Document:

Exhibit 10.2

 

FIRST UNITED CORPORATION EXECUTIVE AND DIRECTOR DEFERRED COMPENSATION PLAN

SERP ALTERNATIVE PARTICIPATION AGREEMENT

 

THIS SERP ALTERNATIVE
PARTICIPATION AGREEMENT (this “SERP Alternative Participation Agreement”) is entered into this 9th day of
January, 2015 (the “Execution Date”) by and between First United Corporation
(“Employer”) and Keith R. Sanders, an executive officer of the Employer (the “Participant”).

 

RECITALS:

 

WHEREAS, the Employer
has adopted the First United Corporation Executive and Director Deferred Compensation Plan, amended and restated effective as of
November 19, 2008 (the “Plan”); and

 

WHEREAS, the Employer
in its sole and absolute discretion annually selects the individual(s), if any, who will be eligible to actively participate in
the Plan for the following year; and

 

WHEREAS, the Employer
in its sole and absolute discretion annually determines whether to award Employer Contribution Credits to Plan participants, and
if so, the amount of any such Credits to award to any particular Participant; and

 

WHEREAS, the Participant
does not participate in the First United Bank & Trust Supplemental Executive Retirement Plan (the “SERP”); and

 

WHEREAS, the Employer
wishes to provide certain additional benefits in the form of Employer Contribution Credits to the Participant to reflect that fact
that the Participant does not participate in the SERP; and

 

WHEREAS, the Employer
and the Participant desire to enter into this SERP Alternative Participation Agreement to provide the Participant with the opportunity
to earn additional compensation in the form of Employer Contribution Credits awarded pursuant to the terms of the Plan; and

 

NOW, THEREFORE, in
consideration of the foregoing, the agreements and covenants set forth herein, and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree to this SERP Alternative Participation Agreement, effective as of
the Execution Date, as follows:

 

1.           Definitions. Except as defined
in the Recitals and below, capitalized terms in this SERP Alternative Participation Agreement shall have the meanings given those
terms in the Plan.

 

		(a)	“Award” means any decision of the Employer to award Employer Contribution Credits to the Participant's Employer
Contribution Credit Account for a particular Plan Year.

 

		(b)	“Cause” has the meaning given that term in Section 8(a) hereof.

 

		(c)	“Competitive Employment” means the Participant engages, directly or indirectly, as an owner, partner, member, director,
officer, employee or agent of any sole proprietorship or entity, in the business of providing goods or services that are substantially
similar to those provided by the Employer in any county in which the Employer has a branch.

 

		(d)	“Disability” shall have the meaning given that term under the First United Bank & Trust Long Term Disability
Plan, as in effect at the time a determination of Disability is to be made.

 

		(e)	“Employer” means First United Corporation and its successors and assigns unless otherwise herein provided, or any
other corporation or business organization which, with the consent of First United Corporation, or its successors or assigns, assumes
the Employer’s obligations hereunder, or any other corporation or business organization which agrees, with the consent of
First United Corporation, to become a party to the Plan.

 

    	 

    	 

    

 

 

		(f)	“Key Employee” means, for the 12-month period beginning on a particular April 1, a Participant described in Section
416(i) of the Code (disregarding Section 416(i)(5) of the Code and using the definition of compensation under T. Reg. §1.415(c)-2(d)(4))
at any time during the 12-month period ending on the preceding December 31.

 

		(g)	“Normal Retirement” means Participant’s Separation from Service with the Employer for any reason other than
Cause after such Participant has both (i) attained his or her Normal Retirement Age and (ii) commenced receipt of benefits under
the First United Bank & Trust Pension Plan or any successor plan thereto.

 

		(h)	“Normal Retirement Age” means sixty-five (65) years of age.

 

		(i)	“Profitable” means the Employer has positive pre-tax net income. All calculations related to the determination
of whether the Employer was Profitable for a particular period shall be determined as of the Relevant Valuation Date.

 

		(j)	“Relevant Valuation Date” means the last day of the fiscal year immediately preceding the year during which an
Award is made.

 

		(k)	“Separation from Service” means a termination of the Participant’s employment with the Employer in accordance
with Section 409A(a)(2)(A)(i) of the Code and any related regulations or other guidance promulgated with respect to Section 409A
of the Code (and any successor section or regulations).

 

		(l)	“Triggering Event” means the occurrence of any one of the following events subsequent to a Change of Control:

 

		(i)	Participant's receipt of a letter of intent to dismiss without Cause, as such term is defined in Section 8(a) hereof
; or

 

		(ii)	termination of the Plan; or

 

		(iii)	relocation of Participant's employment to a location more than 50 miles from the Participant’s place of employment at
the time of the Change of Control; or

 

		(iv)	a 10% or greater reduction in Participant’s total compensation for the year in which the Triggering Event occurs from
the prior year’s total compensation, but disregarding any reduction in bonus or incentive compensation payments which occurs
in accordance with the terms of any written bonus or incentive compensation program as it reads before the occurrence of a Change
of Control; or

 

		(v)	a change to Participant’s position that results in Participant not being deemed an executive officer of Employer.

