Document:

exv10w5

Exhibit 10.5

ROYAL BANK AMERICA

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (“SERP”)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 1 — STATEMENT OF PURPOSE
	 	 	2	 
	 
	 	 	 	 
	SECTION 2 — DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	SECTION 3 — ELIGIBILITY, PARTICIPATION AND VESTING
	 	 	5	 
	 
	 	 	 	 
	SECTION 4 — RETIREMENT BENEFIT
	 	 	6	 
	 
	 	 	 	 
	SECTION 5 — PRE-RETIREMENT SURVIVOR BENEFIT
	 	 	7	 
	 
	 	 	 	 
	SECTION 6 — TERMINATION OF EMPLOYMENT
	 	 	8	 
	 
	 	 	 	 
	SECTION 7 — DISABILITY BENEFIT AND AUTHORIZED LEAVE OF ABSENCE
	 	 	9	 
	 
	 	 	 	 
	SECTION 8 — RESTRICTIVE COVENANT
	 	 	9	 
	 
	 	 	 	 
	SECTION 9 — ADMINISTRATION
	 	 	10	 
	 
	 	 	 	 
	SECTION 10 — COMPANY-OWNED LIFE INSURANCE (“COLI”)
	 	 	12	 
	 
	 	 	 	 
	SECTION 11 — MISCELLANEOUS
	 	 	13	 
	 
	 	 	 	 
	SECTION 12 — CONSTRUCTION
	 	 	15	 

i

 

SECTION 1 — STATEMENT OF PURPOSE

     This Plan (as herein defined) is designed and implemented for the purpose of providing to a
limited group of key management or highly compensated employees of the Bank (as herein defined),
who are largely responsible for the Bank’s success, the opportunity to receive deferred
compensation in the form of supplemental executive retirement benefits, thereby increasing the
incentive of such key employees to remain in the employ of the Bank and to make the Bank more
profitable. Special payments shall be made to Participants (as herein defined) upon retirement or
death and are intended to provide Participants with additional financial security.

     Effective January 1, 2005, the Plan has been amended and restated to implement certain
amendments adopted by the Board and to comply with the terms of Section 409A of the Code (as herein
defined).

SECTION 2 — DEFINITIONS

          2.1. “Accrued Benefit” means a Participant’s normal retirement benefit, as described in
Section 4.1 hereof, multiplied by a fraction, the numerator of which is the Participant’s total
number of Years of Service with the Bank at the time of determination, and the denominator of which
is the aggregate number of Years of Service with the Bank the Participant would have accumulated at
his or her Normal Retirement Age.

          2.2. “Actuarial Equivalent” means, with respect to a given benefit, any other benefit
provided under the terms of the Plan which has the same present or equivalent value on the date the
given benefit payment commences, based on the use of actuarial equivalent factors adopted by the
Bank and being used to value the Plan liabilities at the time of the calculation.

          2.3. “Bank” means Royal Bank America, a Pennsylvania corporation, also doing business as the
Royal Bank, including any subsidiaries, successors and assigns thereto.

          2.4. “Beneficiary” means any person or persons designated by a Participant in writing on a
form satisfactory to the Bank. In the absence of any living designated beneficiary, a deceased
Participant’s Beneficiary shall be the deceased Participant’s then living spouse, if any, for his
or her life; if none, or from and after such spouse’s death, then the living children of the
deceased Participant, if any, in equal shares, for their joint and survivor lives; and if none, or
after their respective joint and survivor lives, the estate of the deceased Participant.

          2.5. “Board” means the Board of Directors of the Bank.

 

 

          2.6. “Change of Control” means the purchase or other acquisition by any person, entity or
group of persons, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934 (hereinafter called “Act”), or any comparable successor provisions, of beneficial ownership
(within the meaning of Rule 13e-3 promulgated under the Act) of thirty percent (30%) or more of
either the outstanding shares of common stock or the combined voting power of the Bank’s then
outstanding voting securities entitled to vote generally, or the approval by the shareholders of
the Bank of a reorganization, merger, or consolidation, in each case, with respect to which persons
who were shareholders of the Bank immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than fifty percent (50%) of the combined voting power
entitled to vote generally in the election of directors of the reorganized, merged or consolidated
the Bank’s then outstanding securities, or a liquidation or dissolution of the Bank. or of the
sale of all or substantially all of the Bank’s assets.

          2.7. “Compensation Committee” means the committee appointed by the Board pursuant to Section
9.4 that is authorized to oversee, administer and amend the Plan.

