Document:

Exhibit 10.5

 

PERFORMANCE DRIVEN RETIREMENT PLAN AGREEMENT

 

THIS PERFORMANCE DRIVEN
RETIREMENT PLAN AGREEMENT (this “Agreement”), adopted this 17th day of November, 2015, by and between Farmers
and Merchants Bank, located in Upperco, Maryland (the “Employer”), and Mark Krebs (the “Executive”), formalizes
the agreements and understanding between the Employer and the Executive.

 

WITNESSETH:

 

WHEREAS, the Executive
is employed by the Employer;

 

WHEREAS, the Employer recognizes
the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment
and to provide the Executive with additional incentive to achieve corporate objectives;

 

WHEREAS, the Employer wishes
to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;

 

WHEREAS, the Employer and
the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and

 

WHEREAS, the Employer intends
this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred
compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select
group of management or highly compensated employee of the Employer;

 

NOW THEREFORE, in consideration
of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

 

ARTICLE 1

DEFINITIONS

 

For the purpose of this
Agreement, the following phrases or terms shall have the indicated meanings:

 

1.1           “Accumulation
Period Crediting Rate” means sixty-seven percent (67%) of the prior Plan Year’s Return on Equity, provided
however that the minimum such rate shall be zero percent (0%) and the maximum shall be ten percent (10%).

 

1.2           “Administrator”
means the Board or its designee.

 

1.3           “Affiliate”
means any business entity with whom the Employer or the Employer would be considered a single employer under Section 414(b) and
414(c) of the Code. Such term shall be interpreted in a manner consistent with the definition of “service recipient”
contained in Code Section 409A.

 

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1.4           “Base
Salary” means the Executive’s annualized cash compensation, excluding bonuses, commissions, distributions from
nonqualified deferred compensation plans, fringe benefits, incentive payments, non-monetary awards, overtime, relocation expenses,
stock options and other fees, and automobile and other allowances paid to the Executive for services rendered (whether or not such
allowances are included in the Executive’s gross income). Base Salary shall be calculated before reduction for amounts voluntarily
deferred or contributed by the Executive pursuant to qualified or non-qualified plans and shall be calculated to include amounts
not otherwise included in the Executive’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to
plans established by the Employer; provided, however, that all such amounts will be included in compensation only to the extent
that had there been no such plan, the amount would have been payable in cash to the Executive.

 

1.5           “Beneficiary”
means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s
death.

 

1.6           “Board”
means the Board of Directors of the Employer.

 

1.7           “Cause”
means any of the following:

 

a)           an intentional
act of fraud, embezzlement, or theft by the Executive in the course of employment. For purposes of this Agreement no act or failure
to act on the part of the Executive shall be deemed to have been intentional if it was due primarily to an error in judgment or
negligence. An act or failure to act on the Executive’s part shall be considered intentional if it is not in good faith and
if it is without a reasonable belief that the action or failure to act is in the Employer’s best interests. Any act or failure
to act based upon authority granted by resolutions duly adopted by the board of directors or based upon the advice of counsel for
the Employer shall be conclusively presumed to be in good faith and in the Employer’s best interests, or

b)           intentional
violation of any law or significant policy of the Employer that, in the Employer’s sole judgment, has an adverse effect
on the Employer, or

c)           gross
negligence, insubordination, disloyalty, or dishonesty in the performance of duties, or

d)           intentional
wrongful damage to the business or property of the Employer, including without limitation the Employer’s reputation, which
in the Employer’s sole judgment causes material harm to the Employer, or

e)           a
breach of fiduciary duties, whether in the Executive’s capacity as an officer or as a director, or

f)           removal
of the Executive from office or permanent prohibition of the Executive from participating in the Employer’s affairs by an
order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), or

 

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g)           conviction
of the Executive for or plea of no contest to a felony or conviction of or plea of no contest to a misdemeanor involving moral
turpitude, or the actual incarceration of the Executive for forty-five (45) consecutive days or more, or

h)           intentional
wrongful disclosure of secret processes or confidential information of the Employer or the Employer, which in the Employer’s
sole judgment causes material harm to the Employer or the Employer, or

i)           the
occurrence of any event that results in the Executive being excluded from coverage, or having coverage limited for the Executive
as compared to other executives of the Employer, under the Employer’s blanket bond, fidelity, or directors’ and officers’
insurance policy covering its directors, officers, or employees.

