MONROE BANCORP
<DOCUMENT>
<TYPE>EX-10.VIII
<SEQUENCE>4
<FILENAME>ex10-viii.txt
<TEXT>
Exhibit 10 (viii)
-----------------














                                 MONROE BANCORP

                      DIRECTORS' DEFERRED COMPENSATION PLAN

               (As Amended and Restated Effective January 1, 1999)










<PAGE>


                                 MONROE BANCORP
                      DIRECTORS' DEFERRED COMPENSATION PLAN
               (As Amended and Restated Effective January 1, 1999)


                                TABLE OF CONTENTS
                                -----------------

ARTICLE                                                                    PAGE
-------                                                                    ----

         INTRODUCTION .....................................................  1

I.       DEFINITIONS  .....................................................  1

         1.1      Accounting Date..........................................  1
         1.2      Board....................................................  1
         1.3      Committee................................................  1
         1.4      Company..................................................  1
         1.5      Director.................................................  1
         1.6      Disability...............................................  1
         1.7      Fees.....................................................  1
         1.8      Fiscal Year..............................................  1
         1.9      Individual Account.......................................  1
         1.10     Participant..............................................  1
         1.11     Participation Agreement..................................  1
         1.12     Plan ....................................................  2
         1.13     Plan Sponsor.............................................  2
         1.14     Rabbi Trust..............................................  2

II.      PARTICIPATION.....................................................  2

III.     DEFERRALS AND ALLOCATIONS.........................................  2

         3.1      Deferral Account.........................................  2
         3.2      Accounting...............................................  2
         3.3      Crediting of Deferrals...................................  3

IV.      INVESTMENT OF CONTRIBUTIONS.......................................  3

         4.1      Conversion of Accounts...................................  3
         4.2      Investments .............................................  3
         4.3      Unsecured Contractual Rights.............................  3

                                      -i-
<PAGE>

V.       DISTRIBUTIONS.....................................................  4

         5.1      Time of Payment of Benefits..............................  4
         5.2      Method of Payment of Benefits............................  4
         5.3      Benefit Payment Elections................................  4
         5.4      Death of the Participant and Beneficiary Designation.....  5

VI.      PLAN ADMINISTRATION...............................................  5

         6.1      Administration by the Committee..........................  5
         6.2      Power and Responsibilities of the Committee..............  6
         6.3      Liabilities..............................................  6
         6.4      Claims Procedure.........................................  7

VII.     AMENDMENT AND TERMINATION OF THE PLAN.............................  7

         7.1      Amendment of the Plan....................................  7
         7.2      Termination of the Plan..................................  7

VIII.    MISCELLANEOUS.....................................................  7

         8.1      Governing Law............................................  7
         8.2      Headings and Gender......................................  7
         8.3      Participant's Rights; Acquittance........................  7
         8.4      Spendthrift Clause.......................................  8
         8.5      Counterparts.............................................  8
         8.6      Limitations on Liability.................................  8
         8.7      Incapacity for Participant or Beneficiary................  8
         8.8      Corporate Successors.....................................  8
         8.9      Evidence  ...............................................  8
         8.10     Severability.............................................  8

         SIGNATURES   .....................................................  9


                                      -ii-
<PAGE>

                                  INTRODUCTION
                                  ------------

         The purpose of this Plan is to permit Directors of the Plan Sponsors to
defer the receipt and resulting taxation of the Fees received from Plan Sponsors
for services as a Director of Plan Sponsors.

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

         Whenever the initial letter of the following words or phrases is
capitalized in this Plan, those words and phrases shall have the meanings stated
below unless a different meaning is plainly required by the context:


         1.1 "Accounting Date" means the last day of each month (and any other
date selected by the Committee).

         1.2 "Board" means the Board of Directors of the Company.

         1.3 "Committee" means the Compensation Committee of the Board.

         1.4 "Company" means Monroe Bancorp.

         1.5 "Director" means any duly elected and serving member of the Board
of Directors of a Plan Sponsor.

         1.6 "Disability" means any mental or physical disability that would
render the affected Participant unable to perform his or her duties as a
Director.

         1.7 "Fees" means all fees payable to a Director for a Fiscal Year for
services rendered to a Plan Sponsor as a Director with respect to such Fiscal
Year.

         1.8 "Fiscal Year" means the calendar year.

         1.9 "Individual Account" means the individual bookkeeping account
maintained for each Participant in accordance with Section 3.1 which shall be a
book reserve account and shall be recorded on the financial books and records of
the Company as a liability owed to the Director.

