Document:

Exhibit 10.1

 

PSB BANCORP, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

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

 

INTRODUCTION

 

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

 

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

 

AGREEMENT

 

PSB
and the Executive agree as follows:

 

Article
1

Definitions

 

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

 

1.1  “Change in Control”
means any of the following:

 

(i)  any person (as such term is used in Sections
13d and 14d-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than PSB, a majority-owned subsidiary of PSB, an employee benefit
plan (or related trust) of PSB or a direct or indirect majority-owned
subsidiary of PSB, or affiliates of PSB (as defined in Rule 12b-2 under
the Exchange Act), becomes the beneficial owner (as determined pursuant to Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of PSB
representing more than 25% of the combined voting power of PSB’s then
outstanding securities (other than any person beneficially owning five percent
[5%] or more of the voting power of PSB’s stock on the date hereof);

 

(ii)  the liquidation or dissolution of PSB or the
occurrence of, or execution of an agreement providing for, a sale of all or
substantially all of the assets of PSB to an entity which is not a direct or
indirect majority-owned subsidiary of PSB;

 

(iii)  the occurrence of, or execution of an
agreement providing for, a reorganization, merger, consolidation or other
similar transaction or connected series of

 

1

 

transactions of PSB as a result of which either (A)
PSB does not survive or (B) pursuant to which shares of PSB common stock (“Common
Stock”) would be converted into cash, securities or other property, unless, in
case of either (A) or (B), the holders of PSB Common Stock immediately prior to
such transaction will, following the consummation of the transaction,
beneficially own, directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors of the company surviving, continuing or resulting
from such transaction;

 

(iv)  the occurrence of, or execution of an
agreement providing for a reorganization, merger, consolidation or similar
transaction of PSB, or any connected series of such transactions, if upon
consummation of such transaction or transactions, the persons who are members
of the Board of Directors of PSB immediately before such transaction or
transactions cease or, in the case of the execution of an agreement for such
transaction or transactions, it is contemplated in such agreement that, upon
consummation, such persons would cease to constitute a majority of the Board of
Directors of PSB or, in the case where PSB does not survive in such
transaction, of the company surviving, continuing or resulting from such
transaction or transactions;

 

(v)  any other event which is at any time
designated as a “Change in Control” for purposes of this Agreement by a
resolution adopted by the Board of Directors of PSB with the affirmative vote
of a majority of the non-employee directors in office at the time the
resolution is adopted; and in the event any such resolution is adopted, the
Change in Control event specified thereby shall be deemed incorporated herein
by reference and thereafter may not be amended, modified or revoked without the
written agreement of the Executive;

 

(vi)  during any period of two (2) consecutive
years during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors of PSB cease for any reason to
constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period; provided, however
that this provision shall not apply in the event two-thirds of the Board of
Directors at the beginning of a period no longer are directors due to death,
retirement, or other circumstances not related to a Change in Control.

 

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

 

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

 

2

 

1.3  “Disability”
means the Executive’s suffering a sickness, accident or injury which has been
determined by the carrier of any group disability insurance policy provided by
PSB or made available by PSB to its employees and covering the Executive, or by
the Social Security Administration, to be a disability rendering the Executive
totally and permanently disabled.  The
Executive must submit proof to PSB of the carrier’s or Social Security
Administration’s determination upon the request of PSB.

 

1.4  “Early Termination”
means the Termination of Employment before Normal Retirement Age for reasons
other than death, Disability, termination for Cause or following a Change of
Control.

 

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

 

1.6  “Normal Retirement Date”
means the later of the Normal Retirement Age or Termination of Employment.

 

1.7  “Termination of Employment”
means that the Executive ceases to be employed by PSB, or a majority-owned
subsidiary of PSB, for any reason, voluntary or involuntary, other than by
reason of a leave of absence approved by PSB.

 

Article
2

Retirement Benefits

 

2.1  Normal Retirement Benefit.  Upon Termination of Employment on or after
the Executive’s Normal Retirement Age for any reason other than death, PSB
shall pay to the Executive the benefit described in this Section 2.1.

 

2.1.1  Amount of Benefit.  The annual benefit under this Section 2.1 is
equal to the product of (i) 30%, times (ii) the sum of (A) the highest total
annualized base salary(ies) paid to the Executive by PSB and its majority-owned
subsidiaries during the four (4) year period ending on the date of his
Termination of Employment, plus (B) the highest total annual bonus(es)  paid to the Executive by such entity(ies)
with respect to any one of the four (4) full calendar years immediately
preceding the year of his Termination of Employment.  In the event the Executive continues in the employ
of PSB beyond his Normal Retirement Age, the annual benefit determined in
accordance with the preceding sentence shall be increased by five percent (5%)
for each full year that his employment continues beyond his Normal Retirement
Age.  For purposes of this Section 2.1.1
and Section 2.2.1, only base salary and annual bonus are intended to be
included for purposes of the required benefit calculations, so that
compensation resulting from stock-based awards, director fees and other
remuneration not generally considered salary or bonus shall be excluded.

 

2.1.2  Payment of Benefit.  PSB shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing on the first day of the
month following the Executive’s Normal Retirement Date and continuing on the
first day of the month for the 239 months that follow; provided, however, that
in the event of his death prior to the payment of all of his benefit, the
relevant provision of Article 3 shall apply.

 

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2.2  Early Termination Benefit.  Upon Early Termination, PSB shall pay to the
Executive the benefit described in this Section 2.2.

 

2.2.1  Amount of Benefit.  The annual benefit under this Section 2.2 is
equal to the product of (i) 30%, times (ii) the sum of (A) the highest total
annualized base salary(ies) paid to the Executive by PSB and its majority-owned
subsidiaries during the four (4) year period ending on the date of Early
Termination, plus (B) the highest total annual bonus(es) paid to the Executive
by such entities with respect to any one of the four (4) full calendar years
immediately preceding the year of the date of Early Termination, times (iii)
30%, times (iv) the number of full years that have elapsed from the date of
this Agreement to the date of Early Termination.  The provisions of this section are subject to
the last sentence of Section 2.1.1.

