Exhibit 10.1

 

PSB BANCORP, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

AGREEMENT, made the 1st day of July 2004, by and between PSB BANCORP, INC.
(“PSB”), a Pennsylvania corporation with its principal executive offices located
in Philadelphia, Pennsylvania, and VINCENT J. FUMO (the “Executive”).

 

INTRODUCTION

 

The purpose of this Agreement is to provide specified benefits to the Executive,
a member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development and future business
success of PSB.  This Agreement shall be unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”).

 

To encourage the Executive to remain an employee of PSB, PSB is willing to
provide supplemental retirement benefits to the Executive.  PSB will pay the
benefits from its general assets.

 

AGREEMENT

 

PSB and the Executive agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

 

1.1  “CHANGE IN CONTROL” MEANS ANY OF THE FOLLOWING:

 

(I)  ANY PERSON (AS SUCH TERM IS USED IN SECTIONS 13D AND 14D-2 OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”), OTHER THAN
PSB, A MAJORITY-OWNED SUBSIDIARY OF PSB, AN EMPLOYEE BENEFIT PLAN (OR RELATED
TRUST) OF PSB OR A DIRECT OR INDIRECT MAJORITY-OWNED SUBSIDIARY OF PSB, OR
AFFILIATES OF PSB (AS DEFINED IN RULE 12B-2 UNDER THE EXCHANGE ACT), BECOMES THE
BENEFICIAL OWNER (AS DETERMINED PURSUANT TO RULE 13D-3 UNDER THE EXCHANGE ACT),
DIRECTLY OR INDIRECTLY, OF SECURITIES OF PSB REPRESENTING MORE THAN 25% OF THE
COMBINED VOTING POWER OF PSB’S THEN OUTSTANDING SECURITIES (OTHER THAN ANY
PERSON BENEFICIALLY OWNING FIVE PERCENT [5%] OR MORE OF THE VOTING POWER OF
PSB’S STOCK ON THE DATE HEREOF);

 

(II)  THE LIQUIDATION OR DISSOLUTION OF PSB OR THE OCCURRENCE OF, OR EXECUTION
OF AN AGREEMENT PROVIDING FOR, A SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS
OF PSB TO AN ENTITY WHICH IS NOT A DIRECT OR INDIRECT MAJORITY-OWNED SUBSIDIARY
OF PSB;

 

(III)  THE OCCURRENCE OF, OR EXECUTION OF AN AGREEMENT PROVIDING FOR, A
REORGANIZATION, MERGER, CONSOLIDATION OR OTHER SIMILAR TRANSACTION OR CONNECTED
SERIES OF

 

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TRANSACTIONS OF PSB AS A RESULT OF WHICH EITHER (A) PSB DOES NOT SURVIVE OR (B)
PURSUANT TO WHICH SHARES OF PSB COMMON STOCK (“COMMON STOCK”) WOULD BE CONVERTED
INTO CASH, SECURITIES OR OTHER PROPERTY, UNLESS, IN CASE OF EITHER (A) OR (B),
THE HOLDERS OF PSB COMMON STOCK IMMEDIATELY PRIOR TO SUCH TRANSACTION WILL,
FOLLOWING THE CONSUMMATION OF THE TRANSACTION, BENEFICIALLY OWN, DIRECTLY OR
INDIRECTLY, MORE THAN 50% OF THE COMBINED VOTING POWER OF THE THEN OUTSTANDING
VOTING SECURITIES ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OF THE
COMPANY SURVIVING, CONTINUING OR RESULTING FROM SUCH TRANSACTION;

 

(IV)  THE OCCURRENCE OF, OR EXECUTION OF AN AGREEMENT PROVIDING FOR A
REORGANIZATION, MERGER, CONSOLIDATION OR SIMILAR TRANSACTION OF PSB, OR ANY
CONNECTED SERIES OF SUCH TRANSACTIONS, IF UPON CONSUMMATION OF SUCH TRANSACTION
OR TRANSACTIONS, THE PERSONS WHO ARE MEMBERS OF THE BOARD OF DIRECTORS OF PSB
IMMEDIATELY BEFORE SUCH TRANSACTION OR TRANSACTIONS CEASE OR, IN THE CASE OF THE
EXECUTION OF AN AGREEMENT FOR SUCH TRANSACTION OR TRANSACTIONS, IT IS
CONTEMPLATED IN SUCH AGREEMENT THAT, UPON CONSUMMATION, SUCH PERSONS WOULD CEASE
TO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF PSB OR, IN THE CASE WHERE
PSB DOES NOT SURVIVE IN SUCH TRANSACTION, OF THE COMPANY SURVIVING, CONTINUING
OR RESULTING FROM SUCH TRANSACTION OR TRANSACTIONS;

 

(V)  ANY OTHER EVENT WHICH IS AT ANY TIME DESIGNATED AS A “CHANGE IN CONTROL”
FOR PURPOSES OF THIS AGREEMENT BY A RESOLUTION ADOPTED BY THE BOARD OF DIRECTORS
OF PSB WITH THE AFFIRMATIVE VOTE OF A MAJORITY OF THE NON-EMPLOYEE DIRECTORS IN
OFFICE AT THE TIME THE RESOLUTION IS ADOPTED; AND IN THE EVENT ANY SUCH
RESOLUTION IS ADOPTED, THE CHANGE IN CONTROL EVENT SPECIFIED THEREBY SHALL BE
DEEMED INCORPORATED HEREIN BY REFERENCE AND THEREAFTER MAY NOT BE AMENDED,
MODIFIED OR REVOKED WITHOUT THE WRITTEN AGREEMENT OF THE EXECUTIVE;

 

(VI)  DURING ANY PERIOD OF TWO (2) CONSECUTIVE YEARS DURING THE TERM OF THIS
AGREEMENT, INDIVIDUALS WHO AT THE BEGINNING OF SUCH PERIOD CONSTITUTE THE BOARD
OF DIRECTORS OF PSB CEASE FOR ANY REASON TO CONSTITUTE AT LEAST A MAJORITY
THEREOF, UNLESS THE ELECTION OF EACH DIRECTOR WHO WAS NOT A DIRECTOR AT THE
BEGINNING OF SUCH PERIOD HAS BEEN APPROVED IN ADVANCE BY DIRECTORS REPRESENTING
AT LEAST TWO-THIRDS OF THE DIRECTORS THEN IN OFFICE WHO WERE DIRECTORS AT THE
BEGINNING OF THE PERIOD; PROVIDED, HOWEVER THAT THIS PROVISION SHALL NOT APPLY
IN THE EVENT TWO-THIRDS OF THE BOARD OF DIRECTORS AT THE BEGINNING OF A PERIOD
NO LONGER ARE DIRECTORS DUE TO DEATH, RETIREMENT, OR OTHER CIRCUMSTANCES NOT
RELATED TO A CHANGE IN CONTROL.

 

Notwithstanding anything else to the contrary set forth in this Agreement, if
(i) an agreement is executed by PSB providing for any of the transactions or
events constituting a Change in Control as defined herein, and the agreement
subsequently expires or is terminated without the transaction or event being
consummated, and (ii) Executive’s employment did not terminate during the period
after the agreement and prior to such expiration or termination, for purposes of
this Agreement it shall be as though such agreement was never executed and no
Change in Control event shall be deemed to have occurred as a result of the
execution of such agreement.

