EXHIBIT 10.(i)
1999 DIRECTORS' STOCK OPTION PLAN
OF
MONROE BANCORP
1. Purpose. The 1999 Directors' Stock Option Plan of Monroe Bancorp
(the "Plan") is designed to promote the interests of Monroe Bancorp ("Company")
and its Subsidiaries through the granting of nonqualified stock options
("NSO's") to the members of the Board of Directors of the Company ("Directors").
2. Effective Date and Duration. The effective date of the Plan is
January 1, 1999. Options may be granted under the Plan for a period of ten (10)
years commencing January 1, 1999; however, no options may be exercised until the
Plan has been approved by a majority of the shares of the Company represented at
the shareholders' meeting at which approval of the Plan is considered. No
options shall be granted under the Plan after December 31, 2009. Upon that date,
the Plan shall expire, except as to outstanding options which options shall
remain in effect until they have been exercised, terminated or expired.
3. Administration.
(a) Administrative Committee. The Plan shall be administered
by the Executive Committee of the Board of Directors ("Committee"). The
Committee, from time to time, may adopt any rule or procedure it deems necessary
or desirable for the proper and efficient administration of the Plan provided it
is consistent with the terms of the Plan. The decision of a majority of the
Committee members shall constitute the decision of the Committee. In
administering the Plan, the Committee's actions and determinations shall be
binding on all interested parties. A member of the Committee shall be eligible,
at any time when he is such a member, to receive an option under the Plan. The
decision of a majority of the members of the Committee shall constitute the
decision of the Committee.
(b) Administrative Discretion. Notwithstanding any other
provisions of the Plan, unless set forth or otherwise contemplated herein, the
Committee shall have no authority to (i) grant NSO's; (ii) determine the option
period; (iii) determine the time or times at which NSO's will be granted; (iv)
determine the time or times when each NSO becomes exercisable; (v) determine
other conditions and limitations, if any, applicable to the exercise of each
NSO; or (vi) determine the nature and duration of the restrictions, if any, to
be imposed upon the sale or other disposition of shares acquired by any Director
upon exercise of an NSO, and the nature of the events, if any, and the duration
of the period, in which any Director's rights in respect of shares acquired upon
exercise of an option may be forfeited. Each NSO granted under the Plan to a
Director shall be evidenced by a written stock option agreement substantially in
the form attached hereto as Exhibit A. Any notice or document required to be
given to or filed with the Committee will be properly given or filed if
delivered or mailed by certified mail, postage prepaid, to the Committee at 210
East Kirkwood Avenue, Bloomington, Indiana 47408.
(c) No Contract of Employment. Neither the Plan nor any
stock option agreement executed hereunder shall constitute a contract of
employment between the Company
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and a Director. Participation in the Plan does not give any Director the right
to be retained, nominated or reelected as a Director, nor will participation in
the Plan give any Director any right or claim to any benefit under the Plan,
unless such right or claim has specifically accrued under the terms of the Plan.
4. Shares Covered by the Plan. The stock to be subject to options under
the Plan shall be shares of authorized common stock of the Company and may be
unissued shares or reacquired shares (including shares purchased in the open
market), or a combination thereof, as the Committee may from time to time
determine. Subject to the provisions of Section 11, the maximum number of shares
to be delivered upon exercise of all options granted under the Plan shall not
exceed one hundred fifty-three thousand (153,000) shares. If the exercise price
of any option granted under the Plan is satisfied by tendering shares to the
Company (by either actual delivery or by attestation), only the number of shares
issued net of shares tendered shall be deemed delivered for purposes of
determining the maximum number of shares available for delivery under the Plan.
Shares covered by an option that are forfeited due to termination of service or
that remain unpurchased or undistributed upon expiration or termination of the
option may be made subject to further options.