         1.10 "Participant" means a Director who becomes a Participant pursuant
to the provisions of Article II of the Plan.

         1.11 "Participation Agreement" means one or more written agreements
between the Participant and a Plan Sponsor pursuant to which the Participant
elects to defer all or a portion of

                                      -1-
<PAGE>

his or her Fees, designates his beneficiary(ies), elects a form of distribution
and elects the time at which his benefit will be distributed under the Plan.

         1.12 "Plan" means the deferred compensation plan embodied herein, as
amended from time to time, known as the Monroe Bancorp Directors' Deferred
Compensation Plan as amended and restated effective January 1, 1999.

         1.13 "Plan Sponsor" means the Company and any other entity the Company
allows to adopt and become a co-sponsor of the Plan.

         1.14 "Rabbi Trust" means the rabbi trust established by the Company
with a corporate trustee to provide for the benefits created by this Plan.


                                   ARTICLE II
                                  PARTICIPATION
                                  -------------

         Each Director, while a Director, may elect to defer the receipt of all
or a portion of the Fees he or she would otherwise receive with respect to a
Fiscal Year. The election to defer shall be made by the execution of a
Participation Agreement and shall be effective with respect to services rendered
during the Fiscal Years which commence immediately after the date the Director
elects to defer the receipt of Fees. Each Director shall have the right to amend
or revoke his or her election to defer the receipt of his or her Fees for any
Fiscal Year which commences immediately after an amended Participation Agreement
is delivered to the Committee.

                                   ARTICLE III
                            DEFERRALS AND ALLOCATIONS
                            -------------------------

         3.1 Deferral Account. The Committee shall establish and maintain an
Individual Account in the name of each Participant, to which the Committee shall
credit the Fees deferred by the Participant pursuant to Article II and from
which the Committee shall debit all amounts paid to the Participant or his
designated beneficiary pursuant to Article V.

         3.2 Accounting. As of each Accounting Date, the Participants'
Individual Accounts will be adjusted as follows:

                  (i)      First, by charging a Participant's Individual Account
                           with any payments made to or on behalf of that
                           Participant or his designated beneficiary since the
                           last Accounting Date.

                  (ii)     Second, by adjusting the balances in all the
                           Participants' Individual Accounts, pro rata, so that
                           the total of the Individual Account balances equal
                           the adjusted net worth of the Rabbi Trust fund (as
                           determined below) as of that Accounting Date.

                                      -2-
<PAGE>

                  (iii)    Finally, by crediting each Participant's Individual
                           Account with any deferred Fees that are to be
                           allocated to his Individual Account as of that
                           Accounting Date.

The "adjusted net worth of the Rabbi Trust fund" as of any Accounting Date means
the fair market value of all the property held by the trustee under that trust
on that date, less an amount equal to the contributions made to the trustee
since the previous Accounting Date.

         3.3 Crediting of Deferrals. All amounts deferred by a Participant
pursuant to Article II shall be credited to the Participant's Individual Account
effective as of the last day of the month in which the deferred Fees are
contributed to the Rabbi Trust. Deferred Fees will be contributed to the Rabbi
Trust as soon as practicable following the date the Fees would otherwise have
been paid to the Participant had they not been deferred.


                                   ARTICLE IV
                           INVESTMENT OF CONTRIBUTIONS
                           ---------------------------

         4.1 Conversion of Accounts. Prior to June 30, 1998, Individual Accounts
were deemed to be invested in Monroe Stock. Effective as of June 30, 1998, each
Participant's Individual Account was converted to a dollar value by multiplying
the number of "shares" allocated to the Participant's Individual Account
(including the cash dividend on Monroe Stock to paid on or about June 30, 1998)
times the per share fair market value of Monroe Stock as of that date. This per
share fair market value was determined by the Board of Directors after reference
to a written valuation of Monroe Stock, on a minority, nonmarketable basis,
prepared by Hoefer & Arnett. From July 1, 1998 through December 31, 1998,
earnings were credited to each Participant's Individual Account at a rate equal
to the rate paid on December 31, 1998 for three-year notes issued by the U.S.
Treasury. Effective on the date on which amounts credited under the Plan are
first transferred to the Rabbi Trust, which date shall be on or as soon as
possible after January 1, 1999, the adjustment to each Participant's Individual
Account shall be determined by the earnings on the investments made under the
Plan through the Rabbi Trust.

