Document:

Exhibit
10.5

BRADFORD
BANK

CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement (the “Agreement”) is entered into as of January 1, 2006
between Bradford Bank (the “Bank”) and David L. Costello, III (the “Executive”).

RECITALS

The Executive is currently a member of senior
management of the Bank.

The Bank desires to provide the Executive with
financial protection in the event of certain events occurring within 12 months
of a Change in Control of the Bank, in order to provide an executive retention
device for the Bank. The Agreement is intended to comply with the requirements
of Internal Revenue Code Section 409A.

AGREEMENT

The Bank and the Executive agree as follows:

If (a) the Bank experiences a
Change in Control and (b) with 12 months of that Change in Control a Specified Event occurs, then
the Bank will pay the Executive a lump sum cash  payment, 30 days after  the
Specified  Event, equal to two times the Executive’s base salary in effect on the day before the date of the Specified Event
(less applicable withholding). For example, if the Bank experiences a Change in
Control on August 1, 2020, and the Executive is involuntarily terminated
without cause on April 1, 2021, on May 1, 2021 the Bank would make a lump sum payment to the Executive equal to two times the
Executive’s base salary in effect on March 31, 2021.

The following terms used in this Agreement
have the meanings set forth below:

a.             “Change in Control” means a change in control within the meaning of
Internal Revenue Code Section 409A and Internal Revenue Service guidance under
Code Section 409A (e.g., Q&A 12 of IRS Notice 2005-1).

b.             “Specified
Event” means any of the following:

i.                                          the Executive is assigned to a work location
outside the Baltimore metropolitan area;

ii.                                       the Executive is involuntarily terminated
without cause (with “cause” being defined for this purpose as material
misconduct in the course of the executive’s employment with the Bank); or

iii.                                    the Executive’s title, responsibilities or
authorities with the Bank are materially diminished.

This Agreement contains the entire understanding of
the Bank and the Executive with respect to the subject matter of this
Agreement.

Prior to the date of a Change in Control of the
Bank, the Bank have the right, in its sole and absolute discretion, to amend or terminate this
Agreement, from time to time, in any manner, and any amendment or termination
of this Agreement by the Bank shall, upon adoption by the Board of Directors 

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of the Bank, become and be binding on the Executive without any
requirement for consent by or other action by the Executive. The Bank shall
give written notice to the Executive of any amendment or termination of this
Agreement by the Bank as promptly as practical after the adoption of the
amendment or termination. This Agreement (as previously amended) shall become
irrevocable upon a Change in Control of the Bank.

If any provision of the Agreement is held to be
illegal or void, such illegality or invalidity shill not affect the remaining
provisions of the Agreement, but shall be fully severable, and the Agreement
shall be construed and enforced as if said illegal or invalid provision had
never been inserted in this Agreement. The laws of the State of Maryland shall
govern, control and determine all questions of law arising with respect to the
Agreement and the interpretation and validity of its respective provisions,
except where those laws are preempted by the laws of the United States.

IN WITNESS WHEREOF, the Bank and the Executive have caused this Agreement to be executed,
effective as specified above.

	
  ATTEST/WITNESS:

  	
   

  	
   

  	
   

  	
  BRADFORD BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kimberly A.
  Ruckle

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ John O. Mitchell, III

  
	
  Print: Kimberly
  A. Ruckle

  	
   

  	
   

  	
   

  	
  Print Name:

  	
   

  	
  John O. Mitchell, III

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Kimberly A. Ruckle

  	
   

  	
   

  	
   

  	
  /s/ David
  L. Costello, III

  
	
  Print: Kimberly
  A. Ruckle

  	
   

  	
   

  	
   

  	
  David L. Costello, III

  
											

 

 

 2Exhibit
10.6

FORM OF

BRADFORD
BANCORP, INC.

 EMPLOYMENT AGREEMENT

THIS
AGREEMENT (the “Agreement”), made this _____ day of
_____________, 2007, by and between BRADFORD BANCORP, INC., a
federally chartered corporation (the “Company”), and [Name] (“Executive”).