 

1.8           “Change
in Control” means a change in the ownership or effective control of the Employer, or in the ownership of a substantial
portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

 

1.9           “Contribution”
means the amount the Employer contributes to the Deferral Account, calculated according to the provisions of Article 2.

 

1.10         
“Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled
hereunder.

 

1.11         “Code”
means the Internal Revenue Code of 1986, as amended.

 

1.12         “Deferral
Account” means the Employer’s accounting for the accumulated Contributions plus accrued interest.

 

1.13         “Disability”
means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees
of the Employer. The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination
and may require the Executive to submit to reasonable physical and mental examinations for this purpose. The Executive will also
be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance
with a disability insurance program, provided that the definition of disability applied under such disability insurance program
complies with the initial sentence of this Section.

 

1.14         
“Distribution Period Crediting Rate” means the interest rate equal to the 20 Year Moody’s Aa Corporate bond
index minus 0.25% (.25 basis points), based on the Moody’s yield on the first business day of the Plan Year.

 

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1.15         “Early
Termination” means that the Executive, prior to Normal Retirement Age, has experienced a Separation from Service, except
when such Separation from Service occurs following a Change in Control or due to termination for Cause.

 

1.16         “Effective
Date” means November 1, 2015.

 

1.17         “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

1.18         “Normal
Retirement Age” means the Executive attaining age sixty-five (65).

 

1.19         “Projected
Account Balance” means Two Hundred Seventy Two Thousand Eight Hundred Twenty-Five Dollars ($272,825). 

 

1.20         “Plan
Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year. The initial
Plan Year shall commence on the Effective Date and end on the following December 31.

 

1.21         “Return
on Equity” means the Employer’s annual return on equity as determined under Generally Accepted Accounting Principles
(GAAP). If a holding company is formed, Return on Equity shall be the annual return on equity of the holding company as determined
under GAAP.

 

1.22         “Separation
from Service” means a termination of the Executive’s employment with the Employer and its Affiliates for reasons
other than death or Disability. A Separation from Service may occur as of a specified date for purposes of the Agreement even if
the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and
circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services
would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether
as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average
level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which
the Executive performed services for the Employer, if that is less than thirty-six (36) months). A Separation from Service will
not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive
with the right to reemployment with the Employer. If the Executive’s leave exceeds six (6) months but the Executive is not
entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the
expiration of such six (6) month period. In determining whether a Separation of Service occurs the Administrator shall take into
account, among other things, the definition of “service recipient” and “employer” set forth in Treasury
regulation §1.409A-1(h)(3). The Administrator shall have full and final authority, to determine conclusively whether a Separation
from Service occurs, and the date of such Separation from Service.

 

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1.23         “Specified
Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term
is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded
on an established securities market or otherwise, as defined in Code §1.897-1(m). If the Executive is a key employee at any
time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period
commencing on the first day of the following April.

 

1.24         “Unforeseeable
Emergency” means a severe financial hardship to the Executive resulting
from an illness or accident of the Executive, the Executive’s
spouse, the Beneficiary, or the Executive’s dependent (as defined in Section
152(a) of the Code), loss of the Executive’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Executive.

 

Article
2

Contributions

 

2.1           Initial
Contribution. As of the Effective Date, the Employer shall make an initial Contribution to the Deferral Account in an amount
equal to Five Thousand Five Hundred Sixty-Five Dollars ($5,565).

 

2.2           Annual
Contributions. Except as provided below, as of the first day of each month while the Executive is employed by the Employer,
the Employer shall make a monthly Contribution to the Deferral Account in an amount equal to 0.833% of Base Salary. Notwithstanding
the forgoing, the Employer shall not make any Contributions in a Plan Year if the Return on Equity for the immediately preceding
Plan Year was less than six and one-fourth percent (6.25%). In addition to any other amounts contributed by the Employer, the Board
may choose to make additional Contributions if it determines in its sole discretion that it is in the best interests of the Employer
to do so.

 

2.3           Additional
Contribution Upon Change in Control. In addition to any annual Contributions made by the Employer pursuant to Section 2.2,
on the date of any Change in Control, the Employer shall make a Contribution equal to three times Base Salary as of the date of
the Change in Control multiplied by the average percentage of Base Salary contributed by the Employer to the Deferral Account in
the three (3) Plan Years immediately preceding the Change in Control.

