Document:

Assignment and Consent to Assignment of Sublease

 Exhibit 10.40 
 TENANT ORIGINAL 
 ASSIGNMENT AND 
 CONSENT TO ASSIGNMENT OF SUBLEASE 
 THIS ASSIGNMENT AND CONSENT TO ASSIGNMENT OF SUBLEASE (this “Consent”) is made as of the 18th day of August, 2006, by and among DBSI HOUSING, INC., as successor in interest to The Arbors of Brookhollow
Operating Partnership, LTD (“Landlord”); ASCENSION CAPITAL GROUP, LTD., (“Assignor”); ENCORE CAPITAL GROUP, INC. (“Encore”); ASCENSION ACQUISITION, L.P. (“Assignee”); and SOUTHWESTERN
BELL TELEPHONE, L.P. (“Tenant”). 
 RECITALS: 
 A. WHEREAS, Landlord and Tenant, successor in interest to Southwestern Bell Telephone Company (“Original Tenant”), are parties to that certain
Lease Agreement dated September 26, 2000 (the “Lease”). Terms not otherwise defined in this Consent are defined in the Lease; and 
 B. WHEREAS, Landlord lease to Tenant certain premises consisting of approximately 85,893 rentable square feet (the “Tenant’s Premises”) of that certain building located at 2201 East Lamar Boulevard, Arlington, Texas, attached
hereto as Exhibit “A”; and 
 C. WHEREAS, Tenant subleased approximately 28,603, rentable square feet on the second floor of the
Building (the “Premises”), located within the Tenant’s Premises, to Assignor, pursuant to the Sublease dated as of February 12, 2004, by and between Tenant and Assignor (the “Sublease”), attached hereto as Exhibit
“B”; and 
 D. WHEREAS, Assignor and Assignee intend to enter into an Asset Purchase Agreement (“the Purchase Agreement”),
pursuant to which Assignor will transfer substantially all of its assets to Assignee, the consummation of which (the “Closing”) is scheduled to occur on or about August 17, 2005; and 
 E. WHEREAS, is connection with the purchase Agreement, Assignor wishes to assign to Assignee and Assignee wishes to assume from Assignor the Sublease as of
Closing, which assignment and assumption is conditioned upon and shall be effective only in the event of the Closing; and 
 F. WHEREAS,
Assignor has asked Landlord and Tenant to consent to the assignment of the Sublease (“Assignment to Sublease”) to Assignee. 
 NOW,
THEREFORE, Landlord and Tenant each hereby consents to the Assignment of Sublease of the Premises to Assignee, such consent being subject to and upon the following terms and conditions to each of which Assignor and Assignee expressly agree.

 1. Assignment of Sublease. Assignor hereby transfers and assigns to Assignee all of its right, title, and interest to
and under the Sublease effective as of the date of the Closing, to have and to hold the same for and during the remainder of the term(s) mentioned in such Sublease, subject to the covenants and conditions therein mentioned. Rents and other charges
paid or due under the Sublease shall be presented between Assignor and Assignee as of the Closing Date. 

 

 

  

