Document:

Exhibit
      10.2

     

    AGREEMENT
      UNDER THE

    FIRST
      UNITED BANK CORPORATION 

    CHANGE
      IN CONTROL SEVERANCE PLAN

    

    THIS
      AGREEMENT (the “Agreement”) is entered into this 14th
      day of
      February, 2007 by and between FIRST
      UNITED
      CORPORATION, a
      Maryland corporation (“the
      Company”), and William B. Grant, 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, a copy of which is attached hereto
      as
Exhibit
      A;
      and

    

    WHEREAS, 
      the Eligible Employee has been designated as a participant in the Plan,
      effective as of the date set forth in Section 2 of this Agreement;
      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,
      effective as set forth in Section 2 of 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)  	
              “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 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.

            

    

    

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

            

    

    

    
      	(c)  	
              “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.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	(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)  	
              “Effective
                Date”
                means the date set forth in Section 2 of this
                Agreement.

            

    

    

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

            

    

    

    
      	(g)  	
              “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.

            

    

    

    
      	(h)  	
              “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 status or position as an employee of the Employer as a result of a material
      diminution in his 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 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
      giving notice), or any removal of the Eligible Employee from or any failure
      to
      reappoint or reelect him to such position(s) (except in connection with the
      Eligible Employee’s Severance other than for Good Reason). Without limiting the
      foregoing, “Good Reason” shall include the Eligible Employee’s not being
      employed, after a Change in Control, as the Chief Executive Officer of a
      corporation the capital stock of which is listed or traded on a national
      securities exchange.

    

    (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.

    

    
      
        
        

      

      
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    (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
      as is
      the case on the date of the Change in Control or which would materially reduce
      his 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 office is located immediately prior to the
      Change in Control and further from his 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.

    

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

            

    

    

    
      	(j)  	
              “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.

            

    

    

    
      	(k)  	
              “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.

            

    

    

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

            

    

    

    2.  Effective
      Date and Term of Agreement.
      The
      effective date of this Agreement shall be February 14, 2007. This
      Agreement shall remain in effect from the Effective Date through February 14,
      2010; 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 six 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.

     

    
      
        
        

      

      
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    3.  Change
      in Control Severance Benefits.
      

    

    
      	
            	(a)	
              Generally. 
                Subject to subsections (h) and (i) below, the Eligible Employee shall
                be
                entitled to the Change in Control Severance Benefits provided in
                this
                Section 3 if he 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 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, if the Eligible Employee
                incurs
                a Severance during the Change in Control Protection Period, the Company
                shall pay to him a lump sum cash payment, no later than 10 days after
                the
                Severance Date, equal to 2.99 times the Eligible Employee’s Final
                Pay.

            

    

     

    
      	
            	(d)	
              [Intentionally
                Omitted]. 

            

    

     

    
      	
            	(e)	
              Immediate
                Vesting of Equity-Based Compensation Awards upon a Change in
                Control.
                Subject to subsections (h) and (i) below and any other limitations
                imposed
                by law, 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.

            

    

     

    
      
        
        

      

      
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            	(f)	
              Benefit
                Continuation. 
                Subject to subsections (h) and (i) below, 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 30 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 was covered as of his 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 during the Welfare Benefit Continuation
                Period.
                

            

    

     

    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.

     

    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.

     

    
      
        
        

      

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

            

    

     

    
      	
            	(h)	
              Release. 
                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)) unless he first executes a written release and
                agreement provided by the Company and does not revoke such release
                and
                agreement within the time permitted therein for such
                revocation.

            

    

    

    
      	
            	(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 months after the Severance
                Date (or,
                if earlier, the date of the Key Employee’s
                death).

            

    

     

    4.  Excise
      Tax.

    

    
      	
            	(a)	
              Gross-Up
                Payment.
                Notwithstanding any provision of the Plan or this Agreement to the
                contrary, in the event
                it
                shall be determined that any payment or
                distribution whether paid or payable or distributed or distributable
                pursuant to the terms of this Agreement or otherwise pursuant to
                or by
                reason of any other agreement, policy, plan, program or arrangement
                (including, without limitation, payments or acceleration of vesting
                in
                respect of any equity-based or other award), or similar right
                (collectively, a “Payment”), to or for the benefit of the Eligible
                Employee, would be subject to the excise tax imposed by Section 4999
                of
                the Code, or any successor provision thereto, or any similar tax
                imposed
                by state or local law, or any interest or penalties with respect
                to such
                excise tax (such tax or taxes, together with any such interest and
                penalties, are collectively referred to as the “Excise Tax”), then the
                Eligible Employee shall be entitled to receive an additional payment
                (a
                “Gross-Up Payment”) in an amount such that, after payment by the Eligible
                Employee of all taxes (including any interest or penalties imposed
                with
                respect to such taxes), including any Excise Tax, imposed upon the
                Gross-Up Payment, the Eligible Employee retains an amount of the
                Gross-Up
                Payment equal to the Excise Tax imposed upon the
                Payment.

