EXHIBIT
      10.8

    

      THE
        TALBOT BANK OF EASTON, MARYLAND

      SUPPLEMENTAL
        DEFERRED COMPENSATION PLAN

       

      TRUST
        AGREEMENT

       

       

      Effective
        as of December 11, 1996

      


      



      
        
           

        

        
           

          
            

          

        

        
          Table
            of Contents

          
          

        

      


      THE
        TALBOT BANK OF EASTON, MARYLAND

      SUPPLEMENTAL
        DEFERRED COMPENSATION PLAN TRUST AGREEMENT

       

      Effective
        as of December 11, 1996

      


      TABLE
        OF CONTENTS

      


      ARTICLE
        1

      ESTABLISHMENT
        OF TRUST

      
        	 	 	 
	
                1.1

              	
                TRUST
                  DEPOSITS

              	
                1

              
	
                1.2

              	
                IRREVOCABILITY

              	
                1

              
	
                1.3

              	
                GRANTOR
                  TRUST

              	
                1

              
	
                1.4

              	
                PLAN
                  ASSETS

              	
                2

              
	 	 	 


      

      ARTICLE
        2

      THE
        PLAN

      
        	 	 	 
	
                2.1

              	
                BENEFIT
                  PROVISIONS

              	
                2

              
	
                2.2

              	
                CONFLICTS
                  WITH TRUST

              	
                2

              
	
                2.3

              	
                TRUSTEE
                  RELIANCE

              	
                2

              
	 	 	 


      

      ARTICLE
        3

      PAYMENTS
        TO THE PLAN PARTICIPANT OR BENEFICIARIES

      
        	 	 	 
	
                3.1

              	
                PAYMENT
                  SCHEDULE AND TAXES 

              	
                2

              
	
                3.2

              	
                PAYMENTS
                  BY EMPLOYER 

              	
                2

              
	
                3.3

              	
                CESSATION
                  OF PAYMENTS: RECOMMENCEMENT 

              	
                3

              
	 	 	 


      

      ARTICLE
        4

      PAYMENTS
        TO EMPLOYER

      
        	 	 	 
	
                4.1

              	
                PAYMENTS
                  TO THE EMPLOYER

              	
                3

              
	 	 	 


      

      ARTICLE
        5

      INVESTMENT
        AUTHORITY

      
        	 	 	 
	
                5.1

              	
                TRUSTEE
                  AUTHORITY

              	
                3

              
	
                5.2

              	
                TYPES
                  OF INVESTMENTS

              	
                3

              
	 	 	 


      

      ARTICLE
        6

      DISPOSITION
        OF INCOME

      
        	 	 	 
	
                6.1

              	
                DISPOSITION
                  OF INCOME

              	
                3

              
	 	 	 


      

      ARTICLE
        7

      RESPONSIBILITY
        OF THE TRUSTEE

      
        	 	 	 
	
                7.1

              	
                TRUSTEE
                  INDEMNIFICATION

              	
                4

              
	
                7.2

              	
                LIMITATION
                  ON POWERS

              	
                4

              
	 	 	 


      

      ARTICLE
        8

      FEES
        AND EXPENSES OF THE TRUSTEE

      
        	 	 	 
	
                8.1

              	
                TRUSTEE
                  EXPENSES AND FEES

              	
                4

              
	 	 	 


      

      ARTICLE
        9

      RESIGNATION
        AND REMOVAL OF THE TRUSTEE

      
        	 	 	 
	
                9.1

              	
                TRUSTEE
                  RESIGNATION 

              	
                4

              
	
                9.2

              	
                TRUSTEE
                  REMOVAL 

              	
                4

              
	
                9.3

              	
                TRANSFER
                  OF ASSETS 

              	
                4

              
	
                9.4

              	
                COURT'S
                  APPOINTMENT OF SUCCESSOR 

              	
                5

              
	 	 	 


      

      ARTICLE
        10

      APPOINTMENT
        OF SUCCESSOR

      
        	 	 	 
