Exhibit
      10.5

    
 

    FIRST
      UNITED CORPORATION 

    CHANGE
      IN CONTROL SEVERANCE PLAN

     

    As
      amended and restated on June 18, 2008

     

    First
      United Corporation, a Maryland corporation (the “Company”). hereby adopts this
      First United Corporation Change in Control Severance Plan (the “Plan”) for the
      benefit of certain employees of the Company and its subsidiaries.  The
      Plan, as set forth herein, is intended to help retain certain executive
      officers, maintain a stable work environment and provide economic security
      to
      eligible employees in the event of certain terminations of employment.  The
      Plan is intended to be an unfunded plan maintained primarily for the purpose
      of
      providing deferred compensation for a select group of management or highly
      compensated employees and therefore exempt from Parts 2, 3 and 4 of Title I
      of
      ERISA.

     

    ARTICLE
      I. 

    DEFINITIONS

     

    As
      hereinafter used:

    


    Section
      1.1 “Affiliate”
means
      any “parent corporation” and any “subsidiary corporation” of the Company, as
      such terms are defined in Section 424 of the Code.

     

    Section
      1.2 “Agreement” 
      means the written agreement between the Company and an Eligible Employee
      pursuant to which the Company agrees to provide Change in Control Severance
      Benefits to the Eligible Employee in accordance with the Plan.  Each
      Agreement may contain such information, terms and conditions as the Plan
      Administrator in its discretion may specify, including without limitation,
      the
      following:

     

    (a) the
      effective date and duration of the Agreement;

     

    (b) the
      Change in Control Severance Benefits to which the Eligible Employee is entitled
      under the Plan and the time and manner in which such Change in Control Severance
      Benefits are to be paid; and

     

    (c) any
      other
      provisions which supplement the terms and conditions contained in the
      Plan.

     

    Section
      1.3 “Board”
means
      the Board of Directors of the Company.

     

    Section
      1.4 “Change
      in Control”
means
      the first of the following events to occur after the Effective
      Date:

     

    (a) Any
      “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
      Exchange Act of 1934, as amended) becomes, within the 12-month period ending
      on
      the date of such person’s most recent acquisition, a “beneficial owner” (as
      defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
      securities of the Company representing more than 35% of the voting power of
      the
      then outstanding securities of the Company; provided that a Change in Control
      shall not be deemed to occur as a result of a transaction in which the Company
      becomes a subsidiary of another corporation and in which the shareholders of
      the
      Company, immediately prior to the transaction, will beneficially own,
      immediately after the transaction, shares entitling such shareholders to more
      than 50% of all votes to which all shareholders of the parent corporation would
      be entitled in the election of directors (without consideration of the rights
      of
      any class of stock to elect directors by a separate class vote); and provided
      further that ownership or control of the Company’s voting securities,
      individually or collectively, by any Affiliate that is a bank or any benefit
      plan sponsored by the Company or any Affiliate shall not constitute a Change
      in
      Control.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) The
      consummation of (1) a merger, consolidation, or similar extraordinary event
      involving the Company and another entity where the shareholders of the Company,
      immediately prior to the merger, consolidation or similar extraordinary event,
      will not beneficially own, immediately after the merger, consolidation or
      similar extraordinary event, shares entitling such shareholders to more than
      50%
      of all votes to which all shareholders of the surviving corporation would be
      entitled in the election of directors (without consideration of the rights
      of
      any class of stock to elect directors by a separate class vote), or (2) a sale
      or other disposition of all or substantially all of the assets of the Company;
      or

     

    (c) During
      any 12-month period, individuals who at the beginning of such period constituted
      the Board cease for any reason to constitute a majority thereof, unless the
      election, or the nomination for election by the Company’s shareholders, of at
      least a majority of the directors who were not directors at the beginning of
      such period, was approved by a vote of at least two-thirds of the directors
      then
      in office at the time of such election or nomination who either (1) were
      directors at the beginning of such period or (2) whose appointment, election
      or
      nomination for election was previously so approved.

     

    Section
      1.5 “Change
      in Control Severance Benefits”
      means,
      with respect to each Eligible Employee, the benefits payable pursuant to the
      Eligible Employee’s Agreement.

     

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

     

    Section
      1.7 “Company”
means
      First United Corporation, a Maryland corporation, and any successor
      thereto.

     

    Section
      1.8 “Effective
      Date”
means,
      with respect to each Agreement, the effective date of such
      Agreement.