         4.2 Investments. All deferrals under the Plan shall be credited to each
Participant's Individual Account as provided in Section 3.2. The Participant may
request that the trustee of the Rabbi Trust invest his Individual Account in any
investment approved by the Committee from time to time. The Committee may
establish any rule or procedure it deems necessary or desirable concerning the
Participant's ability to request or failure to request the investment of the
Rabbi Trust funds. No provision of the Plan shall impose or be deemed to impose
any obligation upon the Company, other than an unsecured contractual obligation
to make a cash payment to Participants and their beneficiaries in accordance
with the terms of the Plan. Benefits payable under the Plan shall be paid
directly by the Company from its general assets to the extent not paid from the
Rabbi Trust.

                                      -3-
<PAGE>

         4.3 Unsecured Contractual Rights. The Plan at all times shall be
unfunded and constitute a mere promise by the Company to make benefit payments
in the future. Notwithstanding any other provision of this Plan, neither a
Participant nor his or her designated beneficiary shall have any preferred claim
on, or any beneficial ownership interest in, any assets of the Company prior to
the time benefits are paid as provided in Article V, including any Fees deferred
by the Participant. All rights created under this Plan shall be mere unsecured
contractual rights of the Participant against the Company.


                                    ARTICLE V
                                  DISTRIBUTIONS
                                  -------------

         5.1 Time of Payment of Benefits. All amounts credited to a
Participant's Individual Account, including any adjustments credited in
accordance with Section 3.2, shall be or commence to be distributed to or for
the benefit of a Participant (or his designated beneficiary) as soon as
practicable following the Participant's death or Disability or, if earlier, the
later of (i) the last day the Participant is serving as a Director, or (ii) an
age specified by the Participant in his most recently filed Participation
Agreement. The election of the age at which benefits hereunder may be
distributed may be amended by the delivery of an amended Participation Agreement
to the Committee as described in section 5.3.

         5.2 Method of Payment of Benefits. The balance of a Participant's
Individual Account shall be paid by the Company in cash or kind, as determined
by the Committee, in one of the following methods effectively elected by the
Participant in a Participation Agreement:

                  (a)      A single lump sum.

                  (b)      Installments payable at such monthly or annual
                           intervals, over a period not in excess of 10 years,
                           as shall be elected by the Participant.


         5.3 Benefit Payment Elections.

                  (a)      In order to be effective, a Participant's election of
                           the manner in which his benefits shall be distributed
                           (including benefits which become payable as a result
                           of the Participant's death) must be made by
                           delivering a Participation Agreement or an amended
                           Participation Agreement to the Committee not later
                           than 60 days prior to the beginning of the Plan Year
                           in which the distribution event occurs. If the
                           Participant does not elect a form of distribution
                           under Section 5.2, or such election is not timely or
                           properly made under this Section 5.3, his entire
                           benefit shall be distributed in the form of a single
                           lump sum.

                  (b)      In the event a Participant properly elects and is
                           eligible to receive his Individual Account in the
                           form specified in Section 5.2(b), the Participant

                                      -4-
<PAGE>

                           must specify in his written election the number of
                           years over which the installments are to be
                           distributed.


         5.4 Death of the Participant and Beneficiary Designation.

                  (a)      Form and Time of Payment. In the event of a
                           Participant's death, the balance in his or her
                           Individual Account shall be paid to the Participant's
                           designated beneficiary in a single lump sum. Such
                           distribution shall be made as soon as practicable in
                           which the Participant's death occurs. If the
                           Participant dies after distribution of his benefits
                           under the Plan has commenced, his remaining benefit,
                           if any, shall be distributed in the same manner and
                           at the same time(s) as such benefit was being
                           distributed prior to his death, or in a single lump
                           sum, if effectively elected by the Participant in his
                           most recently filed Participation Agreement.

                  (b)      Designation of Beneficiaries. The Participant may
                           designate a primary and contingent beneficiary or
                           beneficiaries on forms provided by the Committee,
                           which for this purpose may include the Participation
                           Agreement. Such designation may be changed at any
                           time for any reason by the Participant and without
                           notice to or consent of any prior or future
                           beneficiaries. If the Participant fails to designate
                           a beneficiary, or if such designation shall for any
                           reason be illegal or ineffective, or if the
                           designated beneficiary(ies) shall not survive the
                           Participant, his benefits under the Plan shall be
                           paid: (i) to his surviving spouse; (ii) if there is
                           no surviving spouse, to the duly appointed and
                           qualified executor or other personal representative
                           of the Participant to be distributed in accordance
                           with the Participant's will or applicable intestacy
                           law; or (iii) in the event that there shall be no
                           such representative duly appointed and qualified,
                           then to such persons as, at the date of his death,
                           who would be entitled to share in the distribution of
                           the Participant's estate under the provisions of the
                           applicable statutes then in force governing the
                           descent of intestate property, in the proportions
                           specified in such statute. The Committee may
                           determine the identity of the distributees, and in so
                           doing may act and rely upon any information it may
                           deem reliable upon reasonable inquiry, and upon any
                           affidavit, certificate, or other document believed by
                           it to be genuine, and upon any evidence believed by
                           it to be sufficient.