 

		(m)	“Year of Service” means each twelve (12) consecutive month period of full time employment with the Employer. No
credit will be received for a partial Year of Service.

 

2.           Effective Date of Participation.
The effective date of the Participant’s participation in the Plan shall be January 9, 2015.

 

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3.           Contributions and Credits to Participant’s
Account. The Participant’s Account shall be credited with any Participation Compensation Deferrals made pursuant to Section
3(b) of this Agreement. With respect to any year during which it has been determined that the Employer has been Profitable,
the Employer may award to such Participant the Employer Contribution Credits provided in Section 3(a) of this Agreement. The Participant’s
Account also may be credited with any deemed income, gains, and losses awarded pursuant to Section 4 of this Agreement.

 

		(a)	Employer Contribution Credits.

 

		(i)	Pursuant to the Plan (including Section 3.1 thereof), the amount of any Employer's Contribution Credits awarded to the Participant
for a particular Plan Year will be equal to 15% of the Participant’s base salary for such Plan Year. The Participant will
receive notice of the amount of Employer Contribution Credits for such Plan Year. Notwithstanding anything to the contrary in this
Participation Agreement, the Employer retains sole and absolute discretion to determine both the fact of and the amount of Employer
Contribution Credits for any Plan Year; provided, however, that the Employer intends to exercise such discretion in a manner that
is not inconsistent with Section 3(a)(ii) of this Agreement.

 

		(ii)	Except with respect to any year during which the Employer determines there is good cause, the Employer generally intends not
to make adjustments to the amount of Employer Contribution Credits for a Plan Year as provided in Section 3(a)(i) if during such
Plan Year the Employer has been Profitable.

 

(b)         Participant Compensation Deferrals.
The Participant may elect on an Election Form provided by the Employer to defer Compensation which would otherwise be payable to
the Participant in the manner provided in Section 3.2 of the Plan. The provisions of the Plan, and in particular Sections
3.2, 4.1, 4.5, and 7.1 of it, shall apply to such Compensation Deferrals.

 

4.           Allocation and Investment of Participant’s
Account. The Plan is an unfunded deferred compensation arrangement for the select group of management or highly compensated
employees. All rights with respect to any assets that are related to the Plan, including any investment thereof, are exercised
by the Employer and/or the Trustee selected by the Employer. Pursuant to the terms of the Plan, the Participant understands that
(s)he may communicate the preference as to how any Plan assets that are related to the Participant’s Plan account should
be deemed to be invested among the categories of deemed investments that are available under the Plan. The provisions of Article
IV of the Plan shall apply to the credits in Participant’s Account without any distinction as to the source of such credit(s).
Accordingly, any election or deemed election with respect to the investment of Employer Contribution Credits shall also apply to
the Participant Compensation Deferrals, if any, and any election or deemed election regarding the investment of Participant Compensation
Deferrals shall also apply to any Employer Contribution Credits.

 

5.           Vesting.

 

(a)           Employer Contribution Credits.
Subject to Section 8 hereof, a Participant shall become 100% vested in his or her Employer Contribution Credits for a Plan
Year upon the following events:

 

(i)           upon
the Participant’s Normal Retirement;

 

(ii)          upon
the Participant’s Separation from Service following a Change of Control and subsequent Triggering Event;

 

(iii)        upon
a Separation from Service due to a Disability;

 

(iv)       upon
completion of two (2) consecutive Years of Service immediately following the Plan Year for which the Award was made; or

 

(v)        upon
the Participant’s death.

 

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			There shall be no partial vesting of Employer Contribution Credits.

 

(b)         Participant Compensation
Deferrals. The Participant shall at all times be 100% vested in amounts credited to his or her Participant Compensation Deferral
Account.

 

6.           Distribution
of Benefits. The provisions of Article VI of the Plan shall apply to the benefits associated with the Participant’s
Account without any distinction as to the source of such benefit(s). Accordingly, any election or deemed election with respect
to the distribution of benefits related to Employer Contribution Credits shall also apply to any Participant Compensation Deferrals
and any election or deemed election regarding the distribution of benefits related to Participant Compensation Deferrals shall
also apply to Employer Contribution Credits. Notwithstanding anything to the contrary in the Plan or this Agreement, if the Participant
does not have any benefits related to Participant Compensation Deferrals, then for purposes of Section 6.2 of the Plan, such Participant
shall be deemed to have failed to designate properly the manner of payment of the Participant’s benefit under the Plan, and,
accordingly, the payment of such Participant’s benefits shall be in a lump sum.