 

Article
3

DEFFERAL
ACCOUNT

 

3.1           Establishing
and Crediting. The Employer shall establish a Deferral Account on its books for the Executive and shall credit to the Deferral
Account the following amounts:

 

(a)          Any
Contributions hereunder; and

(b)          Interest
as follows:

 

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(i)          on
the first day of each month until the earliest of Disability, Separation from Service or the Executive’s death, interest
shall be credited on the Deferral Account at an annual rate equal to the Accumulation Period Crediting Rate, compounded monthly;

(ii)         on
the first day of each month during any payment term hereunder, interest shall be credited at an annual rate equal to the Distribution
Period Crediting Rate, compounded monthly, except that no interest will be credited during the payment term of the Section 4.2
Early Termination benefit.

 

3.2           Recordkeeping
Device Only. The Deferral Account is solely a device for measuring amounts to be paid under this Agreement and is not a trust
fund of any kind.

 

ARTICLE 4

PAYMENT OF BENEFITS

 

4.1           Normal
Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive the Deferral
Account balance calculated at Separation from Service in lieu of any other benefit hereunder. This benefit shall be paid in one
hundred twenty (120) consecutive monthly installments commencing the month following Separation from Service. Each Plan Year during
payout the payment amount shall be re-amortized to take into account changes in the Distribution Period Crediting Rate.

 

4.2           Early
Termination Benefit. If Early Termination occurs, the Employer shall pay the Executive the Deferral Account balance calculated
at Separation from Service in lieu of any other benefit hereunder. This benefit shall be paid in thirty-six (36) consecutive monthly
installments commencing the month following Separation from Service. Notwithstanding anything to the contrary in Section 3.1(b)(ii),
no interest shall be credited to the Deferral Account balance during the distribution period.

 

4.3           Disability
Benefit. If the Executive experiences a Disability prior to Normal Retirement Age, the
Employer shall pay the Executive the Deferral Account balance calculated as of the date of determination of Disability in lieu
of any other benefit hereunder. This benefit shall be paid in one hundred twenty (120) consecutive monthly installments commencing
the month following Disability. Each Plan Year during payout the payment amount shall be re-amortized to take into account changes
in the Distribution Period Crediting Rate.

 

4.4           Change
in Control Benefit. If a Change in Control occurs prior to Separation from Service and prior to Normal Retirement Age, the
Employer shall pay the Executive the Deferral Account balance, inclusive of the additional contribution upon Change in Control
specified in Section 2.2, calculated at the date of the Change in Control, in lieu of any other benefit hereunder. This benefit
shall be paid in a lump sum within thirty (30) days following Change in Control.

 

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4.5           Death
Prior to Commencement of Benefit Payments. In the event the Executive dies prior to Separation from Service and Disability,
the Employer shall pay the Beneficiary the greater of (i) the Projected Account Balance or (ii) Deferral Account balance calculated
at the Executive’s death, in lieu of any other benefit hereunder. This benefit shall be paid in a lump sum within ninety
(90) days following the Executive’s death, with the actual date of payment determined by the Employer in its sole discretion.

 

4.6           Death
Subsequent to Commencement of Benefit Payments. In the event the Executive dies while receiving payments, but prior to receiving
all payments due and owing hereunder, the Employer shall pay the Beneficiary the same amounts at the same times as the Employer
would have paid the Executive, had the Executive survived.

 

4.7           Hardship
Distribution. If an Unforeseeable Emergency occurs, the Executive may petition the Board to receive a distribution from the
Agreement (a “Hardship Distribution”). The Board in its sole discretion may grant such petition. If granted, the Executive
shall receive, within sixty (60) days, a distribution from the Agreement only to the extent deemed necessary by the Board to remedy
the Unforeseeable Emergency, plus an amount necessary to pay taxes reasonably anticipated as a result of the distribution. In any
event, the maximum amount which may be paid out as a Hardship Distribution is the Deferral Account balance as of the day the Executive
petitioned the Board to receive a Hardship Distribution. A Hardship Distribution shall reduce the Deferral Account balance.

 

4.8           Termination
for Cause. If the Employer terminates the Executive’s employment for Cause, then the Executive shall forfeit all benefits
hereunder.

 

4.9           Restriction
on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is
considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions
hereunder. Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during
the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive
during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following
Separation from Service, or if earlier, upon the Executive’s death. All subsequent distributions shall be paid as they would
have had this Section not applied.

