EXHIBIT 10.5



BAY-VANGUARD FEDERAL SAVINGS BANK

TWO-YEAR EMPLOYMENT AGREEMENT



THIS AGREEMENT (the Agreement), made this 12th day of January, 2005, by and between BAY-VANGUARD FEDERAL SAVINGS BANK, a federally-chartered savings bank (the Bank), andDANIEL J. GALLAGHER,
JR. (Executive).



W I T N E S S E T H



WHEREAS, Executive serves in a position of
substantial responsibility;



WHEREAS, the Bank wants to
assure Executives continued employment for the term of this Agreement; and



WHEREAS, Executive desires to remain employed by the Bank during the term of this Agreement.



NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and upon the other terms and conditions provided for in this
Agreement, the parties hereby agree as follows:



1. Employment.The Bank will employ Executive as Senior Vice President-Commercial Lending. Executive will perform all duties and shall have all powers commonly incident to the offices of Senior Vice President-Commercial Lending or which, consistent with those
offices, the Chairman of the Bank delegate to Executive. Executive also agrees to serve, if elected, as an officer and/or director of any subsidiary of the Bank or BV Financial, Inc. (the Company) and to carry out the duties and
responsibilities reasonably appropriate to that position.



2. Location
and Facilities. The Bank will furnish Executive with the working facilities and staff customary for the position of Senior Vice President-Commercial Lending. The Bank will locate the office and staff of Executive at the principal
administrative offices of the Bank.



3. Term.



| | a. | The term of this Agreement shall include (i) the initial term, consisting of the period commencing on the date of this Agreement (the Effective Date) and ending on the
second anniversary of the Effective Date, plus (ii) any and all extensions of the initial term made pursuant to this Section 3.
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| | b. | Commencing on the first anniversary of the Effective Date, and continuing on each anniversary thereafter, the disinterested members of the board of directors of the Bank may extend
the term of this Agreement for an additional year so that the remaining term of the Agreement again becomes twenty-four (24) months, unless Executive elects not to extend the term of this Agreement by giving written notice of his intentions in
accordance with Section 19 of this Agreement. Each year, the Board of Directors of the Bank (the Board) will review Executives performance for purposes of determining whether to extend the term of this Agreement and will include
the rationale and results of its review in the minutes of its meeting. Executive shall receive notice as soon as possible after such review as to whether the Agreement will be extended for an additional year.
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4. Base Compensation.



| | a. | The Bank agrees to pay the Executive an annual base salary of $96,350, payable in accordance with the customary payroll practices of the Bank.
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| | b. | Each year, the Board of the Bank will review the level of Executives base salary, based upon factors they deem relevant, in order to determine whether to maintain or increase
Executives base salary.
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5. Bonuses.
Executive will participate in discretionary and loan production bonuses, along with other incentive compensation programs the Bank may sponsor or award from time to time to other senior management employees.



6. Benefit Plans. Executive will participate in life insurance, medical,
dental, pension, profit sharing, other retirement and stock-based compensation plans and other programs and arrangements that the Bank or the Company may sponsor or maintain for the benefit of their employees. In addition to Executives
personal coverage, the Bank will pay $800 per month towards family coverage for Executives dependents.



7. Vacation and Leave.



| | a. | Executive may take vacation and other leave in accordance with the Banks policy for senior executives or otherwise as approved by the Board.
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| | b. | In addition to paid vacations and other leave, the Board may grant Executive a leave of absence, with or without pay, at such time or times and upon such terms and conditions as the
Board may determine in its discretion.
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8. Expense Payments
and Reimbursements.The Bank will reimburse Executive for all reasonable out-of-pocket business expenses incurred in connection with his services under this Agreement including, but not limited to, mileage reimbursement. Executive must
substantiate the payment of all expenses in accordance with applicable policies of the Bank.



9. Conference Attendance and Cellular Phone.Executive and his spouse will be entitled to attend the annual Maryland Bankers Association conference and such other conferences as may be approved by the
Board of Directors of the Bank from time to time. The Bank will provide the Executive with a cellular phone and will pay (or reimburse) Executive for all reasonable expenses related to the business use of such phone.