5. Eligibility and Grant of Options. On or as soon as reasonably
practicable following January 1, 1999, each member of the Board of Directors
shall receive an option to acquire five thousand (5,000) shares of common stock
of the Company. Thereafter, each individual who is elected to serve as a member
of the Board of Directors and who has not been previously granted an option
hereunder shall receive an option to acquire five thousand (5,000) shares of
Company stock. Such option shall be granted as soon as reasonably practicable
following the Director's election.
6. Option Price. The option price per share of stock under each NSO
shall be determined by the Committee in its discretion; provided, however, the
option price per share shall be not less than one hundred percent (100%) of the
Fair Market Value of the shares on the date on which the option is granted. For
this purpose, Fair Market Value means the per share closing price for the
Company's common stock on the last trading day prior to the date on which the
option is granted upon the principal securities exchange on which such shares
are traded or, if such shares are not then traded on any exchange, at the
average of the low bid and high asked price of such securities on such trading
day in the over-the-counter market. If the Company's stock is not traded in the
over-the-counter market, Fair Market Value shall mean the amount determined by
the Committee in its discretion and in good faith taking into account such
factors as the Committee deems relevant.
7. Option Period. The option period for each option granted under the
Plan shall be ten (10) years from the date of grant of such option.
8. Vesting and Exercise of Options. All options granted under the Plan
shall vest, and thereby become exercisable, on the first anniversary of the date
on which such options were
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granted. Notwithstanding the foregoing, in the event of a Change in Control of
the Company or the permanent and total disability or death of a Director, any
options granted under the Plan may be exercised in full without regard to any
restrictions on the vesting of the options. All rights to exercise an option
shall terminate sixty (60) days after the date on which the Director ceases to
be a Director of the Company, but not later than the date the option expires
pursuant to its terms, unless such termination is on account of permanent and
total disability or death. In this case, the option shares otherwise exercisable
may be exercised within one (1) year from the date the Director's status as a
Director ceases due to permanent and total disability or death, but not later
than the date the option expires pursuant to its terms. During such period,
subject to the limitations of the Plan, the Director, his guardian,
attorney-in-fact or personal representative, as the case may be, may exercise
the option in full. For purposes of the Plan, permanent and total disability
shall mean any disability that would qualify as a disability under Section
22(c)(3) of the Internal Revenue Code of 1986, as amended.
9. Payment for Stock. Full payment for shares purchased hereunder shall
be made at the time the option is exercised. Payment may be made by delivering
to the Company (a) cash; (b) whole shares of common stock of the Company
("Delivered Stock") which (i) has been owned by the Director for more than six
(6) months and has been paid for, within the meaning of Securities Exchange
Commission Rule 144 (and, if such stock was purchased from the Company by use of
a promissory note, such note has been fully paid with respect to such stock), or
(ii) was obtained by the Director in the public market or otherwise than through
the exercise of an option under this Plan or under any other stock option plan
involving Company stock; (c) a combination of cash and Delivered Stock; or (d)
provided that a public market for the Company's common stock exists, (i) through
a "same day sale" commitment from the Director and a broker-dealer that is a
member of the National Association of Securities Dealers ("NASD Dealer") whereby
the Director irrevocably elects to exercise the option and to sell a portion of
the common stock so purchased in order to pay the option price, and whereby the
NASD Dealer irrevocably commits upon receipt of such stock to forward the option
price directly to the Company; or (ii) through a "margin" commitment from the
Director and an NASD Dealer whereby the Director irrevocably elects to exercise
the option and to pledge the stock so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the option
price and whereby the NASD Dealer irrevocably commits upon receipt of such stock
to forward the option price directly to the Company. Delivered Stock shall be
valued by the Committee at its Fair Market Value determined as of the date of
the exercise of the option. No shares shall be issued until full payment for
them has been made, and a Director shall have none of the rights of a
shareholder with respect to any shares until they are issued to him. Upon
payment of the full purchase price, and any required withholding taxes, the
Company shall issue a certificate or certificates to the Director evidencing
ownership of the shares purchased pursuant to the exercise of the option which
contain(s) such terms, conditions and provisions as may be required and as are
consistent with the terms, conditions and provisions of the Plan and the stock
option agreement between the Company and the Director. For purposes of this
Section 9, payment for shares purchased hereunder may be delivered to the
Company through such attestation or
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certification procedures as may be established by the Committee from time to
time in its sole discretion.