 

7.           Beneficiaries. The provisions
of Article VII of the Plan shall apply to the benefits associated with the Participant’s Account without any distinction
as to the source of such benefit(s). Accordingly, any designation or deemed designation of a Beneficiary for receipt of benefits
related to Employer Contribution Credits shall also apply to any benefits related to Participant Compensation Deferrals and any
designation or deemed designation of a Beneficiary for receipt of benefits related to Participant Compensation Deferrals shall
also apply to any benefits related to Employer Contribution Credits.

 

8.           Forfeiture of Benefits Related
to Employer Contribution Credits.

 

		(a)	No Benefits Payable Upon Termination for Cause. Notwithstanding anything contained herein
to the contrary, no benefits related to Employer Contribution Credits shall be payable to the Participant if his or her employment
with the Employer is terminated for Cause, regardless of whether the Participant would otherwise be vested in his or her Employer
Contribution Credits. For purposes hereof, a Participant whose employment is terminated for any of the following reasons shall
be regarded as having been terminated for “Cause”:

 

		(i)	willful or grossly negligent misconduct that is materially injurious to the Employer;

 

		(ii)	embezzlement or misappropriation of funds or property of the Employer;

 

		(iii)	conviction of a felony or the entrance of a plea of guilty or nolo contendere to a felony;

 

		(iv)	conviction of any crime involving fraud, dishonesty, moral turpitude or breach of trust or the
entrance of a plea of guilty or nolo contendere to such a crime;

 

		(v)	failure or refusal by the Participant to devote full business time and attention to the performance
of his or her duties and responsibilities if such breach has not been cured within fifteen (15) days after notice is given to the
Participant; or

 

		(vi)	issuance of a final non-appealable order or other direction by a Federal or state regulatory agency
prohibiting the Participant’s employment in the business of banking.

 

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		(b)	Competitive Employment. Notwithstanding anything contained herein to the contrary, and regardless
of whether the Participant would otherwise be vested in his or her Employer Contribution Credits, the Employer’s obligation
to make payments on account of such Employer Contribution Credits to the Participant or a Beneficiary under this SERP Alternative
Participation Agreement will be conditioned upon (i) the Participant refraining from Competitive Employment for a period of three
(3) years following his or her Separation from Service with the Employer, (ii) the Participant refraining from injurious disclosure
of confidential information concerning the Employer, and (iii) the Participant remaining available, at the Employer’s reasonable
request, to provide at least six (6) hours’ of transition services per month for twelve (12) months following his or her
Separation from Service (except in the case of a Separation from Service due to death or Disability); provided, however, that only
condition (ii) of this paragraph shall apply if the Participant has a Separation from Service following a Change of Control
and subsequent Triggering Event. If the Participant violates any of the foregoing conditions, then the Participant will forfeit
all then-unpaid amounts related to Employer Contribution Credits under this SERP Alternative Participation Agreement and be obligated
to reimburse the Employer for all amounts paid hereunder, plus interest thereon at the rate of 10% per year. If the Employer engages
an attorney that is not its employee to collect any amounts owed by the Participant pursuant to this paragraph, then the
Participant will be obligated to reimburse the Employer for any associated attorney’s fees and other costs of collection.

 

9.           Taxes; Withholding. The Participant
shall be responsible for the payment of all applicable local, state and federal taxes associated with the Participant’s participation
in the Plan and the receipt of benefits hereunder, and the Employer shall have the right to deduct from any distributions hereunder
any such taxes or other amounts required by law to be withheld therefrom.

 

		10.	General Provisions

 

		(a)	No Assignment. All benefits under this SERP Alternative Participation Agreement shall not
be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any such
action shall be void for all purposes of this SERP Alternative Participation Agreement. Benefits under the Plan shall not in any
manner be subject to the debts, contracts, liabilities, engagements, or torts of any person, nor shall they be subject to attachments
or other legal process for or against any person, except to such extent as may be required by law. This paragraph (a) does
not prohibit the transfer or assignment to the Participant’s spouse, former spouse or child of the right to receive all or
a portion of the benefits payable to the Participant under this SERP Alternative Participation Agreement, if such transfer or assignment
is made pursuant to a domestic relations order issued by a court that is legally binding on the Participant. Payment of benefits
pursuant to such an order may not be made before the earlier of (i) when such benefits are actually paid to the Participant or
(ii) a date specified in the order that is not before the earliest date that benefits could actually begin being paid to the Participant
if he or she terminated employment. Any provision of an order for payment of benefits upon the election of the spouse, former spouse
or child cannot be given effect. Any payment of benefits pursuant to a domestic relations order will be subject to tax withholding
as provided by law. If a domestic relations order is served on the Employer, it will be processed in accordance with the Employer’s
rules for processing qualified domestic relations orders established pursuant to Section 414(p) of the Code.