 

1.2  “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

 

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1.3  “DISABILITY” MEANS THE EXECUTIVE’S SUFFERING A SICKNESS, ACCIDENT OR INJURY
WHICH HAS BEEN DETERMINED BY THE CARRIER OF ANY GROUP DISABILITY INSURANCE
POLICY PROVIDED BY PSB OR MADE AVAILABLE BY PSB TO ITS EMPLOYEES AND COVERING
THE EXECUTIVE, OR BY THE SOCIAL SECURITY ADMINISTRATION, TO BE A DISABILITY
RENDERING THE EXECUTIVE TOTALLY AND PERMANENTLY DISABLED.  THE EXECUTIVE MUST
SUBMIT PROOF TO PSB OF THE CARRIER’S OR SOCIAL SECURITY ADMINISTRATION’S
DETERMINATION UPON THE REQUEST OF PSB.

 

1.4  “EARLY TERMINATION” MEANS THE TERMINATION OF EMPLOYMENT BEFORE NORMAL
RETIREMENT AGE FOR REASONS OTHER THAN DEATH, DISABILITY, TERMINATION FOR CAUSE
OR FOLLOWING A CHANGE OF CONTROL.

 

1.5  “NORMAL RETIREMENT AGE” MEANS THE EXECUTIVE’S 65TH BIRTHDAY.

 

1.6  “NORMAL RETIREMENT DATE” MEANS THE LATER OF THE NORMAL RETIREMENT AGE OR
TERMINATION OF EMPLOYMENT.

 

1.7  “TERMINATION OF EMPLOYMENT” MEANS THAT THE EXECUTIVE CEASES TO BE EMPLOYED
BY PSB, OR A MAJORITY-OWNED SUBSIDIARY OF PSB, FOR ANY REASON, VOLUNTARY OR
INVOLUNTARY, OTHER THAN BY REASON OF A LEAVE OF ABSENCE APPROVED BY PSB.

 

ARTICLE 2
RETIREMENT BENEFITS

 

2.1  NORMAL RETIREMENT BENEFIT.  UPON TERMINATION OF EMPLOYMENT ON OR AFTER THE
EXECUTIVE’S NORMAL RETIREMENT AGE FOR ANY REASON OTHER THAN DEATH, PSB SHALL PAY
TO THE EXECUTIVE THE BENEFIT DESCRIBED IN THIS SECTION 2.1.

 

2.1.1  AMOUNT OF BENEFIT.  THE ANNUAL BENEFIT UNDER THIS SECTION 2.1 IS EQUAL TO
THE PRODUCT OF (I) 30%, TIMES (II) THE SUM OF (A) THE HIGHEST TOTAL ANNUALIZED
BASE SALARY(IES) PAID TO THE EXECUTIVE BY PSB AND ITS MAJORITY-OWNED
SUBSIDIARIES DURING THE FOUR (4) YEAR PERIOD ENDING ON THE DATE OF HIS
TERMINATION OF EMPLOYMENT, PLUS (B) THE HIGHEST TOTAL ANNUAL BONUS(ES)  PAID TO
THE EXECUTIVE BY SUCH ENTITY(IES) WITH RESPECT TO ANY ONE OF THE FOUR (4) FULL
CALENDAR YEARS IMMEDIATELY PRECEDING THE YEAR OF HIS TERMINATION OF EMPLOYMENT. 
IN THE EVENT THE EXECUTIVE CONTINUES IN THE EMPLOY OF PSB BEYOND HIS NORMAL
RETIREMENT AGE, THE ANNUAL BENEFIT DETERMINED IN ACCORDANCE WITH THE PRECEDING
SENTENCE SHALL BE INCREASED BY FIVE PERCENT (5%) FOR EACH FULL YEAR THAT HIS
EMPLOYMENT CONTINUES BEYOND HIS NORMAL RETIREMENT AGE.  FOR PURPOSES OF THIS
SECTION 2.1.1 AND SECTION 2.2.1, ONLY BASE SALARY AND ANNUAL BONUS ARE INTENDED
TO BE INCLUDED FOR PURPOSES OF THE REQUIRED BENEFIT CALCULATIONS, SO THAT
COMPENSATION RESULTING FROM STOCK-BASED AWARDS, DIRECTOR FEES AND OTHER
REMUNERATION NOT GENERALLY CONSIDERED SALARY OR BONUS SHALL BE EXCLUDED.

 

2.1.2  PAYMENT OF BENEFIT.  PSB SHALL PAY THE ANNUAL BENEFIT TO THE EXECUTIVE IN
12 EQUAL MONTHLY INSTALLMENTS COMMENCING ON THE FIRST DAY OF THE MONTH FOLLOWING
THE EXECUTIVE’S NORMAL RETIREMENT DATE AND CONTINUING ON THE FIRST DAY OF THE
MONTH FOR THE 239 MONTHS THAT FOLLOW; PROVIDED, HOWEVER, THAT IN THE EVENT OF
HIS DEATH PRIOR TO THE PAYMENT OF ALL OF HIS BENEFIT, THE RELEVANT PROVISION OF
ARTICLE 3 SHALL APPLY.

 

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2.2  EARLY TERMINATION BENEFIT.  UPON EARLY TERMINATION, PSB SHALL PAY TO THE
EXECUTIVE THE BENEFIT DESCRIBED IN THIS SECTION 2.2.

 

2.2.1  AMOUNT OF BENEFIT.  THE ANNUAL BENEFIT UNDER THIS SECTION 2.2 IS EQUAL TO
THE PRODUCT OF (I) 30%, TIMES (II) THE SUM OF (A) THE HIGHEST TOTAL ANNUALIZED
BASE SALARY(IES) PAID TO THE EXECUTIVE BY PSB AND ITS MAJORITY-OWNED
SUBSIDIARIES DURING THE FOUR (4) YEAR PERIOD ENDING ON THE DATE OF EARLY
TERMINATION, PLUS (B) THE HIGHEST TOTAL ANNUAL BONUS(ES) PAID TO THE EXECUTIVE
BY SUCH ENTITIES WITH RESPECT TO ANY ONE OF THE FOUR (4) FULL CALENDAR YEARS
IMMEDIATELY PRECEDING THE YEAR OF THE DATE OF EARLY TERMINATION, TIMES (III)
30%, TIMES (IV) THE NUMBER OF FULL YEARS THAT HAVE ELAPSED FROM THE DATE OF THIS
AGREEMENT TO THE DATE OF EARLY TERMINATION.  THE PROVISIONS OF THIS SECTION ARE
SUBJECT TO THE LAST SENTENCE OF SECTION 2.1.1.

 

2.2.2  PAYMENT OF BENEFIT.  PSB SHALL PAY THE ANNUAL BENEFIT TO THE EXECUTIVE IN
12 EQUAL MONTHLY INSTALLMENTS COMMENCING ON THE FIRST DAY OF THE MONTH FOLLOWING
THE EXECUTIVE’S NORMAL RETIREMENT AGE AND CONTINUING ON THE FIRST DAY OF THE
MONTH FOR THE 239 MONTHS THAT FOLLOW; PROVIDED, HOWEVER, THAT IN THE EVENT OF
HIS DEATH PRIOR TO THE PAYMENT OF ALL OF HIS BENEFIT, THE RELEVANT PROVISION OF
ARTICLE 3 SHALL APPLY.

