SEVERANCE AGREEMENT
                               -------------------

     THIS AGREEMENT  entered into this 7 day of March,  2000, by and between The
Patapsco Bank (the "Bank"),  and Michael J. Dee (the  "Employee"),  effective on
the date above (the "Effective Date").

     WHEREAS,  the Employee has heretofore  been employed by the Bank as a Chief
Financial Officer and Controller; and

     WHEREAS,  the Bank deems it to be in its best  interest  to enter into this
Agreement  as  additional  incentive to the Employee to continue as an executive
employee of the Bank; and

     WHEREAS,   the  parties   desire  by  this   writing  to  set  forth  their
understanding  as to their  respective  rights and  obligations  in the event of
termination of Employee's  employment under the  circumstances set forth in this
Agreement.

     NOW, THEREFORE, it is AGREED as follows:

     1.   Change in Control
          -----------------

          (a)  Payment in the Event of Change in Control.
               -----------------------------------------

          (1) Involuntary Termination If the Employee's employment is terminated
              -----------------------
by the Bank, without the Employee's prior written consent and for a reason other
than Just Cause (as  defined in Section  3(a)  hereof),  in  connection  with or
within  twenty-four  (24) months  after any change in control of the Bank or the
Company,  the Employee shall,  subject to paragraph (2) of this Section 1(a), be
paid an amount  equal to one times his base  salary  then in  effect,  but in no
event  greater  than the  difference  between  (i) the product of 2.99 times his
"base amount" as defined in Section  280G(b)(3) of the Internal  Revenue Code of
1986,  as amended  (the  "Code") and  regulations  promulgated  thereunder  (the
"Maximum Amount"),  and (ii) the sum of any other parachute payments (as defined
under Section  280G(b)(2) of the Code) that the Employee  receives on account of
the  change in  control.  Said sum shall be paid in one lump sum within ten (10)
days of such termination.

         (2) In the event that the Employee and the Bank jointly  determine  and
agree that the total parachute payments receivable under clauses (i) and (ii) of
Section  1(a)(1) hereof exceed the Maximum Amount,  notwithstanding  the payment
procedure set forth in Section  1(a)(1)  hereof,  the Employee  shall  determine
which and how much,  if any, of the  parachute  payments to which he is entitled
shall be  eliminated  or  reduced  so that the total  parachute  payments  to be
received by the Employee do not exceed the Maximum Amount.  If the Employee does
not make his  determination  within ten business days after  receiving a written
request from the Bank,  the Bank may make such  determination,  and shall notify
the Employee promptly  thereof.  Within five business days of the earlier of the
Bank's receipt of the Employee's determination pursuant to this paragraph or the
Bank's determination in lieu of a determination by the Employee,  the Bank shall
pay to or  distribute  to or for the benefit of the Employee such amounts as are
then due the Employee under this Agreement.

         (3) As a result of  uncertainty  in  application of Section 280G of the
Code at the time of payment  hereunder,  it is possible  that such payments will
have been made by the Bank which  should not have been made  ("Overpayment")  or
that  additional  payments will not have been made by the Bank which should have
been made  ("Underpayment"),  in each  case,  consistent  with the  calculations
required  to be made  under  Section  1(a)(1)  hereof.  In the  event  that  the
Employee,  based upon the assertion by the Internal  Revenue Service against the
Employee of a deficiency  which the Employee  believes has a high probability of
success, determines that an Overpayment has been made, any such Overpayment paid
or  distributed  by the Bank to or for the benefit of Employee  shall be treated
for all purposes as a loan ab initio which the Employee  shall repay to the Bank
together  with interest at the  applicable  federal rate provided for in Section
7872(f)(2)(B) of the Code; provided,  however, that no such loan shall be deemed
to have been made and no amount  shall be payable by the Employee to the Bank if
and to the extent  such  deemed  loan and  payment  would not either  reduce the
amount on which the Employee is subject to tax under  Section 1 and Section 4999
of the Code

<PAGE>
or generate a refund of such taxes.  In the event that the Employee and the Bank
determine, based upon controlling precedent or other substantial authority, that
an Underpayment has occurred,  any such  Underpayment  shall be promptly paid by
the Bank to or for the benefit of the  Employee  together  with  interest at the
applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.

