--------------------------------------------------------------------------------

Exhibit 10.1

EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT, dated as of this 27th day of August, 2019 (the
“Effective Date”), by and between Severn Bancorp, Inc. and/or Severn Bank
(sometimes collectively referred to as “SVBI”), “collectively, the “Company” and
Vance W. Adkins (the “Executive”).
 
WHEREAS, SVBI wishes to employ Executive, as its Chief Financial Officer, on the
terms and conditions herein contained;
 
WHEREAS, the Executive wishes to commence or continue employment with SVBI on
the terms and subject to the conditions set forth herein.
 
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, the parties agree as follows:
 
1.           Employment and Duties. The Executive shall commence employment as
Chief Financial Officer of Severn Bancorp and Severn Bank (the “Position”) on
the terms and subject to the conditions of this Agreement. The Executive accepts
such employment and agrees to perform the managerial duties and responsibilities
customary of the Position. The Executive agrees to devote the necessary time and
attention on a full-time basis to the discharge of such duties and
responsibilities relating to the Position as are customary and as may be
assigned to the Executive by SVBI’s Chief Executive Officer and the Board of
Directors of SVBI, as appropriate, or their designees.
 
2.           Term. The Term (defined below) of this Agreement is effective as of
September 16, 2019, (“Effective Date”) and will continue for one year (the
“Initial Term”) or (ii) the date this Agreement otherwise terminates pursuant to
Section 6 below; provided, however, that at the end of the Initial Term, if this
Agreement has not been previously terminated pursuant to Section 6 below, this
Agreement shall be automatically extended for a one-year term (a “Renewal
Term”), commencing at the end of the Initial Term, unless either party gives
written notice of non-renewal no later than ninety (90) days prior to the end of
the Initial Term.  This Agreement shall continue to be further extended for an
additional one-year term at the end of each Renewal Term, unless either party
gives written notice of non-renewal no later than thirty (30) days prior to the
end of the applicable Renewal Term.  During the Initial Term or any Renewal
Term, this Agreement may be terminated at any time pursuant to Section 6 or
section below.  Upon the expiration or non-renewal of this Agreement at the end
of the Initial Term or any Renewal Term, the Company shall have no further
liability or obligations to the Executive, except as set forth herein.  The term
of this Agreement, including the Initial Term and all Renewal Terms, if any, is
referred to herein as the “Term.”
 
3.           Compensation.
 
(a)          Base Salary.  The Executive will be paid an annual base salary as
determined by the Board of Directors of SVBI or its Compensation Committee (the
“Compensation Committee”), which total base salary, however, shall not be less
than $240,000 per year, subject to all applicable withholdings.  The base salary
shall be paid in approximately equal installments to the Executive in accordance
with established payroll practices of the Company (but no less frequently than
monthly).

--------------------------------------------------------------------------------

(b)          Annual Incentive. During the Term, the Executive will be eligible
to participate in any annual incentive plan, if any, applicable to Severn Bank
executives and approved by the Board of Directors of SVBI and to be paid in
accordance with the terms of such plan. Any incentive payments due hereunder
shall be payable to the Executive on a date determined by The Compensation
Committee but in no event later than three (3) months following the end of the
applicable calendar year.  The annual incentive shall also be referred to herein
as a “bonus.”
 
(c)        Stock Compensation.  The Executive shall be eligible to participate
to the extent and in the manner provided and to receive equity-based awards
under any equity plan established by SVBI in accordance with the terms of such
plan, as the Compensation Committee may determine, and which terms may be
modified in the discretion of the Compensation Committee.
 
(d)          Clawback. The Executive agrees that any incentive compensation
(including both equity and cash incentive compensation) that Executive receives
from Severn Bank or the Company is subject to repayment (i.e., clawback) to the
Company or a related entity as determined by the Compensation Committee in the
event (i) a restatement of the Company’s financial results (other than a
restatement caused by a change in applicable accounting rules or
interpretations), the result of which is that the financial statements were
materially inaccurate and any incentive compensation paid would have been a
materially lower amount had it been calculated based on such restated results or
(ii) the repayment is otherwise required by applicable federal or state law or
regulation or stock exchange requirement, or as set forth on a separate
“clawback” policy, as may be adopted from time to time by the SVBI Board of
Directors.  Except where offset of, or recoupment from, incentive compensation
covered by Code Section 409A (as defined in Section 19) is prohibited by Code
Section 409A, to the extent allowed by law and as determined by the Compensation
Committee, the Executive agrees that such repayment may, in the discretion of
the Compensation Committee, be accomplished by withholding of any unvested
equity or future compensation to be paid to the Executive by the Company. Any
recovery of incentive compensation covered by Code Section 409A shall be
implemented in a manner which complies with Code Section 409A.
 
4.           Benefit Plans.  The Executive shall be eligible to participate in
any benefit plans or programs that the Company provides to the class of
employees that includes the Executive, on a basis not less favorable than that
provided to such class of employees.
 
