Document:

Exhibit 10.1

 

 

SEPARATION
AGREEMENT

 

THIS SEPARATION AGREEMENT (this “Agreement”)
is made by and among Kevin B. Cashen (“Executive”), Bay Bank, F.S.B., a federal savings bank (the “Bank”),
and Bay Bancorp, Inc., a Maryland corporation and parent company of the Bank (“Bancorp” and, together
with the Bank, the “Company”). Executive, the Bank and Bancorp are sometimes individually referred to
herein as a “Party” and are sometimes collectively referred to herein as the “Parties”.
Capitalized terms used but not defined herein shall have the meanings given such terms in the Employment Agreement (as defined
below).

 

RECITALS

 

WHEREAS, Executive is employed by the Company
as its President and Chief Executive Officer pursuant to an Employment Agreement, dated as of February 26, 2014, by and among Executive,
the Bank and Bancorp (the “Employment Agreement”), which is being amended hereby as provided in Section
4(e) hereof.

 

WHEREAS, Executive also serves as a director
of the Bank and of Bancorp.

 

WHEREAS, Executive and the Company desire
to terminate Executive’s relationships with the Company and agree to the terms and conditions relating thereto.

 

NOW, THEREFORE, in consideration of the
covenants and other agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the Parties, the Parties agree as follows:

 

AGREEMENT

 

1.                 
Resignation. Executive hereby resigns as (a) the President and Chief Executive Officer and an employee of
the Company, (b) a director of the Bank and (c) a director of Bancorp, such resignations to be effective as of December 5, 2014
(the “Resignation Date”). Executive agrees and understands that after the Resignation Date, he is not
authorized to perform any work for, or to represent himself to others as an employee or other agent of, the Company. The Company
hereby waives any prior notice required to be given pursuant to the Employment Agreement by Executive in connection with his resignations.

 

2.                 
Commitments of the Company.

 

(a)               
Payment of Accrued Amounts. Executive shall be entitled to receive (i) any reimbursable business expenses
(as provided in the Employment Agreement) that have been incurred by Executive but remain unreimbursed by the Company as of the
Resignation Date, provided that Executive has accounted for such expenses in writing on or before the Resignation Date, and (ii)
all unpaid Base Salary and other compensation that has accrued through the Resignation Date (the amounts set forth in items
(i) and (ii) are collectively referred to herein as the “Accrued Amounts”). The Accrued Amounts,
less all applicable federal, state and local tax withholding and deductions, shall be paid as soon as is reasonably practicable
following the Resignation Date (but in no event later than five (5) business days following the Resignation Date).

 

    	 

    	 

    

(b)              
Payment of Severance and Additional Benefits. In full accord and satisfaction of all Released Claims (as defined
below in Section 4(a)(i) of this Agreement), and subject to Section 5 and Section 6 of this Agreement, Executive
shall be entitled to the following additional payments and benefits:

 

(i)                
The Bank will pay Executive the cash value of any unused vacation that Executive has accrued through the Resignation
Date, computed on a daily basis, which shall be paid in a lump sum within 10 day after the date on which this Agreement becomes
effective and enforceable (the “Effective Date”).

 

(ii)              
The Bank will Pay Executive an amount equal to $295,500 (the “Severance”),
which is the sum of (A) $250,000 (i.e., Executive’s Base Salary amount at the annual rate in effect immediately
prior to the Resignation Date) and (B) $45,500 (i.e., the average of the actual cash bonuses earned by Executive for the
calendar years ending December 31, 2011, 2012 and 2013). The Severance shall be paid in 12 equal
monthly installments commencing within 10 days after the Effective Date.

 

(iii)            
During the period that the Severance is paid, Executive may elect to continue his participation in the Company’s
medical and dental plan(s) pursuant to the federal Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
in which case the Company will reimburse Executive for the costs of such election less any amounts that Executive would have paid
for such coverages had he remained an active employee of the Company.

 

(iv)            
During the period that the Severance is paid, Executive may continue to participate in the Company’s life insurance
benefits plan(s) on the same terms and conditions that apply to the Company’s principal executive officer position; provided,
however, that if any life insurance benefits plan prohibits continued coverage of Executive due to his termination of employment
with the Company, then the Bank will pay the portion of the premium due upon conversion of Executive’s coverage to an individual
life insurance policy that relates to the period during which the Severance is paid.

