Document:

Exhibit

Exhibit 10.2

APPENDIX B

 
DEFERRED COMPENSATION PLAN 
OF ERIE INDEMNITY COMPANY

Accounts Not Earned and Vested On or Before December 31, 2004
(As Amended and Restated Effective as of January 1, 2019)

ARTICLE ONE

INTRODUCTION

This Appendix B incorporates the provisions of the Plan as it relates to Deferred Compensation Accounts other than such accounts that were earned and vested on or before December 31, 2004, without material modifications to the terms of the Plan after October 3, 2004.  The provisions of this Appendix B shall apply in determining the rights and features of such accounts and is generally effective as of January 1, 2009. 

ARTICLE TWO

DEFINITIONS

When the following words or phrases are used in this Appendix B with initial capital letters, they shall have the following meanings:

2.1“Administrator” is a term that is defined in Article Two of the Basic Plan Document.

2.2“Affiliate” is a term that is defined in Article Two of the Basic Plan Document.

2.3“Amendment Form” shall mean the Amendment Form described in Section 5.7.  An Amendment Form may be in paper and/or electronic form, as designated by the Administrator.

2.4“Beneficiary” is a term that is defined in Article Two of the Basic Plan Document. 

2.5“Board” is a term that is defined in Article Two of the Basic Plan Document.

2.6“Code” is a term that is defined in Article Two of the Basic Plan Document.

2.7“Committee” shall mean the Executive Compensation and Development Committee of the Board, or its successor, as designated by the Board.

2.8“Compensation” shall mean for any period, the rate of base salary or the wages paid by the Company or an Affiliate to an Employee during the period.  For this purpose, the “rate of base salary or the wages paid” shall exclude Form W-2 income in the form of overtime compensation, bonuses, commissions, deferred compensation plan payments or severance pay under any 

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severance benefit plan, but shall include Form W-2 income paid as a lump sum in lieu of merit increase and compensation excluded from Form W-2 income because of salary reduction agreements in connection with plans described in Sections 125, 132(f)(4) or 401(k) of the Code or resulting from deferred compensation contracts for the year in question.

2.9“Company” is a term that is defined in Article Two of the Basic Plan Document.

2.10“Controlled Group Member” shall mean any organization which, together with the Company, is a member of a controlled group of corporations under Sections 414(b), 414(c), and 1563(a) of the Code, applying an 80% test for purposes of Section 1563(a). 

2.11“Deferred Compensation Account” shall mean the bookkeeping account described in Section 4.4.

2.12“Election Form” shall mean the Participation Election Form described in Section 3.2 and/or Section 3.3.  An Election Form may be in paper and/or electronic form, as designated by the Administrator.

2.13“Employee” is a term that is defined in Article Two of the Basic Plan Document.  

2.14“Hypothetical Interest” shall mean the gains and losses credited to a Participant’s Deferred Compensation Account in accordance with Section 4.5.

2.15“Participant” shall mean each Employee who participated in the Plan in accordance with the terms and conditions of this Appendix B.  Participant shall also include a former Employee who had become a Participant as an Employee and on whose behalf the Administrator is maintaining a Deferred Compensation Account pursuant to the terms of this Appendix B.

2.16“Plan” is a term that is defined in Article Two of the Basic Plan Document.

2.17“Qualified Plan” is a term that is defined in Article Two of the Basic Plan Document.

2.18“Separation from Service” shall mean an Employee’s complete cessation of all services as an Employee for the Company and all Controlled Group Members or as otherwise set forth below:

		
	a)
	A Separation from Service shall not be considered to have occurred if the individual’s employment relationship is treated by the Company or any Controlled Group Member as continuing while the individual is on military leave, sick leave, or other bona fide leave of absence if such period of leave does not exceed six months or, if longer, so long as the individual’s right to reemployment is provided by statute or by contract.  If the period of leave exceeds six months and such reemployment rights are not provided, the employment relationship is deemed to cease on the first date immediately following such six-month period.

 
		
	b)
	A Separation from Service shall also not be considered to have occurred if the individual’s employment relationship is treated by the Company or any Controlled 

2

Group Member as continuing while the individual is on a leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six months, where such impairment causes the individual to be unable to perform the duties of his position or any substantially similar position, provided that, for purposes of the Plan, the employment relationship shall be considered to continue no longer than 29 months or, if longer, so long as the individual’s right to reemployment is provided by statute or by contract.  If the period of leave exceeds 29 months and such reemployment rights are not provided, the employment relationship is deemed to cease on the first date immediately following such 29-month period.

		
	c)
	A Separation from Service shall also not be considered to have occurred, regardless of the level of services anticipated or provided by the individual as an employee or in the capacity other than an employee, if the individual continues to provide services to the Company or any Controlled Group Member at a rate that is fifty percent (50%) or more of the level of services rendered, on average, during the immediately preceding 36-month period (or the full period of such services, if less than 36 months) and the remuneration for such services is fifty percent (50%) or more of the average remuneration earned during the 36-month period (or the full period of such services, if less than 36 months).

		
	d)
	Otherwise, a Separation from Service is presumed to have occurred if the facts and circumstances indicate that (A) the Company or any Controlled Group Member and the individual reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the individual would perform after such date would permanently decrease to 20% or less of the average level of bona fide services over the immediately preceding 36-month period (or the full period of such services, if less than 36 months) or (B) the level of bona fide services the individual performs after a given date decreases to a level equal to 20% or less of the average level of bona fide services performed by the individual over the immediately preceding 36-month period (or the full period of such services, if less than 36 months).

2.19“Specified Employee” shall mean, for any period during which the Company remains publicly traded, an individual who is included in the group of employees who are determined to be “key employees” under Section 416(i)(1)(A)(i), (ii), or (iii) of the Code (as applied in accordance with regulations thereunder and disregarding Section 416(i)(5) of the Code), identified in the manner and under the procedures specified in a writing adopted by the Committee.

2.20 “Supplemental Company Contribution” shall mean, the contribution credit described in Section 4.3(b) and determined in reference to a formula set forth in the Qualified Plan.  Except as otherwise specified by the Board, any change in the employer matching contribution formula under the Qualified Plan shall automatically be considered a change to the Plan, effective as of the effective date of change under the Qualified Plan, and the Plan shall thereafter be administered in accordance with such change.

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2.21“Supplemental Employee Contribution” shall mean the contribution credit described in Section 4.3(a).

2.22“Valuation Date” shall mean the close of business as of each business day. 

2.23“Vested” is a term that is defined in Article Two of the Basic Plan Document.

ARTICLE THREE

PARTICIPATION

3.1  ELIGIBILITY

The individuals who are eligible to participate in the Plan are those Employees selected by the Committee. The Committee shall make its selection of eligible Employees before January 1 of the year next beginning or at such other times as it shall decide for the purpose of determining the eligibility of new Employees hired by the Company or its Affiliates or Employees newly promoted into a classification eligible for participation in the Plan.

The Committee, in its sole discretion, shall determine to what extent an Employee is eligible to participate under the provisions of Article Four.  Except as otherwise provided by the Committee, an Employee who has been selected by the Committee as eligible to participate under Section 4.2 and/or Section 4.3 of the Plan shall continue such eligibility from year to year of his employment with the Company or Affiliate, regardless of whether the Employee elects to participate or not; provided, however, that the Committee, in its discretion, may terminate all or part of an Employee’s eligibility for any given year.  To participate in the Plan for any given year, an Employee must be classified within a select group of management and highly compensated employees for such year.

3.2 PARTICIPATION UNDER DEFERRED COMPENSATION PROVISIONS

An Employee who is eligible under the provisions of Section 3.1 to participate under the deferral provisions of Section 4.2 may elect to participate, alter the extent of his participation, or suspend or terminate his participation under such deferral provisions by delivering a properly completed and executed Election Form to the Administrator. This Election Form shall specify:

		
	a)
	The percentage of any bonus to be deferred as provided in Section 4.2 for the calendar year to which the election applies;

		
	b)
	The Participant’s investment designation in accordance with Section 4.6;

		
	c)
	The method by which the amounts deferred for the calendar year to which the election applies (included Hypothetical Interest on such deferrals) are to be paid in accordance with a method of payment permitted under Section 5.2(a);

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	d)
	The time as of which payment of the amounts deferred for the calendar year to which the election applies (included Hypothetical Interest on such deferrals) is to occur (in the event of a lump sum distribution) or commence (in the event of a form of distribution other than a lump sum) in accordance with a time of payment permitted under Section 5.2(b); and

		
	e)
	The Beneficiary to whom payment of all amounts credited to the Participant’s Deferred Compensation Account under this Appendix B will be made in the event of the Participant’s death (unless this Beneficiary has already been designated pursuant to Section 3.3 or otherwise).

The election under paragraph (a) above shall be irrevocable with respect to the calendar year to which it applies, except as provided in Sections 4.1(c) or 4.1(d).  The election under paragraph (b) above may be changed as provided in Section 4.6 and shall be subject to the provisions of Section 3.4.  The elections under paragraphs (c) and (d) above shall be irrevocable except as provided in Section 5.7 and shall be subject to the provisions of Section 3.4.  The election under paragraph (e) above may be made and may be changed as provided in Article Two of the Basic Plan Document, subject to the provisions of Section 3.4.

