COLUMBIA SAVINGS AND LOAN ASSOCIATION
1989 DEFERRED COMPENSATION INVESTMENT ACCOUNT PLAN
1. Purpose.
This 1989 Deferred Compensation Investment Account Plan (the "Plan") is intended to provide incent ives, in the form of
deferred compensation, which will attract, motivate and retain executives of the highest caliber for Columbia Savings and Loan
Association and its subsidiaries (together, the "Association"). Under the Plan, all or a portion of a participant's annual bonus
with respect to each calendar year (and, in certain circumstances, other deferred c ompensation entitlements) shall be deferred
and allocated to Plan accounts. Those deferred amounts shall then be deemed, for purposes of t he Plan only, to represent
specified percentages of the Association's investments in certain portfolios of equity securit ies. Eventual distributions to
participants from the Plan shall be dependent, in part, on the performance of the equity securities included in those portfolios.
Thus, while all of the equity securities will be owned throughout by the Association alone, the appreciation or depreciation of
the participants' deferred amounts will be substantially dependent upon the performance of the included equity securities. In
addition, distributions shall be dependent in part upon each participant's length of service t o the Association, so that the Plan will
provide an incentive to participants to continue to offer and provide their services to the Association.
The Plan is intended to replace the Association's Incentive Investment Plan (the "Prior Plan").
2. Certain Definitions.
The following terms used in this Plan shall have the following meanings:2.1 Account. "Account" means, with respect to Participant's interest in any Portfolio, any of such Participant's Vested
Account, Unvested Account or Interim Account.
2.2 Deferred Amount. "Deferred Amount" means, with respect to a Participant in a particular Portfolio, the a mount
initially allocated to the Account of the Participant under that portfolio.
2.3 Deemed Maturity Date. "Deemed Maturity Date" means, with respect to a Participant in a Long-Term Port folio
whose employment by the Association is terminated for any reason prior to the Maturity Dat e of such tong-Term Portfolio,
the Maturity Date of the Short-Term Portfolio which was established with respect to t he same calendar year as such Long-
Term Portfolio.
2.4 Disposition. "Disposition" of an Underlying Security means any transfer or other disposition of such Underlying
Security other than a Realization.
2.5 Distribution. "Distribution" means any cash payment by the Association to a Participant in respect of such
Participant's interest in a Portfolio.
2.6 Excess Deferred Amount. "Excess Deferred Amount" means, with respect to a Participant in any Portfolio, the
excess, if any, of (i) such Participant's Deferred Amount with respect to the Portfolio, over (i i) thirty-seven and one-half
percent (37.5%) of the annual cash bonus otherwise payable to the Participant with respect to the calendar year
corresponding to the Portfolio; provided, however, that if the annual cash bonus otherwise payable to such Participant for
such calendar year exceeds $1,000,000, then "Excess Deferred Amount", shall instead mean the excess, if any, of (x) such
Participant's Deferred Amount with respect to the Portfolio, over (y) fifty percent (50%) of the annual cash bonus
otherwise payable to the Participant with respect to the calendar year corresponding to the Portfolio.
2.7 Interest. "Interest” means, with respect to a given date, the Moody's Corporate Bond Yield Average for Aaa bonds
(the -Moody's Yield") for the calendar month ending two months before such date, or, if the Moody's Yiel d is no longer
published monthly, a substantially similar average selected by the Board of Directors of the Association, compounded
annually.
EXHIBIT "A"
2.8 Interim Account. "Interim Account" means, from time to time with respect to a Participant in a particular
Portfolio, the Liquidated Value of all Liquidated Underlying Securities which are de scribed in the next sentence multiplied
by the Participant's Percentage Interest in the Portfolio, plus Interest as provided in Se ction 5.1 hereof. The Liquidated
Underlying Securities to which the preceding sentence applies are (i) if the Parti cipant is employed by the Association
continuously during the Portfolio Period or dies or becomes Permanently Disabled prior to the Maturit y Date of the
Portfolio, all Underlying Securities which are Liquidated prior to such Maturity Date , and (ii) if the Participant's
employment with the Association is terminated prior to the Maturity Date other t han by reason of death or Permanent
Disability, all Underlying Securities which are Liquidated prior to the date of termination of employment. Notwithstanding
the foregoing, there shall be deducted from the "Interim Account" any amount otherwise al locable to such Account which
is rolled into a Deferred Amount for the benefit of the Participant under a subsequently established Portfolio, as provided in
Sections 3.3 and 6 hereunder.