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10. Nontransferability. No option shall be transferable, except by the
Director's will or the laws of descent and distribution. During the Director's
lifetime, his option shall be exercisable (to the extent exercisable) only by
him. The option, and any rights and privileges pertaining thereto, shall not be
transferred, assigned, pledged or hypothecated by the Director in any way,
whether by operation of law of otherwise and shall not be subject to execution,
attachment or similar process.
11. Changes in Stock.
(a) Substitution of Stock and Assumption of Plan. In the event
of any change in the common stock of the Company through stock dividends,
split-ups, recapitalizations, reclassifications or otherwise, or in the event
that other stock shall be substituted for the present common stock of the
Company as the result of any merger, consolidation or reorganization or similar
transaction which constitutes a Change in Control of the Company, then the
Committee shall make appropriate adjustment or substitution in the aggregate
number, price and kind of shares available under the Plan and in the number,
price and kind of shares covered under any options granted or to be granted
under the Plan. The Committee's determination in this respect shall be final and
conclusive. Provided, however, that the Company shall not, and shall not permit
its Subsidiaries to, recommend, facilitate or agree or consent to a transaction
or series of transactions which would result in a Change of Control of the
Company unless and until the person or persons or entity or entities acquiring
or succeeding to the assets or capital stock of the Company or any of its
Subsidiaries as a result of such transaction or transactions agrees to be bound
by the terms of the Plan so far as it pertains to options theretofore granted
and agrees to assume and perform the obligations of the Company and its
Successor hereunder (as defined in subsection (b)).
(b) Conversion of Stock. In the event of a Change in Control
of the Company pursuant to which another person or entity acquires control of
the Company (such other person or entity being the "Successor"), the kind of
shares of common stock which shall be subject to the Plan and to each
outstanding option shall, automatically by virtue of such Change in Control of
the Company, be converted into and replaced by shares of common stock, or such
other class of securities having rights and preferences no less favorable than
common stock of the Successor, and the number of shares subject to the option
and the purchase price per share upon exercise of the option shall be
correspondingly adjusted, so that, by virtue of such Change in Control of the
Company, each Director shall have the right to purchase (i) that number of
shares of common stock of the Successor which have a fair market value equal, as
of the date of such Change in Control of the Company, to the fair market value,
as of the date of such Change in Control of the Company, of the shares of common
stock of the Company theretofore subject to his option, (ii) for a purchase
price per share which, when multiplied by the number of shares of common stock
of the Successor subject to the option, shall equal the aggregate exercise price
at which the Director could have acquired all of the shares of common stock of
the Company previously optioned to the Director.
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12. Information to be Furnished by Directors. Directors, or any other
persons entitled to benefits under the Plan, must furnish to the Committee such
documents, evidence, data or other information as the Committee considers
necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each Director, and each other person who is entitled to
benefits hereunder, are to be provided on the condition that he furnish full,
true and complete data, evidence or other information, and that he will promptly
sign any document reasonably related to the administration of the Plan requested
by the Committee.
13. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
14. Gender and Number. When the context admits, words in the masculine
gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural.
15. Action by Company. Any action required of or permitted by the
Company under the Plan shall be by resolution of the Board of Directors or by a
person or persons authorized by resolution of the Board of Directors.
16. Controlling Laws. Except to the extent superseded by the laws of
the United States, the laws of Indiana, without reference to the choice of law
principles thereof, shall be controlling in all matters relating to the Plan.
17. Mistake of Fact. Any mistake of fact or misstatement of facts shall
be corrected when it becomes known and proper adjustment made by reason thereof.
18. Severability. In the event any provisions of the Plan shall be held
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if such illegal or invalid provisions had never been contained in
the Plan.