 

4.10         Acceleration
of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder.
Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4)
in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements
with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but
not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may
become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

 

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4.11         Delays
in Payment by Employer. A payment may be delayed to a date after the designated payment date under any of the circumstances
described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay
in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated
Participants on a reasonably consistent basis.

 

(a)          Payments
subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to
any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent
deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer
may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed
to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably
anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

(b)          Payments
that would violate Federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably
anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment
is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation.
The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal
Revenue Code is not treated as a violation of law.

(c)          Solvency.
Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue
as a going concern.

 

4.12         Treatment
of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment
under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such
payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of
the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative
impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable;
and (iv) if Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s solvency, in
the first calendar year in which the Employer’s funds are sufficient to make the payment.

 

4.13         Facility
of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator
may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his
or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee.
Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

 

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4.14         Excise
Tax Limitation. Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be
treated as an “excess parachute payment” under Code Section 280G, the Employer shall reduce such benefit payment to
the extent necessary to avoid treating such benefit payment as an excess parachute payment. The Executive shall be entitled to
only the reduced benefit and shall forfeit any amount over and above the reduced amount.

 

4.15         Changes
in Form or Timing of Benefit Payments. The Employer and the Executive may, subject to the terms hereof, amend this Agreement
to delay the timing or change the form of payments. Any such amendment:

 

(a)          must
take effect not less than twelve (12) months after the amendment is made;

(b)          must,
for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in
Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally
scheduled to be made;

(c)          must,
for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution
is scheduled to begin; and

(d)          may
not accelerate the time or schedule of any distribution.

 

Article
5

Beneficiaries

 

5.1           Designation
of Beneficiaries. The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s
death, and the designation may be changed from time to time by the Executive by filing a new designation. Each designation will
revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator and shall be effective only
when filed in writing with the Administrator during the Executive’s lifetime. If the Executive names someone other than the
Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required
to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator.
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.

 

5.2           Absence
of Beneficiary Designation. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due
to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to
the Executive’s spouse. If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s
living descendants per stirpes, and if there are no living descendants, to the Executive’s estate. In determining
the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied
by the Executive’s personal representative, executor, or administrator.

 

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Article
6

ADMINISTRATION

 

6.1           Administrator
Duties. The Administrator shall be responsible for the management, operation, and administration of the Agreement. When making
a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive
or Beneficiary. No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA
or other law, or any duty similar to any fiduciary duty under ERISA or other law.

 

6.2           Administrator
Authority. The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration
of this Agreement, and shall have all powers necessary to accomplish its purposes.

 

6.3           Binding
Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection
with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall
be final, conclusive and binding upon all persons having any interest in this Agreement.

 

6.4           Compensation,
Expenses and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator
is authorized at the expense of the Employer to employ such legal counsel and recordkeeper as it may deem advisable to assist in
the performance of its duties hereunder. Expense and fees in connection with the administration of this Agreement shall be paid
by the Employer.

 

6.5           Employer
Information. The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s
compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.

 

6.6           Termination
of Participation. If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select
group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right,
in its sole discretion, to prohibit the Executive from receiving any additional Contributions hereunder.

 

6.7           Compliance
with Code Section 409A. The Employer and the Executive intend that the Agreement comply with the provisions of Code Section
409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts
are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that
affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

 

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Article
7

Claims
and Review Procedures

 

7.1           Claims
Procedure. A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall
make a claim for such benefits as follows.

 

(a)          Initiation
– Written Claim. The Claimant initiates a claim by submitting to the Administrator 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.

(b)          Timing
of Administrator Response. The Administrator shall respond to such Claimant within ninety (90) days after receiving
the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator
can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the
initial ninety (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 Administrator expects to render its decision.

(c)          Notice
of Decision. If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of
such denial. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification
shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which
the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim
and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable
to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following
an adverse benefit determination on review.

 

7.2           Review
Procedure. If the Administrator denies part or all of the claim, the Claimant shall have the opportunity for a full and fair
review by the Administrator of the denial as follows.

 

(a)          Initiation
– Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s
notice of denial, must file with the Administrator a written request for review.

(b)          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 Administrator 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.

 

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(c)          Considerations
on Review. In considering the review, the Administrator 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.