3.3  PARTICIPATION UNDER SUPPLEMENTAL 401(k) PROVISIONS

An Employee who is eligible under the provisions of Section 3.1 to participate under the deferral provisions of Section 4.3 may elect to participate, alter the extent of his participation, or suspend or terminate his participation under such deferral provisions by delivering a properly completed and executed Election Form to the Administrator.  This Election Form shall specify:

		
	a)
	The percentage of his future Compensation to be deferred as provided in Section 4.3 for the calendar year to which the election applies;

		
	b)
	The Participant’s investment designation in accordance with Section 4.6;

		
	c)
	The method by which amounts the Participant defers for the calendar year to which the election applies and which are attributable to the Participant’s Supplemental Employee Contributions (included Hypothetical Interest on such deferrals) are to be paid in accordance with a method of payment permitted under Section 5.2(a);

		
	d)
	The time as of which payment of the amounts the Participant defers for the calendar year to which the election applies and which are attributable to the Participant’s Supplemental Employee Contributions (included Hypothetical Interest on such deferrals) is to occur (in the event of a lump sum distribution) or commence (in the event of a form of distribution other than a lump sum) in accordance with a time of payment permitted under Section 5.2(b); 

		
	e)
	The method by which amounts represented by those credits to the Participant’s Deferred Compensation Account which are attributable to the Supplemental Company Contributions made on the Participant’s behalf (including Hypothetical 

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Interest on such amounts) are to be paid in accordance with a method of payment permitted under Section 5.2(a); 

		
	f)
	The time as of which payment of the amounts represented by those credits to the Participant’s Deferred Compensation Account which are attributable to the Supplemental Company Contributions made on the Participant’s behalf (including Hypothetical Interest on such amounts) is to occur (in the event of a lump sum distribution) or commence (in the event of a form of distribution other than a lump sum) in accordance with a time of payment permitted under Section 5.2(b); and

		
	g)
	The Beneficiary to whom payment of all amounts credited to the Participant’s Deferred Compensation Account under this Appendix B will be made in the event of the Participant’s death (unless this Beneficiary has already been designated pursuant to Section 3.2 or otherwise).

The election under paragraph (a) above shall be irrevocable with respect to the calendar year to which it applies, except as provided in Sections 4.1(c) or 4.1(d).  The election under paragraph (b) above may be changed as provided in Section 4.6 and shall be subject to the provisions of Section 3.4.  The elections under paragraphs (c), (d), (e) and (f) above shall be irrevocable except as provided in Section 5.7 and, with respect to elections under paragraphs (c) and (d), shall be subject to the provisions of Section 3.4.  The election under paragraph (g) above may be made and may be changed as provided in Article Two of the Basic Plan Document, subject to the provisions of Section 3.4.

3.4  COORDINATION OF ELECTIONS

Notwithstanding any provision of the Plan to the contrary, an Employee is eligible to participate under the provisions of Sections 4.2 and 4.3 and who elected to participate under both Sections shall be required to coordinate and combine certain elections (stated below) into a single election that is applicable both to a bonus deferred under Section 4.2 and Compensation deferred under Section 4.3.  The elections that shall be coordinated into a single election under this Section 3.4 are:

		
	a)
	A Participant’s investment designation described in Sections 3.2(b) and 3.3(b);

		
	b)
	A Participant’s method of payment election described in Sections 3.2(c) and 3.3(c);

		
	c)
	A Participant’s time of payment election described in Sections 3.2(d) and 3.3(d); and

		
	d)
	A Participant’s Beneficiary designation described in Sections 3.2(e) and 3.3(g).

The effective date of this Section 3.4 with respect to any Participant shall be the effective date of the Participant’s initial deferral under Section 4.2 or his initial deferral under Section 4.3, whichever is later.

3.5  EFFECTIVE DATE FOR PARTICIPATION

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	a)
	Except as provided under paragraph (b) below, the effective date for participation in the Plan by an Employee who is eligible to participate under Section 3.1 shall be the first day of the calendar year that immediately follows the calendar year in which the Administrator receives the Employee’s properly completed and executed Election Form.  For any given year, the effective date for the deferral of any Participant bonus under Section 4.2 shall be the date such bonus would otherwise be payable to the Participant and the effective date for the deferral of a Participant’s Compensation under Section 4.3 shall be the last day of the first pay period that ends in the calendar year that immediately follows the calendar year in which the Administrator receives the Employee’s properly completed and executed Election Form.

		
	b)
	The effective date for participation in the Plan by a newly hired Employee or a newly promoted Employee who is eligible to participate under Section 3.1 shall be the date that the Employee begins active employment with the Company or an Affiliate or the date on which the Employee’s promotion is effective, provided the Administrator has received the Employee’s Election Form prior to such date.  Notwithstanding the preceding sentence, a newly hired Employee or newly promoted Employee who is eligible to participate under Section 3.1 may elect to participate under the provisions of Section 3.2 and/or Section 3.3 by delivering a properly completed and executed Election Form to the Administrator within 30 days of the Employee’s date of hire or, if applicable, effective date of promotion.  In the event such an Employee completes such action, the Employee’s elections under Section 3.2 and/or Section 3.3 shall apply only with respect to that portion of a bonus and/or that Compensation that is attributable to the Employee’s services performed after the Election Form has been delivered to the Administrator and the effective date for participation of such Employee shall be the date as of which the Administrator determines such Election Form to be effective. 

3.6  CESSATION OF ELIGIBILITY

If during a calendar year a Participant has a Separation from Service, deferrals under the provisions of Sections 4.2 and/or 4.3 shall cease as of the date of such Separation from Service or such earlier date on which the Participant no longer receives Compensation.  If during a calendar year a Participant ceases to satisfy the criteria that qualified him for Plan participation, as determined by the Committee, (including, for this purpose, the requirement that a Participant be classified within a select group of management and highly compensated employees), the Participant’s deferrals under the provisions of Sections 4.2 and/or 4.3 shall continue for the remainder of such calendar year and shall thereafter cease until such time as the Committee determines the individual again satisfies the criteria for Plan participation.  Such individual shall remain a Participant, however, until the amounts represented by the Vested Deferred Compensation Account maintained on his behalf under the Plan are distributed.

ARTICLE FOUR

COMPENSATION DEFERRED

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4.1  DEFERRED COMPENSATION ELECTION

		
	a)
	Initial Deferral Election.  An Employee who is eligible to participate in the Plan under the provisions of Section 3.1 may elect to defer an annual bonus and/or Compensation for a given calendar year by delivering a properly completed and executed Election Form to the Administrator as provided in Sections 3.2, 3.3, or 3.5.  Except as provided in Section 3.5(b), a properly completed and executed Election Form shall be considered to be delivered on a timely basis if it is provided to the Administrator by the last day of the last full pay period ending in the calendar year which immediately precedes the calendar year for which the deferral election is effective and the annual bonus and/or Compensation is to be earned.  Except as provided in paragraphs (c) or (d) below, any such deferral election shall be irrevocable as of the last day of the last full pay period ending in the calendar year that immediately precedes the calendar year to which the election applies.  Such deferral election shall automatically terminate as to any annual bonus or Compensation attributable to services after such calendar year.

		
	b)
	Subsequent Deferral Elections.  With respect to any calendar years beginning after the year an Employee first becomes eligible to participate under Section 3.1, the Employee may elect to defer an annual bonus and/or Compensation attributable to services performed in such year by delivering a properly completed and executed Election Form to the Administrator by the last day of the last full pay period ending in the calendar year which immediately precedes the calendar year for which the deferral election is to be effective and the annual bonus and/or Compensation is to be earned.  Except as provided in paragraphs (c) or (d) below, any such deferral election shall be irrevocable as of the last day of the last full pay period ending in the calendar year that immediately precedes the calendar year to which the election applies.  Such deferral election shall automatically terminate as to any annual bonus or Compensation attributable to services after such calendar year.

		
	c)
	If a Participant makes a withdrawal due to an unforeseeable emergency under Section 5.6 all remaining deferrals of annual bonus and/or Compensation under the Plan for the calendar year in which such a withdrawal is made shall be cancelled.  Such Participant shall not be permitted to make any further deferral of annual bonus or Compensation until the Participant satisfies the procedures set forth in paragraph (b) above.

		
	d)
	Participant deferrals of annual bonus and/or Compensation under the Plan shall be cancelled in such other events or conditions as the Commissioner of Internal Revenue may prescribe in generally applicable guidance published in the Internal Revenue Bulletin which the Administrator, in its discretion, chooses to apply under the Plan; provided, however, that a Participant shall have no direct or indirect election to the application of such events or conditions to his individual circumstances. 

4.2  AMOUNT OF BONUS DEFERRAL

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Subject to Section 3.5(b), an Employee who is eligible to participate under the provisions of this Section 4.2 may elect to defer receipt of up to 100% of any annual bonus to be payable by the Company or an Affiliate.  Compensation deferred under this Section 4.2 is credited to the Participant’s Deferred Compensation Account as of the date such compensation would otherwise be payable to the Participant.

4.3  AMOUNT OF SUPPLEMENTAL 401(k) CONTRIBUTIONS

		
	a)
	An Employee who is eligible to participate under the provisions of this Section 4.3 may elect to defer receipt of up to 100% of his Compensation attributable to services performed after the election is delivered to the Administrator.  Deferrals under this paragraph (a) shall be designated as Supplemental Employee Contributions and shall be made within such times and in accordance with such means as are designated by the Administrator.  The election under this paragraph (a) shall be independent of and unaffected by any deferral election under the Qualified Plan. 

		
	b)
	In the event that (i) the allocation of employer matching contributions under the Qualified Plan on behalf of a Participant is limited for any given Plan Year due to the limitation on elective contributions made on such Participant’s behalf under the Qualified Plan under Section 402(g) of the Code, and (ii) the Participant is making Supplemental Employee Contributions for the given year at or above such level required by the Administrator for the given year, the amount by which such employer matching contributions are limited, as determined by the Administrator in its discretion, shall be credited under the Plan as restored matching contributions and shall be designated as Supplemental Company Contributions.

		
	c)
	Compensation deferred under paragraph (a) above shall be credited to the Participant’s Deferred Compensation Account as of the date such Compensation would otherwise be payable to the Participant.  Compensation deferred under paragraph (b) above shall be credited to Participant’s Deferred Compensation Account as of the date such compensation would otherwise have been treated as a contribution allocation under the Qualified Plan.