     

    Section
      1.9 “Eligible
      Employee”
means
      an Executive who is designated by the Plan Administrator as eligible to
      participate in the Plan.

     

    Section
      1.10 “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended.

     

    Section
      1.11 “Executive”
means
      a
      management or highly compensated employee of the Company or a subsidiary
      thereof.

     

    
      
        
        

      

      
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    Section
      1.12 “Plan”
means
      the First United Corporation Change in Control Severance Plan, as set forth
      herein, as it may be amended from time to time.

     

    Section
      1.13 “Plan
      Administrator”
means
      the Compensation Committee of the Board, as appointed from time to time by
      the
      Board, or such other person or persons appointed from time to time by the
      Compensation Committee of the Board to administer the Plan.

     

    Section
      1.14 “Severance”
shall
      have the meaning given that term in the Agreement.

     

    ARTICLE
      II. 

    ELIGIBILITY
      AND PARTICIPATION

     

    Section
      2.1 The
      Plan
      Administrator, in its sole discretion, shall from time to time designate those
      Executive(s) who shall be eligible to participate in the Plan.

     

    Section
      2.2 Each
      Executive who is designated as eligible to participate in the Plan shall
      participate in the Plan by entering into an Agreement and completing such other
      forms and furnishing such other information as the Plan Administrator may
      request. An Eligible Employer’s participation in the Plan shall commence as of
      the date specified in the Agreement.

     

    ARTICLE
      III. 

    CHANGE
      IN CONTROL SEVERANCE BENEFITS

     

    Section
      3.1 Each
      Eligible Employee, subject to the terms and conditions of his or her Agreement,
      shall become entitled to receive Change in Control Severance Benefits as set
      forth in his or her Agreement.

     

    ARTICLE
      IV. 

    PLAN
      ADMINISTRATION

     

    Section
      4.1 The
      Plan
      Administrator shall administer the Plan and may interpret the Plan, prescribe,
      amend and rescind rules and regulations under the Plan and make all other
      determinations necessary or advisable for the administration of the Plan,
      subject to all of the provisions of the Plan.

     

    Section
      4.2 The
      Plan
      Administrator may delegate any of its duties hereunder to such person or persons
      from time to time as it may designate.

     

    Section
      4.3 The
      Plan
      Administrator is empowered, on behalf of the Plan, to engage accountants, legal
      counsel and such other personnel as it deems necessary or advisable to assist
      it
      in the performance of its duties under the Plan.  The functions of any such
      persons engaged by the Plan Administrator shall be limited to the specified
      services and duties for which they are engaged, and such persons shall have
      no
      other duties, obligations or responsibilities under the Plan. All reasonable
      expenses thereof shall be borne by the Company.

     

    Section
      4.4 The
      Plan
      Administrator shall not be liable for any actions by it hereunder unless due
      to
      its own gross negligence or willful misconduct, and it shall be indemnified
      and
      saved harmless by the Company from and against all personal liability to which
      it may be subject by reason of any act done or omitted to be done in its
      official capacity as Plan Administrator in good faith in the administration
      of
      the Plan, including all expenses reasonably incurred in its defense in the
      event
      the Company fails to provide such defense upon the request of the Plan
      Administrator. Except as provided in the foregoing sentence and except in
      connection with any breach of duty to Eligible Employees, the Plan Administrator
      shall be relieved of all responsibility in connection with its duties hereunder
      to the fullest extent permitted by law.

     

    
      
        
        

      

      
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    Section
      4.5 Following
      the occurrence of a Change in Control, the Company or any successor may not
      remove from office the individual or individuals who served as Plan
      Administrator immediately prior to the Change in Control; provided, however,
      if
      any such individual ceases to be affiliated with the Company, the Company may
      appoint another individual or individuals as Plan Administrator so long as
      the
      successor Plan Administrator consists solely of an individual or individuals
      who
      either (a) were officers of the Company immediately prior to the Change in
      Control or (b) were directors of the Company immediately prior to the Change
      in
      Control and are not affiliated with the acquiring entity in the Change in
      Control.

     

    ARTICLE
      V. 

