Citizens Community Federal Supplemental Executive Retirement Plan







         The purpose of the Plan is to provide supplemental retirement benefits to a select groupof employees who contribute materially to the continued growth, development and futurebusiness success of Citizens Community Federal. The Plan shall be unfunded for tax purposesand for purposes of Title I of ERISA.


         For purposes of the Plan, unless otherwise clearly apparent from the context, thefollowing phrases or terms shall have the following indicated meanings:

“Annual Benefit” shall mean with respect to any Participant, an annual benefit equal to thepercent of the Participant’s Final Average Compensation set forth in a Participant’s PlanAgreement, times the number of the Participant’s Years of Credited Service set forth in aParticipant’s Plan Agreement, calculated through the last day of the month in which theParticipant experiences a Termination of Employment. A Participant’s Annual Benefit shall notexceed the maximum Annual Benefit set forth in his Plan Agreement.

“Bank” shall mean Citizens Community Federal, a federally chartered savings bank, and anysuccessor to all or substantially all of the assets or business of the Bank.

“Beneficiary” shall mean one or more persons, estates or other entities, designated in accordancewith Article 9, that are entitled to receive benefits under the Plan upon the death of a Participant.

“Beneficiary Designation Form” shall mean the form established from time to time by theCommittee that a Participant completes, signs and returns to the Bank or the Committee todesignate one or more Beneficiaries.

“Board” shall mean the board of directors of the Bank.

“Change in Control” shall mean the first to occur of any of the following events:

(a) An acquisition of control of the Bank within the meaning of the Home Owners’ LoanAct of 1933 and 12 C.F.R. Part 574.4(a) as in effect on the date hereof that is notsubject to rebuttal;


(b) Any event that would be required to be reported in response to Item 1 of the currentreport on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934 (the “Exchange Act”) if the Exchange Act wereapplicable to the Bank;

(c) Any “person” (as that term is used in Section 13 and 14(d)(2) of the Exchange Act)becomes the beneficial owner (as that term is used in Section 13(d) of the ExchangeAct), directly or indirectly, of 25% or more of the Bank’s outstanding securitiesentitled to vote in the election of directors;

(d) Individuals who are members of the Board on the date hereof (each the “IncumbentBoard“) cease for any reason to constitute at least a majority thereof, provided that anyperson becoming a member of the Board subsequent to the date hereof whose electionwas approved by a vote of at least three-quarters of the members comprising theIncumbent Board, or whose nomination for election by the Bank’s stockholders (ormembers in the case of the Bank in mutual form) was approved by the nominatingcommittee serving under the Incumbent Board shall be considered a member of theincumbent Board;

(e) The sale of all or substantially all of the assets of the Bank, excluding transfers toentities that are within a “controlled group of corporations” (as defined in Code Section1563) in which the Bank is the parent corporation; or

(f) A reorganization, merger, consolidation or similar transaction involving the Bank inwhich either the Bank is not the resulting entity or the Bank is the resulting entity butthe stockholders of such entity immediately prior to such transaction do not own atleast 60% of the voting securities of such entity immediately following the completionof such transaction.

The term “Change in Control” does not include (i) the formation of a mutual holdingcompany by the Bank; (ii) the reorganization of the Bank to a stock institution (whether or not inholding company form); (iii) an acquisition of securities by an employee benefit plan of theBank; or (iv) an acquisition of securities of the Bank (or its holding company) in considerationfor a contribution of capital to the Bank (or its holding company).

“Claimant” shall have the meaning set forth in Section 14.1.

“Code” shall mean the Internal Revenue Code 1986, as it may be amended from time to time.

“Committee” shall mean the committee described in Article12.

