Exhibit 10.11
















                            FIRST UNITED CORPORATION

                         EXECUTIVE AND DIRECTOR DEFERRED

                                COMPENSATION PLAN








































                              Amended and Restated
                         Effective as of October 1, 1998

<PAGE>
                            FIRST UNITED CORPORATION
                EXECUTIVE AND DIRECTOR DEFERRED COMPENSATION PLAN

                              Amended and Restated
                         Effective as of October 1, 1998

                                    RECITALS

         This,  the First United  Corporation  Executive  and Director  Deferred
Compensation  Plan (the  "Plan"),  is adopted by First United  Corporation  (the
"Employer"),  effective  as of  October  1,  1998,  for  certain  of its (or its
participating   subsidiary's)  executive  employees  and  Directors.   The  Plan
constitutes  an  amendment  and  restatement  of the  First  United  Corporation
Deferred Compensation Plan and Trust.

         The  purpose of the Plan is to offer  participants  an  opportunity  to
elect to defer  the  receipt  of  compensation  in  order  to  provide  deferred
compensation  benefits  taxable  pursuant to section 451 of the Internal Revenue
Code of 1986,  as amended (the "Code"),  and to provide a deferred  compensation
vehicle  to  which  the  Employer  may  credit  certain  amounts  on  behalf  of
participants. The Plan is intended to be a "top-hat" plan under sections 201(2),
301(a)(3) and 401(a)(1) of the Employee  Retirement Income Security Act of 1974,
as amended ("ERISA").

         Accordingly, the following Plan is adopted.

                                    ARTICLE 1
                                   DEFINITIONS

         1.1  ACCOUNT  means  the  balance   credited  to  a  Participant's   or
Beneficiary's Plan account,  including  contribution  credits and deemed income,
gain and losses credited thereto. A Participant's or Beneficiary's Account shall
be determined as of the date of reference.

         1.2 BENEFICIARY  means any person or person so designated in accordance
with the provisions of Article 7.

         1.3  CHANGE OF CONTROL  means any  change of  control  of First  United
Corporation  as the result  (a) of merger,  acquisition,  or  bankruptcy  by any
individual,  entity or group of persons, within the meaning of sections 13(d)(3)
or  14(d)  of the  Securities  Exchange  Act of 1934,  or any  other  comparable
successor provisions,  of beneficial ownership (within the meaning of Rule 13d-3
of the  Securities  Exchange  Act of 1934) of 50  percent  or more of either the
outstanding  shares of common stock or the combined voting power of First United
Corporation's then outstanding voting securities entitled to vote generally,  or
(b)  the  approval  by  the  stockholders  of  First  United  Corporation  of  a
reorganization,  merger, or  consolidation,  in each case, with respect to which
persons who were stockholders of First United  Corporation  immediately prior to
such reorganization,  merger or consolidation do not immediately  thereafter own
more than 50 percent of the combined voting power of the reorganized, merged, or
consolidated  First United  Corporation's  then outstanding  securities that are
entitled  to vote  generally  in the  election of  directors  or (c) the sale of
substantially all of First United Corporation's assets.

         1.4 CODE means the Internal  Revenue  Code of 1986 and the  regulations
thereunder, as amended from time to time.

         1.5 COMPENSATION  means (i) with respect to an Eligible  Individual who
is an  employee of the  Employer,  compensation  as defined in the First  United
Corporation  401(k) Profit  Sharing  Plan,  and (ii) with respect to an Eligible
Individual  who  is  a  Director  of  the  Employer,   the  total  current  cash
remuneration paid by the Employer to the Eligible Individual with respect to his
or her service for the Employer.

         1.6   COMPENSATION   DEFERRAL   ACCOUNT  is  defined  in  Section  3.2.

         1.7    COMPENSATION    DEFERRALS    is   defined   in   Section    3.2.

<PAGE>

         1.8 DESIGNATION  DATE means the date or dates as of which a designation
of deemed investment directions by an individual pursuant to Section 4.5, or any
change in a prior designation of deemed  investment  directions by an individual
pursuant to Section 4.5, shall become  effective.  The Designation  Dates in any
Plan Year shall be designated by the Employer.

         1.9  EFFECTIVE  DATE means the  effective  date of this  amendment  and
restatement of the Plan, which shall be October 1, 1998.

         1.10 ELIGIBLE INDIVIDUAL means for any Plan Year (or applicable portion
thereof) a person who is determined by the  Employer,  or its designee,  to be a
member of a select group of  management or highly  compensated  employees of the
Employer or a member of the Employer's  Board of Directors and who is designated
by the Employer,  or its designee,  to be an Eligible Individual under the Plan.
By  each  December  31,  the  Employer,  or its  designee,  shall  notify  those
individuals, if any, who will be Eligible Individuals for the next Plan Year. If
the Employer,  or its designee,  determines that an individual  first becomes an
Eligible  Individual  during a Plan Year, the Employer,  or its designee,  shall
notify such individual of its determination and of the date during the Plan Year
on which the individual shall first become an Eligible Individual.

         1.11 EMPLOYER  means First United  Corporation  and its  successors and
assigns unless otherwise herein provided,  or any other  corporation or business
organization  which,  with the  consent  of  First  United  Corporation,  or its
successors or assigns,  assumes the  Employer's  obligations  hereunder,  or any
other  corporation or business  organization  which agrees,  with the consent of
First United Corporation, to become a party to the Plan.

         1.12 EMPLOYER  CONTRIBUTION  CREDIT  ACCOUNT is defined in Section 3.1.

         1.13  EMPLOYER   CONTRIBUTION   CREDITS  is  defined  in  Section  3.1.

         1.14 ENTRY DATE with  respect to an  individual  means the first day of
the pay  period  following  the date on which the  individual  first  becomes an
Eligible Individual.