(d)          Timing
of Administrator Response. The Administrator shall respond in writing to such Claimant within sixty (60) days after receiving
the request for review. If the Administrator determines that special circumstances require additional time for processing the claim,
the Administrator can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to
the end of the initial sixty (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 Administrator expects to render its decision.

(e)          Notice
of Decision. The Administrator shall notify the Claimant in writing of its decision on review. The Administrator 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 this 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 8

AMENDMENT AND TERMINATION

 

8.1           Agreement
Amendment Generally. Except as provided in Section 8.2, this Agreement may be amended only by a written agreement signed by
both the Employer and the Executive.

 

8.2           Amendment
to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may
be amended by the Employer at any time, if found necessary in the opinion of the Employer, i) to ensure that the Agreement is characterized
as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under
ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of
the Employer’s auditors or banking regulators.

 

8.3           Agreement
Termination Generally. Except as provided in Section 8.4, this Agreement may be terminated only by a written agreement signed
by the Employer and the Executive. Such termination shall not cause a distribution of benefits under this Agreement. Rather, upon
such termination benefit distributions will be made at the earliest distribution event permitted under Article 4.

 

    	 	12	 

     

    

 

8.4           Effect
of Complete Termination. Notwithstanding anything to the contrary in Section 8.3, and subject to the requirements of Code Section
409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the
Agreement. In the event of such a complete termination, the Employer shall pay the Deferral Account balance to the Executive. With
regard to Section 8.4(b), the Deferral Account balance will include the additional contribution upon Change in Control specified
in Section 2.3 of this Agreement. Such complete termination of the Agreement shall occur only under the following circumstances
and conditions.

 

(a)          Corporate
Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate
dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A),
provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the
calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk
of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

(b)          Change
in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate
within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated
as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single
plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced
the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts
of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable
action to terminate the arrangements.

 

Article
9

MISCELLANEOUS

 

9.1           No
Effect on Other Rights. This Agreement constitutes the entire agreement between the Employer and the Executive as to the subject
matter hereof. No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.
Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right
of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.

 

9.2           State
Law. To the extent not governed by ERISA, the provisions of this Agreement shall be construed and interpreted according to
the internal law of the State of Maryland without regard to its conflicts of laws principles.

 

9.3           Validity.
In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never
been inserted herein.

 

    	 	13	 

     

    

 

9.4           Nonassignability.
Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

 

9.5           Unsecured
General Creditor Status. Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue,
for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such
asset by virtue of any provision of this Agreement. The Employer’s obligation hereunder shall be an unfunded and unsecured
promise to pay money in the future. In the event that the Employer purchases an insurance policy insuring the life of the Executive
to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever
in said policy or the proceeds therefrom.

 

9.6           Life
Insurance. If the Employer chooses to obtain insurance on the life of the Executive in connection with its obligations under
this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information
as may be required by the Employer or the insurance company designated by the Employer.

 

9.7           Unclaimed
Benefits. The Executive shall keep the Employer informed of the Executive’s current address and the current address of
the Beneficiary. If the location of the Executive is not made known to the Employer within three years after the date upon which
any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until
the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit
payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Employer
may discharge its obligation by payment to the Beneficiary. If the location of the Beneficiary is not made known to the Employer
by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge
its obligation by payment to the Executive’s estate. If there is no estate in existence at such time or if such fact cannot
be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under
this Agreement.

 

9.8           Suicide
or Misstatement. No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the
Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Employer
denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for
any other reason.

 

9.9           Removal.
Notwithstanding anything in this Agreement to the contrary, the Employer shall not distribute any benefit under this Agreement
if the Executive is subject to a final removal or prohibition order issued pursuant to Section 8(e) of the Federal Deposit Insurance
Act. Furthermore, any payments made to the Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C. 1828,
FDIC Regulation 12 CFR Part 359 and any other regulations or guidance promulgated thereunder.

 

    	 	14	 

     

    

 

9.10         Forfeiture
Provision. The Executive shall forfeit any non-distributed benefits under this Agreement if during the Restricted Period and
in the Restricted Territory the Executive, and without the prior written consent of the Employer:

 

a)         directly
or indirectly solicits or attempts to solicit any Customer to accept or purchase Financial Products or Services of the same nature,
kind, or variety as provided to the Customer by the Employer during the one year immediately before the Executive’s employment
termination with Employer,

b)         directly
or indirectly influences or attempts to influence any Customer, joint venturer, or other business partner of the Employer to alter
that person or entity’s business relationship with the Employer in any respect, or

c)         accepts
the Financial Products or Services business of any Customer or provides Financial Products or Services to any Customer on behalf
of anyone other than the Employer.