          2.8. “Company” means Royal Bancshares of Pennsylvania, Inc. including any subsidiaries,
successors and assigns thereto.

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

          2.10. “Disability” means the Participant (a) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, or (b) is, by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of not less than
12 months, receiving income replacement benefits for a period of not less than 3 months under an
accident and health plan covering employees of the participant’s employer.

          2.11. “Early Retirement Date” means a date on which a Participant retires from the Bank on or
after attaining age fifty-five (55) and at least one (1) year of Participation in the Plan, then
having completed at least ten (10) years of employment service with the Bank.

          2.12. “Effective Date” means January 1, 1998.

          2.13. “High Average Recognized Compensation” means the Recognized Compensation (as defined
herein) of a Participant for each of the three (3) consecutive calendar years of his or her
employment

 

 

service with the Bank which produce the highest annual average. If a Participant has been in
the employ of the Bank for more than one (1) calendar year but less than three (3) calendar years,
then the High Average Recognized Compensation for that Participant shall be based upon that
Participant’s actual calendar years of service. If a Participant has served with the Bank for less
than one (1) year, then the High Average Recognized Compensation for that Participant shall be
equal to the Participant’s Recognized Compensation. If necessary under the Participant’s SERP
Agreement, High Average Salary Compensation (based solely of the Participant’s salary) and High
Average Bonus Compensation shall be determined separately, but shall be based on the same years.

          2.14. “Normal Retirement Age” means the date on which a Participant attains age sixty (60)
and has completed at least one (1) year of Participation in the Plan.

          2.15. “Participant” means an employee of the Bank selected by the Board for participation in
the Plan in accordance with Section 3 hereof, and who has not for any reason become ineligible to
participate further in this Plan. An individual shall be deemed to continue as a Participant until
all benefits payable to the Participant under this Plan have been distributed.

          2.16. “Plan” means the Royal Bank Supplemental Executive Retirement Plan (“SERP”) as
contained in this document, including all amendments thereto.

          2.17. “Plan Year” means the twelve month period commencing on January 1 of each year and
ending the following December 31.

          2.18. “Recognized Compensation” means the annual compensation level to be used for purposes
of the Plan in determining the amount of benefits to which a Participant is entitled. Each
Participant’s Recognized Compensation shall be that amount listed in that Participant’s SERP
Agreement (as herein defined) as such amount may be amended from time to time by the Compensation
Committee. Recognized Compensation can be arbitrarily set by the Compensation Committee, may
include such percentage of a Participant’s annual bonus as may be determined by the Compensation
Committee and need not be the same as the Participant’s base salary or W-2 compensation.

          2.19. “SERP Agreement” means a written agreement between a Participant and the Bank in
substantially the form attached hereto as Exhibit A.

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

 

 

thereof) of the Bank if any stock of the Bank or the Company is publicly traded on
an established securities market or otherwise.

          2.21. “Termination for Cause” means the termination of a Participant’s employment with the
Bank for any one or more of the following reasons: (a) fraud, misappropriation or intentional
material damage to the property or operation of the Bank; (b) conviction of a felony; or (c)
continuance of failure by the Participant to perform his or her duties after written notice to the
Participant by the Bank’s Board specifying such failure, provided that such failure shall have been
found by a two-thirds (2/3) majority vote of the members of the Board other than the Participant.

          2.22. “Year of Service” means a period of twelve consecutive months during which a
Participant is employed by the Bank and performs at least 1,500 hours of service. Unless otherwise
provided in his or her SERP Agreement, in determining a Participant’s Years of Service, he or she
shall receive credit for service from and after his or her most recent employment commencement
date.

SECTION 3 — ELIGIBILITY, PARTICIPATION AND VESTING

          3.1. Eligibility. The Board, in its sole discretion, shall select the employees of
the Bank who are eligible to become Participants. Notwithstanding the foregoing, effective January
1, 2003, in order to become a Participant in the Plan, an employee of the Bank must have completed
a minimum of 10 Years of Service.

          3.2. Participation. The Board or its designee shall notify those employees selected
for participation of the benefits available under the Plan. An eligible employee becomes a
Participant in the Plan upon the execution and delivery by him or her and the Bank of a SERP
Agreement. Thereafter, a Participant shall remain a Participant as long as he or she is
continuously employed by the Bank.