         (4) "Change in Control" shall mean any one of the following events: (1)
the  acquisition  of  ownership,  holding  or power to vote more than 25% of the
Bank's or the Company's  voting  stock,  (2) the  acquisition  of the ability to
control the election of a majority of the Bank's or the Company's directors, (3)
the  acquisition  of a controlling  influence over the management or policies of
the Bank or the Company by any person or by persons acting as a "group"  (within
the meaning of Section 13(d) of the Securities  Exchange Act of 1934)  (provided
that in the case of (1), (2) and (3) hereof, ownership or control of the Bank by
the Company  itself shall not  constitute a "Change in Control"),  or (4) during
any period of two consecutive  years,  individuals (the "Continuing  Directors")
who at the  beginning  of such period  constitute  the Board of Directors of the
Company or the Bank (the "Existing Board") cease for any reason to constitute at
least  two-thirds  thereof,  provided  that any  individual  whose  election  or
nomination for election as a member of the Existing Board was approved by a vote
of at least  two-thirds  of the  Continuing  Directors  then in office  shall be
considered a Continuing  Director.  For purposes of this subparagraph  only, the
term  "person"  refers to an individual or a  corporation,  partnership,  trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization  or any other form of entity not  specifically  listed herein.  The
decision of the Bank's non-employee  directors as to whether a Change in Control
has occurred shall be conclusive and binding.

                    (b)    Change    in    Control;    Voluntary    Termination.
                           ----------------------------------------------------
Notwithstanding  any other  provision  of this  Agreement to the  contrary,  the
Employee may voluntarily  terminate his employment under this Agreement,  and be
entitled to the  payment  described  in Section  1(a) of this  Agreement  within
twenty-four (24) months following a Change in Control of the Bank or the Company
and within  ninety (90) days  following  the  occurrence of any of the following
events,  which has not been  consented to in advance by the Employee in writing:
(i) the requirement  that the Employee move his personal  residence,  or perform
his principal executive functions,  more than thirty (30) miles from his primary
office as of the date of the change in control; (ii) a material reduction in the
Employee's  base  compensation as in effect on the date of the change in control
or as the same may be increased from time to time; (iii) the failure by the Bank
to continue to provide the Employee with  compensation and benefits provided for
under this  Agreement,  as the same may be increased  from time to time, or with
benefits  substantially  similar  to  those  provided  to him  under  any of the
employee  benefit  plans  in which  the  Employee  now or  hereafter  becomes  a
participant,  or the taking of any action by the Bank which  would  directly  or
indirectly  reduce any of such  benefits or deprive the Employee of any material
fringe  benefit  enjoyed by him at the time of the change in  control;  (iv) the
assignment to the Employee of duties and  responsibilities  materially different
from those  normally  associated  with his  position;  (v) a failure to elect or
reelect the Employee to the Board of  Directors of the Bank,  if the Employee is
serving  on the Board on the date of the change in  control;  or (vi) a material
diminution  or  reduction  in  the  Employee's   responsibilities  or  authority
(including  reporting  responsibilities)  in connection with his employment with
the Bank.

                    (c) Compliance with 12 U.S.C.  Section 1828(k). Any payments
                        ------------------------------------------
made to the Employee  pursuant to this Agreement,  or otherwise,  are subject to
and conditioned  upon their  compliance  with 12 U.S.C.  Section 1828(k) and any
regulations promulgated thereunder.

                    (d) Trust.  (1) Within five  business days before or after a
                        -----
change in control as defined in Section 1(a) of this  Agreement,  the Bank shall
(i)  deposit,  or  cause  to be  deposited,  in a  grantor  trust  (the  "Trust)
substantially  in the form of the  trust  that  the  Bank's  Board of  Directors
approved on September 28, 1995 for the Bank's  Retirement Plan for  Non-Employee
Directors,  an amount equal to the maximum  amount  payable  pursuant to section
1(a) hereof,  and (ii) provide the trustee of the Trust with a written direction
to hold said amount and any investment  return  thereon in a segregated  account
for the benefit of the Employee,  and to follow the  procedures set forth in the
next paragraph as to the payment of such amounts from the Trust.