 

2.2.2  Payment of Benefit.  PSB shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing on the first day of the
month following the Executive’s Normal Retirement Age and continuing on the
first day of the month for the 239 months that follow; provided, however, that
in the event of his death prior to the payment of all of his benefit, the
relevant provision of Article 3 shall apply.

 

2.3  Disability Benefit.  If the Executive terminates employment due to
Disability prior to his Normal Retirement Age, PSB shall pay to the Executive
the benefit described in this Section 2.3.

 

2.3.1  Amount of Benefit.  The annual benefit under this Section 2.3 is
equal the Normal Retirement Benefit determined in the same manner described in
Section 2.1.1, but by treating the date of his Termination of Employment as the
attainment of his Normal Retirement Age.

 

2.3.2  Payment of Benefit.  PSB shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing on the first day of the
month following his Termination of Employment and continuing on the first day
of the month for the 239 months that follow; provided, however, that in the
event of his death prior to the payment of all of his benefit, the relevant
provision of Article 3 shall apply.

 

2.4  Change in Control Benefit.  Notwithstanding any provisions herein to the
contrary (except the provisions of Section 5.2), upon the occurrence of a
Change in Control prior to, or concurrent with, the Executive’s Termination of
Employment, PSB shall pay to the Executive the benefit described in this
Section 2.4.

 

2.4.1  Amount of Benefit.  The benefit under this Section 2.4 is equal
to the present value of the product of (i) the Normal Retirement Benefit
determined in the same manner described in Section 2.1.1, but by treating the
date of the occurrence of the Change in Control as the Executive’s Normal
Retirement Date (whether or not he terminates employment at such time), times
(ii) two (2).  For purposes of the
preceding sentence, the present value of the Executive’s benefit shall be
determined by (i) using a discount factor of 4% per annum, (ii) assuming 240
monthly payments would otherwise be made, and (iii) discounting the flow of
assumed payments to the date of the Change in Control, but

 

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by assuming that such monthly payments would have
commenced the first day of the month following the attainment of Executive’s
Normal Retirement Age.

 

2.4.2  Payment of Benefit.  PSB shall pay the benefit, determined under
Section 2.4.1, in one lump sum, within 30 days after the date it is determined
with certainty that the last sentence of Section 1.1 will not become
operative.  In the event of the Executive’s
death prior to payment of the lump sum benefit, his death shall not operate to
reduce the amount payable (under Section 3 or otherwise), and it shall be paid
to his beneficiary at the otherwise relevant time.

 

2.5  Limitations.  All benefits payable under this Article 2
shall be subject to the provisions contained in Article 5 of this Agreement.

 

Article
3

Death Benefits

 

3.1  Death During Active
Service.  If the Executive
dies while employed by PSB, PSB shall pay to the Executive’s beneficiary the
benefit described in this Section 3.1. 
This benefit shall be paid in lieu of the benefits under Article 2,
unless Section 2.4 becomes applicable.

 

3.1.1  Amount of Benefit.  The benefit under this Section 3.1 is equal
to the amount of the annual benefit determined under Section 2.1.1, times ten
(10).

 

3.1.2  Payment of Benefit.  PSB shall pay the amount described in Section
3.1.1 to the Executive’s beneficiary, in one lump sum, on the date that he
would have attained his Normal Retirement Age had he not died.

 

3.2  Death During Payment of
Benefit.  If the Executive
dies after any benefit payments have commenced under this Agreement, but before
receiving all such payments, PSB shall pay to the Executive’s beneficiary an
amount equal to the excess, if any, of (i) the product of (A) the annual
benefit he was receiving at the time of his death, times (B) ten (10), minus
(ii) the sum of the benefits paid to him hereunder through the date of his
death.  Any such excess shall be paid to
such beneficiary, in one lump sum, no later than 30 days after proof of the
Executive’s death is submitted to PSB.

 

3.3  Death After Termination of
Employment But Before Payment of a Retirement Benefit Commences.  If the Executive’s employment terminates
after having accrued benefits under this Agreement, but he dies prior to
commencement of the payment of such benefits, PSB shall pay to the Executive’s
beneficiary an amount equal to the annual benefit to which he would have been
entitled had he not died, times ten (10). 
Such amount shall be paid to such beneficiary, in one lump sum, on the
date that the Executive would have been paid his first benefit installment had he
not died.

 

3.4  Limitations.  All benefits payable under this Article 3
shall be subject to the provisions contained in Article 5 of this Agreement.

 

5

 

Article
4

Beneficiaries

 

4.1  Beneficiary Designations.  The Executive shall designate a beneficiary
by filing a written designation with PSB. 
The Executive may revoke or modify the designation at any time by filing
a new designation.  However, designations
will only be effective if signed by the Executive and received by PSB during
the Executive’s lifetime.  The Executive’s
beneficiary designation shall be deemed automatically revoked if the
beneficiary predeceases the Executive, or if the Executive names a spouse as
beneficiary and the marriage is subsequently dissolved.  If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive’s estate.

 

4.2  Facility of Payment.  If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, PSB may pay such benefit to the guardian,
legal representative or person having the care or custody of such minor,
incompetent person or incapable person. 
PSB may require proof of incompetence, minority or guardianship as it
may deem appropriate prior to distribution of the benefit.  Such distribution shall completely discharge
PSB from all liability with respect to such benefit.

