exhibit10-7.htm


    
      
        

      

    

    EXHIBIT
10.7


    
      	
              AMENDED
      AND RESTATED

            
	
              MALVERN
      FEDERAL SAVINGS BANK

            
	
              SUPPLEMENTAL
      EXECUTIVE RETIREMENT PLAN AGREEMENT

            


    

     

              
 THIS
AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT
(the “Agreement”) by and between Malvern Federal Savings Bank (the “Bank”), a
federally-chartered savings bank located in Paoli, Pennsylvania, and RONALD
ANDERSON (the “Executive”), intending to be legally bound hereby, is adopted
effective as of December 16, 2008.

     

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

     

               
WHEREAS,
the Executive entered into a Supplemental Executive Retirement Plan Agreement
with the Bank dated as of October 6, 2004 (the “Prior Agreement”), which Prior
Agreement was amended as of September 28, 2006 for the purpose of bringing the
Prior Agreement into compliance with the proposed regulations issued under
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”);
and

     

               
WHEREAS,
the Bank wishes to amend and restate the Prior Agreement in order to comply with
the final regulations issued under Section 409A of the Code in April
2007.

     

               
NOW,
THEREFORE,
in consideration of the foregoing premises and other good and valuable
consideration, the receipt and acceptance of which are hereby acknowledged, the
Executive and the Bank hereby agree as follows:

    
      	 
      
	
              AGREEMENT

            
	
              Article
      1

            
	
              Definitions

            


    

     

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

    
      	 
      	 
      
	
              1.1

            	
              “Beneficiary” means
      each designated person, or the estate of the deceased Executive, entitled
      to benefits, if any, upon the death of the Executive determined pursuant
      to Article 4.

            
	 
      	 
      
	
              1.2

            	
              “Beneficiary
      Designation Form” means the form established from time to time by
      the Plan Administrator that the Executive completes, signs and returns to
      the Plan Administrator to designate one or more
      Beneficiaries.

            
	 
      	 
      
	
              1.3

            	
              “Change
      in Control” means a change in the ownership of the Company or the
      Bank, a change in the effective control of the Company or the Bank, or a
      change in the ownership of a substantial portion of the assets of the
      Company or the Bank, in each case as provided under Section 409A of the
      Code and the regulations thereunder, provided, however, that neither any
      second-step conversion and reorganization in which Malvern Federal Mutual
      Holding Company (the “MHC”) ceases to exist nor any increase in the
      ownership of the Company by the MHC shall be deemed to be a Change in
      Control.

            
	 
      	 
      
	
              1.4

            	
              “Code”
      means the Internal Revenue Code of 1986, as
      amended.

            
	 
      	 
      
	
              1.5

            	
              “Company”
      means Malvern Federal Bancorp, Inc., the mid-tier stock holding
      company of the Bank.

            
	 
      	 
      
	
              1.6

            	
              “Disability” means
      the Executive (i) is unable to engage in any substantial gainful activity
      by reason of any medically determinable physical or mental impairment
      which can be expected to result in death or can be expected to last for a
      continuous period of not less than twelve (12) months, or (ii) is, by
      reason of any medically determinable physical or mental impairment which
      can be expected to result in death or can be expected to last for a
      continuous period of not less than 12 months, receiving income replacement
      benefits for a period of not less than three months under an accident and
      health plan covering employees of the Bank (or would have been had the
      Executive been eligible to participate in such
    plan).

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    
      	
              1.7

            	
              “Early
      Termination” means
      the Executive’s Separation from Service before Normal Retirement Age for
      any reason other than death, Disability, Termination for Cause or
      following a Change in Control.

            
	 
      	 
      
	
              1.8

            	
              “Effective
      Date” means
      April 1, 2004.

            
	 
      	 
      
	
              1.9

            	
              “Normal
      Retirement Age” means the Executive’s 65th
      birthday.

            
	 
      	 
      
	
              1.10

            	
              “Normal
      Retirement Date” means the later of the Normal Retirement Age or a
      Separation from Service after reaching Normal Retirement
      Age.

            
	 
      	 
      
	
              1.11

            	
              “Plan
      Administrator” means
      the plan administrator described in Article 8.

            
	 
      	 
      
	
              1.12

            	
              “Plan
      Year” means each consecutive twelve (12) month period commencing on
      October 1 and ending the following September 30. The initial Plan Year
      shall commence on the Effective Date and end on September 30,
      2004.

            
	 
      	 
      
	
              1.13

            	
              “Separation
      from Service” means a termination of the Executive’s services
      (whether as an employee or as an independent contractor) to the Bank
      (including companies which are deemed to be part of a controlled group of
      corporations with the Bank for purposes of Treas. Reg. §1.409A-1(h)) for
      any reason. Whether a Separation from Service has occurred shall be
      determined in accordance with the requirements of Section 409A of the Code
      based on whether the facts and circumstances indicate that the Bank and
      the Executive reasonably anticipated that no further services would be
      performed after a certain date or that the level of bona fide services the
      Executive would perform after such date (whether as an employee or as an
      independent contractor) would permanently decrease to no more than twenty
      percent (20%) of the average level of bona fide services performed
      (whether as an employee or an independent contractor) over the immediately
      preceding thirty-six (36) month period.

            
	 
      	 
      
	
              1.14

            	
              “Specified
      Employee” means
      a key employee as defined in Section 416(i) of the Code (without regard to
      Section 416(i)(5) of the Code) and as otherwise defined in Section 409A of
      the Code and the regulations thereunder.

            
	 
      	 
      
	
              Article
      2

              Benefits
      During Lifetime

            
	 
      	 
      	 
      
	
              2.1

            	
              Normal
      Retirement Benefit. Upon the Executive’s Separation from Service on
      or after the Normal Retirement Age for any reason other than death, the
      Bank shall pay to the Executive the benefit described in this Section 2.1
      in lieu of any other benefit under this Article.

            
	 
      	 
      
	 
      	
              2.1.1

            	
              Amount
      of Benefit. The annual benefit under this Section 2.1 is SIXTY ONE
      THOUSAND DOLLARS ($61,000). If the Executive continues in the employ of
      the Bank beyond Normal Retirement Age, the amount above shall be increased
      3.5% for
      each completed twelve-month period between Normal Retirement Age and the
      earlier of (i) age seventy (70) or (ii) the Separation from
      Service.