“Compensation” shall mean the annual cash compensation relating to services performed by aParticipant for the Bank during any calendar year, whether or not paid in such calendar year orincluded on the Federal Income Tax Form W-2 for such calendar year, excluding fringe benefits,stock options, other stock based compensation, relocation expenses, non-monetary awards, andautomobile and other allowances paid to a Participant for employment services rendered(whether or not such allowances are included in the Participant’s gross income). Compensationshall be calculated before reduction for compensation voluntarily deferred or contributed by theParticipant pursuant to all qualified or non-qualified plans of the Bank and shall be calculated toinclude amounts not otherwise included in the Participant’s gross income under Code Sections125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Bank; provided, however,that all such amounts will be included in compensation only to the extent that, had there been nosuch plan, the amount would have been payable in cash to the Participant.


“Employee” shall mean a person who is classified as an employee of the Bank.

“Equivalent Actuarial Value” shall mean, unless otherwise specified in the Plan Agreement, abenefit of equivalent value to another form of benefit, computed on the basis of an interest ratefactor of 7 percent per annum.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may beamended from time to time.

“Final Average Compensation” shall mean the amount determined by dividing by two theParticipant’s Compensation during the two Plan Years (whether or not consecutive) in the fivePlan Year period immediately prior to his Termination of Employment (or if Termination ofEmployment occurs during the month of December then including the Plan Year in whichTermination of Employment occurs) that results in the largest total.

“Monthly Benefit” shall mean one twelfth (1/12) of the Participant’s Annual Benefit.

“Normal Retirement Date” shall mean the later of (1) the date of the Participant’s Termination ofEmployment or (2) the Participant’s attainment of age sixty-five (65).

“Participant” shall mean any Employee (i) who is selected to participate in the Plan, (ii) whosigns a Plan Agreement and a Beneficiary Designation Form and (iii) whose signed PlanAgreement and Beneficiary Designation Form are accepted by the Bank or the Committee. Aspouse or former spouse of a Participant shall not be treated as a Participant in the Plan or havean Annual Benefit under the Plan, even if he or she has an interest in the Participant’s benefitsunder the Plan as a result of applicable law or property settlements resulting from legalseparation or divorce.

“Payout Period” shall mean the number of consecutive months set forth as the Payout Period in aParticipant’s Plan Agreement, commencing on the first day of the calendar month next followingthe Participant’s Normal Retirement Date, except as otherwise provided in Section 3.2(a).

“Plan” shall mean this Supplemental Executive Retirement Plan, which shall be evidenced bythis instrument and by each Plan Agreement, as they may be amended from time to time.


“Plan Agreement” shall mean a written agreement, as may be amended from time to time, whichis entered into by and between the Bank and a Participant. Should there be more than one PlanAgreement, the Plan Agreement bearing the latest date of acceptance by the Bank shall supersedeall previous Plan Agreements in their entirety and shall govern such entitlement. The terms ofany Plan Agreement may be different for any Participant, and any Plan Agreement may limit thebenefits otherwise provided under the Plan.

“Plan Year” shall mean a period beginning on January 1 of each calendar year and continuingthrough December 31 of such calendar year.

“Termination of Employment” shall mean the severing of employment with the Bank for anyreason.

“Trust” shall mean any trust established between the Bank and the trustee named therein toprovide benefits hereunder, as amended from time to time.

“Years of Credited Service” shall mean the total number of Plan Years (or fraction thereofdetermined on a months basis) taken into account under a Participant’s Plan Agreement forpurposes of calculating such Participant’s Annual Benefit.

Selection, Enrollment, Eligibility

2.1 Selection by Committee. Participation in the Plan shall be limited to a select group ofmanagement and highly compensated Employees, as determined by the Committee in itssole discretion from time to time. From that group, the Committee shall select, in its solediscretion, Employees to participate in the Plan.

2.2 Enrollment Requirements. As a condition to participation, each selected Employeeshall complete, execute and return to the Bank or the Committee a Plan Agreement and aBeneficiary Designation Form. In addition, the Committee shall establish from time totime such other enrollment requirements as it determines in its sole discretion arenecessary or appropriate.