5.           Reimbursement of Expenses.  Executive shall be reimbursed upon
Executive’s incurring reasonable and approved business expenses in connection
with the performance of his duties, subject to presentation of adequate
substantiation, including receipts, for the reasonable business travel,
entertainment, lodging, and other business expenses incurred by the Executive. 
The Company reserves the right to review these expenses and determine, in its
sole discretion, whether to approve the expense and whether future reimbursement
of such expenses to the Executive will continue without prior approval by the
Boards of Directors of SVBI or their designees.  All requests for reimbursement
shall be submitted by Executive within sixty (60) days of incurring any
reimbursable expense, and payment shall be made within thirty (30) days of
submittal of such request(s).

--------------------------------------------------------------------------------

6.           Termination of Employment.
 
(a)          Death or Incapacity. The Executive’s employment under this
Agreement shall terminate automatically upon the Executive’s death. The
Executive’s spouse, if she survives the Executive, or, if not, the Executive’s
estate shall receive (A) any unpaid base salary for time worked through the date
of termination payable in a lump sum as soon as administratively feasible
following termination, but not later than 60 days thereafter; (B) any incentive
or annual bonus compensation earned during the calendar year preceding the
calendar year of termination, but not yet paid as of the date of termination,
payable on the earlier of (i) the thirtieth (30th) day after the date of
termination, or (ii) when otherwise due; (C) any benefits or awards vested, due
and owing pursuant to the terms of any other plans, policies or programs,
payable when otherwise due (hereinafter subsections (A) – (C) collectively are
referred to as the “Accrued Obligations”). If the Company determines that
Incapacity, as hereinafter defined, of the Executive has occurred, it may
terminate the Executive’s employment and this Agreement upon thirty (30) days’
written notice, provided that, within thirty (30) days after receipt of such
notice, the Executive shall not have returned to full-time performance of the
Executive’s assigned duties. In the event of a termination due to Incapacity,
the Company shall pay the Accrued Obligations to the Executive. For purposes of
this Agreement, “Incapacity” shall occur if the Company determines that the
Executive is suffering a physical or mental impairment that renders the
Executive unable to perform the essential functions of the Position, and such
impairment exists for six months within any twelve-month period. 
Notwithstanding any other provision in this Agreement, SVBI shall comply with
all requirements of the Americans with Disabilities Act.  Further, if the
Executive’s employment is terminated due to death or “Incapacity,” then no
payments (other than the Accrued Obligations under this Section 6(a)) shall be
owed or paid under Section 7(a) or Section 9(a).
 
(b)          Termination by Company With or Without Cause. Severn Bank may
terminate the Executive’s employment during the term of this Agreement, with or
without Cause. For purposes of this Agreement, “Cause” shall mean:
 
(i)         the Executive’s willful misconduct in connection with the
performance of the Executive’s duties;
 
(ii)        the Executive’s misappropriation or embezzlement of funds or
material property of the Company;
 
(iii)       the Executive’s fraud or dishonesty with respect to the Company;
 
(iv)      the Executive’s failure to perform any of the material duties and
responsibilities required by the Position (other than by reason of Incapacity),
including but not limited to meeting the material performance expectations of
the Company, as communicated to Executive in writing, or the Executive’s failure
to follow reasonable instructions or policies of the Company, in either case
after being advised in writing of such failure and being given a reasonable
opportunity and period (as determined by the Board in its reasonable business
judgment) to remedy such failure, which period shall be not less than thirty
(30) days;

--------------------------------------------------------------------------------

(v)         the Executive’s conviction of, indictment for (or the procedural
equivalent), or entering of a guilty plea or plea of no contest with respect to
any felony or any misdemeanor involving moral turpitude; or
 
(vi)       the Executive’s conviction of or entering a guilty plea of no contest
with respect to any crime for which he receives imprisonment as a punishment;
 
(vii)      the Executive’s breach of a material term of this Agreement, or
violation in any material respect of any policy, code or standard of behavior
generally applicable to officers of the Company, after being advised in writing
of such breach or violation and being given a reasonable opportunity and period
(as determined by the Board in its reasonable business judgment) to remedy such
breach or violation (if such breach or violation is deemed by the Board to be
capable of being remedied) which period shall be not less than thirty (30) days;
 
(viii)     the Executive’s material breach of fiduciary duties owed to the
Company; or
 
(ix)       the Executive’s engaging in conduct that, if it became known by any
regulatory or governmental agency or the public, would be or is reasonably
likely to result in the good faith judgment of the Board, in injury to the
Company, monetarily or otherwise.
 
(c)         Termination by Executive for Good Reason. The Executive may
terminate
employment for Good Reason.  For purposes of this Agreement, “Good Reason” shall
mean:
 
(i)          a material reduction in the Executive’s base salary; or
 
(ii)        a permanent demotion of the Executive and diminution in duties that
requires Executive to perform continued duties materially inconsistent with the
Executive’s Position, authority, duties or responsibilities as contemplated by
Section 1 hereof; or
 
(iii)       the relocation of the Executive to any other primary place of
employment more than 50 miles from the Company headquarters in Annapolis,
Maryland, without the Executive’s express written consent to such relocation; or
 
(iv)       a material breach of this Agreement by the Company.
 
The Executive is required to provide notice to the Company of the existence of a
condition described in Section 6(c) above within a sixty (60) day period after
the initial existence of the condition, and the Company shall have thirty (30)
days after notice to remedy the condition without liability.  To trigger payment
under this Section, the Executive must also terminate employment within 180 days
after the occurrence of the event constituting “Good Reason.”
 