4.4  DEFERRED COMPENSATION ACCOUNT

A Deferred Compensation Account shall be established for each Employee who properly completes, executes and delivers an Election Form under Section 3.2 and/or Section 3.3.  Any bonus a Participant defers for calendar years beginning on and after January 1, 2005 under Section 4.2 and/or any Supplemental Employee Contributions and Supplemental Company Contributions credited on the Participant’s behalf for calendar years beginning on and after January 1, 2005 under Section 4.3, as well as Hypothetical Interest earned on all such deferred compensation, shall be credited to this Deferred Compensation Account.  A Participant’s Deferred Compensation Account shall be kept only for bookkeeping and accounting purposes and no Company funds shall be transferred or designated to this account.  A Participant’s interest in the Deferred Compensation Account maintained on his behalf shall be Vested at all times.

4.5  HYPOTHETICAL INTEREST

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The Deferred Compensation Account maintained on behalf of a Participant under this Appendix B shall be credited with Hypothetical Interest.  The Hypothetical Interest shall be credited as of each Valuation Date on the amount credited to the Participant’s Deferred Compensation Account on such Valuation Date in accordance with the valuation procedure adopted by the Administrator.  The Hypothetical Interest credited to each Deferred Compensation Account is determined by the Administrator and computed in reference to the appreciation or depreciation experienced since the immediately preceding Valuation Date by the hypothetical investment funds which the Administrator may offer to Participants under Section 4.6. For any given period, Hypothetical Interest may be a positive or a negative figure.  The crediting of Hypothetical Interest shall occur so long as there is a balance in the Participant’s Deferred Compensation Account regardless of whether the Participant has incurred a Separation from Service.  The Administrator may prescribe any reasonable method or procedure for the accounting of Hypothetical Interest.

4.6  PARTICIPANT INVESTMENT DESIGNATION

		
	a)
	A Participant (and any eligible Employee first electing to participate in the Plan) may designate, within such time and in accordance with such means as are designated by the Administrator, that portion of his future deferred compensation under Sections 4.2 and 4.3, and separately, that portion of any existing Deferred Compensation Account maintained on his behalf which shall be credited with Hypothetical Interest in reference to each of the hypothetical investment funds that may be offered by the Administrator, in the discretion of the Administrator.  Such designations may specify, in 1% increments, the percentages to be credited in reference to each of the hypothetical investment funds offered.  Such designations may remain in effect until the Participant submits a new designation within such times and in accordance with such means as are designated by the Administrator.  New designations shall be effective as of a given date specified by the Administrator.  In the event a Participant fails to make an effective designation under this paragraph (a), the Administrator, acting in its discretion, shall make such designation on behalf of the Participant.

		
	b)
	In accepting participation in the Plan, a Participant agrees on behalf of himself and his Beneficiary to assume all risk in connection with any decrease in value of the hypothetical investment funds in reference to which Hypothetical Interest is credited to the Participant’s Deferred Compensation Account.  The Company, the Affiliates and the Administrator shall not be liable to any Participant or Beneficiary for the under-performance of any hypothetical investment fund offered under the Plan.

		
	c)
	The Administrator may, in its discretion, offer additional hypothetical investment funds to Participants and may cease to offer any such fund at such time as it deems appropriate.  In the event the Administrator decides to discontinue offering a hypothetical investment fund under the Plan, those Participants on whose behalf Hypothetical Interest is then being credited on the basis of the discontinued hypothetical investment fund may be required, at the discretion of the Administrator, to have affected amounts consolidated with (or “mapped” to) a replacement hypothetical investment fund selected by the Administrator or may be required to designate, from such selection of hypothetical funds as may be offered by the 

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Administrator, a hypothetical fund or funds as a replacement for the hypothetical investment fund being discontinued.  Any such designation by a Participant shall be made in accordance with paragraph (a) above.  Hypothetical Interest credited on behalf of any Participant who is affected by the discontinuation of a hypothetical investment fund but who fails to make any replacement designation offered in this paragraph (c) shall mirror, to the extent of the Participant’s interest in such discontinued fund, such hypothetical investment fund or funds as the Administrator may choose in its discretion.  Any changes under this paragraph (c) shall take effect as of such times and under such rules as shall be established by the Administrator.

		
	d)
	Notwithstanding any provision of the Plan to the contrary, the eligibility of a Participant to make any designation under this Section 4.6 shall not be construed as to provide any Participant or other person with a beneficial ownership interest in any assets of the Company or an Affiliate. Title to and beneficial ownership of any assets which the Company or any Affiliate may earmark to pay the contingent deferred compensation hereunder shall at all times remain in the Company or Affiliate.  The Participant, his Beneficiary and any heirs, successors or assigns shall not have any legal or equitable right, interest or control over or any property interest whatsoever in any specific assets of the Company or any Affiliate or related entity on account of having an interest under the Plan.  Any and all of the Company’s assets, and any life insurance policies, annuity contracts or the proceeds therefrom which may be acquired by the Company shall be, and remain, the general unpledged, unrestricted assets of the Company.  In no event shall the Company or any Affiliate be required to purchase any specific shares or interest in any investment fund.

4.7  STATEMENTS

Statements will be sent to each Participant as to the balance of his Deferred Compensation Account at least once each calendar year.

ARTICLE FIVE

PAYMENT OF DEFERRED COMPENSATION

		
	5.1.
	PAYMENT 

Except as otherwise provided in this Article Five, payment of the amounts represented by all or a portion of a Participant’s Vested Deferred Compensation Account shall be made according to the method and at the time(s) permitted under Section 5.2 and elected by the Participant in his Election Form(s) or, if applicable, in the most recent, properly completed and effective Amendment Form(s) which the Participant has delivered to the Administrator prior to the Participant’s Separation from Service.  If a Participant has not delivered to the Administrator a properly completed and effective Election Form or, if for any reason the Administrator determines that any Election Form(s) or Amendment Form(s) is materially deficient, payment of the amounts represented by that portion of the Vested Deferred Compensation Account for which the election is undelivered or materially deficient shall be made in a lump sum during the month 

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next following the month of the Participant’s Separation from Service except as otherwise provided in this Article Five.  For all purposes of the Plan and effective until such time as the Participant delivers to the Administrator a properly completed and effective Election Form or Amendment Form that includes a method and time of payment election, such default method and time of payment shall be treated as the Participant’s elected method and time of payment with respect to any given portion of a Deferred Compensation Account to which the default applies.

		
	5.2.
	METHODS AND TIMES OF PAYMENT

		
	a)
	A Participant may elect any one of the following methods of payment with respect to each separate deferral election made in regard to any amounts attributable to the Participant’s bonus deferral in accordance with Section 4.2 and/or the Participant’s deferral of Supplemental Employee Contributions under Section 4.3(a).  In accordance with the coordination of elections under Section 3.4, such elected method of payment shall apply to all such amounts deferred for the calendar year to which the election applies (including Hypothetical Interest on such deferrals): 

		
	(i)
	A lump sum distribution;

		
	(ii)
	Payment in approximately equal annual installments for a period not to exceed 10 years; or

		
	(iii)
	Payment in approximately equal monthly installments for a period not to  
exceed 10 years.

A Participant may separately elect any of the above methods of payment for amounts represented by those credits to the Participant’s Vested Deferred Contribution Account which are attributable to the Supplemental Company Contributions made on the Participant’s behalf (including Hypothetical Interest on such credits).

Payments of the distributable amount represented by all or a portion of the balance in the Participant’s Vested Deferred Compensation Account shall be made in cash.

		
	b)
	A Participant may elect, with respect to each separate deferral election made in regard to any amounts attributable to the Participant’s bonus deferral in accordance with Section 4.2 and/or the Participant’s deferral of Supplemental Employee Contributions under Section 4.3(a), to have such amounts distributed to him (or, in the case of an installment distribution, commence to be distributed to him) as of the month next following the month of the Participant’s Separation from Service, as of a given future month and year, or as of the earlier of these, as such Participant has elected in accordance with Section 3.2(d) and/or Section 3.3(d); provided, however, that any given future month/year for payment must be at least five years from the effective date of such deferral.  In accordance with the coordination of elections under Section 3.4, such elected time of payment shall apply to all such amounts deferred for the calendar year to which the election applies (including Hypothetical Interest on such deferrals).

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With respect to amounts represented by those credits to a Participant’s Vested Deferred Compensation Account which are attributable to the Supplemental Company Contributions made on the Participant’s behalf (including Hypothetical Interest on such credits), the Participant may separately elect to have such amounts distributed to him (or, in the case of an installment distribution, commence to be distributed to him) as of the month next following the month of the Participant’s Separation from Service or as of any given month and year, provided such given month and year follows the Participant’s Separation from Service, as such Participant has elected in accordance with Section 3.3(f).

Except as provided in this Article Five, no distribution shall commence before or after the elected distribution date(s) provided in this paragraph (b).  For purposes of this Section 5.2, if the Company makes a distribution within the permitted distribution period (as defined below) and the actual date of such distribution is not within the direct or indirect control of the Participant, such distribution shall be treated as having been made on such elected distribution date.  The “permitted distribution period” for this purpose shall begin on the thirtieth day before the Participant’s elected distribution date and shall end on the later of (i) the last day of the calendar year that includes the Participant’s elected distribution date, and (ii) the fifteenth day of the third month following the Participant’s elected distribution date.

		
	c)
	In the event the Participant dies before receiving the entire distribution to which he is entitled under the Plan, the provisions of Section 5.8 shall apply.

		
	5.3.
	ACCELERATION OF PAYMENTS 

Notwithstanding the provisions of Sections 5.1 and 5.2 and any Participant election thereunder, the Company may pay a Participant the amounts represented by all or a portion of the balances credited to a Participant’s Vested Deferred Compensation Account in a lump sum as of the first Valuation Date that is administratively reasonable following the occurrence of any of the events or conditions identified below.  Such lump sum payment shall be equal to the amount, as determined by the Administrator, as is reasonably estimated to be required to satisfy the purpose of the accelerated payment.  The events or conditions to which this Section 5.3 applies are:

		
	a)
	The Participant needs to avoid a violation of an applicable federal, state, local, or foreign ethics law or conflicts of interest law.

		
	b)
	The Participant incurs state, local, or foreign tax obligations arising from participation in the Plan that apply to a Plan interest before such interest is otherwise payable from the Plan.

		
	c)
	The Participant incurs federal employment tax obligations under Sections 3101, 3121(a), or 3121(v)(2) of the Code with respect to a Vested Deferred Compensation Account and any federal, state, local, or foreign tax obligations arising from such employment tax obligations.