            
	 
      	 
      	 
      
	 
      	
              2.1.2

            	
              Payment
      of Benefit. Subject to Section 2.5 hereof, if applicable, the Bank
      shall pay the annual benefit to the Executive in twelve (12) equal monthly
      installments commencing within ninety (90) days following the Executive’s
      Normal Retirement Date, and payable on the first of each month thereafter.
      The annual benefit shall be paid to the Executive for fifteen (15)
      years.

            
	 
      	 
      	 
      
	
              2.2

            	
              Early
      Termination Benefit. Upon Early Termination, the Bank shall pay to
      the Executive the benefit described in this Section 2.2 in lieu of any
      other benefit under this
Article.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    
      	 
      	
              2.2.1

            	
              Amount
      of Benefit. The annual benefit under this Section 2.2 is the Early
      Termination Annual Benefit set forth on Schedule A for the Plan Year ended
      immediately prior to the date on which Early Termination occurs. This
      benefit is determined by vesting the Executive in one hundred percent
      (100%) of the Accrual Balance shown on Schedule A (hereinafter “Accrual
      Balance”).

            
	 
      	 
      	 
      
	 
      	
              2.2.2

            	
              Payment
      of Benefit. Subject to Section 2.5 hereof, if applicable, the Bank
      shall pay the annual benefit to the Executive in twelve (12) equal monthly
      installments commencing within ninety (90) days following the Early
      Termination, and payable on the first of each month thereafter. The annual
      benefit shall be paid to the Executive for fifteen (15)
      years.

            
	 
      	 
      	 
      
	
              2.3

            	
              Disability
      Benefit. Upon the Executive’s Separation from Service due to
      Disability prior to Normal Retirement Age, the Bank shall pay to the
      Executive the benefit described in this Section 2.3 in lieu of any other
      benefit under this Article.

            
	 
      	 
      
	 
      	
              2.3.1

            	
              Amount
      of Benefit. The annual benefit under this Section 2.3 is the
      Disability Annual Benefit set forth on Schedule A for the Plan Year ended
      immediately prior to the date on which the Separation from Service due to
      Disability occurs. This benefit is determined by vesting the Executive in
      one hundred percent (100%) of the Accrual
  Balance.

            
	 
      	 
      	 
      
	 
      	
              2.3.2

            	
              Payment
      of Benefit. The Bank shall pay the annual benefit to the Executive
      in twelve (12) equal monthly installments commencing with the month
      following Normal Retirement Age and payable on the first of each month
      thereafter. The annual benefit shall be paid to the Executive for fifteen
      (15) years.

            
	 
      	 
      	 
      
	
              2.4

            	
              Change
      in Control Benefit. Upon a Change in Control followed by the
      Executive’s Separation from Service before Normal Retirement Age for any
      reason other than death or Disability, the Bank shall pay to the Executive
      the benefit described in this Section 2.4 in lieu of any other benefit
      under this Article.

            
	 
      	 
      
	 
      	
              2.4.1

            	
              Amount
      of Benefit. The annual benefit under this Section 2.4 is the Change
      in Control Annual Benefit set forth on Schedule A for the Plan Year ended
      immediately prior to the date on which the Separation from Service
      occurs.

            
	 
      	 
      	 
      
	 
      	
              2.4.2

            	
              Payment
      of Benefit. Subject to Section 2.5 hereof, if applicable, the Bank
      shall pay the annual benefit to the Executive in twelve (12) equal monthly
      installments commencing within ninety (90) days following the Separation
      from Service, and payable on the first of each month thereafter. The
      annual benefit shall be paid to the Executive for fifteen (15)
      years.

            
	 
      	 
      	 
      
	
              2.5

            	
              Restriction
      on Timing of Distributions. Notwithstanding any provision of this
      Agreement to the contrary, if the Executive is considered a Specified
      Employee at the time of Separation from Service (for any reason other than
      death or Disability) under such procedures as established by the Bank in
      accordance with Section 409A of the Code, benefit distributions that are
      made as a result of the Separation from Service may not commence earlier
      than six (6) months after the date of such Separation from Service.
      Therefore, in the event this Section 2.5 is applicable to the Executive,
      any distribution which would otherwise be paid to the Executive within the
      first six months following the Separation from Service shall be
      accumulated and paid to the Executive in a lump sum on the first day of
      the seventh month following the Separation from Service. All subsequent
      distributions shall be paid in the manner
  specified.

            
	 
      	 
      
	
              2.6

            	
              Distributions
      Upon Income Inclusion Under Section 409A of the Code. Upon the
      inclusion of any amount into the Executive’s income as a result of the
      failure of this Agreement to comply with the requirements of Section 409A
      of the Code, to the extent such tax liability can be covered by the
      Executive’s accrual balance, a distribution shall be made as soon as is
      administratively practicable following the discovery of the plan failure,
      provided, however, that the amount of the distribution shall not exceed
      the amount required to be included in income as a result of the failure to
      comply with the requirements of Section 409A of the Code and the
      regulations issued
thereunder.

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    
      	
              Article
      3

              Death
      Benefits

            
	 
      	 
      
	
              3.1

            	
              Death
      During Active Service. If the Executive dies while in the active
      service of the Bank, the Bank shall pay to the Beneficiary the benefit
      described in this Section 3.1. This benefit shall be paid in lieu of the
      benefits under Article 2.

            
	 
      	 
      
	 
      	
              3.1.1

            	
              Amount
      of Benefit. The benefit under this Section 3.1 is the Death Benefit
      set forth on Schedule A for the Plan Year ending immediately prior to the
      date of the Executive’s death.

            
	 
      	 
      	 
      
	 
      	
              3.1.2

            	
              Payment
      of Benefit. The Bank shall pay the benefit to the Beneficiary in
      the form elected by the Executive on the Election Form, attached hereto
      and made a part of this Agreement, commencing within ninety (90) days
      following receipt by the Bank of the Executive’s death certificate. Any
      change in the form or timing of the payment upon death shall not take
      effect until at least 12 months after the Election Form is submitted by
      the Executive and accepted by the Plan Administrator. If the Executive
      elects installment payments, during the applicable installment period the
      Bank shall credit interest on the unpaid Accrual Balance at an annual rate
      equal to the yield on a 10-year U.S. Treasury Note, measured as of the end
      of the month prior to the date of the Executive’s death, plus two percent
      (2%), compounded monthly. Notwithstanding any election by the Executive to
      the contrary, if the benefit under this Section 3.1 is less than fifty
      thousand dollars ($50,000), the Bank shall pay the benefit in a lump
      sum.