                                       -2-
<PAGE>
         (2) During the thirty-six (36)  consecutive  month period following the
date on which the Bank makes the deposit referred to in the preceding paragraph,
the  Employee  may  provide  the  trustee  of the Trust  with a  written  notice
requesting  that the trustee pay to the  Employee  an amount  designated  in the
notice as being payable  pursuant to Section 1(a) or (b).  Within three business
days after receiving said notice,  the trustee of the Trust shall send a copy of
the  notice  to the  Bank via  overnight  and  registered  mail  return  receipt
requested.  On the tenth (10th)  business  day after  mailing said notice to the
Bank,  the trustee of the Trust  shall pay the  Employee  the amount  designated
therein in immediately  available funds,  unless prior thereto the Bank provides
the  trustee  with a written  notice  directing  the  trustee to  withhold  such
payment.  In  the  latter  event,  the  trustee  shall  submit  the  dispute  to
non-appealable  binding arbitration for a determination of the amount payable to
the  Employee  pursuant  to Section  1(a) or (b)  hereof,  and the costs of such
arbitration  (including  any legal fees and expenses  incurred by the  Employee)
shall be paid by the Bank. The trustee shall choose the arbitrator to settle the
dispute,  and  such  arbitrator  shall be  bound  by the  rules of the  American
Arbitration Association in making his determination. The parties and the trustee
shall be bound  by the  results  of the  arbitration  and,  within 3 days of the
determination  by the  arbitrator,  the  trustee  shall  pay from the  Trust the
amounts  required to be paid to the  Employee  and/or the Bank,  and in no event
shall the  trustee  be  liable  to either  party  for  making  the  payments  as
determined by the arbitrator.

         (3) Upon the earlier of (i) any payment from the Trust to the Employee,
or (ii) the date  thirty-six  (36) months after the date on which the Bank makes
the deposit  referred to in the first  paragraph  of this  subsection  (d),  the
trustee of the Trust shall pay to the Bank the entire  balance  remaining in the
segregated  account  maintained  for the benefit of the  Employee.  The Employee
shall  thereafter  have no  further  rights  under  this  Section  1, no further
interest  in the Trust  pursuant  to this  Agreement,  and no further  rights or
claims against the Bank pursuant to this Agreement.

         2.  Term.  This  Agreement  shall  remain  in  effect  for  the  period
             ----
commencing  on the  Effective  Date and  ending on the  earlier  of (i) the date
thirty-six  months  after  the  Effective  Date,  and (ii) the date on which the
Employee  terminates  employment  with the Bank;  provided  that the  Employee's
rights  hereunder  shall continue  following the  termination of this employment
with the Bank under any of the  circumstances  described  in Section 1(a) or (b)
hereof.  Additionally,  on each annual anniversary date from the Effective Date,
the term of this Agreement  shall be extended for an additional  one-year period
beyond the then effective expiration date provided the Board of Directors of the
Bank  determines  in a duly  adopted  resolution  that  the  performance  of the
Employee has met the Board's requirements and standards, and that this Agreement
shall be extended.

         3.       Termination or Suspension Under Federal Law.
                  -------------------------------------------

                    (a)  Termination  for "Just  Cause"  shall mean  termination
because of, in the good faith  determination  of the Bank's Board of  Directors,
the Employee's personal dishonesty,  incompetence, willful misconduct, breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach of any provision of this  Agreement.  The Employee shall have no right to
receive compensation or other benefits for any period after termination for Just
Cause.  No act, or failure to act, on the  Employee's  part shall be  considered
"willful"  unless he has acted,  or failed to act, with an absence of good faith
and  without a  reasonable  belief  that his action or failure to act was in the
best interest of the Bank.

                    (b) If the Employee is removed and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an order issued under
Sections  8(e)(3) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(3) or (g)(1)),  all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.

                    (c) If the Bank is in default (as defined in Section 3(x)(1)
of FDIA), all obligations under this Agreement shall terminate as of the date of
default;  however,  this  Paragraph  shall not affect  the vested  rights of the
parties.