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 2. No Waiver. Neither the giving of this Consent our anything herein, in the
Assignment to Sublease shall be consumed to modify, waive, impair or affect any of the covenants, agreements, terms, provisions, obligations or conditions contained in the Lease or Sublease (except as may be herein expressly provided), or to waive
any breach thereof, or any rights of Landlord or Tenant against any person or entity liable or responsible for the performance thereof or to increase the obligations or diminish the rights of Landlord under the Lease, or to increase rights or
diminish the obligations of Tenant thereunder, or to, in any way, be existed as giving Assignee any greater rights than the Original Tenant extend in the Lease would be entitled to, and all covenants, agreements, terms, provisions and conditions of
the Lease and Sublease are hereby mutually declared to be in full force and effect. 
 3. No Further Consent. This
Consent shall not be construed either as a consent by Landlord or Tenant to, or as permitting any other or further subletting of the Premises, whether in whole or in part, or any further assignment of the Sublease or Lease, or as a wavier of the
requirement of obtaining Landlord’s and Tenant’s consent thereto, and notwithstanding anything to the contrary contained in the Lease or Sublease, Assignee shall not, without the prior written consent of Landlord and Tenant, which consent
shall not be unreasonably withheld, assign the Lease, Sublease, or this Consent or sublet the Premises or any part thereof. Landlord’s and Tenant’s consent to any future assignment or sublease shall be conditioned and subject to the
rights, obligations, restrictions and conditions that are applicable to an assignment or sublease by Tenant pursuant to the Lease. 
 4. No Release. The giving of this Consent shall not be deemed or serve to release Assignor from any liability, obligation or duty, which such Tenant or such successor in interest may have under the Sublease. The giving of this
Consent shall not be deemed to constitute a release of Assignor, or any guarantor of Assignor’s performance hereunder (“Guarantor”), from further performance by Assignor or such Guarantor of covenants undertaken to be performed by
Assignor in the Sublease. Assignor and/or such Guarantor shall remain liable and responsible for all rent and other obligations imposed upon Assignor in the Sublease. 
 5. Assignee’s Obligation. Assignee, for Assignee and its successors and assigns hereby (a) accepts the Sublease for a portion of Tenant’s interest in and to the Lease, (b) recognizes
all of the covenants, agreements, terms, provisions, obligations and conditions contained in the Lease, and hereby assumes all of said terms, provisions, agreements, covenants, obligations and conditions of the Lease on the part of the Tenant to be
kept, observed and performed with respect to the Premises, (c) agrees to keep and perform, and to permit no violation beyond the expiration of applicable periods of notice and grace of, each and every covenant, agreement, term, provision,
obligation and condition therein set forth on the part of Tenant with respect to the Premises to be kept, observed and performed, and (d) acknowledges, confirms and agrees that the Right of First refused and renewal options are not assignable
or conveyed to Assignee. 
 6. Default. In the event of any default under the Lease, Landlord may proceed directly
against Tenant or anyone else liable under the Lease without first exhausting Landlord’s remedies against any other person or entity liable therein to Landlord. In the event of any default under the Sublease, Tenant may proceed directly against
Assignor or anyone else liable under the Sublease without first exhausting Tenant’s remedies against any other person or entity liable therein to Tenant. 
 

 
  

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 7. Indemnification. Neither Landlord nor Tenant shall be responsible for the payment
of any commissions or fees in connection with the Assignment of Sublease, and Assignor and Assignee, jointly and severally agree to indemnify and hold Landlord and Tenant harmless from and against any claims, liability, losses or expenses, including
reasonable attorneys’ fees incurred by Landlord or Tenant in connection with any claims for commission by any broker or agent in connection with the Assignment of Sublease. 
 8. Notices. Landlord’s mailing address for purposes of notice under this Consent or the Lease is: 
 DBSI-Discovery Real Estate Services, LLC 
 Attn: Vice President of Leasing 
 12426 W. Explorer Drive, Suite 100 
 Boise, ID 83713 
 with a copy to: 
 DBSI Group of Companies 
 Attn: General Counsel 
 1550 S. Tech Lane 
 Meridian, ID 83642 
 Assignor’s mailing address: 
 Ascension Capital Group, Ltd. 
 Attn: Erich M. Ramsey 
 2201 E. Lamar Boulevard, Suite 200 
 Arlington, TX 76006 
 Assignee’s mailing address: 
  

			
	Encore Capital Group, Inc.	 	Ascension Capital, L.P.
	8875 Aero Drive	 	8875 Aero Drive
	San Diego, CA 92123	 	San Diego, CA 92123

 9. Conditions Precedent. Each of the parties hereto agrees that this Consent
is conditioned upon and shall be effective only in the event of the Closing. If the Closing occurs, this Consent shall be in full force and effect and shall be binding and enforceable against the parties hereto, without any further action on behalf
of the parties. 
 10. Execution of Consent. The parties hereto agree that this Consent may be signed and delivered by
facsimile signature and counterparts. 
 

 
  

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 Executed as of the 18th day of August, 2005. 
  

			
	LANDLORD:
	DBSI Housing, Inc.
		
	By:	 	 /s/ Steven P. Winger

	Name:	 	Steven P. Winger
	Title:	 	Vice President of Leasing
	
	TENANT:
	Southwestern Bell Telephone, L.P.
		
	By:	 	SWBT TEXAS, LLC, its General Partner
		
	By:	 	 /s/ J. Stephen Sandly

	Name:	 	J. Stephen Sandly
	Title:	 	Director—Real Estate Transactions
	
	ASSIGNOR:
	Ascension Capital Group, Ltd.
		