            
	 
      	 
      	 
      
	
              3.2

            	
              Death
      During Benefit Period. If the Executive dies after the benefit
      payments have commenced under this Agreement but before receiving all such
      payments, the Bank shall pay the remaining benefits to the Beneficiary at
      the same time and in the same amounts they would have been paid to the
      Executive had the Executive survived.

            
	 
      	 
      
	
              3.3

            	
              Death
      Following Separation from Service But Before Benefits Commence. If
      the Executive is entitled to benefits under this Agreement but dies prior
      to the commencement of said benefits, the Bank shall pay to the
      Beneficiary the same benefits, in the same manner, that would have been
      paid to the Executive had the Executive survived; however, said benefit
      payments will commence within ninety (90) days of the Executive’s
      death.

            
	 
      	 
      
	
              Article
      4

            
	
              Beneficiaries

            
	 
      
	
              4.1

            	
              Beneficiary
      Designation. The Executive shall have the right, at any time, to
      designate a Beneficiary(ies) to receive any benefits payable under this
      Agreement upon the death of the Executive. The Beneficiary designated
      under this Agreement may be the same as or different from the beneficiary
      designated under any other benefit plan of the Bank in which the Executive
      participates.

            
	 
      	 
      
	
              4.2

            	
              Beneficiary
      Designation: Change. The Executive shall designate a Beneficiary by
      completing and signing the Beneficiary Designation Form, and delivering it
      to the Plan Administrator or its designated agent. The Executive’s
      Beneficiary designation shall be deemed automatically revoked if the
      Beneficiary predeceases the Executive or if the Executive names a spouse
      as Beneficiary and the marriage is subsequently dissolved. The Executive
      shall have the right to change a Beneficiary by completing, signing and
      otherwise complying with the terms of the Beneficiary Designation Form and
      the Plan Administrator’s rules and procedures, as in effect from time to
      time. Upon the acceptance by the Plan Administrator of a new Beneficiary
      Designation Form, all Beneficiary designations previously filed shall be
      cancelled. The Plan Administrator shall be entitled to rely on the last
      Beneficiary Designation Form filed by the Executive and accepted by the
      Plan Administrator prior to the Executive’s
  death.

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    
      	
              4.3

            	
              Acknowledgment.
      No designation or change in designation of a Beneficiary shall be
      effective until received, accepted and acknowledged in writing by the Plan
      Administrator or its designated agent.

            
	 
      	 
      
	
              4.4

            	
              No
      Beneficiary Designation. If the Executive dies without a valid
      Beneficiary designation, or if all designated Beneficiaries predecease the
      Executive, then the Executive’s spouse shall be the designated
      Beneficiary. If the Executive has no surviving spouse, the benefits shall
      be made to the personal representative of the Executive’s
      estate.

            
	 
      	 
      
	
              4.5

            	
              Facility
      of Payment. If the Plan Administrator determines in its discretion
      that a benefit is to be paid to a minor, to a person declared incompetent,
      or to a person incapable of handling the disposition of that person’s
      property, the Plan Administrator may direct payment of such benefit to the
      guardian, legal representative or person having the care or custody of
      such minor, incompetent person or incapable person. The Plan Administrator
      may require proof of incompetence, minority or guardianship as it may deem
      appropriate prior to distribution of the benefit. Any payment of a benefit
      shall be a payment for the account of the Executive and the Executive’s
      Beneficiary, as the case may be, and shall be a complete discharge of any
      liability under the Agreement for such payment
    amount.

            
	 
      	 
      
	
              Article
      5

            
	
              General
      Limitations

            
	 
      
	
              5.1

            	
              Excess
      Parachute or Golden Parachute Payment. If the payments pursuant to
      this Agreement, either alone or together with other payments and benefits
      which the Executive has the right to receive from the Bank and the
      Company, would constitute a “parachute payment” under Section 280G of the
      Code, or would be a prohibited golden parachute payment pursuant to 12
      C.F.R. §359.2 and for which the appropriate federal banking agency has not
      given written consent to pay pursuant to 12 C.F.R. §359.4, the amount of
      each of the payments pursuant to this Agreement shall be reduced by the
      minimum amount necessary to result in (i) no portion of the payments under
      this Agreement being non-deductible to the Bank or the Company pursuant to
      Section 280G of the Code and subject to the excise tax imposed under
      Section 4999 of the Code, and (ii) no adverse consequence to the Bank or
      the Company under or pursuant to such banking regulations. All amounts
      payable under this Agreement shall also be subject to limitations or
      prohibitions imposed by subsequent changes or amendments to the cited laws
      and regulations except to the extent that any amounts payable under this
      Agreement are grandfathered or otherwise exempt or excluded from the
      change or amendment.

            
	 
      	 
      
	
              5.2

            	
              Termination
      for Cause. Notwithstanding any provision of this Agreement to the
      contrary, the Bank shall not pay any benefit under this Agreement if the
      Bank terminate the Executive’s employment for Cause. Termination of the
      Executive’s employment for “Cause” shall mean termination because of
      personal dishonesty, 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 the Agreement. For purposes of this
      paragraph, no act or failure to act on the Executive’s part shall be
      considered “willful” unless done, or omitted to be done, by the Executive
      not in good faith and without reasonable belief that the Executive’s
      action or omission was in the best interest of the
      Bank.

            
	 
      	 
      
	
              5.3

            	
              Removal.
      Notwithstanding any provision of this Agreement to the contrary, the Bank
      shall not pay any benefit under this Agreement if the Executive is subject
      to a final removal or prohibition order issued by an appropriate federal
      banking agency pursuant to Section 8(e) of the Federal Deposit Insurance
      Act (“FDIA”).

