OLD LINE BANCSHARES INC (Form: 10-K, Received: 03/30/2011 12:57:44)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made as of the 28 th day of January, 2011, between Old Line Bank (the "Bank" or “Employer”), a Maryland-chartered commercial bank, and James W. Cornelsen, a resident of the State of Maryland (the "Employee").

RECITALS:

The parties hereto entered into an employment agreement dated March 31, 2003 ("Original Agreement");

The Original Agreement was amended on December 31, 2004, December 30, 2005, January 1, 2007, January 1, 2008, January 1, 2009 and January 1, 2010; and

The parties hereto desire to amend and restate the Original Agreement, as amended, as provided herein.

In consideration of the above premises and the mutual agreements hereinafter set forth, the parties hereby agree as follows:

1. DEFINITIONS . Whenever used in this Agreement, the following terms and their variant forms will have the meaning set forth below:

1.1 " Agreement " means this Agreement and any exhibits incorporated herein together with any amendments hereto made in the manner described in this Agreement.

1.2 " Affiliate " means any business entity which controls the Employer, is controlled by or is under common control with the Employer.

1.3 " Area " means the geographic area within a radius of 25 miles of Employer’s corporate headquarters. It is the express intent of the parties that the Area as defined herein is the area where the Employee performs or performed services on behalf of the Employer under this Agreement as of, or within a reasonable time prior to, the termination of the Employee's employment hereunder.

1.4 " Board " means the board of directors of the Bank.

1.5 " Business of the Employer " means the business conducted by the Employer, which is community banking with less than one billion dollars in assets.

1.6 " Cause " means, any of the following events or conduct preceding a termination of employment initiated by the Employer:

(a) any act that constitutes, on the part of the Employee, fraud or dishonesty toward the Employer;

(b) the conviction of the Employee of a felony or crime involving moral turpitude;

(c) the Employee's entering into any transaction or contractual relationship (other than this Agreement) with, or diversion of business opportunity from, the Employer (other than on behalf of the Employer or with the prior written consent of the Board); provided, however, that in the case of this Clause (c), such conduct will not constitute Cause unless the Board delivers to the Employee written notice setting forth (1) the conduct deemed to qualify as Cause, (2) reasonable remedial action that might remedy such objection, and (3) a reasonable time (not less than thirty (30) days) within which the Employee may take such remedial action, and the Employee has not taken the specified remedial action with the specified reasonable time;

(d) the Employee breaches the covenants contained in Sections 6, 7 or 8 hereof;

(e) conduct by the Employee that results in removal of the Employee as an officer or employee of the Employer pursuant to a written order by any regulatory agency with authority or jurisdiction over the Employer; or

1.7 " Company Information " means Confidential Information and Trade Secrets.

1.8 " Confidential Information " means data and information relating to the business of the Employer (which does not rise to the status of a Trade Secret) which is or has been disclosed to the Employee or of which the Employee became aware as a consequence of or through the Employee's relationship to the Employer and which has value to the Employer and is not generally known to its competitors. Confidential Information does not include any data or information that has been voluntarily disclosed to the public by the Employer (except where such public disclosure has been made by the Employee without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.

1.9 " Change in Control " means any one of the following events first to occur after the completion of the initial public offering of the common stock of the Bank:

(a) the acquisition by any person or persons acting in concert of the then outstanding voting securities of either the Bank or the Company, if, after the transaction, the acquiring person (or persons) owns, controls or holds with power to vote thirty percent (30%) or more of any class of voting securities of the Bank or the Company, as the case may be, or such other transaction as may be described under 12 C.F.R. Section 225.41(b)(1) or any successor thereto;

(b) within any twelve-month period (beginning on or after the Effective Date) the persons who were directors of either the Bank or the Company immediately before the beginning of such twelve-month period (the "Incumbent Directors") cease to constitute at least a majority of such board of directors; provided that any director who was not a director as of the Effective Date will be deemed to be an Incumbent Director if that director was elected to such board of directors by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors;

(c) the approval by the stockholders of either the Bank or the Company of a reorganization, merger or consolidation, with respect to which persons who were the stockholders of either the Bank or the Company, as the case may be, immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting power entitled to vote in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities; or

(d) the sale, transfer or assignment of all or substantially all of the assets of the Company or the Bank to any third party.

1.10 " Effective Date " means March 31, 2003.

1.11 " Good Reason " means, any of the following events or conduct preceding a termination of employment initiated by the Employee:

(a) a material diminution in the powers, responsibilities or duties of the Employee hereunder or a material change as to whom Employee reports and who reports to Employee;

(b) the failure of the Board to elect the Employee as the President and Chief Executive Officer of the Bank and the Company;

(d) the failure of the Board or the board of directors of the Company to nominate the Employee for re-election following expiration of each of the Employee's terms of service on the Board or the board of directors of the Company that arises during the Term (as defined below);

(e) a change in the location of the principal office of Employee more than thirty five (35) miles from its existing location;

(f) a material reduction of benefits provided to Employee under Section 4.6 of this Agreement during the Term or any extensions thereof unless such reduction is reasonably related to the financial performance of the Employer or the performance of Employee under this Agreement; or

(g) a material reduction in the dollar amount of any bonus paid to Employee under a Board adopted bonus plan during the Term or any extensions thereof unless such reduction is reasonably related to the failure of Employee to meet all or part of the criteria for a bonus under a Board approved bonus plan or the financial performance of Employer subject to any regulatory restriction on the payment of a bonus or any portion thereof.

provided, however, that no termination of employment which is triggered by any conduct or event described in this Section 1.11 shall constitute a termination of employment for Good Reason unless the Employee has first provided the Employer with the opportunity to cure the event or conduct by giving the Employer a written notice describing in sufficient detail the Employee's belief that a Good Reason exists, which notice is given within ninety (90) days of the initial existence of the condition alleged to constitute Good Reason, and the condition is not cured within thirty (30) days from the date such notice is received by the Employer.

1.12 " Permanent Disability " means the total inability of the Employee to perform the Employee's duties under this Agreement for a period of one hundred and eighty (180) consecutive days as certified by a physician chosen by the Employer and reasonably acceptable to the Employee or by a physician selected by Employer’s long term disability insurance carrier in the event Employer has such insurance coverage.

1.13 " Trade Secrets " means information including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which:

(a) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

1.14 “ Company ” means any entity that, on or after the Effective Date, controls the Bank.

2. DUTIES.

2.1 The Employee is employed as the President and Chief Executive Officer of the Bank and the Company, subject to the direction of the Board or its designee, must perform and discharge well and faithfully the duties which may be assigned to him from time to time by the Employer in connection with the conduct of its business. The duties and responsibilities of the Employee are set forth on Exhibit A attached hereto.

2.2 In addition to the duties and responsibilities specifically assigned to the Employee pursuant to Section 2.1 hereof, the Employee must:

(a) devote substantially all of the Employee's time, energy and skill during regular business hours to the performance of the duties of the Employee's employment (reasonable vacations and reasonable absences due to illness excepted) and faithfully and industriously perform such duties;

(b) diligently follow and implement all management policies and decisions communicated to him by the Board; and

2.3 The Employee must devote the Employee's entire business, time, attention and energies to the Business of the Employer and must not during the Term of this Agreement be engaged (whether or not during normal business hours) in any other business or professional activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage; but this will not be construed as preventing the Employee from:

(a) investing the Employee's personal assets in businesses which are not in competition with the Business of the Employer and which will not require any services on the part of the Employee in their operation or affairs and in which the Employee's participation is solely that of an investor;

(b) purchasing securities in any corporation whose securities are regularly traded provided that such purchase will not result in him collectively owning beneficially at any time five percent (5%) or more of the equity securities of any business in competition with the Business of the Employer; and

(c) participating in civic and professional affairs and organizations and conferences, preparing or publishing papers or books or teaching so long as the Board approves of such activities prior to the Employee's engaging in them.

2.4 Directorship . Employee will also be appointed to and serve as a member of the Board of Directors of the Bank.

3. TERM AND TERMINATION.

3.1 Term . The initial term and any extensions thereof made pursuant to this Section 3.1 are referred to as the "Term." The Term of this Agreement is for four (4) years. As provided in the fifth amendment to the Original Agreement dated January 1, 2009, the Term of this Agreement expires on March 30, 2014. On or before the 2011 anniversary of the Effective Date and on or before each succeeding consecutive anniversary of the Effective Date while this Agreement is in effect the Board shall meet and may, in its sole discretion, extend the Term for one additional year or such greater Term as the Board deems appropriate.

3.2 Termination . The employment of the Employee under this Agreement may be terminated prior to the expiration of the Term only as follows, subject to the conditions set forth below:

3.2.1 By the Employer:

(a) for Cause at any time, upon written notice to the Employee, in which event the Employer will have no further obligation to the Employee except for the payment of any amounts due and owing under Section 4 on the effective date of the termination; or

(b) without Cause or upon the Permanent Disability of Employee at any time, provided that the Employer gives the Employee sixty (60) days' prior written notice of its intent to terminate, in which event the Employer will be required to make the termination payments under Section 3.7.

3.2.2 By the Employee:

(a) for Good Reason at any time, in which event the Employer will be required to make the termination payments under Section 3.7; or

(b) without Good Reason, provided that the Employee gives the Employer sixty (60) days' prior written notice of the Employee's intent to terminate, in which event: (1) the Employer will have no further obligation to the Employee except for future payment of any amounts due and owing under Section 4 on the effective date of the termination and (2) Employee forfeits any stock option grants that are not vested.

3.2.3 By the Employee:

(a) within six (6) months following a Change in Control; provided that the Employee gives at least thirty (30) days' prior written notice to the Employer of the Employee's intention to terminate this Agreement with such resignation to be effective immediately, in which event the Employer will be required to make a termination payment under Section 3.7; or

(b) prior to the date on which a Change in Control occurs if the Employee can demonstrate that a third party has taken steps reasonably calculated to effect a Change in Control or in connection with or anticipation of a Change in Control, in which event the Employer will be required to make a termination payment under Section 3.7.

3.2.4 At any time upon mutual, written agreement of the parties, in which event the Employer will have no further obligation to the Employee except for the payment of any amounts due and owing under Section 4 on the effective date of termination unless otherwise set forth in the written agreement.

3.2.5 Immediately upon the Employee's death, in which event the Employer will have no further obligation to the Employee except for: (1) the payment of any amounts due and owing under Section 4 on the date of Employee's death; (2) all non vested stock options shall immediately vest and (3) Employer will pay the then current Base Salary to Employee's estate for twelve (12) months after the date on which Employed died.