	
                10.1

              	
                APPOINTMENT
                  OF SUCCESSOR

              	
                5

              
	 	 	 


      

      ARTICLE
        11

      AMENDMENT
        OR TERMINATION

      
        	 	 	 
	
                11.1

              	
                AMENDMENT

              	
                5

              
	
                11.2

              	
                TERMINATION

              	
                5

              
	 	 	 


      

      ARTICLE
        12

      MISCELLANEOUS

      
        	 	 	 
	
                12.1

              	
                VALIDITY
                  OF PROVISIONS

              	
                5

              
	
                12.2

              	
                NO
                  ASSIGNMENT OF BENEFITS

              	
                5

              
	
                12.3

              	
                GOVERNING
                  LAW

              	
                5

              
	
                12.4

              	
                SUCCESSOR
                  AND ASSIGNS

              	
                6

              
	
                12.5

              	
                TRUSTEE'S
                  SUCCESSORS

              	
                6

              
	
                12.6

              	
                HEADINGS

              	
                6

              
	 	 	 


      

      ARTICLE
        13

      EFFECTIVE
        DATE

      
        	 	 	 
	
                13.1

              	
                EFFECTIVE
                  DATE

              	
                6

              


      

      


       

      
        
           

        

        
           

          
            

          

        

        
          Table
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      THE
        TALBOT BANK OF EASTON, MARYLAND

      SUPPLEMENTAL
        DEFERRED COMPENSATION PLAN TRUST AGREEMENT

       

      RECITALS

       

      THIS
        TRUST AGREEMENT is made and entered into effective as of the ________ day
        of
        ___________, 1996 by and between The Talbot Bank of Easton, Maryland (the
        “Employer”), which sponsors the Talbot Bank of Easton, Maryland, Supplemental
        Deferred Compensation Plan (the “Plan”), and Alex. Brown Capital Advisory &
        Trust Company, a corporation having trust powers under the laws of the State
        of
        Maryland (the “Trustee”). 

       

      The
        Employer has established the Plan which is intended to be a “top hat plan”
        (i.e., an unfunded plan of deferred compensation maintained for members of
        a
        select group of management or highly compensated employees) under sections
        201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security
        Act
        of 1974 (“ERISA”). The Plan has been created for the sole benefit of the
        Employer's President and Chief Executive Officer. 

       

      The
        Plan
        provides for the Employer to pay all Plan benefits from its general revenues
        and
        assets. The Employer wishes to establish an irrevocable trust fund for the
        purpose of providing a source from which to pay benefits under the Plan,
        such
        trust fund being subject to the claims of the Employer's creditors in the
        event
        of the Employer's bankruptcy or insolvency. Contributions to the trust fund
        shall be held by the Trustee and invested, reinvested and distributed in
        accordance with the provisions of this Trust Agreement. 

       

      The
        Trust
        established by this Trust Agreement is intended to be a “grantor trust,” with
        the result that the corpus and income of the trust are treated for tax purposes
        as assets and income of the Employer. 

       

      NOW,
        THEREFORE, in consideration of the mutual covenants contained herein, the
        Employer and the Trustee, intending to be legally bound, declare and agree
        as
        follows: 

       

      ARTICLE
        1

       

      ESTABLISHMENT
        OF TRUST

       

      1.1  TRUST
        DEPOSITS.
        The
        Employer shall deposit with the Trustee, in trust, certain funds as required
        under the Plan, which funds shall be held and disposed of by the Trustee
        as
        provided in this Trust Agreement. 

       

      1.2  IRREVOCABILITY.
        The
        Trust shall be irrevocable.

       

      1.3  GRANTOR
        TRUST.
        The
        Trust is intended to be a grantor trust, of which the Employer is the grantor,
        within the meaning of sub-part E, part I, subchapter J, chapter 1, subtitle
        A of
        the Internal Revenue Code of 1986, as amended, and shall be construed
        accordingly.