2.3 Eligibility; Commencement of Participation. Provided an Employee selected toparticipate in the Plan has met all enrollment requirements set forth in the Plan andrequired by the Committee, including returning all required documents to the Bank or theCommittee, that Employee shall commence participation in the Plan on the date his PlanAgreement is executed by the Bank.

2.4 Termination of Participation. If the Committee determines in good faith that aParticipant no longer qualifies as a member of a select group of management or highlycompensated employees, as membership in such group is determined in accordance withSections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right,in its sole discretion, to (i) cease further benefit accruals hereunder and/or (ii)immediately distribute in a single lump sum the Equivalent Actuarial Value of theMonthly Benefits for the Payout Period, determined as if the Participant experienced aTermination of Employment, and terminate the Participant’s participation herein.



3.1 Benefits.Upon a Participant’s Normal Retirement Date, the Bank shall pay the Monthly Benefit to him during the Payout Period.

3.2 Death Benefits.

(a) If the Participant dies before having commenced receiving benefits under Section 3.1,the Monthly Benefit shall be paid to his Beneficiary for the Payout Period, commencingon the first day of the month following the date the Participant dies.

(b) If the Participant dies after he has commenced receiving benefits under Section 3.1,then the Bank shall pay to his Beneficiary the Monthly Benefit during the remainder ofthe Payout Period.

3.3 Acceleration of Benefits; Lump Sum Payments. The Committee may accelerate thepayment of a Participant’s Monthly Benefits at such time and in such manner as theCommittee may determine, in which case the accelerated benefit shall be equal to theEquivalent Actuarial Value of such unpaid Monthly Benefits.

3.4 Tax Withholding from Distributions. The Bank, or the trustee of the Trust, shallwithhold from any payments made to a Participant all federal, state and local income,employment and other taxes required to be withheld by the Bank, or the trustee of theTrust, in connection with such payments, in amounts and in a manner to be determined inthe sole discretion of the Bank and the trustee of the Trust.

3.5 Restriction on Benefits. Notwithstanding anything contained in this Article 3 to thecontrary, the obligations of the Bank to a Participant under the Plan are subject to theregulatory restrictions set forth in Article 7.

In-Service Withdrawals and Distributions

         No in-service withdrawals or distributions are permitted under the Plan.


         Unless otherwise provided in the Participant’s Plan Agreement, the Participant shall be fullyvested in his Monthly Benefit at all times.


Participant Contributions

         Participant contributions are neither permitted nor required under the Plan.

Regulatory Provisions

         The obligations of the Bank to a Participant under the Plan are subject to the followingrestrictions:

7.1 Temporary Suspension or Prohibition. If a Participant is suspended and/ortemporarily prohibited from participating in the conduct of the Bank’s affairs by anotice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act(“FDIA”), 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank’s obligations to such Participantunder the Plan shall be suspended as of the date of service of such notice, unless stayedby appropriate proceedings. If the charges in the notice are dismissed, the Bank may inits discretion  reinstate in whole or in part any of its obligations which were suspended.

7.2 Permanent Suspension or Prohibition.  If a Participant is removed and/orpermanently prohibited from participating in the conduct of the Bank’s affairs by anorder issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and(g)(1), all obligations of the Bank to such Participant under the Plan shall terminate asof the effective date of the order, but vested rights of the contracting parties shall not beaffected.

7.3 Default. If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), allobligations of the Bank to Participants and Beneficiaries under the Plan shall terminateas of the date of default, but this provision shall not affect any vested rights of thecontracting parties.