10. Loyalty and Confidentiality.



| | a. | During the term of this Agreement, Executive shall: (i) devote all his business time, attention, skill, and efforts to the faithful performance of his duties as Senior Vice
President-Commercial Lending of the Bank; provided, however, that from time to time, Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations that will not present any conflict of
interest with the Bank or the Company or any of their affiliates, and that will not unfavorably affect the performance of Executives employment duties, and that will not violate any applicable statute or regulation. Executive shall not engage
in any business or activity contrary to the business affairs or interests of the Bank or the Company.
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| | b. | Nothing contained in this Agreement prevents or limits Executives right to invest in the capital stock or other securities of any business dissimilar from that of the Bank or
the Company, or, solely as a passive, minority investor, in any business.
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| | c. | Executive agrees to maintain the confidentiality of any and all information concerning the operation or financial status of the Bank and Company; the names or addresses of any
borrowers, depositors and other customers; any information concerning or obtained from such customers; and any other information concerning the Bank or the Company which he gains or of which he becomes aware during the course of his employment.
Executive further agrees that, unless required by law or specifically permitted by the Board in writing, he will not disclose to any person or entity, either during or subsequent to his employment, any of the above-mentioned information not
generally known to the public, nor shall he use the information in any way other than for the benefit of the Bank and the Company.
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11. Termination and Termination Pay.Subject to Section 12 of this Agreement, Executive or the Bank may terminate Executives employment under the
following circumstances:



| | a. | Death. Executives employment under this Agreement shall terminate upon his death during the term of this Agreement, in which event Executives estate shall receive
the compensation due to Executive through the last day of the calendar month in which his death occurred.
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| | b. | Retirement. This Agreement shall terminate upon Executives retirement under the retirement benefit plan or plans in which he participates pursuant to Section 6 of this
Agreement or otherwise.
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| | c. | Disability.
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| | i. | The Board or Executive may terminate Executives employment after having determined Executive has suffered a Disability. For purposes of this Agreement, Disability
means a physical or mental infirmity that impairs Executives ability to substantially perform his duties under this Agreement and results in Executive becoming eligible for long-term disability benefits under any long-term disability plans of
the Bank or the Company (or, if no such benefits exist, that impairs Executives ability to substantially perform his duties under this Agreement for a period of at least one hundred eighty (180) consecutive days). The Board, in good faith,
shall determine whether or not Executive becomes and continues to be permanently disabled for purposes of this Agreement, based upon competent medical advice and other factors that the Board reasonably believes to be relevant. As a condition to any
benefits, the Board may require Executive to submit to physical or mental evaluations and tests as the Board or its medical experts deem reasonably appropriate.
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| | ii. | In the event of his Disability, Executive shall no longer be obligated to perform services under this Agreement. The Bank will pay Executive, as Disability pay, an amount equal to
one hundred percent (100%) of Executives bi-weekly rate of base salary in effect as of the date of his termination of employment due to Disability. The Bank will make Disability payments on a monthly basis commencing on the first day of the
month following the effective date of Executives termination of employment due to Disability and ending on the earlier of: (A) the date he returns to full-time employment at the Bank in the same capacity as he was employed prior to his
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termination for Disability; (B) his death; (C) his attainment of age 65; or (D) the date the Agreement
would have expired had Executives employment not terminated by reason of Disability. The Bank will reduce Disability pay otherwise due to Executive under this provision by the amount of any short- or long-term disability benefits payable to
Executive under any other disability programs sponsored by the Bank. In addition, during any period of Executives Disability, the Bank shall continue to provide Executive and his dependents, to the greatest extent possible, all benefits
(including, without limitation, benefits under retirement plans and medical, dental and life insurance plans) provided to Executive and his dependents prior to his Disability, on the same terms as if Executive remained actively employed by the Bank.