          3.3. Suicide. Notwithstanding any other term or provision of this Plan or any SERP
Agreement, this Plan and the applicable SERP Agreement shall be void and of no force or effect with
respect to any Participant who dies by reason of suicide within two (2) years after the date of his
or her SERP Agreement, and no benefit of any kind shall be payable under this Plan to such
Participant, his or her Beneficiary or any other person claiming under him or her.

          3.4. Vesting. If a Participant was a Participant in the Plan prior to January 1,
2003, upon attaining Normal Retirement Age such Participant shall be 100% vested in his or her
benefit under the Plan.

 

 

Otherwise, a Participant shall be 100% vested in his or her benefit under the Plan upon
completing 10 Years of Service.

SECTION 4 — RETIREMENT BENEFIT

          4.1. Normal Retirement Benefit.

          (a) If a Participant is continually employed by the Bank until his or her Normal
Retirement Age, his or her normal retirement benefit shall be an annual benefit equal to that
percentage of his or her High Average Recognized Compensation specified in his or her SERP
Agreement.

          (b) If the Participant terminates employment on the date he or she attains his Normal
Retirement Age, the normal retirement benefit shall be payable in equal monthly installments
commencing on the first day of the month following the Participant’s Normal Retirement Age
and continuing for the remainder of the Participant’s life.

          (c) If the Participant terminates employment after the date he attains his Normal
Retirement Age, then he or she shall receive a benefit payable in equal monthly installments
commencing on the first day of the month following the Participant’s retirement and
continuing for the remainder of the Participant’s life. If specifically provided in the
Participant’s individual SERP Participation Agreement, the benefit payable shall be increased
to be the Actuarial Equivalent of the benefit the Participant would have received had the
Participant retired on the date he or she attained Normal Retirement Age.

          4.2. Early Retirement Benefit. If a Participant is continually employed by the Bank
until his or her Early Retirement Date, he or she shall be entitled to receive an early retirement
benefit equal to the Actuarial Equivalent amount of his or her Accrued Benefit. This early
retirement benefit shall be payable in equal monthly installments commencing on the first day of
the month following the Participant’s actual retirement, continuing for the remainder of the
Participant’s life.

          4.3. Death After Commencement of Retirement Benefit. If, after commencement of
benefits under Section 4.1 or 4.2, a Participant should die prior to the completion of
one-hundred-twenty (120) monthly payments, such monthly payments shall be continued to the
Participant’s Beneficiary until the completion of one-hundred-twenty (120) combined monthly
payments.

 

 

          4.4. Alternate Form of Payment. The Bank may, in its sole and absolute discretion,
approve a retiring Participant’s request of an alternate form of life annuity in which case such
payments shall be in the amount of the Actuarial Equivalent of the normal form of benefit
hereunder. No installment or lump sum payments shall be permitted under this Section 4.4.

          4.5. Forfeiture of Benefits. Notwithstanding the foregoing provisions of this
Section 4, a Participant shall forfeit all benefits under the Plan if his or her employment with
the Bank terminates by reason of a Termination for Cause or if he or she violates the restrictive
covenant set forth in Section 8 hereof.

          4.6. Loan of Portion of Benefits. In the event that the Participant or his or her
Beneficiary is required to include an amount in taxable income for any year in excess of the actual
cash payments made under this Plan to the Participant or Beneficiary in such year (the “Excess
Income”), the Bank shall loan to the Participant or Beneficiary an amount equal to the Excess
Income multiplied by a percentage equal to the marginal tax rate applicable to inclusion of the
Excess Income in the taxable income of the Participant or Beneficiary, plus the amount of any
penalties or interest assessed by the Internal Revenue Service with respect to the Excess Income
(the “Loan”). The Loan shall be evidenced by a note payable to the Bank in 120 equal monthly
installments, commencing the first month in which benefits become payable, including interest at
the rate determined by the Board but not in excess of the prime lending rate as published in the
Wall Street Journal as of the date of the Loan. If the Wall Street Journal prime rates are no
longer published, the interest rate shall be based on some other similar published rate selected by
the Board in its sole discretion. The Bank shall reduce the amount of the monthly benefit payments
hereunder to the Participant or Beneficiary by the amount of the monthly payments on the Loan.

SECTION 5 — PRE-RETIREMENT SURVIVOR BENEFIT

          5.1. Survivor Benefit.

          (a) If a Participant dies while employed by the Bank but prior to the Participant’s
Early Retirement Date, the Bank shall pay to the Beneficiary of the Participant the survivor
benefit specified in the Participant’s SERP Agreement. This survivor benefit shall be equal
to that percentage of his or her Recognized Compensation specified in his or her SERP
Agreement. This benefit shall be payable in equal monthly installments commencing on the
first day of the month following the Participant’s death and continuing for sixty (60)
months.