7.4 Termination by Regulators. All obligations of the Bank to Participants andBeneficiaries under the Plan shall be terminated, except to the extent determined thatcontinuation of the Plan is necessary for the continued operation of the Bank: (i) by theDirector of the Office of Thrift Supervision (the “OTS Director”) or his designee, at thetime the Federal Deposit Insurance Corporation enters into an agreement to provideassistance to or on behalf of the Bank under the authority contained in Section 13(c) ofthe FDIA; or (ii) by the OTS Director or his designee, at the time the OTS Director orhis designee approves a supervisory merger to resolve problems related to operation ofthe Bank or when the Bank is determined by the OTS Director to be in an unsafe orunsound condition. Any rights of the parties that have already vested, however, shallnot be affected by any such action.

7.5 Other Regulatory Restrictions on Payment. Notwithstanding anything herein to thecontrary, (1) any payments made by the Bank under the Plan shall be subject to andconditioned upon compliance with 12 U.S.C. § 1828(k) and any regulationspromulgated thereunder and (2) payments contemplated to be made by the Bank underthe Plan shall not be immediately payable to the extent such payments are barred orprohibited by an action or order issued by the Office of Thrift Supervision or theFederal Deposit Insurance Corporation.



8.1 Funding Generally. The Bank’s obligations under the Plan shall be an unfunded andunsecured promise to pay. The Bank shall not be obligated under any circumstances tofund in advance its obligations under the Plan, and when the benefit amount is paid itshall be expensed out of the Bank’s general assets.

8.2 Option to Fund Informally. Notwithstanding Section 8.1, the Bank may, at its soleoption, or by agreement, informally fund its obligations under the Plan in whole or inpart, provided, however, that in no event shall such informal funding be construed tocreate any trust fund, escrow account or other security for any Participant orBeneficiary with respect to the payment of any benefit under the Plan, other than aspermitted by Internal Revenue Service and Department of Labor rules and regulationsfor unfunded supplemental retirement plans.

Beneficiary Designation

9.1 Beneficiary. Each Participant shall have the right, at any time, to designate hisBeneficiary(ies) (both primary as well as contingent) to receive any benefits payableunder the Plan upon the death of the Participant. The Beneficiary designated under thePlan may be the same as or different from the Beneficiary designated under any otherplan of the Bank in which the Participant participates.

9.2 Beneficiary Designation: Change; Spousal Consent. A Participant shall designatehis Beneficiary by completing and signing the Beneficiary Designation Form andreturning it to the Bank or the Committee. A Participant shall have the right to changea Beneficiary by completing, signing and otherwise complying with the terms of theBeneficiary Designation Form and the Committee’s rules and procedures, as in effectfrom time to time. If the Participant names someone other than his spouse as aBeneficiary, a spousal consent, in the form designated by the Committee, must besigned by that Participant’s spouse and returned to the Bank or the Committee. Uponthe acceptance by the Bank or the Committee of a new Beneficiary Designation Form,all Beneficiary designations previously filed shall be canceled. The Committee shallbe entitled to rely on the last Beneficiary Designation Form filed by the Participant andaccepted by the Bank or the Committee prior to his death.

9.3 Acknowledgment. No designation or change in designation of a Beneficiary shall beeffective until received and acknowledged in writing by the Bank or the Committee.

9.4 No Beneficiary Designation. If a Participant fails to designate a Beneficiary asprovided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiariespredecease a Participant or die prior to complete distribution of the Participant’sbenefits, then a Participant’s designated Beneficiary shall be deemed to be his survivingspouse. If a Participant has no surviving spouse, the benefits remaining under the Planto be paid to a Beneficiary shall be payable to the Participant’s estate.


9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiaryto receive payments pursuant to the Plan, the Committee shall have the right,exercisable in its discretion, to cause the Bank to withhold such payments until thismatter is resolved to the Committee’s satisfaction.

9.6 Discharge of Obligations. The payment of benefits under the Plan to a Beneficiaryshall fully and completely discharge the Bank and the Committee from all furtherobligations under the Plan with respect to the Participant.