 

		(b)	No Employment Rights. Participation in the Plan, and the execution of this SERP Alternative
Participation Agreement, shall not be construed to confer upon the Participant the legal right to be retained in the employ of
the Employer, or give the Participant or any Beneficiary, or any other person, any right to any payment whatsoever, except to the
extent of the benefits provided for hereunder. The Participant shall remain subject to discharge to the same extent as if this
Plan had never been adopted.

 

		(c)	Incompetence. If the Administrator determines that any person to whom a benefit is payable
under this SERP Alternative Participation Agreement is incompetent by reason of physical or mental disability, the Administrator
shall have the power to cause the payments becoming due to such person to be made to another individual for the Participant’s
benefit without responsibility of the Administrator or the Employer to see to the application of such payments. Any payment made
pursuant to such power shall, as to such payment, operate as a complete discharge of the Employer, the Administrator, and their
representatives.

 

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		(d)	Identity. If, at any time, any doubt exists as
to the identity of any person entitled to any payment hereunder or the amount or time of such payment, the Administrator shall
be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction
is obtained. The Administrator shall also be entitled to pay such sum into court in accordance with the appropriate rules
of law. Any expenses incurred by the Employer or Administrator incident to such proceeding or litigation shall be charged against
the benefits of the Participant.

 

		(e)	Amendment and Termination. Except as prohibited by applicable law, the Employer may unilaterally
modify, amend or terminate this SERP Alternative Participation Agreement; provided, however, that no modification, amendment or
termination shall reduce any vested benefit to which the Participant has already become entitled at the time of the modification,
amendment or termination, including, without limitation, benefits to which a Participant became entitled due to a Change of Control,
unless the Participant consents in writing to such modification, amendment or termination. Any modification, amendment or termination
shall be evidenced by a written instrument executed by the Employer and delivered to the Participant.

 

		(f)	Compliance with Law. Notwithstanding any other provision of this SERP Alternative Participation
Agreement to the contrary, the Employer may amend, modify or terminate this SERP Alternative Participation Agreement, without the
consent of the Participant, as the Employer deems necessary or appropriate to ensure compliance with any law, rule, regulation
or other regulatory pronouncement applicable to the Plan, including, without limitation, Section 409A of the Code and any related
regulations or other guidance promulgated with respect to Section 409A of the Code.

 

		(f)	Governing Law. To the extent not preempted by federal law, this SERP Alternative Participation
Agreement shall be governed by, construed and administered under, the laws of the State of Maryland, exclusive of the conflict
of laws principles of that State.

 

		(g)	Severability. Should any provision of this SERP Alternative Participation Agreement be deemed
or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions hereof unless such
invalidity shall render impossible or impractical the functioning of this SERP Alternative Participation Agreement and, in such
case, the Employer shall immediately adopt a new provision to take the place of the one held illegal or invalid.

 

		(h)	Headings. The headings contained in this SERP Alternative Participation Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of this
Plan nor in any way shall they affect this SERP Alternative Participation Agreement or the construction of any provision thereof.

 

		(i)	Terms. Singular nouns shall be read as plural and masculine pronouns shall be read as feminine,
and vice versa, as appropriate.

 

		(j)	Successors. This SERP Alternative Participation Agreement shall be binding upon each of
the parties and shall also be binding upon their respective successors or assigns.

 

		(k)	Application of the Plan; Entire Agreement. The Participant acknowledges, by executing this
SERP Alternative Participation Agreement, that (i) this SERP Alternative Participation Agreement is subject in all respects to
the provisions of the Plan, as amended from time to time, the terms of which are incorporated herein by reference and made a part
hereof, (ii) that a copy of the Plan and all amendments thereto through the date hereof were provided to the Participant on the
date hereof, and (iii) he or she understands and accepts of all of the terms and conditions of the Plan. This SERP Alternative
Participation Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof. Any and all prior
agreements or understandings with respect to such matters are hereby superseded.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

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[SIGNATURE PAGE]

 

IN WITNESS WHEREOF,
each of the parties has caused this SERP Alternative Participation Agreement to be executed as of the Execution Date.

 

	ATTEST:	 	FIRST UNITED CORPORATION:
	 	 	 	 
	 	 	By:  	/s/ William B. Grant
	 	 	Name:	William B. Grant
	 	 	Title:	Chairman/Chief Executive Officer
	 	 	 	 
	WITNESS:	 	PARTICIPANT:
	 	 	 
	 	 	/s/ Keith R. Sanders
	 	 	Name: Keith R. Sanders

 

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EXHIBIT A

First United Corporation Executive and
Director Deferred Compensation Plan, as amended and restated effective as of November 19, 2008Exhibit 10.3

 

AGREEMENT UNDER THE

FIRST UNITED CORPORATION 

CHANGE IN CONTROL SEVERANCE PLAN

 

THIS AGREEMENT (the
“Agreement”) is entered into this 9th day of January, 2015 (the “Effective Date”) by
and between First United Corporation, a Maryland corporation (“the Company”),
and Keith R. Sanders, an executive officer of the Company (the “Eligible Employee”).