Notwithstanding the above, “Good Reason” shall not include any resignation by
the Executive where Cause for the Executive’s termination by the Company exists,
or an isolated, insubstantial or inadvertent action by the Company.

--------------------------------------------------------------------------------

7.            Obligations Upon Termination.
 
(a)         Without Cause; Good Reason. If, during the Term, the Company shall
terminate the Executive’s employment without Cause (which shall not include the
cessation of employment as a result of the non-renewal or expiration of the
Agreement) or the Executive shall terminate employment for Good Reason, the
Executive shall be entitled to the Accrued Obligations (as defined in Section 6
(a)) and, upon Executive’s signing the Release attached as Exhibit A, which
Release must be signed and not revoked within the period set forth in the
Release, subject to any applicable delay under Section 19, the Executive shall
also be entitled to the following benefits:
 
(i)          If termination takes place during Executive’s first year of
employment, payment of an amount equal to three (3) months of the Executive's
base salary, payable in a one-time lump sum at termination of employment. 
However, the Company shall have a right to delay payment in its sole discretion
for a sixty (60) period following termination or if payment would be prohibited
by applicable law (but only until the payment is no longer prohibited), each in
accordance with the requirements of Code Section 409A.  If termination takes
place following one year of employment, then payment of an amount equal to six
(6) months base salary shall be paid in the same fashion as above described.
 
(ii)        For twelve (12) months after the date of termination, the Executive
shall receive coverage under all employee health insurance programs or plans
(medical, dental and vision) (“Health Care Plans”) in which the Executive and/or
his spouse and any of his dependents were entitled to participate immediately
prior to such termination, with the Company paying the lesser of (A) the dollar
amount of premium that the employer paid immediately prior to the termination of
employment without regard to any subsequent increase in premium otherwise due or
(B) the employer portion of the premium due for the coverage actually provided
(the “Heath Care Continuance Benefit”), provided that the continued
participation of the Executive and/or his spouse and any of his dependents is
possible under the general terms and provisions of the Health Care Plans.  If
the Company cannot maintain such coverage for the Executive or his spouse or
dependents under the terms and provisions of the Health Care Plans (or where
such continuation would adversely affect the tax status of the Health Care Plans
pursuant to which the coverage is provided), the Company shall provide the
Health Care Continuance Benefit by either providing substantially identical
benefits directly, or through an insurance arrangement, or by paying Executive
the above amount for twelve-months (12) months after the date of termination
with such payments to be made in accordance with the Company's established
payroll practices (but no less frequently than monthly) for employees generally
for the period during which such cash payments are to be provided.  To the
extent allowed by applicable law, the 12-month Health Care Continuance Benefit
period shall run concurrently with the period for which the Executive and/or his
spouse and any of his dependents would be eligible for continuation coverage
under the Consolidated Omnibus Reconciliation Act of 1985 (the “COBRA Period”).
 
(iii)        Notwithstanding the foregoing, and in addition to the Employer’s
remedies set forth in Section 7(f), all such payments and benefits under Section
7(a) otherwise to be made after Executive’s termination of employment shall
cease to be paid, and the Employer shall have no further obligation with respect
thereto, in the event Executive, without the consent of the Employer, engages in
any activity prohibited in Section 7 or any of its sub-parts or breaches Section
8.

--------------------------------------------------------------------------------

(b)         Non-Competition.  Notwithstanding the foregoing, all such payments
and benefits under Section 7(a) otherwise to be made after the Executive’s
termination of employment shall cease to be paid, and the Company shall have no
further obligation with respect thereto, in the event the Executive engages in
any activity prohibited in Section 7.  In exchange for the payments on
termination as provided herein, other provisions of this Agreement and other
valuable consideration, the Executive agrees that the Executive will not engage
in Competition for a period of twelve (12) months after the Executive’s
employment with Severn Bank ceases for any reason under which payment would be
due under Section 7(a) (including if payment is not actually made due to the
failure of the Executive to execute and not revoke the Release required
therein).  For purposes hereof, “Competition” means the Executive’s performing
duties that are the same as or substantially similar to those duties performed
by Executive for Severn Bank within twelve (12) months of the cessation of
Executive’s employment, as an officer, a director, an employee, a partner or in
any other capacity, within twenty-five (25) miles of the headquarters of Severn
Bank (or any Maryland headquarters of any successor of any of them) in the event
of a merger consummated as of the last day of employment) or within ten (10)
miles of any branch office of Severn Bank (or any successor - as to its Maryland
branches only) in the event of a merger consummated as of the last day of
employment, as such locations exist as of the date Executive’s employment
ceases, if those duties are performed for a bank of other financial institution
that provides products or services that are the same as or substantially similar
to, and competitive with, any of the products or services provided by Severn
Bank at the time Executive’s employment ceases.
 