 

2.3  DISABILITY BENEFIT.  IF THE EXECUTIVE TERMINATES EMPLOYMENT DUE TO
DISABILITY PRIOR TO HIS NORMAL RETIREMENT AGE, PSB SHALL PAY TO THE EXECUTIVE
THE BENEFIT DESCRIBED IN THIS SECTION 2.3.

 

2.3.1  AMOUNT OF BENEFIT.  THE ANNUAL BENEFIT UNDER THIS SECTION 2.3 IS EQUAL
THE NORMAL RETIREMENT BENEFIT DETERMINED IN THE SAME MANNER DESCRIBED IN SECTION
2.1.1, BUT BY TREATING THE DATE OF HIS TERMINATION OF EMPLOYMENT AS THE
ATTAINMENT OF HIS NORMAL RETIREMENT AGE.

 

2.3.2  PAYMENT OF BENEFIT.  PSB SHALL PAY THE ANNUAL BENEFIT TO THE EXECUTIVE IN
12 EQUAL MONTHLY INSTALLMENTS COMMENCING ON THE FIRST DAY OF THE MONTH FOLLOWING
HIS TERMINATION OF EMPLOYMENT AND CONTINUING ON THE FIRST DAY OF THE MONTH FOR
THE 239 MONTHS THAT FOLLOW; PROVIDED, HOWEVER, THAT IN THE EVENT OF HIS DEATH
PRIOR TO THE PAYMENT OF ALL OF HIS BENEFIT, THE RELEVANT PROVISION OF ARTICLE 3
SHALL APPLY.

 

2.4  CHANGE IN CONTROL BENEFIT.  NOTWITHSTANDING ANY PROVISIONS HEREIN TO THE
CONTRARY (EXCEPT THE PROVISIONS OF SECTION 5.2), UPON THE OCCURRENCE OF A CHANGE
IN CONTROL PRIOR TO, OR CONCURRENT WITH, THE EXECUTIVE’S TERMINATION OF
EMPLOYMENT, PSB SHALL PAY TO THE EXECUTIVE THE BENEFIT DESCRIBED IN THIS SECTION
2.4.

 

2.4.1  AMOUNT OF BENEFIT.  THE BENEFIT UNDER THIS SECTION 2.4 IS EQUAL TO THE
PRESENT VALUE OF THE PRODUCT OF (I) THE NORMAL RETIREMENT BENEFIT DETERMINED IN
THE SAME MANNER DESCRIBED IN SECTION 2.1.1, BUT BY TREATING THE DATE OF THE
OCCURRENCE OF THE CHANGE IN CONTROL AS THE EXECUTIVE’S NORMAL RETIREMENT DATE
(WHETHER OR NOT HE TERMINATES EMPLOYMENT AT SUCH TIME), TIMES (II) TWO (2).  FOR
PURPOSES OF THE PRECEDING SENTENCE, THE PRESENT VALUE OF THE EXECUTIVE’S BENEFIT
SHALL BE DETERMINED BY (I) USING A DISCOUNT FACTOR OF 4% PER ANNUM, (II)
ASSUMING 240 MONTHLY PAYMENTS WOULD OTHERWISE BE MADE, AND (III) DISCOUNTING THE
FLOW OF ASSUMED PAYMENTS TO THE DATE OF THE CHANGE IN CONTROL, BUT

 

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BY ASSUMING THAT SUCH MONTHLY PAYMENTS WOULD HAVE COMMENCED THE FIRST DAY OF THE
MONTH FOLLOWING THE ATTAINMENT OF EXECUTIVE’S NORMAL RETIREMENT AGE.

 

2.4.2  PAYMENT OF BENEFIT.  PSB SHALL PAY THE BENEFIT, DETERMINED UNDER SECTION
2.4.1, IN ONE LUMP SUM, WITHIN 30 DAYS AFTER THE DATE IT IS DETERMINED WITH
CERTAINTY THAT THE LAST SENTENCE OF SECTION 1.1 WILL NOT BECOME OPERATIVE.  IN
THE EVENT OF THE EXECUTIVE’S DEATH PRIOR TO PAYMENT OF THE LUMP SUM BENEFIT, HIS
DEATH SHALL NOT OPERATE TO REDUCE THE AMOUNT PAYABLE (UNDER SECTION 3 OR
OTHERWISE), AND IT SHALL BE PAID TO HIS BENEFICIARY AT THE OTHERWISE RELEVANT
TIME.

 

2.5  LIMITATIONS.  ALL BENEFITS PAYABLE UNDER THIS ARTICLE 2 SHALL BE SUBJECT TO
THE PROVISIONS CONTAINED IN ARTICLE 5 OF THIS AGREEMENT.

 

ARTICLE 3
DEATH BENEFITS

 

3.1  DEATH DURING ACTIVE SERVICE.  IF THE EXECUTIVE DIES WHILE EMPLOYED BY PSB,
PSB SHALL PAY TO THE EXECUTIVE’S BENEFICIARY THE BENEFIT DESCRIBED IN THIS
SECTION 3.1.  THIS BENEFIT SHALL BE PAID IN LIEU OF THE BENEFITS UNDER ARTICLE
2, UNLESS SECTION 2.4 BECOMES APPLICABLE.

 

3.1.1  AMOUNT OF BENEFIT.  THE BENEFIT UNDER THIS SECTION 3.1 IS EQUAL TO THE
AMOUNT OF THE ANNUAL BENEFIT DETERMINED UNDER SECTION 2.1.1, TIMES TEN (10).

 

3.1.2  PAYMENT OF BENEFIT.  PSB SHALL PAY THE AMOUNT DESCRIBED IN SECTION 3.1.1
TO THE EXECUTIVE’S BENEFICIARY, IN ONE LUMP SUM, ON THE DATE THAT HE WOULD HAVE
ATTAINED HIS NORMAL RETIREMENT AGE HAD HE NOT DIED.

 

3.2  DEATH DURING PAYMENT OF BENEFIT.  IF THE EXECUTIVE DIES AFTER ANY BENEFIT
PAYMENTS HAVE COMMENCED UNDER THIS AGREEMENT, BUT BEFORE RECEIVING ALL SUCH
PAYMENTS, PSB SHALL PAY TO THE EXECUTIVE’S BENEFICIARY AN AMOUNT EQUAL TO THE
EXCESS, IF ANY, OF (I) THE PRODUCT OF (A) THE ANNUAL BENEFIT HE WAS RECEIVING AT
THE TIME OF HIS DEATH, TIMES (B) TEN (10), MINUS (II) THE SUM OF THE BENEFITS
PAID TO HIM HEREUNDER THROUGH THE DATE OF HIS DEATH.  ANY SUCH EXCESS SHALL BE
PAID TO SUCH BENEFICIARY, IN ONE LUMP SUM, NO LATER THAN 30 DAYS AFTER PROOF OF
THE EXECUTIVE’S DEATH IS SUBMITTED TO PSB.