                                      -3-
<PAGE>
                    (d) All obligations  under this Agreement  shall  terminate,
except to the extent that  continuation  of this  Agreement is necessary for the
continued  operation  of  the  Company:  (i) by the  Commissioner  of  Financial
Regulation  of the  State of  Maryland  ("Commissioner")  at the  time  that the
Federal  Deposit  Insurance  Corporation  ("FDIC")  enters into an  agreement to
provide assistance to or on behalf of the Bank under the authority  contained in
Section  13(c)  of  FDIA;  or (ii) by the  Commissioner  at the  time  that  the
Commissioner  approves  a  supervisory  merger to  resolve  problems  related to
operation of the Bank or when the Bank is determined by the  Commissioner  to be
in an unsafe or  unsound  condition.  Such  action  shall not  affect any vested
rights of the parties.

                    (e) If a notice  served under  Section  8(e)(3) or (g)(1) of
the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits
the Employee from participating in the conduct of the Bank's affairs, the Bank's
obligations  under  this  Agreement  shall be  suspended  as of the date of such
service, unless stayed by appropriate proceedings.  If the charges in the notice
are  dismissed,  the  Bank  shall  (i)  pay  the  Employee  all or  part  of the
compensation  withheld while its contract  obligations were suspended,  and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

                    (f) The terms of this Section 3 shall prevail over any other
provisions of this Agreement.

         4.       Expense Reimbursement.
                  ---------------------

                    In the event that any dispute  arises  between the  Employee
and the  Bank as to the  terms  or  interpretation  of this  Agreement,  whether
instituted by formal legal  proceedings or otherwise,  including any action that
the Employee  takes to enforce the terms of this  Agreement or to defend against
any action taken by the Bank or the Company, the Employee shall be reimbursed by
the Bank for all costs  and  expenses,  including  reasonable  attorneys'  fees,
arising from such dispute,  proceedings or actions,  provided (other than as set
forth in Section 1(d)(2) above) that the Employee shall obtain a final judgement
in favor of the  Employee  in a court of  competent  jurisdiction  or in binding
arbitration  under  the  rules of the  American  Arbitration  Association.  Such
reimbursement shall be paid within ten (10) days of Employee's furnishing to the
Bank and the Company  written  evidence,  which may be in the form,  among other
things, of a canceled check or receipt, of any costs or expenses incurred by the
Employee.  The Bank shall also reimburse the Employee in an amount equal to 150%
of any excise taxes  payable by the Employee  under Code Section 4999 due to the
inadvertent  violation  of the payment  limit  described in Section 1(a) of this
Agreement.

         5.       Successors and Assigns.
                  ----------------------

                    (a) This  Agreement  shall  inure to the  benefit  of and be
binding upon any corporate or other successor of the Bank or Company which shall
acquire,  directly  or  indirectly,  by  merger,   consolidation,   purchase  or
otherwise,  all or  substantially  all of the  assets  or  stock  of the Bank or
Company.

                    (b) Since the Bank and the Company are  contracting  for the
unique and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties  hereunder  without first obtaining
the written consent of the Bank and the Company.

         6.       Amendments. No amendments or additions to this Agreement shall
                  ----------
be binding  unless made in writing and signed by all of the  parties,  except as
herein otherwise specifically provided.

         7.       Applicable Law. Except to the extent preempted by Federal law,
                  --------------
the laws of the State of Maryland  shall govern this  Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

         8.       Severability. The provisions of this Agreement shall be deemed
                  ------------
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

                                      -4-
<PAGE>

         9.       Entire   Agreement.   This   Agreement,   together   with  any
                  ------------------
understanding or  modifications  thereof as agreed to in writing by the parties,
shall constitute the entire agreement between the parties hereto.



         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.




ATTEST:                              THE PATAPSCO BANK


/s/ Theodore C. Patterson            By:/s/ Joseph J. Bouffard
-------------------------               ----------------------------------
Secretary                               Its President




WITNESS:


/s/ Helen Donning                       /s/ Michael J. Dee
-------------------------               ----------------------------------
                                        Michael J. Dee



                                      -5-
<PAGE>
                               SEVERANCE AGREEMENT

     THIS AGREEMENT entered into this 7th day of March, 2000, by and between The
Patapsco Bank (the "Bank"), and Frank J. Duchacek (the "Employee"), effective on
the date above (the "Effective Date").