WHEREAS, Executive serves in a position of
substantial responsibility; and

WHEREAS, the Company wishes to assure
Executive’s services for the term of this Agreement; and

WHEREAS, Executive is willing to serve in
the employ of the Company during the term of this Agreement.

NOW, THEREFORE, in consideration of the
mutual covenants contained in this Agreement, and upon the other terms and
conditions provided for in this Agreement, the parties hereby agree as follows:

1.             Employment.   The Company will employ Executive as [position].  Executive
will perform all duties and shall have all powers commonly incident to his
position, including [position details] or
which, consistent with his position, the Board of Directors of the Company (the
“Board”) delegates to Executive. 
Executive also agrees to serve, if elected, as an officer and/or
director of any subsidiary or affiliate of the Company and to carry out the
duties and responsibilities reasonably appropriate to those offices.

2.             Location
and Facilities. 
The Company will furnish Executive with the working facilities and staff
customary for executive officers with the titles and duties set forth in
Section 1 and as are necessary for him to perform his duties.  The location of such facilities and staff
shall be at the principal administrative offices of the Company and Bradford
Bank (the “Bank”), or at such other site or sites customary for such offices.

3.             Term.

a.                                       The
term of this Agreement shall include: (i) the initial term, consisting of the
period commencing on the date of this Agreement (the “Effective Date”) and
ending on the third anniversary of the Effective Date, plus (ii) any and all
extensions of the initial term made pursuant to this Section 3.

b.                                      Commencing
on the first anniversary of the Effective Date and continuing on each
anniversary of the Effective Date thereafter, the disinterested members of the
Board may extend the Agreement term for an additional year, so that the
remaining term of the Agreement again becomes thirty-six (36) months, unless Executive
elects not to extend the term of this Agreement by giving written notice in
accordance with Section 18 of this Agreement. 
The Board will review the Agreement and Executive’s performance annually
for purposes of determining whether to extend the Agreement term and will
include the rationale and results of its review in the minutes of its
meeting.  The Board will notify Executive
as soon as possible after its annual review whether it has determined to extend
the Agreement.

4.             Base
Compensation.

a.                                       For
his services as [position], the Company agrees to
pay Executive an annual base salary at the rate of $[amount]
per year, payable in accordance with customary payroll practices.

b.                                      During
the term of this Agreement, the Board will review the level of Executive’s base
salary at least annually, based upon factors deemed relevant, in order to
determine Executive’s base salary through the remaining term of the Agreement.

5.             Bonuses.  Executive will participate in discretionary
bonuses or other incentive compensation programs that the Company or the Bank
may sponsor for or award from time to time to senior management employees.

6.             Benefit
Plans.  Executive
will participate in life insurance, medical, dental, pension, profit sharing,
retirement and stock-based compensation plans and other programs and
arrangements that the Company or the Bank may sponsor or maintain for the
benefit of their employees at a level comparable to other senior management
employees.

7.             Vacations
and Leave.

a.                                       Executive
may take vacations and other leave in accordance with applicable policy for
senior executives, or otherwise as approved by the Board.

b.                                      In
addition to paid vacations and other leave, the Board may grant Executive a
leave or leaves of absence, with or without pay, at such time or times and upon
such terms and conditions as the Board, in its discretion, may determine.

8.             Expense
Payments and Reimbursements.  The
Company will reimburse Executive for all reasonable out-of-pocket
business expenses incurred in connection with his services under this Agreement
upon substantiation of such expenses in accordance with applicable policies of
the Company.

9.             Loyalty
and Confidentiality.

a.                                       During the term of this Agreement,
Executive will devote all his business time, attention, skill, and efforts to
the faithful performance of his duties under this Agreement; provided, however,
that from time to time, Executive may serve on the boards of directors of, and
hold any other offices or positions in, companies or organizations that will not
present any conflict of interest with the Company or any of its subsidiaries or
affiliates, unfavorably affect the performance of Executive’s duties pursuant
to this Agreement, or violate any applicable statute or regulation.  Executive will not engage in any business or
activity contrary to the business affairs or interests of the Company or any of
its subsidiaries or affiliates.

