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	OLD LINE BANK

Supplemental Life Insurance Agreement
	 	Exhibit 10.9






OLD LINE BANK

SUPPLEMENTAL LIFE INSURANCE AGREEMENT




     THIS SUPPLEMENTAL LIFE INSURANCE AGREEMENT (the “Agreement”) is adopted this 3rd day
of January, 2006, by and between OLD LINE BANK, a state-chartered commercial bank located
in Waldorf, Maryland (the “Bank”), and CHRISTINE RUSH (the “Executive”).



     The purpose of this Agreement is to retain and reward the Executive, by dividing the death
proceeds of certain life insurance policies which are owned by the Bank on the life of the
Executive with the designated beneficiary of the Executive. The Bank will pay the life insurance
premiums from its general assets.



Article 1

Definitions





	 	 	Whenever used in this Agreement, the following terms shall have the meanings specified:
	 
	1.1	 	“Bank’s Interest” means the benefit set forth in Section 2.1.
	 
	1.2	 	“Beneficiary” means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the Executive.
	 
	1.3	 	“Beneficiary Designation Form” means the form established from time to time by the
Plan Administrator that the Executive completes, signs and returns to the Plan Administrator
to designate one or more Beneficiaries.
	 
	1.4	 	“Board” means the Board of Directors of the Bank as from time to time constituted.
	 
	1.5	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	1.6	 	“Disability” means the Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less
than twelve (12) months, or (ii) is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income replacement benefits
for a period of not less than three (3) months under an accident and health plan covering
employees of the Bank. Medical determination of Disability may be made by either the Social
Security Administration or by the provider of an accident or health plan covering employees of
the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the
Plan Administrator of the Social Security Administration’s or provider’s determination.
	 
	1.7	 	“Executive’s Interest” means the benefit set forth in Section 2.2.




 









 











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Supplemental Life Insurance Agreement





	1.8	 	“Insurer” means the insurance company issuing the Policy on the life of the
Executive.
	 
	1.9	 	“Net Death Proceeds” means the total death proceeds of the Policy minus the greater
of (i) the cash surrender value or (ii) the aggregate premiums paid by the Bank.
	 
	1.10	 	“Plan Administrator” means the plan administrator described in Article 11.
	 
	1.11	 	“Policy” or “Policies” means the individual insurance policy or policies
adopted by the Bank for purposes of insuring the Executive’s life under this Agreement.
	 
	1.14	 	“Separation from Service” means the termination of the Executive’s employment with
the Bank for reasons other than death or Disability. Whether a Separation from Service takes
place is determined based on the facts and circumstances surrounding the termination of the
Executive’s employment and whether the Bank and the Executive intended for the Executive to
provide significant services for the Bank following such termination. A termination of
employment will not be considered a Separation from Service if:






	 	(a)	 	the Executive continues to provide services as an employee of the Bank at an
annual rate that is twenty percent (20%) or more of the services rendered, on average,
during the immediately preceding three full calendar years of employment (or, if
employed less than three years, such lesser period) and the annual remuneration for
such services is twenty percent (20%) or more of the average annual remuneration earned
during the final three full calendar years of employment (or, if less, such lesser
period), or
	 
	 	(b)	 	the Executive continues to provide services to the Bank in a capacity other
than as an employee of the Bank at an annual rate that is fifty percent (50%) or more
of the services rendered, on average, during the immediately preceding three full
calendar years of employment (or if employed less than three years, such lesser period)
and the annual remuneration for such services is fifty percent (50%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or if less, such lesser period).





Article 2

Policy Ownership/Interests





	2.1	 	Bank’s Interest. The Bank shall own the Policies and shall have the right to
exercise all incidents of ownership and, subject to Article 3, the Bank may terminate a Policy
without the consent of the Executive. The Bank shall be the beneficiary of the remaining
death proceeds of the Policies after the Executive’s Interest is determined according to
Section 2.2 below.
	 
	2.2	 	Executive’s Interest. The Executive, or the Executive’s assignee, shall have the
right to designate the Beneficiary of an amount of death proceeds equal to thirty percent
(30%) of the Net Death Proceeds. The Executive shall also have the right to elect and change




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Supplemental Life Insurance Agreement





	 	 	settlement options with respect to the Executive’s Interest by providing written notice to
the Bank and the Insurer.
	 
	2.3	 	Forfeiture of Benefit. The Executive will forfeit his or her benefit if: (i) the
Executive violates any of the provisions detailed in Article 5; (ii) the Executive becomes
gainfully employed by an entity other than the Bank following a Separation from Service due to
Disability; or (iii) the Executive provides written notice to the Bank declining further
participation in the Agreement.