13

		
	d)
	The Plan is terminated and liquidated in accordance with generally applicable guidance prescribed by the Commissioner of Internal Revenue and published in the Internal Revenue Bulletin.

		
	e)
	Such other events or conditions as the Commissioner of Internal Revenue may prescribe in generally applicable guidance published in the Internal Revenue Bulletin which the Administrator, in its discretion, chooses to apply under the Plan; provided, however, that a Participant shall have no direct or indirect election as to the application of such events or conditions to his individual circumstances.

Any payment under this Section 5.3 shall be contingent upon the Administrator’s decision that a Participant has satisfied all material elements of an applicable event or condition and that the Participant produces evidence to that effect that is satisfactory to the Administrator.  If any payment under this Section 5.3 is made and such payment is less than an amount that represents the entire Vested Deferred Compensation Account maintained on the Participant’s behalf, the amount of such payment shall offset any future payment from the Plan to the Participant or any Beneficiary or other person who claims through the Participant.

		
	5.4.
	DELAY OF PAYMENTS

Notwithstanding the provisions of Sections 5.1 and 5.2 and any Participant election thereunder, the Company may delay the payment of amounts represented by all or a portion of the balances credited to a Participant’s Vested Deferred Compensation Account in connection with any of the events or conditions identified below; provided, however that, with respect to any given event or condition, the Administrator shall treat Plan payments to all similarly-situated Participants in a reasonably consistent manner:

		
	a)
	The Administrator reasonably anticipates that if Plan payments were to be made as scheduled, the Company’s deduction with respect to such payments would not be permitted under Section 162(m) of the Code; provided such scheduled payments are then made during the Participant’s first taxable year in which the Administrator reasonably anticipates that the Company’s deduction will not be barred by application of Section 162(m) of the Code.

		
	b)
	The Administrator reasonably anticipates that making scheduled Plan payments will violate federal securities laws or other applicable law; provided that the scheduled payments are then made at the earliest date at which the Administrator reasonably contemplates that making the scheduled payments will not cause such a violation.

		
	c)
	Such other events or conditions as the Commissioner of Internal Revenue may prescribe in generally applicable guidance published in the Internal Revenue Bulletin which the Administrator, in its discretion, chooses to apply under the Plan; provided, however, that a Participant shall have no direct or indirect election as to the application of such events or conditions to his individual circumstances.

		
	5.5.
	DELAY OF PAYMENTS TO SPECIFIED EMPLOYEES

14

Notwithstanding the foregoing provision of this Article Five, if a payment is being made to a Participant on account of such Participant’s Separation from Service and such Participant is a Specified Employee as of the date of such Separation from Service, such payment shall not be made (or commence, in the case of an installment distribution) until the first Valuation Date that is administratively reasonable following the date that is six months after the Participant’s Separation from Service.  

		
	5.6.
	EMERGENCY CIRCUMSTANCES

Notwithstanding any other provision of this Plan, if the Administrator determines, after consideration of a Participant’s application, that the Participant has incurred a severe financial hardship (as defined below) the Administrator may in its sole and absolute discretion direct that all or a portion of the Participant’s Vested Deferred Compensation Account balance be paid to him.  The payment shall be made in the manner and at the times specified by the Administrator for payment; provided, however, such payment shall not be in excess of that amount which is, in the discretion of the Administrator, reasonably necessary to satisfy the financial hardship.  

For purposes of this Section 5.6, a “severe financial hardship” shall mean a financial hardship resulting from (i) an illness or accident of the Participant, the Participant’s spouse, beneficiary or dependent, (ii) the Participant’s loss of property due to casualty, or (iii) any other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant; provided, however, that such financial hardship is not or may not be relieved through reimbursement or compensation from insurance or otherwise, by cessation of deferrals of Compensation in future years, or by liquidation of the Participant’s assets to the extent such liquidation would not cause severe financial hardship.

		
	5.7.
	AMENDMENT TO PAYMENT ELECTION

		
	a)
	A Participant who is an Employee who has not incurred a Separation from Service may elect to defer the date at which payment of an amount otherwise payable under the Plan will occur (or commence) and may elect a change in his elected method of payment (or the default form of payment under Section 5.1) by submitting a properly completed and executed Amendment Form to the Administrator which indicates the period of additional deferral and/or the desired method of payment; provided that:

    
		
	(i)
	Such election shall not be effective until 12 months after it is submitted to the Administrator.

		
	(ii)
	Such election shall require that the payment with respect to which the election is made shall be delayed for a period of not less than five years from the date payment would have been made (or commence) absent the elected change.

		
	(iii)
	If the election pertains to a delay in the payment of a Vested Deferred Compensation Account from a specific year and month that the Participant previously elected in his Election Form or a subsequent Amendment Form (or to which the Participant has defaulted under Section 5.1) such election cannot 

15

be made less than 12 months before the date the payment was otherwise scheduled to be made (or commence).

For purposes of this Article Five, installment payments shall be treated as a single payment.

		
	b)
	A Participant may at any time elect to change his Beneficiary in accordance with Article Two of the Basic Plan document, subject to the provisions of Section 3.4.

		
	5.8.
	PAYMENT UPON DEATH OF PARTICIPANT

		
	a)
	In the event of a Participant’s death before payment is made (or commences) under this Article Five, the amount represented by the Participant’s Vested Deferred Compensation Account shall be paid by the Company to the Participant’s Beneficiary in the form of a lump sum during the month next following the month of the Participant’s death.  Except as provided in Sections 5.3 or 5.4, no payment to a Beneficiary under this paragraph (a) shall be made before or after such identified payment date; provided, however, that if the Company makes a payment within the permitted payment period (as defined below) and the actual date of payment is not within the direct or indirect control of the Beneficiary, such payment shall be treated as having been made on such identified payment date.  The “permitted payment period” for this purpose shall begin on the first day of the month next following the month of the Participant’s death and shall end on the later of (i) the last day of the calendar year that includes the identified payment date, and (ii) the fifteenth day of the third month following the identified payment date.

		
	b)
	In the event of a Participant’s death after payment commences under this Article Five, the amount represented by the remaining balance of the Participant’s Vested Deferred Compensation Account shall be paid by the Company to the Participant’s Beneficiary in the form of a lump sum during the month next following the month of the Participant’s death.  Except as provided in Sections 5.3 or 5.4, no payment to a Beneficiary under this paragraph (b) shall be made before or after such identified payment date; provided, however, that if the Company makes a payment within the permitted payment period identified in paragraph (a) above and the actual date of payment is not within the direct or indirect control of the Beneficiary, such payment shall be treated as having been made on such identified payment date.  

5.9  REHIRED PARTICIPANT

If a Participant incurs a Separation from Service and payment of the amounts represented by the Participant’s Vested Deferred Compensation Account have begun under a method providing for installment payments, such installment payments shall not be suspended if the Participant is subsequently reemployed by the Company or an Affiliate. 

ARTICLE SIX

16

CONSTRUCTION

This Appendix B is intended to memorialize the provisions of the Plan as it pertains to amounts other than grandfathered amounts within the meaning of guidance promulgated by the Internal Revenue Service pursuant to Section 409A of the Code.  As a result, the Administrator shall interpret and construe the terms of this Appendix B so as to be consistent with such Internal Revenue Service guidance.  References or cross references to an identified Article, Section or specific part thereof, shall refer to such Article, Section (or part) of this Appendix B, unless otherwise qualified by the context. 

17Exhibit 10.1

 

SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN

 

This SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN (this “Agreement”) is made and entered into this 19th day of July, 2019
(the “Effective Date”), by and among SHORE UNITED BANK, a Maryland bank (the
“Bank”), and Lloyd L. Beatty, Jr. (the “Executive”). Capitalized terms used herein are
defined in Section 10 of this Agreement.

 

BACKGROUND

 

To incentivize the
Executive to devote his full business time, attention, and energies to the business of the Bank, the Bank and the Executive desire
to enter into this Agreement to establish the terms and conditions of the nonqualified supplemental executive retirement plan to
be maintained by the Bank on the Executive’s behalf.

 

AGREEMENT

 

In consideration of
the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, intending to be legally bound hereby, the parties hereby agree as follows:

 

1.                  
General Terms and Conditions. The Bank hereby establishes a nonqualified supplemental executive retirement plan for
the benefit of the Executive. Section 2 below describes the benefits available to the Executive, or the Executive’s
Beneficiary, upon the occurrence of certain events as described in, and subject to the terms and conditions of, this Agreement;
provided the Executive remains in the Continuous Service of the Bank from the Effective Date until the specified event. Each benefit
described in Section 2 is in lieu of any other benefit therein. No benefits under this Agreement shall be payable with respect
to any event other than the events described below, and the benefits otherwise payable pursuant to Section 2 below are subject
to the further limitations in Section 2(f) and (g).

 

2.                  
Retirement Benefits.

 

(a)               
Termination on or after Normal Retirement Age. If Executive remains in the Continuous Service of the Bank until on
or after attaining Normal Retirement Age, then following the date on which the Executive experiences a Separation from Service
on or after Normal Retirement Age (the “Normal Retirement Date”) for any reason other than (i) discharge of
the Executive by the Bank for Cause, (ii) because the Executive dies or becomes Permanently Disabled or (iii) on or within twelve
(12) months following the effective date of a Change in Control, the Bank shall pay to the Executive the Normal Retirement Benefit
each year for ten (10) years. Payment of the Normal Retirement Benefit shall commence upon the Executive’s Normal Retirement
Date, beginning with the month immediately following the Executive’s Normal Retirement Date, and be paid in twelve (12) equal
monthly installments (without interest) on the first day of each month thereafter until paid in full.

