Exhibit 10.6


 


EMPLOYMENT AGREEMENT


 


This AGREEMENT is made as of this 21st day of March.
2005 by and among THE WASHINGTON SAVINGS BANK, a federally chartered stock
savings bank (the “Employer”) and PHILLIP C. BOWMAN,
an individual residing in Arnold, Maryland (the “Executive”).


 


WHEREAS, the Employer wishes to retain Executive to
serve as its Chief Executive Officer, effective March 21, 2005;


 


WHEREAS, Employer’s retention of the Executive and the
terms hereof is subject to prior approval by the Office of Thrift Supervision;


 


WHEREAS, the Office of Thrift Supervision, by letter
dated March 16, 2004, has granted the Employer a waiver of the prior notice
requirement under applicable regulations, to permit Executive to commence
employment immediately;


 


WHEREAS, the Board of Directors of the Employer have
approved and authorized the Employer to enter into this Agreement with the
Executive, subject to approval  by the
Office of Thrift Supervision;


 


WHEREAS, the Executive is willing to accept employment
as the Chief Executive Officer of the Employer on the terms and conditions set
forth herein; and


 


WHEREAS, the parties desire to enter into this
Agreement, setting forth the terms and conditions for the employment
relationship of the Executive with the Employer;


 


NOW, THEREFORE, in consideration of the foregoing and
the mutual promises, covenants and agreements set forth in this Agreement, and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:


 


1.             Employment.


 


(a)           Term.
The initial term of employment under this Agreement shall be for the period
commencing on the later of the date hereof or approval by the Office of Thrift
Supervision (as described above) and ending on March 20, 2008 (the “Initial
Term”). Subject to annual review and approval by the Board of Directors of the
Employer, this Agreement may be extended by written notice from the Employer to
the Executive for an additional consecutive 12-month period (the “Extended Term”)
no later than March 21, 2007 and every subsequent March 


 

















 


thereafter, unless the Executive has given contrary written notice to
the Employer at least 90 days before any such renewal date. The Initial Term
and all such Extended Terms are collectively referred to herein as the “Employment
Term.”


 


(b)           Duties.
The Executive is employed as chief executive officer during the Employment Term.
As chief executive officer, the Executive shall render executive, policy and
other management services to the Employer consistent with the Executive’s
position and experience and of the type customarily performed by persons serving
in a similar capacity, and shall be responsible for all aspects of the management
and operations of the Employer (including without limitation development and
implementation of a revised business plan, supervision of the Employer’s
lending function, and development of an executive management team consistent
with the Employer’s business plan and the policies and direction of the Board
of Directors) and shall report to the Employer’s Board of Directors or such
committee thereof as shall be designated by the Board of Directors. During the
Employment Term, there shall be no material decrease in the duties and
responsibilities of the Executive otherwise than as provided herein, unless the
parties otherwise agree in writing. During the Employment Term, the Executive
shall not be required to relocate, without his consent, his place of employment
to a location more than 50 miles away from the Employer’s Bowie, Maryland
headquarters location to perform his duties hereunder, except for reasonably
required travel by the Executive on the business of the Employer. The Executive
is encouraged to affiliate with professional associations, business and civic
organizations in support of his role as chief executive officer, provided that
Executive’s involvement in such activities does not adversely affect the
performance of his duties on behalf of the Employer.


 


2.             Compensation and
Benefits.


 


(a)           Base
Salary. The Executive shall initially be paid a base salary at an
annualized rate of $225,000 (as may be adjusted from time to time in accordance
with this Agreement, “Base Salary”), payable in accordance with the Employer’s
regular payroll practices for its executive employees. On an annual basis,
prior to November 30 of each year during the Employment Term, the Executive’s
Base Salary shall be reviewed by the independent members of the Board of
Directors (or a committee comprised exclusively of independent members, as set
forth in the listing standards of the American Stock Exchange) and may be
increased in the discretion of the Board of Directors of the Employer or such
committee. In reviewing the Executive’s Base Salary, the Chief Executive
Officer and Board of Directors of the Employer shall consider the Executive’s
performance, scope of responsibility, and such other matters as they deem
appropriate. The Base Salary of the Executive shall not be decreased at any
time during the Employment Term from the amount then in effect, unless the
Executive otherwise agrees in writing.