| | d. | Termination for Cause.
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| | i. | The board of directors of the Bank may, by written notice to Executive in the form and manner specified in this paragraph, immediately terminate Executives employment at any
time, for Cause. Executive shall have no rights to receive compensation or other benefits for any period after termination for Cause, except for already vested benefits. Termination for Cause shall mean termination because
of, in the good faith determination of the Board, Executives:
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| | (1) | Personal dishonesty;
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| | (2) | Incompetence;
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| | (3) | Willful misconduct;
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| | (4) | Breach of fiduciary duty involving personal profit;
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| | (5) | Intentional failure to perform duties under this Agreement;
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| | (6) | Willful violation of any law, rule or regulation (other than traffic violations or similar offenses) that reflects adversely on the reputation of the Bank or the Company, any felony
conviction, any violation of law involving moral turpitude, or any violation of a final cease-and-desist order; or
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| | (7) | Material breach by Executive of any provision of this Agreement.
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| | ii. | Notwithstanding the foregoing, Executives termination for Cause will not become effective unless the Bank has delivered to Executive 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 of finding that, in the good faith opinion of the Board (after reasonable notice to Executive and an opportunity for
Executive to be heard before the board with counsel), Executive was guilty of the conduct described above and specifying the particulars of his conduct.
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| | e. | Voluntary Termination by Executive. In addition to his other rights to terminate employment under this Agreement, Executive may voluntarily terminate employment during the
term of this Agreement upon at least sixty (60) days prior written notice to the board. Upon Executives voluntary termination, Executive will receive only his compensation, vested rights and employee benefits up to the date of his termination.
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| | f. | Without Cause or With Good Reason.
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| | 1. | In addition to termination pursuant to Sections 11(a) through 11(e), the Board, may, upon providing written notice to Executive, immediately terminate his employment at any time for
a reason other than Cause (a termination Without Cause) and Executive may, upon providing written notice to the Board, immediately terminate this Agreement at any time within ninety (90) days following an event constituting Good
Reason as defined below (a termination With Good Reason).
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| | 2. | Subject to Section 12 of this Agreement, in the event of his termination of employment under this Section 11(f), Executive shall receive his base salary for the remaining term of
the Agreement paid in one lump sum within ten (10) calendar days of his termination. Executive shall also receive, for the remaining term of the Agreement, the benefits he would have received under any retirement programs (whether tax-qualified or
non-qualified) in which he participated prior to his termination (with the amount of benefits determined by reference to the benefits Executive received or which the Bank or Company accrued on his behalf during the twelve (12) months preceding his
termination). Executive shall also continue to participate in any health (including medical and dental), life, disability or similar insurance coverage or benefit plans for the remaining term of the Agreement, upon terms no less favorable than the
most favorable terms provided to senior executives of the Company and the Bank during such period. If the Company and the Bank cannot provide such coverage because the Executive is no longer an employee, the Company and the Bank shall provide
Executive with comparable coverage on an individual policy basis or the cash equivalent.
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| | 3. | Good Reason shall exist if, without Executives express written consent, the Company and the Bank materially breach any of their respective obligations under this
Agreement. Without limitation, such a material breach would occur upon any of the following:
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| | (i) | A material reduction in Executives responsibilities or authority in connection with his employment with the Bank;
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| | (ii) | Assignment to Executive of duties of a non-executive nature or duties for which he is not reasonably equipped by his skills and experience;
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| | (iii) | A reduction in salary or benefits contrary to the terms of this Agreement, or, following a Change in Control as defined in Section 12 of this Agreement, any reduction in salary or
material reduction in benefits below the amounts Executive was entitled to receive prior to the Change in Control;
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| | (iv) | Termination of incentive and benefit plans, programs or arrangements, or reduction of Executives participation to such an extent as to materially reduce their aggregate value
below their aggregate value as of the Effective Date;
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| | (v) | A requirement that Executive relocate his principal business office or his principal place of residence outside of the area consisting of a twenty-five (25) mile radius from the
current main office and any branch of the Bank, or the assignment to Executive of duties that would reasonably require such a relocation; or
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| | (vi) | liquidation or dissolution of the Company or the Bank.
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Notwithstanding the foregoing, a reduction or elimination of Executives benefits under one or more benefit plans maintained by the Company or the
Bank as part of a good faith, overall reduction or elimination of such plans or benefits thereunder, that applies to all participants in a non-discriminatory manner (except as discrimination may be necessary to comply with law) shall not constitute
an event of Good Reason or a material breach of this Agreement. However, benefits of the same type or general extent as those offered prior to an overall reduction or elimination also must not be available to other officers of the Company and the
Bank or any company that controls either of them under a plan or plans in or under which Executive is not entitled to participate.