2.9 Involuntary Termination Without Cause. "Involuntary Termination Without Cause" shall mean, and a Participant
shall be deemed to have been "Involuntarily Terminated Without Cause" if, (A) such Pa rticipant's employment by the
Association is terminated at the Association's initiative and not by mutual agree ment with the Participant and (B) such
termination is not the result of any justifiable cause as determined in good fait h by the Board of Directors of the Association
in its sole discretion, such cause to include, without limitation, (i) such Part icipant's willful and material failure or refusal to
perform services as provided in his or her contract of employment or as directed by the Boa rd of Directors of the Association
from time to time, (ii) a misappropriation of any funds or property of the Association, (iii ) conviction of the Participant of a
felony or (iv) any act of the Participant or failure to act by the Participant which has a material adverse effect on the
Association unless undertaken or omitted in good faith and in the performance of the Participant's duties.
2. 10 Liquidated Value. "Liquidated Value" with respect to an Underlying Security means the Value of such sec urity at
the time of its Liquidation as determined pursuant to Section 2.26 hereof.
2.11 Liquidation. "Liquidation" of an Underlying Security means the Disposition or other Realization of such security.
2.12 Long-Term Portfolio. "Long-Term Portfolio" means (i) with respect to Portfolios established by the Board of
Directors of the Association with respect to calendar years prior to and including cale ndar year 1997, the Portfolio established
with respect to each such calendar year which has a Maturity Date of December 31, 2003, and (ii) if the Board of Directors of
the Association exercises the election to extend the establishment of Long-Term Port folios as provided in Section 7.3 hereof,
with respect to Portfolios established by the Board of Directors of the Association corresponding t o calendar years after
calendar year 1997 through and including calendar year 2008, the Portfolio established with respec t to each such calendar
year which has a Maturity Date of December 31, 2013.
2.13 Maturity Date. "Maturity Date," with respect to a particular Portfolio and irrespective of the partic ular
circumstances of any Participant in such Portfolio, means the first date on which Dist ributions could be payable under the
provisions of the Plan.
2.14 Other Deferred Compensation. "Other Deferred Compensation" means, with respect to any Participant, the
discounted present value of and vested entitlement to deferred compensation, retirement benefits, bonuses or any similar
benefits pursuant to any plan (other than this Plan) maintained by the Association including, without limitation, the
Supplemental Retirement Plan, unless and to the extent that such benefits are al ready subject to a binding written agreement
pursuant to Section 3.3 (iii) hereof.
2.15 Other Executive. "Other Executive" means any officer or employee of the Association other than a Senior
Executive.
2.16 Participant . "Participant" means, with respect to a Portfolio, any Senior Executive or Other Executi ve who
participates in that Portfolio.
2.17 Percentage Interest. "Percentage Interest" means, with respect to a Participant's interest in a Portfolio. (1) such
Participant's Deferred Amount, divided by (ii) the aggregate Value of all Underlying Secun*ties included in that Portfol io.
2.18 Permanent Disability. "Permanent Disability" means, with respect to a Participant, and such Participant shall be
deemed to have become "Permanently Disabled" if, such Participant becomes unable to engage in activities substantially
similar to those engaged in prior to the occurrence of an impairment by reason of any medi cally determinable physical or
mental impairment which can be expected to result in death or which has last ed or can be expected to last for a continuous
period of not less than 12 months.
