Document:

Exhibit 10.1

 

Farmers and Merchants Bank

Supplemental Executive Retirement
Agreement

 

 

Farmers and Merchants Bank

Supplemental Executive Retirement Agreement

 

This Supplemental Executive
Retirement Agreement (this “Agreement”) is adopted this 30th day of December, 2010, by and between Farmers and Merchants
Bank, a state-chartered commercial bank located in Upperco, Maryland (the “Bank”), and James R. Bosley, Jr. (the “Executive”).

 

The purpose of this
Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees
who contribute materially to the continued growth, development and future business success of the Bank. This Agreement shall be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”),
as amended from time to time.

 

Article 1

Definitions

 

Whenever used in this
Agreement, the following words and phrases shall have the meanings specified:

 

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

 

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

 

		1.3	“Beneficiary” means each designated person or entity, or the estate of the deceased
Executive, entitled to any benefits upon the death of the Executive pursuant to Article 4.

 

     

     

    

 

		1.4	“Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.

 

		1.5	“Board” means the Board of Directors of the Bank as from time to time constituted.

 

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

 

		1.7	“Code” means the Internal Revenue Code of 1986, as amended, and all regulations
and guidance thereunder, including such regulations and guidance as may be promulgated after the Effective Date.

 

		1.8	“Disability” means the Executive: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees or directors of the Bank. Medical determination of Disability may be made
by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the
Bank provided that the definition of “disability” applied under such insurance program complies with the requirements
of the preceding sentence. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator
of the Social Security Administration’s or the provider’s determination.

 

		1.9	“Discount Rate” means the rate used by the Plan Administrator for determining
the Accrual Balance. The Discount Rate will be the Moody’s 20 year AA Corporate Bond rate less one quarter percent (.25%).
The initial Discount Rate is four and sixty-eight one hundredths percent (4.68%). However, the Plan Administrator, in its discretion,
may adjust the Discount Rate to maintain the rate within reasonable standards according to GAAP and/or applicable bank regulatory
guidance. Additionally, any accounting entries will be adjusted if the calculated Discount Rate changes by one percent (1%) or
more during any applicable reporting period.

 

		1.10	“Early Involuntary Termination” means a Separation from Service (other than
a Termination for Cause) prior to age 57 due to the independent exercise of the unilateral authority of the Bank to terminate the
Executive’s employment, other than due to the Executive’s implicit or explicit request, where the Executive was willing
and able to continue performing services.

 

		1.11	“Early Voluntary Termination” means Separation from Service before age 57 except
when such Separation from Service occurs within twenty-four (24) months following a Change in Control or due to death, Disability,
Early Involuntary Termination or Termination for Cause.

 

     

     

    

 

		1.12	“Effective Date” means December 30, 2010.

 

		1.13	“High 3 Average Pay” means the average of the Executive's highest three (3)
Base Salaries for any three (3) years prior to Separation from Service, including the year such Separation from Service occurs.

 

		1.14	“Plan Administrator” means the Board or such committee or person as the Board
shall appoint.

 

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

 

		1.16	“Separation from Service” means termination of the Executive’s employment
with the Bank for reasons other than death. Whether a Separation from Service has occurred is determined in
accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank
and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona
fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an
independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank
if the Executive has been providing services to the Bank less than thirty-six (36) months).

 

		1.17	“Specified Employee” means an employee who at the time of Separation from Service
is a key employee of the Bank, if any stock of the Bank is publicly traded on an established securities market or otherwise. For
purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i),
(ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the
twelve (12) month period ending on December 31 (the “identification period”). If the employee is a key employee during
an identification period, the employee is treated as a key employee for purposes of this Agreement. during the twelve (12) month
period that begins on the first day of April following the close of the identification period.

 

		1.18	“Termination for Cause” means Separation from Service for:

 

		(a)	Gross negligence or gross neglect of duties to the Bank;

		(b)	Conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the
Executive’s employment with the Bank; or

 

     

     

    

 

		(c)	Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy committed
in connection with the Executive’s employment and resulting in a material adverse effect on the Bank.