 

Article
5

General Limitations

 

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

 

5.1  Excess Parachute or Golden
Parachute Payment.  In the
event that the amounts and benefits payable under this Agreement, when added to
other amounts and benefits which may become payable to the Executive by PSB and
any affiliated company, are such that he becomes subject to the excise tax
provisions of Code Section 4999, he shall be paid such additional amount or
amounts as will result in his retention (after the payment of all federal,
state and local excise, employment and income taxes on such payments and the
value of such benefits) of a net amount equal to the net amount he would have
retained had the initially calculated payments and benefits been subject only
to income and employment taxation.  For
purposes of the preceding sentence, the Executive shall be deemed to be subject
to the highest marginal federal, relevant state and relevant local tax
rates.  All calculations required to be
made under this subsection shall be made by PSB’s independent public
accountants, subject to the right of Executive’s representative to review the
same.  All such amounts required to be
paid shall be paid at the time any withholding may be required under applicable
law, and any additional amounts to which the Executive may be entitled shall be
paid or reimbursed no later than 15 days following confirmation of such amount
by the Company’s accountants.  In the
event any amounts paid hereunder are subsequently determined to be in error
because estimates were required or otherwise, the parties agree to reimburse
each other to correct such error, as appropriate, and to pay interest thereon
at the applicable federal rate (as determined under Code Section 1274 for the
period of time such erroneous amount remained outstanding and unreimbursed).  The parties recognize that the actual
implementation of the provisions of this subsection are complex and agree to
deal with each other in good faith to resolve any questions or disagreements
arising hereunder.

 

6

 

5.2  Termination for Cause.  Notwithstanding any provision of this
Agreement to the contrary, PSB shall not pay any benefit under this Agreement
if PSB terminates the Executive’s employment for Cause. Termination of the
Executive’s employment for “Cause” shall mean termination because of personal
dishonesty by the Executive in the performance of his duties which results in
demonstrable material injury to PSB, willful misconduct by the Executive which
remains uncured 15 days following the giving of written notice thereof to the
Executive by the Board of Directors of PSB, breach by the Executive of a
fiduciary duty to PSB involving personal profit, intentional failure to perform
stated duties following the giving of written notice thereof to the Executive
by the Board of Directors of PSB, or the issuance of a final cease-and-desist
order, relating to the Executive’s conduct, by a state or federal regulatory
body.  For purposes of this paragraph, no
act or failure to act on the Executive’s part shall be considered “willful”
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive’s action or omission was in the
best interest of PSB or any of its majority-owned subsidiaries.

 

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

 

5.4  Competition after
Termination of Employment. 
The Executive shall forfeit his right to any further benefits if the
Executive, without the prior written consent of PSB, violates any one of the
following described restrictive covenants.

 

5.4.1  Non-Compete Provision.  The Executive shall not, for a period of
12 months following termination of employment, directly or indirectly,
either as an individual or as a proprietor, stockholder, partner, officer,
director, employee, agent, consultant or independent contractor of any
individual, partnership, corporation or other entity (excluding an ownership
interest of one percent (1%) or less in the stock of a publicly traded
company):

 

(i)  become employed by, participate in, or be
connected in any manner with the ownership, management, operation or control of
any bank or bank holding company, savings and loan or savings and loan holding
company, or other similar financial institution if the Executive’s
responsibilities will include providing banking or other financial services
within 25 miles of the main office(s) maintained by PSB, and any of its
majority-owned subsidiaries, as of the date of the termination of the Executive’s
employment;

 

(ii)  participate in any way in hiring or otherwise
engaging, or assisting any other person or entity in hiring or otherwise
engaging, on a temporary, part-time or permanent basis, any individual who was
employed by PSB or any of its majority-owned subsidiaries as of the date of
termination of the Executive’s employment;

 

(iii)  sell, offer to sell, provide banking or other
financial services, assist any other person in selling or providing banking or
other financial services, or solicit or otherwise compete for, either directly
or indirectly, any orders, contract, or accounts for

 

7

 

services of a kind or nature like or substantially
similar to the financial services performed or financial products sold by PSB
or any of its majority-owned subsidiaries (the preceding hereinafter referred
to as “Services”), to or from any person or entity from whom the Executive or
PSB (or such subsidiaries), to the knowledge of the Executive, provided banking
or other financial services, sold, offered to sell or solicited orders,
contracts or accounts for Services during the one (1) year period immediately
prior to the termination of the Executive’s employment; or

 

(iv)  divulge, disclose, or communicate to others
in any manner whatsoever, any nonpublic confidential information of PSB and its
majority-owned subsidiaries, to the knowledge of the Executive, including, but
not limited to, the names and addresses of customers or prospective customers,
of PSB (and such subsidiaries), as they may have existed from time to time, of
work performed or services rendered for any customer, any method and/or
procedures relating to projects or other work developed for PSB (or any of such
subsidiaries), earnings or other information concerning PSB (or such
subsidiaries).  The restrictions
contained in this subparagraph (iv) apply to all information regarding PSB (and
such subsidiaries), regardless of the source who provided or compiled such
information.  Notwithstanding anything to
the contrary, the restriction set forth in this paragraph shall not apply to any
information that becomes known to the general public from sources other than
the Executive.

 

5.4.2  Judicial Remedies.  In the event of a breach or threatened breach
by the Executive of any provision of these restrictions, the Executive
recognizes the substantial and immediate harm that a breach or threatened
breach will impose upon PSB (and/or a majority-owned subsidiary of PSB), and
further recognizes that in such event monetary damages may be inadequate to
fully protect PSB (and such subsidiaries). 
Accordingly, in the event of a breach or threatened breach of this
Agreement, the Executive consents to PSB’s entitlement to preliminary,
interlocutory, temporary or permanent injunctive, or any other equitable
relief, protecting and fully enforcing PSB’s rights hereunder and preventing
the Executive from further breaching any of his obligations set forth
herein.  The Executive expressly waives
any requirement, based on any statute, rule of procedure, or other source, that
PSB post a bond as a condition of obtaining any of the above-described
remedies.  Nothing herein shall be
construed as prohibiting PSB from pursuing any other remedies available to PSB
at law or in equity for such breach or threatened breach, including the
recovery of damages from the Executive, which may include the return of all or
a portion of benefits previously paid hereunder.  The Executive expressly acknowledges and
agrees that: (i) the restrictions set forth in Section 5.4.1 hereof are
reasonable, in terms of scope, duration, geographic area, and otherwise, (ii)
the protections afforded PSB in Section 5.4.1 hereof are necessary to protect
its legitimate business interest, (iii) the restrictions set forth in Section
5.4.1 hereof will not be materially adverse to the Executive’s employment
opportunities following his termination of employment with PSB or a
majority-owned subsidiary of PSB, and (iv) his agreement to observe such
restrictions forms a material part of the consideration for this Agreement.