2.19 Portfolio . "Portfolio" means any Short-Term Portfolio or Long-Term Portfolio.
2.20 Portfolio Period "Portfolio Period" means the period from the establishment of a Portfolio by the Board of Directors
of the Association through its Maturity Date. 2.21 Realization. "Realization" means, and an Underlying Security shall be deemed to have been "Realized" if, afte r four
years from the date of acquisition of such Underlying Security by the Association: (1) (A) such Underlying Security has
been registered under the Securities Act of 1933, as amended (the "Act"), (B) such Underlying Security is a class of
security convertible into or is a class of security which has been distributed to the public generally pursuant to an effec tive
registration statement under the Act, and (C) all contractual restrictions on transfer of such Underlying Security, i f any,
under shareholders' agreements to which the Association is or was a party, are terminated or lapse by their terms; or (ii )
such Underlying Security is purchased either by the issuer thereof or by any third party in an acquisition, directly or
indirectly in any form of transaction, including, without limitation, any merger, consolidation, purchase or like tra nsaction,
of greater than or equal to 50% of the combined voting power or assets and properties of such issuer. 2.22 Senior Executive. "Senior Executive" means the Chief Executive Officer, the President, the Chief Financial Officer, all
Executive Vice Presidents and any other officer or employee of the Association who serves on the Association's Investment
Committee or performs similar functions with respect to the Association's investments.
2.23 Short-Term Portfolio. "Short-Term Portfolio" means (i) the Portfolio established by the Board of Directors of the
Association with respect to each calendar year which has a Maturity Date which is five years after the Dece mber 31 of the
calendar year with respect to which such Portfolio is established and (ii) as provided in Section 7.3 hereunder, the Portfolio
established at the Determination Meeting (as defined in Section 3.1) in calendar year 1998 which would have constitut ed a
Long-Term Portfolio but for the failure of the Board of Directors of the Association to make the election provided in such
Section. 2.24 Underlying Security. "Underlying Security" means, with respect to a Portfolio, the included portion of an equity
security (i) purchased by the Association during the calendar year with respect to which such Portfolio was established and
(ii) which is selected by the Board of Directors of the Association for inclusion in that Portfolio; provided, however, that at
the Determination Meeting held in calendar year 1989, the Board of Directors may, in its discretion, determine to include in
the Portfolios established at such meeting equity securities purchased by the Association after March 3 1, 1988 and not
included in the Prior Plan. The determination of what constitutes an equity security for this purpose shall be made by t he
Board of Directors in its reasonable discretion in circumstances where the Association receives contract rights or other
property which provides for payments to the Association based directly upon the equity valuation of an issuer or has other
characteristics generally associated with an equity investment. 2.25 Unvested Account. "Unvested Account" means, from time to time with respect to a Participant in a particular Portfolio,
such Participant's Value Intrest in the Portfolio, not included in such Participant's Vested Account or Interim Acc ount.
2.26 Value. "Value" means, for purposes of assigning an acquisition value to an Underlying Security, (1) if the Underlying
Security is purchased by the Association in a transaction in which evidence of indebtedness of
the issuer is not also purchased or in which the purchase price of the Underlying Security is
stated separately from the purchase price for any evidence of indebtedness, the separately stated purchase price; (ii) if the Underlying Security is purchased by the
Association in circumstances not covered by clause (i) but in which an allocation of value
between the Underlying Security and evidence of indebtedness is set forth in a written
agreement for federal income tax purposes, the purchase price allocated to the Underlying
Security in such agreement; or (iii) if the Underlying Security is purchased by the Association
in circumstances not covered by either of clause (i) or (ii), the amount paid by the Association
which is determined in good faith by the Board of Directors of the Association, after
consultation, as determined by the Board of Directors in its sole discretion to be advisable,
with its investment advisers, to represent the purchase price for the Underlying Security.
"Value" means, for purposes of assigning a Liquidated Value to an Underlying Security, (i) if
there is a Realization but not, within 30 days of such Realization, a Disposition of the
Underlying Security, the weighted average closing price of a share or unit of the Underlying
Security for the 30-day period following its Realization (the "Valuation Period") on the
principal national securities exchange on which shares or units of the Underlying Security are
listed or admitted to trading or, if not they are not so listed or admitted, the weighted average
of reported bid and asked prices during the Valuation Period in the over-the-counter market as
furnished by the National Association of Securities Dealers, Inc. in its automated quotation
system or, if such firm is not then engaged in the business of reporting such prices, as
furnished by any similar firm then engaged in such business selected by the Board of
Directors of the Association or, if there is no such firm, as furnished by any member of the
National Association of Securities Dealers, Inc. selected by the Board of Directors of the
Association or, if the shares or units of the Underlying Security are not publicly traded, the
amount determined in good faith by the Board of Directors of the Association after
consultation, as determined by the Board of Directors in its sole discretion to be advisable,
with its investment advisers; or (ii) if there is a Disposition of the Underlying Security, the
consideration, if any, received by the Association in exchange for the Underlying Security.