Leave of Absence

         If a Participant is authorized by the Bank for any reason to take a leave of absence fromemployment with the Bank, such Participant shall continue to be considered employed by theBank during such leave of absence (and therefore not to have experienced a Termination ofEmployment) and service during the leave of absence shall be credited for purposes ofdetermining the Participant’s Years of Credited Service.

Termination, Amendment or Modification

11.1 Termination. Although the Bank anticipates that it will continue as a sponsor of thePlan for an indefinite period of time, there is no guarantee that it will continue as asponsor of the Plan or will not terminate its sponsorship of the Plan at any time in thefuture. Accordingly, the Bank reserves the right to terminate its sponsorship of thePlan at any time with respect to any or all of its Participants, by action of the Board.Upon termination of sponsorship of the Plan by the Bank, the Annual and MonthlyBenefit of each affected Participant shall be determined as if he had experienced aTermination of Employment on the date Plan sponsorship is terminated. MonthlyBenefits shall be paid to affected Participants as follows: Prior to a Change in Control,the Bank shall have the right, in its sole discretion, to pay the Equivalent ActuarialValue of the Monthly Benefits for the Payout Period in a lump sum; otherwisepayments shall be made as provided for in Article 3. After a Change in Control, theBank shall be required to pay the Equivalent Actuarial Value of the Monthly Benefitsfor the Payout Period in a lump sum. If the Bank terminates its sponsorship of thePlan, the Plan shall terminate. The termination of sponsorship of the Plan or thetermination of the Plan shall not adversely affect any Participant or Beneficiary whohas become entitled to the payment of any benefits under the Plan as of the date oftermination; provided, however, that the Bank shall have the right to acceleratepayments without a premium or prepayment penalty by paying the Equivalent ActuarialValue of the remaining benefits in a lump sum.


11.2 Amendment. The Bank may, at any time, amend or modify the Plan in whole or inpart by action of the Board; provided, however, that no amendment or modificationshall be effective to decrease or restrict the value of a Participant’s Annual Benefitdetermined at the time the amendment or modification is made, calculated as if theParticipant had experienced a Termination of Employment as of the effective date ofthe amendment or modification. The amendment or modification of the Plan shall notaffect any Participant or Beneficiary who has become entitled to the payment ofbenefits under the Plan as of the date of the amendment or modification; provided,however, that the Bank shall have the right to accelerate payments without a premiumor prepayment penalty by paying the Equivalent Actuarial Value of the unpaid MonthlyBenefits in a lump sum.

11.3 Effect of Payment. The full payment of the applicable benefit under the Plan shallcompletely discharge all obligations to a Participant and his designated Beneficiariesunder the Plan.


12.1 Committee Duties. The Plan shall be administered by a Committee which shallconsist of the Board, or such committee as the Board shall appoint. Members of theCommittee may be Participants under the Plan. The Committee shall also have thediscretion and authority to (i) make, amend, interpret, and enforce all appropriate rulesand regulations for the administration of the Plan and (ii) decide or resolve any and allquestions including interpretations of the Plan, as may arise in connection with thePlan. Any individual on the Committee who is a Participant shall not vote or act onany matter relating solely to himself. When making a determination or calculation, theCommittee shall be entitled to rely on information furnished by a Participant or theBank.

12.2 Agents. In the administration of the Plan, the Committee may, from time to time,employ agents and delegate to them such administrative duties as it sees fit (includingacting through a duly appointed representative) and may from time to time consult withcounsel who may be counsel to the Bank.

12.3 Binding Effect of Decisions. The decision or action of the Committee with respect toany question arising out of or in connection with the administration, interpretation andapplication of the Plan and the rules and regulations promulgated hereunder shall befinal and conclusive and binding upon all persons having any interest in the Plan.

12.4 Indemnity of Committee. The Bank shall indemnify and hold harmless the membersof the Committee, and any person to whom the duties of the Committee may bedelegated, against any and all claims, losses, damages, expenses or liabilities arisingfrom any action or failure to act with respect to the Plan, except in the case of grossmisconduct by the Committee or any of its members or any such delegate.

