EX-10.7 7 exhibit107sterlingnational.htm EX-10.7
Exhibit 10.7
STERLING NATIONAL BANK NONQUALIFIED DEFERRED COMPENSATION PLAN

Sterling National Bank
Nonqualified Deferred Compensation Plan
Table of Contents

Article 1 | Definitions | 1
1.1 | Account | 1
1.2 | Administrator | 1
1.3 | Board | 1
1.4 | Bonus | 1
1.5 | Cause | 1
1.6 | Change-in-Control | 1
1.7 | Code | 2
1.8 | Compensation | 2
1.9 | Deferrals | 2
1.10 | Deferral Election | 2
1.11 | Disability | 2
1.12 | Effective Date | 2
1.13 | Eligible Employee | 2
1.14 | Employee | 2
1.15 | Employer | 2
1.16 | Employer Discretionary Contribution | 2
1.17 | ERISA | 2
1.18 | Investment Fund | 3
1.19 | Participant | 3
1.20 | Plan Year | 3
1.21 | Retirement | 3
1.22 | Salary | 3
1.23 | Separation from Service | 3
1.24 | Service Recipient | 3
1.25 | Specified Employee | 4
1.26 | Trust | 4
1.27 | Trustee | 4
1.28 | Years of Service | 4
Article 2 | Participation | 4
2.1 | Commencement of Participation | 4
2.2 | Loss of Eligible Employee Status | 4
Article 3 | Contributions | 4
3.1 | Deferral Elections - General | 4
3.2 | Time of Election | 4
3.3 | Distribution Elections | 5
3.4 | Additional Requirements | 5
3.5 | Cancellation of Deferral Election due to Disability | 5
3.6 | Employer Discretionary Contribution | 5
Article 4 | Vesting | 6
4.1 | Vesting of Deferrals | 6
4.2 | Vesting of Employer Discretionary Contributions | 6
4.3 | Vesting due to Certain Events | 6
4.4 | Amounts Not Vested | 6
4.5 | Forfeitures | 6
Article 5 | Accounts | 7
5.1 | Accounts | 7
5.2 | Investments, Gains and Losses | 7

Article 6 | Distributions | 7
6.1 | Distribution Election | 7
6.2 | D i stributions upon an In-Service Account Triggering Date | 8
6.3 | Distributions upon a Separation from Service | 8
6.4 | Substantially Equal Annual Installments | 8
6.5 | Distributions due to Disability | 8
6.6 | Distributions upon Death | 8
6.7 | Changes to Distr i bution Elections | 8
6.8 | Acceleration or Delay in Payments | 9
6.9 | Unforeseeable Emergency | 9
6.10 | Distributions to Specified Employee | 9
6.11 | Minimum Distribution | 9
6.12 | Form of Payment | 9
6.13 | Separation from Service for Cause | 9
Article 7 | Beneficiaries | 10
7.1 | Beneficiaries | 10
7.2 | Lost Beneficiary | 10
Article 8 | Funding | 10
8.1 | Prohibition against Funding | 10
8.2 | Deposits in Trust | 10
8.3 | Withholding of Employee Contributions | 10
Article 9 | Claims Administration | 10
Article 10 | General Provisions | 11
10.1 | Administrator | 11
10.2 | No Assignment | 11
10.3 | No Employment Rights | 11
10.4 | Incompetence | 11
10.5 | Identity | 12
10.6 | Other Benefits | 12
10.7 | Expenses | 12
10.8 | Inso l vency | 12
10.9 | Amendment or Modification | 12
10.10 | Plan Suspension | 12
10.11 | Plan Termination | 12
10.12 | Plan Termination due to a Change-in-Control | 13
10.13 | Construction | 14
10.14 | Governing Law | 14
10.15 | Se v e r abilit y | 14
10.16 | Head i ngs | 14
10.17 | Terms | 14
10.18 | Code Section 409A Fail Safe Provision | 14
10.19 | No Guarantee of Tax Consequences | 14
10.20 | Limitation on Actions | 14
10.21 | Right of Setoff | 14
10.22 | Receipt and Release | 15
10.23 | Furnishing Information | 15
10.24 | Insurance | 15

Sterling National Bank
Nonqualified Deferred Compensation Plan
Sterling National Bank hereby adopts this Sterling National Bank Nonqualified Deferred Compensation Plan (the "Plan") for the benefit of a select group of management or highly compensated employees. This Plan is an unfunded arrangement and is intended to be exempt from the participation, vesting, funding, and fiduciary requirements set forth in Title I of the Employee Retirement Income Security Act of 1974, as amended. It is intended to comply with Internal Revenue Code Section 409A.
Article 1 Definitions
1.1 Account
The sum of all the bookkeeping sub-accounts as may be established for each Participant as provided in Section 5.1 hereof.
1.2 Admi nistrator
The Employer or individuals or an administrative committee appointed by the Employer shall serve as the Administrator of the Plan. The Administrator shall serve as the agent for the Employer with respect to the Trust.
1.3 Bo ard
The Board of Directors of the Employer.
1.4 Bonus
Cash Compensation which is designated as such by the Employer and which relates to services performed during an incentive period by an Eligible Employee in addition to his or her Salary, including any pretax elective deferrals from said Bonus to any Employer sponsored plan that includes amounts deferred under a Deferral Election or any elective deferral as defined in Code Section 402(g)(3) or any amount contributed or deferred at the election of the Eligible Employee in accordance with Code Section 125 or 132(f)(4).