 


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(b)           Bonuses
and Incentive Compensation. The Executive shall be eligible to receive an
annual bonus of $50,000 for the initial year of service hereunder, payable by
March 31, 2006, and thereafter such bonuses as shall be determined by the
independent members of the Board of Directors (or a committee comprised
exclusively of independent members). No other compensation provided for in this
Agreement shall be deemed a substitute for the Executive’s right to participate
in such bonus when and as declared by the Board of Directors of the Employer. This
provision shall not preclude the grant of any other bonus or incentive
compensation to the Executive as determined by the Board of Directors of the
Employer.


 


(c)           Employee
Stock Options. The Executive shall be entitled on and effective as of September
30, 2005 (provided Executive continues to be employed on that date) to an
initial grant of 5-year options to purchase 5,000 shares of the Employer’s
Common Stock at an exercise price per share equal to the closing price of the
Common Stock on the American Stock Exchange on that date. The option grant
shall be evidenced by the Employer’s customary form. Any further grant of
employee stock options shall be subject to the discretion of the independent
members of the Board of Directors or its Compensation Committee.


 


(d)           Benefit
Plans. The Executive shall be eligible to participate in any employee
pension benefit plans (as that term is defined under Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended), group life
insurance plans, medical plans, dental plans, long-term disability plans,
business travel insurance programs and other fringe benefit plans or programs
maintained by the Employer for the benefit of its executive employees. The
Executive’s participation in any such benefit plans and programs shall be based
on, and subject to satisfaction of, the eligibility requirements and other
conditions of such plans and programs. If the Executive’s employment by the
Employer shall cease for any reason other than by voluntary termination (as
described in Section 3(b) below) or for “Cause” (defined in Section 3(e)
below), the Executive shall receive continued group life, health, dental,
accident and long term disability insurance coverage for the remaining
Employment Term, equivalent to the coverage to which he would have been
entitled under such plans (as in effect on the date of his termination of
employment, or, if his termination of employment occurs after a “Change of
Control” (defined in Section 4(b) below), on the date of such Change of
Control, whichever benefits are greater, if he had continued working for the
Employer during the remaining Employment Term at the highest rate of salary
achieved during the Employment Term, but taking into account any coverage
provided from any subsequent employer.


 


(e)           Expenses.
Subject to the policies of the Employer and oversight by the Board of Directors
or the Audit Committee thereof, the Executive is authorized to incur reasonable
expenses in the performance of his duties hereunder, including the costs of
business entertainment, travel, and attendance at conventions and 


 


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meetings. The Employer (subject to oversight by the Audit Committee) shall
reimburse the Executive for all such expenses promptly upon periodic
presentation by the Executive of an itemized account of such expenses.


 


(f)            Other
Benefits. During the period of employment, the Executive shall also be
entitled to receive the following benefits:


 


(i)            Paid vacation of at
least four weeks during each calendar year (prorated for partial years) (with
no carry over of unused vacation to a subsequent year) and any holidays that
may be provided to substantially all employees of the Employer in accordance
with the Employer’s holiday policy;


 


(ii)           Reasonable sick leave
consistent with the Employer’s policy in that regard for other executive
officers;


 


(iii)          Reimbursement of monthly
dues and related fees (but not personal expenses) for one country club
membership as may be beneficial to the Executive’s roles with the Employer. The
choice of club shall be subject to prior review and approval by the Audit Committee
of the Board of Directors, and shall be subject to subsequent review and
disapproval by the Audit Committee; and


 


(iv)          The lease of an
automobile for business use for up to $500 monthly and reasonable associated
repair and maintenance costs.


 


3.             Termination.


 


Prior to a Change of Control, the Executive’s
employment by the Employer shall be subject to termination as follows:


 


(a)           Expiration
of the Employment Term. The Executive’s employment with the Employer shall
not terminate prior to the expiration of the established term, except as
provided below in Section 3.


 


(b)           Voluntary
Termination. The Executive may terminate this Agreement upon not less than
60 days prior written notice delivered to the Employer, in which event the
Executive shall be entitled only to the compensation and benefits the Executive
has earned or accrued through the effective date of the voluntary termination.


 


(c)           Termination
Upon Death. This Agreement shall terminate upon the Executive’s death. In
the event this Agreement is terminated as a result of the Executive’s death,
the Employer shall continue payments of the Executive’s Base Salary which
should have otherwise been due for a period of 30 days following the Executive’s
death to the Executive’s estate.