Article 3

Comparable Coverage





	3.1	 	Insurance Policies. If the Executive is entitled to a benefit, the Bank may provide
such benefit through the Policies purchased at the commencement of this Agreement, or may
provide comparable insurance coverage to the Executive through whatever means the Bank deems
appropriate. If the Executive waives or forfeits his or her right to the benefit, the Bank
shall choose to cancel the Policy or Policies on the Executive, or may continue such coverage
and become the direct beneficiary of the entire death proceeds.
	 
	3.2	 	Offer to Purchase. If the Bank discontinues a Policy while the Executive is employed
by the Bank at the date of discontinuance or while the Executive has a benefit that has not
been forfeited, the Bank shall give the Executive at least thirty (30) days to purchase such
Policy. The purchase price shall be the fair market value of the Policy, as determined under
Treasury Reg. §1.61-22(g)(2) or any subsequent applicable authority. Such notification shall
be in writing.





Article 4

Premiums and Imputed Income





	4.1	 	Premium Payment. The Bank shall pay all premiums due on all Policies.
	 
	4.2	 	Economic Benefit. The Bank shall determine the economic benefit attributable to the
Executive based on the life insurance premium factor for the Executive’s age multiplied by the
aggregate death benefit payable to the Beneficiary. The “life insurance premium factor” is
the minimum factor applicable under guidance published pursuant to Treasury Reg. §
1.61-22(d)(3)(ii) or any subsequent authority .
	 
	4.3	 	Imputed Income. The Bank shall impute the economic benefit to the Executive on an
annual basis, by adding the economic benefit to the Executive’s W-2, or if applicable, Form
1099.





Article 5

General Limitations





	5.1	 	Excess Parachute or Golden Parachute Payment. If the payments and benefits pursuant
to this Agreement, either alone or together with other payments and benefits which the




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Supplemental Life Insurance Agreement





	 	 	Executive has the right to receive from the Bank, would constitute an “excess parachute
payment” under Section 280G of the Code, or would be a prohibited golden parachute payment
pursuant to 12 C.F.R. §359.2 and for which the appropriate federal banking agency has not
given written consent to pay pursuant to 12 C.F.R. §359.4, the payments and benefits
pursuant to this Agreement shall be reduced, in the manner determined by the Executive in
the case of the application of Section 280G of the Code, by the amount, if any, which is the
minimum necessary to result in (i) no portion of the payments and benefits under this
Agreement being non-deductible to the Bank pursuant to Section 280G of the Code and subject
to the excise tax imposed under Section 4999 of the Code, and (ii) no adverse consequence to
the Bank under or pursuant to such banking regulations. All benefits payable under this
Agreement shall also be subject to limitations or prohibitions imposed by subsequent changes
or amendments to the cited laws and regulations except to the extent that any benefits
payable under this Agreement are grandfathered or otherwise exempt or excluded from the
change or amendment.
	 
	5.2	 	Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Executive shall forfeit any right to a benefit under this Agreement if the Bank
terminates the Executive’s employment for cause. Termination of the Executive’s employment for
“Cause” shall mean termination because of personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order or material breach of any provision of the
Agreement. For purposes of this paragraph, no act or failure to act on the Executive’s part
shall be considered “willful” unless done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that the Executive’s action or omission was in the best
interest of the Bank.
	 
	5.3	 	Removal. Notwithstanding any provision of this Agreement to the contrary, the
Executive’s rights in the Agreement shall terminate if the Executive is subject to a final
removal or prohibition order issued by an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act (“FDIA”).
	 
	5.4	 	Suicide or Misstatement. No benefits shall be payable if the Executive commits
suicide within two years after the date of this Agreement, or if the insurance company denies
coverage (i) for material misstatements of fact made by the Executive on any application for
life insurance purchased by the Bank, or (ii) for any other reason.





Article 6

Beneficiaries





	6.1	 	Beneficiary. The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefits payable under the Agreement upon the death of the
Executive. The Beneficiary designated under this Agreement may be the same as or different
from the beneficiary designation under any other Agreement of the Bank in which the Executive
participates.




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Supplemental Life Insurance Agreement





	6.2	 	Beneficiary Designation; Change. The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form, and delivering it to the Bank or its
designated agent. The Executive’s beneficiary designation shall be deemed automatically
revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as
Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to
change a Beneficiary by completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Bank’s rules and procedures, as in effect from time to
time. Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Bank shall be entitled to rely on the
last Beneficiary Designation Form filed by the Executive and accepted by the Bank prior to the
Executive’s death.
	 