b.                                      Nothing
contained in this Agreement will prevent or limit Executive’s right to invest
in the capital stock or other securities or interests of any business
dissimilar from that of the Company, or, solely as a passive, minority
investor, in any business.

c.                                     Executive
agrees to maintain the confidentiality of any and all information concerning
the operations or financial status of the Company and its affiliates; the names
or addresses of any borrowers, depositors and other customers; any information
concerning or obtained from such customers; and any other information
concerning the Company or its affiliates to which he may be exposed during the
course of his employment.  Executive
further agrees that, unless required by law or specifically permitted by the
Board in writing, he will not disclose to any person or entity, either during
or subsequent to his employment, any of the above-mentioned information
which is not generally known to the public, nor will he use the information in
any way other than for the benefit of the Company or its affiliates.

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10.          Termination
and Termination Pay.  Subject
to Section 11 of this Agreement, Executive’s employment under this Agreement
may be terminated in the following circumstances:

a.                                       Death.  Executive’s employment under this Agreement
will terminate upon his death during the term of this Agreement, in which event
Executive’s estate will receive the compensation due to Executive through the
last day of the calendar month in which his death occurred.

b.                                      Retirement.  This Agreement will terminate upon Executive’s
retirement on or after age 65.

c.             Disability.

i.                                          The
Board or Executive may terminate Executive’s employment after having determined
Executive has a Disability.  For purposes
of this Agreement, “Disability” means the Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months.  The Board will determine whether or not
Executive is and continues to be permanently disabled for purposes of this
Agreement in good faith, based upon competent medical advice and other factors
that the Board reasonably believes to be relevant.  As a condition to any benefits, the Board may
require Executive to submit to physical or mental evaluations and tests as the
Board or its medical experts deem reasonably appropriate.

ii.                                       In
the event of his Disability, Executive will no longer be obligated to perform
services under this Agreement.  The
Company will pay Executive, as Disability pay, an amount equal to one hundred
percent (100%) of Executive’s rate of base salary in effect as of the date of
his termination of employment due to Disability. The Company will make
Disability payments on a monthly basis commencing on the first day of the month
following the effective date of Executive’s termination of employment due to
Disability and ending on the earlier of: (A) the date he returns to full-time
employment in the same capacity as he was employed prior to his termination for
Disability; (B) his death; (C) his attainment of age 65; or (D) the date this
Agreement would have expired had Executive’s employment not terminated by
reason of Disability.  The Company will
reduce Disability payments by the amount of any short- or long-term disability
benefits payable to Executive under any other disability programs sponsored by
the Company.  In addition, during any
period of Executive’s Disability, the Company will continue to provide
Executive and his dependents, to the greatest extent possible, with continued
coverage under all benefit plans (including, without limitation, retirement
plans and medical, dental and life insurance plans) in which Executive and/or
his dependents participated prior to his Disability on the same terms as if he
remained actively employed by the Company.

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d.             Termination for Cause.

i.                                          The
Board may, by written notice to Executive in the form and manner specified in
this paragraph, immediately terminate his employment at any time for “Cause.”  Executive shall have no right to receive
compensation or other benefits for any period after termination for Cause,
except for already vested benefits. 
Termination for Cause shall mean termination because of, in the good
faith determination of the Board, Executive’s:

(1)                                  Personal
dishonesty;

(2)                                  Incompetence;

(3)                                  Willful
misconduct;

(4)                                  Breach
of fiduciary duty involving personal profit;

(5)                                  Intentional
failure to perform stated duties;

(6)                                  Willful
violation of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order; or

(7)                                  Material
breach of any provision of this Agreement.

ii.                                       Notwithstanding
the foregoing, Executive’s termination for Cause will not become effective
unless the Company has delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of a majority of the entire membership of the
Board, at a meeting of the Board called and held for the purpose of finding
that, in the good faith opinion of the Board (after reasonable notice to Executive
and an opportunity for Executive to be heard before the Board with counsel),
Executive engaged in of the conduct described above and specifying the
particulars of this conduct.

