Operation of the plan

1. Investment direction. In general, neither the participant nor the designated beneficiary may directly or indirectly control the investment of contributions or earnings, if any, in an account. An account is initially invested in a portfolio based upon the selections made by the participant on the enrollment form. Once the participant makes such selections, all subsequent contributions to the same account generally will be invested in accordance with those investment selections; provided, however, that a participant may, in accordance with these rules, reallocate assets in an account upon a change in the designated beneficiary and also once per calendar year without changing the designated beneficiary of the account. Upon such reallocation, the participant's account will be invested in portfolios consistent with the new investment selections, and subsequent contributions to the account will be invested in accordance with the new investment selections. A participant who wishes to make different investment selections with respect to a future contribution for the same designated beneficiary may do so at any time. If a participant is awarded a matching grant, the matching grant will be invested according to the portfolio allocation instructions on file for the participant's account. Notwithstanding the foregoing, the Bank has the authority to modify the investment strategy, asset allocation, or the underlying investments with respect to any portfolio or any account held under the plan, at any time, without regard to prior participant selections. 2. Change in designated beneficiary. Subject to the limitations set forth below, a participant may transfer an account to a new designated beneficiary. If the new designated beneficiary is a member of the family of the prior designated beneficiary, the transfer will not be treated as a distribution. If the new designated beneficiary is not a member of the family of the prior designated beneficiary, the transfer will be treated where required for tax reporting purposes as a distribution to the participant and a contribution to a new account on behalf of the new designated beneficiary. Under no circumstances may a participant transfer an account to a new designated beneficiary if the source of any contribution made to the account was a UT/UGMA account and the account is still held under a custodianship. If the designated beneficiary for whom the UT/UGMA account was established has become the participant of the account, a change in the designated beneficiary will be permitted. Except as provided by the plan disclosure statement, a matching grant account may not transfer and the matching grant may be forfeited if the new designated beneficiary has received a matching grant, has a matching grant account or is the participant on the account. Notwithstanding the foregoing, the Bank has the authority to suspend processing a designated beneficiary change if it suspects that the participant has submitted the change in the designated beneficiary request primarily to avoid the limitation on the number of changes in investment selection permitted in a calendar year under federal law. 3. Successor participant. In accordance with procedures established by the Bank, the participant is entitled to designate a successor participant on the enrollment form, or such other form as may be approved by the Bank, who shall become the new participant and assume all of the rights and responsibilities of the current participant with respect to an account and succeed to all of the current participant's rights, title, and interests in an account, including the right to change the designated beneficiary, upon the death, resignation, or refusal to act of the current participant. The successor participant shall execute such forms as the Bank may require to assume all rights and responsibilities as participant. If the designated beneficiary is at least eighteen years old, the designated beneficiary may be named as the successor participant. A designation executed by a participant prior to the participant's death that is accepted following the participant's death will govern distributions following, but not prior to, the manager's acceptance of the designation. In the event a successor participant is not named on the enrollment form or on another form accepted by the manager, or the named successor participant does not accept the account, the surviving spouse of the participant will become the participant for the account. A participant that is not an individual will be deemed not to have a surviving spouse. In the event there is no surviving spouse and the designated beneficiary is not a minor, the designated beneficiary will become the participant for the account. If the designated beneficiary is a minor, the designated beneficiary's custodial parent will become the participant for the account. If the designated beneficiary has more than one custodial parent, the custodial parent whose birthday is earlier in the calendar year will become the participant for the account. Notwithstanding the foregoing, if the source of any contribution made to the account was a UT/UGMA account, the participant may be removed or replaced, and the designated beneficiary or the successor custodian may become the successor participant, only in accordance with the applicable UT/UGMA laws. In the event there is a dispute relating to who is duly authorized to act with respect to an account, the manager may, in its sole discretion, refuse to accept any contribution to an account or to make any distribution from an account until such dispute is resolved to its satisfaction. 4. Pledge or assignment. Neither the participant nor the designated beneficiary may transfer, pledge, or assign any interest such party may have under the plan as collateral or security for a loan, including a loan used to make a contribution, or for any other purpose, other than as specifically provided in these rules. 5. Transfer of ownership. To the extent permitted by law, the participant's and the designated beneficiary's interests in an account under the plan are not subject to attachment or alienation by third-party creditors and are not transferable other than by will, by the laws of descent and distribution, or as provided in these rules or section 529 of the Code.