 

5.4.3  Overbreadth of Restrictive
Covenant.  It is the intention
of the parties that if any restrictive covenant in this Agreement is determined
by a court of competent

 

8

 

jurisdiction to be overly broad, then the court should
enforce such restrictive covenant to the maximum extent permitted under the law
as to area, breadth and duration.

 

5.4.4  Change in Control.  The non-compete provision detailed in Section
5.4.1 hereof shall not be enforceable following a Change in Control.

 

5.5  Suicide or Misstatement.  No benefits shall be payable if the Executive
commits suicide within two (2) years after the date of this Agreement, or if an
insurance company (if applicable) denies coverage for material misstatements of
fact made by the Executive on any application for life insurance purchased by
PSB.

 

Article
6

Claims and Review Procedures

 

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

 

6.1.1  Initiation – Written Claim.  The Claimant initiates a claim by submitting
to PSB a written claim for the benefits.

 

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

 

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

 

(i)  the specific reasons for the denial,

 

(ii)  a reference to the specific provisions of the
Agreement on which the denial is based,

 

(iii)  a description of any additional information
or material necessary for the Claimant to perfect the claim and an explanation
of why it is needed,

 

(iv)  an explanation of the Agreement’s review
procedures and the time limits applicable to such procedures, and

 

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

 

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

 

9

 

6.2.1  Initiation – Written
Request.  To initiate the
review, the Claimant, within 60 days after receiving PSB’s notice of
denial, must file with PSB a written request for review.

 

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

 

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

 

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

 

6.2.5  Notice of Decision.  PSB shall notify the Claimant in writing of
its decision on review.  PSB shall write
the notification in a manner calculated to be understood by the Claimant. The
notification shall set forth:

 

(i)  the specific reasons for the denial,

 

(ii)  a reference to the specific provisions of the
Agreement on which the denial is based,

 

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

 

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

 

Article
7

Amendments and Termination

 

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

 

10

 

Article
8

Miscellaneous

 

8.1  Binding Effect.  This Agreement shall bind the Executive and
PSB (and its majority-owned subsidiaries), and their beneficiaries, survivors,
executors, successors, administrators and transferees.

 

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

 

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

 

8.4  Reorganization.  PSB shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of PSB under
this Agreement.  Upon the occurrence of
such event, the term “PSB” as used in this Agreement shall be deemed to refer
to the successor or survivor company.

 

8.5  Tax Withholding.  PSB shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.  In the event adequate funds are unavailable
for such withholding, the Executive agrees to provide the same to PSB upon
written request.

 

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

 

8.7  Unfunded Arrangement.  The Executive and any beneficiary are general
unsecured creditors of PSB for the payment of benefits under this
Agreement.  The benefits represent the
mere promise by PSB to pay such benefits. 
The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors.  Any insurance
on the Executive’s life is a general asset of PSB, or a majority-owned
subsidiary of PSB, to which the Executive and any beneficiary have no preferred
or secured claim.

 

8.8  Entire Agreement.  This Agreement constitutes the entire
agreement between PSB and the Executive as to the subject matter hereof.  No rights are granted to the Executive by
virtue of this Agreement other than those specifically set forth herein.

 

8.9  Administration.  PSB shall have powers which are necessary to
administer this Agreement, including but not limited to:

 

(i)  establishing and revising the method of
accounting for the Agreement;

 

(ii)  maintaining a record of benefit payments;

 

11

 

(iii)  establishing rules and prescribing any forms
necessary or desirable to administer the Agreement; and

 

(iv)  interpreting the provisions of the Agreement.

 

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

 

8.10  Named Fiduciary.  PSB shall be the named fiduciary and plan
administrator under this Agreement.  It
may delegate to others certain aspects of the management and operational
responsibilities including the employment of advisors and the delegation of
ministerial duties to qualified individuals.

 

8.11  Headings.  Headings are included in this Agreement for
the convenience of the parties and shall not be taken into consideration in
construing the provisions of this Agreement.

 

8.12  Legal Fees to Enforce
Rights After Change in Control. 
PSB is aware that upon the occurrence of a Change of Control, the Board
of Directors or a shareholder of PSB, or of any successor corporation might
then cause or attempt to cause PSB or such successor to refuse to comply with
its obligations under the Agreement and might cause or attempt to cause PSB to
institute, or may institute, litigation seeking to deny the Executive the
benefits intended under the Agreement. 
In these circumstances, the purpose of the Agreement could be
frustrated. Accordingly, if, following a Change of Control, it should appear to
the Executive that PSB or any successor corporation has failed to comply with
any of its obligations under the Agreement or any agreement thereunder, or if
PSB or any other person takes any action to declare the Agreement void or
unenforceable or institutes any litigation or other legal action designed to
deny, diminish or to recover from the Executive the benefits intended to be
provided, then PSB irrevocably authorizes the Executive to retain counsel of
the Executive’s choice at the expense of PSB to represent the Executive in
connection with the initiation or defense of any litigation or other legal
action, whether by or against PSB or any director, officer, shareholder or
other person affiliated with PSB or any successor thereto in any jurisdiction

 

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

 

	
  EXECUTIVE:

  	
  PSB BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vincent J. Fumo

  	
   

  
	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
						

 

12

 

BENEFICIARY DESIGNATION

 

PSB BANCORP, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

Vincent J. Fumo

 

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

 

	
  Primary:

  	
   

  
	
   

  
	
  Contingent:

  	
   

  
	
   

  

 

 

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

 

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

 

 

	
  Signature

  	
   

  	
   

  
	
   

  
	
  Date

  	
   

  	
   

  
	
   

  
	
   

  
	
  Received by PSB this            
  day of                             ,
  200  .