	By:	 	 Ascension Capital Management, LLC,
 its General Partner

		
	By:	 	 /s/ Erich M. Ramsey

	Name:	 	Erich M. Ramsey
	Title:	 	Chief Executive Officer
	
	ASSIGNEE:
	Encore Capital Group, Inc.
		
	By:	 	 /s/ Paul Gromberg

	Name:	 	Paul Gromberg
	Title:	 	EVP & CFO
	
	Ascension Acquisition, L.P.
		
	By:	 	ACG Holding, Inc., its General Partner
		
	By:	 	 /s/ Paul Gromberg

	Name:	 	Paul Gromberg
	Title:	 	Treasurer

  

 4Exhibit 10.2

 Exhibit 10.2 
 FAIRMOUNT BANK 
 EMPLOYMENT AGREEMENT 

THIS AGREEMENT (the “Agreement”) entered into this      day of
            , 2010 by and between Fairmount Bank located at 8216 Philadelphia Road, Baltimore, Maryland 21237 (the “Bank”), and Joseph M. Solomon (“Executive”).

 WHEREAS, Executive and Bank entered into an agreement dated on March 31, 2008 (the “Prior Agreement”),
pursuant to which Executive serves as President and Chief Executive Officer of the Bank; and 
 WHEREAS, the parties
hereto desire to set forth the terms of a revised Agreement and the continuing employment relationship between the Bank and Executive, and the Prior Agreement is hereby replaced in its entirety by this Agreement. 
 NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter
provided, the parties hereby agree as follows: 
 1. Employment. During the term of this Agreement, which is effective as
of the date of the conversion (the “Conversion”) of the Bank from the mutual to stock form of organization (the “Commencement Date”), Executive shall serve in the capacity of President and Chief Executive Officer of the Bank.
Executive shall render such administrative and management services to the Bank as are currently rendered and as are customarily performed by persons situated in a similar executive capacity. Executive shall promote the business of the Bank.
Executive’s other duties shall be such as the Board of Directors of the Bank (the “Board of Directors” or “Board”) may from time to time reasonably direct, including normal duties as an officer of the Bank. 
 2. Service on the Board of Directors. During the term of this Agreement, Executive will continue to serve on the Board of Directors
of the Bank as a director. If at any time during the term of this Agreement Executive shall fail to be re-nominated to the Board of Directors other than for reasons of Just Cause (as defined in Section 9(d) of this Agreement), Executive shall
have “Good Reason” (as defined in Section 9(e) of this Agreement) to terminate his employment under this Agreement, and Executive shall have no further obligations under this Agreement. 
 3. Base Compensation. The Bank agrees to pay or cause to be paid to Executive during the term of this Agreement (as hereinafter
defined in Section 7) an aggregate base salary at the rate of $125,580 per annum, payable in accordance with the customary payroll practices of the Bank; provided, however, that the rate of Executive’s aggregate base salary shall be
reviewed by the Board of Directors not less often than annually, and Executive shall be entitled to receive annual increases at such percentage or in such an amount as the Board of Directors, in its sole discretion, may decide. Fairmount Bancorp,
Inc. (the “Company”) and the Bank shall apportion between them the aggregate base salary, based upon the services rendered by Executive to the Company and the Bank. 
 4. Discretionary Bonus. Executive shall be entitled to receive an annual bonus in an amount which is based on the bonus program
maintained by the Bank as of the date of this Agreement and shall be eligible to participate in any future bonus program adopted by the Bank in an equitable manner. No other compensation provided for in this Agreement shall be deemed a substitute
for Executive’s right to receive bonuses when and as declared by the Board of Directors or as provided for by any plan or program of the Bank. 
 5. Expenses. During the term of this Agreement, Executive shall be entitled to receive prompt reimbursement of all reasonable expenses incurred (in accordance with the policies and procedures of
the Bank) in performing services under this Agreement; provided, however, that Executive properly accounts for expenses in accordance with the policies of the Bank. 
 6. Employee Benefits. 
 (a) Participation in Retirement and Executive Benefit Plans. Executive shall be entitled, while employed under the terms of this Agreement, to receive all benefits under any tax-qualified or
non-qualified employee benefit plan or arrangement in effect as of the date of this Agreement or that the Bank implements at any time during the term of this Agreement. Executive shall be entitled to participate in such future plans or arrangements
on the same terms as other employees of the Bank or as established by the Bank for Executive or other selected employees. 