 

3.3  DEATH AFTER TERMINATION OF EMPLOYMENT BUT BEFORE PAYMENT OF A RETIREMENT
BENEFIT COMMENCES.  IF THE EXECUTIVE’S EMPLOYMENT TERMINATES AFTER HAVING
ACCRUED BENEFITS UNDER THIS AGREEMENT, BUT HE DIES PRIOR TO COMMENCEMENT OF THE
PAYMENT OF SUCH BENEFITS, PSB SHALL PAY TO THE EXECUTIVE’S BENEFICIARY AN AMOUNT
EQUAL TO THE ANNUAL BENEFIT TO WHICH HE WOULD HAVE BEEN ENTITLED HAD HE NOT
DIED, TIMES TEN (10).  SUCH AMOUNT SHALL BE PAID TO SUCH BENEFICIARY, IN ONE
LUMP SUM, ON THE DATE THAT THE EXECUTIVE WOULD HAVE BEEN PAID HIS FIRST BENEFIT
INSTALLMENT HAD HE NOT DIED.

 

3.4  LIMITATIONS.  ALL BENEFITS PAYABLE UNDER THIS ARTICLE 3 SHALL BE SUBJECT TO
THE PROVISIONS CONTAINED IN ARTICLE 5 OF THIS AGREEMENT.

 

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ARTICLE 4
BENEFICIARIES

 

4.1  BENEFICIARY DESIGNATIONS.  THE EXECUTIVE SHALL DESIGNATE A BENEFICIARY BY
FILING A WRITTEN DESIGNATION WITH PSB.  THE EXECUTIVE MAY REVOKE OR MODIFY THE
DESIGNATION AT ANY TIME BY FILING A NEW DESIGNATION.  HOWEVER, DESIGNATIONS WILL
ONLY BE EFFECTIVE IF SIGNED BY THE EXECUTIVE AND RECEIVED BY PSB DURING THE
EXECUTIVE’S LIFETIME.  THE EXECUTIVE’S BENEFICIARY DESIGNATION SHALL BE DEEMED
AUTOMATICALLY REVOKED IF THE BENEFICIARY PREDECEASES THE EXECUTIVE, OR IF THE
EXECUTIVE NAMES A SPOUSE AS BENEFICIARY AND THE MARRIAGE IS SUBSEQUENTLY
DISSOLVED.  IF THE EXECUTIVE DIES WITHOUT A VALID BENEFICIARY DESIGNATION, ALL
PAYMENTS SHALL BE MADE TO THE EXECUTIVE’S ESTATE.

 

4.2  FACILITY OF PAYMENT.  IF A BENEFIT IS PAYABLE TO A MINOR, TO A PERSON
DECLARED INCOMPETENT, OR TO A PERSON INCAPABLE OF HANDLING THE DISPOSITION OF
HIS OR HER PROPERTY, PSB MAY PAY SUCH BENEFIT TO THE GUARDIAN, LEGAL
REPRESENTATIVE OR PERSON HAVING THE CARE OR CUSTODY OF SUCH MINOR, INCOMPETENT
PERSON OR INCAPABLE PERSON.  PSB MAY REQUIRE PROOF OF INCOMPETENCE, MINORITY OR
GUARDIANSHIP AS IT MAY DEEM APPROPRIATE PRIOR TO DISTRIBUTION OF THE BENEFIT. 
SUCH DISTRIBUTION SHALL COMPLETELY DISCHARGE PSB FROM ALL LIABILITY WITH RESPECT
TO SUCH BENEFIT.

 

ARTICLE 5
GENERAL LIMITATIONS

 

All benefits payable under this Agreement shall be subject to the following
limitations:

 

5.1  EXCESS PARACHUTE OR GOLDEN PARACHUTE PAYMENT.  IN THE EVENT THAT THE
AMOUNTS AND BENEFITS PAYABLE UNDER THIS AGREEMENT, WHEN ADDED TO OTHER AMOUNTS
AND BENEFITS WHICH MAY BECOME PAYABLE TO THE EXECUTIVE BY PSB AND ANY AFFILIATED
COMPANY, ARE SUCH THAT HE BECOMES SUBJECT TO THE EXCISE TAX PROVISIONS OF CODE
SECTION 4999, HE SHALL BE PAID SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL RESULT
IN HIS RETENTION (AFTER THE PAYMENT OF ALL FEDERAL, STATE AND LOCAL EXCISE,
EMPLOYMENT AND INCOME TAXES ON SUCH PAYMENTS AND THE VALUE OF SUCH BENEFITS) OF
A NET AMOUNT EQUAL TO THE NET AMOUNT HE WOULD HAVE RETAINED HAD THE INITIALLY
CALCULATED PAYMENTS AND BENEFITS BEEN SUBJECT ONLY TO INCOME AND EMPLOYMENT
TAXATION.  FOR PURPOSES OF THE PRECEDING SENTENCE, THE EXECUTIVE SHALL BE DEEMED
TO BE SUBJECT TO THE HIGHEST MARGINAL FEDERAL, RELEVANT STATE AND RELEVANT LOCAL
TAX RATES.  ALL CALCULATIONS REQUIRED TO BE MADE UNDER THIS SUBSECTION SHALL BE
MADE BY PSB’S INDEPENDENT PUBLIC ACCOUNTANTS, SUBJECT TO THE RIGHT OF
EXECUTIVE’S REPRESENTATIVE TO REVIEW THE SAME.  ALL SUCH AMOUNTS REQUIRED TO BE
PAID SHALL BE PAID AT THE TIME ANY WITHHOLDING MAY BE REQUIRED UNDER APPLICABLE
LAW, AND ANY ADDITIONAL AMOUNTS TO WHICH THE EXECUTIVE MAY BE ENTITLED SHALL BE
PAID OR REIMBURSED NO LATER THAN 15 DAYS FOLLOWING CONFIRMATION OF SUCH AMOUNT
BY THE COMPANY’S ACCOUNTANTS.  IN THE EVENT ANY AMOUNTS PAID HEREUNDER ARE
SUBSEQUENTLY DETERMINED TO BE IN ERROR BECAUSE ESTIMATES WERE REQUIRED OR
OTHERWISE, THE PARTIES AGREE TO REIMBURSE EACH OTHER TO CORRECT SUCH ERROR, AS
APPROPRIATE, AND TO PAY INTEREST THEREON AT THE APPLICABLE FEDERAL RATE (AS
DETERMINED UNDER CODE SECTION 1274 FOR THE PERIOD OF TIME SUCH ERRONEOUS AMOUNT
REMAINED OUTSTANDING AND UNREIMBURSED).  THE PARTIES RECOGNIZE THAT THE ACTUAL
IMPLEMENTATION OF THE PROVISIONS OF THIS SUBSECTION ARE COMPLEX AND AGREE TO
DEAL WITH EACH OTHER IN GOOD FAITH TO RESOLVE ANY QUESTIONS OR DISAGREEMENTS
ARISING HEREUNDER.