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
   

  
	
  Title

  	
   

  	
   

  
						

 

13Exhibit 10.2

 

PSB BANCORP, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

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

 

INTRODUCTION

 

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

 

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

 

AGREEMENT

 

PSB and the Executive agree as follows:

 

Article 1

Definitions

 

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

 

1.1  “Change in Control” means any of the following:

 

(i)  any person (as such term is used in Sections
13d and 14d-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), other than PSB, a majority-owned subsidiary of PSB, an employee benefit
plan (or related trust) of PSB or a direct or indirect majority-owned
subsidiary of PSB, or affiliates of PSB (as defined in Rule 12b-2 under
the Exchange Act), becomes the beneficial owner (as determined pursuant to
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of PSB representing more than 25% of the combined voting power of PSB’s then
outstanding securities (other than any person beneficially owning five percent
[5%] or more of the voting power of PSB’s stock on the date hereof);

 

(ii)  the liquidation or dissolution of PSB or the
occurrence of, or execution of an agreement providing for, a sale of all or
substantially all of the assets of PSB to an entity which is not a direct or
indirect majority-owned subsidiary of PSB;

 

(iii)  the occurrence of, or execution of an
agreement providing for, a reorganization, merger, consolidation or other
similar transaction or connected series of

 

1

 

transactions of PSB as a
result of which either (A) PSB does not survive or (B) pursuant to which shares
of PSB common stock (“Common Stock”) would be converted into cash, securities
or other property, unless, in case of either (A) or (B), the holders of PSB
Common Stock immediately prior to such transaction will, following the
consummation of the transaction, beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the company
surviving, continuing or resulting from such transaction;

 

(iv)  the occurrence of, or execution of an
agreement providing for a reorganization, merger, consolidation or similar
transaction of PSB, or any connected series of such transactions, if upon
consummation of such transaction or transactions, the persons who are members
of the Board of Directors of PSB immediately before such transaction or
transactions cease or, in the case of the execution of an agreement for such
transaction or transactions, it is contemplated in such agreement that, upon
consummation, such persons would cease to constitute a majority of the Board of
Directors of PSB or, in the case where PSB does not survive in such
transaction, of the company surviving, continuing or resulting from such
transaction or transactions;

 

(v)  any other event which is at any time
designated as a “Change in Control” for purposes of this Agreement by a
resolution adopted by the Board of Directors of PSB with the affirmative vote
of a majority of the non-employee directors in office at the time the
resolution is adopted; and in the event any such resolution is adopted, the
Change in Control event specified thereby shall be deemed incorporated herein
by reference and thereafter may not be amended, modified or revoked without the
written agreement of the Executive;

 

(vi)  during any period of two (2) consecutive
years during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors of PSB cease for any reason to
constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period; provided, however
that this provision shall not apply in the event two-thirds of the Board of
Directors at the beginning of a period no longer are directors due to death,
retirement, or other circumstances not related to a Change in Control.

 

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

 

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

 

2

 

1.3  “Disability” means the Executive’s suffering a sickness,
accident or injury which has been determined by the carrier of any group disability
insurance policy provided by PSB or made available by PSB to its employees and
covering the Executive, or by the Social Security Administration, to be a
disability rendering the Executive totally and permanently disabled.  The Executive must submit proof to PSB of the
carrier’s or Social Security Administration’s determination upon the request of
PSB.

 

1.4  “Early Termination” means the Termination of Employment
before Normal Retirement Age for reasons other than death, Disability,
termination for Cause or following a Change of Control.

 

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

 

1.6  “Normal Retirement Date” means the later of the Normal
Retirement Age or Termination of Employment.

 

1.7  “Termination of Employment” means that the Executive ceases
to be employed by PSB, or a majority-owned subsidiary of PSB, for any reason,
voluntary or involuntary, other than by reason of a leave of absence approved
by PSB.

 

Article 2

Retirement Benefits

 

2.1  Normal Retirement Benefit. 
Upon Termination of Employment on or after the Executive’s Normal
Retirement Age for any reason other than death, PSB shall pay to the Executive
the benefit described in this Section 2.1.

 

2.1.1  Amount of Benefit.  The annual benefit under this Section 2.1
is equal to the product of (i) 27.5%, times (ii) the sum of (A) the highest
total annualized base salary(ies) paid to the Executive by PSB and its
majority-owned subsidiaries during the four (4) year period ending on the date
of his Termination of Employment, plus (B) the highest total annual bonus(es)
paid to the Executive by such entities with respect to any one of the four (4)
full calendar years immediately preceding the year of his Termination of
Employment.  In the event the Executive
continues in the employ of PSB beyond his Normal Retirement Age, the annual
benefit determined in accordance with the preceding sentence shall be increased
by five percent (5%) for each full year that his employment continues beyond
his Normal Retirement Age.  For purposes
of this Section 2.1.1 and Section 2.2.1, only base salary and annual
bonus are intended to be included for purposes of the required benefit
calculations, so that compensation resulting from stock-based awards, director
fees and other remuneration not generally considered salary or bonus shall be
excluded.

 

2.1.2  Payment of Benefit.  PSB shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing on the first day of the
month following the Executive’s Normal Retirement Date and continuing on the
first day of the month for the 239 months that follow; provided, however, that
in the event of his death prior to the payment of all of his benefit, the
relevant provision of Article 3 shall apply.

 

3

 

2.2  Early Termination Benefit. 
Upon Early Termination, PSB shall pay to the Executive the benefit
described in this Section 2.2.

 

2.2.1  Amount of Benefit.  The annual benefit under this Section 2.2
is equal to the product of (i) 27.5%, times (ii) the sum of (A) the highest
total annualized base salary(ies) paid to the Executive by PSB and its
majority-owned subsidiaries during the four (4) year period ending on the date
of Early Termination, plus (B) the highest total annual bonus(es) paid to the
Executive by such entities with respect to any one of the four (4) full
calendar years immediately preceding the year of the date of Early Termination,
times (iii) 11%, times (iv) the number of full years that have elapsed from the
date of this Agreement to the date of Early Termination.  The provisions of this section are
subject to the last sentence of Section 2.1.1.