 


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(d)           Termination
Upon Disability. The Employer may terminate this Agreement upon the
Executive’s disability. For purposes of this Agreement, the Executive’s
inability to perform the Executive’s duties hereunder by reason of physical or
mental illness or injury for a period of 26 consecutive weeks that follows the
Executive’s use of all available sick leave (the “Disability Period”) shall
constitute disability. The determination of disability shall be made by a
physician selected by the Employer. During the Disability Period, the Executive
shall be entitled to 100% of the Executive’s Base Salary otherwise payable
during that period, reduced by any other Employer provided benefits to which
the Executive may be entitled with respect to the Disability Period which
benefits are specifically payable solely on account of such disability
(including, but not limited to, benefits provided under any disability
insurance policy or program, worker’s compensation law, or any other benefit
program or arrangement then in effect, it being acknowledged that the Employer
does not currently maintain any group disability coverage).


 


(e)           Termination
for Cause. Subject to the provisions of Section 3(k) of this
Agreement, the Employer may terminate Executive’s employment for Cause. For the
purposes of this Agreement, the Employer shall have “Cause” to terminate
Executive’s employment under this Agreement upon:  (i) 
the failure by Executive to perform his duties under this Agreement
(other than any such failure resulting from Executive’s incapacity due to
physical or mental illness), after a written demand for performance is
delivered to Executive by the Board, which demand specifically identifies the
manner in which the Board believes that Executive has not performed his duties;
(ii) the engaging by Executive in acts of dishonesty, incompetence, fraud,
gross negligence, breach of fiduciary duty involving personal profit, willful
misconduct or other gross misconduct injurious to the Employer;  (iii) 
the violation by Executive of any law, rule or regulation (other than
traffic violations or similar offenses) or formal or informal enforcement
action of any governmental regulatory agency applicable to the Emoloyer or its
personnel and injurious to the Bank; or (iv) the breach of this Agreement by
Executive.


 


Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of a majority of the entire membership of
the Board at a meeting of the Board called and held for the purpose (after
reasonable written notice to Executive and an opportunity for Executive,
together with his counsel, to be heard before the Board at such meeting),
finding that in the good faith opinion of the Board, Executive was guilty of
conduct set forth above in any of clauses (i), (ii), (iii) or (iv) of this
Section 3(e) and describing such conduct.


 


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(f)            Termination
Without Cause. The Employer may terminate the Executive’s employment for
reasons other than Cause upon not less than 60 days prior written notice
delivered to the Executive, in which event the Employer shall pay to the
Executive, within 30 days of the date of termination, a lump sum payment equal
to the unpaid Base Salary that would have been paid to or earned by the
Executive pursuant to this Agreement, if the Executive had remained employed
under the terms of this Agreement through the end of the Initial Term, or for a
period of 12 months following the date of termination, whichever period is greater.
If the Executive terminates his employment with the Employer during the
Employment Term for “Good Reason” (defined in Section 4(c) below), other than
following a Change of Control, such termination shall be deemed to have been a
termination by the Employer of the Executive’s employment without Cause.


 


(g)           Change
of Control. If the Executive’s employment by the Employer shall cease for
any reason other than Cause within 12 months following a Change of Control that
occurs during the Employment Term, the provisions of paragraph 4 below shall
apply.


 


(h)           Termination
as the Result of Non-Renewal. If the Employer does not extend the
Employment Term under Section 1(a) then, upon the expiration of the Employment
Term, the Employer shall pay to the Executive, within thirty (30) days of
termination, a lump sum payment equal to 12 months Base Salary. However, at
Employer’s option exercised at the time the Employer gives its notice of
extension under Section 1(a), Employer may release Executive from the
provisions of Section 5(b), upon which Executive shall be deemed to have waived
and released any right to severance under this Section 3(h).


 


(i)            Resignation.
Effective upon the Executive’s termination of employment for any reason, the
Executive hereby resigns from any and all offices and positions related to the
Executive’s employment with the Employer and any subsidiaries or affiliates
thereof, and held by the Executive at the time of termination.


 


(j)            Regulatory Limits. Notwithstanding any other provision in
this Agreement, (i) the Employer may terminate or suspend this Agreement and
the employment of the Executive hereunder, as if such termination were for
Cause under Section 3(e) hereof, to the extent required by the applicable
Federal or state related to banking, deposit insurance or bank or savings
institution holding companies or by regulations or orders issued by the Office
of Thrift Supervision, the Federal Deposit Insurance Corporation or any other
state or federal banking regulatory agency having jurisdiction over the
Employer and (ii) no payment shall be required to be made to or for the benefit
of the Executive under this Agreement to the extent such payment is prohibited
by applicable law, regulation or order issued by a banking agency or a court of
competent jurisdiction; provided, that
it shall be the Employer’s burden to prove that any such action was so
required.