            
	 
      	 
      
	
              5.4

            	
              Non-compete
      Provision. The Executive shall forfeit any unpaid benefits under
      this Agreement if during the term of this Agreement, and for a period of
      five years after payment of benefits has commenced, the Executive,
      directly or indirectly, either as an individual or as a proprietor,
      stockholder, partner, officer, director, employee, agent, consultant or
      independent contractor of any individual, partnership, corporation or
      other entity (excluding an ownership interest of three percent (3%) or
      less in the stock of a publicly-traded
  company):

            


    


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    
      	 
      	
              (i)

            	
              becomes
      employed by, participates in, or becomes connected in any manner with the
      ownership, management, operation or control of any bank, savings and loan
      or other similar financial institution if the Executive’s responsibilities
      will include providing banking or other financial services within the
      twenty-five (25) miles of any office maintained by the Bank as of the date
      of the Executive’s Separation from Service;

            
	 
      	 
      	 
      
	 
      	
              (ii)

            	
              participates
      in any way in hiring or otherwise engaging, or assisting any other person
      or entity in hiring or otherwise engaging, on a temporary, part-time or
      permanent basis, any individual who was employed by the Bank as of the
      date of the Executive’s Separation from Service;

            
	 
      	 
      	 
      
	 
      	
              (iii)

            	
              assists,
      advises, or serves in any capacity, representative or otherwise, any third
      party in any action against the Bank or transaction involving the
      Bank;

            
	 
      	 
      	 
      
	 
      	
              (iv)

            	
              sells,
      offers to sell, provides banking or other financial services, assists any
      other person in selling or providing banking or other financial services,
      or solicits or otherwise competes for, either directly or indirectly, any
      orders, contract, or accounts for services of a kind or nature like or
      substantially similar to the financial services performed or financial
      products sold by the Bank (the preceding hereinafter referred to as
      “Services”), to or from any person or entity from whom the Executive or
      the Bank, to the knowledge of the Executive, provided banking or other
      financial services, sold, offered to sell or solicited orders, contracts
      or accounts for Services during the three (3) year period immediately
      prior to the Executive’s Separation from Service;

            
	 
      	 
      	 
      
	 
      	
              (v)

            	
              divulges,
      discloses, or communicates to others in any manner whatsoever, any
      confidential information of the Bank, to the knowledge of the Executive,
      including, but not limited to, the names and addresses of customers or
      prospective customers of the Bank, as they may have existed from time to
      time, of work performed or services rendered for any customer, any method
      and/or procedures relating to projects or other work developed for the
      Bank, earnings or other information concerning the Bank. The restrictions
      contained in this subparagraph (v) apply to all information regarding the
      Bank, regardless of the source who provided or compiled such information.
      Notwithstanding anything to the contrary, all information referred to
      herein shall not be disclosed unless and until it becomes known to the
      general public from sources other than the Executive.

            
	 
      	 
      	 
      
	 
      	
              5.4.1

            	
              Judicial
      Remedies. In the event of a breach or threatened breach by the
      Executive of any provision of these restrictions, the Executive recognizes
      the substantial and immediate harm that a breach or threatened breach will
      impose upon the Bank, and further recognizes that in such event monetary
      damages may be inadequate to fully protect the Bank. Accordingly, in the
      event of a breach or threatened breach of these restrictions, the
      Executive consents to the Bank’s entitlement to such ex
      parte,
      preliminary, interlocutory, temporary or permanent injunctive, or any
      other equitable relief, protecting and fully enforcing the Bank’s rights
      hereunder and preventing the Executive from further breaching any of his
      obligations set forth herein. The Executive expressly waives any
      requirement, based on any statute, rule of procedure, or other source,
      that the Bank post a bond as a condition of obtaining any of the
      above-described remedies. Nothing herein shall be construed as prohibiting
      the Bank from pursuing any other remedies available to the Bank at law or
      in equity for such breach or threatened breach, including the recovery of
      damages from the Executive. The Executive expressly acknowledges and
      agrees that: (i) the restrictions set forth in Section 5.4 hereof are
      reasonable, in terms of scope, duration, geographic area, and otherwise,
      (ii) the protections afforded the Bank in Section 5.4 hereof are necessary
      to protect its legitimate business interest, (iii) the restrictions set
      forth in Section 5.4 hereof will not be materially adverse to the
      Executive’s employment with the Bank, and (iv) his agreement to observe
      such restrictions forms a material part of the consideration for this
      Agreement.

            


    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    
      	 
      	
              5.4.2

            	
              Overbreadth
      of Restrictive Covenant. It is the intention of the parties that if
      any restrictive covenant in this Agreement is determined by a court of
      competent jurisdiction to be overly broad, then the court should enforce
      such restrictive covenant to the maximum extent permitted under the law as
      to area, breadth and duration.

            
	 
      	 
      	 
      
	 
      	
              5.4.3

            	
              Change
      in Control. The non-compete provision detailed in Section 5.4
      hereof shall not be enforceable or applicable following a Change in
      Control.

            
	 
      	 
      	 
      
	
              5.5

            	
              Suicide
      or Misstatement. No benefits shall be payable if the Executive
      commits suicide within two years after the date of the Prior Agreement, or
      if the insurance company denies coverage (i) for material misstatements of
      fact made by the Executive on any application for life insurance purchased
      by the Bank, or (ii) for any other reason.

            
	 
      	 
      
	
              Article
      6

            
	
              Claims
      and Review Procedures

            
	 
      
	
              6.1

            	
              Claims
      Procedure. An Executive or Beneficiary (“claimant”) who has not
      received benefits under the Agreement that he or she believes should be
      paid shall make a claim for such benefits as
    follows:

            
	 
      	 
      
	 
      	
              6.1.1

            	
              Initiation
      - Written Claim. The claimant initiates a claim by submitting to
      the Plan Administrator a written claim for the
      benefits.

            
	 
      	 
      	 
      
	 
      	
              6.1.2

            	
              Timing
      of Bank Response. The Plan Administrator shall respond to such
      claimant within 90 days after receiving the claim. If the Plan
      Administrator determines that special circumstances require additional
      time for processing the claim, the Plan Administrator can extend the
      response period by an additional 90 days by notifying the claimant in
      writing, prior to the end of the initial 90-day period, that an additional
      period is required. The notice of extension must set forth the special
      circumstances and the date by which the Plan Administrator expects to
      render its decision.