12.5 Information. To enable the Committee to perform its functions, the Bank shallsupply full and timely information to the Committee as the Committee may reasonablyrequest.


Other Benefits and Agreements

         The benefits provided for a Participant or a Participant’s Beneficiary under the Plan are inaddition to any other benefits available to such Participant under any other plan or programsponsored by the Bank. The Plan shall supplement and shall not supersede, modify or amend anyother such plan or program except as may otherwise be expressly provided therein.

Claims Procedures

14.1 Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (suchParticipant or Beneficiary being referred to below as a “Claimant”) may deliver to theCommittee a written claim for a determination with respect to the amountsdistributable to such Claimant from the Plan. If such a claim relates to the contents ofa notice received by the Claimant, the claim must be made within 60 days after suchnotice was received by the Claimant. All other claims must be made within 180 daysof the date on which the event that caused the claim to arise occurred. The claim muststate with particularity the determination desired by the Claimant.

14.2 Notification of Decision. The Committee shall consider a Claimant’s claim within areasonable time, and shall notify the Claimant in writing:

(a) that the Claimant’s requested determination has been made, and that the claimhas been allowed in full; or

(b) that the Committee has reached a conclusion contrary, in whole or in part, tothe Claimant’s requested determination, and such notice must set forth in amanner calculated to be understood by the Claimant:

(i) the specific reason(s) for the denial of the claim, or any part of it;

(ii) specific reference(s) to pertinent provisions of the Plan upon whichsuch denial was based;

(iii) a description of any additional material or information necessary forthe Claimant to perfect the claim, and an explanation of why suchmaterial or information is necessary; and
(iv) an explanation of the claim review procedure set forth in Section 14.3below.


14.3 Review of a Denied Claim. With 60 days after receiving a notice from the Committeethat a claim has been denied, in whole or in part, a Claimant (or the Claimant’s dulyauthorized representative) may file with the Committee a written request for a reviewof the denial of the claim. Thereafter, but not later than 30 days after the reviewprocedure began, the Claimant (or the Claimant’s duly authorized representative):
(a) may review pertinent documents;

(b) may submit written comments or other documents; and/or

(c) may request a hearing, which the Committee, in its sole discretion, maygrant.

14.4 Decision on Review. The Committee shall render its decision on review promptly,and not later than 60 days after the filing of a written request for review of the denial,unless a hearing is held or other special circumstances require additional time, in whichcase the Committee’s decision must be rendered within 120 days after such date. Suchdecision must be written in a manner calculated to be understood by the Claimant, andit must contain:

(a) specific reasons for the decision;

(b) specific reference(s) to the pertinent Plan provisions upon which the decision wasbased; and

(c) such other matters as the Committee deems relevant.

14.5 Legal Action. A Claimant’s compliance with the foregoing provisions of this Article14 is a mandatory prerequisite to a Claimant’s right to commence any legal action withrespect to any claim for benefits under the Plan.


15.1 Establishment of the Trust. The Bank may establish the Trust upon such terms as itdeems appropriate.

15.2 Interrelationship of the Plan and the Trust. The provisions of the Plan including aParticipant’s Plan Agreement shall govern the rights of such Participant to receivedistributions pursuant to the Plan. The provisions of the Trust shall govern the rightsof the Bank, Participants and the creditors of the Bank to the assets transferred to theTrust. The Bank shall at all times remain liable to carry out its obligations under thePlan.

15.3 Investment of Trust Assets. The trustee of the Trust shall be authorized, upon writteninstructions received from the Committee or investment manager appointed by theCommittee, to invest and reinvest the assets of the Trust in accordance with theapplicable trust agreement.


15.4 Distributions From the Trust. The Bank’s obligations under the Plan may besatisfied with Trust assets distributed pursuant to the terms of the Trust and any suchdistribution shall reduce the Bank’s obligations under the Plan.