 

Article 2

Distributions During Lifetime

 

		2.1	Normal Retirement Benefit. Upon Separation from Service after attaining age 57, the Bank
shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

 

		2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is thirty-five percent (35%)
of High 3 Average Pay. 

 

		2.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in
twelve (12) equal monthly installments commencing within ninety (90) days following Separation from Service. The annual benefit
shall be distributed to the Executive for twenty (20) years.

 

		2.2	Early Involuntary Termination Benefit. If Early Involuntary Termination occurs prior to
age 57, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under
this Article.

 

		2.2.1	Amount of Benefit. The annual benefit under this Section 2.2 is the Percentage of High 3
Average Pay determined as of the end of the Plan Year preceding Separation from Service.

 

	Executive’s Age At Which
 Separation from Service Occurs	 	Percentage of High 3 Average
 Pay	 
	48	 	 	26	%
	49	 	 	27	%
	50	 	 	28	%
	51	 	 	29	%
	52	 	 	30	%
	53	 	 	31	%
	54	 	 	32	%
	55	 	 	33	%
	56	 	 	34	%

 

		2.2.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in
twelve (12) equal monthly installments commencing within ninety (90) days following Separation from Service. The annual benefit
shall be distributed to the Executive for twenty (20) years.

 

     

     

    

 

		2.3	Early Voluntary Termination Benefit. If the Executive experiences Early Voluntary
Termination prior to age 57, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Article.

 

		2.3.1	Amount of Benefit. The benefit under this Section 2.3 is one hundred percent (100%)
of the Accrual Balance determined as of the end of the month prior to Separation from Service; however, the minimum annual benefit
shall not be less than Six Thousand Five Hundred Eighty-Six dollars ($6,586).

 

		2.3.2	Distribution of Benefit. The Bank shall distribute the benefit to the Executive over twenty
(20) years in equal monthly installments commencing within ninety (90) days following Separation from Service. Interest shall be
credited on the Accrual Balance during the installment period at a rate equal to the Discount Rate in effect at the time of Separation
from Service.

 

		2.4	Disability Benefit. If the Executive experiences a Disability prior to age 57 followed
by Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any
other benefit under this Article.

 

		2.4.1	Amount of Benefit. The benefit under this Section 2.4 is one hundred percent (100%)
of the Accrual Balance determined as of the end of the month prior to Separation from Service; however, the minimum annual benefit
shall not be less than Six Thousand Five Hundred Eighty-Six dollars ($6,586).

 

		2.4.2	Distribution of Benefit. The Bank shall distribute the benefit to the Executive over twenty
(20) years in equal monthly installments commencing within ninety (90) days following Separation from Service. Interest shall be
credited on the Accrual Balance during the installment period at a rate equal to the Discount Rate in effect at the time of Separation
from Service.

 

		2.5	Change in Control Benefit. If a Change in Control occurs prior to age 57, followed within
twenty-four (24) months by Separation from Service, the Bank shall distribute to the Executive the benefit described in this Section
2.5 in lieu of any other benefit under this Article.

 

		2.5.1	Amount of Benefit. The benefit under this Section 2.5 is the present value of a 20-year
payment stream equal to thirty-five percent (35%) of High 3 Average Pay, using a rate equal to the Discount Rate in effect at the
time of Separation from Service.

 

		2.5.2	Distribution of Benefit.  The Bank shall distribute the benefit to the Executive
over (5) years in equal monthly installments commencing within ninety (90) days following Separation from Service.

 

     

     

    

 

		2.6	Restriction on Commencement of Distributions.  Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.6 shall govern
all distributions hereunder. If benefit distributions which would otherwise be made to the Executive due to Separation from Service
are limited because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months
following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall
be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service.
All subsequent distributions shall be paid in the manner specified.

 

		2.7	Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the
Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred
hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code
section 409A. Any such distribution will decrease the Executive’s benefits distributable under this Agreement.