| | g. | Continuing Covenant Not to Compete or Interfere with Relationships. Regardless of anything in this Agreement to the contrary, following Executives termination of
employment pursuant to Section 11(f):
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| | 1. | Executives obligations under Section 10(c) of this Agreement will continue in effect; and
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| | 2. | During the period ending on the first anniversary of Executives termination of employment, Executive shall not serve as an officer, director or employee of any bank holding
company, bank, savings bank, savings and loan holding company, mortgage company or other financial institution that offers products or services competing with those offered by the Bank from any office within thirty-five (35) miles from the main
office or any branch of the Bank and, further, Executive shall not interfere with the relationship of the Company and the Bank with any of their employees, agents, or representatives.
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12. Termination in Connection with a Change in Control.



| | a. | Definition of Change in Control. For purposes of this Agreement, a Change in Control means any of the following events:
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| | 1. | Merger: The Company merges into or consolidates with another corporation, or merges another corporation into the Company, and, as a result, persons who were stockholders of
the Company immediately before the merger or consolidation hold less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation.
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| | 2. | Acquisition of Significant Share Ownership: There is filed or required to be filed a report on Schedule 13D or another form or schedule (other than Schedule 13G) required
under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have
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become the beneficial owner(s) of 25% or more of a class of the Companys voting securities, but
this clause (2) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities.



| | 3. | Change in Board Composition: If, during any period of two consecutive years, individuals who constitute the Companys Board of Directors at the beginning of the two-year
period cease for any reason to constitute at least a majority of the Companys Board of Directors; provided, however, that for purposes of this clause (d), each director who is first elected by the board (or first nominated by the board for
election by the stockholders) by a vote of at least two-thirds (2/3) of the directors who were directors at the
beginning of the two-year period shall be deemed to have also been a director at the beginning of the two-year period; or
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| | 4. | Sale of Assets: The Company sells to a third party all or substantially all of its assets.
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Notwithstanding anything in this Agreement to the contrary, in no event shall the reorganization of the Bank from the mutual
holding company form of organization to the full stock holding company form of organization (including the elimination of the mutual holding company) constitute a Change in Control for purposes of this Agreement.



| | b. | Termination. If, within the period ending one (1) year after a Change in Control, (i) the Company and the Bank terminate Executives employment Without Cause, or (ii)
Executive voluntarily terminates his employment With Good Reason, the Bank shall, within ten calendar days of the termination of Executives employment, make a lump-sum cash payment to him equal to two (2) times Executives average Annual
Compensation over the five (5) most recently completed calendar years ending with the year immediately preceding the effective date of the Change in Control. In determining Executives average Annual Compensation, Annual Compensation shall
include base salary and any other taxable income, including, but not limited to, amounts related to the granting, vesting or exercise of restricted stock awards or stock options, commissions, bonuses, retirement benefits, director or committee fees
and fringe benefits paid to Executive or accrued or paid on Executives behalf during any applicable calendar year. Annual Compensation shall also include profit sharing, employee stock ownership plan and other retirement contributions or
benefits, including those made to or accrued on behalf of Executive under any tax-qualified or non-qualified plan or arrangement (whether or not such amounts are taxable) during any applicable calendar year.The cash payment made under this
Section 12(b) shall be made in lieu of any payment also required under Section 11(f) of this Agreement because of a termination of Executives employment; however, Executives rights under Section 11(f) are not otherwise affected by this
Section 12.
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Also, upon termination under this
Section 12, Executive shall receive for a twenty-four (24) month period the benefits he would have received under any retirement programs (whether tax-qualified or non-qualified) in which he participated prior to his termination. The amount of these
retirement benefits will be determined by reference to the benefits Executive received or which the Company or the Bank accrued on Executives behalf under the benefit programs during the twelve (12) months preceding the Change in Control.
Executive will also continue to participate in any Bank-sponsored health (including medical and dental), life, disability or similar insurance coverage or benefit plans for a twenty-four (24) month period, under terms