e.                                       Voluntary
Termination by Executive.  In
addition to his other rights to terminate under this Agreement, Executive may
voluntarily terminate employment during the term of this Agreement upon at
least sixty (60) days prior written notice to the Board.  Upon Executive’s voluntary termination, he
will receive only his compensation and vested rights and benefits through the
date of his termination.

f.                                         Without
Cause or With Good Reason.

i.                                          In
addition to termination pursuant to Sections 10(a) through 10(e), the Board
may, by written notice to Executive, immediately terminate his employment at
any time for a reason other than Cause (a termination “Without Cause”) and
Executive may, by written notice to the Board, immediately terminate this
Agreement at any time within sixty (60) days following an event constituting “Good
Reason,” as defined below  (a termination
“With Good Reason”).

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ii.                                       Subject
to Sections 11 and 26 of this Agreement, in the event of termination under this
Section 10(f), Executive will receive his base salary as of his termination
date for the remaining term of the Agreement, with such amount paid in one lump
sum within ten (10) calendar days of his termination.  Executive will also continue to participate
in any benefit plans of the Company or the Bank that provide medical, dental
and life insurance coverage for the remaining term of the Agreement, under
terms and conditions no less favorable than the most favorable terms and
conditions provided to senior executives during the same period or, if the
Company or the Bank cannot provide such coverage because Executive is no longer
an employee, the Company or the Bank will provide Executive with comparable
coverage on an individual policy basis, provided, however, that to the extent
required under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations issued thereunder, the aggregate
payments received for such insurance continuation coverage shall not exceed the
applicable dollar limitation under Section 402(g)(1)(B) of the Code for the
year in which Executive terminates employment.

iii.                                    “Good
Reason” exists if, without Executive’s express written consent, the Company
materially breaches any of its obligations under this Agreement.  Without limitation, such a material breach
will occur upon any of the following:

(1)                                  A
material reduction in Executive’s responsibilities or authority in connection
with his employment with the Company;

(2)                                  Assignment
to Executive of duties of a non-executive nature or duties for which he
is not reasonably equipped by his skills and experience;

(3)                                  Failure
of Executive to be nominated or renominated to the Board to the extent
Executive is a Board member prior to the Effective Date;

(4)                                  A
material reduction in salary or benefits contrary to the terms of this
Agreement, or, following a Change in Control as defined in Section 11 of this
Agreement, any material reduction in salary or benefits below the amounts
Executive was entitled to receive prior to the Change in Control;

(5)                                  Termination
of incentive and benefit plans, programs or arrangements, or reduction of
Executive’s participation, that is not applicable to other similarly situated
participants and to such an extent as to materially reduce their aggregate
value below their aggregate value as of the Effective Date;

(6)                                  A
requirement that Executive relocate his principal business office or his
principal place of residence outside of the area consisting of a thirty-five
(35) mile radius from the current main office and any branch of the Company or
the Bank, or the assignment to Executive of duties that would reasonably
require such a relocation; or

(7)           Liquidation or dissolution of the
Company.

iv.                                   Notwithstanding
the foregoing, a reduction or elimination of Executive’s benefits under one or
more benefit plans, programs or arrangements maintained as part of a good
faith, overall reduction or elimination of such plans or benefits, applicable
to all participants in a manner that does not discriminate against Executive
(except as such discrimination may be necessary to comply with law), will not
constitute an event of Good Reason or a material breach of this Agreement,
provided that benefits of the same type or to the same general extent as those
offered under such plans prior to the reduction or elimination are not
available to other officers of the Company or any affiliate under a plan or
plans in or under which Executive is not entitled to participate.