1.5 Cause
For purposes of this Plan, "Cause" shall mean (i) engaging in willful or grossly negligent misconduct that is mater i ally injurious to the Employer and/or affiliate, (ii) embezzlement or misappropriation of funds or property of the Employer and/or affiliate, (iii) conviction of a felony or the entrance of a plea of guilty or nolo contendere to a felony, (iv) conviction of any crime involving fraud, dishonesty or breach of trust or the entrance of a plea of guilty or nolo contendere to such a crime, or (v) failure or refusal by the Participant to devote full business time and attention to the performance of his or her duties and responsibilities if such breach has not been cured within fifteen (15) days after notice is given to the Participant.
1.6 Change-in-Control
Provided that such term shall be interpreted within the meaning of regulat i ons promulgated under Code Section 409A, a "Change-in-Control" of the Employer (which, for purpose of this Section 1.5 shall mean Sterling Bancorp and/or Sterling National Bank but not any of its affiliates or subsidiaries) shall mean the first to occur of any of the following:
(a)the date that any one person or persons acting as a group acquires ownership of Employer stock constituting more than fifty percent (50%) of the total fair market value or total voting power of the Employer;
(b)the date that any one person or persons acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of the stock of the Employer possessing thirty percent (30%) or more of the total voting power of the stock of the Employer;
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(c)the date that any one person or persons acting as a group acquires (or has acqu i red during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Emp l oyer that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the Employer immediately prior to such acqu i sition; or
(d)the date that a majority of members of the Employer's Board is replaced during any 12- month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or elections, provided that for purposes of this Section, a Change-in-Control of the Employer will not occur if the majority stockholder of the Employer is another corporation.
1.7 Code
The Internal Revenue Code of 1986, as amended.
1.8 Compensation
Compensation means, for purposes of contributions under this Plan, a Participant's Salary and Bonus.
1.9 Deferrals
The portion of Compensation that a Participant elects to defer in accordance with Section 3.1 hereof.
1.10 Deferral Election
The separate agreement, submitted to the Administrator, by which an Eligible Employee agrees to participate in the Plan and make Deferrals thereto.
1.11 Disability
Provided that such term shall be interpreted within the meaning of regulations promulgated under Code Section 409A, a Participant shall be considered to have incurred a Disability if: (i) the Participant is determined to be disabled in accordance with a disability insurance program sponsored by the Participant's Employer that applies a definition of disability that complies with the regulations under Code Section 409A; or (i i) the Participant is determined to be tota ll y disabled by the Social Security Admin i stration.
1.12 Effective Date
January 1, 2020.
1.13 Eligible Employee
An Employee shall be considered an Eligible Employee if such Employee is a member of a "select group of management or highly compensated employees," within the meaning of Sections 201, 301 and 401 of ER I SA, and is designated as an Eligible Employee by the Administrator. The Administrator may at any time, in its sole discretion, change the eligible criteria for an Eligible Employee or determine that one or more Participants will cease to be an Eligible Employee. The designation of an Employee as an Eligible Employee in any year shall not confer upon such Emp l oyee any right to be designated as an Elig i ble Employee in any future Plan Year.
1.14 Employee
Any person employed by the Employer.
1.15 Employer
Sterling Bancorp, Sterling National Bank and their subsidiaries and affiliates.
1.16 Employer Discretionary Contribution
A discretionary contribution made by the Employer that is credited to one or more Participant's Accounts in accordance with the terms of Section 3.6 hereof.
1.17 ER ISA
The Employee Retirement Income Security Act of 1974, as amended.
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1.18 In vestment Fund
Each investment(s) which serves as a means to measure value, increases or decreases with respect to a Participant's Accounts.
1.19 Participant
An Eligible Employee who is a Participant as provided in Article 2.
1.20 Plan Year
Calendar year.
1.21 Retirement
Retirement shall mean a Participant's Separation from Service on, or subsequent to, the applicable Participant attaining sixty-five (65) years of age.
1.22 Salary
An Eligible Employee's base salary earned during a Plan Year, including any pretax elective deferrals from said Salary to any Employer sponsored plan that includes amounts deferred under a Deferral Election or any elective deferral as defined in Code Section 402(g)(3) or any amount contributed or deferred at the elect i on of the E li gible Employee in accordance with Code Section 125 or 132(f)(4).
1.23 Separation from Service
Provided that such term shall be interpreted within the meaning of regulations promulgated under Code Sec t ion 409A, to mean a change in an Executive's service relationship with the Service Recipient such as a death, ret i rement or other termination of employment, whether or not initiated by the Service Recipient, such that the Service Recipient reasonably determines, based on the facts and circumstances available at such determination date, that no further services will be performed by the Executive for the Service Recip i ent after a certain date (the "Separation Date") or that the l evel of bona fide services the Participant will perform after the Separation Date (whether as an employee, independent contractor or other service provider) will decrease permanently to a level that is less than 50% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period. No Separat i on from Service shall be deemed to occur due to military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months or, if longer, so long as Executive's right to reemployment is prov i ded by law or contract. If the leave exceeds six months and Executive's right to reemployment is not provided by law or by contract, then Executive shall have a Separat i on from Service on the first date immediately fo ll owing such six-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence may be substituted for such six-month period, provided, however, that an earlier termination of employment will end such disability extension. Upon a sale or other disposition of the assets of the Emp l oyer to an unrelated purchaser, the Adm i nistrator reserves the right, to the extent perm i tted by Code sect i on 409A to determine whether Participants providing services to the purchaser after and in connection with the purchase transaction have experienced a Separation from Service.