 

(v)              
All unvested awards granted to Executive under the Carrollton Bancorp 2007 Equity Plan and the Jefferson Bancorp,
Inc. 2010 Stock Option Plan (collectively, the “Equity Plans”) that have not expired or been forfeited
pursuant to their terms (the “Equity Awards”) shall, notwithstanding any provisions thereof with respect
to vesting, immediately vest and become fully exercisable or payable, as the case may be. In addition, the award agreements evidencing
Equity Awards that are stock options will be amended to provide that such Equity Awards will, subject to the other terms and conditions
of such agreements, remain exercisable by Executive until the earlier of the date that is 12 months following the Resignation Date
and their Expiration Dates (as specified in the stock option agreements) notwithstanding the termination of Executive’s employment,
subject in all cases to the condition that Executive does not breach or threaten to breach this Agreement or any term of the Employment
Agreement that survives the termination of his employment. All Equity Awards shall otherwise remain subject to the terms and conditions
of the Equity Plans and their respective award agreements. Bancorp shall take or cause to be taken all actions necessary, consistent
with the terms and conditions of the Equity Plans, to effect such modifications. The Equity Awards that constitute stock options
are identified in Schedule 1 hereto.

 

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(vi)            
The Bank will provide Executive with reasonable outplacement services through a placement agency chosen by the Bank
for up to 12 months following the Effective Date.

 

(c)               
No Other Payments or Benefits. Executive agrees that he is not entitled to any payments by or benefits from
the Company other than (i) as set forth in this Section 2 or (ii) any monies properly payable to Executive for indemnification
or advancement by virtue of rights to which Executive may be entitled pursuant to the charter or bylaws of the Bank or the Company
or pursuant to any policy of insurance maintained by the Company. Without limiting the generality of the foregoing, Executive acknowledges
and agrees that he is not be entitled to any payments or benefits pursuant to Section 13 of the Employment Agreement.

 

3.                 
Termination of Benefits. Except as provided otherwise in paragraphs (iii) and (iv) of Section
2(b), Executive’s coverage under the Company’s employee benefit and insurance plans, programs and arrangements
will terminate on the Resignation Date (other than Executive’s right to elect to continue his health and dental insurance
at his sole cost and expense following the termination of his employment with the Bank pursuant to COBRA to the extent that paragraph
(iii) of Section 2(b) does not apply).

 

4.                 
Commitments of Executive.

 

(a)               
General Release and Forbearance Agreement.

 

(i)                
Except as provided in Section 4(a)(ii) hereof, Executive releases and discharges the Company, Affiliates,
their respective officers, directors, employees, agents, stockholders, and all employee benefit plans sponsored by the Company
(the “Released Parties”), from any and all debts, demands, actions, complaints, charges, causes of action,
suits, covenants, contracts, wages, bonuses, damages and any and all claims, demands, liabilities and expenses (including attorneys’
fees and costs) whatsoever of any name or nature, both in law and in equity (“Claims”) which he had,
now has or hereafter may have, based on any act or omission which occurred through the Effective Date, other than those described
in Section 4(a)(ii) hereof (the “Released Claims”). Without limiting the generality of the foregoing,
this general release covers all Claims arising out of or related to Executive’s employment with the Company, the termination
of his employment, the Employment Agreement, and/or any other relationship of any kind between Executive and a Released Party,
including, without limitation, (A) Claims for tort or contract, or relating to salary, wages, bonuses, severance, commissions,
stock or stock options, the breach of any oral or written contract or promise, misrepresentation, defamation, and interference
with prospective economic advantage, interference with contract, intentional and negligent infliction of emotional distress, negligence,
breach of the covenant of good faith and fair dealing, and medical, disability or other leave; (B) Claims arising out of, based
on, or connected with Executive’s employment by the Company, including, without limitation, the terms and conditions of employment,
or with his service as a director of the Company, and the termination of that employment or service, including, without limitation,
Claims arising under Section 806 of the Sarbanes-Oxley Act of 2002, and any other Claims alleging retaliation of any nature; (C)
for alleged securities violations by the Company, including, without limitation, in any way related to the exercise or payment
of equity awards granted to Executive; and/or (D) for unlawful employment discrimination of any kind, including, without limitation,
discrimination due to age, sex, disability or handicap, including, without limitation, failure to offer reasonable accommodations,
race, color, religion, sexual orientation, national origin, or sexual or other unlawful harassment arising under or based on any
local, state or federal equal employment opportunity, anti-discrimination or similar law, policy, order, regulation or guidelines
affecting or relating to Claims or rights of employees. This general release is agreed to without reliance upon any statement or
representation by the Company.