         1.15 PARTICIPANT  means any person so designated in accordance with the
provisions of Article 2, including,  where appropriate  according to the context
of the Plan, any former  employee or former member of the Board of Directors who
is or may become  (or whose  Beneficiaries  may  become)  eligible  to receive a
benefit under the Plan.

         1.16  PARTICIPANT  ENROLLMENT AND ELECTION FORM means the form or forms
on which a Participant  elects to defer  Compensation  hereunder and/or on which
the Participant makes certain other designations as required thereon.

         1.17 PLAN means this First United  Corporation  Executive  and Director
Deferred  Compensation  Plan, an amendment and  restatement  of the First United
Corporation Deferred Compensation Plan and Trust, as amended from time to time.

         1.18 PLAN  YEAR  means  the  twelve  (12)  month  period  ending on the
December 31 of each year during which the Plan is in effect.

         1.19 TOTAL AND  PERMANENT  DISABILITY  means the inability to engage in
any  substantial  gainful  activity  by  reason  of any  medically  determinable
physical or mental  impairment  that may be expected to result in death or which
has lasted or can be expected to last for a  continuous  period of not less than
12 months.  The permanence and degree of such  impairment  shall be supported by
medical  evidence.  Disability will be determined to exist if the Participant is
receiving  disability  benefits  under  the  Social  Security  Act  or  Railroad
Retirement Act.

         1.20 TRUST means the Trust established pursuant to Article 11.

         1.21  TRUSTEE  means the trustee of the Trust  established  pursuant to
Article 11.

                                      -2-
<PAGE>

         1.22  VALUATION DATE means the last day of each Plan Year and any other
date that the Employer, in its sole discretion, designates as a Valuation Date.

                                    ARTICLE 2
                          ELIGIBILITY AND PARTICIPATION

         2.1 REQUIREMENTS. Every Eligible Individual on the Effective Date shall
be eligible to become or continue as a Participant on the Effective Date.  Every
other Eligible Individual shall be eligible to become a Participant on the first
Entry Date occurring on or after the date on which he or she becomes an Eligible
Individual.  No individual shall become a Participant,  however, if he or she is
not an Eligible Individual on the date his or her participation is to begin.

         Participation in the Participant  Compensation  Deferral feature of the
Plan is  voluntary.  In order to  participate  in the  Participant  Compensation
Deferral feature of the Plan, an otherwise Eligible Individual must make written
application in such manner as may be required by Section 3.2 and by the Employer
and must agree to make Compensation Deferrals as provided in Article 3.

         Participation in the Employer  Contribution  Credit feature of the Plan
is automatic for all Participants.

         2.2 RE-EMPLOYMENT, ETC. If a Participant whose employment or
Director status with the Employer is terminated is subsequently re-employed by
or subsequently becomes a Director of the Employer, he or she shall become a
Participant in accordance with the provisions of Section 2.1.

         2.3  CHANGE  OF  EMPLOYMENT  CATEGORY.  During  any  period  in which a
Participant remains in the employ of the Employer,  but ceases to be an Eligible
Individual, he or she shall not be eligible to make Compensation Deferrals or to
be credited with Employer Contribution Credits (if any) hereunder.

                                    ARTICLE 3
                            CONTRIBUTIONS AND CREDITS

         3.1  EMPLOYER  CONTRIBUTION  CREDITS.  There shall be  established  and
maintained a separate Employer  Contribution  Credit Account in the name of each
Participant.  Such Account shall be credited or debited, as applicable, with (a)
amounts equal to the Employer's  Contribution  Credits credited to that Account,
if any;  (b) deemed  earnings  and losses  (to the extent  realized,  based upon
deemed fair market  value of the  Account's  deemed  assets)  allocated  to that
Account; and (c) expenses and/or taxes charged to that Account.

         For  purposes of this  Section,  the  Employer's  Contribution  Credits
credited  to  a  Participant's   Employer  Contribution  Credit  Account  for  a
particular Plan Year shall be an amount (if any) determined by the Employer,  in
its discretion.

         The  Participant's   Employer  Contribution  Credit  Account  shall  be
credited or debited,  as  applicable,  as of each  Valuation  Date,  with deemed
earnings or losses, as applicable, and, at the Employer's discretion,  expenses.
The amount of deemed  earnings or losses and expenses  shall be as determined by
the  Employer.  The Employer  shall have the  discretion to allocate such deemed
earnings or losses and expenses among Participants' Employer Contribution Credit
Accounts  pursuant  to  such  allocation  rules  as  the  Employer  deems  to be
reasonable and administratively practicable.

         A  Participant  shall  be  vested  in  amounts  credited  to his or her
Employer Contribution Credit Account as provided in Section 5.3.

         3.2  PARTICIPANT  COMPENSATION  DEFERRALS.  In  accordance  with  rules
established by the Employer, a Participant may elect to defer Compensation which
is due to be earned and which would otherwise be paid to the Participant, in any
fixed  periodic  dollar amounts or  percentages  designated by the  Participant.
Amounts so deferred will be considered a Participant's "Compensation Deferrals".
Ordinarily,  a Participant  shall make such an election with respect to a coming
twelve (12) month Plan Year during the period  beginning  on the  December 1 and
ending on the  December 31 of the prior Plan Year,  or during such other  period
established by the Employer.