19. Effect of Headings. The descriptive headings and Sections of the
Plan are inserted for convenience of reference and identification only and do
not constitute a part of the Plan for purposes of interpretation.
20. Amendment and Discontinuance. The Board of Directors may, at any
time, without the approval of the shareholders of the Company (except as
otherwise required by applicable law, rule or regulations, including without
limitation any shareholder approval of the safe harbor provisions of Rule 16b-3
promulgated under the Securities Exchange Act of 1934) alter, amend, modify,
suspend or discontinue the Plan, but may not, without the consent of the holder
of an option, make any alteration which would adversely affect an option
previously granted under the Plan. Provided, further, the Board of Directors may
not, without the approval
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of the shareholders of the Company, make any alteration which would (a) increase
the aggregate number of shares subject to options under the Plan, except as
provided in Section 11; (b) decrease the minimum option price, except as
provided in Section 11; (c) extend the term of the Plan or the term during which
any option can be exercised; (d) change the restrictions on the transferability
of options; (e) change the manner of determining the option price; (f) change
the time(s) at or circumstances under which options may be exercised; (g) change
the class of individuals eligible for options; or (h) withdraw administration of
the Plan from the Committee or the Board of Directors.
21. Liability. No member of the Board of Directors, the Committee or
officers or employees of the Company or any of its Subsidiaries shall be
personally liable for any action, omission or determination made in good faith
in connection with the Plan.
22. Withholding. A Director shall be solely responsible for all
federal, state, city and local taxes applicable to his exercise of an NSO under
the Plan and, where required by applicable law, will pay to the Company all such
taxes. The Committee may, in its discretion and subject to such rules as it may
adopt, permit a Director to satisfy, in whole or in part, any withholding tax
obligation which may arise in connection with the exercise of the option by
having the Company retain shares of stock which would otherwise be issued in
connection with the exercise of the option or accept delivery from the Director
of shares of Company stock which have a Fair Market Value, determined of the
date of the delivery of such shares, equal to the amount of withholding tax to
be satisfied by that retention or delivery.
23. Miscellaneous.
(a) The term "Board" or "Board of Directors" means board of
directors of the Company.
(b) The term "Subsidiary" or "Subsidiaries" means any banking
institution or other corporation more than fifty percent (50%) of whose total
combined voting stock of all classes is held by the Company or by another
corporation qualifying as a Subsidiary within this definition.
(c) The term "Change in Control of the Company" means (i) any
merger or consolidation of the Company or any Subsidiary irrespective of which
party is the surviving entity; (ii) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the assets of the Company or any
Subsidiary; (iii) any tender offer, exchange offer or other purchase offer
and/or agreement to purchase as much as (or more than) twenty percent (20%) of
the outstanding common stock of the Company or any Subsidiary; (iv) during any
period of two (2) consecutive years during the term of the Plan specified in
Section 2, individuals who at the date of the adoption of the Plan constitute
the Board of Directors of the Company cease for any reason to constitute at
least a majority thereof, unless the election of each Director at the beginning
of such period has been approved by Directors representing at least a majority
of the
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Directors then in office who were Directors on the date of the adoption of the
Plan; or (v) a majority of the Board of Directors or a majority of the
shareholders of the Company approve, adopt, agree to recommend, or accept any
agreement, contract, offer or other arrangement providing for, or any series of
transactions resulting in, any of the transactions described above.
Notwithstanding the foregoing, a Change in Control of the Company (A) shall not
occur as a result of the issuance of stock by the Company in connection with any
public offering of its stock, or (B) be deemed to have occurred with respect to
any transaction unless such transaction has been approved or tendered by a
majority of the shareholders who are not Section 16 grantees. For this purpose,
a Section 16 grantee is a person subject to potential liability under Section
16(b) of the Securities Exchange Act of 1934, as amended with respect to
transactions involving equity securities of the Company.
MONROE BANCORP
DATED:_________________________ By:___________________________________
Charles G. Conville, President
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