 

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(ii)              
Notwithstanding Section 4(a)(i) hereof, this general release does not cover any Claims in respect of (A) rights
to indemnification and to be held harmless and be defended by the Company pursuant to the Bank’s charter or bylaws or Bancorp’s
charter or bylaws to the extent that Executive is entitled thereto, (B) directors and officers insurance rights to which Executive
may be entitled, (C) rights to contribution to which Executive may be entitled, (D) rights that Executive has in his capacity as
an equityholder of Bancorp, (E) rights under this Agreement, including in respect of Severance, or (F) rights to any vested benefits
under the Bay Bank, F.S.B. 401(k) Savings Plan and Trust or the Equity Plans (collectively, the “Excluded Claims”).

 

(iii)            
Executive represents and warrants that he has not sued or filed any Claim against the Company or any of the other
Released Parties in or with any local, state or federal court or administrative agency. Executive will not sue or bring any Released
Claim against the Company or any of the other Released Parties with respect to any matters arising out of or relating to his employment
or service with the Company, or any Released Claims that, as a matter of law, cannot be released, such as under workers’
compensation, for unemployment benefits or any Released Claims related to the Company’s future involvement with, if any,
Executive’s retirement plans with the Company. In the event that Executive, on his behalf, sues or brings any Released Claim
against the Company or any of the other Released Parties in respect of any of the foregoing matters, that suit or Released Claim
shall be dismissed, if permitted by law, upon presentation of this Agreement and Executive will reimburse the Company for all legal
fees and expenses incurred in defending such suit or Released Claim and obtaining its dismissal. Notwithstanding anything to the
contrary contained in this Section 4, nothing in this Agreement shall preclude Executive from filing a charge or complaint
of discrimination with the Equal Employment Opportunity Commission or any other administrative agency or from participating or
cooperating in any investigation or proceeding with respect to discrimination conducted by any of such agencies. However, in the
event that such a charge or complaint is filed with any administrative agency by Executive, or in the event of an authorized investigation,
charge or lawsuit filed by any administrative agency, Executive hereby expressly waives, and shall not accept, any monetary award,
damages, costs or attorneys’ fees or release of any sort against the Company or any of the other Released Parties.

 

(b)              
Cooperation. Executive will respond to inquiries and otherwise assist the Company with respect to matters
with which he had been involved while employed by the Company. Without limiting the generality of the foregoing, Executive will
cooperate with the Company in its investigation, defense or prosecution of any potential or actual claim, charge, grievance, or
suit by or against the Company. Executive shall not communicate with any attorney or representation of any person who may be involved
in any claim, charge, grievance or suit that is adverse to the Company, and will immediately notify the Company of any such communication
or attempted communication.

 

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(c)               
Return of Property.

 

(i)                
On or before the Effective Date, executive will:

 

(A)            
return to the Company all originals and copies of Property of the Company that is in Executive’s possession
or under his control; provided, however, that with respect to any Property the nature of which prevents its return,
Executive will permanently delete and/or destroy all such Property; and he will provide written certification to the Executive
Chairman of the Bank within five days of the Effective Date that he has fully complied with his obligations under this paragraph
(A);

 

(B)             
not take any action to preserve or regain access to Property by or through any means, including, without limitation,
access to the Company’s facilities or through a computer or other digital or electronic means; and

 

(C)             
promptly pay all amounts due, owing or otherwise payable by Executive to the Company. Executive expressly authorizes
the Company to withhold any amounts payable to him, including for compensation, reimbursement and otherwise, until he has complied
with this paragraph (C).

 

(ii)              
Executive will promptly return any Property which may come into his possession or under his control in the future,
will not make any copy thereof, and will not, directly or indirectly, use, disclose, or transmit in any manner any of such Property.

 

(d)              
Intellectual Property.