    PLAN
      AMENDMENT OR TERMINATION

     

    Section
      5.1 The
      Plan
      may not be terminated with respect to an Eligible Employee prior to the end
      of
      the term of such Eligible Employee’s Agreement without the written consent of
      the Eligible Employee. The Plan may be amended by the Board at any time;
      provided, however, that the Plan may not be amended without the written consent
      of an Eligible Employee if such amendment would in any manner adversely affect
      the interests of such Eligible Employee.  Without limiting the scope of the
      foregoing sentence, any action taken by the Company or the Plan Administrator
      to
      cause an Eligible Employee to no longer be designated as an Eligible Employee
      or
      any action taken by the Company or the Plan Administrator to decrease the
      benefits for which an Eligible Employee is eligible, and any amendment to
      Section 4.5 or this Section 5.1 following the occurrence of a Change in Control,
      shall be treated as an amendment to the Plan which adversely affects the
      interests of any Eligible Employee.

     

    Section
      5.2 Notwithstanding
      Section 5.1 or any other provision of this Plan or any Agreement to the
      contrary, the Company may amend, modify or terminate this Plan and/or any
      Agreement, without the consent of the Eligible Employee, as the Company deems
      necessary or appropriate to ensure compliance with any law, rule, regulation
      or
      other regulatory pronouncement applicable to the Plan, including, without
      limitation, Section 409A of the Code and any Treasury Regulations or other
      guidance thereunder.

     

    ARTICLE
      VI. 

    CLAIMS
      PROCEDURES

     

    Section
      6.1 Applications
      for Benefits and Inquiries. 
      Any application for benefits, inquiries about the Plan or inquiries about
      present or future rights under the Plan must be submitted to the Plan
      Administrator in writing.

     

    
      
        
        

      

      
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    Section
      6.2 Denial
      of Claims. 
      In the event that any application for benefits is denied in whole or in part,
      the Plan Administrator must notify the applicant, in writing, of the denial
      of
      the application, and of the applicant’s right to review the denial.  The
      written notice of denial will be set forth in a manner designed to be understood
      by the applicant, and will include specific reasons for the denial, specific
      references to the Plan provisions upon which the denial is based, a description
      of any additional material or information necessary for the applicant to perfect
      the claim and an explanation of why such material or information is necessary,
      and an explanation of the Plan’s review procedure, including the applicant’s
      right to bring a civil action under Section 502(a) of ERISA following an adverse
      decision on review.

     

    This
      written notice will be given to the employee within 90 days after the Plan
      Administrator receives the application, unless special circumstances require
      an
      extension of time, in which case, the Plan Administrator has up to an additional
      90 days.  If an extension of time is required, written notice of the
      extension will be furnished to the applicant before the end of the initial
      90-day period. This notice of extension will describe the special circumstances
      necessitating the additional time and the date by which the Plan Administrator
      expects to render a decision on the application.

     

    Section
      6.3 Request
      for a Review. 
      Any person (or that person’s authorized representative) for whom an application
      for benefits is denied, in whole or in part, may appeal the denial by submitting
      a written request for a review to the Plan Administrator within 60 days after
      the application is denied.  The Plan Administrator will give the applicant
      (or his or her representative) an opportunity to review pertinent documents
      in
      preparing a request for a review and submit written comments, documents, records
      and other information relating to the claim.

     

    Section
      6.4 Decision
      on Review. 
      The Plan Administrator will provide written notice of its decision on review
      within 60 days after receipt of the request, unless special circumstances
      require an extension of time (not to exceed an additional 60 days).  If an
      extension for review is required, written notice of the extension will be
      furnished to the applicant within the initial 60-day period. This notice of
      extension will describe the special circumstances necessitating the additional
      time and the date by which the Plan Administrator expects to render a decision
      on review. In the event that the Plan Administrator confirms the denial of
      the
      application for benefits in whole or in part, the notice will outline, in a
      manner calculated to be understood by the applicant, the specific reasons for
      the decision, the specific Plan provisions upon which the decision is based,
      a
      statement that the applicant is entitled to receive, upon request and free
      of
      charge, reasonable access to, and copies of, all documents, records and other
      information relevant to the applicant’s claim for benefits, and a statement of
      the applicant’s right to bring an action under Section 502(a) of ERISA. 


     

    Section
      6.5 Rules
      and Procedures. 
      The Plan Administrator may establish rules and procedures, consistent with
      the
      Plan and with ERISA, as necessary and appropriate in carrying out its
      responsibilities in reviewing benefit claims.

     

    
      
        
        

      

      
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    ARTICLE
      VII. 

