made on Executive’s behalf to any employee benefit plans of the Bank or the Company as if
Executive had continued his employment with the Bank for a thirty-six (36) month period following
his termination of employment, based on contributions or payments made (on an annualized basis) at
the Date of Termination. Any payments hereunder shall be made in a lump sum within thirty (30)
days after the Date of Termination, or in the event that Section 409A of the Internal Revenue Code
of 1986, as amended (“Code”) applies, no later than the first day of the seventh month following
the Date of Termination. Such payments shall not be reduced in the event Executive obtains other
employment following termination of employment.

     (c) Upon the occurrence of an Event of Termination, the Bank will cause to be continued life,
medical, dental and disability coverage substantially identical to the coverage maintained by the
Bank for Executive and his family prior to Executive’s termination. Such coverage shall continue
at the Bank’s expense for a period of thirty-six (36) months from the Date of Termination.

     (d) Notwithstanding anything herein to the contrary, in no event shall the aggregate payments
or benefits to be made or afforded to Executive under this Section constitute an “excess parachute
payment” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), or any
successor thereto, and in order to avoid such a result, Executive’s benefits hereunder shall be
reduced, if necessary, to an amount, the value of which is one dollar

6

 

($1.00) less than an amount equal to three (3) times Executive’s “base amount,” as determined
in accordance with Section 280G. The allocation of the reduction required hereby shall be
determined by Executive.

6. TERMINATION FOR JUST CAUSE.

     (a) The term “Termination for Just Cause” shall mean termination because of: (i) Executive’s
being convicted of a felony or of any lesser criminal offense involving moral turpitude; (ii) the
willful commission by the Executive of a criminal or other act that, in the judgment of the Board,
would likely cause substantial economic damage to the Company or the Bank or substantial injury to
the business reputation of the Company or Bank; (iii) the commission by the Executive of any act of
fraud in the performance of his duties on behalf of the Company or Bank or a material violation of
the Company’s or the Bank’s code of ethics; (iv) the continuing willful failure of the Executive to
perform his duties to the Company or the Bank (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness) after written notice thereof has been
given to Executive by the Board (specifying the particulars thereof in reasonable detail) and
Executive has been given a reasonable opportunity to be heard and cure such failure; or (v) an
order of a federal or state regulatory agency or a court of competent jurisdiction requiring the
termination of the Executive’s employment by the Company or the Bank. For purposes of this
Section, no act, or the failure to act, on Executive’s part shall be “willful” unless done, or
omitted to be done, in bad faith and without reasonable belief that the action or omission was in
the best interests of the Bank or its affiliates.

     (b) Notwithstanding Section 6(a), the Bank may not terminate Executive for Just Cause unless
and until there shall have been delivered to him a Notice of Termination which shall include a copy
of a resolution duly adopted by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for that purpose, finding that in
the good faith opinion of the Board, Executive was guilty of conduct justifying Termination for
Just Cause and specifying the particulars thereof in detail. Executive shall not have the right to
receive compensation or other benefits for any period after Termination for Just Cause. During the
period beginning on the date of the Notice of Termination for Just Cause pursuant to Section 6
hereof through the Date of Termination, any unvested stock options and related limited rights
granted to Executive under any stock option plan shall not be exercisable nor shall any unvested
awards granted to Executive under any stock benefit plan of the Bank, the Company or any subsidiary
or affiliate thereof, vest. At the Date of Termination, any such unvested stock options and
related limited rights and any such unvested awards shall become null and void and shall not be
exercisable by or delivered to Executive at any time subsequent to such Termination for Just Cause.
In the Event of Executive’s Termination for Just Cause, Executive shall resign as a director of
the Company and the Bank, and as a director and/or officer of any subsidiary or affiliate of the
Company and/or the Bank.

7. TERMINATION FOR DISABILITY OR DEATH.

     (a) The Bank or Executive may terminate Executive’s employment after having established
Executive’s Disability. For purposes of this Agreement, “Disability” means a physical or mental
infirmity that impairs Executive’s ability to substantially perform his duties under this Agreement
and that results in Executive’s becoming eligible for long-term disability

7

 

benefits under a long-term disability plan of the Company or the Bank (or, if the Company or
the Bank has no such plan in effect, that impairs Executive’s ability to substantially perform his
duties under this Agreement for a period of one hundred eighty (180) consecutive days). The Board
shall determine in good faith, based upon competent medical advice and other factors that they
reasonably believe to be relevant, whether or not Executive is and continues to be disabled for
purposes of this Agreement. As a condition to any benefits, the Board may require Executive to
submit to such physical or mental evaluations and tests as its deems reasonably appropriate, at the
Bank’s expense.