 

RECITALS:

 

WHEREAS, the Company
adopted the First United Corporation Change in Control Severance Plan effective as of February 14, 2007, as amended and supplemented
from time to time, a copy of which is attached hereto as Exhibit A (the “Plan”); and

 

WHEREAS,  the
Eligible Employee has been designated as a participant in the Plan, effective as of the Effective Date; and

 

WHEREAS, the Company
and the Eligible Employee desire to enter into this Agreement to set forth the benefits to which the Eligible Employee is entitled
under the Plan; and

 

NOW, THEREFORE, in
consideration of the foregoing, the agreements and covenants set forth herein, and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree to enter into this Agreement, as follows:

 

1.           Definitions. Except as defined
in the Recitals and below, capitalized terms in this Agreement shall have the meanings given those terms in the Plan.

 

		(a)	“Base Amount” means the Eligible Employee’s “annualized includible
compensation for the base period,” within the meaning of Sections 280G(d)(1) and (d)(2) of the Code and the Treasury Regulations
thereunder.

 

		(b)	“Cause” means one of the following reasons for which the Eligible Employee’s
employment with the Employer is terminated: (1) willful or grossly negligent misconduct that is materially injurious to the Employer;
(2) embezzlement or misappropriation of funds or property of the Employer; (3) conviction of a felony or the entrance of a plea
of guilty or nolo contendere to a felony; (4) conviction of any crime involving fraud, dishonesty, moral turpitude or breach of
trust or the entrance of a plea of guilty or nolo contendere to such a crime; (5) failure or refusal by the Eligible Employee to
devote full business time and attention to the performance of his or her duties and responsibilities if such breach has not been
cured within 15 days after notice is given to the Eligible Employee; or (6) issuance of a final non-appealable order or other direction
by a Federal or state regulatory agency prohibiting the Eligible Employee’s employment in the business of banking.

 

		(c)	“Change in Control Severance Benefits” means the benefits payable pursuant to
Section 3 of this Agreement.

 

    	 

    	 

    

 

		(d)	“Change in Control Protection Period” means the period commencing on the later
of (1) the date that is 90 days before the date a Change in Control occurs, or (2) the Effective Date, and ending on the first
anniversary of the date the Change in Control occurs.

 

		(e)	“Contingent Payments” means payments in the “nature of compensation”
to (or for the benefit) of an Eligible Employee if such payment is “contingent on a change in the ownership or effective
control of the corporation or in the ownership of a substantial portion of the assets of the corporation,” as such terms
are defined in Section 280G of the Code and the Treasury Regulations thereunder.

 

		(f)	“Disability” shall have the meaning given that term under the First United Bank
& Trust Long Term Disability Plan, as in effect at the time a determination of Disability is to be made.

 

		(g)	“Effective Date” has the meaning given such term in the Preamble to this Agreement.

 

		(h)	“Employer” means the Company or an Affiliate.

 

		(i)	“Final Pay” means the sum of (1) the Eligible Employee’s annual salary
for the year in which employment terminates, regardless of whether all such salary has been paid at the time of termination of
employment and (2) the greater of (A) the Eligible Employee’s targeted cash bonus for the year in which employment terminates
or (B) the actual cash bonus earned by the Eligible Employee for the year immediately prior to the year in which employment terminates.

 

		(j)	“Good Reason” means, without the specific written consent of the Eligible Employee,
any of the following:

 

(1)       A material
and adverse change in the Eligible Employee’s status or position(s) as an officer or management employee of the Employer
as in effect immediately prior to the Change in Control, including, without limitation, any adverse change in his or her status
or position as an employee of the Employer as a result of a material diminution in his or her duties or responsibilities (other
than, if applicable, any such change directly attributable to the fact that the Employer is no longer publicly owned) or the assignment
to him or her of any duties or responsibilities which are materially inconsistent with such status or position(s) (other than any
isolated and inadvertent failure by the Employer that is cured promptly upon his or her giving notice), or any removal of the Eligible
Employee from or any failure to reappoint or reelect him or her to such position(s) (except in connection with the Eligible Employee’s
Severance other than for Good Reason).