"Value" means, for purposes of assigning a value to a Portfolio, the aggregate value of the
Underlying Securities assigned to such Portfolio as determined in accordance with the first
two sentences of this Section. After its Liquidation, an Underlying Security shall not be
deemed in a Portfolio for valuation purposes.
2.27 Value Interest. "Value Interest" means, with respect to a Participant in a particular Portfolio, (i) such Participant's
Percentage Interest multiplied by the then Value of the Portfolio, minus (ii) any amount deducted from such Partici pant's
Interim Account and rolled into a Deferred Amount for the binefit of that Participant under a subsequently established
Portfolio, as provided in Section 6 hereunder.
2.28 Vested Account. "Vested Account" means, from time to time with respect to a Participant in a particular Portfolio, the
Value Interest of such Participant in the Portfolio multiplied by the sum, up to one hundred percent ( 100%), of the
following percentages: (i) (A) five percent (5%) multiplied by (B) the number of calendar years in which the Participa nt
was employed by the Association prior to calendar year 1989, plus (ii) twenty percent (20%) multiplied by each calendar
year beginning with and following calendar year 1989 in which the Participant is employed by the Association; provided,
however, that such sum shall be doubled, up to one hundred percent ( 100%), if such Participant's employment with the
Association is Involuntarily Terminated Without Cause prior to the Maturity Date of the Portfolio.
3. Selection of Participants and Amount of Contributions. 3.1 Senior Executives. The Board of Directors of the Association, at two meetings of its members during each cal endar year
(each, a "Determination Meeting") will determine (i) the Senior Executives ent itled to participate in each of the Portfolios established
at the Determination Meeting, (ii) the amount of each Senior Executive Partici pant's Percentage Interest in each of such Portfolios and
(iii) the total of Deferred Amounts which each Senior Executive Participant is ent itled to defer in the Plan for that year (the "Total
Deferred Amount"). In the event that the limitation provided in Section 3.3 hereunder on a Participant's total Deferred Amount
requires a reduction in such Participant's Percentage Interests in such Portfolios, the resulti ng unallocated Deferred Amounts shall not
be reassigned to other Participants. The Total Deferred Amount of each Participant for each calendar year shall be divided equally
between such calendar year's Short-Term Portfolio and Long-Term Portfolio, except as otherwise provide d in Section 7.3 hereof. It is
contemplated that the Determination Meetings will be the Board of Directors meetings held in March and September of each calenda r
year; however, the Board of Directors may, in its sole discretion, consider the Determi nation Meetings to be any other regular or
special meeting or meetings of the Board of Directors held in such calendar year or the succeeding calendar year. The Percentage
Interest in a Portfolio which may be allocated to any Senior Executive shall not exceed (x) 65% for Portfolios established with respect
to calendar year 1989, (y) 55% for Portfolios established with respect to calendar year 1990 and (z) 5017c for Portfolios established
with respect to calendar year 1991 and thereafter.
3.2 Other Executives. In determining the allocation of Senior Executive Percentage Interests in each Port folio at each
Determination Meeting, the Board of Directors of the Association shall leave unallocat ed a percentage interest determined by it in its
sole discretion (the "Unallocated Percentage Interest"). The Senior Executives sele cted at such Determination Meeting shall thereafter,
within 30 days of the Determination Meeting, select the Other Executives, if any, who shall part icipate in each Portfolio through the
Unallocated Percentage Interest. The Senior Executives shall evidence their determination by filing with the Secretary of the
Association a written statement indicating (i) the Other Executives entitled to participate, through the Unallocated Percentage Interest,
in each of the Portfolios established at the Determination Meetings and (ii) the amount of each Other Executive Participant's
Percentage Interest in each of such Portfolios. The aggregate Deferred Amounts which an Other Executive is allocated under the Plan
with respect to a particular calendar year's Portfolios shall be divided equally between suc h calendar year's Short-Term Portfolio and
Long-Term Portfolio, except as otherwise provided in Section 7.3 hereof.