 

(b)               
Termination Prior to Normal Retirement Age. If the Executive experiences a Separation from Service prior to attaining
Normal Retirement Age for any reason other than (i) discharge of the Executive by the Bank for Cause, (ii) because the Executive
dies or becomes Permanently Disabled or (iii) on or within twelve (12) months following the effective date of a Change in Control,
then the Bank shall pay to the Executive in a single lump sum on or within thirty (30) days after the Executive’s Separation
from Service an amount equal to the Accrual Balance as of the date of Executive’s Separation from Service.

  

     1

     

    

 

(c)               
Termination in Connection with a Change in Control. If before, on or after Normal Retirement Age, the Executive experiences
a Separation from Service on or within the twelve (12) months following the effective date of a Change in Control for any reason
other than (i) discharge of the Executive by the Bank for Cause or (ii) because the Executive dies or becomes Permanently Disabled,
then the Bank shall pay to the Executive in a single lump sum on or within thirty (30) days after the Executive’s Separation
from Service an amount equal to the present value of the Participant’s Normal Retirement Benefit discounted using the current
discount rate being utilized to calculate GAAP liabilities and assuming payments commence immediately.

 

(d)               
Disability. If Executive becomes Permanently Disabled while in the Continuous Service of the Bank and before any
event described in Subsections (a), (b) or (c) above, the Bank shall pay to the Executive in a single lump sum on or within thirty
(30) days following the date on which the Executive becomes Permanently Disabled an amount equal to the Accrual Balance as of the
date Executive becomes Permanently Disabled.

 

(e)               
Death. If the Executive dies while in the Continuous Service of the Bank and before the occurrence of any event triggering
the Executive’s entitlement to a benefit under this Section 2, then no benefits shall be paid under this Agreement.
If Executive dies after the occurrence of any event triggering the Executive’s entitlement to a benefit under this Section
2 and prior to payment of the entire Accrual Balance, the Executive’s Beneficiary shall receive in a single lump sum
on or within thirty (30) days after the Executive’s death an amount equal to the remaining Accrual Balance at the time of
Executive’s death.

 

(f)                
Forfeiture of Benefits; Regulatory Limitations. Notwithstanding any other provision of this Agreement, if (i) the
Bank discharges the Executive for Cause, or grounds exist for the Bank to discharge the Executive for Cause, regardless of whether
an event triggering an entitlement to a benefit under Subsection (a) through (e) has occurred, no benefits shall be paid under
this Agreement and any previously paid amounts shall be repaid to Bank by Executive upon five (5) days’ notice. The obligations
of the Bank under this Agreement are further subject to its adherence to applicable state and federal banking regulations, rules,
or statutes.

 

(g)               
Temporary Suspension Applicable to a Specified Employee. Notwithstanding the foregoing provisions of this Section
2, if Executive is a “specified employee,” within the meaning of Code Section 409A, as of the date of Executive’s
Separation from Service with the Bank other than by reason of death, payment of benefit amounts otherwise due shall be delayed
to the extent necessary under Code Section 409A until the earlier of six (6) months after Separation from Service or the date of
Executive’s death, as applicable. Any payments that are so delayed shall be paid in a single lump sum in cash in the seventh
month following Executive’s Separation from Service, or within thirty (30) days after the Executive’s death, if earlier.

 

3.                  
Amendment; Termination. This Agreement may be amended or terminated only by a written agreement signed by the Bank
and the Executive. The Bank may unilaterally amend the Agreement to conform with written directives to the Bank to comply with
legislative changes or tax law, including, without limitation, Code Section 409A and any and all Treasury regulations and guidance
promulgated thereunder. No amendment shall provide for or otherwise permit any acceleration of the time or schedule of any payment
under the Agreement in a manner that would be prohibited under Code Section 409A. No waiver of any provision contained in this
Agreement shall be effective unless it is in writing and signed by the party against whom such waiver is asserted. Notwithstanding
the preceding provisions of this Section 3, the Bank may elect to terminate the Agreement under any circumstances permitted
by Treasury Regulations Section 1.409A-3(j)(4)(ix). In any such event, the Bank shall distribute to the Executive the Accrual Balance
in a single lump sum at the earliest date permitted under such Treasury Regulations. The amount of the benefit (but not the timing
of payment) shall be determined as if the effective date of the termination of the Agreement constituted an involuntary discharge
by the Bank other than for Cause on or within twelve (12) months following a Change in Control.

  

     2

     

    

 

4.                  
ERISA Provisions.

 

(a)               
Plan Administrator Duties. This Agreement shall be administered by the Board of Directors of the Bank (the “Board
of Directors”), or such committee or person(s) as the Board of Directors shall appoint, except that the Executive may
not participate in any such actions and will excuse himself from participating in any such matter involving himself and/or this
Agreement. The Board of Directors, (or its delegatee(s)) in its capacity as the “administrator” of the Agreement for
purposes of ERISA, shall have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Agreement; and (ii) decide or resolve any and all questions including interpretations
of this Agreement, as may arise in connection with the Agreement. The decision or action of the Board of Directors (or its delegatee)
with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement
and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest
in the Agreement. The “Named Fiduciary” under the Agreement is the Bank.

 

(b)               
Claims Procedures.

 

(i)                
Notice of Denial.

 

(1)               
If Executive or a Beneficiary (a “claimant”) is denied a claim for benefits under this Agreement, the
Claims Administrator shall provide to the claimant written notice of the adverse benefit determination (whether such claim is denied
in whole or in part) within a reasonable period of time but no later than ninety (90) days after the Claims Administrator receives
the claim. However, under special circumstances (to be determined by the Claims Administrator), the Claims Administrator may extend
the time for processing the claim to a day no later than one hundred eighty (180) days after the Claims Administrator receives
the claim. The claimant shall be notified in writing within the initial 90-day period of the need to extend the time for review,
the special circumstances requiring an extension, and the date by which a decision is expected.

 

(2)               
With respect to a claim for benefits due to Executive being Permanently Disabled, the Claims Administrator shall provide
to the claimant written notice of the adverse benefit determination within a reasonable period of time but no later than forty-five
(45) days after the Claims Administrator receives the claim. This 45-day period may be extended up to thirty (30) days if an extension
is necessary due to matters beyond the control of the Agreement (to be determined by the Claims Administrator) and the claimant
is notified, prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the
date by which the Claims Administrator expects to render a decision. If, prior to the end of the first 30-day extension period,
the Claims Administrator determines that, due to matters beyond the control of the Agreement (to be determined by the Claims Administrator),
a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an
additional thirty (30) days, provided that the Claims Administrator notifies the claimant, prior to the expiration of the initial
30-day extension period, of the circumstances requiring the extension and the date as of which the Claims Administrator expects
to render a decision. In the case of any such extension, the notice of extension shall also specifically explain the standards
on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information
needed to resolve those issues, and the claimant shall have at least forty-five (45) days within which to provide the specified
information, if any.

 

     3

     

    

 

(ii)              
Contents of Notice of Denial. If a claimant is denied a claim for benefits under this Agreement, the Claims Administrator
shall provide to such claimant written notice of the denial. Any such notice of an adverse benefit determination shall be written
in a manner calculated to be understood by the claimant (and with respect to a claim for benefits due to Executive being Permanently
Disabled, be provided in a culturally and linguistically appropriate manner) and shall set forth:

 

(1)               
the specific reason or reasons for the denial;

 

(2)               
specific references to the pertinent provisions of this Agreement on which the denial is based;

 

(3)               
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary;

 

(4)               
an explanation of this Agreement’s claim review procedures, and the time limits applicable to such procedures, including
a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination
on review;

 

(5)               
in the case of a claim for benefits due to Executive being Permanently Disabled:

 

(A)             
 a discussion of the decision, including an explanation of the basis for disagreeing with or not following: the views presented
by the claimant to the Agreement of health care professionals treating the claimant and vocational professionals who evaluated
the claimant, the views of medical or vocational experts whose advice was obtained on behalf of the Agreement in connection with
a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination,
and a disability determination regarding the claimant presented by the claimant to the Agreement made by the Social Security Administration;

 

(B)             
if the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit,
either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Agreement to the
claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request in writing;

 

     4

     

    

 

(C)             
the specific internal rules, guidelines, protocols, standards or other similar criteria of the Agreement relied upon in
making the adverse determination, or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar
criteria of the Agreement do not exist; and

 

(D)             
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 to the claimant’s claim for benefits.

 

(iii)            
Right to Review. After receiving written notice of the denial of a claim, a claimant or his representative shall
be entitled to:

 

(1)               
submit written comments, documents, records, and other information relating to the denied claim to the Claims Administrator
or Appeals Fiduciary, as applicable; and

 

(2)               
request, free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to
the claim

 

(3)               
request a full and fair review of the denial of the claim by written application to the Claims Administrator (or Appeals
Fiduciary in the case of a claim for benefits payable due to Executive being Permanently Disabled), which shall include:

 

(A)             
a review that takes into account all comments, documents, records, and other information submitted by the claimant relating
to the claim, without regard to whether such information was submitted or considered in the initial benefit determination; and

 

(B)             
in the case of a claim for benefits due to Executive being Permanently Disabled:

 

i.                   
before issuing an adverse benefit determination on review, providing the claimant, free of charge with any new or additional
evidence considered, relied upon, or generated by the Agreement or other person making the benefit determination (or at the direction
of the Agreement or such other person) in connection with the claim as soon as possible and sufficiently in advance of the date
on which the notice of adverse benefit determination on review is required to be provided to give the claimant a reasonable opportunity
to respond prior to that date; and

 

ii.                 
before issuing an adverse benefit determination on review based on a new or additional rationale, providing the claimant,
free of charge, with the rationale as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit
determination on review is required to be provided to give the claimant a reasonable opportunity to respond prior to that date.