 


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(k)           Notice
of Termination. Any termination by the Employer or by Executive pursuant to
the terms and provisions of this Agreement shall be communicated by written
Notice of Termination, as defined in this Agreement, to the other party to this
Agreement. For purposes of this Agreement, a “Notice of Termination” shall mean
a written notice, given in accordance with the provisions of Section 15 of this
Agreement, which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated.


 


(l)            No
Mitigation. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, such
amounts shall not be reduced whether or not the Executive obtains other
employment.


 


4.             Termination Following
a Change of Control.


 


(a)           In
the event the Employer terminates the Executive’s employment, or the Executive
terminates employment with Good Reason, in either case within 12 months after a
Change of Control, the Employer shall, within 60 days of termination, pay to
the Executive a lump sum cash payment equal to 2.99 times the average annual
compensation paid to the Executive by Employer and included in the Executive’s
gross income for income tax purposes during the five full calendar years, or
shorter period of employment, that immediately precede the year during which
the Change of Control occurs.


 


(b)           For
purposes of this Agreement, a “Change of Control” shall mean:


 


(1)           The
acquisition by any individual, entity or group (within the meaning of Section
13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of either (i) the then
outstanding shares of common stock of the Employer (the “Outstanding Common
Stock”), or (ii) the combined voting power of the then outstanding voting
securities of the Employer entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); provided,
however, that for purposes of this
subsection (1), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Employer, (ii) any acquisition
by the Employer, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Employer or any other corporation
controlled by the Employer, or (iv) any acquisition by any corporation pursuant
to a transaction that complies with clauses (i), (ii) and (iii) of subsection
(3) of this Section 4(c); or


 


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(2)           Individuals
who, as of the date hereof (giving effect to the Executive replacing John F.
Motzer as a member of the Board of Directors), constitute the Board of
Directors (the “Incumbent Board”) cease for any reason to constitute at least a
majority of such Board of Directors; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors of the Employer; or


 


(3)           Consummation
of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Employer (a “Business Combination”),
in each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Employer or all or substantially all of the Employer’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Common Stock and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Employer,
the Employer, such corporation resulting from such Business Combination or a
corporation controlled by any of them) beneficially owns, directly or
indirectly, 25% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or


 


(4)           Approval
by the shareholders of the Employer of a complete liquidation or dissolution of
the Employer without the establishment of a successor corporation.


 


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(c)           “Good Reason” shall
mean:


 


(i)            without Executive’s
written consent, a significant change in the nature or scope of the
authorities, powers, functions or duties of Executive or the assignment to
Executive of any duties inconsistent with his positions, duties,
responsibilities and status with the Employer, or a change in his reporting
responsibilities, titles or offices, or any removal of Executive from any of
such positions, except:  (1) in
connection with the termination by the Employer of his employment for Cause or
disability; or (2) in connection with the termination by Executive of his
employment other than for Good Reason; or (3) as a result of his death; or


 


(ii)           any purported
termination of Executive’s employment that is not effected pursuant to a Notice
of Termination satisfying the requirements of Section 3(k) (and for purposes of
this Agreement, no such purported termination shall be effective).


 


(d)           It is the intention of the parties hereto that the payments and other
compensation provided for herein
are reasonable compensation for Executive’s services to the Employer and shall
not constitute an “excess parachute payment” within the meaning of Section 280G
of the Code and any regulations thereunder. In the event that the Employer’s
independent accountants acting as auditors for the Employer determine that the
payments provided for herein under Section 4 hereof constitute an “excess
parachute payment” within the meaning of Section 280G of the Code and any
regulations thereunder, then the compensation payable under Section 4 hereof
shall be reduced by the Employer in its sole discretion to the point that such
compensation shall not qualify as an “excess parachute payment” within the
meaning of Section 280G of the Code and any regulations thereunder.


 


5.             Covenants.


 


(a)           Confidentiality.
The Executive shall not, without the prior written consent of the Employer,
disclose or use in any way, either during the Employment Term or thereafter,
except as required in the course of his employment by Employer, any
confidential business or technical information or trade secret acquired in the
course of the Executive’s employment by the Employer. The Executive
acknowledges and agrees that it would be difficult to fully compensate the
Employer for damages resulting from the breach or threatened breach of the
foregoing provision and, accordingly, that the Employer shall be entitled to
temporary preliminary injunctions and permanent injunctions to enforce such
provision. This provision with respect to injunctive relief shall not, however,
diminish the Employer’s right to claim and recover damages. The Executive 


 


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covenants to use his best efforts to prevent the publication or
disclosure of any trade secret or any confidential information concerning the
business or finances of Employer or Employer’s affiliates, or any of their
dealings, transactions or affairs which may come to the Executive’s knowledge
in the pursuance of his duties or employment.