          (b) If a Participant dies while employed by the Bank and on or after the Participant’s
Early Retirement Date, the Bank shall pay to the Beneficiary of the Participant the survivor
benefit specified

 

 

in the Participant’s SERP Agreement. This survivor benefit shall be equal to
that percentage of his or her Recognized Compensation specified in his or her SERP Agreement.
This benefit shall be payable in equal monthly installments commencing on the first day of
the month following the Participant’s death and continuing for one hundred twenty (120)
months.

SECTION 6 — TERMINATION OF EMPLOYMENT

          6.1. Termination Benefit. If a Participant terminates employment with the Bank prior
to attaining his or her Early Retirement Date, other than by reason of death or Disability, said
Participant shall be entitled to that vested portion of his or her Accrued Benefit as specified in
his or her SERP Agreement; provided, however, that in the event the Participant is subsequently (1)
removed or prohibited from being an institutional-affiliated party by a final order of the
appropriate federal banking agency, pursuant to Section 8(e) of the Federal Deposit Insurance Act
or by the Pennsylvania Department of Banking pursuant to state law, or (2) is convicted of a crime
for which the criminal activity charged primarily involved conduct engaged in while an employee or
director of the Bank, the Bank shall have no obligation to make future payments as of the date of
the final order or conviction, as the case may be.

          6.2. Change of Control. Notwithstanding anything to the contrary herein, if a
Participant’s employment with the Bank is terminated, other than by retirement, death, Disability,
or Termination for Cause, within two (2) years of a Change of Control of the Bank, then, for
purposes of this Plan, it shall be deemed that the Participant has remained in the employ of the
Bank until the earlier to occur of: (a) the Participant’s death; or (b) the Participant’s
attaining his or her Normal Retirement Age, except as provided in Section 4.2 herein. Furthermore,
if at the time a Change of Control occurs, the Bank had established a trust in accordance with
Section 9.5 hereof, the Bank shall be required to transfer cash and/or other assets to said trust
in an amount equal to the discounted present value of all of the future benefits payable hereunder
to each Participant and Beneficiary. If the Bank had not previously established a trust in
accordance with Section 9.5 hereof, a trust shall be established at the time a Change of Control
occurs, and the above funding requirements will apply to said trust. The discount rate shall be
the 5-Year United States Treasury Note rate as published on the first day of the month immediately
preceding the date on which the determination is made, compounded annually. If these rates are no
longer published, the discount rate shall be some other similar average selected by the Board in
its sole discretion.

          6.3. Restriction of Timing of Distributions. Notwithstanding any provision of this
Plan to the contrary, if the Participant is considered a Specified Employee at termination of
employment under such procedures as established by the Bank in accordance with Section 409A of the
Code, benefit distributions that

 

 

are made by reason of termination of employment may not commence earlier than six (6) months
after the date of such termination of employment. Therefore, in the event this Section 6.3 is
applicable to a Participant, any distribution that would otherwise be paid to the Participant
within the first six months following the termination of employment shall be accumulated and paid
to the Participant in a lump sum on the first day of the seventh month following the termination of
employment. All subsequent distributions shall be paid in the manner specified.

SECTION 7 — DISABILITY BENEFIT AND AUTHORIZED

LEAVE OF ABSENCE

          7.1. Disability Benefit. Notwithstanding anything to the contrary herein, if a
Participant’s employment with the Bank is terminated prior to attaining his or her Early Retirement
Date as a result of the Participant’s Disability, then, for purposes of this Plan, it shall be
deemed that the Participant has remained in the employ of the Bank until the earliest to occur of:
(a) the Participant’s death; (b) the Participant’s attaining his or her Normal Retirement Age,
except as provided in Section 4.2 herein; or (c) the cessation of the Participant’s Disability and
the failure of the Participant to return to active employment with the Bank within a reasonable
time after recovery from the Disability.

          7.2. Authorized Leave of Absence. A Participant’s employment with the Bank shall not
be deemed to have terminated for purposes of this Plan during any authorized leaves of absence.