 

(i)                
Executive agrees that any and all information, reports, other documents, domain names, and other works (whether in
an electronic format or otherwise) created for or on behalf of the Company by Executive during his service with the Company, whether
or not developed on Company premises or equipment or during normal Company business hours (the “Intellectual Property”),
are and shall remain works made for hire and the sole and exclusive property of the Company. To the extent that such Intellectual
Property is not considered work made for hire, Executive hereby assigns to the Company (or its nominee) any and all interest that
he may now or in the future have in the Intellectual Property. Upon request by the Company, Executive shall execute and deliver
to the Company any document or instrument that may be necessary to secure or perfect the Company’s title to or interest in
any Intellectual Property so assigned.

 

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(ii)              
On and after the Resignation Date, Executive will not, directly or indirectly, create, develop, adopt, license or
otherwise use any intellectual property of the Company, including, without limitation, any copyright, trademark, service mark,
mark, brand or trade secret (or anything which is similar thereto and/or a derivative thereof) that the Company has used or currently
uses or that Executive has reason to know is being contemplated for future use by the Company, with such prohibited use including
use as a portion of or the entire design, brand, trademark, service mark, title, domain name, Facebook name or Twitter handle.
Executive agrees that all such intellectual property is owned by the Company and the Executive waives all claims to such intellectual
property.

 

(e)               
Ongoing Obligations Under Employment Agreement. Executive acknowledges and agrees that his obligations
under Section 7, Section 9 (as amended hereby) and Section 11 of the Employment Agreement (relating to confidentiality, the protection
of the Company’s business, and remedies in respect of the foregoing) are not affected by this Agreement and remain in full
force and effect; provided, however, that Section 9(a) of the Employment Agreement is, subject to Section 5(b)
hereof, hereby amended to reduce, for purposes only of Section 9(a)(i), the Restricted Period (as defined in the Employment Agreement)
from one (1) year after the termination of Executive’s employment to six (6) months after the termination of Executive’s
employment. For the avoidance of doubt, the Restricted Period shall continue for one (1) year after the termination of Executive’s
employment for purposes of all provisions of Section 9 of the Employment Agreement other than Section 9(a)(i). 

 

5.                 
Remedies in the Event of Breach.

 

(a)               
General. In the event that a Party breaches or threatens to breach any covenant, agreement, obligation, representation
or warranty made in this Agreement, such Party agrees to pay the non-breaching Party’s attorneys’ fees and other costs
and expenses incurred by the non-breaching Party in connection with such breach or threatened breach, including, without limitation,
the fees and costs incurred in seeking to obtain injunctive relief or other damages with respect to the breach or threatened breach.

 

(b)              
Breach by Executive. In addition to the remedies specified in Section 5(a), if Executive breaches or
threatens to breach (i) any covenant, agreement, obligation, representation or warranty made in this Agreement or (ii) any covenant,
agreement, obligation, representation or warranty made in the Employment Agreement which survives the termination of Executive’s
employment with the Company, such as, without limitation, Section 7 or Section 9 of the Employment Agreement, then (x) the Company’s
obligations under Section 2(b) of this Agreement shall immediately terminate and the Company shall have the right to recover
all payments made to or for the benefit of Executive under Section 2(b), but Executive’s obligations under this Agreement
shall remain in full force and effect; provided, however, that the foregoing shall apply in the event of a breach
or threatened breach of any covenant, agreement or obligation, representation or warranty that relates to a claim under the Age
Discrimination in Employment Act (the “ADEA”) only if and to the extent permitted by the ADEA; and (y)
the amendment to Section 9(a) of the Employment Agreement effected by Section 4(e) hereof shall be null and void and the
Restricted Period shall automatically revert, for all purposes, to the period stated in the original Section 9(a) of the Employment
Agreement.

 

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The foregoing remedies shall be in addition
to, and not in lieu of, any other remedy, at law or in equity, that the non-breaching Party may have in connection with the breach
or threatened breach.