1.24 Service Recipient
Provided that such term shall. be interpreted within the meaning of regulations promulgated under Code Section 409A, Service Recipient shall mean the Employer or person for whom the services are performed and with respect to whom the l egally binding right to compensation ar i ses, and all persons w i th whom such person would be considered a single employer under Code Section 414(b) (employees of controlled group of corporations), and all persons with whom such person would be considered a single employer under Code Section 414(c) (employees of partnerships, proprietorships, etc., under common control).
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1.25 Specified Employee
Provided that such term shall be interpreted within the meaning of regulations promulgated under Code Section 409A, a "Specified Employee" shall mean a participant who is considered a key employee on the Identification Date, as defined in Code Section 416(i) without regard to section 416(i)(5) and such other requirements imposed under Code Section 409A(a)(2)(B)(i) and regulations thereunder for the period beginning April 1 of the year subsequent to the Identification Date and ending March 31 of the following year. The Identification Date for this Plan is December 31 of each year. Notwithstanding anything to the contrary, a Participant is not a Specified Employee unless any stock of the Service Recipient is publicly traded on an established securities market or otherwise.
1.26 Trust
The agreement between the Employer and the Trustee under which the assets of the Plan are held, administered and managed, which shall conform to the terms of Rev. Proc. 92-64.
1.27 Trustee
Individual or entity, or such other successor that shall become trustee pursuant to the terms of the Plan.
1.28 Years of Service
A Participant's "Years of Service" for vesting purposes shall be measured as a twelve (12) month period commencing with the date such Employer Discretionary Contribution is credited or deemed credited to the Plan and anniversaries thereof. With respect to a Plan Year, the Employer Discretionary Contribution, if any, shall be deemed made on the last day of the Plan Year.
Article 2 Participation
2.1 Commencement of Participation
Each Eligible Employee shall become a Participant at the earlier of the date on which his or her Deferral Election first becomes effective or the date on which an Employer Discretionary Contribution is first credited to his or her Account.
2.2 Loss of Eligible Employee Status
A Participant who is no longer an Eligible Employee shall not be permitted to submit a Deferral Election and all Deferrals for such Participant shall cease as of the end of the year in which such Participant is determined to no longer be an E li gible Employee. Amounts credited to the Account of a Participant who is no longer an Eligible Employee shall continue to be held pursuant to the terms of the Plan and shall be distributed as provided in Article 6.
Article 3 Contributions
3.1 Deferral Elections - General
A Participant's Deferral Election for a Plan Year, is irrevocable for that applicable Plan Year; provided, however that a cessation of Deferrals shall be allowed if required by the terms of the Employer's qualified 401 (k) plan in order for the Participant to obtain a hardship withdrawal from the 401(k) plan, if the Participant is determined to be disabled within the meaning of Section 3.5 hereof, or if required under Section 6.9 (Unforeseeable Emergency) of this Plan. Such amounts deferred under the Plan shall not be made available to such Participant, except as provided in Article 6, and shall reduce such Participant's Compensation from the Employer in accordance with the provisions of the applicable Deferral Election; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Employer as provided in Article 8. The Deferral Election, in addition to the requirements set forth below, must designate: (i) the amount of Compensation to be deferred, (ii) the time of the distribution, and (iii) the form of the distribution.
3.2 Time of Election
A Deferral Election shall be void if it is not made in a timely manner as follows:
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(a)A Deferral Election with respect to any Compensation must be submitted to the Administrator before the beginning of the calendar year during which the amount to be deferred will be earned. Except to the extent set forth in this Plan, as of December 31 of the calendar year ending before the year for which said Deferral Election is to be effective, such Deferral Election is irrevocable for the immediately following calendar year.
(b)Notwithstanding the foregoing and in the discretion of the Employer, in a year in which an Employee is first eligible to participate, and provided that such Employee is not eligible to participate in any other similar account balance arrangement subject to Code Section 409A, such Deferral Election shall be submitted within thirty (30) days after the date on which an Employee is first eligib l e to participate, and such Deferral Election shall apply to Compensation to be earned during the remainder of the calendar year after such election is made.
3.3 Distribution Elections
At the time a Participant makes a Deferral Election, he or she must also elect the time and form of the distribution by establishing one or more In-Service sub-account(s) or Separation from Service sub-account(s) as provided in Sections 5.1 and 6.1. If the Participant fails to properly designate the time and form of a distribution, the Participant's Account shall be designated as a Separation from Service sub-account and shall be paid in a lump sum.
3.4 Additional Requirements
The Deferral Election, subject to the limitations set forth in Sections 3.1 and 3.2 hereof, shall comply with the following additional requirements, or as otherwise required by the Administrator in its sole d i scretion:
(a)Deferrals may be made in whole percentages or stated dollar amounts as determined by the Administrator.
(b)The maximum amount that may be deferred each Plan Year is twenty-five percent (25%) of the Participant's Salary and one-hundred percent (100%) of the Participant's Bonus, net of applicable taxes.
(c)The distribution year for an In-Service sub-account must be at least five (5) Plan Years after the Plan Year in which such Deferral is credited to an I n-Service sub-account. The initial contribution year will be considered as the first year.
3.5 Cancellation of Deferral Election due to Disability
Notwithstanding anything to the contrary, if a Participant incurs a disability as defined in this Section 3.5, said Participant may file an election to stop Deferrals as of the date the election is received by the Administrator, provided that such cancellation occurs by the later of the end of the calendar year or the 15th day of the third month following the date the Participant i ncurs a disability. Disability for purposes of this Section 3.5 on l y means that a Participant incurs a medically determinable physical or mental impairment resulting in the Participant's inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of not less than six months, as determined by the Administrator in its sole discretion.