SECTION 8 — RESTRICTIVE COVENANT

          8.1. Restrictive Covenant. It shall be a condition to the payment of benefits under
this Plan that, during the first three-year period after termination of employment or retirement,
the Participant does not (i) own, manage, operate, join, control, be employed by, or participate in
the ownership, management, operation, or control of any business or entity within the Philadelphia
SMSA (Standard Metropolitan Statistical Area) if such ownership, management, operation, joining,
control, employment or participation will or could reasonably be expected to harm the business,
profitability, business interests or reputation of the Bank, or (ii) disclose any information
deemed to be confidential or a trade secret, as described in the following paragraph, to anyone who
is not a current Bank employee without the express written permission of the Bank, with said
written permission having been duly authorized by the Bank’s Board of Directors.

          The Participant acknowledges and agrees that Participant has access to certain confidential
and sensitive information relating to the Bank incident to Participant’s employment by the Bank,
including, but not limited to, information pertaining to: (i) the identity of the Bank’s customers
and customer prospects; (ii) the

 

 

special needs of the Bank’s customers; (iii) confidential market studies, information and
analyses; (iv) current and prospective services; (v) business projections; (vi) business plans and
strategies; (vii) financial statements and information; and (viii) special services of the Bank.
The Participant acknowledges and agrees that this information, if disclosed, could place the Bank
at a competitive disadvantage. Consequently, the Participant acknowledges and agrees that such
information constitutes a trade secret, and the Participant acknowledges and agrees not to disclose
such information to any person who is not a current employee of the Bank at any time prior to, or
subsequent to, the termination of employment or retirement, without the express written consent of
the Bank.

SECTION 9 — ADMINISTRATION

          9.1. General. The Plan shall be administered by the Board or its designee. The
Board shall have the authority, subject to the terms of the Plan, to construe the provisions of the
Plan and to adopt rules and regulations and make all determinations necessary or advisable for the
administration of the Plan. The Board shall make all determinations as to rights to benefits under
the Plan. No member of the Board shall be liable for any action of determination made in good
faith with respect to the Plan or any SERP Agreement. Any decision by the Board denying a claim by
a Participant or a Beneficiary for benefits under the Plan shall be stated in writing and delivered
or mailed to the Participant or Beneficiary at his or her last known address. Such decision shall
set forth the specific reasons for the denial of benefits. In addition, the Board shall afford a
reasonable opportunity to the Participant or Beneficiary for a full and fair review of the decision
denying such claim within thirty (30) days of such notice.

          9.2. Participant Statement. The Bank shall provide each Participant on an annual
basis with a statement showing that Participant’s current and projected survivor income benefit and
retirement benefit under the Plan.

          9.3. Interpretation. The interpretation and construction of the Plan by the Board,
and any action taken hereunder, shall be binding and conclusive upon all parties in interest. No
member of the Board shall be liable to any person for any action taken or omitted to be taken in
connection with the interpretation, construction or administration of the Plan, so long as such
action or omission be made in good faith.

          9.4. Authority to Appoint a Committee. The Board, within its discretion, shall have
the authority to appoint a Compensation Committee of not less than three (3) of its members which
shall have authority over the Plan in lieu of the entire Board.

 

 

          9.5. Authority to Establish a Trust. The Board shall have the right at any time to
establish a trust to which the Bank may transfer from time to time certain assets to be used by
said trustee(s) to satisfy some or all of the Bank’s obligations and liabilities under the Plan.
All assets held by such trust shall be subject to the claims of the Bank’s creditors in the event
of the Bank’s Insolvency (as defined herein). The Bank shall be considered “Insolvent” for
purposes of said trust if: (a) the Bank is unable to pay its debts as they become due; and (b) the
Bank is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

          9.6. Amendment and Termination of the Plan. The Bank reserves the right, at any time
and from time to time, by action of the Board, to amend or terminate the Plan, including but not
limited to the right to discontinue making premium contributions for any year for which the Bank is
not profitable. Notwithstanding the foregoing, no such amendment or termination shall reduce or
accelerate (a) the benefits (including survivor benefits) of a Participant (or Beneficiary) to whom
payments under this Plan had then commenced, or (b) the Accrued Benefit (including survivor
benefits) of a Participant who has not yet attained his or her Normal Retirement Age, or (c) the
benefits (including survivor benefits) of a Participant who has then attained his or her Normal
Retirement Age, or (d) the benefits (including survivor benefits) of a Participant whose employment
with the Bank has been terminated. In addition, each other Participant employed by the Bank on the
date of such amendment or termination shall be entitled to benefits (including survivor benefits)
under this Plan, at such time as such benefits would have been paid absent such amendment or
termination, in an amount equal to the amount that would have been paid under the Plan if he or she
had terminated employment on the day immediately preceding the date of such amendment or
termination of the Plan.