            
	 	 	 
	 
      	
              6.1.3

            	
              Notice
      of Decision. If the Plan Administrator denies part or all of the
      claim, the Plan Administrator shall notify the claimant in writing of such
      denial. The Plan Administrator shall write the notification in a manner
      calculated to be understood by the claimant. The notification shall set
      forth:

            


    

     

    
      	 
      	 
      	
              6.1.3.1

            	
              The
      specific reasons for the denial,

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.1.3.2

            	
              A
      reference to the specific provisions of the Agreement on which the denial
      is based,

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.1.3.3

            	
              A
      description of any additional information or material necessary for the
      claimant to perfect the claim and an explanation of why it is
      needed,

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.1.3.4

            	
              An
      explanation of the Agreement’s review procedures and the time limits
      applicable to such procedures, and

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.1.3.5

            	
              A
      statement of the claimant’s right to bring a civil action under ERISA
      Section 502(a) following an adverse benefit determination on
      review.

            


    

     

    
      	
              6.2

            	
              Review
      Procedure. If the Plan Administrator denies part or all of the
      claim, the claimant shall have the opportunity for a full and fair review
      by the Plan Administrator of the denial, as
  follows:

            
	 
      	 
      
	 
      	
              6.2.1

            	
              Initiation
      - Written Request. To initiate the review, the claimant, within 60
      days after receiving the Plan Administrator’s notice of denial, must file
      with the Plan Administrator a written request for
      review.

            
	 
      	 
      	 
      
	 
      	
              6.2.2

            	
              Additional
      Submissions - Information Access. The claimant shall then have the
      opportunity to submit written comments, documents, records and other
      information relating to the claim. The Plan Administrator shall also
      provide the claimant, upon request and free of charge, reasonable access
      to, and copies of, all documents, records and other information relevant
      (as defined in applicable ERISA regulations) to the claimant’s claim for
      benefits.

            


    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    

     

    
      	 
      	
              6.2.3

            	
              Considerations
      on Review. In considering the review, the Plan Administrator shall
      take into account all materials and information the claimant submits
      relating to the claim, without regard to whether such information was
      submitted or considered in the initial benefit
      determination.

            
	 
      	 
      	 
      
	 
      	
              6.2.4

            	
              Timing
      of Plan Administrator Response. The Plan Administrator shall
      respond in writing to such claimant within 60 days after receiving the
      request for review. If the Plan Administrator determines that special
      circumstances require additional time for processing the claim, the Plan
      Administrator can extend the response period by an additional 60 days by
      notifying the claimant in writing, prior to the end of the initial 60-day
      period, that an additional period is required. The notice of extension
      must set forth the special circumstances and the date by which the Plan
      Administrator expects to render its decision.

            
	 
      	 
      	 
      
	 
      	
              6.2.5

            	
              Notice
      of Decision. The Plan Administrator shall notify the claimant in
      writing of its decision on review. The Plan Administrator shall write the
      notification in a manner calculated to be understood by the claimant. If
      the Plan Administrator denies part or all of the claim, the notification
      shall set forth:

            


    

     

    
      	 
      	 
      	
              6.2.5.1

            	
              The
      specific reasons for the denial,

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.2.5.2

            	
              A
      reference to the specific provisions of the Agreement on which the denial
      is based,

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.2.5.3

            	
              A
      statement that the claimant is entitled to receive, upon request and free
      of charge, reasonable access to, and copies of, all documents, records and
      other information relevant (as defined in applicable ERISA regulations) to
      the claimant’s claim for benefits, and

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              6.2.5.4

            	
              A
      statement of the claimant’s right to bring a civil action under ERISA
      Section 502(a).

            
	 
      	 
      	 
      
	
              Article
      7

            
	
              Amendments
      and Termination

            
	 
      
	
              7.1

            	
              Amendments.
      This Agreement may be amended only by a written agreement signed by the
      Bank and the Executive. However, the Bank may unilaterally amend this
      Agreement to conform with written directives to the Bank from its banking
      regulators or to comply with legislative changes or tax law, including
      without limitation Section 409A of the Code and any and all Treasury
      regulations and guidance promulgated thereunder.

            
	 
      	 
      
	
              7.2

            	
              Plan
      Termination Generally. The Bank may unilaterally terminate this
      Agreement at any time. Except as provided in Section 7.3, the termination
      of this Agreement shall not cause a distribution of benefits under this
      Agreement. Rather, upon such termination benefit distributions will be
      made at the earliest distribution event permitted under Article 2 or
      Article 3.

            
	 
      	 
      
	
              7.3

            	
              Plan
      Terminations Under Section 409A. Under no circumstances may the
      Agreement permit the acceleration of the time or form of any payment under
      the Agreement prior to the payment events specified herein, except as
      provided in this Section 7.3. The Bank may, in its discretion, elect to
      terminate the Agreement in any of the following three circumstances and
      accelerate the payment of the entire unpaid balance of the Executive’s
      vested benefits as of the date of such payment in accordance with Section
      409A of the Code, provided that in each case the action taken complies
      with the applicable requirements set forth in Treasury Regulation
      §1.409A-3(j)(4)(ix):

            
	 
      	 
      
	 
      	
              (a)

            	
              the
      Agreement is irrevocably terminated within the 30 days preceding a Change
      in Control and (1) all arrangements sponsored by the Company and the Bank
      and any successors immediately following the Change in Control that would
      be aggregated with the Agreement under Treasury Regulation §1.409A-1(c)(2)
      are terminated with respect to each participant that experienced the
      Change in Control event, and (2) the Executive and all participants under
      the other aggregated arrangements receive all of their benefits under the
      terminated arrangements within 12 months of the date that all necessary
      action to irrevocably terminate the Agreement and the other aggregated
      arrangements is taken;

            


    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    
      	 
      	
              (b)

            	
              the
      Agreement is irrevocably terminated at a time that is not proximate to a
      downturn in the financial health of the Company or the Bank and (1) all
      arrangements sponsored by the Company and the Bank that would be
      aggregated with the Agreement under Treasury Regulation §1.409A-1(c) if
      the Executive participated in such arrangements are terminated, (2) no
      payments are made within 12 months of the date the Company and the Bank
      take all necessary action to irrevocably terminate the arrangements, other
      than payments that would be payable under the terms of the arrangements if
      the termination had not occurred; (3) all payments are made within 24
      months of the date the Company and the Bank take all necessary action to
      irrevocably terminate the arrangements; and (4) neither the Company nor
      the Bank adopts a new arrangement that would be aggregated with the
      Agreement under Treasury Regulation §1.409A-1(c) if the Executive
      participated in both arrangements, at any time within three years
      following the date the Company and the Bank take all necessary action to
      irrevocably terminate the Agreement; or

            
	 
      	 
      	 
      
	 
      	
              (c)

            	
              the
      Agreement is terminated within 12 months of a corporate dissolution taxed
      under Section 331 of the Code, or with the approval of a bankruptcy court
      pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts deferred by
      the Executive under the Agreement are included in the Executive’s gross
      income in the later of (1) the calendar year in which the termination of
      the Agreement occurs, or (2) the first calendar year in which the payment
      is administratively practicable.