 

6.                 
Compliance with Law. Notwithstanding anything in this Agreement to the contrary, any payments made to Executive
pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal
Deposit Insurance Act (12 U.S.C. § 1828(k)) and the regulations promulgated thereunder (including those contained in 12 C.F.R.
Part 359), as such statutory provision and regulations may be amended, superseded and/or replaced from time to time. If a payment
due to Executive under this Agreement constitutes “deferred compensation” (as defined in Treasury Regulation Section
1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) and such
payment is scheduled to be paid within six months after the Resignation Date, then such payment shall be paid within 15 calendar
days after the end of the six-month period that begins on the Resignation Date. If Executive dies prior to the date that payments
are required to commence in accordance with the previous sentence, then payment shall be made in a lump sum within 15 calendar
days after the appointment of the personal representative or executor of Executive’s estate following his death. This Agreement
is intended to comply with, or otherwise be exempt from, Section 409A of Internal Revenue Code of 1986, as amended (the “Code”),
and any Treasury Regulations and guidance promulgated thereunder. Should any provision of this Agreement be found not to comply
with, or otherwise be exempt from, the provisions of Section 409A of the Code, then such provision may be modified and given effect
(retroactively if necessary), in the sole discretion of the Company and without Executive’s consent, in such manner as the
Company determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Section 409A of the Code.
Notwithstanding anything in this Agreement to the contrary: (a) in no event shall the Company exercise its discretion to accelerate
the timing or settlement of any required payment hereunder where such payment constitutes deferred compensation within the meaning
of Section 409A of the Code unless, and solely to the extent that, such accelerated payment or settlement is permissible under
Treasury Regulation section 1.409A-3(j)(4) or any successor provision; and (b) the Company shall have no liability to Executive,
including, without limitation, for any taxes or penalties that may be imposed on Executive, in the event that any provision of
this Agreement is not compliant with, or exempt from, Section 409A of the Code. As used in this Agreement, the terms “termination
of employment”, “resignation” and words of similar import mean, for purposes of any payments under this Agreement
that are payments of deferred compensation subject to Section 409A of the Code, Executive’s “separation from service”
as defined in Section 409A of the Code.

 

7.                 
Miscellaneous.

 

(a)               
Taxes. Executive shall be liable for and shall pay all federal, state and local income or other similar taxes,
and all related interest, penalties or other liabilities and costs, that may be due in connection with the payments to be made
to Executive hereunder. The Company shall have the right to withhold from any such payments all amounts necessary to satisfy its
withholding obligations with respect thereto. Executive acknowledges that the Company has not made representations or warranties
of any kind regarding the tax consequence, if any, of any payments made hereunder.

 

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(b)              
No Representations by the Company. Executive acknowledges and agrees that the Company has made no representations
or promises to him except as expressly set forth herein.

 

(c)               
Notices.

 

(i)                
All notices, requests, demands or other communications that are required or may be given under this Agreement shall
be in writing and shall be given by personal delivery, by certified or registered United States mail (postage prepaid, return receipt
requested), by a nationally recognized overnight delivery service for next day delivery, as follows (or to such other address as
any party may give in a notice given in accordance with the provisions hereof):

 

If to the Bank or Bancorp:

 

Bay Bank, F.S.B. 

2328 West Joppa Road, Suite 325 

Lutherville, Maryland 21093 

Attn: Executive Chairman

 

With a copy to:

 

Gordon Feinblatt LLC 

233 East Redwood Street 

Baltimore, Maryland 21202 

Attn: Andrew Bulgin, Esquire

 

If to Executive:

 

Kevin B. Cashen 

2 Grainfield Court 

Catonsville, Maryland 21228

 

With a copy to:

 

(ii)              
All notices, requests or other communications will be effective and deemed given only as follows: (A) if given by
personal delivery, upon such personal delivery; (B) if sent by certified or registered mail, on the fifth (5th) business
day after being deposited in the United States mail; or (C) if sent for next day delivery by overnight delivery service, on the
date of delivery as confirmed by written confirmation of delivery, except that if such confirmation is received after 5:00 p.m.
(in the recipient’s time zone) on a business day, or is received on a day that is not a business day, then such notice, request
or communication will not be deemed effective or given until the next succeeding business day. Notices, requests and other communications
sent in any other manner, including by electronic mail, will not be effective.

 

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(d)              
No Admission. This Agreement is entered into by the Parties for settlement purposes only and does not constitute
an admission of wrongdoing of any kind.

 

(e)               
Governing Law; Jurisdiction; No Jury Trial.

 

(i)                
This Agreement has been made in and shall be governed by and construed in accordance with the laws of the State of
Maryland, exclusive of any conflicts of law principle which would apply the law of another jurisdiction, and, to the extent applicable,
the laws of the United States, whether as to its validity, construction, capacity, performance or otherwise.