 

		2.8	Change in Form or Timing of Distributions.  For distribution of benefits under this
Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend this Agreement to delay the timing or change
the form of distributions.  Any such amendment:

 

		(a)	may not accelerate the time or schedule of any distribution, except as provided in Code Section
409A;

		(b)	must, for benefits distributable under Sections 2.1, 2.2, 2.3 2.4, and 2.5 delay the commencement
of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and

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

 

Article 3

Distribution at Death

 

		3.1	Death During Active Service. If the Executive dies prior to Separation from Service, the
Bank shall distribute to the Beneficiary the benefit described in this Section 3.1. This benefit shall be distributed in lieu of
any benefit under Article 2.

 

		3.1.1	Amount of Benefit. The benefit under this Section 3.1 is one hundred percent (100%) of the
Accrual Balance as of the end of the month prior to death.

 

		3.1.2	Distribution of Benefit. The Bank shall distribute the benefit to the Beneficiary in a lump
sum within ninety (90) days following the Executive’s death. The Beneficiary shall be required to provide to the Bank the
Executive’s death certificate.

 

     

     

    

 

		3.2	Death During Distribution of a Benefit. If the Executive dies after any benefit distributions
have commenced under this Agreement but before receiving all such distributions, the Bank shall distribute to the Beneficiary the
remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive
survived. The Beneficiary shall be required to provide to the Bank the Executive’s death certificate.

 

		3.3	Death Before Benefit Distributions Commence. If the Executive is entitled
to benefit distributions under this Agreement but dies prior to the date that commencement of said benefit distributions are scheduled
to be made under this Agreement, the Bank shall distribute to the Beneficiary the same benefits to which the Executive was entitled
prior to death, except that the benefit distributions shall be paid in the manner specified in Section 3.1.2 and shall commence
on the first day of the fourth month following the Executive’s death. The Beneficiary shall be required to provide to the
Bank the Executive’s death certificate.

 

Article 4

Beneficiaries

 

		4.1	In General. The Executive shall have the right, at any time, to designate a Beneficiary
to receive any benefit distributions under this Agreement upon the death of the Executive. The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive
participates.

 

		4.2	Designation. The Executive shall designate a Beneficiary by completing and signing the Beneficiary
Designation Form and delivering it to the Plan Administrator or its designated agent. If the Executive names someone other than
the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent
is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned
to the Plan Administrator. The Executive's beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall
have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation
Form and the Plan Administrator’s rules and procedures. Upon the acceptance by the Plan Administrator of a new Beneficiary
Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to
rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s
death.

 

		4.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective
until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

 

		4.4	No Beneficiary Designation. If the Executive dies without a valid beneficiary designation,
or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.
If the Executive has no surviving spouse, any benefit shall be paid to the Executive's estate.

 

     

     

    

 

		4.5	Facility of Distribution. If the Plan Administrator determines in its discretion that a
benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition
of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative
or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require
proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution
of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely
discharge any liability under this Agreement for such distribution amount.

 

Article 5

General Limitations

 

		5.1	Termination for Cause. Notwithstanding any provision of this Agreement to the contrary,
the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated
by the Bank or an applicable regulator due to a Termination for Cause.

 

		5.2	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank
shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued
by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

 

		5.3	Excess Parachute or Golden Parachute Payment. Notwithstanding any provision of this Agreement
to the contrary, the Bank shall not pay any benefit under this Agreement to the extent the benefit would be an excess parachute
payment under Section 280G of the Code or would be a prohibited golden parachute payment pursuant to 12 C.F.R. §359.2 and
for which the appropriate federal banking agency has not given written consent to pay pursuant to 12 C.F.R. §359.4. However,
upon written request by the Executive, the Bank shall file a written request for payment to the appropriate federal banking agency.

 

Article 6

Administration of Agreement

 

		6.1	Plan Administrator Duties. The Plan Administrator shall
administer this Agreement according to its express terms and shall also have the discretion and authority to (i) make, amend, interpret
and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) resolve any questions that
may arise in connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with
Code Section 409A. If the Executive or his Beneficiary believes benefits are due under this Agreement in excess of the benefits
that are being distributed, Article 7 provides guidance on the claims and review procedures that should be followed. 