                                   ARTICLE VI
                               PLAN ADMINISTRATION
                               -------------------

         6.1 Administration by the Committee. The Committee shall be responsible
for administering the Plan. Except as the Company shall otherwise expressly
determine, the Committee shall be charged with the full power and the
responsibility for administering the Plan

                                      -5-
<PAGE>

in all its details. Provided no Participant who is also a member of the
Committee shall vote on any matter concerning that Participant's individual
benefit hereunder.

         6.2 Powers and Responsibilities of the Committee.

                  (a)      The Committee shall have all powers necessary to
                           administer the Plan, including the power to construe
                           and interpret the Plan documents; to decide all
                           questions relating to an individual's eligibility to
                           participate in the Plan; to determine whether a
                           Participant has actually terminated as a Director; to
                           determine the amount, manner and timing of any
                           distribution of benefits or withdrawal under the
                           Plan; to resolve any claim for benefits in accordance
                           with Section 6.3, and to appoint or employ advisors,
                           including legal counsel, to render advice with
                           respect to any of the Committee's responsibilities
                           under the Plan. Any construction, interpretation, or
                           application of the Plan by the Committee shall be
                           final, conclusive and binding. All actions by the
                           Committee shall be taken pursuant to uniform
                           standards applied to all persons similarly situated.

                  (b)      Records and Reports. The Committee shall be
                           responsible for maintaining sufficient records to
                           determine each Participant's eligibility to
                           participate in the Plan, and the Fees of each
                           Participant for purposes of determining the amount of
                           contributions that may be made by or on behalf of the
                           Participant under the Plan.

                  (c)      Rules and Decisions. The Committee may adopt such
                           rules as it deems necessary, desirable, or
                           appropriate in the administration of the Plan. All
                           rules and decisions of the Committee shall be applied
                           uniformly and consistently to all Participants in
                           similar circumstances. When making a determination or
                           calculation, the Committee shall be entitled to rely
                           upon information furnished by a Participant or
                           beneficiary, the Plan Sponsors or the legal counsel
                           of the Company.

                  (d)      Application and Forms for Benefits. The Committee may
                           require a Participant or beneficiary to complete and
                           file with it an application for a benefit, and to
                           furnish all pertinent information requested by it.
                           The Committee may rely upon all such information so
                           furnished to it, including the Participant's or
                           beneficiary's current mailing address.

         6.3      Liabilities. The Committee shall be indemnified and held
                  harmless by the Plan Sponsors with respect to any actual or
                  alleged breach of responsibilities performed or to be
                  performed under the Plan.

                                      -6-
<PAGE>

         6.4      Claims Procedure.

                  (a)      Filing a Claim. Any Participant or beneficiary under
                           the Plan may file a written claim for a Plan benefit
                           with the Committee or with a person named by the
                           Committee to receive claims under the Plan. The
                           Committee shall review the claim and determine the
                           benefit payable, if any, as described in Section 6.2.

                  (b)      Court Action. No Participant or beneficiary shall
                           have the right to seek judicial review of a denial of
                           benefits, or to bring any action in any court to
                           enforce a claim for benefits prior to filing a claim
                           for benefits under this Section 6.3.


                                   ARTICLE VII
                      AMENDMENT AND TERMINATION OF THE PLAN
                      -------------------------------------

         7.1 Amendment of the Plan. The Company shall have, in its sole
discretion, the right at any time for any reason to modify, alter or amend the
Plan in whole or in part.

         7.2 Termination of the Plan. The Company reserves the right, in its
sole discretion, at any time for any reason to terminate the Plan. If the
Company elects to terminate the Plan, each Participant shall be entitled to
receive his or her benefits accrued through the effective date of the
termination of the Plan. Such accrued benefits shall be paid to the Participant
or to the Participant's designated beneficiary as soon as reasonably possible
following such date of termination in a single lump sum.