(c)          Non-Piracy.  In exchange for the benefits promised in this
Agreement and other valuable consideration, the Executive agrees that for a
period of twelve (12) months after Executive’s employment ceases for any reason,
including the expiration or nonrenewal of this Agreement at the end of the
Initial Term or any Renewal Term, Executive will not, directly or indirectly,
solicit, divert from Severn Bank, or transact business with any “Customers” of
the Bank with whom Executive had “Material Contact” during the last twelve (12)
months of the Executive’s employment or about whom the Executive obtained
information not known generally to the public while acting within the scope of
his employment during the last twenty-four months (24) of employment, if the
purpose of such solicitation, diversion or transaction is to provide products or
services that are the same as or substantially similar to those offered by
Severn Bank at the time Executive’s employment ceases.  “Material Contact” means
that Executive personally communicated with the Customer, either orally or in
writing, for the purpose of providing, offering to provide or assisting in
providing products or services of Severn Bank. “Customer” means any person or
entity with whom Severn Bank (or any subsidiary or division) had a depository or
other contractual relationship, pursuant to which Severn Bank or any subsidiary
or division provided products or services within twenty-four months (24) prior
to the cessation of Executive’s employment.
 
(d)         Non-Solicitation. In exchange for the benefits promised in this
Agreement and other valuable consideration, the Executive agrees that for a
period of twelve (12) months after employment ceases, for any reason, including
the expiration or nonrenewal of this Agreement at the end of the Initial Term or
any Renewal Term.  Executive will not, directly or indirectly, hire any person
employed by the Company or solicit for hire or induce any person to terminate
their employment with the Company, if the purpose is to compete with the
Company.

--------------------------------------------------------------------------------

(e)         For Cause; Other Than for Good Reason. If the Executive’s employment
is terminated for Cause or if the Executive terminates employment other than for
Good Reason, this Agreement shall terminate without any further obligation of
the Company to the Executive other than the payment to the Executive of the
Accrued Obligations.
 
(f)           Remedies. The Executive acknowledges that the covenants set forth
in
 
Sections 7 and 8 of this Agreement are just, reasonable, and necessary to
protect the legitimate business interests of SVBI.  The Executive further
acknowledges that if the Executive breaches or threatens to breach any provision
of Sections 7 and 8, SVBI’s remedies at law will be inadequate, and SVBI will be
irreparably harmed.  Accordingly, the Company shall be entitled to an
injunction, both preliminary and permanent, restraining the Executive from such
breach or threatened breach, such injunctive relief not to preclude the Company
from pursuing all available legal and equitable remedies and being entitled to
all reasonable attorney’s fees and costs incurred in connection with the breach,
threatened breach, or any challenge to the enforceability of Sections 7 or 8.
 
(g)          Breach does not excuse performance. Executive agrees that a breach
by
SVBI of any provision of this Agreement (other than a breach of Section 3 or 4)
shall not excuse Executive’s obligation to adhere to the covenants in Sections 7
and 8 and shall not constitute a defense to the enforcement thereof by the
Company.
 
8.          Confidentiality. As an employee of SVBI, the Executive will have
access to and may participate in the origination of non-public, proprietary and
confidential information relating to SVBI, and/or its affiliates and
subsidiaries, and the Executive acknowledges a fiduciary duty owed to SVBI and
its affiliates and subsidiaries not to disclose impermissibly any such
information. Confidential information may include, but is not limited to, trade
secrets, customer lists and information, internal corporate planning, methods of
marketing and operation, and other data or information of or concerning SVBI,
its affiliates and subsidiaries or their customers that is not generally known
to the public or generally in the banking industry. The Executive agrees that
for a period of five (5) years following the cessation of employment, Executive
will not use or disclose to any third party any such confidential information,
either directly or indirectly, except as may be authorized in writing
specifically by SVBI; provided, however, that to the extent the information
covered by this Section 8 is otherwise protected by the law, such as “trade
secrets,” as defined by the Maryland Uniform Trade Secrets Act, or customer
information protected by banking privacy laws, that information shall not be
disclosed or used for however long the legal protections applicable to such
information remain in effect.
 
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
the Executive from performing any duty or obligation that shall arise as a
matter of law. Specifically, the Executive shall continue to be under a duty to
truthfully respond to any legal and valid subpoena or other legal process. This
Agreement is not intended in any way to proscribe the Executive’s right and
ability to provide information to any federal, state or local agency in
connection with the lawful exercise of such agency’s authority. In the event the
Executive is requested to disclose confidential information by subpoena or other
legal process or lawful exercise of authority, the Executive shall promptly
provide SVBI with notice of the same and either receive approval from SVBI to
make the disclosure or cooperate with SVBI in SVBI’'s effort, at its sole
expense, to avoid disclosure.

--------------------------------------------------------------------------------

Federal law provides certain protections to individuals who disclose a trade
secret to their attorney, a court, or a government official in certain,
confidential circumstances.  Specifically, federal law provides that an
individual shall not be held criminally or civilly liable under any federal or
state trade secret law for the disclosure of a trade secret under either of the
following conditions:
 

●
Where the disclosure is made (A) in confidence to a federal, state or local
government official, either directly or indirectly, or to an attorney; and (B)
solely for the purpose of reporting or investigating a suspected violation of
law; or

 

●
Where the disclosure is made in a complaint or other document filed in a lawsuit
or other proceeding, if such filing is made under seal.

 
Federal law also provides that an individual who files a lawsuit for retaliation
by an employer for reporting a suspected violation of law may disclose the trade
secret to the attorney of the individual and use the trade secret information in
the court proceeding, if the individual (A) files any document containing the
trade secret under seal; and (B) does not disclose the trade secret, except
pursuant to court order.