                                      -3-
<PAGE>


         Compensation  Deferrals  shall  be  made  through  regular  payroll  or
retainer/meeting fee deductions and/or through an election by the Participant to
defer a bonus payment not yet payable to him or her at the time of the election.
The Participant may change his or her regular  payroll or  retainer/meeting  fee
deduction Compensation Deferral amount as of, and by written notice delivered to
the Employer days prior to, the beginning of any regular  payroll  period,  with
such change being first effective for  Compensation to be earned in that payroll
period. In the case of bonus payment  deferrals,  the Participant may reduce his
or her bonus or bonuses due to be paid by the  Employer by giving  notice to the
Employer of the reduced bonus payment Compensation  Deferral amount prior to the
date the applicable bonus is first due to be paid.

         Once made, a Compensation  Deferral regular payroll or retainer/meeting
fee deduction  election shall continue in force  indefinitely,  until changed by
the Participant as aforesaid.  A bonus payment reduction  election,  or a change
thereof pursuant to the foregoing, shall continue in force only for the bonus to
which the election relates.

         Compensation  Deferrals  shall be deducted by the Employer from the pay
of a deferring  Participant.  There shall be  established  and maintained by the
Employer  a  separate   Compensation  Deferral  Account  in  the  name  of  each
Participant  to which shall be credited  or  debited:  (a) amounts  equal to the
Participant's  Compensation Deferrals;  (b) amounts equal to any deemed earnings
or losses (to the extent  realized,  based upon deemed fair market  value of the
Account's  deemed assets)  attributable or allocable  thereto;  and (c) expenses
and/or taxes charged to that Account.

         A Participant  shall at all times be one hundred  percent (100%) vested
in amounts credited to his or her Participant Compensation Deferral Account.

                                    ARTICLE 4
                               ALLOCATION OF FUNDS

         4.1  ALLOCATION  OF DEEMED  EARNINGS OR LOSSES ON ACCOUNTS.  Subject to
Section 4.5, each Participant  shall have the right to direct the Employer as to
how  amounts in his or her Plan  Account  shall be deemed to be  invested in the
deemed  investment  options  made  available  under  the Plan.  Subject  to such
limitations as may from time to time be required by law, imposed by the Employer
or the Trustee or contained elsewhere in the Plan, and subject to such operating
rules and procedures as may be imposed from time to time by the Employer,  prior
to the date on which a direction will become  effective,  the Participant  shall
have the right to direct the  Employer  as to how  amounts in his or her Account
shall be deemed to be invested.

         The Employer shall direct the Trustee to invest the account  maintained
in the Trust on behalf of the  Participant  pursuant  to the  deemed  investment
directions the Employer properly has received from the Participant. The value of
the Participant's  Account shall be equal to the value of the account maintained
under the Trust on behalf of the  Participant.  As of each valuation date of the
Trust,  the  Participant's  Account  will be  credited or debited to reflect the
Participant's deemed investments of the Trust.

         The  Participant's  Plan  Account  will be credited or debited with the
increase or decrease in the realizable net asset value or credited interest,  as
applicable,  of the  designated  deemed  investments,  as  follows.  As of  each
Valuation  Date,  an amount equal to the net increase or decrease in  realizable
net asset  value or credited  interest,  as  applicable  (as  determined  by the
Employer or the Trustee, as applicable), of each deemed investment option within
the Account  since the  preceding  Valuation  Date shall be allocated  among all
Participants'  Accounts  deemed  to be  invested  in that  investment  option in
accordance  with the ratio which the portion of the Account of each  Participant
which is deemed to be invested  within that  investment  option,  determined  as
provided  herein,  bears to the  aggregate of all amounts  deemed to be invested
within that investment option.

         4.2 ACCOUNTING FOR  DISTRIBUTIONS.  As of the date of any  distribution
hereunder,  the  distribution  made  hereunder to the  Participant or his or her
Beneficiary or  Beneficiaries  shall be charged to such  Participant's  Account.
Such amounts shall be charged on a pro rata basis against the investments of the
Trust in which the Participant's Account is deemed to be invested.

         4.3  SEPARATE  ACCOUNTS.  A  separate  account  under the Plan shall be
established and maintained hereunder to reflect the Account for each Participant
with  sub-accounts to show separately the applicable  deemed  investments of the
Account.

                                      -4-

<PAGE>

         4.4 INTERIM  VALUATIONS.  If it is  determined by the Employer that the
value of a Participant's Account as of any date on which distributions are to be
made differs materially from the value of the Participant's Account on the prior
Valuation Date upon which the distribution is to be based, the Employer,  in its
discretion,  shall  have the right to  designate  any date in the  interim  as a
Valuation  Date for the purpose of revaluing the  Participant's  Account so that
the Account will, prior to the distribution,  reflect its share of such material
difference in value.

         4.5  DEEMED  INVESTMENT  DIRECTIONS  OF  PARTICIPANTS.  Subject to such
limitations as may from time to time be required by law, imposed by the Employer
or the Trustee or contained elsewhere in the Plan, and subject to such operating
rules and procedures as may be imposed from time to time by the Employer,  prior
to and effective for each Designation  Date, each Participant may communicate to
the employer a direction as to how his or her Plan Accounts  should be deemed to
be invested among such categories of deemed investments as may be made available
by the Employer hereunder. Such direction shall designate the percentage (in any
whole percent multiples) of the Participant's Plan Account which is requested to
be deemed to be invested in such categories of deemed investments.

         An  election   concerning  deemed  investment  choices  shall  continue
indefinitely  until  changed by the  Participant  in a manner  specified  by the
Employer.  If the  Employer  receives  an initial or revised  deemed  investment
direction   which  it  deems  to  be  incomplete,   unclear  or  improper,   the
Participant's investment direction then in effect shall remain in effect (or, in
the  case  of a  deficiency  in an  initial  deemed  investment  direction,  the
Participant shall be deemed to have filed no deemed investment  direction) until
the next  Designation  Date,  unless the Employer  provides for, and permits the
application of, corrective action prior thereto.