 

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5.2  TERMINATION FOR CAUSE.  NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO
THE CONTRARY, PSB SHALL NOT PAY ANY BENEFIT UNDER THIS AGREEMENT IF PSB
TERMINATES THE EXECUTIVE’S EMPLOYMENT FOR CAUSE. TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT FOR “CAUSE” SHALL MEAN TERMINATION BECAUSE OF PERSONAL DISHONESTY BY
THE EXECUTIVE IN THE PERFORMANCE OF HIS DUTIES WHICH RESULTS IN DEMONSTRABLE
MATERIAL INJURY TO PSB, WILLFUL MISCONDUCT BY THE EXECUTIVE WHICH REMAINS
UNCURED 15 DAYS FOLLOWING THE GIVING OF WRITTEN NOTICE THEREOF TO THE EXECUTIVE
BY THE BOARD OF DIRECTORS OF PSB, BREACH BY THE EXECUTIVE OF A FIDUCIARY DUTY TO
PSB INVOLVING PERSONAL PROFIT, INTENTIONAL FAILURE TO PERFORM STATED DUTIES
FOLLOWING THE GIVING OF WRITTEN NOTICE THEREOF TO THE EXECUTIVE BY THE BOARD OF
DIRECTORS OF PSB, OR THE ISSUANCE OF A FINAL CEASE-AND-DESIST ORDER, RELATING TO
THE EXECUTIVE’S CONDUCT, BY A STATE OR FEDERAL REGULATORY BODY.  FOR PURPOSES OF
THIS PARAGRAPH, NO ACT OR FAILURE TO ACT ON THE EXECUTIVE’S PART SHALL BE
CONSIDERED “WILLFUL” UNLESS DONE, OR OMITTED TO BE DONE, BY THE EXECUTIVE NOT IN
GOOD FAITH AND WITHOUT REASONABLE BELIEF THAT THE EXECUTIVE’S ACTION OR OMISSION
WAS IN THE BEST INTEREST OF PSB OR ANY OF ITS MAJORITY-OWNED SUBSIDIARIES.

 

5.3  REMOVAL.  NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY,
PSB SHALL NOT PAY ANY BENEFIT UNDER THIS AGREEMENT IF THE EXECUTIVE IS SUBJECT
TO A FINAL REMOVAL OR PROHIBITION ORDER ISSUED BY AN APPROPRIATE FEDERAL BANKING
AGENCY PURSUANT TO SECTION 8(E) OF THE FEDERAL DEPOSIT INSURANCE ACT.

 

5.4  COMPETITION AFTER TERMINATION OF EMPLOYMENT.  THE EXECUTIVE SHALL FORFEIT
HIS RIGHT TO ANY FURTHER BENEFITS IF THE EXECUTIVE, WITHOUT THE PRIOR WRITTEN
CONSENT OF PSB, VIOLATES ANY ONE OF THE FOLLOWING DESCRIBED RESTRICTIVE
COVENANTS.

 

5.4.1  NON-COMPETE PROVISION.  THE EXECUTIVE SHALL NOT, FOR A PERIOD OF
12 MONTHS FOLLOWING TERMINATION OF EMPLOYMENT, DIRECTLY OR INDIRECTLY, EITHER AS
AN INDIVIDUAL OR AS A PROPRIETOR, STOCKHOLDER, PARTNER, OFFICER, DIRECTOR,
EMPLOYEE, AGENT, CONSULTANT OR INDEPENDENT CONTRACTOR OF ANY INDIVIDUAL,
PARTNERSHIP, CORPORATION OR OTHER ENTITY (EXCLUDING AN OWNERSHIP INTEREST OF ONE
PERCENT (1%) OR LESS IN THE STOCK OF A PUBLICLY TRADED COMPANY):

 

(I)  BECOME EMPLOYED BY, PARTICIPATE IN, OR BE CONNECTED IN ANY MANNER WITH THE
OWNERSHIP, MANAGEMENT, OPERATION OR CONTROL OF ANY BANK OR BANK HOLDING COMPANY,
SAVINGS AND LOAN OR SAVINGS AND LOAN HOLDING COMPANY, OR OTHER SIMILAR FINANCIAL
INSTITUTION IF THE EXECUTIVE’S RESPONSIBILITIES WILL INCLUDE PROVIDING BANKING
OR OTHER FINANCIAL SERVICES WITHIN 25 MILES OF THE MAIN OFFICE(S) MAINTAINED BY
PSB, AND ANY OF ITS MAJORITY-OWNED SUBSIDIARIES, AS OF THE DATE OF THE
TERMINATION OF THE EXECUTIVE’S EMPLOYMENT;

 

(II)  PARTICIPATE IN ANY WAY IN HIRING OR OTHERWISE ENGAGING, OR ASSISTING ANY
OTHER PERSON OR ENTITY IN HIRING OR OTHERWISE ENGAGING, ON A TEMPORARY,
PART-TIME OR PERMANENT BASIS, ANY INDIVIDUAL WHO WAS EMPLOYED BY PSB OR ANY OF
ITS MAJORITY-OWNED SUBSIDIARIES AS OF THE DATE OF TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT;

 

(III)  SELL, OFFER TO SELL, PROVIDE BANKING OR OTHER FINANCIAL SERVICES, ASSIST
ANY OTHER PERSON IN SELLING OR PROVIDING BANKING OR OTHER FINANCIAL SERVICES, OR
SOLICIT OR OTHERWISE COMPETE FOR, EITHER DIRECTLY OR INDIRECTLY, ANY ORDERS,
CONTRACT, OR ACCOUNTS FOR

 

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SERVICES OF A KIND OR NATURE LIKE OR SUBSTANTIALLY SIMILAR TO THE FINANCIAL
SERVICES PERFORMED OR FINANCIAL PRODUCTS SOLD BY PSB OR ANY OF ITS
MAJORITY-OWNED SUBSIDIARIES (THE PRECEDING HEREINAFTER REFERRED TO AS
“SERVICES”), TO OR FROM ANY PERSON OR ENTITY FROM WHOM THE EXECUTIVE OR PSB (OR
SUCH SUBSIDIARIES), TO THE KNOWLEDGE OF THE EXECUTIVE, PROVIDED BANKING OR OTHER
FINANCIAL SERVICES, SOLD, OFFERED TO SELL OR SOLICITED ORDERS, CONTRACTS OR
ACCOUNTS FOR SERVICES DURING THE ONE (1) YEAR PERIOD IMMEDIATELY PRIOR TO THE
TERMINATION OF THE EXECUTIVE’S EMPLOYMENT; OR

 

(IV)  DIVULGE, DISCLOSE, OR COMMUNICATE TO OTHERS IN ANY MANNER WHATSOEVER, ANY
NONPUBLIC CONFIDENTIAL INFORMATION OF PSB AND ITS MAJORITY-OWNED SUBSIDIARIES,
TO THE KNOWLEDGE OF THE EXECUTIVE, INCLUDING, BUT NOT LIMITED TO, THE NAMES AND
ADDRESSES OF CUSTOMERS OR PROSPECTIVE CUSTOMERS, OF PSB (AND SUCH SUBSIDIARIES),
AS THEY MAY HAVE EXISTED FROM TIME TO TIME, OF WORK PERFORMED OR SERVICES
RENDERED FOR ANY CUSTOMER, ANY METHOD AND/OR PROCEDURES RELATING TO PROJECTS OR
OTHER WORK DEVELOPED FOR PSB (OR ANY OF SUCH SUBSIDIARIES), EARNINGS OR OTHER
INFORMATION CONCERNING PSB (OR SUCH SUBSIDIARIES).  THE RESTRICTIONS CONTAINED
IN THIS SUBPARAGRAPH (IV) APPLY TO ALL INFORMATION REGARDING PSB (AND SUCH
SUBSIDIARIES), REGARDLESS OF THE SOURCE WHO PROVIDED OR COMPILED SUCH
INFORMATION.  NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE RESTRICTION SET
FORTH IN THIS PARAGRAPH SHALL NOT APPLY TO ANY INFORMATION THAT BECOMES KNOWN TO
THE GENERAL PUBLIC FROM SOURCES OTHER THAN THE EXECUTIVE.