 

2.2.2  Payment of Benefit.  PSB shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing on the first day of the
month following the Executive’s Normal Retirement Age and continuing on the
first day of the month for the 239 months that follow; provided, however, that
in the event of his death prior to the payment of all of his benefit, the
relevant provision of Article 3 shall apply.

 

2.3  Disability Benefit. 
If the Executive terminates employment due to Disability prior to his
Normal Retirement Age, PSB shall pay to the Executive the benefit described in
this Section 2.3.

 

2.3.1  Amount of Benefit.  The annual benefit under this Section 2.3
is equal the Normal Retirement Benefit determined in the same manner described
in Section 2.1.1, but by treating the date of his Termination of
Employment as the attainment of his Normal Retirement Age.

 

2.3.2  Payment of Benefit.  PSB shall pay the annual benefit to the
Executive in 12 equal monthly installments commencing on the first day of the
month following his Termination of Employment and continuing on the first day
of the month for the 239 months that follow; provided, however, that in the
event of his death prior to the payment of all of his benefit, the relevant
provision of Article 3 shall apply.

 

2.4  Change in Control Benefit. 
Notwithstanding any provisions herein to the contrary (except the
provisions of Section 5.2), upon the occurrence of a Change in Control
prior to, or concurrent with, the Executive’s Termination of Employment, PSB
shall pay to the Executive the benefit described in this Section 2.4.

 

2.4.1  Amount of Benefit.  The benefit under this Section 2.4 is
equal to the present value of the product of (i) the Normal Retirement Benefit
determined in the same manner described in Section 2.1.1, but by treating
the date of the occurrence of the Change in Control as the Executive’s Normal
Retirement Date (whether or not he terminates employment at such time), times
(ii) two (2).  For purposes of the
preceding sentence, the present value of the Executive’s benefit shall be
determined by (i) using a discount factor of 4% per annum, (ii) assuming 240
monthly payments would otherwise be made, and (iii) discounting the flow of
assumed payments to the date of the Change in Control, but

 

4

 

by assuming that such
monthly payments would have commenced the first day of the month following the
attainment of Executive’s Normal Retirement Age.

 

2.4.2  Payment of Benefit.  PSB shall pay the benefit, determined under Section 2.4.1,
in one lump sum, within 30 days after the date it is determined with certainty
that the last sentence of Section 1.1 will not become operative.  In the event of the Executive’s death prior
to payment of the lump sum benefit, his death shall not operate to reduce the
amount payable (under Section 3 or otherwise), and it shall be paid to his
beneficiary at the otherwise relevant time.

 

2.5  Limitations.  All
benefits payable under this Article 2 shall be subject to the provisions
contained in Article 5 of this Agreement.

 

Article 3

Death Benefits

 

3.1  Death During Active Service. 
If the Executive dies while employed by PSB, PSB shall pay to the
Executive’s beneficiary the benefit described in this Section 3.1.  This benefit shall be paid in lieu of the
benefits under Article 2, unless Section 2.4 becomes applicable.

 

3.1.1  Amount of Benefit.  The benefit under this Section 3.1 is
equal to the amount of the annual benefit determined under Section 2.1.1,
times ten (10).

 

3.1.2  Payment of Benefit.  PSB shall pay the amount described in Section 3.1.1
to the Executive’s beneficiary, in one lump sum, on the date that he would have
attained his Normal Retirement Age had he not died.

 

3.2  Death During Payment of Benefit.  If the Executive dies after any benefit
payments have commenced under this Agreement, but before receiving all such
payments, PSB shall pay to the Executive’s beneficiary an amount equal to the
excess, if any, of (i) the product of (A) the annual benefit he was receiving
at the time of his death, times (B) ten (10), minus (ii) the sum of the
benefits paid to him hereunder through the date of his death.  Any such excess shall be paid to such
beneficiary, in one lump sum, no later than 30 days after proof of the
Executive’s death is submitted to PSB.

 

3.3  Death After Termination of Employment But Before Payment of a
Retirement Benefit Commences. 
If the Executive’s employment terminates after having accrued benefits
under this Agreement, but he dies prior to commencement of the payment of such
benefits, PSB shall pay to the Executive’s beneficiary an amount equal to the
annual benefit to which he would have been entitled had he not died, times ten
(10).  Such amount shall be paid to such
beneficiary, in one lump sum, on the date that the Executive would have been
paid his first benefit installment had he not died.

 

3.4  Limitations.  All
benefits payable under this Article 3 shall be subject to the provisions
contained in Article 5 of this Agreement.

 

5

 

Article 4

Beneficiaries

 

4.1  Beneficiary Designations. 
The Executive shall designate a beneficiary by filing a written
designation with PSB.  The Executive may
revoke or modify the designation at any time by filing a new designation.  However, designations will only be effective
if signed by the Executive and received by PSB during the Executive’s
lifetime.  The Executive’s beneficiary
designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary
and the marriage is subsequently dissolved. 
If the Executive dies without a valid beneficiary designation, all
payments shall be made to the Executive’s estate.

 

4.2  Facility of Payment. 
If a benefit is payable to a minor, to a person declared incompetent, or
to a person incapable of handling the disposition of his or her property, PSB
may pay such benefit to the guardian, legal representative or person having the
care or custody of such minor, incompetent person or incapable person.  PSB may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of
the benefit.  Such distribution shall
completely discharge PSB from all liability with respect to such benefit.