            

    

     

    
      	
            	(b)	
              Determination.
                Subject to subsection (d) below, all determinations required to be
                made
                under this Section 4, including whether an Excise Tax is payable
                by the
                Eligible Employee and the amount of such Excise Tax and whether a
                Gross-Up
                Payment is required and the amount of such Gross-Up Payment, will
                be made,
                at the Company’s discretion, by the Company’s outside auditing firm or by
                a nationally recognized accounting or benefits consulting firm (the
                “Firm”) designated by the Company prior to a Change in Control. If the
                Firm determines that any Excise Tax is payable by the Eligible Employee,
                the Company will pay the required Gross-Up Payment to the Eligible
                Employee during the calendar year following the Severance Date. If
                the
                Firm determines that no Excise Tax is payable by the Eligible Employee,
                it
                will, at the same time as it makes such determination, furnish the
                Eligible Employee with an opinion that he has substantial authority
                not to
                report any Excise Tax on his federal, state, local income or other
                tax
                return.  Any determination by the Firm as to the amount of the
                Gross-Up Payment will be binding upon the Company and the Eligible
                Employee.  As a result of the uncertainty in the application of
                Section 4999 of the Code (or any successor provision thereto) and
                the
                possibility of similar uncertainty regarding applicable state or
                local tax
                law at the time of any determination by the Firm hereunder, it is
                possible
                that Gross-Up Payments which will not have been made by the Company
                should
                have been made (an “Underpayment”), consistent with the calculations
                required to be made hereunder.  If the Company exhausts or fails to
                pursue its remedies pursuant to subsection (d) below, and the Eligible
                Employee thereafter is required to make a payment of any Excise Tax,
                the
                Eligible Employee shall so notify the Company, which will direct
                the Firm
                to determine the amount of the Underpayment that has occurred and
                to
                submit its determination and detailed supporting calculations to
                both the
                Company and the Eligible Employee as promptly as possible.  Any such
                Underpayment will be paid by the Company to, or for the benefit of,
                the
                Eligible Employee within five business days after receipt of such
                determination and calculations.

            

    

     

    
      
        
        

      

      
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            	(c)	
              Fees
                and Expenses.
                The fees and expenses of the Firm for its services under this Section
                4
                will be borne by the Company.

            

    

     

    
      	
            	(d)	
              IRS
                Claim.
                The Eligible Employee will notify the Company in writing of any claim
                by
                the Internal Revenue Service that, if successful, would require the
                payment by the Company of a Gross-Up Payment.  Such notification will
                be given as promptly as practicable but no later than 10 business
                days
                after the Eligible Employee actually receives notice of such claim
                and the
                Eligible Employee will further apprise the Company of the nature
                of such
                claim and the date on which such claim is requested to be paid (in
                each
                case, to the extent known by the Eligible Employee).  The Eligible
                Employee will not pay such claim prior to the earlier of (1) the
                expiration of the 30-calendar-day period following the date on which
                he
                gives such notice to the Company, or (2) the date that any payment
                of
                amounts with respect to such claim is
                due.

            

    

     

    The
      Company will bear and pay directly all costs and expenses (including interest
      and penalties) incurred in connection with contesting such claim and will
      indemnify and hold harmless the Eligible Employee, on an after-tax basis, for
      and against any Excise Tax or income tax, including interest and penalties
      with
      respect thereto, imposed as a result of such representation and payment of
      costs
      and expenses.

     

    
      
        
        

      

      
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    Without
      limiting the foregoing provisions of this subsection (d), the Company will
      control all proceedings taken in connection with the contest of any claim
      contemplated by this subsection (d) and, at its sole option, may pursue or
      forego any and all administrative appeals, proceedings, hearings and conferences
      with the taxing authority in respect of such claim (provided that the Eligible
      Employee may participate therein at his own cost and expense) and may, at its
      option, either direct the Eligible Employee to pay the tax claimed and sue
      for a
      refund or contest the claim in any permissible manner, and the Eligible Employee
      agrees to prosecute such contest to a determination before any administrative
      tribunal, in a court of initial jurisdiction and in one or more appellate
      courts, as the Company will determine. If the Company directs the Eligible
      Employee to pay the tax claimed and sue for a refund, the Company will advance
      the amount of such payment to the Eligible Employee on an interest-free basis
      and will indemnify and hold harmless the Eligible Employee, on an after-tax
      basis, from any Excise Tax or income tax, including interest or penalties
      thereon, imposed with respect to such advance. Any extension of the statute
      of
      limitations relating to payment of taxes for the taxable year of the Eligible
      Employee in which the contested amount is claimed to be due is limited solely
      to
      such contested amount.  Furthermore, the Company’s control of any such
      contested claim will be limited to issues with respect to which a Gross-Up
      Payment would be payable hereunder, and the Eligible Employee will be entitled
      to settle or contest, as the case may be, any other issue raised by the Internal
      Revenue Service or any other taxing authority.