     WHEREAS,  the Employee has  heretofore  been employed by the Bank as Senior
Vice President; and

     WHEREAS,  the Bank deems it to be in its best  interest  to enter into this
Agreement  as  additional  incentive to the Employee to continue as an executive
employee of the Bank; and

     WHEREAS,   the  parties   desire  by  this   writing  to  set  forth  their
understanding  as to their  respective  rights and  obligations  in the event of
termination of Employee's  employment under the  circumstances set forth in this
Agreement.

     NOW, THEREFORE, it is AGREED as follows:

         1.       Change in Control
                  -----------------
                    (a)    Payment in the Event of Change in Control.
                           -----------------------------------------

         (1) Involuntary  Termination If the Employee's employment is terminated
             ------------------------
by the Bank, without the Employee's prior written consent and for a reason other
than Just Cause (as  defined in Section  3(a)  hereof),  in  connection  with or
within  twenty-four  (24) months  after any change in control of the Bank or the
Company,  the Employee shall,  subject to paragraph (2) of this Section 1(a), be
paid an amount  equal to one times his base  salary  then in  effect,  but in no
event  greater  than the  difference  between  (i) the product of 2.99 times his
"base amount" as defined in Section  280G(b)(3) of the Internal  Revenue Code of
1986,  as amended  (the  "Code") and  regulations  promulgated  thereunder  (the
"Maximum Amount"),  and (ii) the sum of any other parachute payments (as defined
under Section  280G(b)(2) of the Code) that the Employee  receives on account of
the  change in  control.  Said sum shall be paid in one lump sum within ten (10)
days of such termination.

         (2) In the event that the Employee and the Bank jointly  determine  and
agree that the total parachute payments receivable under clauses (i) and (ii) of
Section  1(a)(1) hereof exceed the Maximum Amount,  notwithstanding  the payment
procedure set forth in Section  1(a)(1)  hereof,  the Employee  shall  determine
which and how much,  if any, of the  parachute  payments to which he is entitled
shall be  eliminated  or  reduced  so that the total  parachute  payments  to be
received by the Employee do not exceed the Maximum Amount.  If the Employee does
not make his  determination  within ten business days after  receiving a written
request from the Bank,  the Bank may make such  determination,  and shall notify
the Employee promptly  thereof.  Within five business days of the earlier of the
Bank's receipt of the Employee's determination pursuant to this paragraph or the
Bank's determination in lieu of a determination by the Employee,  the Bank shall
pay to or  distribute  to or for the benefit of the Employee such amounts as are
then due the Employee under this Agreement.

         (3) As a result of  uncertainty  in  application of Section 280G of the
Code at the time of payment  hereunder,  it is possible  that such payments will
have been made by the Bank which  should not have been made  ("Overpayment")  or
that  additional  payments will not have been made by the Bank which should have
been made  ("Underpayment"),  in each  case,  consistent  with the  calculations
required  to be made  under  Section  1(a)(1)  hereof.  In the  event  that  the
Employee,  based upon the assertion by the Internal  Revenue Service against the
Employee of a deficiency  which the Employee  believes has a high probability of
success, determines that an Overpayment has been made, any such Overpayment paid
or  distributed  by the Bank to or for the benefit of Employee  shall be treated
for all purposes as a loan ab initio which the Employee  shall repay to the Bank
together  with interest at the  applicable  federal rate provided for in Section
7872(f)(2)(B) of the Code; provided,  however, that no such loan shall be deemed
to have been made and no amount  shall be payable by the Employee to the Bank if
and to the extent  such  deemed  loan and  payment  would not either  reduce the
amount on which the Employee is subject to tax under  Section 1 and Section 4999
of the Code


<PAGE>
or generate a refund of such taxes.  In the event that the Employee and the Bank
determine, based upon controlling precedent or other substantial authority, that
an Underpayment has occurred,  any such  Underpayment  shall be promptly paid by
the Bank to or for the benefit of the  Employee  together  with  interest at the
applicable federal rate provided for in Section 7872(f)(2)(B) of the Code.