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g.                                      Continuing
Covenant Not to Compete or Interfere with Relationships.  Regardless of anything herein to the
contrary, following a termination by the Company or Executive pursuant to
Section 10(f):

i.                                          Executive’s
obligations under Section 9(c) of this Agreement will continue in effect; and

ii.                                       During
the period ending on the first anniversary of such termination, Executive will
not serve as an officer, director or employee of any bank holding company,
bank, savings association, savings and loan holding company, mortgage company
or other financial institution that offers products or services competing with
those offered by the Company, the Bank or their affiliates from any office
within thirty-five (35) miles from the main office or any branch of the
Company, the Bank or their affiliates and, further, Executive will not
interfere with the relationship of the Company, the Bank or their  affiliates and any of their employees,
agents, or representatives.

iii.                                    Notwithstanding
anything herein to the contrary, the restrictions set forth in the preceding
paragraph (ii) shall not apply in the event Executive notifies the Company
in writing of his decision to waive his right to receive severance and benefit
continuation pursuant to Section 10(f) of this Agreement. Such notice
shall be provided in accordance with Section 18 of this Agreement, within
5 days following the date of termination pursuant to Section 10(f).

h.             To the extent Executive is a member of the Board on the
date of termination of employment, Executive will resign from the Board
immediately following such termination of employment. Executive will be
obligated to tender this resignation regardless of the method or manner of
termination, and such resignation will not be conditioned upon any event or
payment.

11.          Termination
in Connection with a Change in Control.

a.                                       For
purposes of this Agreement, a “Change in Control” means any of the following
events:

i.                                          Merger:
The Company merges into or consolidates with another entity, or merges another
corporation into the Company, and as a result, less than a majority of the
combined voting power of the resulting corporation immediately after the merger
or consolidation is held by persons who were stockholders of the Company
immediately before the merger or consolidation;

ii.                                       Acquisition
of Significant Share Ownership: 
There is filed, or is required to be filed, a report on Schedule 13D or
another form or schedule (other than Schedule 13G) required under Sections
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the
schedule discloses that the filing person or persons acting in concert has or
have become the beneficial owner of 25% or more of a class of the Company’s
voting securities, but this clause (ii) shall not apply to beneficial ownership
of Company voting shares held in a fiduciary capacity by an entity of which the
Company directly or indirectly beneficially owns 50% or more of its outstanding
voting securities;

iii.                                    Change
in Board Composition:  During any
period of two consecutive years, individuals who constitute the Company’s Board
of Directors at the beginning of the two-year period cease for any reason to
constitute at least a majority of the Company’s Board of Directors; provided,
however, that for purposes of this clause (iii), each director who is first
elected by the board (or first nominated by the board for election by the
members) by a vote of at least two-thirds (2/3) of the directors who were
directors at the beginning of the two-year period shall be deemed to have also
been a director at the beginning of such period; or

iv.                                   Sale
of Assets:  The Company sells to a
third party all or substantially all of its assets.

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b.                                      Termination.  Subject to Section 26 of this Agreement,
if within the period ending one year after a Change in Control, (i) the Company
terminates Executive’s employment without Cause, or (ii) Executive voluntarily
terminates his employment With Good Reason, the Company will, within ten
calendar days of the termination of Executive’s employment, make a lump-sum
cash payment to him equal to three times Executive’s average taxable
compensation (as reported on Form W-2) over the five (5) most recently
completed calendar years (or years of employment, annualized for partial years
of employment, if less than five), ending with the year immediately preceding
the effective date of the Change in Control. 
The cash payment made under this Section 11(b) shall be made in lieu of
any payment also required under Section 10(f) of this Agreement because of
Executive’s termination of employment; however, Executive’s rights under
Section 10(f) are not otherwise affected by this Section 11.  Following termination of employment,
executive will also continue to participate in any benefit plans of the Company
or the Bank that provide medical, dental and life insurance coverage upon terms
no less favorable than the most favorable terms provided to senior executives
or, if the Company cannot provide such coverage because Executive is no longer
an employee, the Company will provide Executive with comparable coverage on an
individual policy basis.  The medical,
dental and life insurance coverage provided under this Section 11(b) shall
cease upon the earlier of:  (i) Executive’s
death; (ii) Executive’s employment by another employer other than one of which
he is the majority owner; or (iii) thirty-six (36) months after his termination
of employment, provided, however, that to the extent required under
Section 409(A) of the Code, and the regulations issued thereunder, the
aggregate payments received for such insurance continuation coverage shall not
exceed the applicable dollar limitation under Section 402(g)(1)(B) of the
Code for the year in which Executive terminates employment.

c.                                       The
provisions of Section 11 and Sections 13 through 25, including the defined
terms used in such sections, shall continue in effect until the later of the
expiration of this Agreement or one year following a Change in Control.