16.1 Status of Plan. The Plan is intended to be a plan that is not qualified within themeaning of Code Section 401(a) and that “is unfunded and is maintained by anemployer primarily for the purpose of providing deferred compensation for a selectgroup of management or highly compensated employees” within the meaning ofERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered andinterpreted to the extent possible in a manner consistent with that intent.

16.2 Unsecured General Creditor. Participants and their Beneficiaries, heirs, successorsand assigns shall have no legal or equitable rights, interests or claims in any propertyor assets of the Bank. For purposes of the payment of benefits under the Plan, any andall assets of the Bank shall be, and remain the general, unpledged and unrestrictedassets of such entity. The Bank’s obligation under the Plan shall be merely of anunfunded and unsecured promise to pay money in the future.

16.3 Liability. The Bank’s liability for the payment of benefits shall be defined only by thePlan including a Participant’s Plan Agreement. The Bank shall have no obligation toa Participant under the Plan except as expressly provided in the Plan including suchParticipant’s Plan Agreement.

16.4 Nonassignability. Neither a Participant nor any other person shall have any right tocommute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, ifany, payable hereunder, or any part thereof, which are, and all rights to which areexpressly declared to be, unassignable and non-transferable. No part of the amountspayable shall, prior to actual payment, be subject to seizure, attachment, garnishmentor sequestration for the payment of any debts, judgments, alimony or separatemaintenance allowed by a Participant or any other person, be transferable by operationof law in the event of a Participant’s or any other person’s bankruptcy or insolvency orbe transferable to a spouse as a result of a property settlement or otherwise.

16.5 Not a Contract of Employment. The terms and conditions of the Plan including aParticipant’s Plan Agreement shall not be deemed to constitute a contract ofemployment between the Bank and a Participant. Nothing in the Plan shall be deemedto give a Participant the right to be retained in the service of the Bank or to interferewith the right of the Bank to discipline or discharge such Participant at any time.


16.6 Furnishing Information. A Participant or his Beneficiary will cooperate with theCommittee by furnishing any and all information requested by the Committee andtake such other actions as may be requested in order to facilitate the administration ofthe Plan and the payments of benefits hereunder, including but not limited to, takingsuch physical examinations as the Committee may deem necessary.

16.7 Terms. Whenever any words are used herein in the masculine, they shall beconstrued as though they were in the feminine in all cases where they would so apply;and whenever any words are used herein in the singular or in the plural, they shall beconstrued as though they were used in the plural or the singular, as the case may be, inall cases where they would so apply.

16.8 Captions. The captions of the articles, sections and paragraphs of the Plan are forconvenience only and shall not control or affect the meaning or construction of any ofits provisions.

16.9 Governing Law. Subject to ERISA, the provisions of the Plan shall be construed andinterpreted according to the internal laws of the State of Wisconsin without regard toits conflicts of laws and principles.

16.10 Notice. Any notice or filing required or permitted to be given to the Committee underthe Plan shall be sufficient if in writing and hand-delivered, or sent by registered orcertified mail, to the address below.

Director of Human Resources
Citizens Community Federal
2174 Eastridge Center
Eau Claire, Wisconsin 54701

Such notice shall be deemed given as of the date of delivery or, if delivery is made bymail, as of the date shown on the postmark on the receipt for registration orcertification. Any notice or filing required or permitted to be given to a Participantunder the Plan shall be sufficient if in writing and hand-delivered, or sent by mail, tothe last known address of such Participant.

16.11 Successors. The provisions of the Plan shall bind and inure to the benefit of the Bankand its successors and assigns and the Participant and the Participant’s designatedBeneficiaries.

16.12 Spouse’s Interest. The interest in the benefits hereunder of a spouse of a Participantwho has predeceased the Participant shall automatically pass to the Participant andshall not be transferable by such spouse in any manner including, but not limited to,such spouse’s will, nor shall such interest pass under the laws of intestate succession.