3.6 Employer Discretionary Contribution
The Employer may make Employer Discretionary Contributions to some or all Participants' Accounts in such amount and in such manner as may be determined by the Employer. Such Employer Discretionary Cont r ibutions, at the option of the Employer, shall be credited to such sub-account as may be elected by the Participant in accordance with Sect i ons 3.1 and 5.1 and procedures established by the Administrator. In the event no such election is made by the Participant or if Emp l oyer des i res to direct Employer Discretionary Contributions to a particular Participant sub-account, the Employer, in its sole discretion, may determine which sub-account will be credited with such Employer Discretionary Contributions. In the event the Employer does not designate which Participant sub-account shall be credited, such Employer Discretionary Contributions shall be credited to a lump-sum Separation from Service sub-account.
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Article 4 Vesting
4.1 Vesting of Deferrals
A Participant shall be one-hundred percent (100%) vested in his or her Account attributable to Deferrals and any earning or losses on the investment of such Deferrals.
4.2 Vesting of Employer Discretionary Contributions
A Participant shall have a vested right to the portion of his or her Account attributable to Employer Discretionary Contribution(s) and any earnings or losses on the investment of such Employer Discretionary Contribution(s) according to such vesting schedule as the Employer shall determ i ne at the time an Employer Discretionary Contribution is made. I n the event the Employer fails to provide a vesting schedu l e for a particular Employer Discretionary Contribution, such Employer Discretionary Contribution shall fully vest in accordance with the following schedule:
Completed Vested
Years of Service Percentage

1 but fewer than 2 | 20%
2 but fewer than 3 | 40%
3 but fewer than 4 | 60%
4 but fewer than 5 | 80%
5 or more years | 100%

If the Employer desires to have a different vesting schedule for a particular Employer Discret i onary Contribution, the Employer shall memorialize such vesting schedule in an addendum to the Plan document, specifying the vesting schedule and the particular Plan Year and/or Participants to which such vest i ng schedule applies.
4.3 Vesting due to Certain Events
(a)A Part i cipant w h o incurs a Disability shall be fu ll y vested in the amounts credited to his or her Account as of the date of Disabil i ty.
(b)Upon a Participant's death, the Participant shall be fully vested in the amounts credited to his or her Account.
(c)A Participant who incurs Retirement shall be fully vested in the amounts credited to his or her Account as of the date of Retirement.
(d)Upon a Change-in-Control, all Participants shall be fully vested in the amounts credited to their Accounts as of the date of the Change-in-Control.
4.4 Amounts Not Vested
Any amounts credited to a Participant's Account that are not vested at the time of a distribution event shall be forfeited.
4.5 Forfeitures
At the discretion of the Employer, any forfeitures from a Participant's Account (i) may continue to be held in the Trust, may be separately invested, and may be used to reduce succeeding Deferrals and any Employer Contributions, or (ii) may be returned to the Employer as soon as administratively feasible.
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Article 5 Accounts
5.1 Accounts
The Administrator shall establish and maintain a bookkeeping account in the name of each Participant. The Administrator shall also establish sub-accounts as provided in subsection (a) and (b), below, as elected by the Participant pursuant to Article 3.
(a)A Participant may establish one or more Separation from Service sub-account by designating as such on the Participant's Deferral Election. Each Participant's Separation from Service sub- account shall be credited with Deferrals (as specified in the Participant's Deferral Election), any Employer Discretionary Contributions, and the Participant's allocable share of any earnings or losses on the foregoing. Each Participant's Separation from Service sub-account shall be reduced by any distributions made plus any federal and state tax withholding, and any social security withholding tax as may be required by law.
(b)A Participant may elect to establish one or more In-Service sub-account by designating as such in the Participant's Deferral Election the year in which payment shall be made. Each Participant's In- Service sub-account shall be credited with Deferrals (as specified in the Participant's Deferral Election), any Employer Discretionary Contributions, and the Participant's allocable share of any earnings or losses on the foregoing. Each Participant's In-Service sub-account shall be reduced by any distributions made plus any federal and state tax withholding and any social security withholding tax as may be required by law.
5.2 Investments, Gains and Losses
(a)A Participant may direct that his or her Separation from Service sub-accounts and or In- Service sub-accounts established pursuant to Section 5.1 may be valued as if they were invested in one or more Investment Funds as selected by the Employer in multiples of one percent (1 %). The Employer may from time to time, at the discretion of the Administrator, change the Investment Funds for purposes of this Plan.
(b)The Administrator shall adjust the amounts credited to each Participant's Account to reflect Deferrals, any Employer Discretionary Contributions, investment experience, distributions and any other appropriate adjustments. Such adjustments shall be made as frequently as is administratively feasible.
(c)A Participant may change his or her selection of Investment Funds with respect to his or her Account or sub-accounts by filing a new election in accordance with procedures established by the Administrator. An election shall be effective as soon as administratively feasible following the date the change is submitted on a form prescribed by the Administrator.
(d)Notwithstanding the Participant's ability to designate the Investment Fund in which his or her deferred Compensation shall be deemed invested, the Employer shall have no obligation to invest any funds in accordance with the Participant's election. Participants' Accounts shall merely be bookkeeping entries on the Employer's books, and no Participant shall obtain any property right or interest in any Investment Fund.
Article 6 Distributions
6.1 Distribution Election
Each Participant shall designate in his or her Deferral Election the form and timing of his or her distribution by ind i cating the type of sub-account as described under Section 5.1, and by designating the form in which payments shall be made from the choices available under Section 6.2 and 6.3 hereof. Notwithstanding anything to the contrary contained herein provided, no acceleration of the time or schedule of payments under the Plan shall occur except as permitted under both this Plan and Code Section 409A.