 

(ii)              
Any judicial proceeding arising out of or relating to this Agreement (including any declaratory judgments) shall,
if it is to be filed in State court, be filed exclusively in the State courts located in Baltimore County, Maryland or, if is to
be filed in Federal court, be filed exclusively in the Federal courts located in Baltimore, Maryland, and each Party hereby consents
to, and will submit to, the personal and subject matter jurisdiction of such courts in any proceeding to enforce any of its obligations
under this Agreement and shall not contend that any such court is an improper or inconvenient venue. The foregoing shall not limit
the right of any Party to obtain execution of judgment in any other jurisdiction. Any service of process in any such action, suit,
proceeding, claim, dispute or controversy shall be by delivering the same or by mailing the same (by referred or certified mail,
return receipt requested) to the relevant addresses set forth in Section 7(c) hereof or to such other addresses as may have
been designated in writing.

 

(iii)            
EACH OF THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY ACTION ARISING UNDER THIS AGREEMENT.

 

(f)               
Blue Pencil. It is the desire and intent of the Parties that the provisions contained in each Section
of this Agreement, and within the subsections of such Sections, especially (but in no way limited to) those provisions
of Sections 4 and 5, are intended to be separate and divisible and shall be enforced to the fullest extent permissible
under applicable laws and public policies. Accordingly, if any portion of any provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid or unenforceable, then (i) such portion shall not be held to affect the validity
of any other provision contained in this Agreement, and (ii) such portion shall be deemed amended either to conform to such restrictions
as such court may allow, or to delete therefrom or reform the portion thus adjudicated to be invalid and unenforceable. The Parties
hereby expressly request and authorize any court of competent jurisdiction to modify any provision of this Agreement if necessary
to render it enforceable, in such manner as to preserve as much as possible the Parties’ original intentions, as expressed
therein, with respect to the scope thereof.

 

(g)              
Amendment. No provision in this Agreement may be amended unless such amendment is agreed to in writing and
signed by both Executive and an authorized officer of the Bank and Bancorp.

 

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(h)              
Waiver. The rights and remedies provided for herein are cumulative and not exclusive of any right or remedy
that may be available to any Party whether at law, in equity, or otherwise. No delay, forbearance, or neglect by any Party, whether
in one or more instances, in the exercise or any right, power, privilege, or remedy hereunder or in the enforcement of any term
or condition of this Agreement shall constitute or be construed as a waiver thereof. No waiver of any provision hereof, or consent
required hereunder, or any consent or departure from this Agreement, shall be valid or binding unless expressly and affirmatively
made in writing and duly executed by the Party to be charged with such waiver. No waiver shall constitute or be construed as a
continuing waiver or a waiver in respect of any subsequent breach or default, either of similar or different nature, unless expressly
so stated in such writing.

 

(i)                
Headings; Construction. The headings of the Sections and subsections of this Agreement are for
convenience of reference only, form no part of this Agreement, and shall not be deemed to alter or affect the meaning or interpretation
of any provision hereof. All references to Sections, subsections, paragraphs, items or other subdivisions
in this Agreement refer to the corresponding Sections, subsections, paragraphs, items or other subdivisions
of this Agreement. All words used in this Agreement shall be construed to be of such gender or number as the circumstances require.
Unless otherwise specifically noted, the words “herein”, “hereof”, “hereby”, “hereunder”
and words of similar import refer to this Agreement as a whole and not to any particular Section, subsection, paragraph,
item or other subdivision of this Agreement.

 

(j)                
Counterparts. This Agreement may be executed in any number of counterparts, each copy of which shall serve
as an original for all purposes, but all copies shall constitute but one and the same agreement. The exchange of copies of this
Agreement and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Agreement
as to the Parties and may be used in lieu of an original of this Agreement for all purposes. Signatures of the parties hereto transmitted
by facsimile or PDF transmission shall be deemed to be their original signatures for all purposes.

 

8.                 
Consideration and Revocation Period. 

 

YOU (EXECUTIVE) HAVE FORTY-FIVE (45)
CALENDAR DAYS FROM THE DATE OF YOUR RECEIPT OF THIS AGREEMENT TO CONSIDER THIS AGREEMENT BEFORE YOU SIGN IT. YOU MAY SIGN THIS
AGREEMENT EARLIER IF YOU WISH, BUT THE DECISION IS ENTIRELY YOURS. ONCE YOU SIGN THIS AGREEMENT, YOU HAVE SEVEN (7) CALENDAR DAYS
AFTER SIGNING TO REVOKE IT, AND THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION OF THAT SEVEN (7)
CALENDAR DAY PERIOD.