 

Article 5

General Limitations

 

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

 

5.1  Excess Parachute or Golden Parachute Payment.  In the event that the amounts and benefits
payable under this Agreement, when added to other amounts and benefits which
may become payable to the Executive by PSB and any affiliated company, are such
that he becomes subject to the excise tax provisions of Code Section 4999,
he shall be paid such additional amount or amounts as will result in his
retention (after the payment of all federal, state and local excise, employment
and income taxes on such payments and the value of such benefits) of a net
amount equal to the net amount he would have retained had the initially
calculated payments and benefits been subject only to income and employment
taxation.  For purposes of the preceding
sentence, the Executive shall be deemed to be subject to the highest marginal
federal, relevant state and relevant local tax rates.  All calculations required to be made under
this subsection shall be made by PSB’s independent public accountants,
subject to the right of Executive’s representative to review the same.  All such amounts required to be paid shall be
paid at the time any withholding may be required under applicable law, and any
additional amounts to which the Executive may be entitled shall be paid or
reimbursed no later than 15 days following confirmation of such amount by the
Company’s accountants.  In the event any
amounts paid hereunder are subsequently determined to be in error because
estimates were required or otherwise, the parties agree to reimburse each other
to correct such error, as appropriate, and to pay interest thereon at the
applicable federal rate (as determined under Code Section 1274 for the
period of time such erroneous amount remained outstanding and
unreimbursed).  The parties recognize
that the actual implementation of the provisions of this subsection are
complex and agree to deal with each other in good faith to resolve any
questions or disagreements arising hereunder.

 

6

 

5.2  Termination for Cause. 
Notwithstanding any provision of this Agreement to the contrary, PSB
shall not pay any benefit under this Agreement if PSB terminates the Executive’s
employment for Cause. Termination of the Executive’s employment for “Cause”
shall mean termination because of personal dishonesty by the Executive in the
performance of his duties which results in demonstrable material injury to PSB,
willful misconduct by the Executive which remains uncured 15 days following the
giving of written notice thereof to the Executive by the Board of Directors of
PSB, breach by the Executive of a fiduciary duty to PSB involving personal
profit, intentional failure to perform stated duties following the giving of
written notice thereof to the Executive by the Board of Directors of PSB, or
the issuance of a final cease-and-desist order, relating to the Executive’s
conduct, by a state or federal regulatory body. 
For purposes of this paragraph, no act or failure to act on the
Executive’s part shall be considered “willful” unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interest of PSB or any of its
majority-owned subsidiaries.

 

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

 

5.4  Competition after Termination of Employment.  The Executive shall forfeit his right to any
further benefits if the Executive, without the prior written consent of PSB,
violates any one of the following described restrictive covenants.

 

5.4.1  Non-Compete Provision.  The Executive shall not, for a period of 12
months following termination of employment, directly or indirectly, either as
an individual or as a proprietor, stockholder, partner, officer, director,
employee, agent, consultant or independent contractor of any individual,
partnership, corporation or other entity (excluding an ownership interest of
one percent (1%) or less in the stock of a publicly traded company):

 

(i)  become employed by, participate in, or be
connected in any manner with the ownership, management, operation or control of
any bank or bank holding company, savings and loan or savings and loan holding
company, or other similar financial institution if the Executive’s
responsibilities will include providing banking or other financial services
within 25 miles of the main office(s) maintained by PSB, and any of its
majority-owned subsidiaries, as of the date of the termination of the Executive’s
employment;

 

(ii)  participate in any way in hiring or otherwise
engaging, or assisting any other person or entity in hiring or otherwise
engaging, on a temporary, part-time or permanent basis, any individual who was
employed by PSB or any of its majority-owned subsidiaries as of the date of
termination of the Executive’s employment;

 

(iii)  sell, offer to sell, provide banking or other
financial services, assist any other person in selling or providing banking or
other financial services, or solicit or otherwise compete for, either directly
or indirectly, any orders, contract, or accounts for

 

7

 

services of a kind or
nature like or substantially similar to the financial services performed or
financial products sold by PSB or any of its majority-owned subsidiaries (the
preceding hereinafter referred to as “Services”), to or from any person or
entity from whom the Executive or PSB (or such subsidiaries), to the knowledge
of the Executive, provided banking or other financial services, sold, offered
to sell or solicited orders, contracts or accounts for Services during the one
(1) year period immediately prior to the termination of the Executive’s
employment; or

 

(iv)  divulge, disclose, or communicate to others
in any manner whatsoever, any nonpublic confidential information of PSB and its
majority-owned subsidiaries, to the knowledge of the Executive, including, but
not limited to, the names and addresses of customers or prospective customers,
of PSB (and such subsidiaries), as they may have existed from time to time, of
work performed or services rendered for any customer, any method and/or
procedures relating to projects or other work developed for PSB (or any of such
subsidiaries), earnings or other information concerning PSB (or such
subsidiaries).  The restrictions
contained in this subparagraph (iv) apply to all information regarding PSB (and
such subsidiaries), regardless of the source who provided or compiled such
information.  Notwithstanding anything to
the contrary, the restriction set forth in this paragraph shall not apply to
any information that becomes known to the general public from sources other
than the Executive.

 

5.4.2  Judicial Remedies.  In the event of a breach or threatened breach
by the Executive of any provision of these restrictions, the Executive
recognizes the substantial and immediate harm that a breach or threatened
breach will impose upon PSB (and/or a majority-owned subsidiary of PSB), and
further recognizes that in such event monetary damages may be inadequate to
fully protect PSB (and such subsidiaries). 
Accordingly, in the event of a breach or threatened breach of this
Agreement, the Executive consents to PSB’s entitlement to preliminary,
interlocutory, temporary or permanent injunctive, or any other equitable
relief, protecting and fully enforcing PSB’s rights hereunder and preventing
the Executive from further breaching any of his obligations set forth
herein.  The Executive expressly waives
any requirement, based on any statute, rule of procedure, or other source, that
PSB post a bond as a condition of obtaining any of the above-described
remedies.  Nothing herein shall be
construed as prohibiting PSB from pursuing any other remedies available to PSB
at law or in equity for such breach or threatened breach, including the
recovery of damages from the Executive, which may include the return of all or
a portion of benefits previously paid hereunder.  The Executive expressly acknowledges and
agrees that: (i) the restrictions set forth in Section 5.4.1 hereof are
reasonable, in terms of scope, duration, geographic area, and otherwise, (ii)
the protections afforded PSB in Section 5.4.1 hereof are necessary to
protect its legitimate business interest, (iii) the restrictions set forth in Section 5.4.1
hereof will not be materially adverse to the Executive’s employment
opportunities following his termination of employment with PSB or a
majority-owned subsidiary of PSB, and (iv) his agreement to observe such
restrictions forms a material part of the consideration for this Agreement.