9.            Termination After Change of Control.
 
(a)          Without Cause or for Good Reason. If Executive’s employment is
involuntarily terminated without Cause within one (1) year after a Change of
Control shall have occurred or if the Executive resigns for Good Reason within
one (1) year after a Change of Control shall have occurred, then SVBI shall pay
to Executive as compensation for services rendered (subject to any applicable
payroll or other taxes required to be withheld), (i) the Accrued Obligations and
(ii) following Executive’s signing, delivering and not revoking the Release
attached as Exhibit A, which Release must be signed, delivered and not revoked
within the period set forth in the Release, payment or severance therein, the
following:
 
(i)           If Change of Control takes place within the first year of
Executive’s employment an amount equal to twelve (12) months of the Executive’s
base salary as in effect at the time of termination, payable in thirty-six (36)
equal semi-monthly installments beginning on the first regular payroll date
following the signing and non-revocation of the Release.  If Change of Control
takes place more than twelve (12) months after commencement of Executive’s
employment, the amount shall be eighteen (18) months of the Executive’s base
salary, paid in the same fashion as above described.
 
(ii)         Payment of an amount equal to the product of twelve (12) times the
monthly rate of the Bank’s subsidy for coverage in its medical, dental and
vision plans for active employees (including any applicable coverage for spouses
and dependents) in effect on the date of termination, made in a lump sum on the
first regular payroll date following the signing and non-revocation of the
Release.

--------------------------------------------------------------------------------

(b)          It is the intention of the parties that no payment be made or
benefit provided to the Executive pursuant to this Agreement or any other
agreement between the Executive and the Company or SVBI that would constitute an
“excess parachute payment” within the meaning of Section 280G of the Internal
Revenue Code and any regulations thereunder (“Code Section 280G”), thereby
resulting in a loss of an income tax deduction by SVBI or the imposition of an
excise tax on Executive under Section 4999 of the Internal Revenue Code.  If the
independent accountants serving as auditors for the Company  on the date of a
Change of Control within the meaning of Code Section 280G (or any other
accounting firm designated by SVBI) determine that some or all of the payments
or benefits scheduled under this Agreement, as well as any other payments or
benefits on such Change of Control, would be nondeductible by SVBI under Code
Section 280G, then the payments scheduled under this Agreement and all other
agreements between the Executive and SVBI will be reduced to one dollar less
than the maximum amount which may be paid without causing any such payment or
benefit to be nondeductible. The determination made as to the reduction of
benefits or payments required hereunder by the independent accountants shall be
binding on the parties.
 
Superseding Provisions. The benefits and payments set forth in Section 9(a) that
may be due in connection with a Change of Control shall supersede all payments,
entitlements and benefits of Executive otherwise payable under Section 7(a)(i),
(ii) and (iii). The benefits and payments due under Section 9(a) replace those
in Section 7(a)(i), (ii) and (iii), and are not cumulative thereof.
 
(c)          For Cause; Other Than for Good Reason. If the Executive’s
employment is terminated for Cause or if the Executive voluntarily terminates
his employment other than for Good Reason, within one (1) year after a Change of
Control, this Agreement shall terminate without any further obligation of the
Company to the Executive other than the payment to the Executive of the Accrued
Obligations.
 
10.         Change of Control Defined. For purposes of this Agreement, other
than Section 9(b), a “Change of Control” occurs if, after the Effective Date,
(i) any person, including persons acting as a group, as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, becomes the owner or beneficial
owner of SVBI securities having 50% or more of the combined voting power of the
then outstanding SVBI securities that may be cast for the election of SVBI’s
directors other than a result of an issuance of securities initiated by SVBI or
open market purchases approved by the Board of Directors of SVBI as long as the
majority of the Board of Directors of SVBI approving the purchases is a majority
at the time the purchases are made; (ii) during any 12-month period, as the
direct or indirect result of, or in connection with, a tender or exchange offer,
a merger or other business combination, a sale of assets, a contested election
of directors, or any combination of these events, the persons who were directors
of SVBI before such events cease to constitute a majority of the Board of
Directors of SVBI as applicable, or any successor’s board; or (iii) any person,
including persons acting as a group, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) assets from SVBI that have a total gross fair market value equal to
or more than 50% of the total gross fair market value of all of the assets of
SVBI, immediately before such acquisition or acquisitions. For purposes of this
Agreement, a Change of Control occurs on the date on which an event described in
(i) – (iii) occurs. If a Change of Control occurs on account of a series of
transactions or events, the Change of Control occurs on the date of the last of
such transactions or events. The above definition of Change of Control is
intended to, and shall be interpreted in a manner as to, comply with the
requirements of Code Section 409A.
 
11.        Documents. All documents, records, tapes and other media of any kind
or description relating to the business of SVBI or any of its subsidiaries (the
“Documents”), whether or not prepared by the Executive, shall be the sole and
exclusive property of SVBI. The Documents (and any copies) shall be returned to
SVBI upon the Executive’s termination of employment for any reason or at such
earlier time or times as the Board of Directors of SVBI or its designee may
specify.
 