         (4) "Change in Control" shall mean any one of the following events: (1)
the  acquisition  of  ownership,  holding  or power to vote more than 25% of the
Bank's or the Company's  voting  stock,  (2) the  acquisition  of the ability to
control the election of a majority of the Bank's or the Company's directors, (3)
the  acquisition  of a controlling  influence over the management or policies of
the Bank or the Company by any person or by persons acting as a "group"  (within
the meaning of Section 13(d) of the Securities  Exchange Act of 1934)  (provided
that in the case of (1), (2) and (3) hereof, ownership or control of the Bank by
the Company  itself shall not  constitute a "Change in Control"),  or (4) during
any period of two consecutive  years,  individuals (the "Continuing  Directors")
who at the  beginning  of such period  constitute  the Board of Directors of the
Company or the Bank (the "Existing Board") cease for any reason to constitute at
least  two-thirds  thereof,  provided  that any  individual  whose  election  or
nomination for election as a member of the Existing Board was approved by a vote
of at least  two-thirds  of the  Continuing  Directors  then in office  shall be
considered a Continuing  Director.  For purposes of this subparagraph  only, the
term  "person"  refers to an individual or a  corporation,  partnership,  trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization  or any other form of entity not  specifically  listed herein.  The
decision of the Bank's non-employee  directors as to whether a Change in Control
has occurred shall be conclusive and binding.

                    (b)    Change    in    Control;    Voluntary    Termination.
                           ----------------------------------------------------
Notwithstanding  any other  provision  of this  Agreement to the  contrary,  the
Employee may voluntarily  terminate his employment under this Agreement,  and be
entitled to the  payment  described  in Section  1(a) of this  Agreement  within
twenty-four (24) months following a Change in Control of the Bank or the Company
and within  ninety (90) days  following  the  occurrence of any of the following
events,  which has not been  consented to in advance by the Employee in writing:
(i) the requirement  that the Employee move his personal  residence,  or perform
his principal executive functions,  more than thirty (30) miles from his primary
office as of the date of the change in control; (ii) a material reduction in the
Employee's  base  compensation as in effect on the date of the change in control
or as the same may be increased from time to time; (iii) the failure by the Bank
to continue to provide the Employee with  compensation and benefits provided for
under this  Agreement,  as the same may be increased  from time to time, or with
benefits  substantially  similar  to  those  provided  to him  under  any of the
employee  benefit  plans  in which  the  Employee  now or  hereafter  becomes  a
participant,  or the taking of any action by the Bank which  would  directly  or
indirectly  reduce any of such  benefits or deprive the Employee of any material
fringe  benefit  enjoyed by him at the time of the change in  control;  (iv) the
assignment to the Employee of duties and  responsibilities  materially different
from those  normally  associated  with his  position;  (v) a failure to elect or
reelect the Employee to the Board of  Directors of the Bank,  if the Employee is
serving  on the Board on the date of the change in  control;  or (vi) a material
diminution  or  reduction  in  the  Employee's   responsibilities  or  authority
(including  reporting  responsibilities)  in connection with his employment with
the Bank.

                    (c) Compliance with 12 U.S.C.  Section 1828(k). Any payments
                        -----------------------------------------
made to the Employee  pursuant to this Agreement,  or otherwise,  are subject to
and conditioned  upon their  compliance  with 12 U.S.C.  Section 1828(k) and any
regulations promulgated thereunder.

                    (d) Trust.  (1) Within five  business days before or after a
change in control as defined in Section 1(a) of this  Agreement,  the Bank shall
(i)  deposit,  or  cause  to be  deposited,  in a  grantor  trust  (the  "Trust)
substantially  in the form of the  trust  that  the  Bank's  Board of  Directors
approved on September 28, 1995 for the Bank's  Retirement Plan for  Non-Employee
Directors,  an amount equal to the maximum  amount  payable  pursuant to section
1(a) hereof,  and (ii) provide the trustee of the Trust with a written direction
to hold said amount and any investment  return  thereon in a segregated  account
for the benefit of the Employee,  and to follow the  procedures set forth in the
next paragraph as to the payment of such amounts from the Trust.