            
	 
      	 
      	 
      
	
              Article
      8

            
	
              Administration

            
	 
      
	
              8.1

            	
              Plan
      Administrator Duties. This Agreement shall be administered by a
      Plan Administrator which shall consist of the Bank’s Board of Directors,
      or such committee or person(s) as the Board of Directors shall appoint.
      The Executive may be a member of the Plan Administrator. The Plan
      Administrator shall also have the discretion and authority to (i) make,
      amend, interpret and enforce all appropriate rules and regulations for the
      administration of this Agreement and (ii) decide or resolve any and all
      questions, including interpretations of this Agreement, as may arise in
      connection with the Agreement. Any acts under this section shall be
      restricted to actions which do not violate Section 409A of the
      Code.

            
	 
      	 
      
	
              8.2

            	
              Agents.
      In the administration of this Agreement, the Plan Administrator may employ
      agents and delegate to them such administrative duties as it sees fit
      (including acting through a duly appointed representative), and may from
      time to time consult with counsel who may be counsel to the
      Bank.

            
	 
      	 
      
	
              8.3

            	
              Binding
      Effect of Decisions. The decision or action of the Plan
      Administrator with respect to any question arising out of or in connection
      with the administration, interpretation and application of the Agreement
      and the rules and regulations promulgated hereunder shall be final and
      conclusive and binding upon all persons having any interest in the
      Agreement.

            
	 
      	 
      
	
              8.4

            	
              Indemnity
      of Plan Administrator. The Bank shall indemnify and hold harmless
      the members of the Plan Administrator against any and all claims, losses,
      damages, expenses or liabilities arising from any action or failure to act
      with respect to this Agreement, except in the case of willful misconduct
      by the Plan Administrator or any of its members.

            
	 
      	 
      
	
              8.5

            	
              Bank
      Information. To enable the Plan Administrator to perform its
      functions, the Bank shall supply full and timely information to the Plan
      Administrator on all matters relating to the date and circumstances of the
      retirement, Disability, death, or Separation from Service of the
      Executive, and such other pertinent information as the Plan Administrator
      may reasonably require.

            
	 
      	 
      
	
              8.6

            	
              Annual
      Statement. The Plan Administrator shall provide to the Executive,
      within 120 days after the end of each Plan Year, a statement setting forth
      the benefits payable under this
  Agreement.

            


    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

    
      	
              Article
      9

            
	
              Miscellaneous

            
	 
      
	
              9.1

            	
              Applicable
      Law. The Agreement and all rights hereunder shall be governed by
      the laws of the Commonwealth of Pennsylvania, except to the extent
      preempted by the laws of the United States of
    America.

            
	 
      	 
      
	
              9.2

            	
              Binding
      Effect. This Agreement shall bind the Executive and the Bank, and
      their beneficiaries, survivors, executors, successors, administrators and
      transferees.

            
	 
      	 
      
	
              9.3

            	
              Entire
      Agreement. This Agreement constitutes the entire agreement between
      the Bank and the Executive as to the subject matter hereof. No rights are
      granted to the Executive by virtue of this Agreement other than those
      specifically set forth herein. All prior agreements between the Bank and
      the Executive with respect to the matters agreed to herein are hereby
      superseded and shall have no force or effect, including but not limited to
      the Prior Agreement.

            
	 
      	 
      
	
              9.4

            	
              Right
      of Offset. The Bank shall have the right to offset the benefits
      against any unpaid obligation the Executive may have with the
      Bank.

            
	 
      	 
      
	
              9.5

            	
              No
      Guarantee of Employment. This Agreement is not an employment policy
      or contract. It does not give the Executive the right to remain an
      employee of the Bank, nor does it interfere with the Bank’s right to
      discharge the Executive. It also does not require the Executive to remain
      an employee nor interfere with the Executive’s right to terminate
      employment at any time.

            
	 
      	 
      
	
              9.6

            	
              Non-Transferability.
      Benefits under this Agreement cannot be sold, transferred, assigned,
      pledged, attached or encumbered in any manner.

            
	 
      	 
      
	
              9.7

            	
              Notice.
      For the purposes of this Agreement, notices and all other communications
      provided for in this Agreement shall be in writing and shall be deemed to
      have been duly given when delivered or mailed by certified or registered
      mail, return receipt requested, postage prepaid, addressed to the
      respective addresses set forth
below:

            


    

     

    
      	 
      	
              To
      the Bank:

            	
              Secretary

            
	 
      	 
      	
              Malvern
      Federal Savings Bank

            
	 
      	 
      	
              42
      E. Lancaster Avenue

            
	 
      	 
      	
              PO
      Box 485

            
	 
      	 
      	
              Paoli,
      Pennsylvania 19301

            
	 
      	 
      	 
      
	 
      	
              To
      the Executive:

            	
              Ronald
      Anderson

            
	 
      	 
      	
              At
      the address last appearing on the

            
	 
      	 
      	
              personnel
      records of the Bank

            


    

     

    
      	
              9.8

            	
              Reorganization.
      The Bank shall not merge or consolidate into or with another company, or
      reorganize, or sell substantially all of its assets to another company,
      firm or person unless such succeeding or continuing company, firm or
      person agrees to assume and discharge the obligations of the Bank
      hereunder.

            
	 
      	 
      
	
              9.9

            	
              Tax
      Withholding. The Bank shall withhold any taxes that, in its
      reasonable judgment, are required to be withheld from the benefits
      provided under this Agreement. The Executive acknowledges that the Bank’s
      sole liability regarding taxes is to forward any amounts withheld to the
      appropriate taxing authority(ies).