 

(iv)             
Application for Review.

 

(1)               
If a claimant wishes a review of the decision denying his claim to benefits under this Agreement, other than a claim described
in paragraph (2) of this Section 4(b)(iv), he must submit the written application to the Claims Administrator within sixty
(60) days after receiving written notice of the denial.

 

     5

     

    

 

(2)               
If the claimant wishes a review of the decision denying his claim to benefits under this Agreement due to Executive being
Permanently Disabled, he must submit the written application to the Appeals Fiduciary within one hundred eighty (180) days after
receiving written notice of the denial.

 

(v)               
Hearing. Upon receiving such written application for review, the Claims Administrator or Appeals Fiduciary, as applicable,
may schedule a hearing for purposes of reviewing the claimant’s claim, which hearing shall take place not more than thirty
(30) days from the date on which the Claims Administrator or Appeals Fiduciary received such written application for review.

 

(vi)             
Notice of Hearing. At least ten (10) days prior to the scheduled hearing, the claimant and his representative designated
in writing by him, if any, shall receive written notice of the date, time, and place of such scheduled hearing. The claimant or
his representative, if any, may request that the hearing be rescheduled, for his convenience, on another reasonable date or at
another reasonable time or place.

 

(vii)           
Counsel. All claimants requesting a review of the decision denying their claim for benefits may employ counsel for
purposes of the hearing.

 

(viii)         
Decision on Review. No later than sixty (60) days (forty-five (45) days with respect to a claim for benefits due
to Executive being Permanently Disabled) following the receipt of the written application for review, the Claims Administrator
or the Appeals Fiduciary, as applicable, shall submit its decision on the review in writing to the claimant involved and to his
representative, if any, unless the Claims Administrator or Appeals Fiduciary determines that special circumstances (such as the
need to hold a hearing) require an extension of time, to a day no later than one hundred twenty (120) days (ninety (90) days with
respect to a claim for benefits due to Executive being Permanently Disabled) after the date of receipt of the written application
for review. If the Claims Administrator or Appeals Fiduciary determines that the extension of time is required, the Claims Administrator
or Appeals Fiduciary shall furnish to the claimant written notice of the extension before the expiration of the initial sixty (60)
day (forty-five (45) days with respect to a claim for benefits due to Executive being Permanently Disabled) period. The extension
notice shall indicate the special circumstances requiring an extension of time and the date by which the Claims Administrator or
Appeals Fiduciary expects to render its decision on review. In the case of a decision adverse to the claimant, the Claims Administrator
or Appeals Fiduciary shall provide to the claimant written notice of the denial. Any such notice of an adverse benefit determination
shall be written in a manner calculated to be understood by the claimant (and with respect to a claim for benefits due to Executive
being Permanently Disabled, be provided in a culturally and linguistically appropriate manner) and shall include:

 

(1)               
the specific reason or reasons for the adverse benefit determination;

 

(2)               
specific references to the pertinent provisions of this Agreement on which the adverse benefit determination is based;

 

     6

     

    

 

(3)               
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 to the claimant’s claim for benefits;

 

(4)               
a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following the adverse benefit
determination on review;

 

(5)               
a statement regarding the availability of other voluntary alternative dispute resolution options;

 

(6)               
in the case of a claim for benefits due to Executive being Permanently Disabled:

 

(A)             
a description of any contractual limitations period that applies to the claimant’s right to bring a civil action under
Section 502(a) of ERISA, including the calendar date on which the contractual limitations period expires for the claim;

 

(B)             
a discussion of the decision, including an explanation of the basis for disagreeing with or not following: the views presented
by the claimant to the Agreement of health care professionals treating the claimant and vocational professionals who evaluated
the claimant, the views of medical or vocational professionals whose advice was obtained on behalf of the Agreement in connection
with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the determination,
and a disability determination regarding the claimant presented by the claimant to the Agreement made by the Social Security Administration;

 

(C)             
if the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit,
either an explanation of the scientific or clinical judgment for the determination, applying the terms of the Agreement to the
claimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request; and

 

(D)             
the specific internal rules, guidelines, protocols, standards or other similar criteria of the Agreement relied upon in
making the adverse determination, or a statement that such rules, guidelines, protocols, standards or other similar criteria do
not exist.

 

The Claims Administrator
has the discretionary authority to determine all interpretative issues arising under this Agreement and the interpretations of
the Claims Administrator shall be final and binding upon Executive or any other party claiming benefits under this Agreement.

 

(ix)             
Calculating Time Periods. The period of time within which a benefit determination initially or on review is required
to be made shall begin at the time a claim or request for review is filed in accordance with the procedures of the Agreement, without
regard to whether all the information necessary to make a benefit determination accompanies the filing. In the event that a period
of time is extended due to the failure of a claimant to submit information necessary to decide a claim or review, the period for
making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the claimant
until the date on which the claimant responds to the request for additional information.

 

     7

     

    

 

(x)               
Standards for Culturally and Linguistically Appropriate Notices. With respect to any notices required to be provided
in a culturally and linguistically appropriate manner, the Agreement shall provide (i) oral language services in the applicable
non-English language (that include answering questions in any applicable non-English language and providing assistance with filing
claims in any applicable non-English language), (ii) a statement in the applicable non-English language, prominently displayed
on notices, explaining how to access language services and (iii) notices in the applicable non-English language upon request. For
this purpose, a non-English language is an applicable non-English language if 10% or more of the population residing in the county
for which the notice is sent is literate only in the same non-English language.

 

(xi)             
 Adjudication of Disability Benefit Claims: Independence and Impartiality. All claims and appeals with respect to
benefits due to Executive being Permanently Disabled shall adjudicated in a manner designed to ensure the independence and impartiality
of the persons involved in making the decision. Accordingly, decisions regarding hiring, compensation, termination, promotion,
or other similar matters with respect to any individual (such as a claims adjudicator or medical or vocational expert) shall not
be based upon the likelihood that the individual will support the denial of benefits.

 

(xii)           
Exhaustion of Administrative Remedies Available under the Agreement.

 

(1)               
In no event will Executive be entitled to challenge the Claims Administrator’s decision in court or any other proceeding
unless and until these claims procedures are exhausted. The Executive then shall have one hundred eighty (180) days from the date
of receipt of the Claims Administrator’s decision on appeal in which to file suit regarding a claim for benefits under this
Agreement. If suit is not filed within such one hundred eighty (180)-day period, it shall be forever barred.

 

(2)               
Notwithstanding the foregoing, in the case of a claim for benefits due to Executive being Permanently Disabled, if the Claims
Administrator or Appeals Fiduciary, as applicable, fails to strictly adhere to all the applicable requirements hereunder, the claimant
is deemed to have exhausted the administrative remedies available under the Agreement, except as provided in the paragraph below
with respect to de minimis violations. If the claimant chooses to pursue remedies under Section 502(a) of ERISA under such circumstances,
the claim or appeal is deemed denied on review without the exercise of discretion by an appropriate fiduciary.

 

The administrative remedies
available under the Agreement will not be deemed exhausted based on de minimis violations that do not cause, and are not likely
to cause, prejudice or harm to the claimant, provided the Agreement demonstrates that the violation was for good cause or due to
matters beyond the control of the Agreement and that the violation occurred in the context of an ongoing, good faith exchange of
information between the Agreement and the claimant. A violation shall not be de minimis if it is part of a pattern or practice
of violations by the Agreement. The claimant may request a written explanation of the violation from the Agreement, and the Agreement
must provide such explanation within ten (10) days, including a specific description of its bases, if any, for asserting that the
violation should not cause the available administrative remedies to be deemed exhausted. If a court rejects the claimant’s
request for immediate review on the basis that the Agreement met the standards for the de minimis exception the claim shall be
considered as refiled on appeal upon the Agreement’s receipt of the court’s decision. Within a reasonable time after
the receipt of the decision, the Agreement shall provide the claimant with notice of the resubmission.

 

     8

     

    

 

(xiii)         
Definitions. For purposes of the Agreement’s claims procedures, the following words and phrases shall have
the respective meanings set forth below:

 

(1)               
“Adverse benefit determination” means any of the following: a denial, reduction or termination of, or
a failure to provide or make payment (in whole or in part) for, a benefit, including any such denial, reduction, termination, or
failure to provide or make payment that is based on a determination of a claimant’s eligibility to participate in a plan
and with respect to a claim for benefits due to Executive being Permanently Disabled, shall also mean any rescission of disability
coverage with respect to a Participant or Beneficiary (whether or not there is an adverse effect on any particular benefit at that
time), where rescission means a cancellation or discontinuance of coverage that has retroactive effect, except to the extent it
is attributable to a failure to timely pay required premiums or contributions towards the cost of coverage.

 

(2)               
 “Appeals Fiduciary” means an individual or group of individuals appointed by the Claims Administrator
to review appeals of claims for benefits payable due to the Executive being Permanently Disabled made pursuant to this Subsection
(b).

 

(3)               
“Claims Administrator” means the Board of Directors or such other person designated by the Board of Directors
from time to time and named by notice to Executive.

 

(4)               
A document, record, or other information shall be considered “relevant” to a claimant’s claim if
such document, record, or other information (A) was relied upon in making the benefit determination, (B) was submitted, considered,
or generated in the course of making the benefit determination, without regard to whether such document, record, or other information
was relied upon in making the benefit determination, (C) demonstrates compliance with the administrative processes and safeguards
required in making the benefit determination, or (D) in the case of a claim for benefits due to Executive being Permanently Disabled,
constitutes a statement of policy or guidance with respect to the Agreement concerning the denied treatment option or benefit for
the claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.

 

(xiv)         
Person Authorized to Act on Behalf of Claimant. The Claims Administrator may establish reasonable procedures to permit
an authorized person to act on behalf of the claimant (and for determining whether a person has been authorized to act on behalf
of a claimant).