--------------------------------------------------------------------------------

12.          Severability. If any provision of this Agreement, or part thereof,
is determined to be unenforceable for any reason whatsoever, it shall be
severable from the remainder of this Agreement and shall not invalidate or
affect the other provisions of this Agreement, which shall remain in full force
and effect and shall be enforceable according to their terms. No covenant shall
be dependent upon any other covenant or provision herein, each of which stands
independently.
 
13.          Modification. The parties expressly agree that should a court find
any provision of this Agreement, or part thereof, to be unenforceable or
unreasonable, the court may modify the provision, or part thereof, in a manner
which renders that provision reasonable, enforceable, and in conformity with the
public policy of Maryland.
 
14.          Governing Law/Venue. This Agreement shall be governed by and
construed in accordance with the laws of Maryland.  The parties further agree
that venue in the event a dispute not otherwise governed by arbitration pursuant
to Section 21, shall be exclusively in the Circuit Court of Anne Arundel County,
or the applicable federal court for that County, at the sole option of SVBI, and
Executive agrees not to object to venue.
 
15.          Notices. All written notices required by this Agreement shall be
deemed given when delivered personally or sent by registered or certified mail,
return receipt requested, to the parties at their addresses set forth on the
signature page of this Agreement. Each party may, from time to time, designate a
different address to which notices should be sent.
 
16.          Amendment. This Agreement may not be varied, altered, modified or
in any way amended except by an instrument in writing executed by the parties
hereto or their legal representatives.
 
17.          Binding Effect. This Agreement shall be binding upon the Executive
and on SVBI, or its successors and assigns, on the Effective Date subject to the
approval by the Boards of Directors of SVBI, will require any successor to all
or substantially all of the business and/or assets of SVBI to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that SVBI would be required to perform it if no such succession had taken place.
This Agreement shall be freely assignable by SVBI.
 
18.         No Construction Against Any Party. This Agreement is the product of
informed negotiations between the Executive and SVBI. If any part of this
Agreement is deemed to be unclear or ambiguous, it shall be construed as if it
were drafted jointly by all parties. The Executive and SVBI agree that neither
party was in a superior bargaining position regarding the substantive terms of
this Agreement.
 
19.          Code Section 409A Compliance.
 
(a)         The intent of the parties is that payments and benefits under this
Agreement comply with Section 409A of the Internal Revenue Code of 1986, as
amended, and applicable guidance thereunder (“Code Section 409A”) or comply with
an exemption from the application of Code Section 409A and, accordingly, all
provisions of this Agreement shall be construed in a manner consistent with the
requirements for avoiding taxes or penalties under Code Section 409A.

--------------------------------------------------------------------------------

(b)          Neither the Executive nor SVBI shall take any action to accelerate
or delay the payment of any monies and/or provision of any benefits in any
matter which would not be in compliance with Code Section 409A.
 
(c)          A termination of employment shall not be deemed to have occurred
for purposes of any provision of this Agreement providing for the form or timing
of payment of any amounts or benefits upon or following a termination of
employment unless such termination is also a “separation from service” (within
the meaning of Code Section 409A) and, for purposes of any such provision of
this Agreement under which (and to the extent) deferred compensation subject to
Code Section 409A is paid, references to a “termination” or “termination of
employment” or like references shall mean separation from service. A “separation
from service” shall not occur under Code Section 409A unless such Executive has
completely severed Executive’s relationship with SVBI or the Executive has
permanently decreased Executive’s services to twenty percent (20%) or less of
the average level of bona fide services over the immediately preceding
thirty-six (36) month period (or the full period if the Executive has been
providing services for less than thirty-six (36) months). A leave of absence
shall only trigger a termination of employment that constitutes a separation
from service at the time required under Code Section 409A. If the Executive is
deemed on the date of separation from service with SVBI to be a “specified
employee”, within the meaning of that term under Code Section 409A(a)(2)(B) and
using the identification methodology selected by SVBI from time to time, or if
none, the default methodology, then with regard to any payment or benefit that
is required to be delayed in compliance with Code Section 409A(a)(2)(B), such
payment or benefit shall not be made or provided prior to the earlier of (i) the
expiration of the six-month period measured from the date of the Executive’s
separation from service or (ii) the date of the Executive’s death. In the case
of benefits required to be delayed under Code Section 409A, however, the
Executive may pay the cost of benefit coverage, and thereby obtain benefits,
during such six-month delay period and then be reimbursed by SVBI thereafter on
the first day of the seventh month following the date of the Executive’s
separation from service or, if earlier, on the date of the Executive’s death,
all payments delayed pursuant to this Section 19(c) (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein.
If any cash payment is delayed under this Section 20(c), then interest shall be
paid on the amount delayed calculated at the prime rate reported in The Wall
Street Journal for the date of the Executive’s termination to the date of
payment.
 
(d)          With regard to any provision herein that provides for reimbursement
of expenses or in-kind benefits subject to Code Section 409A, except as
permitted by Code Section 409A, (i) the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit, and (ii)
the amount of expenses eligible for reimbursement, or in-kind benefits, provided
during any taxable year shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year,
provided that the foregoing clause (ii) shall not be violated with regard to
expenses reimbursed under any arrangement covered by Code Section 105(b) solely
because such expenses are subject to a limit related to the period the
arrangement is in effect. All reimbursements shall be reimbursed in accordance
with SVBI’s reimbursement policies but in no event later than the calendar year
following the calendar year in which the related expense is incurred.