3.2.6 Upon the Permanent Disability of Employee, provided Employee gives Employer sixty (60) days or such other notice as may be reasonable under the circumstance, in which event Employer will be required to make the termination payments under Section 3.7.

3.3 Effect of Termination . Termination of the employment of the Employee pursuant to Section 3.2 will be without prejudice to any right or claim which may have previously accrued to either the Employer or the Employee hereunder and will not terminate, alter, supersede or otherwise affect the terms and covenants and the rights and duties prescribed in this Agreement.

3.4 Suspension With Pay . Nothing contained herein will preclude the Employer from releasing the Employee of the Employee's normal duties and suspending Employee, with pay, during the pendency of any investigation or examination to determine whether or not Cause exists for termination of employee.

3.5 Suspension Without Pay . If Employee is suspended and/or temporarily prohibited from participating in the conduct of the Employer's affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, the Employer's obligations under this Agreement will be suspended as of the date of service thereof, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Employer may in its discretion:

(a) pay Employee all or part of the compensation withheld while its contract obligations were suspended; and/or

(b) reinstate (in whole or in part) any of its obligations which were suspended.

3.6 Other Regulatory Requirements . If the Bank is in default, as defined in Section (3)(x)(1) of the Federal Deposit Insurance Act, all obligations under this Agreement will terminate as the date of such default, but no vested rights of the Employee will be affected. Further, all obligations under this Agreement will be terminated, except, to the extent determined that continuation of the Agreement is necessary for the continued operation of the Bank:

(a) by the Director (the "Director") of the Federal Deposit Insurance Corporation (“FDIC”) or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority of the Federal Deposit Insurance Act; or

(b) by the Director or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems relating to the operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition.

3.7 Termination Payments . In the event this Agreement is terminated by the Employer pursuant to Section 3.2.1(b) or by the Employee pursuant to Section 3.2.2(a) or 3.2.6 and a Change in Control has not occurred, then commencing with the first payroll date immediately following the effective date of such termination, the Employer will pay to the Employee as severance pay and liquidated damages an amount equal to the Average Annual Compensation (as defined below) for a period equal to the remaining Term. In the event a Change in Control has occurred or in anticipation thereof and this Agreement is terminated by Employer or by Employee pursuant to Section 3.2.3, the Employee shall be entitled to a lump sum payment equal to the excess of (a) 2.99 times his Average Annual Compensation over (b) the aggregate present value, as determined for federal income tax purposes, of all other payments to the Employee in the nature of compensation that are treated for federal income tax purposes as contingent on the Change in Control, and shall be paid such lump sum payment by Employer within 24 hours of the effective date of termination of this Agreement. As used herein, the term "Average Annual Compensation" means the Employee’s average annual taxable compensation paid by the Employer during the most recent five (5) taxable years ending before the date the Change in Control occurs (or such portion of such period during which the Employee was employed by the Employer.

Notwithstanding any other provisions to this Agreement to the contrary, if the aggregate of the payments provided for in this Agreement and other payments and benefits which the Employee has the right to receive from the Employer (the "Total Payments") would constitute a "parachute payment," as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), the Employee shall receive the Total Payments unless (a) the after-tax amount that would be retained by the Employee (after taking into account all federal, state and local income taxes payable by the Employee and the amount of any excise taxes payable by the Employee under Section 4999 of the Code that would be payable by the Employee (the "Excise Taxes")) if the Employee were to receive the Total Payments has an aggregate value less than (b) the after-tax amount that would be retained by the Employee (after taking into account all federal, state and local income taxes payable by the Employee) if the Employee were to receive the Total Payments reduced to the largest amount as would result in no portion of the Total Payments being subject to Excise Taxes (the "Reduced Payments"), in which case the Employee shall be entitled only to the Reduced Payments. If the Employee is to receive the Reduced Payments, the Employee shall be entitled to determine which of the Total Payments, and the relative portions of each, are to be reduced.

Also notwithstanding the foregoing, if Executive is a specified employee within the meaning of Section 409A of the Code, no amount payable under Section 3.7 shall be paid before the date that is six months after the effective date of termination of this Agreement, or, if earlier, the date of the Executive’s death, except to the extent that this Agreement may permit payments within that period without causing any amount payable pursuant to this Agreement to be included in the Executive’s gross income pursuant to Section 409A(a)(1)(A) of the Code prior to the year in which the payments are received by the Executive. Any payment deferred under this Section 3.7 shall be paid on the Employer’s first normal payroll date after the six-month date or the date of the Executive’s death, as applicable.

The provisions of this Agreement providing for payments upon a termination of this Agreement are intended to specify a “separation from service” payment event within the meaning of Section 409A(a)(2)(A)(i) of the Code and the regulations thereunder, and shall be construed accordingly.

4. COMPENSATION AND BENEFITS.

4.1 Compensation . The Employee will receive the following salary and benefits:

(a) Base Salary . During the Term, the Employee will receive a base salary at the rate of $284,625 per annum, payable in substantially equal installments in accordance with the Bank's regular payroll practices ("Base Salary"). The Employee's Base Salary will be reviewed by the Board annually, and the Bank may grant Employee an increase in such amount, if any, as may be determined by the Board in its sole discretion.

(b) Incentive Compensation .

(i) In addition to Employee's Base Salary under Section 4.1(a), within ninety (90) days following the end of each fiscal year of the Employer's operations, the Employer may pay the Employee a cash or non cash bonus as determined each year by the Board.

(ii) Provided that sufficient options are available for grant under a stockholder approved stock option or equity incentive plan, on an annual basis, the Bank or the Company shall grant options to Employee to purchase not less than 3,750 shares of stock in the Bank or the Company or such greater amount as may be determined by the Board of Directors or an appropriate committee of the Board of Directors of the Bank or the Company. The exercise price for the options shall be no less than the fair market value of the Bank's or the Company's common stock on the date the options are granted, the options must be exercised within ten (10) years of the date of grant and the options shall be subject to such vesting terms as the Board of Directors or an appropriate committee of the Board of Directors of the Bank or the Company determines from time to time. Notwithstanding anything to the contrary contained in this Section 4.1.(b)(ii), the options to be granted pursuant to this Section 4.1.(b)(ii) will only be evidenced by, and will be subject to the terms and conditions of, a stock option agreement to be entered into between the Bank and Employee or the Company and Employee.

(iii) The Employee will also be entitled to participate in such other bonus, incentive and other executive compensation programs as are made available to senior management of the Employer from time to time.

The bonus amounts which may be payable to the Employee pursuant to this Section 4.1(b) is referred to herein as "Incentive Compensation".

4.2 Compensation as a Director . The Employee will not be compensated for attendance at regular and special Board meetings.

4.3 Automobile . The Bank will make available to the Employee an automobile equivalent in value to the vehicle provided to Employee immediately prior to the date of this Agreement to be utilized by Employee for business and personal use as is customary for presidents of financial institutions in the Area.

4.4 Business Expenses; Memberships . The Employer specifically agrees to reimburse the Employee for (a) reasonable business (including travel) expenses incurred by the Employee in the performance of the Employee's duties hereunder, as approved from time to time by the Board, and (b) the dues and business related expenditures, including initiation fees, associated with membership in professional associations which are commensurate with the Employee's position; provided, however, that the Employee must, as a condition of reimbursement, submit verification of the nature and amount of such expenses in accordance with reimbursement

policies from time to time adopted by the Employer and in sufficient detail to comply with rules and regulations promulgated by the Internal Revenue Service.

4.5 Vacation . On a non-cumulative basis the Employee will be entitled to vacation in each year of this Agreement in accordance with the Bank's vacation policy as then in effect, during which the Employee's Base Salary will be paid in full.

4.6 Benefits . In addition to the Base Salary and Incentive Compensation, the Employee will be entitled to such benefits as may be available from time to time for executives of the Employer similarly situated to the Employee or for Employee individualy. All such benefits will be awarded and administered in accordance with the Employer's standard policies and practices. Such benefits may include, by way of example only, profit-sharing plans, retirement, life and disability insurance benefits and such other benefits as the Employer deems appropriate.

4.7 Withholding . The Employer may deduct from each payment of compensation hereunder all amounts required to be deducted and withheld in accordance with applicable federal and state income, FICA and other withholding requirements.

5. COMPANY INFORMATION .

5.1 Ownership of Information . All Company Information received or developed by the Employee while employed by the Employer will remain the sole and exclusive property of the Employer.

5.2 Obligations of the Employee . The Employee agrees (a) to hold Company Information in strictest confidence, and (b) not to use, duplicate, reproduce, distribute, disclose or otherwise disseminate Company Information or any physical embodiments thereof and may in no event take any action causing or fail to take any action necessary in order to prevent any Company Information from losing its character or ceasing to qualify as Confidential Information or a Trade Secret. In the event that the Employee is required by law to disclose any Company Information, the Employee will not make such disclosure unless (and then only to the extent that) the Employee has been advised by the Company’s legal counsel that such disclosure is required by law and then only after prior written notice is given to the Employer when the Employee becomes aware that such disclosure has been requested and is required by law. This Section 5 will survive the termination of this Agreement with respect to Confidential Information for so long as it remains Confidential Information, but for no longer than three (3) years following termination of this Agreement, and this Section 5 will survive termination of this Agreement with respect to Trade Secrets for so long as is permitted by the then-current Maryland Trade Secrets Act.

5.3 Delivery upon Request or Termination . Upon request by the Employer, and in any event upon termination of employment with the Employer, the Employee will promptly deliver to the Employer all property belonging to the Employer, including without limitation, all Company Information then in the Employee's possession or control.

6. NON-COMPETITION . The Employee agrees that during the Term hereunder and, in the event of the Employee's termination of employment for any reason, thereafter for a period equal to the lesser of (a) eighteen (18) months; or (b) the period during which the Employee is to be paid monthly termination payments, if any, in accordance with Section 3.7 hereof, the Employee will not (except on behalf of or with the prior written consent of the Employer), within the Area, either directly or indirectly, on the Employee's own behalf or in the service or on behalf of others, as a principal, partner, officer, director, manager, supervisor, administrator, consultant, executive employee or in any other capacity which involves duties and responsibilities similar to those undertaken for the Employer, engage in any business which is the same as or essentially the same as the Business of the Employer.