 

     

     

    

 

		6.2	Agents. In the administration of this Agreement, the Plan
Administrator may employ agents and delegate to them such administrative duties as the Plan Administrator sees fit, including acting
through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Bank.

 

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

 

		6.4	Indemnity of Plan Administrator. The Bank shall indemnify
and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any
action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator.

 

		6.5	Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall
supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Executive’s
death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require.

 

		6.6	Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred
twenty (120) days after the end of each Plan Year, a statement setting forth the benefits to be distributed under this Agreement.

 

Article 7

Claims And Review Procedures

 

		7.1	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received
benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:

 

		7.1.1	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan
Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the claimant, the
claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within
one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the claimant.

 

		7.1.2	Timing of Plan Administrator Response. The Plan Administrator shall respond to such
claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days
by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, which an additional period is required.
The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render
its decision.

 

     

     

    

 

		7.1.3	Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan
Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:

 

		(a)	The specific reasons for the denial;

		(b)	A reference to the specific provisions of this Agreement on which the denial is based;

		(c)	A description of any additional information or material necessary for the claimant to perfect the
claim and an explanation of why it is needed;

		(d)	An explanation of this Agreement’s review procedures and the time limits applicable to such
procedures; and

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

 

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

 

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

 

		7.2.2	Additional Submissions – Information Access. The claimant shall then have the opportunity
to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide
the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information
relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

 

		7.2.3	Considerations on Review. In considering the review, the Plan Administrator shall take into
account all materials and information the claimant submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.

 

		7.2.4	Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to
such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional
sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60) day period, which an additional
period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator
expects to render its decision.

 

     

     

    

 

		7.2.5	Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision
on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification
shall set forth:

 

		(a)	The specific reasons for the denial;

		(b)	A reference to the specific provisions of this Agreement on which the denial is based;

		(c)	A statement that the claimant is entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits; and

		(d)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

 

Article 8

Amendments and Termination

 

		8.1	Amendments. This Agreement may be amended only by a written agreement signed by the Bank
and the Executive. However, the Bank may unilaterally amend this Agreement to conform with written directives to the Bank from
its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section
409A.

 

		8.2	Plan Termination Generally. This Agreement may be terminated only by a written agreement
signed by the Bank and the Executive. The benefit shall be the Accrual Balance as of the date this Agreement is terminated. Except
as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement.
Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or
Article 3.

 

		8.3	Plan Terminations Under Code Section 409A. Notwithstanding anything to the contrary in Section
8.2, if the Bank terminates this Agreement in the following circumstances:

 

		(a)	Within thirty (30) days before or twelve (12) months after a Change in Control, provided that all
distributions are made no later than twelve (12) months following such termination of this Agreement and further provided that
all the Bank's arrangements which are substantially similar to this Agreement are terminated so the Executive
and all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of such termination;

 

     

     

    

 

		(b)	Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the
amounts deferred under this Agreement are included in the Executive's gross income in the latest of (i) the calendar year in which
this Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture;
or (iii) the first calendar year in which the distribution is administratively practical; or

		(c)	Upon the Bank’s termination of this and all other arrangements that would be aggregated with
this Agreement pursuant to Treasury Regulations Section 1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not occur proximate to a downturn in the financial
health of the Bank, (ii) all termination distributions are made no earlier than twelve (12) months and no later than twenty-four
(24) months following such termination, and (iii) the Bank does not adopt any new arrangement that would be a Similar Arrangement
for a minimum of three (3) years following the date the Bank takes all necessary action to irrevocably terminate and liquidate
the Agreement;

 

the Bank may distribute the Accrual
Balance, determined as of the date of the termination of this Agreement, to the Executive in a lump sum subject to the above terms.

 

Article 9

Miscellaneous

 

		9.1	Binding Effect. This Agreement shall bind the Executive and the Bank and their beneficiaries,
survivors, executors, administrators, successors and transferees.