 (b) Fringe Benefits. Executive shall be entitled to receive any benefits under
any fringe benefit plan or policy that is in effect as of the date of this Agreement, or that the Bank implements at any time during the term of this Agreement, on the same terms as the Bank’s senior management employees. Nothing paid to
Executive under any plan or arrangement presently in effect or made available in the future will be deemed to be in lieu of base salary or other compensation to Executive under this Agreement. 
 (c) Paid Leave Time. Executive shall be entitled to leave time in accordance with the standard policies or practices of the
Bank for senior executive officers, as in effect from time to time. 
 7. Term of Agreement. Executive’s
employment under this Agreement shall be deemed to have commenced as of the Commencement Date and shall continue for a period of thirty-six (36) calendar months from the Commencement Date. Commencing on the first anniversary of the Commencement
Date and continuing on each anniversary thereafter (each an “Anniversary Date”), the disinterested members of the Board of Directors of the Bank may extend the Agreement an additional year such that the remaining term of the Agreement
shall be thirty-six (36) months, unless Executive elects not to extend the term of this Agreement by giving written notice in accordance with Section 16 of this Agreement. The Board of Directors of the Bank will review the Agreement and
Executive’s performance annually for purposes of determining whether to extend the Agreement and the rationale and results thereof shall be included in the minutes of the Board’s meeting. The Board of Directors of the Bank shall give
written notice to Executive as soon as possible after such review as to whether the Agreement is to be extended; provided, however, that if the Board fails to conduct such review or if written notice of nonrenewal is provided to Executive,
then in such case the term of this Agreement shall become fixed and shall cease at the end of thirty-six (36) full calendar months following the Anniversary Date. 
 8. Loyalty; Noncompetition. 
 (a) During the period of his employment
hereunder and except for illnesses, reasonable vacation periods, and reasonable leaves of absence, Executive shall devote all his full business time, attention, skill and efforts to the faithful performance of his duties hereunder; provided,
however, from time to time, that Executive may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations which will not present any conflict of interest with the Bank or any of its subsidiaries
or affiliates, or unfavorably affect the performance of Executive’s duties pursuant to this Agreement, or will not violate any applicable statute or regulation. “Full business time” is hereby defined as that amount of time usually
devoted to like companies by similarly situated executive officers. During the term of his employment under this Agreement, Executive shall not engage in any business or activity contrary to the business affairs or interests of the Bank or be
gainfully employed in any other position or job other than as provided above. 
 (b) Executive shall not, during or after the
term of this Agreement, disclose any knowledge of the past, present or contemplated business of the Bank, or of any affiliate thereof, to any person for any reason or purpose. Notwithstanding the foregoing, Executive may disclose any information
required in writing by Federal bank regulatory agencies and may disclose to any person information regarding the Bank that is otherwise publicly available or any knowledge of banking or financial concepts or ideas that are not solely and exclusively
derived from the business plans and activities of the Bank. 
 (c) Nothing contained in this Section 8 shall be deemed to
prevent or limit the Executive’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank, or, solely as a passive or minority investor, in any business. 
  

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 9. Termination. 
 Executive’s employment under this Agreement shall be terminated upon any of the following occurrences: 
 (a) Death. Executive’s employment under this Agreement shall terminate upon his death. Executive’s estate shall be
entitled to receive payments of base salary, payable in accordance with the regular payroll practices of the Bank, for sixty (60) days immediately following the date of Executive’s death and any other compensation accrued as of the date of
death. 
 (b) Termination of Employment by the Board of Directors Without Just Cause or by the Executive for Good
Reason. In the event that (i) the Board of Directors terminates Executive’s employment without “Just Cause” (as defined in Section 9(d)) or (ii) such employment is terminated by the Executive for “Good
Reason” (as defined in Section 9(b)(iii), Executive shall be entitled to: 
  

	 	(i)	His base salary for the remaining term of the Agreement, including any renewals or extensions thereof, at the current rate in effect pursuant to Section 3 of this
Agreement, plus the amount of the annual cash bonus earned in the calendar year preceding the year of termination, and a cash equivalent amount equal to the additional retirement benefits under any retirement program (whether tax-qualified or
non-qualified) that Executive would have been entitled to had his employment continued through the remaining term of the Agreement (with the amount of benefits determined by reference to the benefits received by the Executive or accrued on his
behalf under such programs during the twelve (12) months preceding his termination). 