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no less favorable than the most favorable terms provided to senior executives during such period. In the
event the Bank cannot provide such coverage because Executive is no longer an employee, the Bank shall provide Executive with comparable coverage on an individual policy basis or the cash equivalent.



| | c. | The provisions of this Section 12 and Sections 14 through 25, including the defined terms used in such sections, shall continue in effect until the later of the expiration of this
Agreement or two years following a Change in Control.
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13.
Indemnification and Liability Insurance.



| | a. | Indemnification. The Bank agrees to indemnify Executive (and his heirs, executors, and administrators) under this Agreement, and to advance expenses related to this
indemnification, to the fullest extent permitted under applicable law and regulations against any and all expenses and liabilities that Executive reasonably incurs in connection with or arising out of any action, suit, or proceeding in which he
becomes involved by reason of his service as a director or Executive of the Company, the Bank or any of their subsidiaries (whether or not Executive continues to serve as a director or Executive at the time of incurring the expenses or liabilities).
Covered expenses and liabilities include, without limitation, judgments, court costs, attorneys fees and the costs of reasonable settlements (subject to Board approval), provided legal action is brought against Executive in his capacity as an
Executive or director of the Company and the Bank or any of their subsidiaries. Indemnification for expenses shall not extend to matters related to Executives termination for Cause. Notwithstanding anything in this Section 13(a) to the
contrary, the Bank shall not be required to provide any indemnification otherwise prohibited by applicable law or regulation. The obligations of this Section 13(a) shall survive the term of this Agreement by a period of six (6) years.
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| | b. | Insurance. During the period in which the Bank must indemnify Executive, the Bank, at its expense, will arrange for Executives coverage (and his heirs, executors, and
administrators) under a directors and executives liability policy at least equivalent to the insurance coverage provided to directors and senior executives of the Bank.
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14. Reimbursement of Executives Expenses to Enforce this
Agreement.The Bank will reimburse Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys fees, that Executive incurs in connection with his successful enforcement of the Banks
obligations under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Bank take some action specified by this Agreement: as a result of court order; or otherwise following an initial failure
by the Bank to pay such money or take such action promptly following receipt of a written demand from Executive stating the reason that the Bank must make payment or take action under this Agreement.



15. Limitation of Benefits Under Certain Circumstances.If the
payments and benefits pursuant to Section 12 of this Agreement, either alone or together with other payments and benefits which Executive has the right to receive from the Bank, would constitute a parachute payment under Section 280G of
the Code, the payments and benefits pursuant to Section 12 shall be reduced or revised, in the manner determined by Executive, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits under Section
12 being non-deductible to the Company or the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The Banks independent public accountants shall determine any reduction in the
payments and benefits to be made pursuant to Section 12, and the Bank shall pay for the accountants opinion with respect to such reduction. If the Bank and/or Executive



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do not agree with the accountants opinion, the Bank shall pay to Executive the maximum amount of payments and
benefits pursuant to Section 12, as selected by Executive, which the opinion indicates have a high probability of not causing any of the payments and benefits to be non-deductible to the Bank and subject to the imposition of the excise tax imposed
under Section 4999 of the Code. The Bank may also request, and Executive shall have the right to demand that they request, a ruling from the IRS as to whether the disputed payments and benefits pursuant to Section 12 have such tax consequences. The
Bank shall promptly prepare and file the request for a ruling from the IRS, but in no event shall the Bank make such filing later than thirty (30) days from the date of the accountants opinion referred to above. The request shall also be
subject to the Executives approval prior to filing; Executive shall not unreasonably withhold his approval. The Bank and Executive agree to be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect
any IRS rulings, together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. Nothing contained in this Agreement shall result in a reduction of any payments or benefits to which Executive may be entitled
upon termination of employment other than pursuant to Section 12 hereof, or a reduction in the payments and benefits specified in Section 12, below zero.