 

5.4.2  JUDICIAL REMEDIES.  IN THE EVENT OF A BREACH OR THREATENED BREACH BY THE
EXECUTIVE OF ANY PROVISION OF THESE RESTRICTIONS, THE EXECUTIVE RECOGNIZES THE
SUBSTANTIAL AND IMMEDIATE HARM THAT A BREACH OR THREATENED BREACH WILL IMPOSE
UPON PSB (AND/OR A MAJORITY-OWNED SUBSIDIARY OF PSB), AND FURTHER RECOGNIZES
THAT IN SUCH EVENT MONETARY DAMAGES MAY BE INADEQUATE TO FULLY PROTECT PSB (AND
SUCH SUBSIDIARIES).  ACCORDINGLY, IN THE EVENT OF A BREACH OR THREATENED BREACH
OF THIS AGREEMENT, THE EXECUTIVE CONSENTS TO PSB’S ENTITLEMENT TO PRELIMINARY,
INTERLOCUTORY, TEMPORARY OR PERMANENT INJUNCTIVE, OR ANY OTHER EQUITABLE RELIEF,
PROTECTING AND FULLY ENFORCING PSB’S RIGHTS HEREUNDER AND PREVENTING THE
EXECUTIVE FROM FURTHER BREACHING ANY OF HIS OBLIGATIONS SET FORTH HEREIN.  THE
EXECUTIVE EXPRESSLY WAIVES ANY REQUIREMENT, BASED ON ANY STATUTE, RULE OF
PROCEDURE, OR OTHER SOURCE, THAT PSB POST A BOND AS A CONDITION OF OBTAINING ANY
OF THE ABOVE-DESCRIBED REMEDIES.  NOTHING HEREIN SHALL BE CONSTRUED AS
PROHIBITING PSB FROM PURSUING ANY OTHER REMEDIES AVAILABLE TO PSB AT LAW OR IN
EQUITY FOR SUCH BREACH OR THREATENED BREACH, INCLUDING THE RECOVERY OF DAMAGES
FROM THE EXECUTIVE, WHICH MAY INCLUDE THE RETURN OF ALL OR A PORTION OF BENEFITS
PREVIOUSLY PAID HEREUNDER.  THE EXECUTIVE EXPRESSLY ACKNOWLEDGES AND AGREES
THAT: (I) THE RESTRICTIONS SET FORTH IN SECTION 5.4.1 HEREOF ARE REASONABLE, IN
TERMS OF SCOPE, DURATION, GEOGRAPHIC AREA, AND OTHERWISE, (II) THE PROTECTIONS
AFFORDED PSB IN SECTION 5.4.1 HEREOF ARE NECESSARY TO PROTECT ITS LEGITIMATE
BUSINESS INTEREST, (III) THE RESTRICTIONS SET FORTH IN SECTION 5.4.1 HEREOF WILL
NOT BE MATERIALLY ADVERSE TO THE EXECUTIVE’S EMPLOYMENT OPPORTUNITIES FOLLOWING
HIS TERMINATION OF EMPLOYMENT WITH PSB OR A MAJORITY-OWNED SUBSIDIARY OF PSB,
AND (IV) HIS AGREEMENT TO OBSERVE SUCH RESTRICTIONS FORMS A MATERIAL PART OF THE
CONSIDERATION FOR THIS AGREEMENT.

 

5.4.3  OVERBREADTH OF RESTRICTIVE COVENANT.  IT IS THE INTENTION OF THE PARTIES
THAT IF ANY RESTRICTIVE COVENANT IN THIS AGREEMENT IS DETERMINED BY A COURT OF
COMPETENT

 

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JURISDICTION TO BE OVERLY BROAD, THEN THE COURT SHOULD ENFORCE SUCH RESTRICTIVE
COVENANT TO THE MAXIMUM EXTENT PERMITTED UNDER THE LAW AS TO AREA, BREADTH AND
DURATION.

 

5.4.4  CHANGE IN CONTROL.  THE NON-COMPETE PROVISION DETAILED IN SECTION 5.4.1
HEREOF SHALL NOT BE ENFORCEABLE FOLLOWING A CHANGE IN CONTROL.

 

5.5  SUICIDE OR MISSTATEMENT.  NO BENEFITS SHALL BE PAYABLE IF THE EXECUTIVE
COMMITS SUICIDE WITHIN TWO (2) YEARS AFTER THE DATE OF THIS AGREEMENT, OR IF AN
INSURANCE COMPANY (IF APPLICABLE) DENIES COVERAGE FOR MATERIAL MISSTATEMENTS OF
FACT MADE BY THE EXECUTIVE ON ANY APPLICATION FOR LIFE INSURANCE PURCHASED BY
PSB.

 

ARTICLE 6
CLAIMS AND REVIEW PROCEDURES

 

6.1  CLAIMS PROCEDURE.  THE EXECUTIVE OR A BENEFICIARY (“CLAIMANT”) WHO HAS NOT
RECEIVED BENEFITS UNDER THE AGREEMENT THAT HE OR SHE BELIEVES SHOULD BE PAID
SHALL MAKE A CLAIM FOR SUCH BENEFITS AS FOLLOWS:

 

6.1.1  INITIATION – WRITTEN CLAIM.  THE CLAIMANT INITIATES A CLAIM BY SUBMITTING
TO PSB A WRITTEN CLAIM FOR THE BENEFITS.

 

6.1.2  TIMING OF PSB RESPONSE.  PSB SHALL RESPOND TO SUCH CLAIMANT WITHIN
90 DAYS AFTER RECEIVING THE CLAIM.  IF PSB DETERMINES THAT SPECIAL CIRCUMSTANCES
REQUIRE ADDITIONAL TIME FOR PROCESSING THE CLAIM, PSB CAN EXTEND THE RESPONSE
PERIOD BY AN ADDITIONAL 90 DAYS BY NOTIFYING THE CLAIMANT IN WRITING, PRIOR TO
THE END OF THE INITIAL 90-DAY PERIOD, THAT AN ADDITIONAL PERIOD IS REQUIRED. 
THE NOTICE OF EXTENSION MUST SET FORTH THE SPECIAL CIRCUMSTANCES AND THE DATE BY
WHICH PSB EXPECTS TO RENDER ITS DECISION.