7. NON-SOLICITATION OF CUSTOMERS . The Employee agrees that during the Term hereunder and, in the event of the Employee's termination of employment for any reason, thereafter for a period equal to the lesser of (a) eighteen (18) months; or (b) the period during which the Employee is to be paid monthly termination payments, if any, in accordance with Section 3.7 hereof, the Employee will not (except on behalf of or with the prior written consent of the Employer), within the Area, on the Employee's own behalf or in the service or on behalf of others, solicit, divert or appropriate or attempt to solicit, divert or appropriate, directly or by assisting others, any business from any of the Employer's customers, including actively sought prospective customers, with whom the Employee has or had material contact during the last two (2) years of the Employee's employment, for purposes of providing products or services that are competitive with those provided by the Employer.

8. NON-SOLICITATION OF EMPLOYEES . The Employee agrees that during the Term hereunder and, in the event of the Employee's termination of employment for any reason, thereafter for a period equal to the lessor of (a) eighteen (18) months; or (b) the period during which the Employee is to be paid monthly termination payments, if any, in accordance with Section 3.7 hereof, the Employee will not, except for Employee’s Administrative Assistant, within the Area, on the Employee's own behalf or in the service or on behalf of others, solicit, or recruit or attempt to solicit or recruit, directly or by assisting others, any employee of the Employer or its Affiliates, whether or not such employee is a full-time employee or a temporary employee of the Employer or its Affiliates and whether or not such employment is pursuant to written agreement and whether or not such employment is for a determined period or is at will.

9. REMEDIES . The Employee agrees that the covenants contained in Sections 5 through 8 of this Agreement are of the essence of this Agreement; that each of the covenants is reasonable and necessary to protect the business, interests and properties of the Employer; and that irreparable loss and damage will be suffered by the Employer should the Employee breach any of the covenants. Therefore, the Employee agrees and consents that, in addition to all the remedies provided by law or in equity, the Employer will be entitled to a temporary restraining order and temporary and permanent injunctions to prevent a breach or contemplated breach of any of the covenants. The Employer and the Employee agree that all remedies available to the Employer or the Employee, as applicable, will be cumulative.

10. SEVERABILITY . The parties agree that each of the provisions included in this Agreement is separate, distinct and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any Agreement provision will not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision will be redrawn to make the provision consistent with and valid and enforceable under the law or public policy.

11. NO SET-OFF BY THE EMPLOYEE . The existence of any claim, demand, action or cause of action by the Employee against the Employer, or any Affiliate of the Employer, whether predicated upon this Agreement or otherwise, will not constitute a defense to the enforcement by the Employer of any of its rights hereunder.

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

	(i) If to the Employer, to it at:
	1525 Pointer Ridge Road
	Bowie, Maryland 20716
	Attn: Chairman of the Board

	(ii) If to the Employee, to the Employee at:

13. ASSIGNMENT . Neither party hereto may assign or delegate this Agreement or any of its rights and obligations hereunder without the written consent of the other party hereto.

14. WAIVER. A waiver by the Employer of any breach of this Agreement by the Employee will not be effective unless in writing, and no waiver will operate or be construed as a waiver of the same or another breach on a subsequent occasion.

15. ARBITRATION . . Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, except for controversies or claims relating to Sections 5 through 8 of this Agreement which will be handled pursuant to Section 9 of this Agreement, will be settled by binding arbitration in accordance with the Employment Rules of the American Arbitration Association using one arbitrator. The decision of the arbitration panel will be final and binding on the parties, and judgment upon the award rendered by the arbitration panel may be entered by any court having jurisdiction thereof.

16. ATTORNEYS' FEES . In the event that the parties have complied with this Agreement with respect to arbitration of disputes and litigation ensues between the parties concerning the enforcement of an arbitration award and the Employee must employ separate legal counsel regarding such litigation, the Employer shall advance to the Employee, within thirty (30) days after receiving copies of invoices submitted by Employee, any and all reasonable attorneys' fees and expenses incurred with preparing, investigating and litigating such action, proceeding or suit. The Employee must reimburse the Employer for any and all advances that exceed the first $5,000 advanced to the Employee for such legal expenses only if and to the extent that a final decision by a court of competent jurisdiction has determined that the Employee is not entitled to receive any amounts due or to enforce any of the rights under this Agreement.

17. APPLICABLE LAW . This Agreement will be construed and enforced under and in accordance with the laws of the State of Maryland. The parties agree that any appropriate state court located in Prince George’s County, Maryland, will have jurisdiction of any case or controversy arising under or in connection with this Agreement and will be a proper forum in which to adjudicate such case or controversy. The parties consent to the jurisdiction of such courts.

18. INTERPRETATION . Words importing the singular form shall include the plural and vice versa. The terms "herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer to this Agreement. Any captions, titles or headings preceding the text of any article, section or subsection herein are solely for convenience of reference and will not constitute part of this Agreement or affect its meaning, construction or effect.

19. ENTIRE AGREEMENT . This Agreement embodies the entire and final agreement of the parties on the subject matter stated in the Agreement. No amendment or modification of this Agreement will be valid or binding upon the Employer or the Employee unless made in writing and signed by both parties. All prior understandings and agreements relating to the subject matter of this Agreement are hereby expressly terminated.

20. RIGHTS OF THIRD PARTIES . Nothing herein expressed is intended to or will be construed to confer upon or give to any person, firm or other entity, other than the parties hereto and their permitted assigns, any rights or remedies under or by reason of this Agreement.

21. SURVIVAL . The obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 will survive the termination of the employment of the Employee hereunder for the period designated under each of those respective sections.

22. JOINT AND SEVERAL . The obligation of the Bank and the Company to Employee hereunder will be joint and several.

IN WITNESS WHEREOF, the Employer and the Employee have executed and delivered this Agreement as of the date first shown above.

	THE EMPLOYER:

	OLD LINE BANK



	By: /s/ Craig E. Clark

	Name: Craig E. Clark

	Title: Chairman




	THE EMPLOYEE:

	By: /s/ James W. Cornelsen

	Name: James W. Cornelsen

Exhibit A

OLD LINE BANK

JOB DESCRIPTION

JOB TITLE:	PRESIDENT/CHIEF EXECUTIVE OFFICER
FSLA:	EXEMPT
REPORTS TO:	BOARD OF DIRECTORS

SUMMARY:

Plans, develops, and establishes policies and objectives of business organization in accordance with Board directives and corporation charter by performing the following duties personally or through subordinate managers.

ESSENTIAL DUTIES AND RESPONSIBILITIES: The primary duty and responsibility of this position is quality service to both internal and external customers. Specific duties are listed below. Other duties may be assigned.

Confers with corporate managers to plan business objectives, to develop organizational policies, to coordinate functions and operations between divisions and departments, and to establish responsibilities and procedures for attaining objectives.

Provides leadership representations for the bank and holding company board of directors and its committees. Contributes to the effective, profitable operation of the corporation by participation in Liquidity and Asset/Liability Management, Loan Committee, Public Relations /Marketing Committee, and Asset Review Committee activities.

Ensures that the spirit and intent of regulatory and supervisory trusts and concerns are met or exceeded.

Keeps the Board informed concerning major developments and consults with same regarding major decisions affecting the bank or holding company.

Represents the bank and provides leadership in key community activities, including business, charitable, civic, and social organizations to maintain a proper responsible citizen stature for the bank.

Reviews activity reports and financial statements to determine progress and status in attaining objectives and revises objectives and plans in accordance with current conditions.

Directs and coordinates formulation of financial programs to provide funding for new or continuing operations to maximize returns on investments and to increase productivity.

Plans and develops labor and public relations policies designed to improve company's image and relations with customers, employees, and the public.

Evaluates performance of executives for compliance with established policies and objectives of bank.

SUPERVISORY RESPONSIBILITY:

Manages subordinate supervisors in the Lending/Deposit function, Finance and Operations function, Human Resources, and Quality Services and Sales function. Also, responsible for the direct supervision of the Corporate Secretary. Is responsible for the overall direction, coordination, and evaluation of these units.

Provides direct guidance on personnel activities which affect the key bank management team, including salary administration, management incentive, performance objectives, and compliance with established policies to ensure solid team efforts toward the attainment of department, bank, and corporation goals.

Carries out supervisory responsibilities in accordance with the organization's policies and applicable laws. Responsibilities include interviewing, hiring, and training employees; planning, assigning, and directing work; appraising performance; rewarding and disciplining employees; and addressing complaints and resolving problems.

CRA REQUIREMENT:

Expected to understand the bank's obligations under the Community Reinvestment Act and how to fulfill them. Expected to cooperate with and support the bank's CRA program. Will be held accountable for any lack of cooperation that weakens the bank's CRA performance, as reflected in internal audits, agency examinations, and/or community projects.

PRODUCT AND KNOWLEDGE REQUIREMENT:

Should know and understand the products and services that are provided by Bank and give quality service at all times to our customers.

QUALIFICATION REQUIREMENTS:

To perform this job successfully, an individual must be able to perform each essential duty satisfactorily. The requirements listed below are representative of the knowledge, skill, and/or ability required. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

EDUCATION AND/OR EXPERIENCE:

College graduate and graduate of recognized graduate banking school or equivalent; ten years related experience and/or training; or equivalent combination of education and experience.

LANGUAGE SKILLS:

Ability to read, analyze, and interpret common technical journals, financial reports, and legal documents. Ability to respond to common inquiries or complaints from customers, regulatory agencies, or members of the community. A high level of interpersonal skills to effectively communicate policies, procedures, staff objectives, and information to top management, public groups, and/or boards of directors.

ANALYTICAL SKILLS:

A high level of analytical, mathematical and reasoning skills to assess and evaluate the operation of subordinate areas of responsibility, participate in establishing bank-wide financial goals, and draft operational reports to the board.

PHYSICAL DEMANDS:

Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

WORK ENVIRONMENT:

Good. There is little discomfort from noise, heat, dust, or other adverse factors.

PERFORMANCE EXPECTATIONS:

ORGANIZATIONAL EXPECTATIONS:

Understands that the position exists to ultimately serve the customer either directly or indirectly through assisting front-line personnel to answer customer inquiries quickly.

Practices a high degree of professionalism and sets an example for others to follow.

Demonstrates commitment to and understanding of continuous quality improvement. Uses creativity and initiative to recommend quality enhancements when relevant and appropriate.

Has satisfactory attendance within policy guidelines and is punctual.

Manages time effectively. Completes assigned duties within required deadlines.

FINANCIAL EXPECTATIONS:

Makes recommendations to the Board of Directors concerning budgetary needs of the bank.

Within parameters of job, uses good judgment related to Bank income opportunities and expense control.

Is financially responsible.

RELATIONSHIP EXPECTATIONS:

Conducts in-bank and public relationships in a manner that enhances the image and marketing efforts of the Bank.