--------------------------------------------------------------------------------

(e)          If under this Agreement, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each installment shall be
treated as a separate payment. In the event any payment payable upon termination
of employment would be exempt from Code Section 409A under Treas. Reg. §
1.409A-1(b)(9)(iii) but for the amount of such payment, the determination of the
payments to the Executive that are exempt under such provision shall be made by
applying the exemption to payments based on chronological order beginning with
the payments paid closest in time on or after such termination of employment.
 
(f)          When, if ever, a payment under this Agreement specifies a payment
period with reference to a number of days (e.g., “payment shall be made within
ten (10) days following the date of termination”) or a period of time following
termination of employment, the actual date of payment within the specified
period shall be within the sole discretion of SVBI and, if any specified period
covers two calendar years, payment shall be made in the second calendar year.
 
(g)         Notwithstanding any of the provisions of this Agreement, the
Executive shall be solely liable, and SVBI shall not be liable in any way to the
Executive if any payment or benefit which is to be provided pursuant to this
Agreement and which is considered deferred compensation subject to Code Section
409A otherwise fails to comply with, or be exempt from, the requirements of Code
Section 409A.
 
20.         Regulatory Limitation. Notwithstanding any other provision of this
Agreement, neither SVBI nor any subsidiary shall be obligated to make, and the
Executive shall have no right to receive, any payment, benefit or amount under
this Agreement that would violate any law, regulation or regulatory order
applicable to SVBI or any subsidiary at the time such payment is due, including
without limitation, any regulation or order of the Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency, or the Board of
Governors of the Federal Reserve System.
 
21.          Arbitration Disputes.
 
(a)          Agreement to Arbitrate.  Any dispute regarding, relating to, or
arising in connection with the employment of the Executive by the Company (other
than claims for workers’ compensation, unemployment insurance, administrative
claims before the National Labor Relations Board, the Equal Employment
Opportunity Commission , or any other parallel state or local agency, claims
which relate to or arise out of an alleged breach of Section 7(b)-(g) of this
Agreement, or any matter expressly exempted from arbitration by law), or
regarding the interpretation, enforcement, or alleged violation of this
Agreement, shall be resolved exclusively by final and binding arbitration in the
state of Maryland, pursuant to the Employment Arbitration Rules of the American
Arbitration Association, upon a request submitted in writing within thirty (30)
days from the date that the dispute first arose or within thirty (30) days from
the effective date of the Executive’s termination of employment with the
Company, whichever date is earlier; provided, however, that  if the Executive’s
claim arose under a statute providing for a longer time to file a claim, then
that statute shall govern.  The Executive understands and acknowledges that he
will not be allowed to bring his claim before a court or a jury, but that it
will be heard solely in arbitration.  Further, the Executive or the Company may
demand arbitration of any such dispute upon written notice to the other, sent by
certified mail with return receipt requested, which notice shall include a
detailed description of the dispute, a statement of the date the dispute first
arose, and a statement of the relief requested. Any failure to timely demand
arbitration shall constitute a waiver of all rights to raise or present any
claims in any forum arising out of any dispute that was subject to arbitration. 
The limitations period set forth in this Section shall not be subject to
tolling, equitable or otherwise.
 

--------------------------------------------------------------------------------

(b)         Selection of Arbitrator.  All disputes that are subject to
arbitration shall be resolved by a final and binding arbitration which shall be
conducted by a single arbitrator to be selected as follows:  the Executive and
the Company will obtain a list of five arbitrators from the American Arbitration
Association, each of whom will have experience in arbitrating employment
disputes.  Upon receipt of this list, the Executive and the Company will each
strike from the list two arbitrators, leaving the remaining arbitrator as the
parties’ decision maker, unless the parties mutually agree to an otherwise
acceptable arbitrator.  The Executive shall be the first to strike two
arbitrators from the list.  The arbitration hearing shall be held in Anne
Arundel County, Maryland at a neutral location selected by the parties or, in
the event the parties are unable to agree, at a location designated by the
arbitrator.
 
(c)          Authority of Arbitrator.  The arbitrator shall only be authorized
to exercise the powers specifically enumerated by this section and to decide the
dispute in accordance with governing principles of law and equity.  The
arbitrator shall have no authority to modify the powers granted by the terms of
this section or to modify the terms of this Agreement, except as required by
law.  The arbitrator shall have the authority to rule on motions by the parties,
to issue protective orders upon motion of any party or third party, and to
determine only the disputes submitted by the parties based upon the grounds
presented.  Any dispute or argument not presented by the parties is outside the
scope of the arbitrator’s jurisdiction and any award invoking such disputes or
arguments is subject to a motion to vacate; provided, however, the arbitrator
shall have exclusive authority to resolve any dispute relating to the validity,
interpretation, and enforcement of this Agreement.
 
(d)         Opinion and Award.  The arbitrator shall issue a written opinion and
award.  The arbitrator’s opinion and award must be signed and dated, and shall
be issued within ninety (90) days of closing arguments or the receipt of post
hearing briefs, whichever is later.  The arbitrator’s opinion and award shall
decide all issues submitted.  The arbitrator’s opinion and award shall set forth
the legal principles supporting each part of the opinion.  The arbitrator shall
only be permitted to award those remedies in law or equity which are requested
by the parties and which he determines to be supported by the credible, relevant
evidence.
 