     

    
      	
            	(e)	
              Refund.
                If, after the receipt by the Eligible Employee of an amount advanced
                by
                the Company pursuant to subsection (d) above, the Eligible Employee
                receives any refund with respect to such claim, the Eligible Employee
                will
                (subject to the Company’s complying with the requirements of subsection
                (d) above) promptly pay to the Company the amount of such refund
                (together
                with any interest paid or credited thereon after any taxes applicable
                thereto).  If, after the receipt by the Eligible Employee of an
                amount advanced by the Company pursuant to subsection (d) above,
                a
                determination is made that the Eligible Employee will not be entitled
                to
                any refund with respect to such claim, and the Company does not notify
                the
                Eligible Employee in writing of its intent to contest such denial
                or
                refund prior to the expiration of 30 calendar days after such
                determination, then such advance will be forgiven and will not be
                required
                to be repaid, and the amount of such advance will offset, to the
                extent
                thereof, the amount of Gross-Up Payment required to be paid pursuant
                to
                this Section 4.  If, after the receipt by the Eligible Employee of a
                Gross-Up Payment but before the payment by the Eligible Employee
                of the
                Excise Tax, it is determined by the Firm that the Excise Tax payable
                by
                the Eligible Employee is less than the amount originally computed
                by the
                Firm and consequently that the amount of the Gross-Up Payment is
                larger
                than that required by this Section 4, the Eligible Employee shall
                promptly
                refund to the Company the amount by which the Gross-Up Payment initially
                made to him exceeds the Gross-Up Payment required under this Section
                4.

            

    

     

    
      
        
        

      

      
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    5.  Taxes;
      Withholding.
      Subject
      to Section 4, 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.
                

            

    

     

    
      	
            	(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.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
            	(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 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 day first above written. 

    
      	 	 	 
	ATTEST:	FIRST UNITED CORPORATION
	 
 	 
 	 
 
	/s/	By:  	/s/ 
	
              

            	
              

              Name: Robert
                W. Kurtz

              Title: President/Chief
                Risk Officer

            
	 	
            

      	 	 	 
	WITNESS:	ELIGIBLE
              EMPLOYEE
	 	 
	/s/	  	/s/ 
	
              

            	
              
Name: William
              B. Grant
	 	
            

    

     

    
      
        
        

      

      
        10Exhibit
      10.3

     

    AGREEMENT
      UNDER THE

    FIRST
      UNITED BANK CORPORATION 

    CHANGE
      IN CONTROL SEVERANCE PLAN

    

    THIS
      AGREEMENT (the “Agreement”) is entered into this 14th
      day of
      February, 2007 by and between FIRST
      UNITED
      CORPORATION,
      a
      Maryland corporation (“the Company”), and _______________________, 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, a copy of which is attached hereto
      as
Exhibit
      A;
      and

    

    WHEREAS, 
      the Eligible Employee has been designated as a participant in the Plan,
      effective as of the date set forth in Section 2 of this Agreement;
      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,
      effective as set forth in Section 2 of 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”
                means the date set forth in Section 2 of 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).

       

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (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.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

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

            

    

    

    2.  Effective
      Date and Term of Agreement.
      The
      effective date of this Agreement shall be February 14, 2007. This
      Agreement shall remain in effect from the Effective Date through February 14,
      2010; 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 the Change in Control Protection
                Period, the Company shall pay to him or her a lump sum cash payment,
                no
                later than 10 days after the Severance Date, equal to two (2) times
                the
                Eligible Employee’s Final Pay.

            

    

     

    
      	
            	(d)	
              [Intentionally
                Omitted].

            

    

     

    
      	
            	(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.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
            	(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 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)) unless he or she first executes a written release
                and
                agreement provided by the Company and does not revoke such release
                and
                agreement within the time permitted therein for such
                revocation.

            

    

    

    
      	
            	(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.

            

    

     

    
      	
            	(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.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
            	(c)	
              Payment
                of Remaining Benefits.
                If a determination
                is
                made that the Eligible Employee’s Change in Control Severance Benefits
                provided in Section 3(c) must be reduced, payment of the
                remaining Change in Control Severance Benefits provided in
                Section 3(c) shall be made in a lump sum cash payment no later than
                10 days after the latter of the Severance Date or the date the
                determination is made.

            

    

     

    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.
                

            

    

     

    
      	
            	(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.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
            	(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 day first above written. 

    
      	 	 	 
	ATTEST:	FIRST UNITED CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	
              

            	
              

              Name: William
                B. Grant

              Title: Chairman/Chief
                Executive Officer

            
	 	
            

    

    
      	 	 	 
	WITNESS:	ELIGIBLE
              EMPLOYEE
	 	  	
            
	
              

            	
              
Name:

	 	
            

    
      
        
        

      

      
        8

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