 


(b)           Non-Solicitation.


 


(i)            For
a period of 24 months after the termination of Executive’s employment with the
Employer for any reason (the “Date of Termination”), Executive will not contact
or solicit, whether personally or indirectly through agents or representatives,
any employee, consultant or service provider of the Employer, any subsidiary of
the Employer, any affiliate of the Employer or any parent corporation of the
Employer (the “Employer Group”)
for the purpose of terminating his or her employment, consulting or service
providing relationship with any member of the Employer Group. For purposes of
this Section 5(b), employee, consultant or service provider shall include any
employee, consultant or service provider who has performed any service or other
work for any member of the Employer Group, or entered into a written agreement
to so perform any such service or other work, at any time within six months
prior to the Date of Termination.


 


(ii)           For
a period of 12 months after the Date of Termination, Executive will not contact
or solicit, whether personally or indirectly though agents or representatives,
any current customer of the Employer Group for the purposes of soliciting,
diverting, or taking away or attempting to so solicit, divert or take away from
the Employer Group, the banking or lending business of any customer of the
Employer Group.


 


(iii)          Executive agrees to provide a copy, or
accurate written summary, of any of these restrictive covenants, still then
applicable, to any person, firm, company or corporation from whom he seeks
employment if that person, firm, company or corporation is a competitor of any
member of the Employer Group. Employer acknowledges that it has received a copy
of the restrictive covenants of its immediately prior employer.


 


(iv)          Executive
represents to the Employer that the restrictions on his future business
opportunities as provided in this Agreement are fair and protect legitimate
business interests of the Employer Group. He further represents that,  even considering the restrictive covenants in
this Agreement, he expects to be able to earn a good and reasonable living from
those activities, areas, and opportunities not restricted by this Agreement.


 


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(c)           Termination
of Payments. Upon the breach by the Executive of any covenant under this
Section 5, the Employer may terminate, offset or recover from the Executive
immediately any and all benefits paid to the Executive pursuant to this
Agreement, in addition to any and all other remedies available to the Employer
under the law or in equity.


 


(d)           Modification.
Although the parties consider the restrictions contained in this Section 5
reasonable as to protected business, duration, and geographic area, in the
event that any court of competent jurisdiction deems them to be unreasonable,
then such restrictions shall apply to the broadest business, longest period,
and largest geographic territory as may be considered reasonable by such court,
and this Section 5, as so amended, shall be enforced.


 


(e)           Other
Agreements. The Executive represents and warrants that neither the
Executive’s employment with the Employer nor the Executive’s performance of his
obligations hereunder will conflict with or violate the Executive’s obligations
under the terms of any agreement with a previous employer or other party
including agreements to refrain from competing, directly or indirectly, with
the business of such previous employer or any other party.


 


6.             Withholding.


 


The Employer shall deduct and withhold from compensation
and benefits provided under this Agreement all necessary income and employment
taxes and any other similar sums required by law to be withheld.


 


7.             Rules, Regulations
and Policies.


 


The Executive shall use his best efforts to abide by
and comply with all of the rules, regulations, and policies of the Employer,
including without limitation the Employer’s policy of strict adherence to, and
compliance with, any and all requirements of the banking, securities, and
antitrust laws and regulations.


 


8.             Return of Employer’s
Property.


 


After the Executive has received notice of termination
or at the end of his period of employment with Employer, whichever first
occurs, the Executive shall immediately return to Employer all documents and
other property in his possession belonging to Employer.


 


9.             Construction and
Severability.


 


The invalidity of any one or more provisions of this
Agreement or any part thereof, all of which are inserted conditionally upon
their being valid in law, shall not affect the validity of any other provisions
to this Agreement; and in the event 


 


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that one or more provisions contained herein shall be invalid, as
determined by a court of competent jurisdiction, this Agreement shall be
construed as if such invalid provisions had not been inserted.


 


10.          Governing Law.


 


This Agreement shall be governed by the laws of the
United States, where applicable, and otherwise by the laws of the State of Maryland
other than the choice of law rules thereof.