(e)          Enforcement of the Arbitrator’s Award.  The opinion and award of
the arbitrator shall be final and binding on the parties, and it may be
confirmed, enforced, corrected, or vacated by either party only to the extent
authorized by applicable law.
 
(f)          Fees and Costs.  Each party shall be responsible for its own
attorney’s fees, except as provided by law, and for all costs associated with
discovery unless otherwise ordered by the arbitrator.  Each party shall also be
responsible for one-half of the arbitrator’s fee and one-half of any costs
associated with the facilities for the arbitration hearing.
 

--------------------------------------------------------------------------------

22.          Entire Agreement. Except as otherwise provided herein, this
Agreement constitutes the entire agreement of the parties with respect to the
matters addressed herein and, upon the Effective Date, it supersedes all other
prior agreements and understandings, both written and oral, express or implied,
with respect to the subject matter of this Agreement. It is further specifically
agreed and acknowledged that, except as provided herein, the Executive shall not
be entitled to severance payments or benefits under any severance or similar
plan, program, arrangement or agreement of the Company for any cessation of
employment occurring while this Agreement is in effect.
 
23.          Survivability. The provisions of Section 7 and 8 shall survive the
termination, expiration or non-renewal of this Agreement.
 
24.          Title. The titles and sub-headings of each Section and Sub-Section
in the Agreement are for convenience only and should not be considered part of
the Agreement to aid in interpretation or construction.
 
Signature Block on Next Page

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written herein.

 
Severn Bancorp, Inc. and Severn Bank
   
Date: August 27, 2019
By: /s/ Alan J. Hyatt
 
Alan J. Hyatt, President

 
EXECUTIVE
   
Date: August 27, 2019
/s/ Vance W. Adkins
 
Vance W. Adkins

 

--------------------------------------------------------------------------------

EXHIBIT A

RELEASE
 
In consideration of the benefits promised in the Employment Agreement, Vance W.
Adkins (“Executive”), hereby irrevocably and unconditionally releases, acquits,
and forever discharges Severn Bancorp, Inc. and its subsidiary and affiliated
companies and each of their agents, directors, members, shareholders, affiliated
entities, officers, employees, former employees, attorneys, and all persons
acting by, through, under, or in concert with any of them collectively
“Releases” from any and all charges, complaints, claims, liabilities,
grievances, obligations, promises, agreements, controversies, damages, policies,
actions, causes of action, suits, rights, demands, costs, losses, debts and
expenses of any nature whatsoever, known or unknown, suspected or unsuspected,
including, but not limited to, any rights arising out of alleged violations or
breaches of any contracts, express or implied, or any tort, or any legal
restrictions on Releasees’ right to terminate employees, or any federal, state
or other governmental statute, regulation, law or ordinance, including without
limitation  (1) Title VII of the Civil Rights Act of 1964, as amended by the
Civil Rights Act of 1991; (2) the Americans with Disabilities Act; (3) 42 U.S.C.
§ 1981; (4) the federal Age Discrimination in Employment Act (age
discrimination); (5) the Older Workers Benefit Protection Act; (6) the Equal Pay
Act; (7) the Family and Medical Leave Act; and (8) the Employee Retirement
Income Security Act (“ERISA”) (“Claim” or “Claims”), which Executive now has,
owns or holds, or claims to have, own or hold, or which Executive at any time
heretofore had owned or held, or claimed to have owned or held, against each or
any of the Releasees at any time up to and including the date of the execution
of this Release.
 
Executive hereby acknowledges and agrees that the execution of this Release and
the cessation of Executive’s employment and all actions taken in connection
therewith are in compliance with the federal Age Discrimination in Employment
Act and the Older Workers Benefit Protection Act and that the releases set forth
above shall be applicable, without limitation, to any claims brought under these
Acts.  Executive further acknowledges and agrees that:
 
a.          The Release given by Executive is given solely in exchange for the
benefits set forth in the Employment Agreement between SVBI and Executive to
which this Release was initially attached and such consideration is in addition
to anything of value which Executive was entitled to receive prior to entering
into this Release;
 
b.            By entering into this Release, Executive does not waive rights or
claims that may arise after the date this Release is executed;
 
c.            Executive has been advised to consult an attorney prior to
entering into this Release, and this provision of the Release satisfies the
requirements of the Older Workers Benefit Protection Act that Executive be so
advised in writing;
 
d.            Executive has been offered twenty-one (21) days (or 45 days if
applicable) from receipt of this Release within which to consider whether to
sign this Release; and

--------------------------------------------------------------------------------

e.            For a period of seven (7) days following Executive’s execution of
this Release, Executive may revoke this Release by delivering the revocation to
an SVBI officer and it shall not become effective or enforceable until such
seven (7) day period has expired.
 
This Release shall be binding upon the heirs and personal representatives of
Executive and shall inure to the benefit of the successors and assigns of SVBI

August 27, 2019
/s/ Vance W. Adkins
Date
Vance W. Adkins

--------------------------------------------------------------------------------