Chief Operating Officer Employment Agreement

Exhibit 10.5


EMPLOYMENT AGREEMENT


Employment Agreement, dated as of July 26, 2005, between The Columbia Bank, a Maryland trust company (the " Bank" or " Employer" ), Columbia Bancorp, a Maryland corporation (" Columbia" ), Fulton Financial Corporation, a Pennsylvania corporation (" Fulton" ), and John A. Scaldara, Jr., an adult individual (the " Executive" ). The Bank, Columbia and Fulton are collectively referred to herein as the " Companies" .

BACKGROUND

Executive is currently employed as the President and Chief Operating Officer of the Bank and the President and Chief Operating Officer of Columbia. Bank and Executive have previously entered into an Employment Agreement, dated February 26, 1996, as amended (" Original Agreement" ), which provides for certain payments upon the occurrence of a change in control. Columbia and Fulton have entered into an Agreement and Plan of Merger of even date herewith (the " Merger Agreement" ) providing for the merger (the " Merger" ) of Columbia with and into Fulton. Following the effective date of the Merger, the Employer desires to employ Executive, and Executive desires to be employed by the Employer, on the terms and conditions contained in this Agreement. In addition, the Executive will receive a portion of the change of control payments provided for in the Original Agreement as further set forth herein.


NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements contained herein and intending to be legally bound hereby, the parties hereto agree as follows:

Section 1. Capacity and Duties.

1.1 Employment: Acceptance of Employment . The Employer hereby employs Executive, and Executive hereby agrees to be employed by the Employer, for the period and upon the terms and conditions hereinafter set forth.

1.2 Capacity and Duties .

(a) Executive shall serve as President and Chief Operating Officer of the Bank. Executive shall perform such other duties and shall have such authority consistent with his position as may from time to time reasonably be specified by the Chairman and the Board of Directors of the Bank (the " Board" ). Executive shall report directly to the Chairman and shall perform his duties for the Bank principally at the Bank' s offices located in, or at such other locations determined by the Chairman and senior management of Fulton (" Fulton Senior Managemen t" ) within a 25 mile radius of Howard County, Maryland, except for periodic travel that may be necessary or appropriate in connection with the performance of Executive' s duties hereunder.

(b) Executive shall devote his full working time, energy, skill and best efforts to the performance of his duties hereunder, in a manner that will faithfully and diligently further the business and interests of the Bank, and shall not be employed by or participate or engage in or be a part of in any manner the management or operation of any business

enterprise other than the Bank without the prior written consent of the Fulton Senior Management, which consent may be granted or withheld in the Fulton Senior Management' s sole discretion. Executive shall be permitted to continue to operate and participate in John A. Scaldara, Jr. & Associates, LLC consistent with past practice.


Section 2. Term of Employment.

2.1 Term . The term of the Executive' s employment under this Agreement (the Employment Period" ) shall commence on the effective date of the Merger (the " Effective Date" ) and shall continue until the earlier of (i) the close of business on the date which is three (3) years after the date on which, during the Employment Period, either of the Companies gives written notice of termination of this Agreement to the Executive, or the Executive gives written notice of termination of this Agreement to either of the Companies, as applicable, but not later than the close of business on March 31, 2028, (ii) termination of this Agreement by the Bank for any reason other than Cause (as defined in Section 4.3) or by the Executive other than for Good Reason (as defined in Section 4.2), (iii) death of the Executive, (iv) Disability (as defined in Section 4.4) of the Executive, (v) resignation of the Executive for Good Reason, or (vi) discharge of the Executive for Cause.

Section 3. Compensation.

3.1 Basic Compensation . As compensation for Executive' s services hereunder, the Bank shall pay to Executive a salary at an annual rate equal to $244,000 (inclusive of any holiday bonus paid by the Bank), payable in periodic installments in accordance with the Bank' s regular payroll practices in effect from time to time. The Executive shall be considered for his normal year-end salary increase and incentive compensation for 2005, which shall be determined by the Bank consistent with past practice. For years subsequent to the initial year of this Agreement, Executive' s salary shall be at least in the amount of his salary for such initial year with such increases, if any, as may be established by the Board of Directors of the Bank (the " Board" ). Executive' s annual salary, as determined in accordance with this Section 3.1, is hereinafter referred to as his " Base Salary" . The Executive is expected to continue to participate in the Bank' s incentive compensation plan during the Employment Period. Until the third anniversary of the Effective Date, the Executive' s total compensation during any year of the Employment Period shall not be less than $319,000.


3.2 Employee Benefits . In addition to the compensation provided for in Section 3.1, Executive shall be entitled during the Employment Period to participate in such of the Bank' s employee retirement and welfare benefit plans and other benefit programs as and to the extent any such benefit programs, plans or arrangements are or may from time to time be in effect during the Employment Period, as determined by the Bank. To the extent Executive is unable to participate in any non-health insurance employee benefit plan or program provided for under this Agreement because he is ineligible to participate under the terms thereof, Employee shall be compensated in respect of such inability to participate through payment by Bank to Executive, on an annual basis, of an amount equal to the annual cost that would have been incurred by Bank (or by Fulton, if the plan or program is maintained by Fulton) if the Executive were able to participate in such plan or program.


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3.3 Vacation . Executive shall be entitled to annual paid vacation, leave of absence and leave for illness or temporary disability in conformity with the Bank' s regular policies and practices which shall be similar to those offered at Fulton' s other bank subsidiaries, and any leave on account of illness or temporary disability shall not constitute a breach by the Executive of his agreements hereunder.


3.4 Expense Reimbursement . During the term of his employment, the Bank shall reimburse Executive for all reasonable expenses incurred by him in connection with the performance of his duties hereunder in accordance with its regular reimbursement policies as in effect from time to time and upon receipt of itemized vouchers therefor and such other supporting information as the Bank may reasonably require.