3.3 Contributions by Participants. With respect to each Participant in each Portfolio, contribution of the Deferred Amount will
be made from the following sources, in the order specified: (i) first, from the rollover of an am ount in such Participant's Interim
Account in another Portfolio pursuant to Section 6 hereunder, (1i) second, (A) if the annual cash bonus otherwise payable to the
Participant with respect to the calendar year corresponding to the Portfolio is less than or equal to $1,000,000, then from thirty-
seven and one-half percent (37.50/,c) of such annual cash bonus otherwise payable, or (B) if such a nnual cash bonus is greater
than $1,000,000, then from fifty percent (50%) of such annual cash bonus; and (iii) third, if the Partici pant has an Excess
Deferred Amount and Other Deferred Compensation, by the Participant and the Association entering into a binding written
agreement which provides that, in certain circumstances provided in Section 5.3 here under, the Association will be entitled to
reduce Other Deferred Compensation in a specified amount of present benefits or discounted prese nt value of future benefits
otherwise payable to the Participant pursuant to the Other Deferred Compensation. A Partic ipant's Total Deferred Amount with
respect to any calendar year shall not exceed the sum of the amounts provided in cla uses (i)-(iii) of the preceding sentence after
adjusting the percentage figure in subclause (A) of clause (ii) to seventy-five percent (75%) and adjusting the percentage figure
in subclause (B) of clause (ii) to one hundred percent (100%).
4. Portfolio Composition.
4.1 Selection of Securities. At each Determination Meeting in a particular calendar year covered by the Pl an, the
Board of Directors of the Association shall select the Underlying Securities for inclusion in the Short-Term Portfolio
and Long-Term Portfolio to be established with respect to such calendar year; provided, however, that the Board of
Directors may, in its sole discretion, adjust the composition of each of such Portfolios at its meeting in the succeeding
March or such other meeting in the succeeding calendar year as it selects. The Board of Directors may allocate up to
one-third ( 113) of the acquisition Value of each equity security purchased or to be purchased by the Associati on durir .,
the calendar year in which the Determination Meeting is held; provided, however, that at the first Determination
Meeting held after the Plan is approved by the Board of Directors, the Board of Directors ma y, in its discretion,
determine to include in the Portfolios established at such meeting up to one-third (1/3) of the acquisition Value of equity
securities purchased by the Association after March 31, 1988 and not included in the Prior Plan. T he Acquisition
Value of each Underlying Security selected for inclusion shall be allocated equally to the Short-Term Portfolio and the
Long-Term Portfolio established at the Determination Meeting, except as otherwise provided under Section 7.3 hereunder.
4.2 No Right to Underlying Securities. The Association shall hold and shall be entitled to all legal, equitable a nd
beneficial rights and interests to and in the Underlying Securities, including, without limitation, all voting and dispositive
power with respect to such securities. No provision of this Plan shall be deemed to have the effect of providing any
Participant hereunder with any legal, equitable or beneficial interest in any Underlying Security. The Board of Directors of
the Association will not have any trust or other obligation to the Participants in the Plan with respect to its decisions
regarding retention or Liquidation of any Underlying Securities or any other actions which ma y affect such securities. Each
Account shall constitute only a bookkeeping entry by the Association for purposes of facilitating t he computation of benefits
to which Participants are entitled to hereunder. No separate funds of the Association will be segregated for the purpose of
providing for payment of benefits hereunder.
5. Distributions to Participants.
5.1 Distributions on Maturity Date. Except as otherwise provided in this Section 5, on the Maturity Date of each
Portfolio (or, if Section 2.3 applies, the Deemed Maturity Date or the date of a Parti cipant's termination of employment,
whichever is later (the "Terminated Participant Payment Date")), each Partici pant 'in such Portfolio shall become entitled to
receive the amount of such Participant's Interim Account plus Interest, if any, on such amount accrued from the date that
there was first an amount in the Interim Account and calculated to take a ccount of changes in the amount of the Interim
Account from time to time thereafter through the Maturity Date (or, if Section 2.3 a pplies, the Terminated Participant
Payment Date). In addition, except as otherwise provided in this Section 5, on the Maturi ty Date of each Portfolio (or, if
Section 2.3 applies, the Terminated Participant Payment Date), each Participant whose employment with the Association was
terminated prior to the Maturity Date of that Portfolio other than as a result of de ath or Permanent Disability shall become
entitled to receive (i) the amount of such Participant's Unvested Account on the dat e of termination of employment plus
Interest, if any, on such amount from such date through the Maturity Date (or, if Section 2.3 applies, the Deemed Maturity
Date), plus (ii) an amount in respect of all Underlying Securities which are Liquidate d after the date of such termination but
prior to the Maturity Date of the Portfolio which is equal to (A) the Liquidated Value of each such Underlying Security,
multiplied by (B) the Participant's Percentage Interest, such result in turn multipli ed by (C) the Vested Percentage Factor,
plus Interest, if any, on such amount from the date of Liquidation of such Underlying Security through the Maturity Date (or,
if Section 2.3 applies, the deemed Maturity Date). The "Vested Percentage Factor" me ans, with respect to a Participant in a
particular Portfolio, the sum of the amounts described in clauses (i) and (ii) of Section 2.28 (as such amounts may be affected
by the qualifier immediately following clause (ii) in such Section) on the date of such termination.