 

5.                  
Funding by Bank.

 

(a)               
The benefit obligations of the Bank set forth herein constitute an unfunded retirement arrangement, the obligations under
which shall be reflected on the general ledger of the Bank (the “Retirement Liability”). The general corporate
funds of the Bank shall be the sole source of payment of the Retirement Liability. The Bank shall be under no obligation to set
aside, earmark or otherwise segregate any funds with which to pay the Retirement Liability. Executive and Executive’s Beneficiary
or any successor in interest shall be and shall remain unsecured general creditors of the Bank with respect to the Retirement Liability.
Executive and Executive’s Beneficiary shall have no interest in any property of the Bank or any other rights with respect
thereto except to the extent of the contractual right to the Retirement Liability represented by the obligations described in Section
2 of this Agreement.

 

     9

     

    

 

(b)               
Notwithstanding anything herein to the contrary, the Bank has no obligation whatsoever to set aside assets, either directly
or indirectly, in a trust for purposes of paying the Retirement Liability under this Agreement. The Retirement Liability is not
a deposit, is not otherwise funded by the Bank and is not insured by the Federal Deposit Insurance Corporation and does not constitute
a trust account or any other special obligation of the Bank and does not have priority of payment over any other general obligations
of the Bank. If the Bank determines in its sole discretion to set aside assets in a grantor trust for the purpose of paying benefits
under this Agreement, the grantor trust shall not be located outside of the United States or subsequently transferred to any trust
outside of the United States.

 

(c)               
Notwithstanding anything herein to the contrary, the Bank, in its sole discretion, may procure bank-owned life insurance
covering the life of the Executive, with respect to which the Bank shall be the beneficiary, to pay the Bank’s obligations
and to remain available to satisfy any claims of the Bank’s general creditors, under this Agreement. Executive agrees to
fully cooperate with the Bank to enable the Bank to procure such life insurance, including undertaking a physical to the extent
needed to procure the policy. Executive and Executive’s Beneficiary, however, shall have no interest in any such policy of
the Bank or any other rights with respect to such policy, the proceeds of which will be paid to the Bank. The Bank in its sole
discretion will determine whether to procure any such policy and, if the Bank elects to procure such policy, the face amount of
such policy.

 

6.                  
Employment of Executive; Other Agreements. The benefits provided for herein for Executive are supplemental retirement
benefits and shall not be deemed to modify, affect or limit any salary or salary increases, bonuses, profit sharing or any other
type of compensation of Executive in any manner whatsoever. No provision contained in this Agreement shall in any way affect, restrict
or limit any existing employment agreement between the Bank and Executive, nor shall any provision or condition contained in this
Agreement create specific employment or other service rights of Executive or limit the right of the Bank to discharge Executive
with or without cause or otherwise terminate the Executive’s service on the Board of Directors.

 

7.                  
Withholding.

 

(a)               
The Executive is responsible for payment of all taxes applicable to compensation and benefits paid or provided to the Executive
under the Agreement, including federal and state income tax withholding, as applicable. The Bank shall withhold any taxes that,
in its reasonable judgment, are required to be withheld, including but not limited to taxes owed under Code Section 409A and regulations
thereunder, if any, and all employment taxes due to be paid by the Bank pursuant to Code Section 3121(v) and regulations promulgated
thereunder (i.e., Federal Insurance Contributions Act (“FICA”) taxes on the present value of payments
hereunder which are no longer subject to vesting). The Bank’s sole liability regarding such taxes is to forward any amounts
withheld to the appropriate taxing authority(ies). By participating in the Agreement, the Executive consents to the deduction of
all tax withholdings attributable to participation in the Agreement from the benefits due under the Agreement or other payments
due to the Executive by the Bank to satisfy the employee-portion of such obligations. If insufficient cash wages are available
or, if the Executive so desires, the Executive may remit payment in cash for the withholding amounts.

 

     10

     

    

 

(b)               
Notwithstanding any other provision in the Agreement to the contrary, to the extent permitted by Code Section 409A, payments
due under the Agreement may be accelerated to pay, where applicable, the FICA tax imposed under Code Sections 3101, 3121(a), and
3121(v)(2) and any state, local, and foreign tax obligations (the “Tax Obligations”) that may be imposed on
amounts deferred pursuant to the Agreement prior to the time such amounts are paid or made available and to pay the income tax
at source on wages imposed under Code Section 3401 or the corresponding withholding provisions of applicable state, local, or foreign
tax laws as a result of an accelerated payment of the Tax Obligations (the “Income Tax Obligations”). Accelerated
payments pursuant to this Section 7(b) shall not exceed the amount of the Tax Obligations and Income Tax Obligations and
shall be made as a payment directly to taxing authorities pursuant to the applicable withholding provisions. Any accelerated payments
pursuant to this Section 7(b) shall reduce the benefit otherwise payable to the Executive pursuant to the Agreement.

 

(c)               
Notwithstanding any other provision in the Agreement to the contrary, the Executive shall be liable for all taxes related
to payments under this Agreement, and the Bank shall not be liable to any interested party for any such taxes or if the Agreement
fails to be exempt from or to comply with Code Section 409A. Moreover, the Bank and the Executive acknowledge that amounts payable
under this Agreement may need to be bifurcated and made subject to different withholdings and reporting, given the benefits to
accrue hereunder relate to both the Executive’s employment with the Bank and the Executive’s service on the Board of
Directors.

 

8.                  
Arbitration; Jury Trial Waiver.

 

(a)               
Except as otherwise expressly provided herein or in any other subsequent written agreement between Executive and the Bank,
unless prohibited by law, any controversy or claim between Executive and the Bank, or between the respective successors or assigns
of either, or between Executive and any of the Bank’s officers, employees, agents or affiliated entities, arising out of
or relating to this Agreement or any representations, negotiations, or discussions leading up to this Agreement or any relationship
that results from any of the foregoing, whether based on contract, an alleged tort, breach of warranty, or other legal theory (including
claims of fraud, misrepresentation, suppression of material fact, fraud in the inducement, and breach of fiduciary obligation),
and whether based on acts or omissions occurring or existing prior to, at the time of, or after the execution of this Agreement
and whether asserted as an original or amended claim, counterclaim, cross-claim, or otherwise, shall be settled by binding arbitration;
provided, however, that resort to arbitration as provided in this Section 8 may only be had after exhaustion of the claims
procedure described in Subsection 4(b) followed by mediation under the Commercial Mediation Rules of the American Arbitration Association.
Thereafter, arbitration of any unresolved claim shall be administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
Any dispute regarding whether a particular claim is subject to arbitration will be decided by the arbitrator. Any court of competent
jurisdiction may compel arbitration of claims pursuant to this Agreement.

 

(b)               
The arbitrator may award to the prevailing party pre-and post-award expenses of the arbitration, including the arbitrator’s
fees and travel expenses, administrative fees, out-of-pocket expenses such as copying and telephone, court costs, witness fees,
stenographer’s fees, and (if allowed by applicable law) attorneys’ fees. Otherwise, the parties will share equally
the arbitrator’s fee and travel expenses and administrative fees, and each party will bear its own expenses.

 

     11

     

    

 

(c)               
This agreement to arbitrate disputes will survive the payment of all obligations under this Agreement and termination or
performance of any transactions contemplated hereby between Executive and the Bank, and will continue in full force and effect
unless Executive and the Bank otherwise expressly agree in writing.

 

(d)               
By entering into this Agreement, Executive and the Bank agree and acknowledge that:

 

(i)                
by agreeing to arbitrate disputes, Executive and the Bank are giving up the right to trial in a court and THE RIGHT TO TRIAL
BY JURY of all claims that are subject to arbitration under this Agreement;

 

(ii)              
grounds for appeal of the arbitrator’s decision are very limited; and

 

(iii)            
in some cases the arbitrator may be employed by, or may have worked closely with, a business in the same or a related type
of business as the business engaged in by Executive or the Bank.

 

(e)               
EXECUTIVE
AND THE BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ALL DISPUTES, CONTROVERSIES AND CLAIMS BY, BETWEEN OR AGAINST EXECUTIVE
OR THE BANK, WHETHER THE DISPUTE, CONTROVERSY OR CLAIM IS SUBMITTED TO ARBITRATION OR IS DECIDED BY A COURT.

 

Executive must initial here:                      

 

9.                  
Miscellaneous Provisions.

 

(a)               
Counterparts. This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall
be deemed to be an original, and all such counterparts shall constitute one and the same instrument. This Agreement may be executed
and delivered by facsimile transmission of an executed counterpart.

 

(b)               
Construction. As used in this Agreement, the neuter gender shall include the masculine and the feminine, the masculine
and feminine genders shall be interchangeable among themselves and each with the neuter, the singular numbers shall include the
plural, and the plural the singular. The term “person” shall include all persons and entities of every nature
whatsoever, including, but not limited to, individuals, corporations, partnerships, governmental entities and associations. The
terms “including,” “included,” “such as” and terms of similar import shall not imply the exclusion
of other items not specifically enumerated.

 

(c)               
Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be
held to be invalid, illegal, unenforceable or inconsistent with any present or future law, ruling, rule or regulation of any court,
governmental or regulatory authority having jurisdiction over the subject matter of this Agreement, such provision shall be rescinded
or modified in accordance with such law, ruling, rule or regulation and the remainder of this Agreement or the application of such
provision to the person or circumstances other than those as to which it is held inconsistent shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.

 

     12

     

    

 

(d)               
Governing Law. This Agreement is made in the State of Maryland and shall be governed in all respects and construed
in accordance with the laws of the State of Maryland, without regard to its conflicts of law principles, except to the extent superseded
by the Federal laws of the United States.

 

(e)               
Binding Effect. This Agreement is binding upon the parties, their respective successors, assigns, heirs and legal
representatives. Without limiting the foregoing this Agreement shall be binding upon any successor of the Bank whether by merger
or acquisition of all or substantially all of the assets or liabilities of the Bank. This Agreement may not be assigned by any
party without the prior written consent of each other party hereto.