 

TO REVOKE THIS AGREEMENT, YOU MUST DELIVER
YOUR WRITTEN REVOCATION TO THE BANK AS PROVIDED IN SECTION 7(c) OF THIS AGREEMENT DURING SUCH SEVEN (7) DAY PERIOD. YOU ARE ADVISED
TO CONSULT WITH AN ATTORNEY OF YOUR OWN CHOOSING AND AT YOUR OWN EXPENSE PRIOR TO EXECUTING THIS AGREEMENT. THE AGREEMENT, AMONG
OTHER THINGS, WAIVES RIGHTS THAT YOU MAY HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. NOTHING IN THIS AGREEMENT WAIVES
RIGHTS OR CLAIMS UNDER THE ADEA THAT MAY ARISE AFTER THE DATE THAT THIS AGREEMENT IS EXECUTED. 

 

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IN THE EVENT THAT YOU DO NOT ACCEPT THIS
AGREEMENT, BY YOUR SIGNATURE ON AND RETURN OF THE ENCLOSED COPY OF THIS AGREEMENT NOT LATER THAN FORTY-FIVE (45) CALENDAR DAYS
FROM THE DATE OF YOUR RECEIPT OF THIS AGREEMENT, OR, IN THE EVENT THAT YOU DO ACCEPT THIS AGREEMENT BUT SUBSEQUENTLY REVOKE IT
WITHIN SEVEN (7) CALENDAR DAYS AFTER SIGNING IT, THE COMPANY’S OFFER TO ENTER INTO THIS AGREEMENT WILL BE WITHDRAWN AND WILL
NOT BE REINSTATED, AND THIS AGREEMENT WILL NOT BECOME EFFECTIVE OR ENFORCEABLE.

 

YOU AGREE THAT ANY MODIFICATION, MATERIAL
OR OTHERWISE, MADE TO THIS AGREEMENT DOES NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL FORTY-FIVE (45) CALENDAR DAY CONSIDERATION
PERIOD.

 

HAVING ELECTED TO EXECUTE THIS AGREEMENT,
TO FULFILL THE PROMISES AND TO RECEIVE THE SUMS AND BENEFITS STATED HEREIN, YOU FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION,
ENTER INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS YOU HAVE OR MIGHT HAVE AGAINST THE COMPANY AND THE
RELEASED PARTIES AS PROVIDED HEREIN.

 

THIS AGREEMENT CONTAINS A RELEASE AND
AN AGREEMENT NOT TO SUE. PLEASE READ BEFORE SIGNING.

 

[Signatures Appear on Next Page]

 

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[Signature Page]

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the dates set forth below.

 

		WITNESS:	

 

 

 

	/s/ William Weller                     	/s/
Kevin B. Cashen                  
	William Weller, Secretary	Kevin B. Cashen
	 	 
	 	Date:December 5, 2014
	 	 
	 	 
	ATTEST:	BAY BANK, F.S.B. 
	 	 
	 	 
	/s/ William Weller                    	By:/s/ Joseph J. Thomas            
	William Weller, Secretary	Name: Joseph J. Thomas
	 	Title: Executive Chairman
	 	 
	 	Date: December 5, 2014
	 	 
	 	 
	ATTEST:	BAY BANCORP, INC. 
	 	 
	 	 
	/s/ William Weller                   	By:/s/ Joseph J. Thomas            
	William Weller, Secretary	Name: Joseph J. Thomas
	 	Title: Executive Chairman
	 	 
	 	Date: December 5, 2014

 

    	12

    	 

    

Schedule 1

Equity Awards to Vest as of the Resignation
Date

 

	1.		Option to purchase 173,292 shares of Bancorp’s common stock (adjusted to reflect
Bancorp’s merger with Jefferson Bancorp, Inc.) granted on July 10, 2010 under the Jefferson Bancorp, Inc. 2010 Stock
Option Plan; and

 

	2.		Option to purchase 41,436 shares of Bancorp’s common stock granted on January
2, 2013 under the Carrollton Bancorp 2007 Equity Plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13Exhibit 10.2

 

 

BAY BANCORP, INC.