16. Injunctive Relief.Upon a breach or threatened breach of Section 11(g) of this Agreement or the prohibitions upon disclosure contained in Section 10(c)
of this Agreement, the parties agree that there is no adequate remedy at law for such breach, and the Bank shall be entitled to injunctive relief restraining Executive from such breach or threatened breach, but such relief shall not be the exclusive
remedy for a breach of this Agreement. The parties to this Agreement further agree that Executive, without limitation, may seek injunctive relief to enforce the Banks obligations under this Agreement.



17. Successors and Assigns.This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Bank which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Company and the Bank. Since the Bank has
contracted for the unique and personal skills of Executive, Executive shall not assign or delegate his rights or duties hereunder without first obtaining the written consent of the Bank.



18. No Mitigation.Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise and no payment under this Agreement shall be offset or reduced by any compensation or benefits provided to Executive in any subsequent employment.



19. Notices.All notices, requests, demands and other communications made in connection with this Agreement shall be made in
writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed to the Bank at their principal business
offices and to Executive at his home address as maintained in the records of the Bank.



20. No Plan Created by this Agreement.Executive and the Bank expressly declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement are intended to, or shall be deemed
to, create any plan for purposes of the Employee Retirement Income Security Act or any other law or regulation, and each party expressly waives any right to assert the contrary. Any party who makes such an assertion in any judicial or administrative
filing, hearing, or process shall have materially breached this Agreement upon making the assertion.



21. Amendments. No amendments or additions to this Agreement will bind the parties unless made in writing and signed by all of the parties, except as herein otherwise specifically provided.



22. Applicable Law. Except to the extent preempted by federal law, Maryland
law shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.



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23. 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 of this Agreement.



24. Headings. Headings contained in this Agreement are for convenience of reference only.



25. Entire Agreement. This Agreement, together with any understanding or modifications agreed to in writing by the parties,
shall constitute the entire agreement among the parties hereto with respect to the subject matter of this Agreement, other than written agreements with respect to specific plans, programs or arrangements described in Sections 5 and 6.



26. Required Provisions.In the event any of the foregoing provisions of this
Section 26 are in conflict with the terms of this Agreement, this Section 26 shall prevail.



| | a. | The Bank may terminate Executives employment at any time, but any termination by the Bank, other than Termination for Cause, shall not prejudice Executives right to
compensation or other benefits under this Agreement. Executive shall not have the right to receive compensation or other benefits for any period after Termination for Cause as defined in Section 7 of this Agreement.
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| | b. | If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Banks affairs by a notice served under Section 8(e)(3) or 8(g)(1)
of the Federal Deposit Insurance Act, 12 U.S.C. Sec. 1818(e)(3) or (g)(1); the Banks obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion: (i) pay Executive all or part of the compensation withheld while contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the obligations which were suspended.
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| | c. | If Executive is removed and/or permanently prohibited from participating in the conduct of the Banks affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. Sec. 1818(e)(4) or (g)(1), all obligations of the Bank under this contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.
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| | d. | If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. Sec. 1813(x)(1), all obligations of the Bank under this contract shall
terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.
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| | e. | All obligations of the Bank under this contract shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of
the institution: (i) by the Director of the OTS (or his designee), the FDIC or the Resolution Trust Corporation, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section
13(c) of the Federal Deposit Insurance Act, 12 U.S.C. Sec. 1823(c); or (ii) by the Director of the OTS (or his designee) at the time the Director (or his designee) approves a supervisory merger to resolve problems related to the operations of the
Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action.
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| | f. | Any payments made to Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. §1828(k) and FDIC regulation 12
C.F.R. Part 359, Golden Parachute and Indemnification Payments.
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IN WITNESS WHEREOF,the parties hereto have executed this Agreement effective as of the date first set forth above.



|                      |  |                                   |  |                             
|--------------------- |  | --------------------------------- |  | ----------------------------
|Attest:               |  | BAY-VANGUARD FEDERAL SAVINGS BANK
|                      |  |                                  
|/s/ Rose Smith        |  | By:                               |  | /s/ Edmund T. Leonard       
|                      | 
|Attest:               |  | EXECUTIVE                        
|                      |  |                                  
|/s/ Edmund T. Leonard |  | By:                               |  | /s/ Daniel J. Gallagher, Jr.
|                      |  |                                   |  | Daniel J. Gallagher, Jr.    





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