  

	 	(ii)	Coverage under the Bank’s life insurance plans and non-taxable medical, health, and dental plans (each being a “Welfare Plan”) in the same manner in
which Executive received coverage on the last day of his employment with the Bank. Executive and his covered dependents (if any) shall continue participating in such Welfare Plans, subject to the same premium contributions (if any) on the part of
Executive as were required immediately prior to his termination until the earlier of (i) his death; (ii) his employment by another employer other than one of which he is the majority owner; or (iii) three (3) years from his
termination date. 

  

	 	(iii)	For purposes of this Agreement, termination of Executive’s employment hereunder for “Good Reason” shall be limited to Executive’s voluntary
termination of employment after the occurrence of any of the following events which have not been consented to in advance by Executive in writing; provided that Executive has given written notice to the Bank within ninety (90) days after the
initial occurrence of such event and that the Bank has been given at least thirty (30) days to cure the situation (but the Bank may waive its right to cure): (i) if Executive would be required to move his personal residence or perform his
principal executive functions more than thirty (30) miles from Executive’s primary office as of the Commencement Date; (ii) if, in the organizational structure of the Bank, Executive would be required to report to a person or persons
other than the Board of Directors; (iii) if the Bank should fail to maintain Executive’s base compensation in effect pursuant to Section 3 of this Agreement, or fail to maintain the existing employee benefit plans or arrangements in
which Executive participates as of the date of this Agreement, including any material fringe benefit, bonus plan and/or retirement plan, except to the extent that such reduction in compensation or benefit programs is part of an overall adjustment in
compensation and benefits for all employees of the Bank and the Executive is otherwise compensated for such an overall adjustment in an equitable manner; (iv) if Executive would be assigned duties and responsibilities other than those normally
associated with his position as referenced in Section 1 of this Agreement; (v) if Executive’s responsibilities or authority have in any way been materially diminished or reduced other than for reasons of Just Cause; or (vi) if
Executive is not re-elected to the Board of Directors or appointed as Chairman of the Board other than for reasons of Just Cause. 

  

 3 

	 	(iv)	The sum due under Section 9(b)(i) shall be paid in one lump sum within thirty (30) calendar days after such termination. Notwithstanding the foregoing, in the
event Executive is a Specified Employee (within the meaning of Treasury Regulations §1.409A-1(i)), then, to the extent necessary to avoid penalties under Code Section 409A, payment shall be withheld and shall be paid to Executive on the
first day of the seventh month following Executive’s termination of employment by the Bank without Just Cause. 

  

	 	(v)	For purposes of Section 9(b), termination of employment as used herein shall mean “Separation from Service” as defined in Code Section 409A and the
Treasury Regulations promulgated thereunder. 

 (c) Disability. 
  

	 	(i)	Termination by the Bank of Executive’s employment based on “Disability” shall occur if: (A) Executive is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than twelve (12) months; (B) by reason of any medically determinable
physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than twelve (12) months; or (C) Executive is determined to be totally disabled by the Social Security Administration.
Executive shall be entitled to receive benefits under any short or long-term disability plan maintained by the Bank. 

  

	 	(ii)	The Bank shall pay Executive, as disability pay, a monthly payment equal to Executive’s monthly rate of base salary. These disability payments shall commence
within thirty (30) days of the date of Executive’s termination due to Disability and will end on the earlier of (A) the date Executive returns to the full-time employment of the Bank in the same capacity as he was employed prior to
his termination for Disability and pursuant to an employment agreement between Executive and the Bank; (B) the date Executive begins full-time employment with another employer; (C) the date Executive attains the normal retirement age (as
defined in the Bank’s defined contribution plan) or begins receiving benefits under any substitute retirement plan adopted by the Bank; or (D) the date of Executive’s death. Notwithstanding any other provision to the contrary, the
Bank’s obligation for any payments required to be made under this Section 9(c) shall be reduced by any proceeds received by Executive from disability income insurance or any other disability policy or plan maintained by the Bank for
Executive which was paid for by the Bank as partial satisfaction of its obligation under this Section 9(c). 

  

	 	(iii)	The Bank shall cause to be continued life insurance and non-taxable medical and dental coverage substantially identical to the coverage maintained by the Bank for
Executive prior to his termination for Disability. This coverage shall cease upon the earlier of (A) the date Executive returns to the full-time employment of the Bank, in the same capacity as he was employed prior to his termination for
Disability and pursuant to an employment agreement between Executive and the Bank; (B) the date Executive begins full-time employment with another employer; (C) the date Executive attains the normal retirement age or begins receiving
benefits under the Bank’s retirement plan; or (D) the date of Executive’s death. 

