exv10w4w1



 





Exhibit 10.4.1




OLD LINE BANK

Salary Continuation Agreement




FIRST AMENDMENT

TO THE

OLD LINE BANK

SALARY CONTINUATION AGREEMENT

DATED JANUARY 3, 2006

FOR

JAMES CORNELSEN




     THIS FIRST AMENDMENT is adopted this 31st day of December, 2007, effective as of
January 1, 2006, by and between OLD LINE BANK, a state-chartered commercial bank located in Bowie,
Maryland (the “Bank”), and JAMES CORNELSEN (the “Executive”).



     The Bank and the Executive executed the Salary Continuation Agreement on January 3, 2006
effective as of January 1, 2006 (the “Agreement”).



     The undersigned hereby amend the Agreement for the purpose of bringing the Agreement into
compliance with Section 409A of the Internal Revenue Code. Therefore, the following changes shall
be made:



     Section 2.4 of the Agreement shall be deleted in its entirety and replaced by the following:




	2.4	 	Distribution of Benefit. Upon a Change in Control followed within twenty-four (24)
months by the Executive’s Separation from Service, the Bank shall distribute to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under this Article.





     Section 2.4.3 of the Agreement shall be deleted in its entirety and replaced by the following:




	2.4.3	 	Excess Parachute Payment Gross-up. If any benefit payable under this Agreement
would create an excise tax under the excess parachute rules of Section 280G of the Code, the
Bank shall pay to the Executive an additional amount (the “Gross-up”) equal to:





the Executive’s excise penalty tax amount

divided by the sum of

(one minus the sum of the penalty tax rate plus the Executive’s marginal income tax rate)




          The Gross-up shall be paid in the same manner and at the same time as the benefit
which creates the gross-up.





     Section 2.7 of the Agreement shall be deleted in its entirety and replaced by the



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Exhibit 10.4.1




OLD LINE BANK

Salary Continuation Agreement




following:





	2.7	 	Change in Form or Timing of Distributions. All changes in the form or timing of
distributions hereunder must comply with the following requirements. The changes:






	 	(a)	 	may not accelerate the time or schedule of any distribution,
except as provided in Code Section 409A and the regulations thereunder;
	 
	 	(b)	 	must, for benefits distributable under Sections 2.2 and 2.3, be
made at least twelve (12) months prior to the first scheduled distribution;
	 
	 	(c)	 	must, for benefits distributable under Sections 2.1, 2.2, 2.3
and 2.4, delay the commencement of distributions for a minimum of five (5)
years from the date the first distribution was originally scheduled to be made;
and
	 
	 	(d)	 	must take effect not less than twelve (12) months after the
election is made.





     Section 8.3 of the Agreement shall be deleted in its entirety and replaced by the following:




	8.3	 	Plan Terminations Under Section 409A. Notwithstanding anything to the contrary in
Section 8.2, if this Agreement terminates in the following circumstances:






	 	(a)	 	Within thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months following
such termination of the Agreement and further provided that all the Bank’s arrangements
which are substantially similar to the Agreement are terminated so the Executive and
all participants in the similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within twelve (12) months of
such terminations;
	 
	 	(b)	 	Upon the Bank’s dissolution or with the approval of a bankruptcy court,
provided that the amounts deferred under the Agreement are included in the Executive’s
gross income in the latest of (i) the calendar year in which the Agreement terminates;
(ii) the calendar year in which the amount is no longer subject to a substantial risk
of forfeiture; or (iii) the first calendar year in which the distribution is
administratively practical; or
	 
	 	(c)	 	Upon the Bank’s termination of this and all other arrangements that would be
aggregated with this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if
the Executive participated in such arrangements (“Similar Arrangements”), provided that
(i) the termination and liquidation does not occur proximate to a downturn in the
financial health of the Bank, (ii) all termination distributions are made no earlier
than twelve (12) months and no later than twenty-four (24) months following such
termination, and (iii) the Bank does not adopt any new arrangement that would be a
Similar Arrangement for a minimum of three (3) years following the date the Bank takes
all necessary action to irrevocably terminate and liquidate the Agreement;




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Exhibit 10.4.1




OLD LINE BANK

Salary Continuation Agreement





	 	 	 	the Bank may distribute the Deferral Account balance, determined as of the date of the
termination of the Agreement, to the Executive in a lump sum subject to the above terms.





     Section 9.10 of the Agreement shall be deleted in its entirety and replaced by the following:




	9.10	 	Alternative Action. In the event it shall become impossible for the Bank or the Plan
Administrator to perform any act required by this Agreement due to regulatory or other
constraints, the Bank or Plan Administrator may perform such alternative act as most nearly
carries out the intent and purpose of this Agreement and is in the best interests of the Bank,
provided that such alternative acts do not violate Code Section 409A of the Code.





     IN WITNESS OF THE ABOVE, the Bank and the Executive hereby consent to this First Amendment.



	 	 	 	 	 
	EXECUTIVE:	 	OLD LINE BANK
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	JAMES CORNELSEN

	 	Title	 	 
	 

	 	 	 	 






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