Exhibit
10.8


FORM OF


BRADFORD BANK


EMPLOYEE SEVERANCE COMPENSATION PLAN


A.                                    Purpose.


The primary purpose of the
Bradford Bank Employee Severance Compensation Plan (the “Plan”) is to ensure
the successful continuation of the business of Bradford Bank (the “Bank”) and
the fair and equitable treatment of the Bank’s employees following a Change in
Control (as defined below).


B.            Covered Employees.


Subject to paragraph C below, any employee of the Bank with at least one year of service as of his or her
termination date shall be eligible to receive a Change in Control Severance
Benefit (as defined below) if, within the period beginning on the effective
date of a Change in Control and ending on the first anniversary of such date,
(i) the employee’s employment with the Bank is involuntarily terminated or (ii)
the employee terminates employment with the Bank voluntarily after being
offered continued employment in a position that is not a Comparable Position
(as defined below).


C.                                    Limitations on Eligibility
for Change in Control Severance Benefits or Management Restructuring Benefits.


(1)                                  No employee shall be eligible for a Change in
Control Severance Benefit if (a) his or her employment is terminated for “Cause,”
(b) he or she is offered a Comparable Position and declines to accept such
position, or (c) the employee is, at the time of termination of
employment, a party to an individual employment agreement or change in control
agreement with the Bank and/or Bradford Bancorp, Inc. (the “Company”).


(2)                                  For purposes of
this Plan, a termination of employment for “Cause” shall include termination
because of the employee’s personal dishonesty, incompetence, 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 Plan.


(3)                                  For purposes of this Plan, a “Comparable
Position” shall mean a position that would (a) provide the employee with
base compensation and benefits that are comparable in the aggregate to those
provided to the employee prior to the Change in Control; (b) provide the
employee with an opportunity for variable bonus compensation that is comparable
to the opportunity provided to the employee prior to the Change in Control; (c)
be in a location that would not require the employee to increase his or her
daily one way commuting distance by more than thirty-five (35) miles as
compared to the employee’s commuting distance immediately prior to the Change
in Control; and (d) have job skill requirements and duties that are comparable
to the requirements and duties of the position held by the employee prior to
the Change in Control.













D.            Definitions
of Change in Control.


 For purposes of this Plan, “Change in
Control” means the occurrence of any one of the following events:


(1)                                  Merger:  The Company merges into or consolidates with
another corporation, or merges another corporation into the Company, and as a
result, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by persons
who were stockholders of the Company immediately before the merger or
consolidation;


(2)                                  Acquisition
of Significant Share Ownership:   A
report on Schedule 13D or another form or schedule (other than Schedule 13G) is
filed or required to be filed under Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, if the schedule discloses that the filing person or
persons acting in concert has or have become the beneficial owner(s) of 25% or
more of a class of the Company’s voting securities, but this clause (2) shall
not apply to beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly beneficially
owns 50% or more of its outstanding voting securities;


(3)                                  Change
in Board Composition:  During any
period of two consecutive years, individuals who constitute the Company’s Board
of Directors at the beginning of the two-year period cease for any reason to
constitute at least a majority of the Company’s Board of Directors; provided,
however, that for purposes of this clause (3), each director who is first
elected by the board (or first nominated by the board for election by the
stockholders) by a vote of at least two-thirds (2⁄3) of the directors who
were directors at the beginning of the two-year period shall be deemed to have
also been a director at the beginning of such period; or


(4)                                  Sale
of Assets:  The Company or the Bank
sells to a third party all or substantially all of its assets.


E.             Determination of the Change in
Control Severance Benefit.


(1)                                  The Change in Control Severance Benefit
payable to an eligible employee under this Plan shall be determined under the
following schedule:


(a)                                  An eligible employee who does
not receive a benefit pursuant to paragraph (b) of this Section shall receive a
Change in Control Severance Benefit equal to the product of (i) the employee’s
years of service from his or her hire date (including partial years) through
the termination date and (ii) an amount equal to two (2) weeks of the employee’s
Base Compensation (as defined below).  A “year
of service” shall mean each 12-month period of service following an employee’s
hire date determined without regard the number of hours worked during such
period(s).  The minimum payment to an
eligible employee under this paragraph shall be an amount equal to two (2)
weeks of Base Compensation and the maximum payment to an eligible employee
shall be an amount equal to six (6) months of Base Compensation.



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(b)                                 An
eligible employee-officer designated by the Board of Directors prior to a
Change in Control shall receive a Change
in Control Severance Benefit equal to twelve (12) months of Base
Compensation.


(c)                                  The
Change in Control Severance Benefit shall be paid in a lump sum not later than
five (5) business days after the date of the employee’s termination of
employment.


(2)                                  For purpose of
determinations under this paragraph E, “Base Compensation” shall mean:


(a)                                  For salaried
employees, the employee’s annual base salary at the rate in effect on his or
her termination date or, if greater, the rate in effect on the date immediately
preceding the Change in Control.


(b)                                 For employees
whose compensation is determined in whole or in part on the basis of commission
income, the employee’s base salary at termination (or, if greater, the employee’s
base salary on the date immediately preceding the effective date of the Change
in Control), if any, plus the commissions earned by the employee in the twelve
(12) full calendar months preceding his or her termination date (or, if
greater, the commissions earned in the twelve (12) full calendar months
immediately preceding the effective date of the Change in Control).


(c)                                  For hourly
employees, the employee’s total hourly wages for the twelve (12) full calendar
months preceding his or her termination date or, if greater, the twelve (12)
full calendar months preceding the effective date of the Change in Control.