Section 4. Termination of Employment.


4.1 Voluntary Termination . In the event Executive' s employment is voluntarily terminated by Executive other than for Good Reason (as defined in Section 4.2), the Bank shall be obligated to pay Executive his Base Salary through the effective date of his termination, together with applicable expense reimbursements and all accrued and unpaid benefits and vested benefits in accordance with the applicable employee benefit plan. Upon making the payments described in this Section 4.1, the Bank shall have no further compensation obligation to Executive hereunder.

4.2 Termination Without Cause; Termination for Good Reason .


(a) In the event:

(i) Executive' s employment is terminated by the Bank for any reason other than " Cause" (as defined herein); or


(ii) Executive' s employment is terminated by Executive for " Good Reason" (as defined herein);

then the Bank shall continue to pay Executive all of the consideration provided for in Section 3.1 above for the three years following such termination. For purposes of the foregoing, the consideration payable under this Section 3.1 shall include the Base Salary (as in effect immediately prior to the termination) plus the average of his incentive compensation for the three calendar years preceding the termination, provided the amount of the foregoing payments shall not, prior to the third anniversary of the Effective Date, be less than $319,000 per year. During such period, the Executive shall also continue to be eligible to participate in the employee benefit plans cited in Section 3.2, with the exception of health insurance, to the extent he remains eligible under the applicable employee benefit plans. Health insurance shall be provided as set forth in Section 7.2(b).

(b) As used herein, the term " Good Reason" shall mean the following:


(i) material breach of the Bank' s material obligations under this Agreement, provided that the Bank has not remedied such breach after notice and a reasonable opportunity to cure;


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(ii) any decrease in Executive' s Base Salary as increased during his term of employment pursuant to this Agreement (except for decreases that are in conjunction with decreases for substantially all Fulton senior executives), provided that total compensation shall not be less than $319,000, any material reduction in Executive' s duties or authority (other than as a result of the consolidation of the Bank with an affiliate of Fulton, so long as Executive is offered a senior executive position in the combined organization), and any material reduction in Executive' s employee benefits below those required to be provided from time to time pursuant to Section 3.2 and 3.3; or

(iii) The Bank requiring Executive to be based at a location outside a 25 mile radius of Howard County, Maryland, except for reasonably required travel on Fulton' s or the Bank' s business.


4.3 Termination for Cause . Executive' s employment hereunder shall terminate immediately upon notice of termination for " Cause" (as defined herein), in which event the Bank shall not thereafter be obligated to make any further payments hereunder other than amounts (including salary, expense reimbursement, etc.) accrued under this Agreement as of the date of such termination in accordance with generally accepted accounting principles. As used herein, " Cause" shall mean the following, provided that, in the case of circumstances described in clauses (c), (d) and (e) below, Executive shall have been given notice and a reasonable opportunity to cure:

(a) fraud committed in connection with Executive' s employment, dishonesty, theft, misappropriation or embezzlement of the Bank' s funds;

(b) conviction of any felony, crime involving fraud or misrepresentation, or of any other crime (whether or not connected with his employment) the effect of which is likely to adversely affect the Bank or its affiliates;

(c) a material failure by the Executive to perform his duties under this Agreement;

(d) use of alcohol or other drugs which interferes with the performance by Executive of his duties; or


(e) conduct on the part of Executive that brings public discredit or injures the reputation of the Bank or Fulton, in Fulton' s reasonable opinion.


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4.4 Benefits Following Death or Disability .

(a) Following Executive' s total disability (as determined under the Bank' s long-term disability plan or, if no such plan then exists, by a physician selected by the Board) (" Disability" ) or death during the term of this Agreement, the employment of the Executive will terminate automatically, in which event the Bank shall not thereafter be obligated to make any further payments hereunder other than amounts (including salary, expense reimbursement, etc.) accrued under this Agreement as of the date of such termination in accordance with generally accepted accounting principles or as otherwise specifically provided herein.

(b)

(i) In the event of a termination of this Agreement as a result of the Executive' s death, (A) the Bank shall pay the Executive' s estate an amount equal to six months' Base Salary at the rate and as required by Section 3.1 and in effect immediately prior to the date of death, (B) to the extent permitted under the terms of the applicable employee benefit plans, the Bank shall continue benefits under the Bank' s sickness, accident or health insurance for a period of six months following death of the Executive for those dependents and beneficiaries of the Executive who were covered by such programs, plans or arrangements at the date of the Executive' s death, and (C) the Executive' s dependents, beneficiaries and estate, as the case may be, will receive such survivor and other benefits as they may be entitled under the terms of the benefit programs, plans, and arrangements described in Section 3.2 which provide benefits upon death of the Executive.

(ii) In the event of a termination of this Agreement as a result of the Executive' s Disability, (A) the Bank shall pay the Executive an amount equal to six months' Base Salary at the rate and as required by Section 3.1 and in effect immediately prior to the date of Disability, (B) to the extent permitted under the terms of the applicable employee benefit plans, the Bank shall continue benefits under the Bank' s sickness, accident and health insurance for two years following the date of Disability for the Executive and his dependents and beneficiaries who are covered by such programs, plans and arrangements during the two-year period; and (C) the Executive, and his dependents, beneficiaries and estate, as the case may be, will receive such benefits as they may be entitled under the terms of the employee benefit programs, plans, and arrangements described in Section 3.2 which provided benefits upon Disability of the Executive.

(iii) For the purposes of (i) and (ii) above, the Executive shall pay the same percentage of the total cost of coverage under the applicable employee benefit plans as he was paying w ...