            
	 
      	 
      
	
              9.10

            	
              Nature
      of Obligations. Nothing contained herein shall create or require
      the Bank to create a trust of any kind to fund any benefits which may be
      payable hereunder, and to the extent that the Executive acquires a right
      to receive benefits from the Bank hereunder, such right shall be no
      greater than the right of any unsecured general creditor of the
      Bank.

            


    


    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     

    
      	
              9.11

            	
              Headings.
      The section headings contained in this Agreement are for reference
      purposes only and shall not affect in any way the meaning or
      interpretation of this Agreement.

            
	 
      	 
      
	
              9.12

            	
              Validity.
      The invalidity or unenforceability of any provision of this Agreement
      shall not affect the validity or enforceability of any other provisions of
      this Agreement, which shall remain in full force and
      effect.

            
	 
      	 
      
	
              9.13

            	
              Waiver.
      No waiver by any party hereto at any time of any breach by any other party
      hereto of, or compliance with, any condition or provision of this
      Agreement to be performed by such other party shall be deemed a waiver of
      similar or dissimilar provisions or conditions at the same or at any prior
      or subsequent time.

            
	 
      	 
      
	
              9.14

            	
              Counterparts.
      This Agreement may be executed in one or more counterparts, each of which
      shall be deemed to be an original but all of which together will
      constitute one and the same instrument.

            
	 
      	 
      
	
              9.15

            	
              Regulatory
      Prohibition. Notwithstanding any other provision of this Agreement
      to the contrary, any payments made to the Executive pursuant to this
      Agreement, or otherwise, are subject to and conditioned upon their
      compliance with Section 18(k) of the FDIA(12 U.S.C. §1828(k)) and any
      regulations promulgated thereunder, including 12 C.F.R. Part
      359.

            
	 
      	 
      
	
              9.16

            	
              Compliance
      with Section 409A. This Agreement shall at all times be
      administered and the provisions of this Agreement shall be interpreted
      consistent with the requirements of Section 409A of the Code and any and
      all regulations thereunder, including such regulations as may be
      promulgated after the Effective Date of this
    Agreement.

            
	 
      	 
      
	
              9.17

            	
              Rescission.
      Any modification to the terms of this Agreement that would inadvertently
      result in an additional tax liability on the part of the Executive shall
      have no effect, provided the change in the terms of the Agreement is
      rescinded by the earlier of a date before the right is exercised (if the
      change grants a discretionary right) and the last day of the calendar year
      during which such change
occurred.

            


    

     

    [signature
page follows]


    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

     
          IN
WITNESS WHEREOF, the Executive and a duly authorized officer of the Bank
have signed this Agreement as of the date first written above.

    
      	
            	 
      	 
      
	
              
                EXECUTIVE:

              

            	 
      	
              MALVERN
      FEDERAL SAVINGS BANK

            
	 
      	 
      	 
      
	/s/
      Ronald Anderson  	 
      	
              By:
        

            	/s/
      F. Claire Hughes, Jr.  	 
      
	
              
                Ronald
      Anderson

              

            	 
      	
                      
      F.
      Claire Hughes, Jr., Chairman of the

            
	 
      	 
      	
                                 Board
      of Directors

            


    


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    

     

    
       
Supplemental Executive Retirement Plan-Schedule A 

      
        

      

    

     

    Executive:
Ronald Anderson

    
      	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              Period

              Ending

              Sep
      of

            	 	
              Age

            	 	 	
              Accrued

              Liability

            	 	 	
              %
      Vested

              in
      Accrued

              Liability

            	 	 	
              Value

              of
      Vested

              Benefit

            	 	 	
              Value
      as a %

              of
      Potential

              Final
      Value

            	 	 	
              Termination

              For
      Cause

            	 	 	
              Early
      Termination

              Annual
      Benefit

              (1)

            	 	 	
              Disability

              Annual
      Benefit

              (2)

            	 	 	
              Change
      in Control

              Annual
      Benefit

              (3)

            	 	 	
              Preretirement
      Lump

              Sum
      Death
      Benefit

              (4)

            	 
	 	 
      	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
              4/2004

            	 	
              47

            	 	 	$	0	 	 	 	100.00	%	 	$	0	 	 	 	0.00
      	%	 	$	0	 	 	$	0	 	 	$	0	 	 	$	31,214	 	 	$	309,784	 
	 	
              2004

            	 	
              48

            	 	 	$	10,332	 	 	 	100.00
      	%	 	$	10,332	 	 	 	1.71
      	%	 	$	0	 	 	$	1,041	 	 	$	2,809	 	 	$	31,832	 	 	$	315,919	 
	 	
              2005

            	 	
              49

            	 	 	$	31,947	 	 	 	100.00
      	%	 	$	31,947	 	 	 	5.28
      	%	 	$	0	 	 	$	3,219	 	 	$	8,180	 	 	$	33,105	 	 	$	328,556	 
	 	
              2006

            	 	
              50

            	 	 	$	54,895	 	 	 	100.00
      	%	 	$	54,895	 	 	 	9.07
      	%	 	$	0	 	 	$	5,531	 	 	$	13,240	 	 	$	34,429	 	 	$	341,698	 
	 	
              2007

            	 	
              51

            	 	 	$	79,259	 	 	 	100.00
      	%	 	$	79,259	 	 	 	13.09
      	%	 	$	0	 	 	$	7,986	 	 	$	18,005	 	 	$	35,806	 	 	$	355,366	 
	 	
              2008

            	 	
              52

            	 	 	$	105,125	 	 	 	100.00
      	%	 	$	105,125	 	 	 	17.36
      	%	 	$	0	 	 	$	10,592	 	 	$	22,494	 	 	$	37,239	 	 	$	369,581	 
	 	
              2009

            	 	
              53

            	 	 	$	132,586	 	 	 	100.00
      	%	 	$	132,586	 	 	 	21.90
      	%	 	$	0	 	 	$	13,359	 	 	$	26,722	 	 	$	38,728	 	 	$	384,364	 
	 	
              2010

            	 	
              54

            	 	 	$	161,742	 	 	 	100.00
      	%	 	$	161,742	 	 	 	26.72
      	%	 	$	0	 	 	$	16,297	 	 	$	30,704	 	 	$	40,277	 	 	$	399,739	 
	 	