                                  ARTICLE VIII
                                  MISCELLANEOUS
                                  -------------

         8.1 Governing Law. The Plan shall be construed, regulated and
administered according to the laws of the State of Indiana, except in those
areas preempted by the laws of the United States of America in which case such
laws will control.

         8.2 Headings and Gender. The headings and subheadings in the Plan have
been inserted for convenience of reference only and shall not affect the
construction of the provisions hereof. In any necessary construction the
masculine shall include the feminine and the singular the plural, and vice
versa.

         8.3 Participant's Rights; Acquittance. No Participant shall acquire any
right to be retained as a Director by virtue of the Plan, nor, upon his
dismissal, or upon his voluntary termination as a Director, shall he have any
right or interest in or to any Plan assets other than as specifically provided
herein.

                                      -7-
<PAGE>

         8.4 Spendthrift Clause. No benefit or interest available hereunder will
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of the
Participant or his designated beneficiary, either voluntarily or involuntarily.

         8.5 Counterparts. This Plan may be executed in any number of
counterparts, each of which shall constitute but one and the same instrument and
may be sufficiently evidenced by any one counterpart.

         8.6 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, no member of the Board and no officer or employee of a
Plan Sponsor, no member of the Committee nor any individual acting as an
employee or agent of any of them shall be liable to any Participant or
beneficiary for any claim, loss, liability or expense incurred in connection
with the Plan, except when the same shall have been judicially determined to be
due to the gross negligence or willful misconduct of such person.

         8.7 Incapacity of Participant or Beneficiary. If any person entitled to
receive a distribution under the Plan is physically or mentally incapable of
personally receiving and giving a valid receipt for any payment due (unless
prior claim therefor shall have been made by a duly qualified guardian or other
legal representative), then, unless and until claim therefor shall have been
made by a duly appointed guardian or other legal representative of such person,
the Committee may provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a payment for the
account of such person and a complete discharge of any liability of the Plan
Sponsors and the Plan.

         8.8 Corporate Successors. The Plan shall not be automatically
terminated by a transfer or sale of assets of the Company or by the merger or
consolidation of the Company into or with any other corporation or other entity
("Transaction"), but the Plan shall be continued after the Transaction only if
and to the extent that the transferee, purchaser or successor entity agrees to
continue the Plan. However, the corporate successor must agree to be bound by
the terms of the Plan and each Director's Participation Agreement insofar as
they pertain to all benefits theretofore allocated to each Participant's
Individual Account and must agree to be assume and perform the obligations of
the Company hereunder and under each Participation Agreement.

         8.9 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.

         8.10 Severability. In the event any provisions of the Plan shall be
held to be 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 endorsed as if such illegal or invalid provisions had never been
contained in the Plan.

                                      -8-
<PAGE>

                                   SIGNATURES
                                   ----------

         IN WITNESS WHEREOF, the Company has caused this Monroe Bancorp
Directors' Deferred Compensation Plan to be amended and restated by its officers
thereunder duly authorized, this 30th day of December, 1998, but effective as of
January 1, 1999.


                                                     MONROE BANCORP



                                                     By: /s/ Mark D. Bradford
                                                         ----------------------
                                                     Its:  Secretary/Treasurer
                                                           --------------------
ATTEST:


By:  /s/ R. Scott Walters
     --------------------
Its:  Assistant Secretary/Assistant Treasurer
      ---------------------------------------












                                      -9-
<PAGE>

                               FIRST AMENDMENT OF
                                 MONROE BANCORP
                      DIRECTORS' DEFERRED COMPENSATION PLAN
                      -------------------------------------

               (As Amended and Restated Effective January 1, 1999)


         WHEREAS, Monroe Bancorp (the "Company") maintains the Monroe Bancorp
Directors' Deferred Compensation Plan (As Amended and Restated Effective January
1, 1999) (the "Plan"); and

         WHEREAS, the Company desires to amend the Plan to clarify the timing of
distribution elections;

         NOW, THEREFORE, pursuant to the authority reserved to the Company to
amend the Plan and delegated to the undersigned officers by action of the Board
of Directors, the Plan is hereby amended, effective on and after January 1,
2000, by substituting the phrase "in which the Participant ceases to serve as a
Director or in which the benefit is otherwise scheduled to be distributed, if
earlier" for the phrase "in which the distribution event occurs" where that
phrase appears in Section 5.3 of the Plan.