 

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(2)       A 10%
or greater reduction in the Eligible Employee’s base salary and targeted bonus from the base salary and targeted bonus that
was in effective immediately prior to the occurrence of a Change of Control, but disregarding any reduction in bonus which occurs
in accordance with the terms of any written bonus program as it reads immediately prior to the occurrence of a Change of Control.

 

(3)       The failure
by the Employer or any successor to continue in effect any employee benefit plan (excluding any equity compensation plan) in which
the Eligible Employee is participating at the time of the Change in Control (or plans providing the Eligible Employee with at least
substantially similar benefits in the aggregate) other than as a result of the normal expiration of any such plan in accordance
with its terms as in effect at the time of the Change in Control; or the taking of any action, or the failure to act, by the Employer
or any successor which would adversely affect the Eligible Employee’s continued participation in any of such plans on at
least as favorable a basis to him or her as is the case on the date of the Change in Control or which would materially reduce his
or her benefits under any of such plans.

 

(4)       The Employer’s
requiring the Eligible Employee to be based at an office that is both more than 50 miles from where his or her office is located
immediately prior to the Change in Control and further from his or her then current residence, except for required travel on the
Employer’s business to an extent substantially consistent with the business travel obligations which the Eligible Employee
undertook on behalf of the Employer prior to the Change in Control.

 

(5)       The failure
by the Company to obtain assumption of the Plan by a successor.

 

		(k)	“Incentive Plan” means the First United Corporation 2006 Stock and Incentive
Compensation Plan (or a successor plan).

 

		(l)	“Key Employee” means, for the 12-month period beginning on a particular April
1, an Eligible Employee described in Section 416(i) of the Code (applied in accordance with the Section 416 regulations and disregarding
Section 416(i)(5) of the Code) at any time during the 12-month period ending on the preceding December 31.

 

		(m)	“Severance” means (1) the involuntary termination of the Eligible Employee’s
employment by the Employer, other than for Cause, death or Disability or (2) a termination of the Eligible Employee’s employment
by the Eligible Employee for Good Reason, in each case, during the Change in Control Protection Period; provided, however, that
in each case the termination constitutes a “separation from service” within the meaning of Section 409A(a)(2)(A)(i)
of the Code and Treasury Regulations thereunder.

 

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		(n)	“Severance Date” means the date on which the Eligible Employee incurs a Severance.

 

2.            Term of Agreement. The term
of this Agreement shall commence on the Effective Date and shall terminate on the third (3rd) anniversary of the Effective
Date; provided, however, that (a) the Agreement shall automatically extend for additional one-year terms unless the Company provides
written notice to the Eligible Employee not less than 6 months before the end of the then-current term; and (b) the Agreement shall
automatically extend until the end of the Change in Control Protection Period if a Change in Control occurs during the term of
the Agreement.

 

3.            Change in Control Severance Benefits.

 

		(a)	Generally.  Subject to subsections (h) and (i) below and Section 4, the Eligible Employee
shall be entitled to the Change in Control Severance Benefits provided in this Section 3 if he or she incurs a Severance during
the Change in Control Protection Period. Except for any benefits to which the Eligible Employee may be entitled to receive pursuant
to the First United Bank & Trust Supplemental Executive Retirement Plan (as amended or supplemented from time to time), the
Change in Control Severance Benefits provided in this Section 3 shall be the sole severance payments and benefits to which the
Eligible Employee shall be entitled during the Change in Control Protection Period.

 

		(b)	Payment of Accrued Obligations.  If the Eligible Employee incurs a Severance during
the Change in Control Protection Period, the Company shall pay to him or her a lump sum payment in cash, no later than 10 days
after the Severance Date, equal to the sum of (1) the Eligible Employee’s accrued annual base salary and any accrued vacation
pay through the Severance Date, and (2) the Eligible Employee’s annual bonus earned for the fiscal year immediately preceding
the fiscal year in which the Severance Date occurs if such bonus has not been paid as of the Severance Date.

 

		(c)	Payment of Severance. Subject to subsections (h) and (i) below and Section 4, if the Eligible
Employee incurs a Severance during a Change in Control Protection Period, the Company shall pay to him or her a lump sum cash payment
on the 60th day after the Severance Date, equal to two (2) times the Eligible Employee’s Final Pay.

 

		(d)	[Intentionally Omitted].