FIRST AMENDMENT TO STOCK OPTION AGREEMENT

Granted Under the Carrollton Bancorp
2007 Equity Plan

 

This First Amendment
to Stock Option Agreement (this “Amendment”) is made and entered into as of ___________, ___ (the “Effective
Date”) by and between Bay Bancorp, Inc., f/k/a Carrollton Bancorp, a Maryland corporation (the “Company”), and
Kevin B. Cashen (“Participant”).

 

WHEREAS, on January
2, 2014, the Company and Participant entered into a Stock Option Agreement (the “Option Agreement”) evidencing the
Company’s grant, on October 28, 2013, to Participant an option (the “Option”) to purchase 41,436 shares of the
Company’s common stock, par value $1.00 per share (the “Common Stock”), under the Carrollton Bancorp 2007 Equity
Plan (the “Plan”), which Option was designated as an Incentive Stock Option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended;

 

WHEREAS, the Option
Agreement provides that, upon the termination of Participant’s employment for any reason other than his retirement, death,
disability or “Cause”, the portion of the Option that remains unvested as of such termination shall terminate and the
vested portion will remain exercisable until the date that is three months after the date of Participant’s termination of
employment;

 

WHEREAS, Participant,
Bay Bank, F.S.B. (the “Bank”) and the Company have entered into a Separation Agreement in connection with the termination
of Participant’s employment (the “Separation Agreement”);

 

WHEREAS, the Administrator
desires to accelerate the vesting of the Option and modify its terms to provide that the Option shall remain exercisable until
the earlier of the date that is 12 months following Participant’s termination of employment and the Expiration Date, with
the effect that the portion of the Option that currently constitutes an Incentive Stock Option shall thereupon no longer constitute
an Incentive Stock Option;

 

WHEREAS, the Plan authorizes
the Administrator of the Plan to accelerate the vesting of any outstanding stock option and to modify the terms of any outstanding
stock option at any time to, among other things, extend the period during which an option may be exercised following the termination
of the optionee’s employment; and

 

WHEREAS, Participant
has agreed to such acceleration and modification, and the parties hereto desire to amend the Option Agreement to evidence the same.

 

NOW, THEREFORE, in
consideration of the foregoing recitals and the covenants set forth herein, the parties hereto agree to amend the Option Agreement
as follows:

 

1.Acceleration
of Vesting. Section 1 of the Option Agreement is hereby amended to provide that the Option is 100% vested as of the Effective
Date.

 

    	 

    	 

    

2.Extension
of Post-Termination Exercise. Section 2(a)(v) of the Option Agreement is hereby deleted in its entirety and the following is
hereby substituted in lieu thereof:

 

(v)Other
Termination. If there is a Termination of Participant’s service with the Company or any of its Subsidiaries for any reason
other than Retirement, death, Disability or Cause, then any Option held by Participant may thereafter be exercised, to the extent
it was exercisable on the date of such Termination, until the earlier of (A) the date on which Participant breaches or threatens
to breach any covenant, agreement, obligation, representation or warranty made in the Separation Agreement or in that certain Employment
Agreement, dated as of February 26, 2014, by an among Participant, the Bank and the Company, (B) the date that is 12 months after
the Termination, and (C) the Expiration Date (the “Option Termination Date”).

 

3.Effect on
Option Agreement. Except as provided in this Amendment, all terms and conditions of the Option Agreement remain in full force
and effect. Capitalized terms used but not defined herein shall have the meanings given such terms in the Option Agreement.

 

4.Governing
Law. This Amendment shall be interpreted and construed in accordance with the laws of the State of Maryland except to the extent
such law is preempted by applicable federal law.

 

[Signatures Appear on Next
Page]

 

    	2

    	 

    

[Signature Page]

 

IN WITNESS WHEREOF, the Company and
Participant have duly executed this Amendment as of the Effective Date.

 

 

 

 

	 	BAY BANCORP, INC.
	 	 
	 	 
	 	By:                                                   
	 	Name:  Joseph J. Thomas
	 	Title:    Executive Chairman
	 	 
	 	 
	 	PARTICIPANT
	 	 
	 	 
	 	 
	 	Kevin
B. Cashen                      
	 	Printed Name
	 	 
	 	2 Grainfield
Court                     
	 	Street Address
	 	 
	 	Catonsville,
MD 21228            
	 	City, State and Zip Code

 

 

 

 

3

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