Exhibit 10.3

HOWARD BANK

EXECUTIVE INCENTIVE PLAN

1.
Name and Purpose

(a)
Howard Bank hereby establishes this Howard Bank Executive Incentive Plan, as set
forth herein and as it may be amended from time to time (the “Plan”).  The
purpose of the Plan is to reward the achievement of annual business results in a
manner that is consistent with the Company’s strategic plan, values and ongoing
sustainability.

(b)
The Plan shall become effective as of February 26, 2018, and, unless otherwise
determined by the Board, will apply for the entire 2018 Bonus Year.  The Plan
shall remain in effect for future Bonus Years until the Board (as defined below)
amends or terminates the Plan pursuant to Section 8 below.

2.
Definitions

As used in the Plan, unless the context otherwise requires, each of the
following terms has the meaning set forth below:

(a)
“Award” means a bonus award to a Participant under the Plan, as determined by
the Committee.

(b)
“Bonus Year” means a calendar year.

(c)
“Board” means the Board of Directors of Howard Bank.

(d)
“CEO” means the Chief Executive Officer of the Company.

(e)
“Committee” means the Compensation Committee of the Board or another committee
of the Board that is delegated authority to administer the Plan.

(f)
“Company” means Howard Bank, together with its parent(s) and subsidiaries.

(g)
“Participant” means any individual who is an executive of the Company and is
selected by the Committee to participate in the Plan for a Bonus Year.

3.
The Committee and Its Functions

(a)
Subject to the provisions of the Plan and applicable oversight by the Board,
full power and authority to interpret and administer the Plan are vested in the
Committee.  The Committee shall have the discretionary authority to act with
respect to each Participant.  The Committee is authorized to conduct such
consultations with officers and other executives of the Company as it shall deem
necessary or appropriate in the performance of its duties and responsibilities
with respect to the Plan.

(b)
Without limiting the generality of Section 3(a) above, and except as otherwise
specifically provided in the Plan, the Committee shall have the exclusive
authority and discretion to:

 

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(i)
select which executives of the Company (including the CEO) shall be Participants
in the Plan in any Bonus Year, subject to the terms of the Plan;

(ii)
determine the size of the Awards to be granted to Participants and, subject to
the terms of the Plan, the timing of such grants and the payment thereof;

(iii)
determine whether and to what extent any performance metrics applicable to
Awards have been met;

(iv)
interpret and administer the Plan and any instrument or agreement relating to
the Plan or an Award;

(v)
establish, amend, suspend, or waive rules and regulations not inconsistent with
the provisions of the Plan for the administration thereof;

(vi)
engage or employ from time to time such counsel, advisers, consultants,
accountants, analysts and other persons as it may deem necessary or expedient
for the performance of such functions, including engaging third parties to
perform valuations;

(vii)
appoint such agents as it shall deem appropriate for the proper administration
of the Plan;

(viii)
determine the rights of Participants in the event of death, disability,
termination and the like; and

(ix)
make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.

All designations, determinations, interpretations and other decisions by the
Committee under or with respect to the Plan or any Award under the Plan shall be
made in the Committee’s discretion and shall be final, conclusive, and binding
upon all persons, including any employee of the Company, and any beneficiary or
legatee of an employee of the Company.  No determination of the Committee shall
be subject to de novo review if challenged in court.

(c)
Except as may be limited by the Board, the Committee shall have authority to
delegate its authorities under the Plan to officers of the Company or other
individuals.

(d)
No person acting pursuant to the authority provided herein shall be liable for
any action or determination relating to or under the Plan.

4.
Eligibility

(a)
The Committee shall select each executive of the Company who shall be eligible
to participate in the Plan for a Bonus Year.  The Committee may request that the
CEO identify and recommend for the Committee’s approval the executives (other
than the CEO) who shall be eligible to participate in the Plan for a Bonus Year.

 

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(b)
Unless the Committee determines otherwise, executives who begin employment with
the Company following the commencement of a Bonus Year may be selected to be
eligible to participate in the Plan for such Bonus Year only if the executive’s
employment with the Company began prior to October 1st of such year.

5.
Awards

(a)
A Participant may be granted an Award for a particular Bonus Year as the
Committee, in accordance with the Plan, may in its discretion determine.

(b)
The Committee shall determine, in accordance with the Plan, the terms and
conditions for each Award, including but not limited to the applicable
performance metrics, the target payout amount, the maximum payout amount, and
any other vesting or performance conditions.  Performance metrics may be based
on strategic, financial or other goals, and may be measured on a company-wide or
individual basis, or any other basis.

(c)
The terms and conditions of an Award may, but need not, be set forth in a
written agreement signed by the Company and the Participant.

6.
Payment

(a)
Except as may be provided in a written agreement entered into between the
Company and the Participant, a Participant must satisfy the following conditions
in order to receive payment under an Award:

(i)
The Participant must remain continuously employed with the Company at least
through the last day of the Bonus Year (or such later date as may be determined
by the Committee) and must not have given notice of resignation or received a
notice of termination as of such date; and

(ii)
The Participant must satisfy any performance requirements established by the
Committee and must not be subject to a written Performance Improvement Plan
(“PIP”) or have an unsatisfactory performance rating as of the last day of the
Bonus Year (or such later date as may be determined by the Committee).