  

	 	(iv)	Notwithstanding the foregoing, there will be no reduction in the compensation otherwise payable to Executive during any period during which Executive is incapable of
performing his duties hereunder by reason of temporary disability. 

 (d) Termination of Employment by the
Board of Directors for Just Cause. In the event Executive’s employment is terminated for “Just Cause,” no continued payments or benefits shall be due under this Agreement. For purposes of this Agreement, termination for
“Just Cause” shall be defined as termination due to Executive’s personal dishonesty, incompetence, willful misconduct, breach of

  

 4 

	 	 
fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this Agreement Any determination of “Just Cause” as defined by this Section 9(d) shall be determined by a majority vote of the entire membership of the Board of
Directors at a meeting of such Board called and held for the purpose (after reasonable notice to Executive and an opportunity for Executive to be heard before the Board with counsel), of finding that in the good faith opinion of the Board, Executive
committed the conduct described above and specifying the particulars thereof. 

  

	 	(e)	Voluntary Termination of Employment by Executive Other Than for Good Reason. The voluntary termination of employment by Executive during the term of this
Agreement, other than for Good Reason, with the delivery of no less than sixty (60) days written notice to the Board of Directors, entitles Executive to receive only the base salary, vested rights, and all employee benefits up to
Executive’s termination date. 

  

	 	(f)	Termination and Board Membership. To the extent Executive is a member of the board of directors of Fairmount Bancorp Inc. (the “Company”) or the
Bank or any of their affiliates on the date of an involuntary termination of employment with the Company or the Bank or a termination of employment for Good Reason, Executive shall be deemed to have automatically resigned from all of the boards of
directors immediately following such termination of employment with the Company or the Bank. 

  

	 	(g)	Termination and Release of Claims. Any payments to be made under this Agreement shall be contingent on Executive’s execution and non-revocation of a
mutual release in a form acceptable to the Company and the Bank; provided, however, that if the Company or the Bank refuse to execute such mutual release, the Executive’s obligation to execute and not revoke the release as a precondition to
receiving such severance benefits shall terminate. The mutual release agreement shall release the Company and the Bank from any and all claims and other actions by Executive and it shall also release the Executive from any and all claims and other
actions by the Company and the Bank. 

 10. Change in Control. 
  

	 	(a)	For purposes of this Agreement, a Change in Control of the Company or the Bank shall be deemed to have occurred if and when: 

  

	 	(i)	there occurs a change in control of the Company or the Bank within the meaning of the Home Owners Loan Act of 1933 or 12 C.F.R. Part 574 as applied to the Company or
the Bank as if it were a federally chartered institution; 

  

	 	(ii)	as a result of, or in connection with, any merger or other business combination, sale of assets or contested election, wherein the persons who were non-employee
directors of the Company or the Bank before such transaction or event cease to constitute a majority of the Board of Directors of the Company or the Bank or any successor to the Company or the Bank; 

  

	 	(iii)	the Company or the Bank transfers substantially all of its assets to another corporation or entity which is not an affiliate of the Company or the Bank; or

  

	 	(iv)	the Company or the Bank is merged or consolidated with another corporation or entity and, as a result of such merger or consolidation, less than sixty percent
(60%) of the equity interest in the surviving or resulting corporation is owned by the former shareholders or depositors of the Company or the Bank. 

  

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 For purposes of Section 10 of this Agreement, a Change in Control shall not occur as a
result of the Conversion. Upon the Conversion, the resulting bank and holding company shall be subject to this Agreement and the obligations of the Bank set forth herein. 
  

	 	(b)	If Executive’s employment is terminated for any reason other than for Just Cause within twelve (12) months following a Change in Control, Executive shall be
entitled to receive the greater of the following: 

  

	 	(i)	the amount of the payment and benefits specified in Section 9(b), or 

  

	 	(ii)	the amount of the payment and benefits specified in Section 10(c). 

 Such payment shall be made in a lump sum within thirty (30) days following Executive’s termination of employment. For purposes of this Section 10, termination of employment as used herein
shall mean “Separation from Service” as defined in Code Section 409A and the Treasury Regulations promulgated thereunder. Notwithstanding the foregoing, in the event Executive is a Specified Employee (within the meaning of Treasury
Regulations §1.409A-1(i)), then, to the extent necessary to avoid penalties under Code Section 409A, payment shall be withheld and shall be paid to Executive on the first day of the seventh month following Executive’s termination of
employment. 
  