5.2 Distributions After Maturity Date. Except as otherwise provided in this Section 5, after the Maturity Date of each
Portfolio, each Participant in such Portfolio shall become entitled to receive, as and when Underlying Securities in such
Portfolio are Liquidated, an amount in respect of each such Liquidated Underlying Securit y which is equal to (i) the
Liquidated Value of each such Underlying Security, multiplied by (ii) the Participant 's Percentage Interest; provided,
however, that the amount of the Distribution which would otherwise be payable shall be reduced, in t he case of any
Participant whose employment with the Association was terminated prior to the Maturi ty Date of the Portfolio other than as a
resul2 -f' death or Permanent Disability, by an amount equal to the amount of the Distribution ot herwI*S%'.-', .,'able pursuant
to this provision multiplied by the result obtained by subtracting (x) the Vested Percenta ge Factor from (y) one hundred
percent ( 100%).
5.3 Distributions Reduced by Excess Deferred Amount. Notwithstanding anything herein to the contrary, each
Distribution to a Participant in respect of a Portfolio shall be reduced as necessary unt il such reduction or reductions equal the
Participant's Excess Deferred Amount, if any, with respect to such Portfolio. In addition, if on t he last to occur of (1) the
Maturity Date of the Portfolio and (ii) the Liquidation of the last Underlying Security included in such Portfolio, the
Association has not recovered the entire Excess Deferred Amount with respect to a Pa rticipant as provided in the
preceding sentence (the amount of such shortfall being referred to as the "Differential"), then each such Participant who
executed a binding written agreement with the Association pursuant to Section 3.3(111) of the Plan shall thereafter
consent to an adjustment of his or her Other Deferred Compensation entitlements such that the value of such present
entitlements and the discounted present value of such future entitlements are reduc ed in an amount equal to the
Differential. If a Participant in a Portfolio who has executed a binding written agreement pursuant to Section 3.3(iii) of
the Plan terminates his or her employment with the Association prior to the Mat urity Date of such Portfolio other than
as a result of death, the consent referred to in the preceding sentence shall be provided at the time of terminati on.
5.4 Payment Date. The payment date for any Distribution to which a Participant becomes entitled under the
provisions of this Section 5 shall be a date determined by the Association within 90 days of the event establishi ng the
entitlement.
5.5 Compensation; Withholding. All Distributions to a Participant under the Plan shall be deemed compensation to
the Participant. To the extent required by applicable federal, state or local law as in effect at the time of any
Distribution, the Association shall withhold from each Distribution made hereunder any taxes requi red to be withheld
pursuant to such law or laws.
6. Rollover of Amounts in Interim Accounts. With respect to each calendar year after the calendar year with
respect to which a Portfolio is established (other than the last calendar year im mediately preceding the Maturity Date of
such Portfolio), any balance in the Interim Account of each Participant in such Portfolio whose employment with the
Association has not theretofore been terminated shall be rolled into the Portfolios correspondi ng to such subsequent
calendar year and shall constitute all or a portion of the Deferred Amouhts thereunder. Any amounts rolled over pursuant
to this Section 6 shall be allocated equally to the Short-Term Portfolio and the Long-Term Portfolio established at the
applicable Determination Meeting.
7. Plan Effectiveness and Termination.
7.1 Shareholder Approval. This Plan shall not take effect until approved by the Board of Directors of the
Association and by the shareholders of the Association at their annual meeting to be held in calendar year 1989. Any
Portfolios established prior to the approval of the Plan by the shareholders shall be deemed subject to such approval.