(b)
Following the end of a Bonus Year, the Committee shall determine the extent to
which the performance metrics applicable to such Bonus Year have been attained,
and the actual payout amount, if any, for each Award.  The Committee shall have
the discretion to make appropriate adjustments to any evaluation of performance
under a performance metric to eliminate the effects of extraordinary,
nonrecurring or unusual items, transactions or events.

(c)
The Committee shall have the authority to adjust the actual payout amount under
any Award; provided that, unless the Committee expressly determines otherwise,
any reduction in the actual payout amount to one Participant shall not increase
the actual payout amount to any other Participant. The Committee may, in its
discretion, make no payout under all or a portion of the Awards granted for a
Bonus Year.

(d)
Payment under an Award will be made in the year following the Bonus Year to
which the Award relates and by March 15th of such following year. Awards under
the Plan shall be paid in cash and shall be subject to applicable tax
withholding.

 

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(e)
If any overpayment is made under the Plan, the individual receiving the
overpayment shall promptly, upon notice from the Committee, return the amount of
such overpayment to the Company.  Alternatively, the Company shall have the
right to offset the amount of the overpayment against further amounts payable to
or on account of the person who received the overpayment, to the maximum extent
permitted by law.  The foregoing remedy is not intended to be exclusive.

7.
Regulatory and Other Requirements

(a)
All obligations of the Company under this Plan will be terminated, except to the
extent it is determined that continuation of the Plan is necessary for the
continued operation of the Bank (i) by the Board of Directors of the Federal
Deposit Insurance Corporation (or its successor) (“FDIC”, and such Board of
Directors, the “FDIC Board”) or its designee, at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority of the Federal Deposit Insurance Act; or (ii) by the FDIC Board or its
designee, at the time the FDIC Board or its designee approves a supervisory
merger to resolve problems relating to the operation of the Company; (iii) when
the Company is determined by the FDIC Board or its designee to be in a troubled
condition within the meaning of 12 C.F.R. § 303.101(c); (iv) if the Company or
the Bank fails to meet minimum capital requirements; or (v) if the Company or
the Bank becomes subject to final agency action that requires termination of the
Plan.

(b)
If any payment hereunder is determined to violate any regulatory requirement
applicable to the Company, the Company may decline to make such payment or amend
the amount or timing of such payment to comply with such regulatory
requirements, including the requirements of 12 U.S.C. 1828(k) and 12 C.F.R. part
359 and any regulations issued under 12 U.S.C. § 956(b) of the Dodd-Frank Act.

(c)
Awards, including any payment made pursuant thereto, may be subject to clawback
or forfeiture to the extent required by (i) applicable law (including FDIC FIL
66-2010), (ii) a regulator or government agency with authority over the Company,
(iii) the rules and regulations of the Nasdaq Stock Market or other applicable
securities exchange, (iv) a written policy adopted by the Company, or (v) a
written agreement signed by the Company and the Participant.

8.
Unfunded Plan

The Plan shall be an unfunded plan.  Benefits under the Plan shall be paid from
the general assets of the Company and no Participant or other person shall have
any claim to any specific assets of the Company.

9.
Termination, Suspension and Amendment

The Board may at any time and from time to time alter, amend, suspend or
terminate the Plan; provided, however, that any revision or amendment that would
cause the Plan to fail to comply with the requirements of any applicable law,
regulation or rule (including, without limitation, the rules and regulations of
the Nasdaq Stock Market or other applicable securities exchange) if such
amendment were not approved by the shareholders of the Company shall not be
effective unless and until such shareholder approval is obtained.

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10.
No Right to Employment or Participation

(a)
No provision of the Plan, grant or payment of an Award, nor any action taken by
the Committee or the Company pursuant to the Plan shall give or be construed as
giving any individual any right to be retained in the employ of the Company, or
affect or limit the right of the Company to terminate such employment.

(b)
No employee of the Company shall have the right to be selected to participate in
the Plan.  The selection of an employee to be eligible to participate in one
Bonus Year does not grant the employee a right to participate in any future
Bonus Year.

11.
General Provisions

(a)
If any provision of the Plan shall be held illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.

(b)
The Plan and all Awards under the Plan shall be construed in accordance with and
governed by the laws of the State of Maryland (without regard to any principles
of conflicts of laws that refer construction to the laws of another
jurisdiction), except to the extent superseded by federal law.

(c)
Nothing in the Plan shall restrict, or shall be construed as restricting, the
Committee’s or the Company’s authority to award discretionary bonuses that are
separate and apart from the Plan.

(d)
It is intended that, and the Plan shall be interpreted such that, each Award is
either exempt from or compliant with Section 409A of the Internal Revenue Code
of 1986, as amended (“Section 409A”).  Nothing in the Plan shall, or shall be
interpreted or construed to, transfer any liability for any tax (including a tax
or penalty due as a result of a failure to comply with Section 409A) to the
Company or to any other individual or entity, and the Company shall have no
liability to a Participant, or any other party, if an Award that is intended to
be exempt from or compliant with Section 409A is not so exempt or compliant.

(e)
Any payment under the Plan that is subject to Section 409A and that is
contingent on a termination of employment is contingent on a “separation from
service” within the meaning of Section 409A. If, upon separation from service, a
Participant is a “specified employee” within the meaning of Section 409A, any
payment under the Plan that is subject to Section 409A, is triggered by a
separation from service and would otherwise be paid within six months after the
Participation’s separation from service will instead be paid in the seventh
month following the Participant’s separation from service (to the extent
required by Section 409A).