exv10w21



 








EXHIBIT 10.21




INCENTIVE PLAN MODEL AND STOCK OPTION MODEL FOR EXECUTIVE OFFICERS




     For calendar year 2005, executive officers
of Old Line Bancshares, Inc. and Old Line
Bank (currently James W. Cornelsen (CEO), Joseph W. Burnett (Senior Vice President) and
Christine M. Rush (CFO)) may receive discretionary cash and equity compensation under an
Incentive Plan Model and a Stock Option Model approved by the Board of Directors.
The Incentive Plan Model and the Stock Option Model provide mechanisms under which the
compensation committee may in its discretion authorize cash and equity compensation
bonuses to these executive officers.



     The models provide the compensation
committee with guidelines for determining discretionary bonuses. The cash bonus under the
Incentive Plan Model is determined by multiplying the named executive’s base salary by
the aggregate percentage factor calculated based on the performance
criteria described below. The Board of Directors and the compensation
committee of the Board of Directors may adjust, modify or terminate the
models, in full or in part, at any time in their sole discretion. Notwithstanding the
Stock Option Model, the executive officers will continue to receive a number of options
at least equal to the number provided for in their employment agreements, subject to the
terms of those agreements. We will pay all compensation by March 15th of the following year.



Incentive Plan Model




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	    Performance	 	 	 	 	 	                Other
	 	 	 	 	 	 	    Measure	 	Weight	 	                 CEO	 	 Executives
	 	Target Incentive	 	 	 	25.00%	 	15.00%
	 
	 
	 	 	 	 	 	   Return on Assets	 	40%	 	 	 	 
	Threshold
	 	 	 	 	 	0.64%	 	 	 	5.00%	 	3.00%
	Target
	 	 	 	 	 	0.80%	 	 	 	10.00%	 	6.00%
	Stretch
	 	 	 	 	 	0.96%	 	 	 	15.00%	 	9.00%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   Return on Equity	 	35%	 	 	 	 
	Threshold
	 	 	 	 	 	5.97%	 	 	 	4.38%	 	2.63%
	Target
	 	 	 	 	 	7.46%	 	 	 	8.75%	 	5.25%
	Stretch
	 	 	 	 	 	8.95%	 	 	 	13.13%	 	7.88%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Earnings Per Share (EPS)	 	25%	 	 	 	 
	Threshold
	 	 	 	 	 	$0.39	 	 	 	3.13%	 	1.88%
	Target
	 	 	 	 	 	$0.49	 	 	 	6.25%	 	3.75%
	Stretch
	 	 	 	 	 	$0.59	 	 	 	9.38%	 	5.63%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	   Threshold	 	 	 	12.50%	 	7.50%
	 
	 	 	 	 	 	   Target	 	 	 	25.00%	 	15.00%
	 
	 	 	 	 	 	   Stretch	 	 	 	37.50%	 	22.50%





The Threshold is the minimum level at which the compensation committee expects to consider bonus awards. The Target is the level that the compensation committee expects management will achieve and the Stretch is the maximum level the compensation committee anticipates it will pay bonuses.



Stock Option Model



Threshold: Options with a value equal on the date of grant to 10% (for CEO) and 5% (for other executive officers) of base salary based on Black-Scholes pricing model.



Target: Options with a value equal on the date of grant to 20% (for CEO) and 10% (for other executive officers) of base salary based on Black-Scholes pricing model.



Stretch: Options with a value equal on the date of grant to 30% (for CEO) and 20% (for other executive officers) of base salary based on Black-Scholes pricing model.