12.          Indemnification and Liability
Insurance.

a.                                       Indemnification.  The Company agrees to indemnify Executive
(and his heirs, executors, and administrators), and to advance expenses related
to this indemnification, to the fullest extent permitted under applicable law
and regulations against any and all expenses and liabilities that Executive
reasonably incurs in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his service as an officer
or director of the Company or any of its subsidiaries or affiliates (whether or
not he continues to be an officer or director at the time of incurring any such
expenses or liabilities).  Covered
expenses and liabilities include, but are not limited to, judgments, court
costs, and attorneys’ fees and the costs of reasonable settlements, subject to
Board approval, if the action is brought against Executive in his capacity as
an officer or director of the Company or any of its subsidiaries or
affiliates.  Indemnification for expenses
will not extend to matters related to Executive’s termination for Cause.  Notwithstanding anything in this Section
12(a) to the contrary, the Company will not be required to provide indemnification
prohibited by applicable law or regulation. 
The obligations of this Section 12 will survive the term of this
Agreement by a period of six (6) years.

b.                                      Insurance.  During the period for which the Company must
indemnify Executive, the Company will provide Executive (and his heirs,
executors, and administrators) with coverage under a directors’ and officers’
liability policy, at the Company’s expense, that is at least equivalent to the
coverage provided to directors and senior executives of the Company.

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13.          Reimbursement of Executive’s
Expenses to Enforce this Agreement.  The
Company will reimburse Executive for all out-of-pocket expenses,
including, without limitation, reasonable attorneys’ fees, incurred by
Executive in connection with his successful enforcement of the Company’s
obligations under this Agreement. 
Successful enforcement means the grant of an award of money or the
requirement that the Company take some specified action: (i) as a result of
court order; or (ii) otherwise following an initial failure of the Company to
pay money or take action promptly following receipt of a written demand from
Executive stating the reason that the Company must make payment or take action
under this Agreement.

14.          Limitation of Benefits Under
Certain Circumstances.  If
the payments and benefits pursuant to Section 11 of this Agreement, either
alone or together with other payments and benefits Executive has the right to
receive from the Company, would constitute a “parachute payment” under Section
280G of the Internal Revenue Code of 1986, as amended (the “Code”), the
payments and benefits pursuant to Section 11 shall be reduced or revised, in
the manner determined by Executive, by the amount, if any, which is the minimum
necessary to result in no portion of the payments and benefits under Section 11
being non-deductible to the Company pursuant to Section 280G of the Code and
subject to the excise tax imposed under Section 4999 of the Code.  The Company’s independent public accountants
will determine any reduction in the payments and benefits to be made pursuant
to Section 11; the Company will pay for the accountant’s opinion.  If the Company and/or Executive do not agree
with the accountant’s opinion, the Company will pay to Executive the maximum
amount of payments and benefits pursuant to Section 11, as selected by
Executive, that the opinion indicates have a high probability of not causing
any of the payments and benefits to be non-deductible to the Company and
subject to the excise tax imposed under Section 4999 of the Code.  The Company may also request, and Executive
has the right to demand that the Company request, a ruling from the IRS as to
whether the disputed payments and benefits pursuant to Section 11 have such tax
consequences.   The Company will promptly
prepare and file the request for a ruling from the IRS, but in no event will
the Company make this filing later than thirty (30) days from the date of the
accountant’s opinion referred to above. 
The request will be subject to Executive’s approval prior to filing;
Executive shall not unreasonably withhold his approval.  The Company and Executive agree to be bound
by any ruling received from the IRS and to make appropriate payments to each
other to reflect any IRS rulings, together with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code.  Nothing contained in this Agreement shall
result in a reduction of any payments or benefits to which Executive may be
entitled upon termination of employment other than pursuant to Section 11
hereof, or a reduction in the payments and benefits specified in Section 11,
below zero.