 


11.          Assignability and
Successors.


 


This Agreement may not be assigned by the Executive or
the Employer, except that this Agreement shall be binding upon and shall inure
to the benefit of the successor of the Employer through merger or corporate reorganization.


 


12.          Counterparts.


 


This Agreement may be executed in counterparts (each
of which need not be executed by each of the parties), which together shall
constitute one and the same instrument.


 


13.          Jurisdiction and Venue.


 


The jurisdiction of any proceeding between the parties
arising out of, or with respect to, this Agreement shall be in a court of
competent jurisdiction in the State of Maryland, and venue shall be in [Prince
George’s County]. Each party shall be subject to the personal jurisdiction of
the courts of the State of Maryland.


 


14.          Indemnification and
Insurance.


 


During the Employment Term and for a period of six
years thereafter, the Employer shall cause the Executive to be covered by and
named as an insured under any policy or contract of insurance obtained to
insure officers against personal liability for acts or omissions in connection
with service as a director or officer of the Employer or any subsidiary or
affiliate thereof or service in other capacities at the request of the Employer.
The coverage provided to the Executive pursuant to this section shall be of the
same scope and on the same terms and conditions as the coverage (if any)
provided to other officers of the Employer.


 


To the maximum extent permitted under applicable law,
during the Employment Term and for a period of 6 years thereafter, the Employer
shall indemnify the Executive against and hold him harmless from any costs,
liabilities, losses and exposures to the fullest extent and on the most
favorable terms and conditions that similar indemnification is offered to any
officer of the Employer or any subsidiary or affiliate thereof.


 


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15.          Notices.


 


All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be hand delivered, sent by overnight courier or mailed by first-class,
registered or certified mail, return receipt requested, postage prepaid, or
transmitted by telegram, telecopy or telex, addressed as follows:


 


	
  (i)

  	
   

  	
  If to
  the Employer:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The
  Washington Savings Bank

  
	
   

  	
   

  	
   

  	
  4102 Mitchellville Road

  
	
   

  	
   

  	
   

  	
  Bowie,
  MD 20716

  
	
   

  	
   

  	
   

  	
  Attn:

  	
  Chair,
  Audit Committee of the Board of Directors

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a
  copy (which shall not constitute notice) to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Henry D. Kahn, Esq.

  
	
   

  	
   

  	
   

  	
  Hogan & Hartson L.L.P.

  
	
   

  	
   

  	
   

  	
  111 S. Calvert Street

  
	
   

  	
   

  	
   

  	
  Suite 1600

  
	
   

  	
   

  	
   

  	
  Baltimore, MD 21202

  
	
   

  	
   

  	
   

  	
  Fax:
  410/539-6981

  
	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  If to
  the Executive:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Phillip
  C. Bowman

  
	
   

  	
   

  	
   

  	
  636 Cove Terrace

  
	
   

  	
   

  	
   

  	
  Arnold, MD 21012

  



 


Each party may designate by notice in writing a new
address to which any notice, demand, request or communication may thereafter be
so given, served or sent. Each notice, demand, request, or communication which
shall be hand delivered, sent, mailed, telecopied or telexed in the manner
described above, or which shall be delivered to a telegraph company, shall be
deemed sufficiently given, served, sent, received or delivered for all purposes
at such time as it is delivered to the addressee (with the return receipt, the
delivery receipt, or (with respect to a telecopy or telex) the answerback being
deemed conclusive, but not exclusive, evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.


 


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16.          Miscellaneous.


 


This Agreement constitutes the entire understanding
and Agreement between the parties with respect to the subject matter hereof and
shall supersede all prior understandings and agreements.


 


This Agreement cannot be amended, modified, or
supplemented in any respect, except by a subsequent written agreement entered
into by the parties hereto.


 


The services to be performed by the Executive are
special and unique; it is agreed that any breach of this Agreement by the
Executive shall entitle the Employer (or any successors or assigns of the
Employer), in addition to any other legal remedies available to them, to apply
to any court of competent jurisdiction to enjoin such breach.


 


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*          *          *


 


IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement, or caused this Agreement to be duly executed on their
behalf, as of the date and year first above written.


 


	
  Attest:

  	
  THE WASHINGTON SAVINGS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Henry D. Kahn

  	
   

  	
  /s/ Kevin P. Huffman

  
	
   

  	
  By:

  	
  Kevin P. Huffman

  
	
   

  	
  Its:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Phillip C. Bowman

  
	
   

  	
  Phillip C. Bowman

  
	
   

  	
  Executive

  
				



 


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