 

5.4.3  Overbreadth of Restrictive
Covenant.  It is the intention
of the parties that if any restrictive covenant in this Agreement is determined
by a court of competent

 

8

 

jurisdiction to be overly
broad, then the court should enforce such restrictive covenant to the maximum
extent permitted under the law as to area, breadth and duration.

 

5.4.4  Change in Control.  The non-compete provision detailed in Section 5.4.1
hereof shall not be enforceable following a Change in Control.

 

5.5  Suicide or Misstatement. 
No benefits shall be payable if the Executive commits suicide within two
(2) years after the date of this Agreement, or if an insurance company (if
applicable) denies coverage for material misstatements of fact made by the
Executive on any application for life insurance purchased by PSB.

 

Article 6

Claims and Review Procedures

 

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

 

6.1.1  Initiation – Written Claim.  The Claimant initiates a claim by submitting
to PSB a written claim for the benefits.

 

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

 

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

 

(i)  the specific reasons for the denial,

 

(ii)  a reference to the specific provisions of the
Agreement on which the denial is based,

 

(iii)  a description of any additional information
or material necessary for the Claimant to perfect the claim and an explanation
of why it is needed,

 

(iv)  an explanation of the Agreement’s review
procedures and the time limits applicable to such procedures, and

 

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

 

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

 

9

 

6.2.1  Initiation – Written
Request.  To initiate the
review, the Claimant, within 60 days after receiving PSB’s notice of
denial, must file with PSB a written request for review.

 

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

 

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

 

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

 

6.2.5  Notice of Decision.  PSB shall notify the Claimant in writing of
its decision on review.  PSB shall write
the notification in a manner calculated to be understood by the Claimant. The
notification shall set forth:

 

(i)  the specific reasons for the denial,

 

(ii)  a reference to the specific provisions of the
Agreement on which the denial is based,

 

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

 

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

 

Article 7

Amendments and Termination

 

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

 

10

 

Article 8

Miscellaneous

 

8.1  Binding Effect.  This
Agreement shall bind the Executive and PSB (and its majority-owned
subsidiaries), and their beneficiaries, survivors, executors, successors,
administrators and transferees.

 

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

 

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

 

8.4  Reorganization.  PSB
shall not merge or consolidate into or with another company, or reorganize, or
sell substantially all of its assets to another company, firm, or person unless
such succeeding or continuing company, firm, or person agrees to assume and
discharge the obligations of PSB under this Agreement.  Upon the occurrence of such event, the term “PSB”
as used in this Agreement shall be deemed to refer to the successor or survivor
company.

 

8.5  Tax Withholding.  PSB
shall withhold any taxes that are required to be withheld from the benefits
provided under this Agreement.  In the
event adequate funds are unavailable for such withholding, the Executive agrees
to provide the same to PSB upon written request.

 

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

 

8.7  Unfunded Arrangement. 
The Executive and any beneficiary are general unsecured creditors of PSB
for the payment of benefits under this Agreement.  The benefits represent the mere promise by
PSB to pay such benefits.  The rights to
benefits are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors.  Any insurance on the Executive’s life is a
general asset of PSB, or a majority-owned subsidiary of PSB, to which the
Executive and any beneficiary have no preferred or secured claim.

 

8.8  Entire Agreement. 
This Agreement constitutes the entire agreement between PSB and the
Executive as to the subject matter hereof. 
No rights are granted to the Executive by virtue of this Agreement other
than those specifically set forth herein.

 

8.9  Administration.  PSB
shall have powers which are necessary to administer this Agreement, including
but not limited to:

 

(i)  establishing and revising the method of
accounting for the Agreement;

 

(ii)  maintaining a record of benefit payments;

 

11

 

(iii)  establishing rules and prescribing any forms
necessary or desirable to administer the Agreement; and

 

(iv)  interpreting the provisions of the Agreement.

 

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

 

8.10  Named Fiduciary.  PSB
shall be the named fiduciary and plan administrator under this Agreement.  It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.

 

8.11  Headings.  Headings
are included in this Agreement for the convenience of the parties and shall not
be taken into consideration in construing the provisions of this Agreement.

 

8.12  Legal Fees to Enforce Rights After Change in Control.  PSB is aware that upon the occurrence of a
Change of Control, the Board of Directors or a shareholder of PSB, or of any
successor corporation might then cause or attempt to cause PSB or such
successor to refuse to comply with its obligations under the Agreement and
might cause or attempt to cause PSB to institute, or may institute, litigation
seeking to deny the Executive the benefits intended under the Agreement.  In these circumstances, the purpose of the
Agreement could be frustrated. Accordingly, if, following a Change of Control,
it should appear to the Executive that PSB or any successor corporation has
failed to comply with any of its obligations under the Agreement or any
agreement thereunder, or if PSB or any other person takes any action to declare
the Agreement void or unenforceable or institutes any litigation or other legal
action designed to deny, diminish or to recover from the Executive the benefits
intended to be provided, then PSB irrevocably authorizes the Executive to
retain counsel of the Executive’s choice at the expense of PSB to represent the
Executive in connection with the initiation or defense of any litigation or
other legal action, whether by or against PSB or any director, officer,
shareholder or other person affiliated with PSB or any successor thereto in any
jurisdiction

 

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

 

	
  EXECUTIVE:

  	
  PSB BANCORP,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Anthony DiSandro

  	
   

  
	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
						

 

12

 

BENEFICIARY DESIGNATION

 

PSB BANCORP, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

 

Anthony DiSandro

 

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

 

	
  Primary:

  	
   

  
	
   

  
	
  Contingent:

  	
   

  
	
   

  

 

 

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

 

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

 

	
  Signature

  	
   

  	
   

  
	
   

  
	
  Date

  	
   

  	
   

  
	
   

  
	
   

  
	
  Received by PSB
  this             
  day of
                                    ,
  200  .

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
   

  
	
  Title

  	
   

  	
   

  
						

 

13

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