	6.3	 	Acknowledgment. No designation or change in designation of a Beneficiary shall be
effective until received, accepted and acknowledged in writing by the Bank or its designated
agent.
	 
	6.4	 	No Beneficiary Designation. If the Executive dies without a valid designation of
beneficiary, or if all designated Beneficiaries predecease the Executive, then the Executive’s
surviving spouse shall be the designated Beneficiary. If the Executive has no surviving
spouse, the benefits shall be made payable to the personal representative of the Executive’s
estate.
	 
	6.5	 	Facility of Payment. If the Bank determines in its discretion that a benefit is to
be paid to a minor, to a person declared incompetent, or to a person incapable of handling the
disposition of that person’s property, the Bank may direct payment of such benefit to the
guardian, legal representative or person having the care or custody of such minor, incompetent
person or incapable person. The Bank may require proof of incompetence, minority or
guardianship as it may deem appropriate prior to distribution of the benefit. Any payment of
a benefit shall be a payment for the account of the Executive and the Executive’s Beneficiary,
as the case may be, and shall be a complete discharge of any liability under the Agreement for
such payment amount.





Article 7

Assignment




     The Executive may irrevocably assign without consideration all of the Executive’s Interest in
this Agreement to any person, entity, or trust. In the event the Executive shall transfer all of
the Executive’s Interest, then all of the Executive’s Interest in this Agreement shall be vested in
the Executive’s transferee, who shall be substituted as a party hereunder, and the Executive shall
have no further interest in this Agreement.



Article 8

Insurer




     The Insurer shall be bound only by the terms of its given Policy. The Insurer shall not be
bound by or deemed to have notice of the provisions of this Agreement. The Insurer shall have



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Supplemental Life Insurance Agreement



the right to rely on the Bank’s representations with regard to any definitions,
interpretations or Policy interests as specified under this Agreement.




Article 9

Claims And Review Procedure





	9.1	 	Claims Procedure. The Executive or Beneficiary (“claimant”) who has not received
benefits under the Agreement that he or she believes should be paid shall make a claim for
such benefits as follows:






	 	9.1.1	 	Initiation – Written Claim. The claimant initiates a claim by
submitting to the Bank a written claim for the benefits. If such a claim relates to the
contents of a notice received by the claimant, the claim must be made within sixty (60)
days after such notice was received by the claimant. All other claims must be made
within one hundred eighty (180) days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the determination
desired by the claimant.
	 
	 	9.1.2	 	Timing of Bank Response. The Bank shall respond to such claimant
within 90 days after receiving the claim. If the Bank determines that special
circumstances require additional time for processing the claim, the Bank can extend the
response period by an additional 90 days by notifying the claimant in writing, prior to
the end of the initial 90-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date by which the
Bank expects to render its decision.
	 
	 	9.1.3	 	Notice of Decision. If the Bank denies part or all of the claim, the
Bank shall notify the claimant in writing of such denial. The Bank shall write the
notification in a manner calculated to be understood by the claimant. The notification
shall set forth:






	 	(a)	 	The specific reasons for the denial;
	 
	 	(b)	 	A reference to the specific provisions of the Agreement on
which the denial is based;
	 
	 	(c)	 	A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation of why it is
needed;
	 
	 	(d)	 	An explanation of the Agreement’s review procedures and the
time limits applicable to such procedures; and
	 
	 	(e)	 	A statement of the claimant’s right to bring a civil action
under ERISA Section 502(a) following an adverse benefit determination on
review.






	9.2	 	Review Procedure. If the Bank denies part or all of the claim, the claimant shall
have the opportunity for a full and fair review by the Bank of the denial, as follows:






	 	9.2.1	 	Initiation – Written Request. To initiate the review, the claimant,
within 60 days after receiving the Bank’s notice of denial, must file with the Bank a
written




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Supplemental Life Insurance Agreement





	 	 	 	request for review.
	 
	 	9.2.2	 	Additional Submissions – Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Bank shall also provide the claimant, upon
request and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits.
	 
	 	9.2.3	 	Considerations on Review. In considering the review, the Bank shall
take into account all materials and information the claimant submits relating to the
claim, without regard to whether such information was submitted or considered in the
initial benefit determination.
	 
	 	9.2.4	 	Timing of Bank’s Response. The Bank shall respond in writing to such
claimant within 60 days after receiving the request for review. If the Bank determines
that special circumstances require additional time for processing the claim, the Bank
can extend the response period by an additional 60 days by notifying the claimant in
writing, prior to the end of the initial 60-day period, that an additional period is
required. The notice of extension must set forth the special circumstances and the
date by which the Bank expects to render its decision.
	 