       

      
        
           

        

        
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      1.4  PLAN
        ASSETS.
        The
        principal of the Trust, and any earnings thereon, shall be held separate
        and
        apart from other funds of the Employer and shall be used exclusively for
        the
        uses and purposes of the Plan and general insolvency creditors of the Employer
        as herein set forth. Any assets held by the Trust will be subject to the
        claims
        of the Employer's general creditors under federal and state law.


       

      ARTICLE
        2

       

      THE
        PLAN

       

      2.1  BENEFIT
        PROVISIONS.
        The
        terms of the Plan shall govern the amount, form and timing of benefit payments
        under a Plan to which the Plan Participant or a Beneficiary is entitled.
        

       

      2.2  CONFLICTS
        WITH TRUST.
        Notwithstanding any other provision of this Trust or the Plan to the contrary,
        in the event any provision of the Plan is inconsistent with any provision
        of
        this Trust, the terms of this Trust shall control. 

       

      2.3  TRUSTEE
        RELIANCE.
        Any
        direction received by the Trustee from the Employer concerning the Trustee's
        receipt, holding, disposition, investment, or other treatment of the assets
        of
        the Trust shall conclusively be deemed to be in accordance with the terms
        of the
        Plan, and the Trustee shall be entitled to rely, and shall be held harmless
        by
        the Employer in relying, on the propriety of such direction. 

       

      ARTICLE
        3

       

      PAYMENTS
        TO THE PLAN PARTICIPANT OR BENEFICIARIES

       

      3.1  PAYMENT
        SCHEDULE AND TAXES.
        The
        Employer shall deliver to the Trustee a schedule (the “Payment Schedule”) that
        indicates the amounts payable in respect of the Plan Participant upon his
        becoming entitled to receive a distribution from the Plan and that provides
        the
        form in which such amounts are to be paid (as provided for and available
        under
        the Plan) and the time of commencement for the payment of such amounts. The
        Trustee shall make payments to the Plan Participant or his Beneficiaries
        in
        accordance with such Payment Schedule. The Employer shall make provision
        for the
        reporting and withholding of any federal, state or local taxes that may be
        required to be withheld with respect to the payment of benefits pursuant
        to the
        terms of the Plan and shall pay amounts withheld to the appropriate taxing
        authorities. The Trustee will have no responsibilities of any kind with respect
        to any such withholding, but shall provide to the Employer any information
        concerning the Trust in the possession of the Trustee which reasonably is
        requested by the Employer with respect to the Employer's withholding obligations
        under the Plan and this Trust. The Employer will indemnify and hold harmless
        the
        Trustee for any liability incurred by the Trustee with respect to such
        withholding. 

       

      3.2  PAYMENTS
        BY EMPLOYER.
        The
        Employer may make payment of benefits directly to the Plan Participant or
        his
        Beneficiaries as they become due under the terms of the Plan. The Employer
        shall
        notify the Trustee of the Employer's decision to make payment of benefits
        directly prior to the time amounts are payable to the Plan Participant or
        his
        Beneficiaries.

       

      
        
           

        

        
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      3.3  CESSATION
        OF PAYMENTS: RECOMMENCEMENT.
        Upon
        notice from the Employer, the Trustee shall suspend or, if applicable,
        recommence payments in accordance with the terms of such notification.


       

      ARTICLE
        4

       

      PAYMENTS
        TO EMPLOYER

       

      4.1  PAYMENTS
        TO THE EMPLOYER.
        Except
        as provided herein, the Employer shall not have any right or power to direct
        the
        Trustee to return to the Employer or to divert to others any of the Trust
        assets
        before all payments of benefits have been made to Plan Participants or his
        Beneficiaries pursuant to the terms of the Plan. 

       

      ARTICLE
        5

       

      INVESTMENT
        AUTHORITY

       

      5.1  TRUSTEE
        AUTHORITY.
        All
        rights associated with assets of the Trust shall be exercised by the Trustee
        or
        the person designated by Trustee, and shall in no event be exercisable by
        or
        rest with the Plan Participant or the Employer. 