Participates in community organizations, activities, and projects.

Contributes to an overall team effort by being an effective team player.

This job description is not intended to be and should not be construed as an all-inclusive list of the responsibilities, skills, or working conditions associated with the position. While this job description is intended to accurately reflect the position's activities and requirements, management reserves the right to modify, add, or remove duties and assign other duties as necessary.

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT is made as of this 28 th day of January, 2011, by and between OLD LINE BANK, a Maryland-chartered commercial bank (the “Bank” or “Employer”) and CHRISTINE RUSH (the “Employee”).

EXPLANATORY STATEMENT

The parties hereto entered into an employment agreement dated March 31, 2003 ("Original Agreement");

The Original Agreement was amended on December 31, 2004, December 30, 2005, January 1, 2007, January 1, 2008, January 1, 2009, and January 1, 2010; and

The parties hereto desire to amend and restate the Original Agreement, as amended, as provided herein.

NOW THEREFORE, in consideration of the premises, the benefits provided to each party hereunder and the mutual promises made herein, the adequacy and sufficiency of such consideration being hereby acknowledged by the parties, the parties agree as follows:

1. Employment . The Bank hereby employs the Employee as an Executive Vice President and agrees to continue to employ the Employee in that position (or in any other position approved by the Bank) during the term of this Agreement, except as otherwise provided below.

2. Term . The initial term and any extensions thereof are referred to herein as the "Term." The Term of this Agreement expires on March 31, 2013. The Term of this Agreement is two (2) years. On or before March 31, 2012 and on or before each succeeding consecutive April twentieth while this Agreement is in effect, Employer shall inform the employee whether Employer, in its sole discretion, extends this Agreement for one additional year or such greater Term as Employer deems appropriate.

3. Compensation .

A. The Employee's salary under this Agreement shall be $187,335 per annum, payable on a bi-weekly basis. Employee may also receive an annual discretionary bonus. In addition, provided that sufficient options are available for grant under a stockholder approved stock option or equity incentive plan, the Bank or such entity (the "Company") that may then control the Bank, on an annual basis, shall grant options to Employee to purchase not less than 2, 250 shares of stock in the Bank or the Company or such greater amount as may be determined by the Board of Directors or an appropriate committee of the Board of Directors of the Bank or the Company. The exercise price for the options shall be no less than the fair market value of the Bank's or the Company's common stock on the date the options are granted, the options must be exercised within ten (10) years of the date of grant and the options shall be subject to such vesting terms as the Board of Directors or an appropriate committee of the Board of Directors of the Bank or the Company determines from time to time. Notwithstanding anything to the contrary contained in this Section 3 (A), the options to be granted pursuant to this Section 3 (A) will only be evidenced by, and will be subject to the terms and conditions of, a stock option agreement to be entered into between the Bank and Employee or the Company and Employee.

4. Duties .

A. During the term of this Agreement, the Employee shall serve as the Executive Vice President. She shall have such powers and shall perform such duties that are incident and customary to this office, and as granted and assigned to her by the Chief Executive Officer (“CEO”) and/or the Board of Directors.

B. The Employee shall devote her full time, attention, skill, and energy to the performance of her duties under this Agreement, and shall comply with all reasonable professional requests of the Bank; provided, however, that the Employee will be permitted to engage in and manage personal investments and to participate in community and charitable affairs, so long as such activities in the judgment of the Bank’s CEO do not create a conflict of interest or interfere with the performance of her duties under this Agreement. In furtherance of this commitment, the Employee shall disclose all positions she holds with other organizations and any ownership interests she has in other business entities where she may influence or control management decisions. Such disclosures shall be made at the commencement of the Employee’s employment and from time-to-time throughout her employment where her circumstances have changed to make such a disclosure appropriate.

C. The Employee shall immediately notify the Company of (i) her own illness and consequent absence from work or (ii) any intended significant change in her plans to work for the Company.

5. Vacation, Sick and Personal Leave .

A. The Employee shall be entitled to a total of twenty (20) days of paid vacation each calendar year, which she may use in accordance with the Bank’s announced policy that is in effect from time-to-time. The Employee may take her vacation at such times that do not interfere with the performance of her duties under this Agreement.

B. The Employee shall be entitled to six (6) days of paid sick leave and two (2) days of paid personal leave each calendar year, which she may use in accordance with the Bank’s announced policy that is in effect from time-to-time.

6. Expenses . The Bank shall reimburse the Employee for all reasonable expenses incurred in connection with her duties on behalf of the Bank, provided that the Employee shall keep and present to the Bank records and receipts relating to reimbursable expenses incurred by her. Such records and receipts shall be maintained and presented in a format, and with such regularity, as the Bank reasonably may require in order to substantiate the Bank’s right to claim income tax deductions for such expenses. For any expenditure in excess of $500.00, the Employee must obtain written approval from the CEO if she is to be reimbursed for the expense. Without limiting the generality of the foregoing, the Employee shall be entitled to reimbursement for any business-related travel, business-related entertainment and other costs and expenses reasonably incident to the performance of her duties on behalf of the Bank.

7. Fringe Benefits .

A. Insurance . The Employee shall receive health insurance, consistent with the terms set forth in the plan established by the Bank for its employees. The Bank shall also pay the premiums for Employee to receive the following insurance, consistent with the terms set forth in the plans established by the Bank for its employees: dental; life; short-term disability; and long-term disability.

B. Banking . The Bank shall not charge the Employee for use of a savings account, checking account or debit card issued by the Bank. The Employee is eligible to have her paychecks deposited directly in any account she has with the Bank or elsewhere.

8. Termination of Employment .

A. This Agreement shall terminate prior to the expiration of its Term only upon and on the occurrence of the following:

(i) on the death of Employee in which event all non vested stock options shall immediately vest and Employer shall have no further obligation to Employee other than payment of any unpaid salary and any contractually committed obligations to provide Employee with vested benefits pursuant to a salary continuation agreement, supplemental life insurance agreement, or other form of retirement plan (" Retirement Benefits ") in effect as of the date of death;

(ii) on the date Employee becomes physically or mentally incapacitated to the extent she has been unable to perform her duties under this Agreement for a period of sixty (60) consecutive days and, in order to assist the Bank in making such determination, the Employee agrees to make herself available for medical examination by one or more physicians chosen by the Bank and grants to the Bank and such physicians access to all relevant medical information, including copies of the Employee's medical records and access to the Employee's own physicians, in which event Employer will have no further obligation to Employee other than payment of any unpaid salary and Retirement Benefits as of the date of disability;

(iii) on the effective date of Employee's voluntary resignation in which event Employer will have no further obligation to Employee other than payment of any unpaid salary and Retirement Benefits as of the effective date of resignation;

(iv) on the date Employer terminates Employee for "cause" as defined below in which event Employee will have no further obligation to Employee other than payment of any unpaid salary and Retirement Benefits as of the effective date of resignation; or

(v) on the date Employer terminates Employee other than for cause in which event (1) Employer, for the remaining Term, shall pay Employee salary and benefits as such were paid on the date of termination, (2) Employer, for the remaining Term, shall grant options as provided in this Agreement and (3) all unvested options shall immediately vest and all options granted during the remaining Term shall vest when granted.

B. Termination for Cause . Notwithstanding the provisions of Section 2 above, the Employee’s employment (and all of her rights and benefits under this Agreement) shall terminate immediately after written notice upon the happening of any one or more of the following events, which constitute “cause”: (i) the Employee has breached, in any material respect, a provision of this Agreement; (ii) the Employee refuses to perform the duties of her employment under this Agreement in any material respect; (iii) the Employee has committed any act or omission materially and adversely affecting her reputation or that of the Bank or any of its affiliates or materially and adversely affecting any product, policy, program or service offered through or developed by the Bank or any of its affiliates; (iv) the Employee is convicted of or pleads guilty to a charge of any felony or of any lesser crime involving fraud or moral turpitude or directed against the Bank, its affiliates or any of their shareholders, employees, agents or contractors; (v) the Employee commits any other act which is inconsistent with the good faith fulfillment of her responsibilities as an employee of the Bank or is done with the intent to harm the Bank, its affiliates or any of their shareholders, employees, agents or contractors; (vi) the Employee violates any material statute, rule or regulation of any federal, state or local governmental authority pertaining to the marketing, sale, solicitation or offer of any product, policy or program of the Bank or its affiliates; and (vii) the Employee commits any other act or omission which an arbitrator or a court of competent jurisdiction justifies as grounds for dismissal for cause.

C. Unused Vacation, Sick and Personal Leave . The Employee shall be eligible to receive the remaining balance of her unused vacation and personal leave at the termination of her employment only if she is not terminated for “cause” as defined above and she returns all Bank property to the Bank prior to her final day of employment. Employee shall have no right to receive any unused sick leave. If the Employee fails to return any Bank property prior to her last day of employment, the Employee authorizes the Bank to deduct from her final paycheck the reasonable cost (not value) of that item. In the event that the Employee elects to terminate her employment, she must provide the Company with 60 days notice as provided above in order to receive the remaining balance of her unused vacation and personal leave.

9. Non-Competition Agreement .

A. The Employee agrees that, for one (1) year following termination from the Bank, regardless of reason, she will not, as an individual, stockholder, officer, director, partner, agent, employee, consultant, or representative, act for or on behalf of or have any interest, direct or indirect, in any business similar to or competitive with the Bank’s business within a 25-mile radius of the main office of the Bank exclusive of the State of Virginia or Washington, D.C.

B. The Employee agrees, during the period of employment and for one (1) year following the termination of employment, not to solicit or sell or attempt to solicit or sell, for her own account or on behalf of any person or corporation other than the Bank, services or products that are competitive with the services or products of the Bank to any customer or client to which the Employee (or employees under her managerial control) has solicited or sold any services or products on behalf of the Bank during any part of the two (2) years immediately preceding the termination of her employment. This restriction shall, in the case of a multi-location customer or client, apply to the location or locations where Employee (or employees under her managerial control) solicited or sold services or products, as well as any offices of that customer or client within a 25-mile radius of the main office of the Bank.

C. Employee agrees, during the period of employment and for one (1) year following termination, not to perform or render services or attempt to perform or render services, for her own account or on behalf of any person or corporation other than the Bank, for any customer or client of the Bank for which the Employee (or employees under her managerial control) has performed any services, during any part of the two (2) years immediately preceding the termination of her employment. This restriction shall, in the case of a multi-location customer or client, apply to the location or locations where the Employee (or employees under her managerial control) performed or rendered services, as well as any offices of that customer or client within a 25-mile radius of the main office of the Bank.