         If the Employer  possesses (or is deemed to possess as provided  above)
at any  time  directions  as to the  deemed  investment  of less  than  all of a
Participant's Account, the Participant shall be deemed to have directed that the
undersigned  portion of the Account be deemed to be invested in a money  market,
fixed  income,  stable  value or similar fund made  available  under the Plan as
determined by the Employer in its discretion.

         Each Participant hereunder,  as a condition to his or her participation
hereunder, agrees to indemnify and hold harmless the Employer and its agents and
representatives  from any losses or damages of any kind  relating  to the deemed
investment of the Participant's Account hereunder.

         Each  reference  in this  Section to a  Participant  shall be deemed to
include, where applicable, a reference to a Beneficiary.

         4.6  EXPENSES.  Expenses,  including  Trustee  fees,  allocable  to the
administration  or  operation of an Account  maintained  under the Plan shall be
paid by the Employer  unless,  in the  discretion of the Employer,  the Employer
elects to charge such expenses, or any portion thereof,  against the appropriate
Participant's  Account or Participants'  Accounts. If an expense, or any portion
thereof,  is charged against a Participant's  Account,  at the discretion of the
Employer,  such  expense,  or  portion  thereof,  either  (i)  will  reduce  the
contribution to the Trust under Article 3 next due to be made by the Employer in
respect of the Account,  or (ii) will be paid from the Trust to the Employer out
of assets of the Trust corresponding to the Participant's Account hereunder.

         4.7 TAXES. Any taxes generated by earnings in an Account, as determined
by the Employer,  shall be paid by the Employer unless, in the discretion of the
Employer,  the  Employer  elects to charge such taxes  against  the  appropriate
Participant's  Account  or  Participants'  Accounts.  If a tax amount is charged
against a Participant's Account, at the discretion of the Employer, such expense
either (i) will reduce the contribution to the Trust under Article 3 next due to
be made by the Employer in respect of the Account, or (ii) will be paid from the
Trust  to  the  Employer  out  of  assets  of  the  Trust  corresponding  to the
Participant's Account.

                                    ARTICLE 5
                             ENTITLEMENT TO BENEFITS

         5.1 FIXED  PAYMENT  DATES;  TERMINATION  OF  EMPLOYMENT.  On his or her
Participant  Enrollment  and  Election  Form, a  Participant  may select a fixed
payment  date for the  payment or  commencement  of payment of his or her vested
Account (or elect to treat his or her Account as three (3) or more  sub-accounts

                                      -5-

<PAGE>

and select fixed  payment  dates for the payment or  commencement  of payment of
each sub-account),  which will be valued and payable according to the provisions
of Article  6. Such  payment  dates may be  extended  to later  dates so long as
elections to so extend are made by the Participant  prior to the then applicable
fixed date. Such payment dates may not be accelerated.

         Alternatively,  on his or her  Participation  Enrollment  and  Election
Form, a Participant  may select payment or commencement of payment of his or her
vested Account (or sub-account  thereof) at his or her termination of employment
or Director status with the Employer,  or at the earlier of a fixed payment date
or dates or his or her  termination  of employment  or Director  status with the
Employer.  In either of these cases,  the extension and  non-acceleration  rules
discussed  above  shall  apply  to  such  fixed  payment  date or  dates  and/or
termination of employment date, as applicable.

         Any fixed payment date elected by a Participant  as provided above must
be no earlier than the January 1 of the second  calendar year after the calendar
year in which the election is made. If a  Participant  does not select a payment
date or dates as aforesaid,  his or her vested  account shall be  distributed or
commence to be distributed,  as provided in Article 6, at the termination of his
or her employment of Director status with the Employer.

         5.2 HARDSHIP  DISTRIBUTIONS.  In the event of financial hardship of the
Participant,  as hereinafter  defined, the Participant may apply to the Employer
for the  distribution  of all or any  part  of his or her  vested  Account.  The
Employer  shall  consider  the  circumstances  of each such  case,  and the best
interests of the Participant and his or her family, and shall have the right, in
its  sole  discretion,  if  applicable,  to  allow  such  distribution,  or,  if
applicable,  to direct a  distribution  of part of the amount  requested,  or to
refuse to allow any  distribution.  Upon a finding of  financial  hardship,  the
Employer shall make the appropriate distribution to the Participant from amounts
held by the Employer in respect of the Participant's vested Account. In no event
shall the aggregate amount of the  distribution  exceed either the full value of
the Participant's  vested Account or the amount determined by the Employer to be
necessary to alleviate the  Participant's  financial  hardship (which  financial
hardship may be considered to include any taxes due because of the  distribution
occurring  because of this Section,  and which is not reasonably  available from
other resources of the Participant.  For purposes of this Section,  the value of
the  Participant's  vested  Account  shall be  determined  as of the date of the
distribution.

         "Financial  hardship"  means  (a) a severe  financial  hardship  to the
Participant  resulting from a sudden and  unexpected  illness or accident of the
Participant  or of a  dependent  (as  defined  in Code  section  152(a))  of the
Participant,  (b) loss of the  Participant's  property due to  casualty,  or (c)
other similar extraordinary and unforeseeable  circumstances arising as a result
of events beyond the control of the Participant,  each as determined to exist by
the  Employer.  A  distribution  may be made  under this  Section  only with the
consent of the Employer.

