Exhibit 10.7 Employment Agreement between F&M Bancorp, Home Federal Savings Bank and Richard W. Phoebus, Sr.

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

This Confidentiality and Non-Competition Agreement is made this 3O±~day of April, 2001 between F&M Bancorp, a
Maryland corporation, Home Federal Savings Bank, a savings bank (together or separately hereinafter referred to as the "Employers") and Richard W. Phoebus, Sr., (the "Executive").

WHEREAS,
the Executive is presently an executive officer of the Employers; and

WHEREAS,
in order to secure the Executive's agreement to certain confidentiality and non-competition provisions, the parties desire to specify the monetary sums which shall
be due the Executive at the time the Executive's employment with the Employers is terminated; and

WHEREAS,
the parties entered into an "Agreement" dated November 16, 1999, which said agreement shall be superseded and replaced with this Confidentiality and
Non-Competition Agreement.

NOW
THEREFORE, in consideration of the promises and the mutual agreements herein contained, the parties hereby agree as follows:

1.    November 1999 Agreement Superseded.

The Agreement entered into by the parties on November 16, 1999 is superseded and replaced by this Agreement. The November 16, 1999 Agreement shall
be of no further force or effect.

2.    Competition; Confidential Information.

The Executive and the Employers recognize that due to the nature of his employment, and his relationship with Employers, the Executive has had and will have
access to, and has acquired and will acquire, and has assisted and will assist in developing, confidential and proprietary information relating to the business and operations of Employers and their
affiliates, including, without limiting the generality of the foregoing, information with respect to their present and prospective services, systems, clients, customers, agents, and sales and
marketing methods. The Executive acknowledges that such information has been and will be of central importance to Employer's business and that disclosure of it to or its use by others could cause
substantial loss to Employers. The Executive and Employers also recognize that an important part of the Executive's duties has been to develop good will for Employers through his personal contact with
clients of Employers and that there is a danger that this goodwill, a proprietary asset of Employers may follow the Executive if and when his relationship with Employers is terminated. The Executive
accordingly agrees as follows:



---





3.    Payment Upon Termination.

Upon the Executive's termination, whether voluntary or involuntary, the Employers shall pay the Executive the sum of $238,255.20. Such payment shall be made in
eighteen (18) equal monthly installments, beginning the first day of May, 2001.

4.    Mitigation; Exclusivity of Benefits.



5.    Assignability.

The Employers may assign this Agreement and their rights hereunder to any corporation, bank or other entity with or into which the Employers may hereafter merge
or consolidate or to which the Employers may transfer all or substantially all of their assets, if in any such case said corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employers hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or their rights hereunder. The
Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

6.    Notice.

For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

To
the Employers: F&M Bancorp
Attn.: Faye E. Cannon, President
P. 0. Box 518
Frederick, Maryland 21705

To
the Executive: Richard W. Phoebus, Sr.
1419 Lindsay Lane
Hagerstown, Maryland 21742

2

---

7.    Amendment; Waiver.

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive
and such officer or officers as may be specifically designated by the Boards of Directors of the Employers to sign on their behalf. No waiver by any party hereto at any time of any breach by any other
party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.

8.    Controlling Law.

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Maryland.

9.    Nature of Employment and Obligations.



10.  Headings.

The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

11.  Validity.

If any provision of this Agreement is held to be too broad or unreasonable in duration, geographical area or scope or character of restriction to be enforced,
such provision shall be modified to the extent necessary in order that any such provision shall be legally enforceable to the fullest extent permitted by law, and the parties expressly authorize any
court of competent jurisdiction to enforce any such provision to the fullest extent permitted by law.

12.  Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the
same instrument.

13.  Regulatory Prohibition.

Notwithstanding any other provisions of this Agreement to the contrary, the obligations of the Employers and the Executive hereunder shall be suspended or
limited, as the case may be, in the event that the FDIC prohibits or limits, by regulation or order, any payment hereunder pursuant to Section 18(k) of the FDIA (12 U.S.C. §
1828(k)).

3

---

IN
WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

Attest:
F&M BANCORP, for itself and its
Subsidiary, Home Federal Savings Bank

|        |  | By: |  | Faye E. Cannon, President and Chief Executive Officer
|------- |  | --- |  | -----------------------------------------------------
|Witness |  | By: |  | Richard W. Phoebus, Sr., Executive                   

4

---