                                      -2-
<PAGE>
         (2) During the thirty-six (36)  consecutive  month period following the
date on which the Bank makes the deposit referred to in the preceding paragraph,
the  Employee  may  provide  the  trustee  of the Trust  with a  written  notice
requesting  that the trustee pay to the  Employee  an amount  designated  in the
notice as being payable  pursuant to Section 1(a) or (b).  Within three business
days after receiving said notice,  the trustee of the Trust shall send a copy of
the  notice  to the  Bank via  overnight  and  registered  mail  return  receipt
requested.  On the tenth (10th)  business  day after  mailing said notice to the
Bank,  the trustee of the Trust  shall pay the  Employee  the amount  designated
therein in immediately  available funds,  unless prior thereto the Bank provides
the  trustee  with a written  notice  directing  the  trustee to  withhold  such
payment.  In  the  latter  event,  the  trustee  shall  submit  the  dispute  to
non-appealable  binding arbitration for a determination of the amount payable to
the  Employee  pursuant  to Section  1(a) or (b)  hereof,  and the costs of such
arbitration  (including  any legal fees and expenses  incurred by the  Employee)
shall be paid by the Bank. The trustee shall choose the arbitrator to settle the
dispute,  and  such  arbitrator  shall be  bound  by the  rules of the  American
Arbitration Association in making his determination. The parties and the trustee
shall be bound  by the  results  of the  arbitration  and,  within 3 days of the
determination  by the  arbitrator,  the  trustee  shall  pay from the  Trust the
amounts  required to be paid to the  Employee  and/or the Bank,  and in no event
shall the  trustee  be  liable  to either  party  for  making  the  payments  as
determined by the arbitrator.

         (3) Upon the earlier of (i) any payment from the Trust to the Employee,
or (ii) the date  thirty-six  (36) months after the date on which the Bank makes
the deposit  referred to in the first  paragraph  of this  subsection  (d),  the
trustee of the Trust shall pay to the Bank the entire  balance  remaining in the
segregated  account  maintained  for the benefit of the  Employee.  The Employee
shall  thereafter  have no  further  rights  under  this  Section  1, no further
interest  in the Trust  pursuant  to this  Agreement,  and no further  rights or
claims against the Bank pursuant to this Agreement.

         2.  Term.  This  Agreement  shall  remain  in  effect  for  the  period
             ----
commencing  on the  Effective  Date and  ending on the  earlier  of (i) the date
thirty-six  months  after  the  Effective  Date,  and (ii) the date on which the
Employee  terminates  employment  with the Bank;  provided  that the  Employee's
rights  hereunder  shall continue  following the  termination of this employment
with the Bank under any of the  circumstances  described  in Section 1(a) or (b)
hereof.  Additionally,  on each annual anniversary date from the Effective Date,
the term of this Agreement  shall be extended for an additional  one-year period
beyond the then effective expiration date provided the Board of Directors of the
Bank  determines  in a duly  adopted  resolution  that  the  performance  of the
Employee has met the Board's requirements and standards, and that this Agreement
shall be extended.

         3.       Termination or Suspension Under Federal Law.
                  -------------------------------------------

                    (a)  Termination  for "Just  Cause"  shall mean  termination
because of, in the good faith  determination  of the Bank's Board of  Directors,
the Employee's personal dishonesty,  incompetence, willful misconduct, breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations or similar  offenses) or final  cease-and-desist  order,  or material
breach of any provision of this  Agreement.  The Employee shall have no right to
receive compensation or other benefits for any period after termination for Just
Cause.  No act, or failure to act, on the  Employee's  part shall be  considered
"willful"  unless he has acted,  or failed to act, with an absence of good faith
and  without a  reasonable  belief  that his action or failure to act was in the
best interest of the Bank.

                    (b) If the Employee is removed and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an order issued under
Sections  8(e)(3) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(3) or (g)(1)),  all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but the vested rights of
the parties shall not be affected.

                    (c) If the Bank is in default (as defined in Section 3(x)(1)
of FDIA), all obligations under this Agreement shall terminate as of the date of
default;  however,  this  Paragraph  shall not affect  the vested  rights of the
parties.