         5.3 VESTING. A Participant shall at all times be 100% vested in amounts
credited to his or her Participant  Compensation  Deferral Account. With respect
to amounts credited to a Participant's  Employer Contribution Credit Account, if
any,  the  Employer  shall be  permitted to set a vesting date or event for such
Credit,  in which case the  applicable  amounts  credited  to the  Participant's
Employer  Contribution  Credit  Account  shall vest as provided by the Employer.
Such  other  vesting  date or  event  may be  based  on the  performance  by the
participant  of a  specified  number  of  completed  years of  service  with the
Employer,  may be based on the  Participant's  performance of specified  service
goals with respect to the Employer,  may be limited to only certain  termination
of employment events (e.g., involuntary termination, those following a change of
control, etc.) or may be based on any other standard, at the Employer's sole and
absolute discretion.

         If  a  Participant   terminates  employment  (or,  in  the  case  of  a
Participant who is a non-employee  member of the Employer's  Board of Directors,
terminates  membership on the Employer's Board of Directors) because of death or
Total and Permanent Disability,  the Participant shall become 100% vested in his
or  her  Employer  Contribution  Credit  Account.  If a  Participant  terminates
employment  for any other  reason,  he or she shall become  vested in his or her
Employer  Contribution  Credit Account,  if at all, under the vesting provisions
determined by the Employer, as provided above.

         In the event of a Change of Control,  a Participant shall become vested
in his or her Employer Contribution Credit Account as provided in Section 6.4.

                                      -6-
<PAGE>


         5.4  RE-EMPLOYMENT  OF  RECIPIENT,  ETC.  If  a  Participant  receiving
installment distributions pursuant to Section 6.2 is re-employed by the Employer
(or  becomes a member  of the  Employer's  Board of  Directors),  the  remaining
distributions  due to the Participant  shall be suspended until such time as the
Participant (or his or her Beneficiary) once again becomes eligible for benefits
under  Section  5.1 or 5.2,  at which  time such  distribution  shall  commence,
subject to the limitations and conditions contained in this Plan.

                                    ARTICLE 6
                            DISTRIBUTION OF BENEFITS

         6.1 AMOUNT.  A  Participant  (or his or her  Beneficiary)  shall become
entitled to receive,  on or about the date or dates selected by the  Participant
on his or her Participant  Enrollment and Election Form or, if none, on or about
the date of the Participant's  termination of employment or Director status with
the  Employer  (or  earlier as  provided  in Article  5), a  distribution  in an
aggregate  amount equal to the  Participant's  vested  Account.  Any payment due
hereunder  from the Trust  which is not paid by the Trust for any reason will be
paid by the Employer from its general assets.

         6.2 METHOD OF PAYMENT.

             (a) Medium of Payments. Payments under the Plan shall be  made  in
cash or in-kin, as elected by the Participant,  as permitted by the Employer and
the Trustee in their sole and  absolute  discretion  and  subject to  applicable
restrictions on transfer as may be applicable legally or contractually.

             (b) Timing and Manner of Payment. In the case of distributions to a
Participant or his or her  Beneficiary  by virtue of an entitlement  pursuant to
Sections 5.1, an aggregate amount equal to the Participant's vested Account will
be paid by the Trust or the Employer,  as provided in Section 6.1, in a lump sum
or in up to ten (10) substantially equal annual installments (adjusted for gains
and losses), as selected by the Participant as provided in Article 5.

         If a Participant  fails to designate  properly the manner of payment of
the Participant's benefit under the Plan, such payment will be in a lump sum.

         If  the  whole  or  any  part  of a  payment  hereunder  is  to  be  in
installments, the total to be so paid shall continue to be deemed to be invested
pursuant to  Sections  4.1 and 4.5 under such  procedures  as the  Employer  may
establish,  in which  case any  deemed  income,  gain,  loss or  expense  or tax
allocable  thereto (as determined by the Trustee,  in its  discretion)  shall be
reflected in the installed  payments,  in such  equitable  manner as the Trustee
shall determine.

         6.3 DEATH OR DISABILITY BENEFITS.  If a Participant dies or experiences
a Total and Permanent  Disability  before  terminating  his or her employment or
Director status with the Employer and before the commencement of payments to the
Participant  hereunder,  the entire  value of the  Participant's  Account  shall
become  fully vested and shall be paid to the  Participant  (or to the person or
persons designated in accordance with Section 7.1, in the case of death) as soon
as practicable  following death or Total and Permanent  Disability in the manner
provided in Section 6.2.

         Upon the death of a Participant after payments hereunder have begun but
before he or she has received all payments to which he or she is entitled  under
the Plan, the remaining  benefit payments shall be paid to the person or persons
designated in accordance  with Section 7.1, in the manner in which such benefits
were payable to the Participant.

         6.4 CHANGE OF CONTROL.  A Participant  shall become fully vested in his
or her Account immediately prior to a Change of Control of the Employer. As soon
as administratively feasible following a Change of Control of the Employer, each
Participant  shall be paid the entire  balance of his or her account in a single
lump sum payment.


                                      -7-
<PAGE>

                                    ARTICLE 7
                         BENEFICIARIES; PARTICIPANT DATA

         7.1 DESIGNATION OF  BENEFICIARIES.  Each  Participant from time to time
may  designate  any  person  or  persons  (who  may  be  named  contingently  or
successively)  to receive such benefits as may be payable under the Plan upon or
after the Participant's  death, and such designation may be changed from time to
time by the  Participant  by filing a new  designation.  Each  designation  will
revoke  all  prior  designations  by the  same  Participant,  shall be in a form
prescribed  by the  Employer,  and will be effective  only when filed in writing
with the Employer during the Participant's lifetime.