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6.2 Distributions upon an In-Service Account Triggering Date
In-Service sub-account distributions of all vested amounts shall begin as soon as administratively feasible but no later than sixty (60) days following June 1 of the calendar year designated by the Participant on a properly submitted Deferral Election, and are payable in e i ther a lump-sum payment or substantially equal annual installments, as described in Section 6.4 below, over a period of up to five (5) years as elected by the Participant in his or her Deferral Election. If the Participant fails to designate the form of the distribution, the sub-account shall be paid in a lump-sum payment.
6.3 Distributions upon a Separation from Service
If the Participant has a Separation from Service, the vested amount of the Participant's Separation from Service sub-account shall be distributed or commence to be distributed as soon as administratively feasible but no later than sixty (60) days following the Participant's Separation from Service, subject to Section 6.10 (Distributions to Specified Employees). Distribution shall be made either in a lump-sum payment or in substantially equal annual installments, as defined in Section 6.4 below, over a period of up to ten (10) years as elected by the Participant. If the Participant fails to designate the form of the distribution, the sub-account shall be paid in a lump-sum payment. If a Participant has any In-Service sub-accounts at the time of his or her Separation from Service, said sub-accounts shall be distributed in a lump sum as soon as administratively feasible but no later than sixty (60) days following Participant's Separation from Service, subject to Section 6.10 (Distributions to Specified Employees).
6.4 Substantially Equal Annual Installments
(a)The amount of the substantially equal payments of all vested amounts shall be determined by multiplying the Participant's Account or sub-account by a fraction, the denominator of which in the first year of payment equals the number of years over which benefits are to be paid, and the numerator of which is one (1 ). The amounts of the payments for each succeeding year shall be determined by multiplying the Participant's Account or sub-account as of the applicab l e anniversary of the payout by a fraction, the denominator of which equals the number of remaining years over which benefits are to be paid, and the numerator of which is one (1 ). Installment payments made pursuant to this Section 6.4 shall be made as soon as administratively feasible but no later than sixty (60) days following the anniversary of the distribution event, subject to Section 6.10 (Distributions to Specified Employees).
(b)For purposes of the Plan pursuant to Code Section 409A and regulations thereunder, a series of annual installments from a particular subaccount shall be considered a single payment.
6.5 Distributions due to Disability
Upon a Participant's Disability, all vested amounts credited to his or her Account shall be paid to the Participant in a lump sum as soon as administratively feasible but no later than sixty (60) days following the date of Disability.
6.6 Distributions upon Death
Upon the death of a Participant, all vested amounts credited to his or her Account shall be paid, as soon as administratively feasible but no later than sixty (60) days following Participant's date of death, to his or her beneficiary or beneficiaries, as determined under Article 7 hereof, in a lump sum.
6.7 Changes to Distribution Elections
A Participant will be permitted to elect to change the form or timing of the distribution of the balance of one or more sub-accounts within his or her Account to the extent permitted and in accordance with the requirements of Code Section 409A(a)(4)(C), including the requirement that (i) a redeferral election may not take effect until at least twelve (12) months after such election is filed with the Employer, (ii) an e l ection to further defer a distribution (other than a distributio n upon death, Disability or an unforeseeable emergency) must result in the first distribut i on subject to the election being made at least five (5) years after the previously elected date of distribution, and (iii) any redeferral election affecting a distribution at a fixed date must be filed with the Employer at least twelve (12) months before the first scheduled payment under the previous fixed date distribution election.
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6.8 Acceleration or Delay in Payments
To the extent permitted by Code Section 409A, and notwithstanding any provision of the Plan to the contrary, the Administrator, in its sole discretion, may elect to (i) accelerate the time or form of payment of all vested amounts of a benefit owed to a Participant hereunder in accordance with the terms and subject to the conditions of Treasury Regulations Section 1.409A-3(j)(4), or (ii) delay the time of payment of a benefit owed to a Participant hereunder in accordance with the terms and subject to the conditions of Treasury Regulations Section 1.409A-2(b)(7). By way of example, and at the sole discretion of the Administrator, if a Participant's entire Account balance is less than the applicable Code Section 402(g) annual limit, the Employer may distribute the Participant's Account in a lump sum provided that the distribution results in the termination of the participant's entire interest in the Plan, subject to the plan aggregation rules of Code Section 409A and regulations thereunder. By way of example, the Administrator may permit such acceleration of the time or schedule of a payment of all vested amounts under the arrangement to an individual other than a Participant as may be necessary to fulfill a domestic relations order (as defined in Code Section 414(p)(1)(B)).
6.9 Unforeseeable Emergency
The Administrator may permit an early distribut i on of part or all of any deferred amounts; provided, h owever, that such distribution shall be made only if the Administrator, in its sole discretion, determines that the Participant, or the Participant's beneficiary, has exper i enced an Unforeseeable Emergency. An Unforeseeable Emergency is defined as a severe financial hardship resulting from an illness or accident of the Participant, the Participant's spouse, the Participant's beneficiary, or a dependent (as defined in Code Section 152(a)) of the Participant, loss of the Participant's property due to casualty or other similar extraord i nary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. I f an Unforeseeable Emergency is determined to exist, a distribution may not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to wh i ch such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). Upon a distribution to a Participant under this Section 6.10, the Participant's Deferrals shall cease and no further Deferrals shall be made for such Participant for the remainder of the Plan Year.
6.10 Distributions to Specified Employee
Notwithstanding anything herein to the contrary, if any Participant is a Specified Employee upon a Separation from Serv i ce for any reason other than death, distributions of all vested amounts to such Participant shall commence no earlier than six months following Separation from Service ( or, i f earlier, the date of death of the Participant) and no later than eight months following Separation from Service. If distributions are to be made in annual installments, the second installment and all those thereafter will be made on the applicab l e anniversaries of the date on which the Participant's initial installment was payab l e.