     (b) In the event of such Disability, Executive’s obligation to perform services under this
Agreement will terminate. In the event of such termination, Executive shall receive the benefits
provided under any disability program sponsored by the Company or the Bank. To the extent such
benefits are less than Executive’s Base Salary, as defined in Section 3(a) on the effective Date of
Termination and less than sixty-six and two-thirds percent (66 2/3%) of Executive’s Base Salary
after the first year following termination, Executive shall receive as a supplement to such
disability benefit the difference between the benefits provided under any disability program
sponsored by the Company or the Bank and (x) his Base Salary, as defined in Section 3(a), at the
rate in effect on the Date of Termination for period of one (1) year following the Date of
Termination by reason of Disability, and (y) sixty-six and two-thirds percent (66 2/3%) of
Executive’s Base Salary after the first year following termination through the earliest to occur of
the date of Executive’s death, recovery from such Disability, or the date Executive attains age 65.
In calculating the payments due Executive under the Section 6(b), if the disability insurance
payments are excludable from Executive’s income for federal income tax purposes, such amounts shall
be tax adjusted, assuming a combined federal, state and city tax rate of 38%, for purposes of
determining the reduction in the payments due under this Agreement to reflect the tax-free nature
of the disability insurance payment – by way of illustration, a $100 tax-free disability insurance
payment shall reduce the payment due under this Agreement by $161.30. In addition, in the event of
termination due to Executive’s Disability, Executive and his dependents shall, to the greatest
extent possible, continue to be covered, at no cost to them, under all benefit plans (including,
without limitation, retirement plans and medical, dental and life insurance plans) of the Company
or the Bank in which Executive participated prior to the occurrence of Executive’s Disability and
on the same terms as if Executive were actively employed by the Company or the Bank, and said
coverage shall continue through the earliest to occur of (i) Executive’s recovery from such
Disability, or (ii) Executive’s attaining age 65.

     (c) In the event of Executive’s death during the term of this Agreement, his estate, legal
representatives or named beneficiary or beneficiaries (as directed by Executive in writing) shall
be paid Executive’s Base Salary, as defined in Section 3(a), at the rate in effect at the time of
Executive’s death for a period of one (1) year from the date of Executive’s death, and the Bank
will continue to provide Executive’s family the same medical, dental, and other health benefits
that were provided by the Bank to Executive’s family immediately prior to Executive’s death, on the
same terms, including cost, as if Executive were actively employed by the Bank, except to the
extent the terms (including cost) of such benefits are changed in their application to all
continuing employees of the Bank, such coverage to continue for a period of one (1) year after the
date of Executive’s death.

8

 

8. TERMINATION UPON RETIREMENT

     Termination of Executive’s employment based on “Retirement” shall mean termination of
Executive’s employment on or after age 65 and in accordance with a retirement policy established by
the Board with Executive’s consent with respect to him. Upon termination of Executive based on
Retirement, no amounts or benefits shall be due Executive under this Agreement, and Executive shall
be entitled to all benefits under any retirement plan of the Bank and other plans to which
Executive is a party.

9. NOTICE.

     (a) Any notice required under this Agreement shall be in writing and hand-delivered to the
other party. Any termination by the Bank or by Executive shall be communicated by Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination”
shall mean a written notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive’s employment under the provision so indicated.

     (b) “Date of Termination” shall mean (A) if Executive’s employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided that he shall not
have returned to the performance of his duties on a full-time basis during such thirty (30) day
period), and (B) if his employment is terminated for any other reason, the date specified in the
Notice of Termination.

     (c) If the party receiving a Notice of Termination desires to dispute or contest the basis or
reasons for termination, the party receiving the Notice of Termination must notify the other party
within thirty (30) days after receiving the Notice of Termination that such a dispute exists, and
shall pursue the resolution of such dispute in good faith and with reasonable diligence pursuant to
Section 20 of this Agreement. During the pendency of any such dispute, neither the Company nor the
Bank shall be obligated to pay Executive compensation or other payments beyond the Date of
Termination.

10. POST-TERMINATION OBLIGATIONS.

     Executive shall, upon reasonable notice, furnish such information and assistance honestly and
in good faith to the Bank or the Company as may reasonably be required by the Bank or the Company
in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may
become, a party. All payments and benefits to Executive under this Agreement shall be subject to
Executive’s compliance with this Section for one (1) full year after the earlier of the expiration
of this Agreement or termination of Executive’s employment with the Bank.