15.          Injunctive Relief.  Upon a breach or threatened
breach of Section 10(g) of this Agreement or the prohibitions upon disclosure
contained in Section 9(c) of this Agreement, the parties agree that there is no
adequate remedy at law for such breach, and the Company shall be entitled to
injunctive relief restraining Executive from such breach or threatened breach,
but such relief shall not be the exclusive remedy for a breach of this
Agreement.  The parties further agree
that Executive, without limitation, may seek injunctive relief to enforce the
obligations of the Company under this Agreement.

16.          Successors and Assigns.

a.                                       This
Agreement shall inure to the benefit of and be binding upon any corporate or
other successor of the Company which shall acquire, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or substantially all of the
assets or stock of the Company.

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b.                                      Since
the Company is contracting for the unique and personal skills of Executive,
Executive shall not assign or delegate his rights or duties under this
Agreement without first obtaining the written consent of the Company.

17.          No Mitigation.  Executive shall not be
required to mitigate the amount of any payment provided for in this Agreement
by seeking other employment or otherwise and no such payment shall be offset or
reduced by the amount of any compensation or benefits provided to Executive in
any subsequent employment.

18.          Notices.  All notices, requests,
demands and other communications in connection with this Agreement shall be
made in writing and shall be deemed to have been given when delivered by hand
or 48 hours after mailing at any general or branch United States Post Office,
by registered or certified mail, postage prepaid, addressed to the Company at
its principal business office and to Executive at his home address as
maintained in the records of the Company.

19.          No Plan Created by this Agreement.  Executive and the Company
expressly declare and agree that this Agreement was negotiated among them and
that no provision or provisions of this Agreement are intended to, or shall be
deemed to, create any plan for purposes of the Employee Retirement Income
Security Act of 1974 (“ERISA”) or any other law or regulation, and each party
expressly waives any right to assert the contrary.  Any assertion in any judicial or
administrative filing, hearing, or process that an ERISA plan was created by
this Agreement shall be deemed a material breach of this Agreement by the party
making the assertion.

20.          Amendments.  No amendments or additions to this Agreement
shall be binding unless made in writing and signed by all of the parties,
except as herein otherwise specifically provided.

21.          Applicable Law.  Except to the extent preempted by federal
law, the laws of the State of Maryland shall govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance or
otherwise.

22.          Severability.  The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any one provision shall not affect the validity or enforceability of the other
provisions of this Agreement.

23.          Headings.  Headings contained in this Agreement are for
convenience of reference only.

24.          Entire Agreement.  This Agreement, together with any
modifications subsequently agreed to in writing by the parties, shall
constitute the entire agreement among the parties with respect to the foregoing
subject matter, other than written agreements applicable to specific plans,
programs or arrangements described in Sections 5 and 6.

25.          Source of Payments.  Notwithstanding any provision in this
Agreement to the contrary, to the extent payments and benefits, as provided for
under this Agreement, are paid or received by Executive under the Employment
Agreement in effect between Executive and the Bank, the payments and benefits
paid by the Bank will be subtracted from any amount or benefit due
simultaneously to Executive under similar provisions of this Agreement.  Payments will be allocated in proportion to
the level of activity and the time expended by Executive on activities related
to the Company and the Bank, respectively, as determined by the Company and the
Bank.

26.          Effective of Code Section 409A.  Notwithstanding anything in this Agreement to
the contrary, if the Company in good faith determines, as of the effective date
of Executive’s termination of employment, that an amount (or any portion of an
amount) payable to Executive hereunder, is required to be suspended or delayed
for six months in order to satisfy the requirements of Section 409A of the
Code, then the Company will so advise Executive, and any such payment (or the
minimum amount thereof) shall be suspended and accrued for six months,
whereupon such amount or portion thereof shall be paid to Executive in a lump
sum (together with interest thereon at the then-prevailing prime rate) on the
first day of the seventh month following the effective date of Executive’s
termination of employment.

 9
 

IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement on ____________, 2007.

	
  ATTEST:

  	
  BRADFORD BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
  Witness

  	
   

  	
  For the Entire Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  [Name]

  

 

 10

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