D. The Employee agrees, during the period of employment and for one (1) year following termination, not to solicit or hire, either directly or indirectly, any current employee of the Bank to work or perform services for her own account or on behalf of any person or corporation other than the Bank, or attempt to induce any employee to leave the employ of the Bank to work for the Employee or any other person, firm or corporation.

E. The Employee acknowledges that any breach of these provisions will cause irreparable harm to the Bank and entitle the Bank to injunctive or other equitable relief, as well as damages. In the event of a breach of Paragraphs A through C of this Section, the Employee shall pay to the Bank liquidated damages equal to any money received by the Employee due to violation of these Paragraphs, as well as court costs and reasonable attorneys' fees incurred by the Bank to enforce this Agreement. In the event of a breach of Paragraph D of this Section, the Employee shall pay to the Bank liquidated damages equal to any money received by the Employee due to violation of this Paragraph or the equivalent of the most recent one (1) year's salary (at the company) of the hired solicited employee, whichever is greater. Additionally, the Employee agrees to pay the Bank court costs and reasonable attorneys' fees incurred by the Bank to enforce this Agreement.

10. Trade Secrets, Confidential Information and Intellectual Property . The Employee acknowledges that and as a result of her employment with the Bank, the Employee has, is and will be making use of, acquiring, and adding to information of a special and unique nature and value relating to the Bank's intellectual property, trade secrets and other confidential information. In that regard, the Employee agrees to the following:

A. The Employee shall not, at any time during or following her employment with the Bank, divulge or disclose, or employ for any purpose whatsoever, any of the Bank's trade secrets or other confidential information that have been obtained by or disclosed to the Employee as a result of the Employee's employment by the Bank. For purposes of this Agreement, “trade secrets or other confidential information" shall mean all information which is used in the Bank's business and which gives the Bank the opportunity to obtain advantage over its competitors who do not know or use such information, regardless of whether written or otherwise, including, but not limited to, trade secrets, business methods, business plans, financial data, customer lists and contracts, pricing plans, marketing plans or strategies, security devices, product information, billing procedures, employee lists, salaries and other personnel information, and other business arrangements. The term “trade secrets or other confidential information” is not meant to include any information which, at the time of disclosure, is generally known by the public or any competitors of the Bank. If the Employee has any questions regarding the confidential status of information, she should contact the CEO.

B. All notes, data, reference items, sketches, drawings, memoranda, records, and other materials in any way relating to any of the information referred to in the Paragraph above or to the Bank's business shall belong exclusively to the Bank and the Employee agrees to turn over to the Bank all copies of such materials in the Employee's possession or control (whether hard copy or electronic) at the Bank's request or upon the termination of the Employee's employment.

C. All intellectual property, including, but not limited to, all software (including, without limitation, computer programs, object code, source code, documentation, notes, records, work papers, and all other materials associated therewith), and all copyrights, trademarks, patents, trade secrets and other proprietary rights related thereto shall be deemed (1) the sole and exclusive property of the Bank (and/or the Bank's clients or customers if the Bank so determines), and (2) “trade secrets or other confidential information." The Employee also agrees that any work prepared for the Bank or its customers or clients that are susceptible of copyright protection shall be a work-made-for-hire for the Bank. If any such work is deemed for any reason not to be a work-made-for-hire, the Employee hereby agrees to irrevocably assign to the Bank all of the Employee's right, title and interest in and to the copyright in such work and the Employee further agrees to execute all such documents and assurances, and to take all such action, as the Bank shall request, in order to cause the rights assigned hereby fully to vest in the Bank. The Employee hereby waives all so-called “moral rights” relating to all work developed or produced by the Employee hereunder, including, without limitation, any and all rights of attribution, rights of approval, restriction or limitation of use or subsequent modifications. In furtherance of the foregoing, and not in limitation thereof, the Employee agrees to assign the Bank all of the Employee's right, title and interest in and to any and all ideas, concepts, know-how, techniques, processes, methods, inventions, discoveries, developments, innovations and improvements conceived or made by the Employee, whether alone or with others, during the Employee's employment with the Bank, and which either (i) involve or are reasonably related to the Bank's business or (ii) incorporate or are based on, in whole or in part, any of the Bank's trade secrets or other confidential information. (all of the aforesaid sometimes referred to herein as the “Inventions”). The Employee agrees to disclose all Inventions to the Bank promptly, and to provide all assistance reasonably requested by the Bank in the preservation of the Bank’s interest in the Inventions, such as by executing documents, testifying and the like, which assistance shall be provided at the Bank’s expense but without any additional compensation to the Employee. The Employee shall, at the Bank’s expense, assist the Bank or its nominee to obtain patent protection for such Inventions in any countries the Bank may elect in its sole discretion throughout the world. All Inventions shall be the property of the Bank or its nominees, whether patentable or not. The Employee hereby assigns and agrees to assign to the Bank, all of the Employee’s right title and interest in and to all patent applications, patents and reissues related to any Inventions. The Employee agrees to execute, acknowledge and deliver all documents, and to provide other assistance, at the Bank’s request and expense, during and subsequent to the Employee’s employment by the Bank, confirming the complete ownership by the Bank of any and all Inventions, enabling the Bank or its nominees to apply for and maintain patent protection (if applicable), and/or any other legal protection that may then be available for the Inventions.

D. The Employee acknowledges that any breach of this Section will cause irreparable harm to the Bank and entitle the Bank to injunctive or other equitable relief, as well as damages. Damages shall include, but are not limited to, the Employee's payment of the court costs and reasonable attorneys' fees incurred by the Bank to enforce this Agreement.

11. Applicable Law . This Agreement will be construed and enforced under and in accordance with the laws of the State of Maryland. The parties agree that any appropriate state court located in Prince George’s County, Maryland, will have jurisdiction of any case or controversy arising under or in connection with this Agreement and will be a proper forum in which to adjudicate such case or controversy. The parties consent to the jurisdiction of such courts.

12. Entire Agreement . This Agreement embodies the entire and final agreement of the parties on the subject matter stated in the Agreement. No amendment or modification of this Agreement will be valid or binding upon the Employer or the Employee unless made in writing and signed by both parties. All prior understandings and agreements relating to the subject matter of this Agreement are hereby expressly terminated.

13. Severability . The parties agree that each of the provisions included in this Agreement is separate, distinct and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any Agreement provision will not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision will be redrawn to make the provision consistent with and valid and enforceable under the law or public policy.

14. No Set-off by the Employee . The existence of any claim, demand, action or cause of action by the Employee against the Employer, or any Affiliate of the Employer, whether predicated upon this Agreement or otherwise, will not constitute a defense to the enforcement by the Employer of any of its rights hereunder.

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

	(i)	If to the Employer, to it at:

		1525 Pointer Ridge Road Bowie, Maryland 20716 Attn: President

	(ii)	If to the Employee, to the Employee at:

16. Assignment . Neither party hereto may assign or delegate this Agreement or any of its rights and obligations hereunder without the written consent of the other party hereto.

17. Waiver . A waiver by the Employer of any breach of this Agreement by the Employee will not be effective unless in writing, and no waiver will operate or be construed as a waiver of the same or another breach on a subsequent occasion.

18. Interpretation . Words importing the singular form shall include the plural and vice versa. The terms "herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer to this Agreement. Any captions, titles or headings preceding the text of any article, section or subsection herein are solely for convenience of reference and will not constitute part of this Agreement or affect its meaning, construction or effect.

19. Rights of Third Parties . Nothing herein expressed is intended to or will be construed to confer upon or give to any person, firm or other entity, other than the parties hereto and their permitted assigns, any rights or remedies under or by reason of this Agreement.

20. Survival . The obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 will survive the termination of the employment of the Employee hereunder for the period designated under each of those respective sections.

21. This Agreement shall extend to, and be binding upon the Employee, and upon the Bank and its successors and assigns and the term “Bank” as used herein shall include its successors and assigns whether by merger, consolidation, combination or otherwise.

[signatures appear on following page]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, under seal, as of the day and year first hereinabove written.

ATTEST:
	OLD LINE BANK.


/s/ Joseph E. Burnett	By:	/s/ James W. Cornelsen
		(SEAL)
Joseph E. Burnett, Secretary		James W. Cornelsen, President and Chief Executive Officer

WITNESS:

/s/ Joseph E. Burnett		/s/ Christine M. Rush
		(SEAL)
		Christine M. Rush

Maryland		20-0154352
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

	1525 Pointer Ridge Place	20716
	Bowie, Maryland	(Zip Code)
	(Address of principal executive offices)

Common stock, par value $0.01 per share	Name of exchange on which registered
(Title of each class)	The NASDQ Stock Market LLC

Item 1.	Business	3
ITEM 1A.	Risk Factors	18
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	25
Item 4.	(Removed and Reserved)	25

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	64
Item 8.	Financial Statements	67
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	112
Item 9A.	Controls and Procedures	112
Item 9B.	Other Information	112

R	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2010

£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934

Item 10.	Directors, Executive Officers and Corporate Governance	113
Item 11.	Executive Compensation	113
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	113
Item 13.	Certain Relationships and Related Transactions, and Director Independence	114
Item 14.	Principal Accounting Fees and Services	114

	Sale Price Range

	High		Low

2010
First Quarter	$	7.65	$	6.20
Second Quarter		8.09		7.44
Third Quarter		8.99		7.02
Fourth Quarter		8.99		7.26

2009
First Quarter	$	6.60	$	4.03
Second Quarter		6.98		5.21
Third Quarter		7.25		5.90
Fourth Quarter		6.77		6.00

Date Exercisable	# of Shares

January 22, 2011		16,884
May 7, 2011		2,000
December 31, 2011		7,527
May 7, 2012		2,000
Total		28,411

	2010		2009
March	$	0.03	$	0.03
June		0.03		0.03
September		0.03		0.03
December		0.03		0.03
Total	$	0.12	$	0.12

December 31,	2010			2009			2008


	(Dollars in thousands, except per share data)
Earnings and dividends:
Interest revenue	$	18,509		$	17,096		$	15,424
Interest expense		4,943			5,580			5,910
Net interest income		13,566			11,516			9,514
Provision for loan losses		1,082			900			415
Non-interest revenue		1,352			1,820			964
Non-interest expense		11,409			9,257			7,373
Income taxes		997			1,056			939
Net income		1,430			2,123			1,751
Less: Net income (loss) attributable to the non-controlling interest		(73	)		87			(5	)
Net income attributable to Old Line Bancshares, Inc.		1,503			2,036			1,756
Net income available to common stockholders		1,503			1,550			1,727