11. NON-COMPETITION AND NON-DISCLOSURE.

     (a) As a material inducement for the Bank to enter into this Agreement, upon any termination
of Executive’s employment hereunder pursuant to the terms of this Agreement, other than a
termination of Executive’s employment under Sections 5(a)(iii) or 6 of this Agreement,

9

 

Executive agrees not to compete with the Bank for a period of two(2) years following such
termination in any city, town or county in which Executive’s normal business office is located and
the Bank has an office or has filed an application for regulatory approval to establish an office,
determined as of the effective date of such termination, except as agreed to pursuant to a
resolution duly adopted by the Board. Executive agrees that during such period and within said
cities, towns and counties, Executive shall not work for or advise, consult or otherwise serve
with, directly or indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Bank. Executive further agrees that for a period of
two (2) years following any termination of employment, he shall not directly or indirectly,
solicit, hire, or entice any of the following to cease, terminate, or reduce any relationship with
the Bank or the Company or to divert any business from the Bank or the Company: (i) any person who
was an employee of the Bank or the Company during the term of this Agreement; or (ii) any customer
or client of the Bank or the Company. Further, Executive will not directly or indirectly disclose
the names, addresses, telephone numbers, compensation, or other arrangements between the Bank or
the Company and any individual or entity described in Sections (i) and (ii) of this Section. The
parties hereto, recognizing that irreparable injury will result to the Bank, its business and
property in the event of Executive’s breach of this Subsection agree that in the event of any such
breach by Executive, the Bank will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by Executive, Executive’s partners,
agents, servants, employees and all persons acting for or under the direction of Executive.
Nothing herein will be construed as prohibiting the Bank from pursuing any other remedies available
to the Bank for such breach or threatened breach, including the recovery of damages from Executive.

     (b) Executive recognizes and acknowledges that the knowledge of the business activities, plans
for business activities, and all other proprietary information of the Bank or the Company as it may
exist from time to time, are valuable, special and unique assets of the business of the Bank or the
Company. Executive will not, during or after the term of his employment, disclose any knowledge of
the past, present, planned or considered business activities or any other similar proprietary
information of the Bank or the Company to any person, firm, corporation, or other entity for any
reason or purpose whatsoever unless expressly authorized by the Board of Directors or required by
law. Notwithstanding the foregoing, Executive may disclose any knowledge of banking, financial
and/or economic principles, concepts or ideas which are not solely and exclusively derived from the
business plans and activities of the Bank or the Company. Further, Executive may disclose
information regarding the business activities of the Bank or the Company to any bank regulator
having regulatory jurisdiction over the activities of the Bank or the Company, pursuant to a formal
regulatory request. In the event of a breach or threatened breach by Executive of the provisions
of this Section, the Bank or the Company will be entitled to an injunction restraining Executive
from disclosing, in whole or in part, the knowledge of the past, present, planned or considered
business activities of the Bank or the Company, or any other similar proprietary information, or
from rendering any services to any person, firm, corporation, or other entity to whom such
knowledge, in whole or in part, has been disclosed or is threatened to be disclosed. Nothing
herein will be construed as prohibiting the Bank from pursuing any other remedies available to the
Bank for such breach or threatened breach, including the recovery of damages from Executive.

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12. SOURCE OF PAYMENTS.

     All payments provided in this Agreement shall be timely paid in cash or check from the general
funds of the Bank. The Company, however, unconditionally guarantees payment and provision of all
amounts and benefits due hereunder to Executive and, if such amounts and benefits due from the Bank
are not timely paid or provided by the Bank, such amounts and benefits shall be paid or provided by
the Company.

13. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto and supersedes any
prior employment agreement between the Bank or any predecessor of the Bank and Executive, except
that this Agreement shall not affect or operate to reduce any benefit, compensation, tax
indemnification or other provision inuring to the benefit of Executive under any agreement between
Executive, the Bank or the Company. No provision of this Agreement shall be interpreted to mean
that Executive is subject to receiving fewer benefits than those available to him without reference
to this Agreement.

14. NO ATTACHMENT.

     (a) Except as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and
of no effect.

     (b) This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank
and their respective successors and assigns.

15. MODIFICATION AND WAIVER.

     (a) This Agreement may not be modified or amended except by an instrument in writing signed by
the parties hereto.