 

Furthermore, the Executive
shall forfeit any non-distributed benefits under this Agreement if during the Restricted Period in the Restricted Territory the
Executive engages, undertakes, or participates in the business of providing, selling, marketing, or distributing Financial Products
or Services of a similar nature, kind, or variety (x) as offered by the Employer to Customers during the one year immediately before
the Executive’s employment termination with the Employer, or (y) as offered by the Employer to any of its Customers during
the Restricted Period.

 

Additionally, the Executive
shall forfeit any non-distributed benefits under this Agreement if during the Restricted Period the Executive (i) becomes employed
by or serves as a director, partner, consultant, agent, or owner of 5% or more of the outstanding stock of or contractor to any
entity providing these prohibited Financial Products or Services that is located in or conducts business in the Restricted Territory;
(ii) solicits or attempts to solicit or encourages or induces in any way any employee, joint venturer, or business partner of the
Employer or the Employer to terminate an employment or contractual relationship with the Employer or the Employer; (iii) hires
any person employed by the Employer or the Employer during the one-year period before the Executive’s employment termination
with the Employer or any person employed by the Employer or the Employer during the Restricted Period; (iii) causes statements
to be made (whether written or oral) that reflect negatively on the business reputation of the Employer or the Employer.

 

As used in this Section
9.10:

1)         “Restricted
Period” means the period commencing at the earlier of (i) Disability or (ii) Separation from Service and continuing for
thirty-six (36) months, except the Restricted Period shall not include any time period after a Change in Control.

2)         “Restricted
Territory” means the 25-mile radius from 15226 Hanover Pike, Upperco, Maryland.

 

    	 	15	 

     

    

 

3)         “Customer”
means any individual, joint venturer, entity of any sort, or other business partner of the Employer with, for, or to whom the Employer
has provided Financial Products or Services during the last year of the Executive’s employment with the Employer, or any
individual, joint venturer, entity of any sort, or business partner whom the Employer has identified as a prospective customer
of Financial Products or Services within the last year of the Executive’s employment with the Employer.

4)         “Financial
Products or Services” means any product or service that is offered by the Employer or an affiliate on the date of the
Executive’s employment termination, including but not limited to banking activities and activities that are closely related
and a proper incident to banking, or other products or services of the type of which the Executive was involved during the Executive’s
employment with the Employer.

 

9.11         Notice.
Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be
sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business
office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient
if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any
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
on the receipt for registration or certification.

 

9.12         Headings
and Interpretation. Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not
be deemed part of this Agreement. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context
will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

 

9.13         Alternative
Action. In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement
due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out
the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does
not violate Code Section 409A.

 

9.14         Coordination
with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any
other benefits available to the Executive under any other plan or program for employees of the Employer. This Agreement shall supplement
and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

 

9.15         Inurement.
This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive,
the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

 

    	 	16	 

     

    

 

9.16         Tax
Withholding. The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding
of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement.
The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.

 

9.17         Aggregation
of Agreement. If the Employer offers other account balance deferred compensation plans in addition to this Agreement, this
Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

 

IN WITNESS WHEREOF, the
Executive and a representative of the Employer have executed this Agreement document as indicated below:

 

	Executive:	 	Employer:
		 	 	 
	/s/ Mark C. Krebs	 	By:	/s/ James R. Bosley, Jr.
	Mark C. Krebs	 	Its:	President

 

    	 	17	 

     

    

 

PERFORMANCE DRIVEN RETIREMENT PLAN AGREEMENT

 

Beneficiary Designation

 

I, Mark Krebs, designate
the following as Beneficiary under this Agreement:

 

Primary

 

	 	 	 	%
	 	 	 	 
	 	 	 	%

 

Contingent

 

	 	 	 	%
	 	 	 	 
	 	 	 	%

 

I understand that I may
change this beneficiary designation by delivering a new written designation to the Administrator, which shall be effective only
upon receipt by the Administrator prior to my death. I further understand that the designation will be automatically revoked if
the Beneficiary predeceases me or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

 

	Signature:	 	 	Date:	 	 

  

SPOUSAL CONSENT (Required only if Administrator
requests and someone other than spouse is named Beneficiary)

 

I consent to the beneficiary designation above.
I also acknowledge that if I am named Beneficiary and my marriage is subsequently dissolved, the beneficiary designation will be
automatically revoked.