 

6.1.3  NOTICE OF DECISION.  IF PSB DENIES PART OR ALL OF THE CLAIM, PSB SHALL
NOTIFY THE CLAIMANT IN WRITING OF SUCH DENIAL.  PSB SHALL WRITE THE NOTIFICATION
IN A MANNER CALCULATED TO BE UNDERSTOOD BY THE CLAIMANT. THE NOTIFICATION SHALL
SET FORTH:

 

(I)  THE SPECIFIC REASONS FOR THE DENIAL,

 

(II)  A REFERENCE TO THE SPECIFIC PROVISIONS OF THE AGREEMENT ON WHICH THE
DENIAL IS BASED,

 

(III)  A DESCRIPTION OF ANY ADDITIONAL INFORMATION OR MATERIAL NECESSARY FOR THE
CLAIMANT TO PERFECT THE CLAIM AND AN EXPLANATION OF WHY IT IS NEEDED,

 

(IV)  AN EXPLANATION OF THE AGREEMENT’S REVIEW PROCEDURES AND THE TIME LIMITS
APPLICABLE TO SUCH PROCEDURES, AND

 

(V)  A STATEMENT OF THE CLAIMANT’S RIGHT TO BRING A CIVIL ACTION UNDER ERISA
SECTION 502(A) FOLLOWING AN ADVERSE BENEFIT DETERMINATION ON REVIEW.

 

6.2  REVIEW PROCEDURE.  IF PSB DENIES PART OR ALL OF THE CLAIM, THE CLAIMANT
SHALL HAVE THE OPPORTUNITY FOR A FULL AND FAIR REVIEW BY PSB OF THE DENIAL, AS
FOLLOWS:

 

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6.2.1  INITIATION – WRITTEN REQUEST.  TO INITIATE THE REVIEW, THE CLAIMANT,
WITHIN 60 DAYS AFTER RECEIVING PSB’S NOTICE OF DENIAL, MUST FILE WITH PSB A
WRITTEN REQUEST FOR REVIEW.

 

6.2.2  ADDITIONAL SUBMISSIONS – INFORMATION ACCESS.  THE CLAIMANT SHALL THEN
HAVE THE OPPORTUNITY TO SUBMIT WRITTEN COMMENTS, DOCUMENTS, RECORDS AND OTHER
INFORMATION RELATING TO THE CLAIM.  PSB SHALL ALSO PROVIDE THE CLAIMANT, UPON
REQUEST AND FREE OF CHARGE, REASONABLE ACCESS TO, AND COPIES OF, ALL DOCUMENTS,
RECORDS AND OTHER INFORMATION RELEVANT (AS DEFINED IN APPLICABLE ERISA
REGULATIONS) TO THE CLAIMANT’S CLAIM FOR BENEFITS.

 

6.2.3  CONSIDERATIONS ON REVIEW.  IN CONSIDERING THE REVIEW, PSB SHALL TAKE INTO
ACCOUNT ALL MATERIALS AND INFORMATION THE CLAIMANT SUBMITS RELATING TO THE
CLAIM, WITHOUT REGARD TO WHETHER SUCH INFORMATION WAS SUBMITTED OR CONSIDERED IN
THE INITIAL BENEFIT DETERMINATION.

 

6.2.4  TIMING OF PSB RESPONSE.  PSB SHALL RESPOND IN WRITING TO SUCH CLAIMANT
WITHIN 60 DAYS AFTER RECEIVING THE REQUEST FOR REVIEW.  IF PSB DETERMINES THAT
SPECIAL CIRCUMSTANCES REQUIRE ADDITIONAL TIME FOR PROCESSING THE CLAIM, PSB CAN
EXTEND THE RESPONSE PERIOD BY AN ADDITIONAL 60 DAYS BY NOTIFYING THE CLAIMANT IN
WRITING, PRIOR TO THE END OF THE INITIAL 60-DAY PERIOD, THAT AN ADDITIONAL
PERIOD IS REQUIRED.  THE NOTICE OF EXTENSION MUST SET FORTH THE SPECIAL
CIRCUMSTANCES AND THE DATE BY WHICH PSB EXPECTS TO RENDER ITS DECISION.

 

6.2.5  NOTICE OF DECISION.  PSB SHALL NOTIFY THE CLAIMANT IN WRITING OF ITS
DECISION ON REVIEW.  PSB SHALL WRITE THE NOTIFICATION IN A MANNER CALCULATED TO
BE UNDERSTOOD BY THE CLAIMANT. THE NOTIFICATION SHALL SET FORTH:

 

(I)  THE SPECIFIC REASONS FOR THE DENIAL,

 

(II)  A REFERENCE TO THE SPECIFIC PROVISIONS OF THE AGREEMENT ON WHICH THE
DENIAL IS BASED,

 

(III)  A STATEMENT THAT THE CLAIMANT IS ENTITLED TO RECEIVE, UPON REQUEST AND
FREE OF CHARGE, REASONABLE ACCESS TO, AND COPIES OF, ALL DOCUMENTS, RECORDS AND
OTHER INFORMATION RELEVANT (AS DEFINED IN APPLICABLE ERISA REGULATIONS) TO THE
CLAIMANT’S CLAIM FOR BENEFITS, AND

 

(IV)  A STATEMENT OF THE CLAIMANT’S RIGHT TO BRING A CIVIL ACTION UNDER ERISA
SECTION 502(A).

 

ARTICLE 7
AMENDMENTS AND TERMINATION

 

This Agreement may be amended or terminated only by a written agreement signed
by PSB and the Executive.

 

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ARTICLE 8
MISCELLANEOUS

 

8.1  BINDING EFFECT.  THIS AGREEMENT SHALL BIND THE EXECUTIVE AND PSB (AND ITS
MAJORITY-OWNED SUBSIDIARIES), AND THEIR BENEFICIARIES, SURVIVORS, EXECUTORS,
SUCCESSORS, ADMINISTRATORS AND TRANSFEREES.

 

8.2  NO GUARANTEE OF EMPLOYMENT.  THIS AGREEMENT IS NOT AN EMPLOYMENT POLICY OR
CONTRACT.  IT DOES NOT GIVE THE EXECUTIVE THE RIGHT TO REMAIN AN EMPLOYEE OF PSB
OR ANY OF ITS MAJORITY-OWNED SUBSIDIARIES, NOR DOES IT INTERFERE WITH PSB’S
RIGHT TO DISCHARGE THE EXECUTIVE.  IT ALSO DOES NOT REQUIRE THE EXECUTIVE TO
REMAIN AN EMPLOYEE NOR INTERFERE WITH THE EXECUTIVE’S RIGHT TO TERMINATE
EMPLOYMENT AT ANY TIME.

 

8.3  NON-TRANSFERABILITY.  BENEFITS UNDER THIS AGREEMENT CANNOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, ATTACHED OR ENCUMBERED IN ANY MANNER.

 

8.4  REORGANIZATION.  PSB SHALL NOT MERGE OR CONSOLIDATE INTO OR WITH ANOTHER
COMPANY, OR REORGANIZE, OR SELL SUBSTANTIALLY ALL OF ITS ASSETS TO ANOTHER
COMPANY, FIRM, OR PERSON UNLESS SUCH SUCCEEDING OR CONTINUING COMPANY, FIRM, OR
PERSON AGREES TO ASSUME AND DISCHARGE THE OBLIGATIONS OF PSB UNDER THIS
AGREEMENT.  UPON THE OCCURRENCE OF SUCH EVENT, THE TERM “PSB” AS USED IN THIS
AGREEMENT SHALL BE DEEMED TO REFER TO THE SUCCESSOR OR SURVIVOR COMPANY.