Per common share data
Basic earnings	$	0.39		$	0.40		$	0.44
Diluted earnings		0.38			0.40			0.44
Dividends paid		0.12			0.12			0.12
Common stockholders book value, period end		9.52			9.31			8.98
Average common shares outstanding
Basic		3,880,060			3,862,364			3,919,903
Diluted		3,903,577			3,869,466			3,923,223
Common shares outstanding, period end		3,891,705			3,862,364			3,862,364

Balance Sheet Data:
Total assets	$	401,910		$	357,219		$	317,731
Total loans, less allowance for loan losses		299,606			265,009			231,054
Total investment securities		54,786			33,819			37,569
Total deposits		340,527			286,348			231,431
Stockholders’ equity		37,054			35,941			41,687

Performance Ratios:
Return on average assets		0.38	%		0.60	%		0.64	%
Return on average stockholders’ equity		4.14	%		5,22	%		5.04	%
Total ending equity to total ending assets		9.22	%		10.06	%		13.12	%
Net interest margin (1)		3.86	%		3.77	%		3.80	%
Dividend payout ratio for period		31.0	%		22.7	%		26.8	%

Asset Quality Ratios:
Allowance to period-end loans		0.82	%		0.93	%		0.85	%
Non-performing assets to total assets		0.96	%		0.44	%		0.27	%
Non-performing loans to allowance for loan losses		109.81	%		63.93	%		42.88	%

Capital Ratios:
Tier I risk-based capital		11.6	%		12.8	%		16.6	%
Total risk-based capital		12.4	%		13.7	%		17.4	%
Leverage capital ratio		9.2	%		10.0	%		14.0	%

Year Ended December 31,	2010			2009			$ Change			% Change

Net income available to common stockholders	$	1,503		$	1,550		$	(47	)		(3.03	) %
Interest revenue		18,509			17,096			1,413			8.27
Interest expense		4,943			5,580			(637	)		(11.42	)
Net interest income after provision for loan losses		12,484			10,616			1,868			17.60
Non-interest revenue		1,352			1,820			(468	)		(25.71	)
Non-interest expense		11,409			9,257			2,152			23.25
Average total loans		285,465			254,562			30,903			12.14
Average interest earning assets		355,590			308,416			47,174			15.30
Average total interest bearing deposits		263,007			221,651			41,356			18.66
Average non-interest bearing deposits		54,335			39,410			14,925			37.87
Net Interest Margin (1)		3.86	%		3.77	%
Return on average equity		4.14	%		5.22	%
Basic earnings per common share	$	0.39		$	0.40		$	(0.01	)		(2.50	%)
Diluted earnings per common share		0.38			0.40			(0.02	)		(5.00	%)

Average Balances, Interest and Yields
Twelve Months Ended December 31,	2010							2009							2008
	Average							Average							Average
	balance		Interest		Yield			balance		Interest		Yield			balance		Interest		Yield
Assets:
Federal funds sol d(1)	$	2,720,879	$	7,258		0.27	%	$	458,457	$	1,149		0.25	%	$	13,342,150	$	290,788		2.18	%
Interest bearing deposits		19,837,453		188,361		0.95			17,004,299		270,290		1.59			3,116,699		104,560		3.35
Investment securitie s(1)(2)
U.S. Treasury		-		-		-			187,658		7,647		4.07			2,072,573		73,061		3.53
U.S. government agency		5,778,185		173,228		3.00			8,411,754		313,654		3.73			4,896,926		192,271		3.93
Mortgage backed securities		39,179,963		1,399,979		3.57			24,642,044		1,059,386		4.30			7,799,475		356,398		4.57
Municipal securities		2,351,798		117,062		4.98			2,540,562		126,752		4.99			2,875,141		140,893		4.90
Other		2,621,530		70,976		2.71			2,886,213		72,150		2.50			2,124,236		92,723		4.37
Total investment securities		49,931,476		1,761,245		3.53			38,668,231		1,579,589		4.08			19,768,351		855,346		4.33
Loans:(1)
Commercial		78,586,868		4,298,503		5.47			70,966,468		4,168,203		5.87			62,783,300		4,234,175		6.74
Mortgage		192,748,540		11,638,569		6.04			168,196,382		10,346,433		6.15			137,944,563		9,109,972		6.60
Consumer		14,129,643		775,337		5.49			15,399,539		856,562		5.56			16,821,749		896,398		5.33
Total loans		285,465,051		16,712,409		5.85			254,562,389		15,371,198		6.04			217,549,612		14,240,545		6.55
Allowance for loan losses		2,364,613		-					2,277,747		-					1,749,885		-
Total loans, net of allowance		283,100,438		16,712,409		5.90			252,284,642		15,371,198		6.09			215,799,727		14,240,545		6.60
Total interest earning asset s(1)		355,590,246		18,669,273		5.25			308,415,629		17,222,226		5.58			252,026,927		15,491,239		6.15
Non-interest bearing cash		8,811,003							7,104,387							4,369,508
Premises and equipment		17,151,436							14,548,001							5,157,011
Other assets		12,470,229							11,904,806							11,107,525
Total asset s(1)	$	394,022,914						$	341,972,823						$	272,660,971
Liabilities and Stockholders' Equity:
Interest bearing deposits
Savings	$	8,692,555		27,487		0.32		$	6,853,343		25,602		0.37		$	6,436,599		39,492		0.61
Money market and NOW		54,820,016		480,613		0.88			33,931,390		171,476		0.51			34,046,098		321,164		0.94
Other time deposits		199,494,261		3,412,238		1.71			180,866,687		4,356,021		2.41			125,113,791		4,740,952		3.79
Total interest bearing deposits		263,006,832		3,920,338		1.49			221,651,420		4,553,099		2.05			165,596,488		5,101,608		3.08
Borrowed funds		38,079,368		1,022,425		2.68			37,817,464		1,026,755		2.72			34,754,155		808,127		2.33
Total interest bearing liabilities		301,086,200		4,942,763		1.64			259,468,884		5,579,854		2.15			200,350,643		5,909,735		2.95
Non-interest bearing deposits		54,335,130							39,410,471							36,039,280
		355,421,330		4,942,763		1.39			298,879,355		5,579,854		1.87			236,389,923		5,909,735		2.50
Other liabilities		1,632,031							3,390,944							1,450,813
Non-controlling interest		640,378							692,144							-
Stockholders' equity		36,329,175							39,010,380							34,820,235
Total liabilities and stockholders' equity	$	394,022,914						$	341,972,823						$	272,660,971
Net interest sprea d(1)						3.61							3.43							3.20
Net interest incom e(1)			$	13,726,510		3.86	%			$	11,642,372		3.77	%			$	9,581,504		3.80	%

	Twelve Months Ended December 31,									Twelve Months Ended December 31,
	2010 compared to 2009									2009 compared to 2008
	Variance due to:									Variance due to:

	Total			Rate			Volume			Total			Rate			Volume

Interest earning assets:
Federal funds sold (1)	$	6,109		$	79		$	6,030		$	(289,639	)	$	(138,510	)	$	(151,129	)
Interest bearing deposits		(81,929	)		(121,656	)		39,727			165,730			(80,912	)		246,642
Investment Securities (1)
U.S. Treasury		(7,647	)		-			(7,647	)		(65,414	)		9,878			(75,292	)
U.S. government agency		(140,426	)		(54,063	)		(86,363	)		121,383			(10,132	)		131,515
Mortgage backed securities		340,593			(202,358	)		542,951			702,988			(22,306	)		725,294
Municipal securities		(9,690	)		(293	)		(9,397	)		(14,141	)		2,512			(16,653	)
Other		(1,174	)		5,731			(6,905	)		(20,573	)		(47,347	)		26,774
Loans:
Commercial		130,300			(298,525	)		428,825			(65,972	)		(582,060	)		516,088
Mortgage		1,292,136			(193,487	)		1,485,623			1,236,461			(657,060	)		1,893,521
Consumer		(81,225	)		(11,408	)		(69,817	)		(39,836	)		38,138			(77,974	)
Total interest revenue (1)		1,447,047			(875,980	)		2,323,027			1,730,987			(1,487,799	)		3,218,786

Interest bearing liabilities:
Savings		1,885			(4,315	)		6,200			(13,890	)		(16,305	)		2,415
Money market and NOW		309,137			168,213			140,924			(149,688	)		(148,610	)		(1,078	)
Other time deposits		(943,783	)		(1,358,323	)		414,540			(384,931	)		(2,074,050	)		1,689,119
Borrowed funds		(4,330	)		(11,410	)		7,080			218,628			143,283			75,345
Total interest expense		(637,091	)		(1,205,835	)		568,744			(329,881	)		(2,095,682	)		1,765,801

Net interest income (1)	$	2,084,138		$	329,855		$	1,754,283		$	2,060,868		$	607,883		$	1,452,985

Allowance for Loan Losses

Years Ended December 31,	2010			2009			2008
Balance, beginning of period	$	2,481,716		$	1,983,751		$	1,586,737
Provision for loan losses		1,082,000			900,000			415,000

Chargeoffs:
Commercial		(137,151	)		-			-
Mortgage		(958,472	)		(344,825	)		-
Consumer		(4,194	)		(57,210	)		(18,440	)
Total chargeoffs		(1,099,817	)		(402,035	)		(18,440	)
Recoveries:
Mortgage		3,650			-			-
Consumer		927			-			454
Total recoveries		4,577			-			454
Net (chargeoffs) recoveries		(1,095,240	)		(402,035	)		(17,986	)

Balance, end of period	$	2,468,476		$	2,481,716		$	1,983,751

Ratio of allowance for loan losses to:
Total gross loans		0.82	%		0.93	%		0.85	%
Non-accrual loans		91.07	%		156.43	%		233.19	%
Ratio of net-chargeoffs during period to
average loans outstanding during period		0.384	%		0.158	%		0.008	%

Allocation of Allowance for Loan Losses
December 31,	2010					2009					2008
	Amount		% of Loans in Each Category			Amount		% of Loans in Each Category			Amount		% of Loans in Each Category


Consumer	$	8,433		0.48	%	$	10,319		0.57	%	$	13,391		0.50	%
Boat		294,723		3.86			81,417		4.91			94,910		6.22
Mortgage		1,748,122		67.97			1,845,126		66.74			1,348,850		63.21
Commercial		417,198		27.69			544,854		27.78			526,600		30.07