    MISCELLANEOUS

     

    Section
      7.1 Except
      as
      otherwise provided herein or by law, no right or interest of any Eligible
      Employee under the Plan or any Agreement shall be assignable or transferable,
      in
      whole or in part, either directly or by operation of law or otherwise, including
      without limitation by execution, levy, garnishment, attachment, pledge or in
      any
      manner; no attempted assignment or transfer thereof shall be effective; and
      no
      right or interest of any Eligible Employee under the Plan shall be liable for,
      or subject to, any obligation or liability of such Eligible
      Employee.

     

    Notwithstanding
      the preceding paragraph, when a payment is due under this Plan or any Agreement
      to an Eligible Employee who is unable to care for his or her affairs, payment
      may be made directly to his or her legal guardian or personal
      representative.

     

    Section
      7.2 Neither
      the establishment of the Plan, nor any modification thereof, nor the execution
      of any Agreement, nor the creation of any fund, trust or account, nor the
      payment of any benefits shall be construed as giving any Eligible Employee,
      or
      any other person, the right to be retained in the service of the Company or
      any
      subsidiary thereof, and all Eligible Employees shall remain subject to discharge
      to the same extent as if the Plan had never been adopted.

     

    Section
      7.3 If
      any
      provision of this Plan shall be held invalid or unenforceable, such invalidity
      or unenforceability shall not affect any other provisions hereof, and this
      Plan
      shall be construed and enforced as if such provisions had not been
      included.

     

    Section
      7.4 This
      Plan
      shall inure to the benefit of and be binding upon the heirs, executors,
      administrators, successors and assigns of the parties, including each Eligible
      Employee, present and future, and any successor to the Company.  If an
      Eligible Employee incurs a Severance during the Change in Control Protection
      Period but dies before his or her Change in Control Severance Benefits have
      been
      fully paid, any unpaid amounts shall be paid to the executor, personal
      representative or administrators of the Eligible Employee’s estate in a lump sum
      payment no later than the 15th
      day of
      the third calendar month following the Eligible Employee’s death. 

     

    Section
      7.5 The
      headings and captions herein are provided for reference and convenience only,
      shall not be considered part of the Plan, and shall not be employed in the
      construction of the Plan. Capitalized terms shall have the meanings given
      herein.  Singular nouns shall be read as plural and masculine pronouns
      shall be read as feminine, and vice versa, as appropriate.

     

    Section
      7.6 It
      is the
      express intention of the Company that this Plan and all Agreements shall be
      unfunded for tax purposes and for purposes of Title I of ERISA. Eligible
      Employees shall have no right, title or interest whatsoever in or to any assets
      or amounts which are used to pay benefits under the Plan. Each Eligible Employee
      shall be required to look to the provisions of this Plan and to the Company
      itself for enforcement of any and all benefits due under this Plan, and, to
      the
      extent any such person acquires a right to receive payment under this Plan,
      such
      right shall be no greater than the right of any unsecured general creditor
      of
      the Company. Nothing contained in the Plan, and no action taken pursuant to
      its
      provisions, shall create or be construed to create a trust of any kind or a
      fiduciary relationship between the Company and any Eligible Employee or any
      other person. Without limiting the foregoing, should any investment be acquired
      in connection with the liabilities assumed under this Plan or any Agreement,
      no
      Eligible Employee shall have any right with respect to, or claim against, such
      assets nor shall any such purchase be construed to create a trust of any kind
      or
      a fiduciary relationship between the Company and any Eligible Employee or any
      other person. Any such assets shall be and remain a part of the general,
      unpledged, unrestricted assets of the Company, subject to the claims of its
      general creditors. The Company shall be designated the owner and beneficiary
      of
      any investment acquired in connection with its obligation under this
      Plan.

     

    
      
        
        

      

      
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    Section
      7.7 Any
      notice or other communication required or permitted pursuant to the terms hereof
      shall have been duly given when delivered or mailed by United States Mail,
      first
      class, postage prepaid, addressed to the intended recipient at his, her or
      its
      last known address.

     

    Section
      7.8 This
      Plan
      shall be construed and enforced according to the laws of the State of Maryland
      to the extent not preempted by federal law without regard to any conflict of
      laws principles that would apply the law of another jurisdiction.

     

    Section
      7.9 All
      benefits hereunder shall be reduced by applicable withholding and shall be
      subject to applicable tax reporting, as determined by the Plan
      Administrator.

     

    Section
      7.10 Except
      as
      otherwise provided hereunder, all expenses incurred in the administration
      of the Plan, whether incurred by the Company or the Plan
      Administrator, shall be paid by the Company.

     

    
      
        
        

      

      
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