          9.7. Plan Terminations under Section 409A. Notwithstanding anything to the contrary
in Section 9.6, if the Bank terminates the Plan in the following circumstances:

          (a) Within thirty (30) days before, or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months following such
termination of the Plan and further provided that all the Company’s plans and arrangements
which are substantially similar to the Plan are terminated so the Participants and all
participants in similar plans and arrangements are required to receive all amounts of
compensation deferred under the terminated plans and arrangements within twelve (12) months
of the termination of the plans and arrangements;

          (b) Upon the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Plan are included in the Participants gross income in the
latest of (i) the calendar year in which the Plan terminates; (ii) the calendar year in which
the amount is no longer

 

 

subject to a substantial risk of forfeiture or (iii) the first calendar year in which
the distribution is administratively practicable; or

          (c) Upon the Bank’s termination of this and all other account balance plans (as
referenced in Section 409A of the Code or the regulations thereunder), provided that all
distributions are made no earlier than twelve (12) months and no later than twenty-four (24)
months following such termination, and the Bank does not adopt any new account balance plans
for a minimum of five (5) years following the date of such termination;

the Bank may distribute benefits under the Plan, to the Participants, in a lump sum subject to the
above terms.

SECTION 10 — COMPANY-OWNED LIFE INSURANCE (“COLI”)

          10.1. Bank Owns All Rights. In the event that, in its discretion, the Bank purchases
a life insurance policy or policies insuring the life of any Participant to allow the Bank to
informally finance and/or recover, in whole or in part, the cost of providing the benefits
hereunder, neither the Participant nor any Beneficiary shall have any rights whatsoever therein.
The Bank shall be the sole owner and beneficiary of any such policy or policies and shall possess
and may exercise all incidents of ownership therein, except in the event of the establishment of
and transfer of said policy or policies to a trust by the Bank as described in Section 8 hereof.

          10.2. Participant Cooperation. If the Bank decides to purchase a life insurance
policy or policies on any Participant, the Bank will so notify each Participant. Each Participant
shall consent to being insured for the benefit of the Bank and shall take whatever actions may be
necessary to enable the Bank to timely apply for and acquire such life insurance and to fulfill the
requirements of the insurance carrier relative to the issuance thereof as a condition of
eligibility to participate in the Plan.

          10.3. Participant Misrepresentation. If: (a) any Participant is required by this
Plan to submit information to any insurance carrier; and (b) the Participant makes a material
misrepresentation in any application for such insurance; and (c) as a result of that material
misrepresentation the insurance carrier is not required to pay all or any part of the proceeds
provided under that insurance, then the Participant’s (or the Participant’s Beneficiary’s) rights
to any benefits under this Plan may be, at the sole discretion of the Board, reduced in proportion
to the reduction of proceeds that is paid by the insurance carrier because of such material
misrepresentation.

 

 

SECTION 11 — MISCELLANEOUS

          11.1. Non-Alienation of Benefits. No right or benefit under this Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge any right or benefit
under this Plan or any SERP Agreement shall be void. No such right or benefit shall in any manner
be liable for or subject to the debts, contracts, liabilities or torts of the person entitled
thereto. If a Participant or any Beneficiary hereunder shall become bankrupt, or attempt to
anticipate, alienate, sell assign, pledge, encumber, or charge any right hereunder, then such right
or benefit shall, in the discretion of the Board, cease and terminate, and in such event, the Board
may hold or apply the same or any part thereof for the benefit of the Participant or his or her
Beneficiary, spouse, children, or other dependents, or any of them in such manner and in such
amounts and proportions as the Board may deem proper.

          11.2. Unsecured Bank Liability. The obligation of the Bank to make payments
hereunder to a Participant shall constitute an unsecured liability of the Bank. Such payments
shall be made from the general funds of the Bank, and the Bank shall not be required to establish
or maintain any special or separate fund, to purchase or acquire life insurance on a Participant’s
life, or otherwise to segregate assets to assure that such payments shall be made. Neither a
Participant nor any other person shall have any interest in any particular asset of the Bank by
reason of its obligations hereunder, and the right of any of them to receive payments under this
Plan shall be no greater than the right of any other unsecured general creditor of the Bank.
Nothing contained in the Plan shall create or be construed as creating a trust of any kind or any
other fiduciary relationship between the Bank and a Participant or any other person.

          11.3. No Employment Agreement. Neither the execution of this Plan or any SERP
Agreement nor any other action taken by the Bank pursuant to this Plan shall be held or construed
to confer on a Participant any legal right to be continued as an employee of the Bank or to
restrict the right of the Bank to terminate his or her employment.