 

		9.2	No Guarantee of Employment. This Agreement is not a contract for employment. It does not
give the Executive the right to remain as an employee of the Bank nor interfere with the Bank's right to discharge the Executive.
It does not require the Executive to remain an employee nor interfere with the Executive's right to terminate employment at any
time.

 

		9.3	Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned,
pledged, attached or encumbered in any manner.

 

		9.4	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be
withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this Agreement. The
Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate
taxing authorities. The Bank shall satisfy all applicable reporting requirements, including those under Code Section 409A.

 

		9.5	Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of
the State of Maryland, except to the extent preempted by the laws of the United States of America.

 

     

     

    

 

		9.6	Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors
of the Bank for the distribution of benefits under this Agreement. The benefits represent the mere promise by the Bank to distribute
such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors. Any insurance on the Executive's life or other informal funding asset is a
general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.

 

		9.7	Reorganization. The Bank shall not merge or consolidate into or with another bank,
or reorganize, or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank,
firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such an
event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor entity.

 

		9.8	Entire Agreement. This Agreement constitutes the entire agreement between the Bank
and the Executive as to the subject matter hereof. No rights are granted to the Executive by virtue of this Agreement other than
those specifically set forth herein.

 

		9.9	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires
and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

 

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

 

		9.11	Headings. Article and section headings are for convenient reference only and shall not control
or affect the meaning or construction of any provision herein.

 

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

 

		9.13	Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator
under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the address
below:

 

	Farmers and Merchants Bank
	15226 Hanover Pike
	Upperco, MD 21155

 

Such notice shall be deemed given
as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration
or certification.

 

     

     

    

 

Any notice or filing required
or permitted to be given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by
mail to the last known address of the Executive.

 

		9.14	Compliance with Section 409A. This Agreement shall be interpreted and administered consistent
with Code Section 409A.

 

IN WITNESS WHEREOF,
the Executive and a duly authorized representative of the Bank have signed this Agreement.

 

	EXECUTIVE	 	BANK
	 	 	 	 
	/s/ James R. Bosley, Jr.	 	By:	/s/ Kenneth W. Hoffmeyer
	James R. Bosley, Jr.	 	Title:	Chairman of the BoardExhibit 10.2

 

Farmers & Merchants Bank

Supplemental Executive Retirement Plan

First Amendment

 

 

FIRST AMENDMENT

TO THE

FARMERS & MERCHANTS BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AGREEMENT

DCEMBER 30, 2010

FOR

JAMES R. BOSLEY, JR. 

 

THIS First Amendment
is entered into this 22nd day of February, 2011, by and between FARMERS & MERCHANTS BANK (the “Bank”), a
state-chartered commercial bank located in Upperco, Maryland, and James R. Bosley, Jr. (the “Executive”).

 

WHEREAS, the
Bank and the Executive executed the Supplemental Executive Retirement Plan Agreement on December 30, 2010 (the “Agreement”);

 

WHEREAS, Section
8.1 of the Agreement provides that the Agreement may be amended upon mutual consent of the parties thereto; and

 

WHEREAS, the
parties now desire to amend the Agreement, for the purpose of changing the Death During Active Service benefit amount;

 

NOW, THEREFORE,
it is agreed by and between the Bank and the Executive as follows:

 

Section 3.1.1 of the Agreement
shall be amended and replaced as follows:

 

		3.1.1	Amount of Benefit. The benefit under this Section 3.1 is the greater of (i) one hundred
percent (100%) of the Accrual Balance as of the end of the month prior to death (ii) or One Million Two Hundred Fifty-Six Thousand
Seven Hundred Ninety-Nine Dollars ($1,256,799).

 

IN WITNESS WHEREOF,
the parties have executed this Fourth Amendment as of the date indicated above.

 

	EXECUTIVE:	 	BANK:
	 	 	 
	 	 	FARMERS & MERCHANTS BANK
	 	 	 	 
	/s/ James R. Bosley, Jr.	 	By:	/s/ Kenneth W. Hoffmeyer
	James R. Bosley, Jr.	 	Title: 	Chairman of the Board

 

    	 	1

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