         In the absence of a valid Beneficiary  designation,  or if, at the time
any  benefit  payment is due to a  Beneficiary,  there is no living  Beneficiary
validly  named by the  Participant,  the  Employer  shall  pay any such  benefit
payment to the  Participant's  spouse,  if then  living,  but  otherwise  to the
Participant's then living descendants, if any, per stirpes, but, if none, to the
Participant's  estate.  In  determining  the  existence  or  identify  of anyone
entitled  to  a  benefit  payment,  the  Employer  may  rely  conclusively  upon
information supplied by the Participant's personal  representative,  executor or
administrator.

         If a question arises as to the existence or identity of anyone entitled
to receive a benefit  payment as aforesaid,  or if a dispute arises with respect
to any such payment, then,  notwithstanding the foregoing,  the Employer, in its
sole discretion, may distribute such payment to the Participant's estate without
liability for any tax or other consequences  which might flow therefrom,  or may
take such other action as the Employer deems to be appropriate.

         7.2  INFORMATION  TO BE FURNISHED BY  PARTICIPANTS  AND  BENEFICIARIES;
INABILITY TO LOCATE PARTICIPANTS OR BENEFICIARIES. Any communication,  statement
or notice addressed to a Participant or to a Beneficiary at his or her last post
office  address  as shown on the  Employer's  records  shall be  binding  on the
Participant or Beneficiary  for all purposes of the Plan. The Employer shall not
be obliged to search for any Participant or Beneficiary  beyond the sending of a
registered  letter to such last known  address.  If the  Employer  notifies  any
Participant  or  Beneficiary  that he or she is entitled to an amount  under the
Plan and the  Participant or Beneficiary  fails to claim such amount or make his
or her location known to the Employer within three (3) years  thereafter,  then,
except as otherwise  required by law, if the location of one or more of the next
of kin of the  Participant  is known to the  Employer,  the  Employer may direct
distribution  of such amount to any one or more or all of such next of kin,  and
in such proportions as the Employer  determines.  If the location of none of the
foregoing persons can be determined, the Employer shall have the right to direct
that the amount  payable  shall be deemed to be a  forfeiture,  except  that the
dollar amount of the  forfeiture,  unadjusted  for deemed gains or losses in the
interim,  shall be paid by the Employer if a claim for the benefit  subsequently
is made by the  Participant  or the  Beneficiary  to whom it was  payable.  If a
benefit payable to an unlocated Participant or Beneficiary is subject to eschear
pursuant to applicable state law, the Employer shall not be liable to any person
for any payment made in accordance with such law.

                                    ARTICLE 8
                                 ADMINISTRATION

         8.1 ADMINISTRATIVE AUTHORITY. Except as otherwise specifically provided
herein,  the Employer,  acting through its Board of Directors or the designee or
designees thereof,  shall have the sole  responsibility for and the sole control
of the operation and  administration  of the Plan,  and shall have the power and
authority to take all action and to make all decisions and interpretations which
may be necessary or  appropriate  in order to  administer  and operate the Plan,
including, without limiting the generality of the foregoing, the power, duty and
responsibility to:

             (a) Resolve  and  determine all disputes or questions arising under
the Plan,  and to remedy any  ambiguities,  inconsistencies  or omissions in the
Plan.

             (b) Adopt such rules of procedure and regulations as in its opinion
may be necessary for the proper and efficient  administration of the Plan and as
are consistent with the Plan.

             (c) Implement the Plan in accordance with its terms and  the  rules
and regulations adopted as above.

                                      -8-

<PAGE>

             (d) Make determination  with  respect  to  the eligibility  of  any
Eligible  Individual as a Participant  and make  determinations  concerning  the
crediting of Plan Accounts.

             (e) Appoint  any  persons  or  firms,  or  otherwise  act to secure
specialized  advice  or  assistance,  as it  deems  necessary  or  desirable  in
connection with the  administration  and operation of the Plan, and the Employer
shall be entitled to rely conclusively upon, and shall be fully protected in any
action or  omission  taken by it in good  faith  reliance  upon,  the  advice or
opinion  of such  firms or  persons.  The  Employer  shall  have the  power  and
authority to delegate from time to time by written instrument all or any part of
its duties,  powers or  responsibilities  under the Plan,  both  ministerial and
discretionary,  as it deems appropriate,  to any person or committee, and in the
same manner to revoke any such delegation of duties, powers or responsibilities.
Any action of such person or committee in the exercise of such delegated duties,
powers or responsibilities shall have the same force and effect for all purposes
hereunder  as if such  action  had been  taken  by the  Employer.  Further,  the
Employer  may  authorize  one or more  persons to  execute  any  certificate  or
document on behalf of the  Employer,  in which event any person  notified by the
Employer of such authorization shall be entitled to accept and conclusively rely
upon any such  certificate or document  executed by such person as  representing
action by the Employer  until such  notified  person shall have been notified of
the revocation of such authority.

         8.2 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the administration or
operation  of the Plan  discretionary  actions by the  Employer  are required or
permitted,  such actions  shall be  consistently  and  uniformly  applied to all
persons  similarly  situated,  and no such  action  shall be taken  which  shall
discriminate in favor of any particular person or group of persons.

         8.3  LITIGATION.  Except as may be  otherwise  required  by law, in any
action or judicial proceeding  affecting the plan, no Participant or Beneficiary
shall be entitled to any notice or service of  process,  and any final  judgment
entered  in such  action  shall be  binding  on all  persons  interested  in, or
claiming under, the Plan.