7.2 Termination as a Result of Regulatory Capital Deficiency. If, at the end of any fiscal quarter of the
Association, the Association's "regulatory capital" (as determined by regulatory accounting princ iples of the Federal
Home Loan Bank Board or a successor agency ("FHLBB"') then in effect) is less than 95% of the minimum level
required by any FHLBB regulation, then no further Portfolios shall be established and the Board of Directors of the
Association may in its discretion take such steps as shall be necessary to termina te the Plan. Upon such termination,
(i) each Participant in each Portfolio which was in existence immediately prior to such determination whose Vested
Percentage Factor was greater than 40% shall be deemed to have a Vested Percent age of 100% and (ii) each
Underlying Security in each such Portfolio shall be deemed to have been Liquidated. Afte r giving effect to the
preceding sentence, the Board of Directors of the Association will then determine an equi table manner and time of
distributing Plan Account balances to Participants.
7.3 Extension of Establishment of Portfolios. At a Determination Meeting in calendar year 1998 the Board of
Directors of the Association may elect to extend the establishment of Long-Term Portfolios for an additional ten
years. If the Board of Directors makes the election provided in this Section, Short-Term Portfol ios and Long-Term
Portfolios shall be established with respect to the calendar years through and including 1998 and 2008. If the Board
of Directors does not make the election provided in this Section, (i) no Portfolios shall be established with respect to
calendar years after calendar year 1998, and (ii) the Portfolio established at the Determination Meeting in calendar
year 1998 which would have constituted a Long-Term Portfolio had the election been made shall instead be deemed
to constitute a Short-Term Portfolio.
8. Plan Administration. The Board of Directors of the Association (and, to the extent explicitly provided herein, the Senior
Executives) shall cause to be maintained books and records appropriate for the administra tion of the Plan, including, without
limitation, books and records indicating the amounts of Participants' Accounts in Portfolios. The Board of Directors shall have the
authority, consistent with the express provisions and intent of the Plan, to (i) construe and inte rpret the Plan, (ii) define the terms not
already defined herein, (iii) prescribe, amend and rescind rules and regulations relating to the Plan and (iv) make all other
determinations which it deems necessary or advisable in the administration of the Pl an. All determinations and interpretations made by
the Board of Directors shall be binding and conclusive on all Participants in the Plan and their legal represent atives and beneficiaries.
9. Miscellaneous.
9.1 Unsecured General Creditor. Participants and their beneficiaries, heirs, successors and other legal representatives shall
have no legal, equitable or beneficial rights, interests or claims in any property or assets of the Association. No such property or
assets shall be held under any trust for the benefit of Participants, their beneficiari es, heirs, successors or other legal
representatives or held in any way as collateral security for the fulfillment of the obligations of the Association under this Plan.
Any and all of the Association's property and assets shall be and remain the general, unple dged, unrestricted assets of the
Association. The Association's obligations under the Plan shall constitute unfunded and unsecured prom ises of the Association to
pay Distributions in the future.
9.2 Non-assignability,- Successors. Neither a Participant nor any other person shall have any right to sell, assign, convey,
transfer, pledge, hypothecate, mortgage or otherwise encumber any of his or her right or interest created under this Plan
including, without limitation, the right to receive any Distribution or Distributions hereunde r. All such rights and interests are
nontransferable. No part of any amounts payable hereunder shall, prior to the time that t hey are paid, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony, separate maintenance or other obligations owed by a Participant
or any other person, nor shall they be transferable by operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency. In the event of the death of a Participant in any Portfolio, all rights and obligations of such Participant
with respect to such Portfolio shall inure to and be the responsibility of such Participa nt's beneficiaries, heirs, successors or other
legal representatives.
9.3 No Guaranty of Employment. Nothing in the Plan or a Participant's participation in one or more Portfolios established
under the Plan shall (i) be deemed to constitute a contract of employment betwe en the Association and the Participant or to vary
the terms or otherwise affect any written employment agreement in effect betwee n the Association and such Participant or (ii) be
construed as a promise or guaranty that the Association will continue to employ such Participant.