6.11 Minimum Distribution
Notwithstanding any provision to the contrary, if the vested balance of a Partic i pant's Account or sub-account at the time of a distribution event is $10,000 or less, then the Participant shall be paid his or her Account or sub-account as a single l ump sum.
6.12 Form of Payment
All distributions shall be made in the form of cash.
6.13 Separation from Service for Cause
Notwithstanding anything to the contrary contained herein, in the event the Participant has an involuntary Separat i on from Service for Cause, Participant shall only receive the return of his or her Deferrals i ncluding the Participant's allocable share of any earnings or l osses credited on those Deferrals pursuant to Section 5.2 and subject to Section 6.01 (Distributions to Specified Employees) above. Upon a Participant's Separat i on from Service for Cause, all amounts credited to Participant's Account amounts relating to Employer Discretionary Contribut i ons, including the Participant's allocable share of any earnings or losses credited on the forego i ng pursuant to Section 5.2, above, shall be forfeited back to the Employer.
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Article 7 Beneficiaries
7.1 Beneficiaries
Each Participant may from time to time des i gnate one or more pe r sons (who may be any one or more members of such person's family or other persons, administrators, trusts, foundations or other entities) as his or her beneficiary under the Plan. Such designation shall be made in a form prescribed by the Administrator. Each Participant may at any time and from time to time, change any previous beneficiary designat i on, without notice to or consent of any previously des i gnated beneficiary, by amending his or her previous designation in a form prescribed by the Administrator. If the beneficiary does not survive the Participant (or is otherwise unava i lab l e to receive payment) or if no beneficiary is validly designated, then the amounts payable under this Plan shall be paid to the Participant's surviv i ng spouse, or if no surv i ving spouse to the Participant's estate. If more than one person is the beneficiary of a deceased Participant, each such person shall receive a pro rata share of any death benefit payable unless otherwise designated in the applicable form. If a beneficiary who is receiving benefits dies, all benefits that were payable to such beneficiary shall then be payable to the estate of that beneficiary.
7.2 Lost Beneficiary
All Participants and beneficiaries shall have the obligation to keep the Administrator informed of their current address until such time as all benefits due have been paid. I f a Participant or benefic i ary cannot be located by the Administrator exerc i sing due diligence, then, i n its sole discretion, the Admin i strator may presume that the Participant or beneficiary is deceased for purposes of the Plan and all unpaid amounts (net of due diligence expenses) owed to the Participant or beneficiary shall be paid accordingly or, if a beneficiary cannot be so located, then such amounts may be forfeited. Any such presumption of death shall be final, conclusive and binding on all parties.
Article 8 Funding
8.1 Prohibition against Funding
Should any investment be acquired in connection with the liabilities assumed under this Plan, it is expressly understood and agreed that the Participants and beneficiaries shall not have any right with respect to, or claim against, such assets nor shall any such purchase be construed to create a trust of any k i nd or a fi duciary relationship between the Employer and the Participants, their beneficiaries or any other person. Any such assets shall be and remain a part of the general, unpledged, unrestricted assets of the Employer, subject to the claims of its general creditors. It is the express intent i on of the parties hereto that this arrangement shall be unfunded fo r tax purposes and for purposes of Title I of the ERISA. Each Participant and beneficiary shall be r equired to look to the provisions of this Plan and to the Employer itself for enforcement of any and all benefits due under this Plan, and to the extent any such person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer. The Employer or the Trust shall be designated the owner and beneficiary of any investment acquired in connection with its obligation under this Plan.
8.2 Deposits in Trust
Notwithstanding Section 8.1, or any other provision of this Plan to the contrary, the Employer may deposit into the Trust any amounts it deems appropriate to pay the benefits under this Plan. The amounts so deposited may include all contributions made pursuant to a Deferral Election by a Participant and any Employer Discretionary Contributions.
8.3 Withholding of Employee Contributions
The Administrator is authorized to make any and all necessary arrangements with the Employer in order to withhold the Participant's Deferrals under Sect i on 3.1 hereof from his or her Compensat i on. The Administrator shall determine the amount and timing of such withholding.
Article 9 Claims Administration
If the Participant, Beneficiary or his or her representative is denied all or a portion of an expected benefit for any reason and the Participant, Beneficiary or his or her representative desires to dispute the decision of the Administrator, he or she must file a written notification of his or her claim with the Administrator. The Plan,
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being established as a "top-hat plan" within the meaning of DOL Reg. $2520.104- 23, requires all claims for benefits hereunder be made pursuant to those claims procedure requirements under DOL Reg. §2560.503-1, as amended from time to time. Participant, Beneficiary or his or her representative may file with the Administrator a written claim for benefits, if the Participant, beneficiary or his or her representative disputes the Administrator's determination regarding a benefit. The Administrator under this Article 9 will provide a separate written document to Participant, Beneficiary or his or her representative explaining the Plan's claims procedures and which by this reference is incorporated into the Plan. Such documentation shall be written in manner that is in a culturally and linguistically appropriate manner to the party receiving the documentation.
Article 10 General Provisions
10.1 Administrator
(a)The Administrator is expressly empowered to limit the amount of Compensation that may be deferred; to deposit amounts into the Trust in accordance with Section 8.2 hereof; to interpret the Plan, and to determine all questions arising in the administration, interpretation and application of the Plan; to employ actuaries, accountants, counsel, and other persons it deems necessary in connection with the administration of the Plan; to request any information from the Employer it deems necessary to determine whether the Employer would be considered insolvent or subject to a proceeding in bankruptcy; and to take all other necessary and proper actions to fulfill its duties as Administrator.