          11.4. Designation of Beneficiary. Each Participant shall file with the Bank a notice
in writing, in a form acceptable to the Board, designating one or more Beneficiaries to whom
payments becoming due by reason of or after his or her death shall be made. Participants shall
have the right to change the Beneficiary or Beneficiaries so designated from time to time;
provided, however, that no such change shall become effective until received in writing and
acknowledged by the Bank.

 

 

          11.5. Payment to Incompetents. The Bank shall make the payments provided herein
directly to the Participant or Beneficiary entitled thereto or, if such Participant or Beneficiary
has been determined by a court of competent jurisdiction to be mentally or physically incompetent,
then payment shall be made to the duly appointed guardian, committee or other authorized
representative of such Participant or Beneficiary. The Bank shall have the right to make payment
directly to a Participant or Beneficiary until it has received actual notice of the physical or
mental incapacity of such Participant or Beneficiary and actual notice of the appointment of a duly
authorized representative of his or her estate. Any payment to or for the benefit of a Participant
or Beneficiary shall be a complete discharge of all liability of the Bank therefore.

          11.6. Claims for Benefits. Each Participant or other person claiming any benefit
under this Plan must give written notification thereof to the Bank. If a claim is denied, it must
be denied within a reasonable period of time, and be contained in a written notice stating the
following: (a) the specific reason for the denial; (b) specific reference to the Plan provision on
which the denial is based; (c) description of additional information necessary for the claimant to
present his or her claim, if any, and an explanation of why such material is necessary; (d) an
explanation of the Plan’s claims review procedure. The claimant will have 60 days to request a
review of any denial by the Board. The request for review must be in writing and delivered to the
Board, which will then provide a full and fair review. The claimant may review pertinent
documents, and he or she may submit issues and comments in writing. The decision by the Board with
respect to the review must be given within 60 days after receipt of the request, unless special
circumstances require an extension (such as for a hearing). In no event shall the decision be
delayed beyond 120 days after receipt of the request for review. The decision shall be written in
a manner calculated to be understood by the claimant, and it shall include specific reasons and
refer to specific Plan provisions on which it is based.

          11.7. Binding Effect. Obligations incurred by the Bank pursuant to this Plan shall
be binding upon and inure to the benefit of the Bank, its successors and assigns, and the
Participant, his or her Beneficiaries, personal representatives, heirs, and legatees.

          11.8. Entire Plan. This document and any amendments hereto contain all the terms and
provisions of the Plan and shall constitute the entire Plan, any other alleged terms or provisions
being of no effect.

          11.9. Merger, Consolidation or Acquisition. In the event of a merger or
consolidation of the Bank with another corporation or entity, or the acquisition of the outstanding
stock of the Bank by another corporation or entity, then and in such event the obligation and
responsibilities of the Bank under this Plan shall

 

 

be assumed by any such successor or acquiring corporation or entity, and all of the rights,
privileges and benefits of the Participant hereunder shall continue.

          11.10. Enforceability. If any term or condition of this Plan shall be invalid or
unenforceable to any extent or in any application, then the remainder of the Plan, and such term or
condition except to such extent or in such application, shall not be affected thereby, and each and
every term and condition of the Plan shall be valid and enforced to the fullest extent and in the
broadest application permitted by law.

SECTION 12 — CONSTRUCTION

          12.1. Governing Law. This Plan shall be construed and governed in accordance with
the laws of the Commonwealth of Pennsylvania, except to the extent preempted by the laws of the
United States of America.

          12.2. Compliance with Section 409A. This Plan shall at all times be administered and
the provisions of this Plan shall be interpreted consistent with the requirements of Section 409A
of the Code and any and all regulations thereunder.

          12.3. Gender. The masculine gender, where appearing in the Plan, shall be deemed to
include the feminine gender, and the singular may include the plural, unless the context clearly
indicates to the contrary.

          12.4. Headings, Etc. All headings used in this Plan are for convenience of reference
only and are not part of the substance of this Plan.

          IN WITNESS WHEREOF, this Plan, having been duly approved and adopted by the Board of Directors
of the Bank, is executed by the duly authorized officers of the Bank as of the Effective Date.exv10w6

Exhibit 10.6

SERP PARTICIPATION AGREEMENT — GROUP I

     THIS AGREEMENT, made as of the 1st day of January 2007, by and between Royal Bank America, a
Pennsylvania state-chartered bank (the “Bank”), and Robert Tabas, a key management employee of the
Bank (the “Participant”).