 

	Spouse Name:	 	 

 

	Signature:	 	Date:	 	 

 

Received by the Administrator this ________
day of ___________________, 20__

 

	By:	 	 
	Title:JOINT VENTURE AGREEMENT

 

Article I. Introduction

 

This Agreement is entered into as of
March 1, 2017, by and between Precious Investments, Inc., a Nevada corporation (“PNIK”) and Eddeb Management (“Eddeb”)
for the purpose of carrying on a joint venture. The name of the joint venture shall be “Flawless Funds GP Inc.” (hereinafter
referred to as, the “Joint Venture”). The Joint Venture has already been formed as an Ontario corporation.

 

Article II. Purpose of Joint Venture

 

The purpose of the joint venture shall
be to raise money and build the Joint Venture fund for the purposes of trading in precious stones.

 

Article III. Duties of Parties

 

3.1. General Duties

 

Each Joint Venturer will devote such time
and efforts as may be reasonably necessary to build the fund and exploit opportunities to purchase and sell precious stones, including,
notably, colored diamonds.

 

3.2. Exclusive and Primary Obligations

 

3.2.1 Exclusive Obligations

 

Each Joint Venturer agrees that neither
one shall engage in any activities that would conflict with the operations and business purpose of the Joint Venture. Notwithstanding
the foregoing, the preceding sentence shall not be construed in any way to limit PNIK’s ability to manage or sell any of
its existing inventory of colored diamonds or to purchase new inventory from the proceeds thereof for its exclusive benefit.

 

3.2.2 PNIK Primary Duties and Obligations

 

PNIK, through Kashif Khan (“Khan”),
shall be primarily responsible for Marketing and managing the fund.

 

3.2.3 Eddeb's Primary Duties and Obligations

 

Eddeb, through Abdurrahman Eddeb, shall
be primarily responsible for assisting in bringing investors into the fund.

 

Article IV. Ownership of Venture Property

 

4.1. Title to Property

 

All property of the Joint Venture shall
be held in the name of the Joint Venture.

 

    	 		 

     

    

 

4.2. Interest in Property

 

Except as provided below, the beneficial
interest of each party in Joint Venture property, unless changed pursuant to the terms of this Agreement, shall be as follows:
Seventy-Five percent (75%) PNIK and Twenty-Five percent (25%) Eddeb.

 

Article V. Term

 

The term of the Joint Venture will commence
on the date first indicated above and shall terminate as provided in Article IX, below.

 

Article VI. Distributions; Allocation of Profits and Losses

 

6.1. Division or Share of Profits

 

Any profits of the Joint Venture shall
be allocated among the Joint Venturers in the following percentages unless that percentage is changed pursuant to the terms of
this Agreement:

 

PNIK 75%

Eddeb 25%

 

6.2. Calculation of Profits

 

For the purposes of this Agreement, the
profits of the Joint Venture shall be calculated as follows:

 

(a) The expenses of conducting the Joint
Venture shall be deducted from the income of the Joint Venture. The expenses of conducting the Joint Venture shall include all
expenses customarily incurred by businesses similar to the Joint Venture.

 

(b) After the payment of expenses as
described above and retention of adequate operating and capital reserves, PNIK and Eddeb shall each be entitled to receive distributions
of any remaining available cash according to their respective percentage interest in the Joint Venture. The parties agree that
except for distributions necessary to enable each party to pay their respective income tax obligations, a certain percentage of
available cash from operations shall be reinvested new inventory.

 

6.3. Apportionment or Share of Loss

 

Should a loss be sustained by the Joint
Venture, the parties shall bear the loss in the same percentages as profits.

 

6.4. Computation of Loss

 

In computing any loss as between the
parties, deductions shall be made from any assets remaining in the same manner as computing profits in 6.2, that is, deductions
shall first be made to pay expenses, and any remaining sums shall be allocated on a pro rata percentage basis to contributions,
as set forth in 6.2 for computing profits. Should there be insufficient assets to pay expenses due and owing as a result of the
conduct of the Joint Venture, each party shall contribute to the payment of those expenses in the percentage of losses attributed
to that party in this Article.