 

8.5  TAX WITHHOLDING.  PSB SHALL WITHHOLD ANY TAXES THAT ARE REQUIRED TO BE
WITHHELD FROM THE BENEFITS PROVIDED UNDER THIS AGREEMENT.  IN THE EVENT ADEQUATE
FUNDS ARE UNAVAILABLE FOR SUCH WITHHOLDING, THE EXECUTIVE AGREES TO PROVIDE THE
SAME TO PSB UPON WRITTEN REQUEST.

 

8.6  APPLICABLE LAW.  THE AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED
BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, EXCEPT TO THE EXTENT PREEMPTED
BY THE LAWS OF THE UNITED STATES OF AMERICA.

 

8.7  UNFUNDED ARRANGEMENT.  THE EXECUTIVE AND ANY BENEFICIARY ARE GENERAL
UNSECURED CREDITORS OF PSB FOR THE PAYMENT OF BENEFITS UNDER THIS AGREEMENT. 
THE BENEFITS REPRESENT THE MERE PROMISE BY PSB TO PAY SUCH BENEFITS.  THE RIGHTS
TO BENEFITS ARE NOT SUBJECT IN ANY MANNER TO ANTICIPATION, ALIENATION, SALE,
TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE, ATTACHMENT, OR GARNISHMENT BY
CREDITORS.  ANY INSURANCE ON THE EXECUTIVE’S LIFE IS A GENERAL ASSET OF PSB, OR
A MAJORITY-OWNED SUBSIDIARY OF PSB, TO WHICH THE EXECUTIVE AND ANY BENEFICIARY
HAVE NO PREFERRED OR SECURED CLAIM.

 

8.8  ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN
PSB AND THE EXECUTIVE AS TO THE SUBJECT MATTER HEREOF.  NO RIGHTS ARE GRANTED TO
THE EXECUTIVE BY VIRTUE OF THIS AGREEMENT OTHER THAN THOSE SPECIFICALLY SET
FORTH HEREIN.

 

8.9  ADMINISTRATION.  PSB SHALL HAVE POWERS WHICH ARE NECESSARY TO ADMINISTER
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

 

(I)  ESTABLISHING AND REVISING THE METHOD OF ACCOUNTING FOR THE AGREEMENT;

 

(II)  MAINTAINING A RECORD OF BENEFIT PAYMENTS;

 

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(III)  ESTABLISHING RULES AND PRESCRIBING ANY FORMS NECESSARY OR DESIRABLE TO
ADMINISTER THE AGREEMENT; AND

 

(IV)  INTERPRETING THE PROVISIONS OF THE AGREEMENT.

 

PSB shall have absolute discretion to interpret the provisions of this Agreement
and to make all determinations, including factual determinations attendant
thereto.

 

8.10  NAMED FIDUCIARY.  PSB SHALL BE THE NAMED FIDUCIARY AND PLAN ADMINISTRATOR
UNDER THIS AGREEMENT.  IT MAY DELEGATE TO OTHERS CERTAIN ASPECTS OF THE
MANAGEMENT AND OPERATIONAL RESPONSIBILITIES INCLUDING THE EMPLOYMENT OF ADVISORS
AND THE DELEGATION OF MINISTERIAL DUTIES TO QUALIFIED INDIVIDUALS.

 

8.11  HEADINGS.  HEADINGS ARE INCLUDED IN THIS AGREEMENT FOR THE CONVENIENCE OF
THE PARTIES AND SHALL NOT BE TAKEN INTO CONSIDERATION IN CONSTRUING THE
PROVISIONS OF THIS AGREEMENT.

 

8.12  LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL.  PSB IS AWARE THAT
UPON THE OCCURRENCE OF A CHANGE OF CONTROL, THE BOARD OF DIRECTORS OR A
SHAREHOLDER OF PSB, OR OF ANY SUCCESSOR CORPORATION MIGHT THEN CAUSE OR ATTEMPT
TO CAUSE PSB OR SUCH SUCCESSOR TO REFUSE TO COMPLY WITH ITS OBLIGATIONS UNDER
THE AGREEMENT AND MIGHT CAUSE OR ATTEMPT TO CAUSE PSB TO INSTITUTE, OR MAY
INSTITUTE, LITIGATION SEEKING TO DENY THE EXECUTIVE THE BENEFITS INTENDED UNDER
THE AGREEMENT.  IN THESE CIRCUMSTANCES, THE PURPOSE OF THE AGREEMENT COULD BE
FRUSTRATED. ACCORDINGLY, IF, FOLLOWING A CHANGE OF CONTROL, IT SHOULD APPEAR TO
THE EXECUTIVE THAT PSB OR ANY SUCCESSOR CORPORATION HAS FAILED TO COMPLY WITH
ANY OF ITS OBLIGATIONS UNDER THE AGREEMENT OR ANY AGREEMENT THEREUNDER, OR IF
PSB OR ANY OTHER PERSON TAKES ANY ACTION TO DECLARE THE AGREEMENT VOID OR
UNENFORCEABLE OR INSTITUTES ANY LITIGATION OR OTHER LEGAL ACTION DESIGNED TO
DENY, DIMINISH OR TO RECOVER FROM THE EXECUTIVE THE BENEFITS INTENDED TO BE
PROVIDED, THEN PSB IRREVOCABLY AUTHORIZES THE EXECUTIVE TO RETAIN COUNSEL OF THE
EXECUTIVE’S CHOICE AT THE EXPENSE OF PSB TO REPRESENT THE EXECUTIVE IN
CONNECTION WITH THE INITIATION OR DEFENSE OF ANY LITIGATION OR OTHER LEGAL
ACTION, WHETHER BY OR AGAINST PSB OR ANY DIRECTOR, OFFICER, SHAREHOLDER OR OTHER
PERSON AFFILIATED WITH PSB OR ANY SUCCESSOR THERETO IN ANY JURISDICTION

 

IN WITNESS WHEREOF, the Executive and PSB have signed this Agreement as of the
date and year first above written.

 

EXECUTIVE:

PSB BANCORP, INC.

 

 

 

 

 

By

 

 

 

 

 

Vincent J. Fumo

 

 

 

 

Title

 

 

 

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BENEFICIARY DESIGNATION

 

PSB BANCORP, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

Vincent J. Fumo

 

I designate the following as beneficiary of any death benefits under this
Agreement:

 

Primary:

 

 

Contingent:

 

 

 

 

Note:                   To name a trust as beneficiary, please provide the name
of the trustee(s) and the exact name and date of the trust agreement.

 

I understand that I may change these beneficiary designations by filing a new
written designation with PSB.  I further understand that the designations will
be automatically revoked if the beneficiary predeceases me, or, if I have named
my spouse as beneficiary and our marriage is subsequently dissolved.

 

 

Signature

 

 

 

Date

 

 

 

 

Received by PSB this             day of                             , 200  .

 

 

By

 

 

 

Title

 

 

 

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