Total	$	2,468,476		100.00	%	$	2,481,716		100.00	%	$	1,983,751		100.00	%

Investment Securities
(Dollars in thousands)

December 31,	2010		2009		2008

Available For Sale Securities
U.S. government agency	$	3,804	$	7,291	$	10,898
Municipal securities		1,327		2,275		2,443
Mortgage backed		27,919		18,447		16,225
Total Available for Sale Securities	$	33,050	$	28,013	$	29,566

Held To Maturity Securities
U.S. Treasury	$	-	$	-	$	500
Municipal securities		984		301		301
Mortgage backed		20,752		5,506		7,202
Total Held to Maturity Securities	$	21,736	$	5,807	$	8,003

Equity securities	$	2,563	$	2,958	$	2,127

Fair Value, Amortized Cost and Weighted Average Yield

	Available for Sale							Held to Maturity
December 31, 2010	Amortized Cost		Fair Value		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
Maturing
Less than 3 months	$	-	$	-				$	-	$	-
Over 3 months through 1 year		1,009,341		1,041,750		3.68	%		-		-
Over one to five years		1,992,780		2,078,874		3.81	%		302,084		305,385		3.40	%
Over five to ten years		12,034,769		12,202,523		2.90	%		6,784,476		7,005,706		3.76	%
Over ten years		17,562,147		17,726,648		3.65	%		14,649,909		14,654,490		3.15	%
	$	32,599,037	$	33,049,795				$	21,736,469	$	21,965,581

Pledged Securities	$	-	$	-				$	-	$	-

	Available for Sale							Held to Maturity
December 31, 2009	Amortized Cost		Fair Value		Weighted Average Yield			Amortized Cost		Fair Value		Weighted Average Yield
Maturing
Less than 3 months	$	250,039	$	250,398		2.55	%	$	-	$	-
Over 3 months through 1 year		1,394,559		1,413,114		3.22	%		-		-
Over one to five years		4,440,360		4,621,900		4.00	%		99,927		100,210		3.50	%
Over five to ten years		8,567,790		8,760,477		3.32	%		2,279,892		2,373,515		4.40	%
Over ten years		12,751,035		12,967,059		4.16	%		3,426,688		3,603,040		4.78	%
	$	27,403,783	$	28,012,948				$	5,806,507	$	6,076,765

Pledged Securities	$	-	$	-				$	-	$	-

Pointer Ridge Office Investment, LLC
December 31,	2010			2009		2008
Balance Sheets
Current assets	$	758,257		$	891,233	$	540,105
Non-current assets		7,252,413			7,432,268		7,619,352
Liabilities		6,397,360			6,480,230		6,548,760
Equity		1,613,310			1,843,271		1,610,697

Statements of Income
Revenue	$	822,920		$	1,239,137	$	1,014,136
Expenses		1,017,184			1,006,563		1,019,577
Net income (loss)	$	(194,264	)	$	232,574	$	(5,441	)

Loan Portfolio
(Dollars in thousands)
December 31,	2010					2009					2008

Real Estate
Commercial	$	153,527		50.91	%	$	124,002		46.44	%	$	110,826		47.63	%
Construction		24,378		8.08			30,872		11.56			23,422		10.07
Residential		27,081		8.98			23,350		8.74			12,820		5.51
Commercial		83,523		27.69			74,175		27.78			69,961		30.07
Consumer		13,080		4.34			14,622		5.48			15,638		6.72
		301,589		100.00	%		267,021		100.00	%		232,667		100.00	%
Allowance for loan losses		(2,469	)				(2,481	)				(1,983	)
Deferred loan costs, net		486					469					370
	$	299,606				$	265,009				$	231,054

	Loan Maturity Distribution at December 31, 2010
	1 year or less		1-5 years		After 5 years		Total
	(Dollars in thousands)
Real Estate
Commercial	$	32,938	$	111,257	$	9,332	$	153,527
Construction		17,115		5,571		1,692		24,378
Residential		22,087		4,178		816		27,081
Commercial		51,774		27,782		3,967		83,523
Consumer		1,001		820		11,259		13,080
Total Loans	$	124,915	$	149,608	$	27,066	$	301,589

Fixed Rates	$	23,438	$	47,455	$	25,374	$	96,267
Variable Rates		101,477		102,153		1,692		205,322
Total Loans	$	124,915	$	149,608	$	27,066	$	301,589

Loans With Interest Paid From Loan Advances
(Dollars in thousands)
Years Ended December 31,	2010				2009
	# of Borrowers				# of Borrowers

Hotels		1	$	979		1	$	1,741
Single family acquisition & development		1		2,336		2		4,028
		2	$	3,315		3	$	5,769

	# of Borrowers		Loan Balance
Beginning Balance		3	$	1,586
Added to non-accrual				3,585
Charged-off				(1,084	)
Transferred to other real estate owned				(1,376	)
Ending balance non-accrual loans		3	$	2,711

Non-Accrual and Past Due Loans
(Dollars in thousands)

Year Ended December 31,	2010							2009
	# of Borrowers		Account Balance			Interest Not Accrued		# of Borrowers		Account Balance			Interest Not Accrued
Real Estate
Commercial		2	$	2,427		$	315		3	$	1,586		$	191
Construction				-			-				-			-
Residential				-			-				-			-
Commercial				-			-				-			-
Consumer		1		284			4				-			-
Other real estate owned		2		1,153			-				-			-
Total non-performing assets		5	$	3,864		$	319		3	$	1,586		$	191

Non-performing assets as a percentage of total assets				0.96	%						0.44	%
Non-performing loans as a percentage of total gross loans				0.90	%						0.59	%


Accruing past due loans:
30-89 days past due			$	-					2	$	581
90 or more days past due				-							-
Total accruing past due loans			$	-					2	$	581

Ratio of accruing past due loans to total loans:
30-89 days past due				-	%						0.22	%
90 or more days past due				-							-
Total accruing past due loans				-	%						0.22	%

	Certificate of Deposit Maturity Distribution
	December 31, 2010
	Three Months or Less		Three Months to Twelve Months		Over Twelve Months		Total
	(Dollars in thousands)
Certificates of deposit
Less than $100,000	$	52,000	$	44,722	$	28,228	$	124,950
Greater than or equal to $100,000		7,636		26,844		33,100		67,580
Total	$	59,636	$	71,566	$	61,328	$	192,530

Risk Based Capital Analysis
(Dollars in thousands)

December 31,	2010			2009			2008

Tier 1 Capital
Preferred and common stock	$	39		$	39		$	7,043
Additional paid-in capital		29,207			29,034			28,839
Retained earnings		7,535			6,498			5,412
Less: disallowed assets		-			-			-
Total Tier 1 Capital		36,781			35,571			41,294

Tier 2 Capital:
Allowance for loan losses		2,468			2,482			1,984
Total Risk Based Capital	$	39,249		$	38,053		$	43,278

Risk weighted assets	$	317,029		$	277,989		$	248,555

										Regulatory Minimum
Capital Ratios:
Tier 1 risk based capital ratio		11.6	%		12.8	%		16.6	%	4.00%
Total risk based capital ratio		12.4	%		13.7	%		17.4	%	8.00%
Leverage ratio		9.2	%		10.0	%		14.0	%	4.00%

Contractual Obligations
(Dollars in thousands)

	Within one year		One to three years		Three to five years		Over five years		Total

Non-interest bearing deposits	$	67,495	$	-	$	-	$	-	$	67,495
Interest bearing deposits		208,971		55,680		8,816		-		273,467
Short term borrowings		5,669		-		-		-		5,669
Long term borrowings		89		10,195		221		5,867		16,372
Purchase obligations		1,637,349		1,263,715		416,431		-		3,317,495
Operating leases		665		1,271		1,073		8,720		11,729
Total	$	1,920,238	$	1,330,861	$	426,541	$	14,587	$	3,692,227

	Net Interest Income		Yield			Net Interest Spread
GAAP net interest income	$	13,566,068		3.82	%		3.57	%
Tax equivalent adjustment
Federal funds sold		3		-			-
Investment securities		47,642		0.01			0.01
Loans		112,797		0.03			0.03
Total tax equivalent adjustment		160,442		0.04			0.04
Tax equivalent interest yield	$	13,726,510		3.86	%		3.61	%


	Interest Sensitivity Analysis
	December 31, 2010
	Maturing or Repricing
	Within 3 Months			4-12 Months			1-5 Years			Over 5 Years			Total
	(Dollars in thousands)
Interest Earning Assets:
Interest bearing accounts	$	109		$	-		$	-		$	-		$	109
Time deposits in other banks		198			99			-			-			297
Federal funds sold		181			-			-			-			181
Investment securities		-			1,042			2,381			51,363		$	54,786
Loans		103,589			21,326			149,608			27,066			301,589
Total interest earning assets		104,077			22,467			151,989			78,429			356,962

Interest Bearing Liabilities:
Interest-bearing transaction deposits		47,332			23,666			-			-			70,998
Savings accounts		3,168			3,168			3,168			-			9,504
Time deposits		59,636			71,566			61,328			-			192,530
Total interest-bearing deposits		110,136			98,400			64,496			-			273,032
FHLB advances		10,000			-			-			-			10,000
Other borrowings		5,669			-			-			6,372			12,041
Total interest-bearing liabilities		125,805			98,400			64,496			6,372			295,073

Period Gap	$	(21,728	)	$	(75,933	)	$	87,493		$	72,057		$	61,889

Cumulative Gap	$	(21,728	)	$	(97,661	)	$	(10,168	)	$	61,889

Cumulative Gap/Total Assets		(6.08	%)		(27.34	%)		(2.85	%)		17.33	%

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Balance Sheets

December 31,	2010		2009		2008
Assets
Cash and due from banks	$	14,325,266	$	7,402,137	$	8,823,170
Interest bearing accounts		109,170		3,953,312		-
Federal funds sold		180,536		81,138		2,140,525
Total cash and cash equivalents		14,614,972		11,436,587		10,963,695
Time deposits in other banks		297,000		15,031,102		13,267,000
Investment securities available for sale		33,049,795		28,012,948		29,565,976
Investment securities held to maturity		21,736,469		5,806,507		8,003,391
Loans, less allowance for loan losses		299,606,430		265,008,669		231,053,618
Restricted equity securities at cost		2,562,750		2,957,650		2,126,550
Premises and equipment		16,867,561		17,326,099		12,388,046
Accrued interest receivable		1,252,970		1,055,249		1,091,560
Prepaid income taxes		189,523		-		35,649
Deferred income taxes		265,551		178,574		-
Bank owned life insurance		8,703,175		8,422,879		8,096,039
Other real estate owned		1,153,039		-		-
Other assets		1,610,715		1,982,262		1,139,101
Total assets	$	401,909,950	$	357,218,526	$	317,730,625