	 	9.2.5	 	Notice of Decision. The Bank shall notify the claimant in writing of
its decision on review. The Bank shall write the notification in a manner calculated
to be understood by the claimant. The notification shall set forth:






	 	(a)	 	The specific reasons for the denial;
	 
	 	(b)	 	A reference to the specific provisions of the Agreement on
which the denial is based;
	 
	 	(c)	 	A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant (as defined in applicable ERISA
regulations) to the claimant’s claim for benefits; and
	 
	 	(d)	 	A statement of the claimant’s right to bring a civil action
under ERISA Section 502(a).





Article 10

Amendments And Termination




     Notwithstanding any other provision in this Agreement, the Bank may amend or terminate the
Agreement at any time, or may amend or terminate the Executive’s rights under the Agreement at any
time prior to the Executive’s death, by providing written notice of such to the Executive. Upon
termination of the Executive’s rights under this Agreement, the Executive will be eligible for any
life insurance benefit offered to the general employees of the Bank



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Supplemental Life Insurance Agreement




Article 11

Administration





	11.1	 	Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or persons as the Board may
choose. The Plan Administrator shall also have the discretion and authority to (i) make,
amend, interpret and enforce all appropriate rules and regulations for the administration of
this Agreement and (ii) decide or resolve any and all questions including interpretations of
this Agreement, as may arise in connection with this Agreement.
	 
	11.2	 	Agents. In the administration of this Agreement, the Plan Administrator may employ
agents and delegate to them such administrative duties as it sees fit, (including acting
through a duly appointed representative), and may from time to time consult with counsel who
may be counsel to the Bank.
	 
	11.3	 	Binding Effect of Decisions. The decision or action of the Plan Administrator with
respect to any question arising out of or in connection with the administration,
interpretation and application of this Agreement and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all persons having any interest in
this Agreement.
	 
	11.4	 	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the
members of the Plan Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this Agreement, except
in the case of willful misconduct by the Plan Administrator or any of its members.
	 
	11.5	 	Information. To enable the Plan Administrator to perform its functions, the Bank
shall supply full and timely information to the Plan Administrator on all matters relating to
the Base Salary of the Executive, the date and circumstances of the retirement, Disability,
death or Separation from Service of the Executive, and such other pertinent information as the
Plan Administrator may reasonably require.





Article 12

Miscellaneous





	12.1	 	Binding Effect. This Agreement shall bind the Executive and the Bank, their
beneficiaries, survivors, executors, administrators and transferees and any Beneficiary.
	 
	12.2	 	No Guarantee of Employment. This Agreement is not an employment policy or contract.
It does not give the Executive the right to remain an Executive of the Bank, nor does it
interfere with the Bank’s right to discharge the Executive. It also does not require the
Executive to remain an Executive nor interfere with the Executive’s right to terminate
employment at any time.




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Supplemental Life Insurance Agreement





	12.3	 	Applicable Law. The Agreement and all rights hereunder shall be governed by and
construed according to the laws of the State of Maryland, except to the extent preempted by
the laws of the United States of America.
	 
	12.4	 	Reorganization. The Bank shall not merge or consolidate into or with another
company, or reorganize, or sell substantially all of its assets to another company, firm or
person unless such succeeding or continuing company, firm or person agrees to assume and
discharge the obligations of the Bank under this Agreement. Upon the occurrence of such
event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or
survivor company.
	 
	12.5	 	Notice. Any notice or filing required or permitted to be given to the Bank under
this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or
certified mail, to the address below:




Chief Financial Officer

Old Line Bank

P.O. Box 1890

Waldorf, Md. 20604





	 	 	Such notice shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark or the receipt for registration or certification.
	 
	 	 	Any notice or filing required or permitted to be given to the Executive under this Agreement
shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known
address of the Executive.
	 
	12.6	 	Entire Agreement. This Agreement, along with the Executive’s Beneficiary Designation
Form, constitutes the entire agreement between the Bank and the Executive as to the subject
matter hereof. No rights are granted to the Executive under this Agreement other than those
specifically set forth herein.





     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated above.



	 	 	 	 	 	 	 
	EXECUTIVE:	 	BANK:	 	 
	 
	 	 	 	 	 	 
	 	 	Old Line Bank	 	 
	 
	 	 	 	 	 	 
	/s/ Christine M. Rush

	 	By
	 	/s/ James E. Cornelsen	 	 
	 	 	 	 	 	 	 
	Christine Rush
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title
	 	President	 	 







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