F.             Withholding.


All
payments will be subject to customary withholding for federal, state and local
tax purposes.


G.            Parachute
Payment.


Notwithstanding
anything in this Plan to the contrary, if a Change in Control Severance Benefit
to an employee who is a “Disqualified Individual” shall be in an amount which
includes an “Excess Parachute Payment,” taking into account payments under this
Plan and otherwise, the benefit payable under this Plan shall be reduced to the
maximum amount which does not include an Excess Parachute Payment.  The terms “Disqualified Individual” and “Excess
Parachute Payment” shall have the same meanings as under Section 280G of the
Internal Revenue Code of 1986, as amended, or any successor provision thereto.


H.            Administration.


The Plan is administered by
the Board, which shall have the discretion to interpret the terms of the Plan
and to make all determinations about eligibility and payment of benefits.  All decisions of the Board, any action taken
by the Board with respect to the Plan and within the powers granted to the
Board under the Plan, and any interpretation by the Board of any term or
condition of the Plan, are conclusive and binding on all persons, and will be
given the maximum possible deference allowed by law.  The Board may delegate and reallocate any
authority and responsibility with respect to the Plan.



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I.              Source
of Payments.


Unless otherwise determined by the Board, all
payments and benefits provided under this Agreement shall be paid solely by the
Bank.  Notwithstanding anything in this
Agreement to the contrary, no provision of this Agreement shall be construed so
as to result in the duplication of any payment or benefit.


J.             Inalienability.


In no event may any Employee sell, transfer, anticipate, assign or
otherwise dispose of any right or interest under the Plan.  At no time will any such right or interest be
subject to the claims of creditors, nor liable to attachment, execution or
other legal process.


K.            Governing Law.


The
provisions of the Plan will be construed, administered and enforced in
accordance with the laws of the State of Maryland, except to the extent that
federal law applies.


L.            Severability.


If
any provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability will not affect any other provision of the Plan, and the Plan
will be construed and enforced as if such provision had not been included.


M.           No
Employment Rights.


Neither the establishment nor the terms of this Plan shall be held or
construed to confer upon any employee the right to a continuation of employment
by the Bank, nor constitute a contract of employment, express or implied.  The Bank reserves the right to dismiss or
otherwise deal with any employee to the same extent and on the same basis as
though this Plan had not been adopted. 
Nothing in this Plan is intended to alter the at-will status of the Bank’s
employees, it being understood that, except to the extent otherwise expressly
set forth to the contrary in an individual employment-related agreement, the
employment of any employee may be terminated at any time by either the Bank or
the employee with or without cause.


N.            Amendment
and Termination.


The Plan may be terminated or amended in any respect by resolution
adopted by a majority of the Board, unless a Change in Control has previously
occurred.  If a Change in Control occurs,
the Plan no longer shall be subject to amendment, change, substitution,
deletion, revocation or termination in any respect whatsoever.  The form of any proper amendment or
termination of the Plan shall be a written instrument signed by a duly
authorized officer or officers of the Bank, certifying that the amendment or
termination has been approved by the Board. 
A proper amendment of the Plan automatically shall effect a
corresponding amendment to each Participant’s rights hereunder.  A proper termination of the Plan
automatically shall effect a termination of all employees’ rights and benefits
hereunder.


O.            Required
Provisions.


(1)                                  In
the event any of the provisions of this Section
P are in conflict with the terms of this Plan, this Section P shall prevail.



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(2)                                  The
Bank’s Board of Directors may terminate an employee’s employment at any time,
but any termination by the Bank, other than termination for Cause, shall not
prejudice an employee’s right to compensation or other benefits under this
Plan.  An employee shall not have the
right to receive compensation or other benefits for any period after
Termination for Cause.


(3)                                  If an employee is suspended from office
and/or temporarily prohibited from participating in the conduct of the Bank’s
affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or (g)(1); the Bank’s obligations
under this Plan shall be suspended as of the date of service, unless stayed by
appropriate proceedings.  If the charges
in the notice are dismissed, the Bank may in its discretion:  (i) pay the employee all or part of the
compensation withheld while their contract obligations were suspended; and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.


(4)                                  If
an employee is removed and/or permanently prohibited from participating in the
conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1),
all obligations of the Bank under this Plan shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.


(5)                                  If
the Bank is in default as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act, 12 U.S.C. §1813(x)(1) all obligations under this Plan shall
terminate as of the date of default, but this paragraph shall not affect any
vested rights of the contracting parties.


(6)                                  All
obligations under this Plan shall be terminated, except to the extent determined
that continuation of the Plan is necessary for the continued operation of the
Bank:  (i) by the Director of the Office
of Thrift Supervision (OTS), or his designee, at the time the Federal Deposit
Insurance Corporation (FDIC) enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
Federal Deposit Insurance Act, 12 U.S.C. §1823(c); or (ii) by the Director of
the OTS (or his designee) at the time the Director (or his designee) approves a
supervisory merger to resolve problems related to the operations of the Bank or
when the Bank is determined by the Director to be in an unsafe or unsound
condition.  Any rights of the parties
that have already vested, however, shall not be affected by such action.


(7)                                  Any
payments made to employees pursuant to this Plan, or otherwise, are subject to
and conditioned upon their compliance with 12 U.S.C. §1828(k) and FDIC
regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.



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This plan has been approved and adopted by the Board of Directors of
the Bank and is effective as of [date].


	
   

  	
  

  	
  BRADFORD BANK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  For the Entire Board of Directors

  



 



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