       

      5.2  TYPES
        OF INVESTMENTS.
        The
        Trustee shall invest and reinvest the principal and income of the Trust Fund
        and
        keep the Trust Fund invested without distinction between principal and income
        in
        Institutional Shares of the following Flag Investor Mutual Funds managed
        by
        Alex. Brown Incorporated (or its affiliates): 

       

      Intermediate
        -Term Income Fund, Inc.

      Equity
        Partners Fund, Inc.

      Value
        Builder Fund, Inc. 

       

      Investments
        of the aforesaid mutual funds are subject to the Annual Fund Operating Expenses
        associated with each such mutual fund. 

       

      The
        Employer and the Trustee can agree from time to time to alter, amend or modify
        the aforesaid form of investments. 

       

      ARTICLE
        6

       

      DISPOSITION
        OF INCOME

       

      6.1  DISPOSITION
        OF INCOME.
        During
        the term of this Trust, all income received by the Trust shall be accumulated
        and reinvested.

       

      
        
           

        

        
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      ARTICLE
        7

       

      RESPONSIBILITY
        OF THE TRUSTEE

       

      7.1  TRUSTEE
        INDEMNIFICATION.
        

       

      (a)  If
        the
        Trustee undertakes or defends any litigation arising in connection with this
        Trust, the Employer agrees to indemnify the Trustee against the Trustee's
        costs,
        expenses and liabilities (including, without limitation, attorneys' fees
        and
        expenses) relating thereto and to be primarily liable for such payments.
        

       

      (b)  The
        Employer agrees to hold harmless and indemnify the Trustee, to the fullest
        extent permitted under applicable law, for any and all liabilities of any
        kind
        incurred by the Trustee in connection with the Trust (i) relating to periods
        of
        time prior to the Trustee's becoming Trustee or (ii) relating to periods
        of time
        while the Trustee is Trustee but not related to the Trustee's gross negligence,
        willful misconduct, or breach of its duties hereunder. 

       

      7.2  LIMITATION
        ON POWERS.
        Notwithstanding any powers granted to the Trustee pursuant to this Trust
        Agreement or to applicable law, the Trustee shall not have any power that
        could
        give this Trust the objective of carrying on a business and dividing the
        gains
        therefrom, within the meaning of section 301.7701-2 of the Procedure and
        Administrative Regulations promulgated pursuant to the Internal Revenue Code.
        

       

      ARTICLE
        8

       

      FEES
        AND EXPENSES OF THE TRUSTEE

       

      8.1  TRUSTEE
        EXPENSES AND FEES.
        The
        Employer shall pay all expenses of administering the Trust and all Trustee's
        fees and expenses with respect to which the Trustee is entitled to compensation
        or reimbursement. 

       

      ARTICLE
        9

       

      RESIGNATION
        AND REMOVAL OF THE TRUSTEE

       

      9.1  TRUSTEE
        RESIGNATION.
        The
        Trustee may resign at any time by written notice to the Employer, which shall
        be
        effective thirty (30) days after receipt of such notice unless the Employer
        and
        the Trustee agree otherwise. 

       

      9.2  TRUSTEE
        REMOVAL.
        The
        Trustee may be removed by the Employer, on thirty (30) days notice or upon
        shorter notice accepted by the Trustee. 

       

      9.3  TRANSFER
        OF ASSETS.
        Upon
        resignation or removal of the Trustee, all assets shall subsequently be
        transferred to the successor Trustee, which transfer shall be completed no
        later
        than sixty (60) days after such resignation or removal.

       

      
        
           

        

        
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      9.4  COURT'S
        APPOINTMENT OF SUCCESSOR.
        If the
        Trustee resigns or is removed, a successor shall be appointed, in accordance
        with the following section, by the effective date of resignation or removal.
        If
        no such appointment has been made, the Trustee may apply to a court of competent
        jurisdiction for appointment of a successor or for instructions. All expenses
        of
        the Trustee in connection with the proceeding shall be paid by the Employer.
        