 

(f)                
No Trust. Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall
create or be construed to create a trust of any kind, or a fiduciary relationship between the Bank and Executive, Executive’s
Beneficiary or any other person.

 

(g)               
Assignment of Rights and Benefits. No right or benefit provided in this Agreement will be transferable by Executive
except, upon his death, to a named Beneficiary as provided in this Agreement. No right or benefit provided for in the Agreement
will be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate,
sell, assign, pledge, encumber, or charge the same will be void. No right or benefit provided for in the Agreement will in any
manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits; provided,
however, that the undistributed portion of any benefit payable hereunder shall at all times be subject to set-off for debts owed
by Executive to the Bank.

 

(h)               
Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter
hereof and all prior or contemporaneous negotiations, agreements and understandings, whether oral or written, are hereby superseded,
merged and integrated into this Agreement.

 

(i)                
Notices. All notices and other communications required or permitted under this Agreement shall be in writing and,
if mailed by prepaid first-class mail or certified mail, return receipt requested, shall be deemed to have been received on the
earlier of the date shown on the receipt or three (3) business days after the postmarked date thereof. In addition, notices hereunder
may be delivered by hand, facsimile transmission or overnight courier, in which event the notice shall be deemed effective when
delivered or transmitted. All notices and other communications under this Agreement shall be given to the parties hereto, at the
following addresses:

 

Bank:

 

Shore United Bank

18 East Dover Street

Easton, MD 21601

Attention: CHRO

 

Executive: Address on file with
Bank

 

(j)                
Non-waiver. No delay or failure by either party to exercise any right under this Agreement, and no partial or single
exercise of that right, shall constitute a waiver of that or any other right.

 

     13

     

    

 

(k)               
Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its
provisions.

 

(l)                
Accelerated Payouts in the Event of 409A Violations. Notwithstanding any other provision of the Agreement to the
contrary, the Bank shall make payments hereunder before such payments are otherwise due if it determines that the provisions of
the Agreement fail to meet the requirements of Code Section 409A and the rules and regulations promulgated thereunder; provided,
however, that such payment(s) may not exceed the amount required to be included in income as a result of such failure to comply
with the requirements of Code Section 409A and the rules and regulations promulgated thereunder and, to the extent permissible
therein, any taxes, penalties, interest and costs attributable thereto.

 

10.              
Definitions. Where the following words and phrases appear in the Agreement, they shall have the respective meanings
set forth below, unless their context clearly indicates to the contrary:

 

(a)               
“Accrual Balance” means the liability that the Bank accrues, under Generally Accepted Accounting Principles
(“GAAP”) as reasonably applied by the Bank, for the Bank’s obligation to the Executive under this Agreement in
accordance with Accounting Principles Board Opinion Number 12, as amended by Statement of Financial Accounting Standards Number
106, and the Discount Rate. Any one of a variety of amortization methods may be used to determine the Accrual Balance. However,
once chosen, the method must be consistently applied.

 

(b)               
“Beneficiary” shall mean the person(s) designated by the Executive to receive any death benefits described
under Section 2(e) of the Agreement. The Executive shall designate his Beneficiary in writing to the Bank pursuant to procedures
as may be established from time to time; provided, however, if no such designation has been made or if the Beneficiary predeceases
Executive, the Beneficiary of Executive under this Agreement shall be Executive’s legally-married spouse, if any, or, if
there is no legally-married surviving spouse, the Beneficiary shall be Executive’s estate.

 

(c)               
“Cause” shall have the same meaning given to the same or similar term in any employment agreement between
the parties as may be in effect from time to time; provided, however, if there is no such term or similar term in the employment
agreement or if there is no such employment agreement, then the term shall mean (i) intentional misconduct or gross malfeasance,
or an act or acts of gross negligence in the course of employment or any material breach of the Executive’s obligations contained
herein, including, without limitation, acts competitive with or deliberately harmful to the business of the Bank; (ii) any intentional
misstatement or omission to the directors or executive officers of the Bank with respect to any matter; (iii) the intentional failure
of the Executive to follow the reasonable instructions and policies of the Bank; (iv) the Executive’s conviction, admission
or confession of any felony or an unlawful act involving active and willful fraud or moral turpitude; or (v) the violation by the
Executive of applicable state and federal banking regulations, rules, or statutes. If there is a discharge of the Executive by
the Bank for Cause, the Executive will be deemed to and shall resign from the Bank contemporaneously with the termination of the
Executive’s employment.

 

(d)               
“Change in Control” shall mean (i) any transaction, whether by merger, consolidation, asset sale, recapitalization,
reorganization, combination, stock purchase, tender offer, reverse stock split, or otherwise, which results in the acquisition
of, or beneficial ownership (as such term is defined under rules and regulations promulgated under the Securities Exchange Act
of 1934, as amended) by any entity, person or any group thereof acting in concert, of 50% or more of the outstanding shares of
common stock of the Bank; or (ii) the sale of 50% or more of the collective assets of the Bank. For purposes of this Section
10(d), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the Bank. Change in Control shall be construed consistent
with its meaning under Section 409A of the Code.

 

     14

     

    

 

(e)               
“Code” means the Internal Revenue Code of 1986, as amended, and all applicable rules and regulations
promulgated thereunder.

 

(f)                
“Continuous Service” shall mean continuous employment by the Executive with the Bank or any affiliates
as a common law employee and/or continuous service by the Executive as a member of the Board of Directors.

 

(g)               
“Discount Rate” shall mean the interest rate designated by the Board of Directors for determining the
present value of any benefits payable under this Agreement and/or the amount of the installment payments necessary to fully amortize
the Accrual Balance at the designated Discount Rate over the specified payment period. The Board of Directors has the authority
to designate and/or adjust the Discount Rate, in its sole discretion, so as to maintain the rate within reasonable standards according
to GAAP and applicable bank regulatory guidance.

 

(h)               
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and all applicable rules
and regulations promulgated thereunder,

 

(i)                
“Normal Retirement Age” means the attainment of age sixty-nine (69) by the Executive.

 

(j)                
 “Normal Retirement Benefit” means one hundred fifty thousand dollars ($150,000).

 

(k)               
“Permanently Disabled” shall mean any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months that results
in Executive (i) being unable to engage in any substantial gainful activity; or (ii) receiving income replacement benefits for
a period of not less than three (3) months under the Bank’s long-term disability plan covering Executive. The determination
of whether Executive is Permanently Disabled shall be made by the Bank and shall be construed consistent with its meaning under
Section 409A of the Code. If the Executive becomes Permanently Disabled, the Executive will be deemed to and shall resign from
the Bank contemporaneously with the Executive becoming Permanently Disabled.

 

(l)                
“Separation from Service” shall mean (i) a termination of the Executive’s employment where either
(A) the Executive has ceased to perform any services for the Bank and all affiliated companies that, together with the Bank, constitute
the “service recipient” within the meaning of Code Section 409A and the regulations thereunder (collectively, the “Service
Recipient”) or (B) the level of bona fide services the Executive performs for the Service Recipient after a given date
(whether as an employee or as an independent contractor) permanently decreases (excluding either a decrease as a result of 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,
so long as the Executive retains a right to reemployment with the Service Recipient under an applicable statute or by contract
or any other decrease permitted under Code Section 409A) to no more than twenty percent (20%) of the average level of bona fide
services performed for the Service Recipient (whether as an employee or an independent contractor) over the immediately preceding
36-month period (or the full period of service if the Executive has been providing services to the Service Recipient for less than
36 months), and (ii) a termination of the Executive’s service on the Bank, in each case, consistent with a “separation
from service” within the meaning of Code Section 409A. Given the Executive is to be provided retirement benefits under the
Agreement in return for his services as both an employee of the Bank and a member of the Board of Directors, the Executive will
need to separate from service both as an employee and as a member of the Board of Directors to be treated as having a Separation
from Service for purposes of this Agreement. All references to termination or discharge of employment and/or service shall be deemed
to refer to a “separation from service.”

 

[Remainder
of Page Intentionally Left Blank]

 

     15

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first set forth above.

 

	 	SHORE UNITED BANK:
	 	 
	 	 
	 	By:	/s/ Edward C. Allen
	 	 	 
	 	Name:	Edward C. Allen
	 	 	 
	 	Title: 	Executive Vice President and CFO
	 	 
	 	 
	 	EXECUTIVE:
	 	 
	 	/s/ Lloyd L. Beatty, Jr.
	 	Lloyd L. Beatty, Jr.

  

     16

     

    

 

DESIGNATION OF
BENEFICIARY FORM

UNDER

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

Pursuant to Section 10(b) of the
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the “Agreement”), I, Scott Beatty, hereby designate the beneficiary(ies)
listed below to receive any benefits under the Agreement that may be due following my death. This designation shall replace and
revoke any prior designation of beneficiary(ies) made by me under the Agreement.

 

Full Name(s), Address(es) and Social Security
Number(s) of Primary Beneficiary(ies)*:

 

 

 

 

 

 

*If more than one beneficiary is named
above, the beneficiaries will share equally in any benefits, unless you have otherwise provided above. Further, if you have named
more than one beneficiary and one or more of the beneficiaries is deceased at the time of your death, any remaining beneficiary(ies)
will share equally, unless you have provided otherwise above. If no primary beneficiary survives you, then the contingent beneficiary
designated below will receive any benefits due upon your death. In the event you have no designated beneficiary upon your death,
any benefits due will be paid to your legally-married spouse, if any, or, if there is no legally-married surviving spouse, to your
estate. In the event that you are naming a beneficiary that is not a person, please provide pertinent information regarding the
designation.

 

Full Name, Address and Social Security
Number of Contingent Beneficiary:

 

 

 

 

 

 

	Date	 	 	 
	 	 	 	Lloyd L. Beatty, Jr.

 

     17

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