	 	(c)	For purposes of Section 10(b)(ii), the amount of payment and benefits shall be equal to: 

  

	 	(i)	an amount equal to three (3) times his “base amount,” as defined in Code Section 280G(b)(3), less one (1) dollar (“Code § 280G
Maximum”); and 

  

	 	(ii)	coverage under the Bank’s life insurance plan and non-taxable medical, health and dental plans (each being a “Welfare Plan”) in the same manner in which
Executive received coverage on the last day of his employment with the Bank. Executive and his covered dependents (if any) shall continue participating in such Welfare Plans, subject to the same premium contributions (if any) on the part of
Executive as were required immediately prior to his termination until the earlier of (i) his death; (ii) his employment by another employer other than one of which he is the majority owner; or (iii) three (3) years from his
termination date. 

  

	 	(d)	Not later than ten (10) business days after a Change in Control, the Bank shall (i) establish a grantor trust (the “Trust”) designed in accordance
with Revenue Procedure 92-64 and having a trustee independent of the Bank and the Company, (ii) deposit in said Trust an amount equal to the Code §280G Maximum, unless Executive has previously provided a written release of any claims under
this Agreement, and (iii) provide the trustee of the Trust with a written direction to hold said amount and any investment return thereon in a segregated account for the benefit of Executive, and to follow the procedures set forth in the next
paragraph as to the payment of such amounts from the Trust. 

  

	 	(e)	During the 39-consecutive month period after a Change in Control, Executive may provide the trustee of the Trust with a written notice requesting that the trustee pay
to Executive an amount designated in the notice as being payable pursuant to this Agreement. Within three (3) business days after receiving said notice, the trustee of the Trust shall pay such amount to Executive, and coincidentally shall
provide the Bank or its successor with notice of such payment. Upon the earlier of the Trust’s final payment of all amounts due under the preceding paragraph or the date 39 months after the Change in Control, the trustee of the Trust shall pay
to the Bank the entire balance remaining in the segregated account maintained for the benefit of Executive. Executive shall thereafter have no further interest in the Trust. Such notice shall not have the effect of changing the timing of any payment
under this Agreement, for purposes of Section 409A. 

  

 6 

 11. Limitation of Benefits under Certain Circumstances. 
  

	 	(a)	In no event shall the payments and benefits received by Executive exceed three times Executive’s average compensation over the past five years, in accordance with
the OTS regulations. 

  

	 	(b)	If the payments and benefits pursuant to Section 10 of this Agreement, either alone or together with other payments and benefits which the Executive has the right
to receive from the Bank, would constitute a “parachute payment” under Section 280G of the Code, the cash severance payable by the Bank pursuant to Section 10 shall be reduced by the amount, if any, which is the minimum amount
necessary to result in no portion of the payments and benefits under Section 10 being non-deductible to the Bank pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The
determination of any reduction in the payments and benefits shall be based upon the opinion of the Bank’s independent public accountants and paid for by the Bank. In the event that the Bank and/or the Executive do not agree with the opinion of
such accountants, (i) the Bank shall pay to the Executive the maximum amount of payments and benefits as selected by the Executive, which such opinion indicates there is a high probability do not result in any of such payments and benefits
being non-deductible to the Bank and subject to the imposition of the excise tax imposed under Section 4999 of the Code and (ii) the Bank may request, and the Executive shall have the right to demand that they request, a ruling from the
IRS as to whether the disputed payments and benefits have such consequences. Any such request for a ruling from the IRS shall be promptly prepared and filed by the Bank, but in no event later than thirty (30) days from the date of the
accountant’s opinion referred to above, and shall be subject to the Executive’s approval prior to filing, which shall not be unreasonably withheld. The Bank and the Executive agree to be bound by any ruling received from the IRS and to
make appropriate payments to each other to reflect any such rulings, together with interest at the applicable federal rate. 