 

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		(e)	Immediate Vesting of Equity-Based Compensation Awards upon a Change in Control.  Subject
to subsections (h) and (i) below and Section 4, if the Eligible Employee incurs a Severance during the Change in Control Protection
Period, (1) the unexercised portions of all Options and SARs (as defined in the Incentive Plan) granted to the Eligible Employee
under the Incentive Plan that have not expired or been forfeited pursuant to their terms shall automatically accelerate and become
fully exercisable, (2) the restrictions and conditions on all outstanding Stock Awards (as defined in the Incentive Plan) granted
to the Eligible Employee that have not expired or been forfeited pursuant to their terms shall immediately lapse, (3) all outstanding
Performance Units (as defined in the Incentive Plan) granted to the Eligible Employee that have not expired or been forfeited pursuant
to their terms shall become payable in an amount determined by the Committee, based on the Eligible Employee’s target payment
for the relevant performance period and the portion of the relevant performance period that precedes the Change in Control, (4)
all outstanding Stock Units (as defined in the Incentive Plan) granted to the Eligible Employee that have not expired or been forfeited
pursuant to their terms shall become payable in an amount not less than their target amounts, as determined by the Committee, and
(5) all unpaid Dividend Equivalents (as defined in the Incentive Plan) and other Stock-Based Awards (as defined in the Incentive
Plan) granted to the Eligible Employee that have not expired or been forfeited pursuant to their terms shall become fully payable
in amounts determined by the Committee; provided, however, that, where a Severance precedes the Change in Control and the terms
of any award granted to the Eligible Employee under the Incentive Plan would otherwise call for the forfeiture of such award upon
the termination of the Eligible Employee’s employment with the Company, such award shall not be deemed to be forfeited on
account of the Eligible Employee’s Severance and shall remain outstanding (subject to the other terms of the award, including
its original term) as if the Change in Control preceded the Severance.

 

		(f)	Benefit Continuation.  Subject to subsections (h) and (i) below and Section 4, if the
Eligible Employee incurs a Severance during the Change in Control Protection Period, commencing on the date immediately following
such Eligible Employee’s Severance Date and continuing for 24 months (or such lesser time as required to avoid the imposition
of additional taxes under Section 409A of the Code) (the “Welfare Benefit Continuation Period”), the Company shall
cover the Eligible Employee under the same type (e.g., individual or family coverage) of Employer-sponsored group health plan and
dental plan in which he or she was covered as of his or her Severance Date. The Eligible Employee shall receive such continued
coverage under the same terms and conditions (e.g., any requirement that employees pay all or any portion of the cost of such coverage)
that would apply if the Eligible Employee had continued to be an employee of the Employer.

 

For each month during the Welfare
Benefit Continuation Period in which the Eligible Employee’s continued coverage under an insured plan is not possible,
the Company shall, in lieu of providing the coverage described in the preceding paragraph, make a monthly cash payment to the
Eligible Employee equal to the monthly premium the Employer would be charged for coverage of a similarly-situated employee. 
The Company shall not be obligated to “gross up” or otherwise compensate the Eligible Employee for any taxes due on
amounts paid pursuant to the preceding sentence.

 

 

    	5

    	 

    

  

Notwithstanding any other provision
of this subsection (f), the Company’s obligation to provide continued coverage (or, in lieu thereof, make a cash payment)
pursuant to this subsection (f) shall expire on the date the Eligible Employee becomes covered under one or more plans sponsored
by a new employer (other than a successor to the Company) that, at the sole discretion of the Plan Administrator, are determined
to provide coverage at least equivalent in the aggregate to the benefits continued under this subsection (f). The coverage period
for purposes of the group health continuation requirements of Section 4980B of the Code shall commence at the expiration of the
Welfare Benefit Continuation Period.

 

		(g)	Outplacement Services.  Subject to subsection (i) below and Section 4, if the Eligible
Employee incurs a Severance during the Change in Control Protection Period, the Company shall provide him or her with reasonable
outplacement services for up to 12 months following the Severance Date.

 

		(h)	Release. The Company will provide the Eligible Employee with a written release and agreement
within five (5) days of his Severance during a Change in Control Protection Period. The Eligible Employee shall not be eligible
to receive any Change in Control Severance Benefits provided in this Section 3 (other than payments under Section 3(b)) and such
Change in Control Severance Benefits shall be forfeited unless he or she has executed and submitted the written release and agreement
provided by the Company and the applicable period during which the Eligible Employee may revoke such release and agreement has
expired on or before the 60th day after the date provided in subsection 3(c).

 

		(i)	Restriction on Timing of Distribution for Key Employees. Notwithstanding any provision of
this Agreement to the contrary and to the extent required by Section 409A of the Code and the Treasury Regulations thereunder,
if the Eligible Employee is a Key Employee and any class of securities of the Company (or of any person with whom the Company would
be considered a single employer under Section 414(b) and (c) of the Code) is publicly traded as of the Eligible Employee’s
Severance Date, no distribution may be made to the Eligible Employee on account of such Severance before the date that is six (6)
months after the Severance Date (or, if earlier, the date of the Key Employee’s death).