              2011

            	 	
              55

            	 	 	$	192,695	 	 	 	100.00
      	%	 	$	192,695	 	 	 	31.83
      	%	 	$	0	 	 	$	19,416	 	 	$	34,455	 	 	$	41,888	 	 	$	415,728	 
	 	
              2012

            	 	
              56

            	 	 	$	225,558	 	 	 	100.00
      	%	 	$	225,558	 	 	 	37.26
      	%	 	$	0	 	 	$	22,727	 	 	$	37,988	 	 	$	43,564	 	 	$	432,358	 
	 	
              2013

            	 	
              57

            	 	 	$	260,448	 	 	 	100.00
      	%	 	$	260,448	 	 	 	43.02
      	%	 	$	0	 	 	$	26,242	 	 	$	41,316	 	 	$	45,306	 	 	$	449,652	 
	 	
              2014

            	 	
              58

            	 	 	$	297,489	 	 	 	100.00
      	%	 	$	297,489	 	 	 	49.14
      	%	 	$	0	 	 	$	29,975	 	 	$	44,450	 	 	$	47,119	 	 	$	467,638	 
	 	
              2015

            	 	
              59

            	 	 	$	336,815	 	 	 	100.00
      	%	 	$	336,815	 	 	 	55.63
      	%	 	$	0	 	 	$	33,937	 	 	$	47,403	 	 	$	49,003	 	 	$	486,343	 
	 	
              2016

            	 	
              60

            	 	 	$	378,567	 	 	 	100.00
      	%	 	$	378,567	 	 	 	62.53
      	%	 	$	0	 	 	$	38,144	 	 	$	50,183	 	 	$	50,964	 	 	$	505,797	 
	 	
              2017

            	 	
              61

            	 	 	$	422,894	 	 	 	100.00
      	%	 	$	422,894	 	 	 	69.85
      	%	 	$	0	 	 	$	42,610	 	 	$	52,803	 	 	$	53,002	 	 	$	526,029	 
	 	
              2018

            	 	
              62

            	 	 	$	469,955	 	 	 	100.00
      	%	 	$	469,955	 	 	 	77.63
      	%	 	$	0	 	 	$	47,352	 	 	$	55,270	 	 	$	55,122	 	 	$	547,070	 
	 	
              2019

            	 	
              63

            	 	 	$	519,918	 	 	 	100.00
      	%	 	$	519,918	 	 	 	85.88
      	%	 	$	0	 	 	$	52,386	 	 	$	57,594	 	 	$	57,327	 	 	$	568,953	 
	 	
              2020

            	 	
              64

            	 	 	$	572,964	 	 	 	100.00
      	%	 	$	572,964	 	 	 	94.64
      	%	 	$	0	 	 	$	57,731	 	 	$	59,782	 	 	$	59,620	 	 	$	591,711	 
	 	
              4/2021

            	 	
              65

            	 	 	$	605,405	 	 	 	100.00
      	%	 	$	605,405	 	 	 	100.00
      	%	 	$	0	 	 	$	61,000	 	 	$	61,000	 	 	$	61,000	 	 	$	605,405	 
	 	
              4/2022

            	 	
              66

            	 	 	$	626,594	 	 	 	100.00
      	%	 	$	626,594	 	 	 	103.50
      	%	 	$	0	 	 	$	63,135	 	 	$	63,135	 	 	$	63,135	 	 	$	626,594	 
	 	
              4/2023

            	 	
              67

            	 	 	$	648,525	 	 	 	100.00
      	%	 	$	648,525	 	 	 	107.12
      	%	 	$	0	 	 	$	65,345	 	 	$	65,345	 	 	$	65,345	 	 	$	648,525	 
	 	
              4/2024

            	 	
              68

            	 	 	$	671,223	 	 	 	100.00
      	%	 	$	671,223	 	 	 	110.87
      	%	 	$	0	 	 	$	67,632	 	 	$	67,632	 	 	$	67,632	 	 	$	671,223	 
	 	
              4/2025

            	 	
              69

            	 	 	$	694,716	 	 	 	100.00
      	%	 	$	694,716	 	 	 	114.75
      	%	 	$	0	 	 	$	69,999	 	 	$	69,999	 	 	$	69,999	 	 	$	694,716	 
	 	
              4/2026

            	 	
              70

            	 	 	$	719,031	 	 	 	100.00
      	%	 	$	719,031	 	 	 	118.77
      	%	 	$	0	 	 	$	72,449	 	 	$	72,449	 	 	$	72,449	 	 	$	719,031	 


    

     

     

     

    
      	
              Explanation:

            	
              In
      each case, the benefit is based on the year-end amount listed immediately
      prior to date termination of employment occurs. The benefits are payable
      as stated below:

            
	 
      	 
      
	
              (1)

            	 
      	
              Payments
      commence at termination of employment and are payable to the officer or
      the officer’s beneficiary in equal monthly installments for 15
      years.

            
	 
      	 
      	 
      
	
              (2)

            	 
      	
              Payments
      commence at normal retirement age and are payable to the officer or the
      officer’s beneficiary in equal monthly installments for 15
      years.

            
	 
      	 
      	 
      
	
              (3)

            	 
      	
              Payments
      commence at termination of employment and are payable to the officer or
      the officer’s beneficiary in equal monthly installments for 15
      years.

            
	 
      	 
      	 
      
	 
      	 
      	
              The
      amounts are computed by determining the present value of the projected
      annual retirement benefit using a 4.00% discount rate. 4.00% was used
      since this is the rate used to project salary
increases.

            
	 
      	 
      	 
      
	
              (4)

            	 
      	
              The
      listed amounts represent the lump sum value at death. Distributions will
      be made as elected by the officer (lump sum or annuitized over 60, 120, or
      180 months).

            
	 
      	 
      	 
      
	 
      	 
      	
              The
      amounts are computed by determining the present value of the total
      projected annual retirement benefits using a 4.00% discount rate. 4.00%
      was used since this is the rate used to project salary
      increases.

            
	 
      	 
      	 
      
	
              Note:

            	 
      	
              The
      Accrued Liability balance is based
      on the accruals required under Generally Accepted Accounting Principles
      (GAAP). It is based on a plan commencement date of April 1, 2004, the
      interest method of accounting, and a 6.00% discount rate, compounded
      monthly. In event the officer works for the company beyond the age of 65,
      the annual SERP benefit will be increased by 3.50% per year from
      age 66
      through age
70.