 12. Successors and Assigns. 
  

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

  

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

 13. Amendments. No amendments or
additions to this Agreement shall be binding upon the parties hereto unless made in writing and signed by both parties, except as herein otherwise specifically provided. 
 14. Applicable Law. This agreement shall be governed in all respects, whether as to validity, construction, capacity, performance or otherwise, by the laws of the State of Maryland, except
to the extent that Federal law shall be deemed to apply. 
 15. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 
 16. Notices. Any notices, requests, demands and other communications provided for or deemed necessary by this Agreement shall be sufficient if set forth in writing and delivered in person or
sent by registered or certified mail, postage prepaid, to, in the case of Executive, the last address filed in writing by Executive with the Bank, or, in the case of the Bank, to the Bank at its main office to the attention of the Board of
Directors. 
 17. Indemnification. The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors’ and officers’ liability insurance policy at its expense, or in lieu thereof, shall indemnify Executive (and his heirs, executors and administrators) to the fullest extent permitted

  

 7 

 
under law and applicable regulation or under any existing indemnification agreement by and between Executive and the Bank against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having been a director or officer of the Bank (whether or not he continues to be a director or officer at the time of incurring such
expenses or liabilities). Such expenses and liabilities may include, but are not limited to, judgment, court costs and attorneys’ fees and the cost of reasonable settlements. The Bank shall pay such expenses and liabilities in advance of a
final judicial decision (hereinafter an “advancement of expenses”); provided, however, that, an advancement of expenses incurred by Executive in his capacity as a director or executive officer of the Bank (and not in any other capacity in
which service was or is rendered by Executive including, without limitation, services to an employee benefit plan) shall be made only upon delivery to the Bank of an undertaking, by or on behalf of Executive, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision from which there is no further right to appeal that Executive is not entitled to be indemnified for such expenses under this Section 17 or otherwise. Indemnification under this
Section 17 shall be made in accordance with 12 C.F.R. §545.121 or any successor thereto. 
 18. Entire
Agreement. This Agreement together with any understanding or modifications thereof as may be agreed to in writing by the parties, shall constitute the entire agreement between the parties hereto. 
 19. Required Regulatory Provisions. 
 In the event any of the provisions of this Section 19 are in conflict with the terms of this Agreement, this Section 19 shall prevail. 
  

	 	(a)	The Bank may terminate Executive’s employment at any time, but any termination by the Bank, other than Termination for Just Cause, shall not prejudice
Executive’s right to compensation or other benefits under this Agreement. Executive shall not have the right to receive compensation or other benefits for any period after Termination for Just Cause as defined in Section 9(d) hereinabove.

  

	 	(b)	If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings. If
the charges in the notice are dismissed, the Bank may in its discretion: (i) pay Executive all or part of the compensation withheld while their contract obligations were suspended; and (ii) reinstate (in whole or in part) any of the
obligations which were suspended. 

  

	 	(c)	If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), all obligations of the Bank under this contract shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be
affected. 

  

	 	(d)	If the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bank under this
contract shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties. 

  

	 	(e)	All obligations of the Bank under this contract shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued
operation of the institution: (i) by the Director of the OTS (or his designee) or the FDIC, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under authority contained in Section 13(c) of the
Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or (ii) by the Director of the OTS (or his designee) at the time the Director of the OTS (or his designee) approves a supervisory merger to resolve problems related to the operations of
the Bank or when the Bank is determined by the Director of the OTS to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by such action. 

  

 8 

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

 20. Arbitration. 
  

	 	(a)	Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators
sitting in a location selected by Executive within fifty (50) miles from the location of the Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in
any court having jurisdiction; provided, however, that Executive shall be entitled to seek specific performance of his right to be paid until the date of termination during the pendency of any dispute or controversy arising under or in connection
with this Agreement. 

  

	 	(b)	In the event any dispute or controversy arising under or in connection with Executive’s termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all back-pay, including salary, bonuses and any other cash compensation, fringe benefits and any compensation and benefits due Executive under this Agreement.

 21. Payment of Costs and Legal Fees. All reasonable costs and legal fees paid
or incurred by Executive pursuant to any dispute or question of interpretation relating to this Agreement shall be paid or reimbursed by the Bank, if Executive is successful with respect to such dispute or question of interpretation pursuant to a
legal judgment, arbitration or settlement. Such reimbursements shall be paid to Executive within two and one-half (2 1/2) months after the dispute is settled or resolved in Executive’s favor. 
 IN WITNESS WHEREOF, the parties have
executed this Agreement on the latest date set forth below. 
  

							
		 		 	FAIRMOUNT BANK
				
	            ,        	 		 	By:	 	  

	Date	 		 		 	Chairman of the Board
				
	            ,        	 		 		 	  

	Date	 		 		 	Joseph M. Solomon

  

 9

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