                                      -3-
<PAGE>
                    (d) All obligations  under this Agreement  shall  terminate,
except to the extent that  continuation  of this  Agreement is necessary for the
continued  operation  of  the  Company:  (i) by the  Commissioner  of  Financial
Regulation  of the  State of  Maryland  ("Commissioner")  at the  time  that the
Federal  Deposit  Insurance  Corporation  ("FDIC")  enters into an  agreement to
provide assistance to or on behalf of the Bank under the authority  contained in
Section  13(c)  of  FDIA;  or (ii) by the  Commissioner  at the  time  that  the
Commissioner  approves  a  supervisory  merger to  resolve  problems  related to
operation of the Bank or when the Bank is determined by the  Commissioner  to be
in an unsafe or  unsound  condition.  Such  action  shall not  affect any vested
rights of the parties.

                    (e) If a notice  served under  Section  8(e)(3) or (g)(1) of
the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits
the Employee from participating in the conduct of the Bank's affairs, the Bank's
obligations  under  this  Agreement  shall be  suspended  as of the date of such
service, unless stayed by appropriate proceedings.  If the charges in the notice
are  dismissed,  the  Bank  shall  (i)  pay  the  Employee  all or  part  of the
compensation  withheld while its contract  obligations were suspended,  and (ii)
reinstate (in whole or in part) any of its obligations which were suspended.

                    (f) The terms of this Section 3 shall prevail over any other
provisions of this Agreement.

         4.       Expense Reimbursement.
                  ---------------------

                    In the event that any dispute  arises  between the  Employee
and the  Bank as to the  terms  or  interpretation  of this  Agreement,  whether
instituted by formal legal  proceedings or otherwise,  including any action that
the Employee  takes to enforce the terms of this  Agreement or to defend against
any action taken by the Bank or the Company, the Employee shall be reimbursed by
the Bank for all costs  and  expenses,  including  reasonable  attorneys'  fees,
arising from such dispute,  proceedings or actions,  provided (other than as set
forth in Section 1(d)(2) above) that the Employee shall obtain a final judgement
in favor of the  Employee  in a court of  competent  jurisdiction  or in binding
arbitration  under  the  rules of the  American  Arbitration  Association.  Such
reimbursement shall be paid within ten (10) days of Employee's furnishing to the
Bank and the Company  written  evidence,  which may be in the form,  among other
things, of a canceled check or receipt, of any costs or expenses incurred by the
Employee.  The Bank shall also reimburse the Employee in an amount equal to 150%
of any excise taxes  payable by the Employee  under Code Section 4999 due to the
inadvertent  violation  of the payment  limit  described in Section 1(a) of this
Agreement.

         5.       Successors and Assigns.
                  ----------------------

                    (a) This  Agreement  shall  inure to the  benefit  of and be
binding upon any corporate or other successor of the Bank or Company which shall
acquire,  directly  or  indirectly,  by  merger,   consolidation,   purchase  or
otherwise,  all or  substantially  all of the  assets  or  stock  of the Bank or
Company.

                    (b) Since the Bank and the Company are  contracting  for the
unique and personal skills of the Employee, the Employee shall be precluded from
assigning or delegating his rights or duties  hereunder  without first obtaining
the written consent of the Bank and the Company.

         6.       Amendments. No amendments or additions to this Agreement shall
                  ----------
be binding  unless made in writing and signed by all of the  parties,  except as
herein otherwise specifically provided.

         7.       Applicable Law. Except to the extent preempted by Federal law,
                  --------------
the laws of the State of Maryland  shall govern this  Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

         8.       Severability. The provisions of this Agreement shall be deemed
                  ------------
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

                                      -4-
<PAGE>

         9.       Entire   Agreement.   This   Agreement,   together   with  any
                  ------------------
understanding or  modifications  thereof as agreed to in writing by the parties,
shall constitute the entire agreement between the parties hereto.




         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.




ATTEST:                              THE PATAPSCO BANK


/s/ Theodore C. Patterson            By: /s/ Joseph J. Bouffard
---------------------------              -----------------------------------
Secretary                                Its President




WITNESS:


/s/ Helen Donning                        /s/ Frank J. Duchacek
---------------------------              -----------------------------------


                                      -5-