16.13 Validity. In case any provision of the Plan shall be illegal or invalid for any reason,said illegality or invalidity shall not affect the remaining parts hereof, but the Planshall be constructed and enforced as if such illegal or invalid provision had never beeninserted herein.

16.14 Incompetent. If the Committee determines in its discretion that a benefit under thePlan is to be paid to a minor, a person declared incompetent or to a person incapableof handling the disposition of that person’s property, the Committee may directpayment of such benefit to the guardian, legal representative or person having the careand custody of such minor, incompetent or incapable person. The Committee mayrequire proof of minority, incompetence, incapacity or guardianship, as it may deemappropriate prior to distribution of the benefit. Any payment of a benefit shall be apayment for the account of the Participant and the Participant’s Beneficiary, as thecase may be, and shall be a complete discharge of any liability under the Plan for suchpayment amount

16.15 Court Order. The Committee is authorized to make any payments directed by courtorder in any action in which the Plan or the Committee has been named as a party. Inaddition, if a court determines that a spouse or former spouse of a Participant has aninterest in the Participant’s benefits under the Plan in connection with a propertysettlement or otherwise, the Committee, in its sole discretion shall have the right,notwithstanding any election made by the Participant, to immediately distribute thespouse’s or former spouse’s interest in the Participant’s benefits under the Plan to thatspouse or former spouse.

16.16 Distribution in the Event of Taxation. If, for any reason, all or any portion of aParticipant’s benefits under the Plan becomes taxable to the Participant prior toreceipt, a Participant may petition the Committee for a distribution of that portion ofhis benefit that has become taxable. Upon the grant of such a petition, which grantshall not be unreasonably withheld (and, after a Change in Control, shall be granted),the Bank shall distribute to the Participant immediately available funds in an amountequal to the taxable portion of his benefit (which amount shall not exceed suchParticipant’s Equivalent Actuarial Value of his unpaid Monthly Benefits). If thepetition is granted, the tax liability distribution shall be made within 90 days of thedate when the Participant’s petition is granted. Such a distribution shall affect andreduce the benefits to be paid under the Plan.

16.17 Insurance. The Bank, on its own behalf or on behalf of the trustee of the Trust, and,in its sole discretion, may apply for and procure insurance on the life of anyParticipant, in such amounts and in such forms as it may choose. The Bank or thetrustee of the Trust, as the case may be, shall be the sole owner and beneficiary of anysuch insurance. No Participant shall have any interest whatsoever in any such policyor policies, and a Participant shall at the request of the Bank submit to medicalexaminations and supply such information and execute such documents as may berequired by the insurance company or companies to whom the Bank has applied forinsurance.


16.18 Legal Fees To Enforce Rights After Change in Control. The Bank is aware thatupon the occurrence of a Change in Control, the Board (which might then becomposed of new members) or stockholders of the Bank, or of any successorcorporation, might then cause or attempt to cause Bank, or such successor to refuse tocomply with its obligations under the Plan and might cause or attempt to cause theBank to institute, or may institute, litigation seeking to deny Participants the benefitsintended under the Plan. In these circumstances, the purpose of the Plan could befrustrated. Accordingly, if, following a Change in Control, it should appear to anyParticipant that the Bank or any successor corporation has failed to comply with anyof its obligations under the Plan or any agreement thereunder, or, if the Bank or anyother person takes any action to declare the Plan void or unenforceable or institutesany litigation or other legal action designed to deny, diminish or to recover from anyParticipant the benefits intended to be provided, then the Bank irrevocably authorizessuch Participant to retain counsel of his choice at the expense of the Bank to representsuch Participant in connection with the initiation or defense of any litigation or otherlegal action, whether by or against the Bank or any director, officer, stockholder orother person affiliated with the Bank or any successor thereto in any jurisdiction.