 

Article VII. Management Structure

 

    	 	2	 

     

    

 

7.1. Management of Joint Venture

 

The business and affairs of the Joint
Venture shall be managed by two directors: Khan and Eddeb. The directors have the ability to make all decisions as to the day to
day operations of the Joint Venture or deligate such functions as they see fit to officers of the Joint Venture. Only the directors
shall have the ability to:

 

(1) Confess a judgment against the Joint
Venture;

 

(2) Admit any person as a Joint Venturer;

 

(3) Execute or deliver any assignment
for the benefit of the creditors of the Joint Venture;

 

(4) Enter into any lease of real or personal
property;

 

(5) Enter into any loan transaction or
incur any indebtedness of the Joint Venture in excess of $25,000;

 

(6) Purchase any real property;

 

(7) Such other matter(s) as may be mutually
agreed upon by the parties.

 

7.2. Actions by Majority Vote

 

Except as otherwise expressly provided
in this Agreement, all actions taken by the directors shall be by majority vote.

 

Article VIII. Confidentiality

 

8.1. Definition

 

For the purpose of this Agreement, "Proprietary
Information" shall include all information designated by any Joint Venturer, either orally or in writing, as confidential
or proprietary, or which reasonably would be considered proprietary or confidential to the business contemplated by this Agreement,
including but not limited to suppliers, marketing and technical plans, plans for products and ideas and proprietary techniques
and other trade secrets. Notwithstanding the foregoing, "Proprietary Information" shall not include information which
(i) has entered the public domain or became known other than due to a breach of any obligation of confidentiality owed to the owner
of such information; (ii) was known prior to the disclosure of such information; (iii) became known to the recipient from a source
other than a Joint Venturer or its Affiliate, provided there was no breach of an obligation of confidentiality owed to said Joint
Venturer or its Affiliate; or (iv) was independently developed by the party receiving such information.

 

8.2. No Disclosure, Use, or Circumvention

 

No Joint Venturer or its Affiliates shall
disclose any Proprietary Information to any third parties and will not use any Proprietary Information in that Joint Venturer’s
or Affiliates’ business or any affiliated business without the prior written consent of the other Joint Venturer, and then
only to the extent specified in that consent. Consent may be granted or withheld at the sole discretion of any Joint Venturer.
No Joint Venturer shall contact any suppliers, customers, employees, affiliates or associates to circumvent the purposes of this
provision.

 

    	 	3	 

     

    

 

8.3. Maintenance of Confidentiality

 

Each Joint Venturer shall take all steps
necessary or appropriate to maintain the strict confidentiality of the Proprietary Information and to assure compliance with this
Agreement.

 

Article IX. Termination

 

9.1. Date of Termination

 

This Agreement shall be terminated on
the earlier to occur of:

 

(a) The mutual agreement of all of the
parties to this Agreement;

 

(b) Any act or event which makes the
continuation of the business of the Joint Venture impossible or impracticable; or

 

(c) The bankruptcy or insolvency of any
of the parties to this Agreement; or

 

(d) Fifteen (15) years after the effective
date hereof, unless extended by the parties.

 

9.2. Effect of Termination

 

On the termination of this Joint Venture,
the Joint Venture shall be dissolved and wound up in accordance with the provisions of Ontario law, except as otherwise specifically
provided in this Agreement or any amendment to this Agreement.

 

Article X. Assignment

 

No Joint Venturer may assign its rights
and obligations hereunder due to the unique expertise and qualifications of the Joint Venturers.

 

Article XI. Notices

 

All notices to the Joint Venturers pursuant
to this Agreement shall be in writing and shall be deemed effective when given by personal delivery or by certified mail, express
delivery service, or facsimile transmission.

 

Article XII. Applicable Law

 

To the extent not otherwise provided
in the Agreement, the terms of this Joint Venture and the relationship of the Joint Venturers to each other shall be governed by
the provisions of Ontario law.

 

Article XIII. Amendments

 

This Agreement may be amended only by
the written agreement of all of the Joint Venturers.

 

IN WITNESS WHEREOF, the undersigned have
executed this Agreement

effective as of the date first above written.

 

Precious Investments, Inc.

 

By: /s:/ Kashif Khan 

Name: Kashif Khan

 

 

Eddeb Management

 

By: /s/ Abdurrahman Eddeb

Name: Abdurrahman Eddeb

 

    	 	4

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