         8.4 CLAIMS  PROCEDURE.  Any person claiming a benefit under the Plan (a
"Claimant") shall present the claim, in writing, to the Employer or the Trustee,
and the  Employer  or the  Trustee  shall  respond in  writing.  If the claim is
denied,  the written notice of denial shall state, in a manner  calculated to be
understood by the Claimant:

             (a) The  specific  reason  or reasons for the denial, with specific
references to the Plan provisions on which the denial is based;

             (b) A  description  of  any  additional  material  or  information
necessary for the Claimant to perfect his or her claim and an explanation of why
such material or information is necessary; and

             (c) An explanation of the Plan's claims review procedure.

         The written notice  denying or granting the  Claimant's  claim shall be
provided  to the  Claimant  within  ninety  (90) days  after the  Employer's  or
Trustee's  receipt  of  the  claim,  unless  special  circumstances  require  an
extension of time for  processing  the claim.  If such an extension is required,
written notice of the extension shall be furnished by the Employer or Trustee to
the  Claimant  within the  initial  ninety (90) day period and in no event shall
such an  extension  exceed a period  of  ninety  (90)  days  from the end of the
initial ninety (90) day period.  Any extension notice shall indicate the special
circumstances  requiring  the  extension  and the date on which the  Employer or
Trustee  expects to render a decision  on the  claim.  Any claim not  granted or
denied within the period noted above shall be deemed to have been denied.

         Any Claimant who claims is denied,  or deemed to have been denied under
the preceding  sentence (or such  Claimant's  authorized  representative),  may,
within sixty (60) days after the Claimant's  receipt of notice of the denial, or
after the date of the  deemed  denial,  request a review of the denial by notice
given, in writing,  to the Employer or Trustee.  Upon such a request for review,
the claim  shall be  reviewed  by the  Employer  or Trustee  (or its  designated
representative)  which may,  but shall not be required  to, grant the Claimant a
hearing.  In connection with the review,  the Claimant may have  representation,
may examine pertinent documents, and may submit issues and comments in writing.

                                      -9-
<PAGE>

         The decision on review normally shall be made within sixty (60) days of
the  Employer's  receipt of the request for review.  If an  extension of time is
required  due to special  circumstances,  the  Claimant  shall be  notified,  in
writing,  by the  Employer  or Trustee,  and the time limit for the  decision on
review shall be extended one hundred  twenty (120) days.  The decision on review
shall be in writing and shall state, in a manner  calculated to be understood by
the Claimant, the specific reasons for the decision and shall include references
to the relevant  Plan  provisions  on which the  decision is based.  The written
decision on review shall be given to the Claimant within the sixty (60) day (or,
if applicable,  the one hundred twenty (120) day) time limit discussed above. If
the decision on review is not communicated to the Claimant within the sixty (60)
day (or, if  applicable,  the one  hundred  twenty  (120) day) period  discussed
above, the claim shall be deemed to have been denied upon review.  All decisions
on review shall be final and binding with respect to all concerned parties.

                                    ARTICLE 9
                                    AMENDMENT

         9.1 RIGHT TO AMEND. The Employer,  by written instrument  executed by a
duly authorized  representative  of the Employer,  shall have the right to amend
the Plan, at any time and with respect to any provisions hereof, and all parties
hereto or claiming  any  interest  hereunder  shall be bound by such  amendment;
provided,  however,  that no such  amendment  shall  deprive  a  Participant  or
Beneficiary of a right accrued hereunder prior to the date of the amendment.

         9.2   AMENDMENTS   TO   ENSURE   PRIOR    CHARACTERIZATION   OF   PLAN.
Notwithstanding  the  provisions  of Section 9.1, the Plan may be amended by the
Employer at any time,  retroactively if required in the opinion of the Employer,
in order to ensure that the Plan is characterized as "top-hat" plan as described
under ERISA sections 201(2),  301(a)(3),  and 401(a)(1), and to conform the Plan
to the provisions and  requirements  of any applicable law (including  ERISA and
the Code). No such amendment shall be considered  prejudicial to any interest of
a Participant or a Beneficiary hereunder.

                                   ARTICLE 10
                                   TERMINATION

         10.1  EMPLOYER'S  RIGHT TO  TERMINATE  OR SUSPEND  PLAN.  The  Employer
reserves the right to terminate  the Plan and/or its  obligation to make further
credits to Plan  Accounts.  The Employer  also reserves the right to suspend the
operation of the Plan for a fixed or indeterminate period of time.

         10.2  AUTOMATIC  TERMINATION  OF  PLAN.  The Plan  automatically  shall
terminate  upon the  dissolution  of the  Employer,  or upon its merger  into or
consolidation with any other corporation or business  organization if there is a
failure  by  the  surviving   corporation  or  business  organization  to  adopt
specifically and agree to continue the Plan.

         10.3 SUSPENSION OF DEFERRALS. In the event of a suspension of the Plan,
the Employer  shall  continue all aspects of the Plan,  other than  Compensation
Deferrals and Employer Contribution Credits, during the period of suspension, in
which event payments hereunder will continue to be made during the period of the
suspension in accordance with Articles 5 and 6.

         10.4 ALLOCATION AND  DISTRIBUTION.  This Section shall become operative
on a complete termination of the Plan. The provisions of this Section also shall
become  operative  in  the  event  of a  partial  termination  of the  Plan,  as
determined  by the  Employer,  but only with respect to that portion of the Plan
attributable to the Participants to whom the partial  termination is applicable.
Upon the effective date of any such event,  notwithstanding any other provisions
of the Plan, no persons who were not theretofore  Participants shall be eligible
to  become  Participants,  the value of the  interest  of all  Participants  and
Beneficiaries  shall be determined and, after deduction of estimated expenses in
liquidating  and, if applicable,  paying Plan benefits,  paid to them as soon as
practicable after such termination.