     The Agreement has been amended and restated, effective January 1, 2005, to incorporate changes
required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     The Agreement has been further amended and restated, effective January 1, 2007, to incorporate
certain changes to the Benefit calculation and to the Benefit distribution process.

RECITALS

     The Board of Directors of the Bank has adopted the Royal Bank America Supplemental Executive
Retirement Plan (the “Plan”) and has selected the Participant for participation in the Plan. This
SERP Agreement is entered into to evidence the Participant’s participation in the Plan and to set
forth the basis for determining the amount of his or her benefit tinder the Plan.

     NOW, THEREFORE, the Bank and the Participant hereby agree as follows:

     1. Incorporation of the Plan. The Plan (and all its provisions), as it now exists
and as it may be amended hereafter, is incorporated herein and made a part of this Agreement.
Participant acknowledges that he or she has received a copy of the Plan as amended through the date
hereof.

     2. Definitions. When used herein, terms that are defined in the Plan shall have the
meanings given them in the Plan unless a different meaning is clearly required by the context.

     3. No Interest Created. Neither the Participant nor his or her Beneficiary or other
persons claiming under him or her shall have any interest in any assets of the Bank, including
policies of insurance conferred by the Participant’s participation in the Plan. The Participant
and his or her Beneficiary shall have only the right to receive benefits under and subject to the
terms and provisions of the Plan and this SERP Agreement.

 

 

     4. Recognized Compensation. For purposes of the Plan and this SERP Agreement, the
Participant’s Recognized Compensation for each calendar year shall be equal to 100% of the
Participant’s salary for the calendar year plus 100% of the Participant’s bonus attributable to
such calendar year.

     5. Retirement Benefit. The percentage of High Average Recognized Compensation that
will be used to determine the Participant’s retirement benefit under Section 4 of the Plan is 50%
(fifty percent) of the Participant’s High Average Salary Compensation (subject to a maximum amount
of $185,000 per year) plus 25% of the Participant’s High Average Bonus Compensation (subject to a
maximum of $80,000 per year). Therefore, the maximum retirement benefit under this Paragraph 5 is
$265,000 per year.

     6. Survivor Benefit. The Participant’s survivor benefit under Section 5.1(a) of the
Plan is a monthly amount, payable for 12 months, equal to 100% of the Participant’s monthly
Recognized Compensation (one-twelfth of said Recognized Compensation). Thereafter, a monthly
amount payable for 48 months, equal to 50% of the Participant’s monthly Recognized Compensation.

     The Participant’s survivor benefit under Section 5.1(b) of the Plan is a monthly amount equal
to the monthly benefit the Participant would have been entitled to had the Participant retired on
the date of his death. The monthly benefit shall be payable to the Participant’s beneficiary for
120 months.

     7. Termination Benefit. If the Participant terminates employment with the Bank prior
to attaining his or her Early Retirement Date, other than by reason of death or Disability, the
Participant shall be entitled to 100% of his or her Accrued Benefit, payable commencing upon the
Participant’s attaining his or her Normal Retirement Date.

     8. Suicide. Notwithstanding any other term or provision of the Plan or this SERP
Agreement, the Plan and this SERP Agreement shall be void and of no force if the Participant dies
by reason of suicide within two years (2) years after the date of this Agreement, and in such event
no benefit of any kinds shall be payable hereunder to the Participant, his or her Beneficiary or
any other person claiming under the Participant.

 

 

     9. Condition to Payment. The Participant shall be deemed to have forfeited his or
her right to any payments under the Plan and this SERP Agreement if his or her employment with the
Bank terminates by reason of a Termination for Cause.

     10. Entire Agreement. This SERP Agreement contains the entire agreement and
understanding of the Bank and the Participant with respect to supplemental retirement, survivor,
termination and disability benefits and supersedes and replaces all prior agreements and
understanding, written or oral, with respect thereto.

     IN WITNESS WHEREOF, the parties have executed this SERP Agreement in duplicate originals on
the day and year first above written.

	 	 	 	 	 
	 	ROYAL BANK AMERICA

 	 
	 	By:  	/s/ James J. McSwiggan, Jr.
 	 
	 	 	James J. McSwiggan, Jr. 	 
	 	 	Chief Operating Officer 	 
	 
	 
	 	PARTICIPANT

 	 
	 	/s/ Robert R. Tabas
 	 
	 	Robert Tabas

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