9.4 Indemnification. In addition to such other rights of indemnification as they may have as directors and/or officers of the
Association, and to the extent allowed by applicable law, members of the Board of Di rectors of the Association and Senior
Executives who are entitled to participate in the selection of Other Exec utives for participation in the Plan shall be indemnified
by the Association against the reasonable expenses, including attorneys' fees and costs, act ually incurred by them in connection
with any action, suit or proceeding or in connection with any appeal related thereto, to which they or any of them may be a party
by reason of any action taken or omitted to be taken under or in connection with the Plan, and against all amounts paid by them
in settlement thereof (provided, that if less than all the members of the Board of Directors are sought to be held, that the
settlement is approved by at least a majority of the members not sought to be hel d, which approval shall not be unreasonably
withheld) or paid by them in satisfaction of a judgment in any such action, suit or procee ding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that such member of the Board of Dire ctors or Senior Executive did
not act in good faith and in a manner which such person reasonably relieved to be in the best interests of the Association and, in
the case of a criminal proceeding, had no reason to believe that the conduct compla ined of was unlawful; provided, however, that
within 60 days after institution of any such action, suit or proceeding, the member of the B oard of Directors or Senior Executive
shall, in writing, offer to the Association the opportunity at the Association's expense to handle and defend such action, suit or
proceeding.
9.5 Successors to Association . The provisions of this Plan shall bind and inure to the benefit of any successor in interest to
the Association. The term "successor in interest" shall (i) mean, for this purpose, any corporate or other business entity which
shall, directly or indirectly in any form of transaction, including, without limitation, any merger, consolidat ion, purchase or
like transaction, acquire all or substantially all of the business and assets of the Association and (ii) i nclude, without
limitation, if the Association becomes a subsidiary of a savings and loan holding company, the savings and loan holding
company, the Association, any other subsidiary of the savings and loan holding company or any combination thereof. This
provision shall apply successively to each merger, consolidation, purchase or other such transaction involving the
Association or any successor in interest.
9.6 Singular and Plural. Wherever any words are used herein in the singular or in the plural, they shall also be
construed as though they were used in the plural or the singular, respectively, unless the context requires otherwise.
9.7 Governing Law. The provisions of this Plan shall be construed and given effect in accordance with Cali fornia law,
without giving effect to the choice of law rules thereof.
9.8 Headings. The headings used in this Plan are for convenience only and shall not control or affect the meaning of
any provision or provisions.
9.9 Validity . In case any provision of this Plan shall be determined by a court of competent jurisdi ction to be illegal or
invalid for any purpose, such illegality or invalidity shall not affect the remaining provisions of the Plan or the affected
provision for any other purpose. 11 9. 10 Attorneys' Fees. If either the Association or a Participant institutes any action or proceeding in order to enforce
any provision hereof or for damages or declaratory relief by reason of an alleged breach, default or liability of or with
respect to any provision of the Plan, the prevailing party in such action or proceeding shall be entitled to recover from
the other the reasonable costs actually incurred by it in defending the action or proceeding, including, without
limitation, attorneys' fees and costs. 9.11 Specific Performance; Submission to Jurisdiction. ne Association and each Participant in the Plan (by virtue of his
or her participation therein) acknowledges that in the event of a failure by the Association or any Participant to satisfy
any obligations which arise under the Plan, the remedies at law may be inadequa te. Consequently, each agrees that the
other party may pursue any legal or equitable remedy then available to such party, i ncluding but not limited to any
action or suit for damages, and may also seek specific performance of the obligation or obl igations which have not
been satisfied. Any action or proceeding seeking to enforce any provision of, or based on any right ari sing out of, the
Plan (i) shall be brought in the Superior Court in and for the County of Los Angeles or the United St ates District Court
in and for the Central District of California, and the Association and each Parti cipant in the Plan (by virtue of his or
her participation therein) consents to the jurisdiction of such courts (and of the appropriat e appellate courts) in any
such actions or proceedings, waives any objection to venue laid therein and consents that process therein may be
served on it by personal service on the Secretary of the Association; and (ii) shall be assertable, if the Association
becomes a subsidiary of a savings and loan holding company, by the savings and loan holding company, the
Association, any other subsidiary of the savings and loan holding company or any combination thereof. T he
Association and the Participants shall execute such additional documents as the Assoc iation deems necessary or
advisable to effectuate the foregoing.
Columbia Savings and Loan Association 5/10/89