         10.5  SUCCESSOR  TO  EMPLOYER.   Any   corporation  or  other  business
organization  which is a successor to the Employer by reason of a consolidation,
merger or purchase of substantially all of the assets of the Employer shall have

                                      -10-
<PAGE>

the right to become a party to the plan by adopting  the same by  resolution  of
the entity's board of directors or other appropriate  governing body. If, within
ninety (90) days from the effective date of such  consolidation,  merger or sale
of assets,  such new entity does not become a party hereto,  as above  provided,
the Plan automatically  shall be terminated,  and the provisions of Section 10.4
shall become operative.

                                   ARTICLE 11
                                    THE TRUST

         11.1  ESTABLISHMENT OF TRUST. The Employer may, but need not, establish
the Trust with the  Trustee  pursuant  to such terms and  conditions  as are set
forth in the Trust  agreement  to be entered  into  between the Employer and the
Trustee. The Trust is intended to be treated as a "grantor" trust under the Code
and the  establishment  of the Trust is not intended to cause the Participant to
realize current income on amounts contributed  thereto, nor to cause the Plan to
be "funded" within the meaning of ERISA, and the Trust shall be so interpreted.

                                   ARTICLE 12
                                  MISCELLANEOUS

         12.1 LIMITATIONS ON LIABILITY OF EMPLOYER. Neither the establishment of
the Plan nor any modification thereof, nor the creation of any account under the
Plan,  nor the  payment of any  benefits  under the Plan shall be  construed  as
giving to any  Participant or other person any legal or equitable  right against
the Employer, or any officer or employer thereof except as provided by law or by
any Plan provision. The employer does not in any way guarantee any Participant's
Account from loss or depreciation, whether caused by poor investment performance
of a deemed  investment or the inability to realize upon an investment due to an
insolvency  affecting an  investment  vehicle or any other  reason.  In no event
shall the Employer, or any successor, employee, officer, director or stockholder
of the  Employer,  be liable to any person on  account  of any claim  arising by
reason  of the  provisions  of the  Plan  or of any  instrument  or  instruments
implementing its provisions, or for the failure of any Participant,  Beneficiary
or other person to be entitled to any particular tax  consequences  with respect
to the Plan, or any credit or distribution hereunder.

         12.2  CONSTRUCTION.  If any provision of the Plan is held to be illegal
or void, such illegality or invalidity shall not affect the remaining provisions
of the Plan, but shall be fully  severable,  and the Plan shall be construed and
enforced as if said illegal or invalid provision had never been inserted herein.
For all  purposes of the Plan,  where the context  admits,  the  singular  shall
include the plural,  and the plural  shall  include  the  singular.  Headings of
Articles and Sections  herein are inserted only for convenience of reference and
are not to be considered in the  construction of the Plan. The laws of the State
of Maryland  shall  govern,  control and  determine all questions of law arising
with respect to the Plan and the  interpretation  and validity of its respective
provisions,  except  where  those laws are  preempted  by the laws of the United
States.  Participation under the plan will not give any Participant the right to
be retained in the service of the Employer nor any right or claim to any benefit
under the Plan unless such right or claim has specifically accrued hereunder.

         The Plan is intended to be and at all times  shall be  interpreted  and
administered so as to qualify as a top-hat plan (as aforesaid), and no provision
of the Plan shall be  interpreted  so as to give any individual any right in any
assets of the  Employer  which  right is  greater  than the  rights of a general
unsecured creditor of the Employer.

         12.3  SPENDTHRIFT  PROVISION.  No amount  payable to a Participant or a
Beneficiary  under the Plan will, except as otherwise  specifically  provided by
law,  be  subject  in  any  manner  to  anticipation,   alienation,  attachment,
garnishment,  sale,  transfer,  assignment  (either at law or in equity),  levy,
execution, pledge, encumbrance,  charge or any other legal or equitable process,
and any  attempt  to do so will be void;  nor will any  benefit be in any manner
liable for or subject to the debts, contracts, liabilities, engagements or torts
of the person entitled thereto.  Further, (i) the withholding of taxes from Plan
benefit  payments,  (ii) the recovery under the Plan of overpayments of benefits
previously  made to a  Participant  or  Beneficiary,  (iii) if  applicable,  the
transfer  of benefit  rights from the Plan to another  plan,  or (iv) the direct
deposit of benefit  payments  to an  account  in a banking  institution  (if not
actually part of an arrangement  constituting an assignment or alienation) shall
not be construed as an assignment or alienation.

         In the event that any Participant's or Beneficiary's benefits hereunder
are  garnished  or attached by order of any court,  the  Employer or Trustee may
bring an action or a declaratory  judgment in a court of competent  jurisdiction
to  determine  the proper  recipient  of the benefits to be paid under the Plan.
During the pendency of said action,  any benefits  that become  payable shall be
held as  credits  to the  Participant's  or  Beneficiary's  Account  or,  if the

                                      -11-

<PAGE>

Employer or Trustee prefers,  paid into the court as they become payable,  to be
distributed by the court to the recipient as the court deems proper at the close
of said action.

         IN WITNESS  WHEREOF,  the Employer has caused this amended and restated
Plan to be executed and its seal to be affixed  hereto,  effective as of the 1st
day of October, 1998.



ATTEST/WITNESS:                             FIRST UNITED CORPORATION


/s/ Eugene Helbig, Jr.                      By:/s/ Robert W. Kurtz        (SEAL)
---------------------------------              ---------------------------

Print:  Eugene Helbig, Jr.                  Print Name:  Robert W. Kurtz
        -------------------------                        -----------------------

                                            Date:  11/18/98
                                                   -----------------------------