Liabilities and Stockholders' Equity
Deposits
Non-interest bearing	$	67,494,744	$	40,883,419	$	39,880,119
Interest bearing		273,032,442		245,464,373		191,550,521
Total deposits		340,527,186		286,347,792		231,430,640
Short term borrowings		5,669,332		16,149,939		17,773,934
Long term borrowings		16,371,947		16,454,067		21,531,133
Accrued interest payable		434,656		517,889		625,446
Income taxes payable		-		175,543		-
Deferred income taxes		-		-		65,651
Other liabilities		1,248,079		941,165		4,012,968
Total liabilities		364,251,200		320,586,395		275,439,772

Stockholders' equity
Preferred stock, par value $0.01 per share and additional paid in
capital; 7,000 shares issued and outstanding in 2008		-		-		6,703,591
Common stock, par value $0.01 per share; authorized 15,000,000 shares;
issued and outstanding 3,891,705 in 2010 and 3,862,364 in 2009 and 2008		38,917		38,624		38,624
Additional paid-in capital		29,206,617		29,034,954		28,838,810
Warrants to purchase 141,892 shares of common stock		-		-		301,434
Retained earnings		7,535,268		6,498,446		5,411,772
Accumulated other comprehensive income		272,956		368,880		392,611
Total Old Line Bancshares, Inc. stockholders' equity		37,053,758		35,940,904		41,686,842
Non-controlling interest		604,992		691,227		604,011
Total stockholders' equity		37,658,750		36,632,131		42,290,853
Total liabilities and stockholders' equity	$	401,909,950	$	357,218,526	$	317,730,625

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income

Years Ended December 31,	2010			2009		2008
Interest revenue
Loans, including fees	$	16,599,612		$	15,304,608	$	14,240,545
U.S. Treasury securities		-			7,230		69,079
U.S. government agency securities		163,787			296,560		181,792
Mortgage backed securities		1,399,979			1,059,386		356,398
Municipal securities		79,758			84,797		95,822
Federal funds sold		7,255			1,148		285,619
Other		258,440			342,127		194,981
Total interest revenue		18,508,831			17,095,856		15,424,236
Interest expense
Deposits		3,920,338			4,553,099		5,101,608
Borrowed funds		1,022,425			1,026,755		808,127
Total interest expense		4,942,763			5,579,854		5,909,735
Net interest income		13,566,068			11,516,002		9,514,501
Provision for loan losses		1,082,000			900,000		415,000
Net interest income after provision for loan losses		12,484,068			10,616,002		9,099,501
Non-interest revenue
Service charges on deposit accounts		306,548			307,012		311,268
Net gains (losses) on sales of investment securities		-			158,551		(3,081	)
Earnings on bank owned life insurance		336,834			376,165		366,785
Gain on sale of other real estate owned		192,724			-		-
Other fees and commissions		515,896			978,039		288,960
Total non-interest revenue		1,352,002			1,819,767		963,932
Non-interest expense
Salaries		4,681,679			4,037,027		3,316,219
Employee benefits		1,284,993			1,012,014		923,666
Occupancy		1,296,088			1,085,768		1,124,838
Equipment		416,094			354,531		313,133
Data processing		452,675			340,870		269,632
FDIC insurance and State of Maryland assessments		527,807			561,850		151,149
Merger and integration expenses		574,369			-		-
Other operating		2,175,800			1,864,821		1,274,141
Total non-interest expense		11,409,505			9,256,881		7,372,778
Income before income taxes		2,426,565			3,178,888		2,690,655
Income taxes		996,750			1,055,522		939,383
Net income		1,429,815			2,123,366		1,751,272
Less: Net income (loss) attributable to the non-controlling interest		(72,849	)		87,216		(4,846	)
Net income attributable to Old Line Bancshares, Inc.		1,502,664			2,036,150		1,756,118
Preferred stock dividends and discount accretion		-			485,993		29,329
Net income available to common stockholders	$	1,502,664		$	1,550,157	$	1,726,789

Basic earnings per common share	$	0.39		$	0.40	$	0.44
Diluted earnings per common share		0.38			0.40		0.44
Dividend per common share		0.12			0.12		0.12

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity

		Preferred stock &		Common stock						Additional paid-in			Retained			Accumulated other comprehensive		Comprehensive				Non-controlling
		Warrants		Shares			Par value			capital			earnings			income		income				interest
Balance, December 31, 2007	$	-		4,075,849		$	40,758		$	30,465,013		$	4,155,232		$	(29,749	)				$	-
Common stock repurchased		-		(217,085	)		(2,170	)		(1,749,485	)		-			-						-
Net income attributable to Old Line Bancshares, Inc.		-		-			-			-			1,756,118			-		$	1,756,118			-
Unrealized gain on
securities available for sale,
net of income taxes of $275,122		-		-			-			-			-			422,360			422,360			-
Comprehensive income		-		-			-			-			-			-		$	2,178,478			-
Recognition of non-controlling interest		-		-			-			-			-			-						608,857
Net income (loss) attributable to non-controlling interest		-		-			-			-			-			-						(4,846	)
Stock based compensation awards		-		-			-			104,541			-			-						-
Common stock cash dividend $0.12 per share		-		-			-			-			(470,249	)		-						-
Issuance of preferred stock & warrants		7,000,000		-			-			-			-			-						-
Preferred stock dividend payable and accretion		5,025		-			-			-			(29,329	)		-						-
Stock options exercised including tax benefit of $2,777		-		3,600			36			18,741			-			-						-
Balance, December 31, 2008		7,005,025		3,862,364			38,624			28,838,810			5,411,772			392,611						604,011
Net income attributable to Old Line Bancshares, Inc.		-		-			-			-			2,036,150			-		$	2,036,150			-
Unrealized loss on
securities available for sale,
net of income tax benefit of $15,458		-		-			-			-			-			(23,731	)		(23,731	)		-
Comprehensive income		-		-			-			-			-			-		$	2,012,419			-
Net income attributable to non-controlling interest		-		-			-			-			-			-						87,216
Stock based compensation awards		-		-			-			119,711			-			-						-
Common stock cash dividend $0.12 per share		-		-			-			-			(463,483	)		-						-
Repayment of preferred stock and warrant		(7,301,433	)	-			-			76,433			-			-						-
Preferred stock dividend and accretion		296,408		-			-			-			(485,993	)		-						-
Balance, December 31, 2009	$	-		3,862,364		$	38,624		$	29,034,954		$	6,498,446		$	368,880					$	691,227

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity (Continued)


	Preferred stock &		Common stock				Additional paid-in			Retained			Accumulated other comprehensive			Comprehensive			Non-controlling
	warrants		Shares		Par value		capital			earnings			income			income			interest
Balance, December 31, 2009	$	-		3,862,364	$	38,624	$	29,034,954		$	6,498,446		$	368,880					$	691,227
Net income attributable to Old Line Bancshares, Inc.		-		-		-		-			1,502,664			-		$	1,502,664			-
Unrealized loss on
securities available for sale,
net of income tax benefit of $62,483		-		-		-		-			-			(95,924	)		(95,924	)		-
Comprehensive income		-		-		-		-			-			-		$	1,406,740			-
Net income attributable to non-controlling interest		-		-		-		-			-			-						(72,849	)
Distribution to minority member(s)		-		-		-		-			-			-						(13,386	)
Stock based compensation awards		-		-		-		118,127			-			-						-
Common stock cash dividend $0.12 per share		-		-		-		-			(465,842	)		-						-
Stock options exercised including tax benefit of $13,630		-		11,700		117		53,712
Restricted stock issued		-		17,641		176		(176	)		-			-						-
Balance, December 31, 2010	$	-		3,891,705	$	38,917	$	29,206,617		$	7,535,268		$	272,956					$	604,992

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31,	2010			2009			2008
Cash flows from operating activities
Interest received	$	18,626,720		$	17,125,737		$	15,224,058
Fees and commissions received		878,982			1,339,179			438,955
Interest paid		(5,025,996	)		(5,687,411	)		(5,978,157	)
Cash paid to suppliers and employees		(9,805,184	)		(12,328,485	)		(3,101,842	)
Income taxes paid		(1,386,310	)		(1,073,097	)		(1,260,789	)
		3,288,212			(624,077	)		5,322,225
Cash flows from investing activities
Net change in time deposits in other banks		14,734,102			(1,764,102	)		(11,267,000	)
Purchase of investment securities
Held to maturity		(20,316,548	)		-			(8,237,285	)
Available for sale		(16,277,804	)		(12,868,441	)		(27,029,054	)
Proceeds from disposal of investment securities
Held to maturity at maturity or call		4,561,229			2,203,921			2,539,088
Available for sale at maturity or call		10,575,564			10,197,347			7,399,382
Available for sale sold		-			4,243,654			141,919
Loans made, net of principal collected		(37,039,236	)		(34,755,829	)		(29,494,324	)
Proceeds from sale of other real estate owned		415,893			-			-
Redemption (purchase) of equity securities		394,900			(831,100	)		(46,300	)
Return of principal from (investment in) real estate LLC		-			-			(205,050	)
Purchase of premises, equipment and software		(349,195	)		(5,642,201	)		(978,326	)
		(43,301,095	)		(39,216,751	)		(67,176,950	)
Cash flows from financing activities
Net increase (decrease) in
Time deposits		(1,930,127	)		40,266,481			52,043,034
Other deposits		56,109,521			14,650,671			1,575,373
Short term borrowings		(10,480,607	)		(1,623,995	)		1,408,972
Long term borrowings		(82,120	)		(5,077,066	)		-
Proceeds from stock options exercised, including tax benefit		53,829			-			18,777
Proceeds from issuance of preferred stock & warrants		-			-			7,000,000
Repurchase of preferred stock & warrants		-			(7,225,000	)		-
Repurchase of common stock		-			-			(1,751,655	)
Cash dividends paid-preferred stock		-			(213,888	)		-
Cash dividends paid-common stock		(465,842	)		(463,483	)		(470,249	)
Distrbutions to minority members		(13,386	)		-			-
		43,191,268			40,313,720			59,824,252
Net increase (decrease) in cash and cash equivalents		3,178,385			472,892			(2,030,473	)


Cash and cash equivalents at beginning of year		11,436,587		10,963,695		12,994,168
Cash and cash equivalents at end of year	$	14,614,972	$	11,436,587	$	10,963,695