     (b) No term or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate
only as to the specific term or condition waived and shall not constitute a waiver of such term or
condition for the future as to any act other than that specifically waived.

16. REQUIRED PROVISIONS.

     Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and
conditioned upon compliance with 12 U.S.C. Section 1828(k) and any rules and regulations
promulgated thereunder, including 12 C.F.R. Part 359, and to the extent applicable, 12 C.F.R.
§563.39.

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17. SEVERABILITY.

     If, for any reason, any provision of this Agreement, or any part of any provision, is held
invalid, such invalidity shall not affect any other provisions of this Agreement or any part of
such provision not held so invalid, and each such other provision and part thereof shall to the
full extent consistent with law continue in full force and effect.

18. HEADINGS FOR REFERENCE ONLY.

     The headings of sections and paragraphs herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the provisions of this
Agreement.

19. GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of New York, without regard to its
conflict of law principles, unless superceded by federal law or otherwise specified herein.

20. ARBITRATION.

     Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by binding arbitration, as an alternative to civil litigation and without any trial by
jury to resolve such claims, conducted by a panel of three arbitrators sitting in a location
selected by Executive and the Bank within fifty (50) miles from the main office of the Bank, in
accordance with the rules of the American Arbitration Association’s National Rules for the
Resolution of Employment Disputes (“National Rules”) then in effect. One arbitrator shall be
selected by Executive, one arbitrator shall be selected by the Bank and the third arbitrator shall
be selected by the arbitrators selected by the parties. If the arbitrators are unable to agree
within fifteen (15) days upon a third arbitrator, the arbitrator shall be appointed for them from a
panel of arbitrators selected in accordance with the National Rules. Judgment may be entered on
the arbitrator’s award in any court having jurisdiction.

21. PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS.

     In the event any dispute or controversy arising under or in connection with Executive’s
termination is resolved in favor of Executive, whether by judgment, arbitration or settlement,
Executive shall be entitled to the payment of: (1) all legal fees incurred by Executive in
resolving such dispute or controversy; (2) any back-pay, including salary, bonuses and any other
cash compensation, fringe benefits and any compensation and benefits due Executive under this
Agreement; and (3) any other compensation otherwise due Executive as a result of a breach of this
Agreement by the Bank.

22. INDEMNIFICATION.

     The Bank and the Company shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors’ and officers’ liability insurance policy
at its expense. The Bank shall indemnify Executive (and his heirs, executors and administrators)

12

 

to the fullest extent permitted under New York or applicable law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been a director or officer of the
Bank (whether or not he continues to be a director or officer at the time of incurring such
expenses or liabilities), such expenses and liabilities to include, but not be limited to,
advancement of legal fees and expenses, judgments, court costs and attorneys’ fees and the cost of
reasonable settlements.

23. SUCCESSOR TO THE BANK.

     The Bank shall require any successor or assignee, whether direct or indirect, by purchase,
merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank,
expressly and unconditionally to assume and agree to perform the Bank’s obligations under this
Agreement, in the same manner and to the same extent that the Bank would be required to perform if
no such succession or assignment had taken place.

24. NON WAIVER.

     The failure of one party to insist upon or enforce strict performance by the others of any
provision of this Agreement or to exercise any right, remedy or provision of this Agreement will
not be interpreted or construed as a waiver or relinquishment to any extent of such party’s right
to enforce or rely upon same in that or any other instance.

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     IN WITNESS WHEREOF the Bank and Executive have signed (or caused to be signed) this Agreement
this 29th day of June, 2006.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Northfield Savings Bank	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	\s\ Madeline Frank
 

Secretary

	 	 	 	By:

Title:
	 	\s\ Annette Catino
 

Director, Chairperson, Compensation Committee
	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:	 	 	 	Executive	 	 
	 
	 	 	 	 	 	 	 	 
	\s\ Madeline Frank	 	 	 	\s\ John W. Alexander	 	 
	 	 	 	 	 	 	 
	Secretary	 	 	 	John W. Alexander, Chairman of the Board	 	 
	 	 	 	 	and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Northfield Holdings Corp.	 	 
	 	 	 	 	(The Company is executing this Agreement only for	 	 
	 	 	 	 	purposes of acknowledging the obligations of the	 	 
	 	 	 	 	Company hereunder.)	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	\s\ Madeline Frank

	 	 	 	By:
	 	\s\ Annette Catino	 	 
	 

	 	 	 	 	 	 	 	 
	Secretary	 	 	 	Title: Director	 	 

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