(b)The Administrator shall not be liable for any actions by it hereunder, unless due to its own negligence, willful misconduct or lack of good faith.
(c)The Administrator shall be indemnified and saved harmless by the Employer from and against all personal liability to which it may be subject by reason of any act done or omitted to be done in its official capacity as Administrator in good faith in the administration of the Plan and Trust, including all expenses reasonably incurred in its defense in the event the Employer fails to provide such defense upon the request of the Administrator. The Administrator is relieved of all responsibility in connection with its duties hereunder to the fullest extent permitted by law, short of breach of duty to the beneficiaries.
10.2 No Assignment
Benefits or payments under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant's beneficiary, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish the same shall not be valid, nor shall any such benefit or payment be in any way liable for or subject to the debts, contracts, liabilities, engagement or torts of any Participant or beneficiary, or any other person entitled to such benefit or payment pursuant to the terms of this Plan, except to such extent as may be required by law. If any Participant or beneficiary or any other person entitled to a benefit or payment pursuant to the terms of this Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish any benefit or payment under this Plan, in whole or in part, or if any attempt is made to subject any such benefit or payment, in whole or in part, to the debts, contracts, liabilities, engagements or torts of the Participant or beneficiary or any other person entitled to any such benefit or payment pursuant to the terms of this Plan, then such benefit or payment, in the discretion of the Administrator, shall cease and terminate with respect to such Participant or beneficiary, or any other such person.
10.3 No Employment Rights
Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained in the employ of the Employer, or give a Participant or beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to discharge to the same extent as if this Plan had never been adopted.
10.4 Incompetence
If the Administrator determines that any person to whom a benefit is payable under this Plan is incompetent by reason of physical or mental disability, the Administrator shall have the power to cause the payments becoming due to such person to be made to another for his or her benefit without responsibility of the Administrator or the
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Employer to see to the application of such payments. Any payment made pursuant to such power shall, as to such payment, operate as a complete d i scharge of the Employer, the Administrator and the Trustee.
10.5 Identity
If, at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or the amount or time of such payment, the Administrator shall be ent i tled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained. The Administrato r shall also be entitled to pay such sum into court in accordance with the appropriate rules of law. Any expenses incurred by the Employer, Administrator, and Trust incident to such proceeding or litigation shall be charged against the Account of the affected Participant.
10.6 Other Benefits
The benefits of each Participant or beneficiary hereunder shall be in addition to any benefits paid or payable to or on account of the Participant or beneficiary under any other pension, disabil i ty, annuity or retirement plan or policy whatsoever.
10.7 Expenses
All expenses incurred in the administration of the Plan, whether incurred by the Employer or the Plan, shall be paid by the Employer.
10.8 Insolvency
Should the Employer be considered insolvent (as defined by the Trust), the Employer, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan and the Trustee. Upon receipt of such notice, the Administrator or Trustee shall cease to make any payments to Participants who were Employees of the Employer or their beneficiaries and shall hold any and all assets attributable to the Employer for the benefit of the general creditors of the Employer.
10.9 Amendment or Modification
The Employer may, at any time, in its sole discretion, amend or modify the Plan in whole or in part, except that no such amendment or modification shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts, and provided that such amendment or modification complies with Code Section 409A and related regulations thereunder.
10.10 Plan Suspension
The Employer further reserves the right to suspend the Plan in whole or in part, except that no such suspension shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts, and provided that the distribution of the vested Participant Accounts shall not be accelerated but shall be paid at such time and in such manner as determined under the terms of the Plan i mmediately prior to suspension as if the Plan had not been suspended.
10.11 Plan Termination
The Employer further reserves the right to terminate the Plan in whole or in part, in the following manner, except that no such termination shall have any retroactive effect to reduce any amounts allocated to a Participant's Accounts, and provided that such termination complies with Code Section 409A and related regulations thereunder:
(a)The Employer, in its discretion, may terminate the Plan and make the distribution provided below provided that:
(i)the term i nation does not occur proximate to a downturn in the financial health of the Employer and its subsidiaries and its affiliates;
(ii)the Employer terminates all other arrangements that would be aggregated with the Plan as a single plan under Code Section 409A if the same Participant had deferrals of compensation under all of the other arrangements;
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(iii)no payments in liquidation of the Plan are made within 12 months after the date the Employer takes all necessary action to irrevocably terminate the Plan, other than payments that would be payable under the terms of the Plan if action to terminate the Plan had not occurred;
(iv)all payments are made within 24 months after the date of the Employer takes all necessary action to irrevocable terminate the Plan; and
(v)neither the Employer nor any subsidiary or affiliate adopts a new plan that would be aggregated with any terminated plan or arrangement under the definition of what constitutes a plan for purposes of Code Section 409A of the same Participant participated in both arrangements, at any time within 3 years following the date the Employer takes all necessary action to irrevocable terminate the Plan.
Upon a Plan termination, no further Participant Deferrals shall be made, and no further Employer Discretionary Contributions shall be made after the taxable year in which the Plan termination occurs. The Employer shall be responsible to pay any benefit attributable to vested amounts credited to the Participant's Account as soon as practicable after distributions are permissible under Code Section 409A (following any final adjustments to such Accounts in accordance with Article Ill hereof).