       

      ARTICLE
        10

       

      APPOINTMENT
        OF SUCCESSOR

       

      10.1  APPOINTMENT
        OF SUCCESSOR.
        If the
        Trustee resigns or is removed in accordance with Sections 9.1 or 9.2 hereof,
        the
        Employer may appoint any third party, such as a bank trust department or
        other
        party that may be granted corporate trustee powers under state law, as a
        successor to replace the Trustee upon resignation or removal. The appointment
        shall be effective when accepted in writing by the new trustee, who shall
        have
        all of the rights and powers of the former trustee, including ownership rights
        in the Trust assets. The former trustee shall execute any instrument reasonably
        necessary to evidence the transfer. 

       

      ARTICLE
        11

       

      AMENDMENT
        OR TERMINATION

       

      11.1  AMENDMENT.
        This
        Trust Agreement may be amended by a written instrument executed by the Trustee
        and the Employer. Notwithstanding the foregoing, no such amendment shall
        make
        the Trust revocable after it has become irrevocable in accordance herewith.
        

       

      11.2  TERMINATION.
        The
        Trust shall not terminate until the date on which the Plan Participant and
        his
        Beneficiaries no longer are entitled to benefits pursuant to the terms of
        Article 3 hereof. Upon termination of the Trust, any assets remaining in
        the
        Trust shall be returned to the Employer. 

       

      ARTICLE
        12

       

      MISCELLANEOUS

       

      12.1  VALIDITY
        OF PROVISIONS.
        Any
        provision of this Trust Agreement prohibited by law shall be ineffective
        to the
        extent of any such prohibition, without invalidating the remaining provisions
        hereof 

       

      12.2  NO
        ASSIGNMENT OF BENEFITS.
        Benefits payable on behalf of a Plan participant and his or her beneficiaries
        under this Trust Agreement may not be anticipated, assigned (either at law
        or in
        equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
        levy, execution or other legal or equitable process. 

       

      12.3  GOVERNING
        LAW.
        This
        Trust Agreement shall be governed by and construed in accordance with the
        laws
        of the State of Maryland.

       

      
        
           

        

        
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      12.4  SUCCESSOR
        AND ASSIGNS.
        This
        Agreement shall be binding upon and inure to the benefit of the Employer
        and the
        Trustee and their respective successors and assigns. 

       

      12.5  TRUSTEE'S
        SUCCESSORS.
        Any
        corporation into which the Trustee may be merged or with which it may be
        consolidated, or any corporation resulting from any merger, reorganization
        or
        consolidation to which the Trustee may be a party, or any corporation to
        which
        all or substantially all of the trust business of the Trustee may be
        transferred, shall be the successor of the Trustee hereunder without the
        execution or filing of any instrument or the performance of any act.


       

      12.6  HEADINGS.
        Headings of the Sections and Articles of this Agreement are included for
        convenience only and shall not control the meaning or interpretation of any
        provision of this Agreement. 

       

      ARTICLE
        13

       

      EFFECTIVE
        DATE

       

      13.1  EFFECTIVE
        DATE.
        The
        effective date of this Trust Agreement is December 11, 1996.

       


      
        
           

        

        
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      IN
        WITNESS WHEREOF,
        this
        Trust Agreement has been duly executed under seal by the parties hereto,
        effective as of the day and year first above written. 

       

      
        	ATTEST/WITNESS:	 	 	THE
                TALBOT BANK OF EASTON, MARYLAND
	 	 	 	 
	 	 	 	 
	/s/ 	 	 	/s/ 
	
                

              	 	 	
                
                  

                

              
	Print
                Name:	 	 	
                Print
                  Name:  Jerome M. McConnell
Date:

              	
                (SEAL)

              


      

       

      
        
          	ATTEST/WITNESS:	 	 	ALEX,
                  BROWN CAPITAL ADVISORY & TRUST COMPANY, TRUSTEE
	 	 	 	 
	 	 	 	 
	/s/ 	 	 	/s/ 
	
                  

                	 	 	
                  
                    

                  

                
	Print
                  Name:	 	 	
                  Print
                    Name:
Date:

                	
                  (SEAL)

                


        

         

         

        
          
             

          

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