 

4.           Reduction of Change in Control
Severance Benefits.

 

		(a)	Reduction. If it is determined that the aggregate present value of (1) such portion
of the Eligible Employee’s Change in Control Severance Benefits that are considered Contingent Payments, and
(2) all other Contingent Payments payable to the Eligible Employee exceeds 2.99 times the Eligible Employee’s Base Amount
such that the excise tax under Section 4999 of the Code would otherwise be triggered, then the Change in Control Severance
Benefits provided in Section 3(c) shall be reduced to the extent necessary so that the aggregate present value of all Contingent
Payments payable following such reduction does not exceed 2.99 times the Eligible Employee’s Base Amount.

 

    	6

    	 

    

 

		(b)	Determination. The determination that the aggregate present value of the Eligible Employee’s
Contingent Payments exceed 2.99 times his or her Base Amount, and the calculation of the amount of any reduction, shall be made,
at the Company’s discretion, by the Company’s outside auditing firm or by a nationally-recognized accounting or benefits
consulting firm designated by the Company prior to a Change in Control. The firm’s expenses shall be paid by the Company.

 

		(c)	Payment of Remaining Benefits. If the determination is made that an Eligible Employee’s
Change in Control Severance Benefits must be reduced in accordance with Section 4(b), then the amount of such Benefits that are
actually paid to the Eligible Employee pursuant to Section 3(c) will be the amount determined under Section 4(a) (the “Remaining
Benefits”) and such Remaining Benefits will be paid at the same time and in the same form otherwise specified in Section
3(c).

 

5.           Taxes; Withholding. The Eligible
Employee shall be responsible for the payment of all applicable local, state and federal taxes associated with the Eligible Employee’s
participation in the Plan and the receipt of Change in Control Severance Benefits hereunder, and the Company shall have the right
to deduct from any distributions hereunder any such taxes or other amounts required by law to be withheld therefrom.

 

6.           General Provisions

 

		(a)	Amendment and Termination. This Agreement may not be terminated prior to the end of its
term without the written consent of the Eligible Employee.  This Agreement may be amended by the Board at any time;
provided, however, that this Agreement may not be amended without the written consent of the Eligible Employee if such amendment
would in any manner adversely affect the interests of the Eligible Employee.  Any action taken by the Company or the Plan
Administrator to cause the Eligible Employee to no longer be designated as an Eligible Employee or any action taken by the Company
or the Plan Administrator to decrease the benefits for which the Eligible Employee is eligible shall be treated as an amendment
to the Agreement which adversely affects the interests of the Eligible Employee.

 

		(b)	Compliance with Law. Notwithstanding subsection (a) above or any other provision of this
Agreement to the contrary, the Company may amend, modify or terminate this Agreement, without the consent of the Eligible Employee,
as the Company deems necessary or appropriate to ensure compliance with any law, rule, regulation or other regulatory pronouncement
applicable to the Plan or this Agreement, including, without limitation, Section 409A of the Code and any Treasury Regulations
or other guidance thereunder.

 

    	7

    	 

    

  

		(c)	Governing Law. This Agreement shall be construed and enforced according to the laws of the
State of Maryland to the extent not preempted by federal law, without regard to any conflict of laws principles that would apply
the law of another jurisdiction.

 

		(d)	Severability. If any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions hereof, and this Agreement shall be construed and enforced
as if such provisions had not been included.

 

		(e)	Headings and Terms. The headings and captions herein are provided for reference and convenience
only, shall not be considered part of the Agreement, and shall not be employed in the construction of the Agreement. Capitalized
terms shall have the meanings given herein. Singular nouns shall be read as plural and masculine pronouns shall be read as feminine,
and vice versa, as appropriate.

 

		(f)	Successors. This Agreement shall be binding upon each of the parties and shall also be binding
upon their respective successors or assigns.

 

		(g)	Application of the Plan; Entire Agreement. The Eligible Employee acknowledges, by executing
this Agreement, that (1) this Agreement is subject in all respects to the provisions of the Plan, as amended from time to time,
the terms of which are incorporated herein by reference and made a part hereof, (2) that a copy of the Plan and all amendments
thereto through the date hereof were provided to the Eligible Employee on the date hereof, and (3) he or she understands and accepts
of all of the terms and conditions of the Plan. This Agreement sets forth the entire agreement of the parties with respect to the
subject matter hereof. Any and all prior agreements or understandings with respect to such matters are hereby superseded.

 

IN WITNESS WHEREOF,
each of the parties has caused this Agreement to be executed as of the Effective Date.

 

	ATTEST:	 	FIRST UNITED CORPORATION
	 	 	 	 
	 	 	By:	/s/ William B. Grant
	 	 	Name:	William B. Grant
	 	 	Title:	Chairman/Chief Executive Officer
	 	 	 	 
	WITNESS:	 	ELIGIBLE EMPLOYEE
	 	 	 
	 	 	/s/ Keith R. Sanders
	 	 	Name:  Keith R. Sanders

 

    	8

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