(b)The Employer in its discretion may terminate and liquidate the Plan and make the payments provided below within 12 months after a corporate dissolution provided that the value of the Participants' vested benefits is included in the Participants' gross incomes in the latest of the following years (or, if earlier, the year in which the amount is actually or constructively received):
(i)the calendar year in which the Plan termination occurs;
(ii)the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or
(iii)the first calendar year in which the payment is administratively practicable.
Upon a Plan termination following a corporate dissolution, no further Elective Deferrals or Employer Discretionary Contributions shall be made, and the Employer shall be responsible to pay any benefit attributable to vested amounts credited to the Participant's Account as of the effective date of termination (following any final adjustments to such Accounts).
10.12 Plan Termination due to a Change-in-Control
In the event of a Change-in-Control, the Employer or its successor may terminate the Plan within 30 days preceding or the 12 months following a Change-in-Control Event, the Employer or its successor takes irrevocable action to terminate the Plan, the Plan will be terminated and liquidated with respect to the Participants of each corporation that experienced the Change-in-Control. The Plan will be terminated under this Section 10.12 only if all other arrangements sponsored by the Employer experiencing the Change-in- Control that would be aggregated with the Plan as a single plan under Code Section 409A are also terminated, so all Participants under such aggregated arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within 12 months after the date the Employer takes all necessary action to terminate the Plan and the other arrangement. For purposes of this Section 10.12, when the Change of Control results from an asset purchase transaction, the applicable Employer with the discretion to terminate the Plan and the other arrangements is the Plan Sponsor that is primarily liable immediately after the transaction for the payment of deferred compensation. Upon a Plan termination following a Change-in-Control, no further Participant Deferrals or Employer Discretionary Contributions shall be made, and the Employer shall be responsible to pay any benefit attributable to vested amounts credited to the Participant's Account as soon as practicable following date on which the Employer irrevocably takes all necessary action to terminate the Plan (following any final adjustments to such Accounts), but not later than 12 months following such date.
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10.13 Construction
All questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole and final discretion, whose decision shall be final, binding and conclusive upon all persons.
10.14 Governing Law
This Plan shall be governed by, construed and administered in accordance with the applicable provisions of ERISA, Code Section 409A, and any other applicable federal law, provided, however, that to the extent not preempted by federal law this Plan shall be governed by, construed and administered under the laws of the State of New York, other than its laws respecting choice of law.
10.15 Severability
If any provision of this Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of this Plan and this Plan shall be construed and enforced as if such provision had not been included therein. If the inclusion of any Employee (or Employees) as a Participant under this Plan would cause the Plan to fail to comply with the requirements of sections 201(2), 301(a)(3) and 401 (a)(1) of ERISA, then the Plan shall be severed with respect to such Employee or Employees, who shall be considered to be participating in a separate arrangement.
10.16 Headings
The Article headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of this Plan nor in any way shall they affect this Plan or the construction of any provision thereof.
10.17 Terms
Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.
10.18 Code Section 409A Fail Safe Provision
If any provision of this Plan violates Code Section 409A, the regulations promulgated thereunder, regulatory interpretations, announcements or mandatory judicial precedent construing Code Section 409A (collectively "Applicable Law"), then such provision shall be void and have no effect. At all times, this Plan shall be interpreted in such manner that it complies with Applicable Law.
10.19 No Guarantee of Tax Consequences
While the Plan is intended to provide tax deferral for Participants, the Plan is not a guarantee that the intended tax deferral will be achieved. Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with this Plan (including any taxes arising under Section 409A of the Code). Neither the Employer nor any of its directors, officers or employees shall have any obligation to indemnify or otherwise hold any Participant harmless from any such taxes.
10.20 Limitation on Actions
Any Participant or Beneficiary who disagrees with a denial of his appealed claim under Article 9 of this Plan must file any complaint in a federal District Court to dispute such determination (a) within three (3) years of the earlier of the date on which such claim for benefits first accrued or arose under the terms of the Plan, or (b) within one (1) year after the such claim was denied upon appeal, or deemed denied under Article 9 hereof.
10.21 Right of Setoff
The Employer may, to the extent permitted by applicable law, deduct from and setoff against any amounts payable to a Participant from this Plan such amounts as may be owed by a Participant to the Employer, although the Participant shall remain liable for any part of the Participant's payment obligation not satisfied through such deduction and setoff; provided, however, that this setoff may occur only at the date on which the amount would
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otherwise be distributed to the Participant as required by Code Section 409A. By electing to participate in the Plan and deferring compensation hereunder, the Participant agrees to any deduction or setoff under this Section 10.21, which is allowed by law.
10.22 Receipt and Release
Any payment to any Participant or Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Employer, the Administrator and the Trustee under the Plan, and the Administrator may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. If any Participant or Beneficiary is determined by the Administrator to be incompetent by reason of physical or mental disability (including not being the age of majority) to give a valid receipt and release, the Administrator may cause payment or payments becoming due to such person to be made to a legal guardian, trustee, or other proper representative of the Participant or Beneficiary without responsibility on the part of the Administrator, the Employer or the Trustee to follow the application of such funds.
10.23 Furnishing Information
A Participant or Beneficiary will cooperate with the Administrator or any representative thereof by furnishing any and all information requested by the Administrator and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Administrator may deem necessary.
10.24 Insurance
The Employer, on their own behalf or on behalf of the Trustee of the Trust, and, in their sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as they may choose. The Employer or the Trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such policy or policies, and at the request of the Employer, the Participant shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to which the Employer have applied for insurance.
IN WITNESS WHEREOF, Sterling National Bank has caused this instrument to be executed by its duly authorized officer, effective as of this 06 day of January, 2019.

Sterling National Bank
By: |  | /s/ Alexis Brown
|  | Alexis Brown
Title: |  | Director, Compensation

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