         IN WITNESS WHEREOF, the Company has caused this amendment to be
executed on its behalf by its duly authorized officers this 16th day of
December, 1999.


                                     MONROE BANCORP


                                     By: /s/ Mark D. Bradford
                                         --------------------

                                     Its: President and Chief Executive Officer
                                          -------------------------------------



ATTEST:

By:  /s/ Gordon M. Dyott
     -------------------

Its:  Vice President
      --------------


                                      -10-
<PAGE>

                               SECOND AMENDMENT OF
                                 MONROE BANCORP
                      DIRECTORS' DEFERRED COMPENSATION PLAN
                      -------------------------------------

               (As Amended and Restated Effective January 1, 1999)


         WHEREAS, Monroe Bancorp (the "Company") maintains the Monroe Bancorp
Directors' Deferred Compensation Plan (As Amended and Restated Effective January
1, 1999) (the "Plan"); and

         WHEREAS, the Company desires to amend the Plan to change the timing of
distribution elections and the manner of payment, and to update the claims
procedures;

         NOW, THEREFORE, pursuant to the authority reserved to the Company to
amend the Plan and delegated to the undersigned officers by action of the Board
of Directors, the Plan is hereby amended, generally effective on and after
January 1, 2004, unless otherwise specified herein, in the following
particulars:

         1.       By replacing the first sentence of Section 5.1 of the Plan
                  with the following:

                  "All amounts credited to a Participant's Individual Account,
                  including any adjustments credited in accordance with Section
                  3.2, shall be or commence to be distributed to or for the
                  benefit of a Participant (or his designated beneficiary) as
                  soon as practicable following the Participant's death or
                  Disability, or, if earlier, the later of (i) the last day of
                  the Fiscal Year in which the Participant ceases to serve as a
                  Director, or (ii) an age (no later than age 70 1/2) specified
                  by the Participant in his most recently filed Participation
                  Agreement."

         2.       By replacing subsection 5.2(b) of the Plan with the following:

                  "(b)     Installments payable at such quarterly, semi-annual
                           or annual intervals, over a period not in excess of
                           20 years, as shall be elected by the Participant."

         3.       By adding a subsection designated 5.2(c) to read as follows:

                  "(c)     A combination of the methods specified in subsections
                           (a) and (b)."

         4.       By adding the following sentence to follow the first sentence
                  of Section 5.3(a) effective December 18, 2003:

                  "Notwithstanding the preceding sentence a Participant may
                  elect to change the manner in which the benefits shall be
                  distributed (including benefits which become payable as a
                  result of the Participant's death) by delivering an amended

                                      -11-
<PAGE>

                  Participation Agreement to the Committee by December 31, 2003
                  and such election shall be effective 60 days after the
                  Committee receives the election."

         5.       By adding a subsection designated 5.3(c) to read as follows:

                  "(c)     In the event a Participant properly elects and is
                           eligible to receive his Individual Account in the
                           form specified in Section 5.2(c), the Participant
                           must specify in his written election the percentage
                           of the account which will be distributed in a single
                           sum and the percentage of the account which will be
                           distributed in installments, including the number of
                           years over which such installments shall be
                           distributed."

         6.       By replacing the first two sentences of subsection 5.4(a) of
                  the Plan with the following:

                  "In the event of a Participant's death prior to any
                  distribution of benefits, the balance in the Participant's
                  Individual Account shall be paid or commence to be paid to the
                  Participant's designated beneficiary in the manner elected by
                  the Participant in his most recently filed Participation
                  Agreement. Such distribution shall be made or commenced as
                  soon as practicable following the date of the Participant's
                  death."

         7.       By replacing Section 6.4 of the Plan with the following
                  effective January 1, 2002:

                  "6.4     Claims and Review Procedure.

                  (a)      Procedures Governing the Filing of Benefit Claims.
                           All Benefit Claims must be filed on the appropriate
                           claim forms available from the Committee or in
                           accordance with the procedures established by the
                           Committee for claim purposes. A "Benefit Claim" means
                           a request for a Plan benefit or benefits, made by a
                           Claimant or by an authorized representative of a
                           Claimant, which complies with the Plan's procedures
                           for making benefit claims. "Claimant" means a
                           Participant or a beneficiary who is claiming
                           entitlement to the payment of any benefit under the
                           Plan.

                  (b)      Notification of Benefit Determinations. The Committee
                           will notify a Claimant, in accordance with subsection
                           (c) below, of the Plan's benefit determination within
                           a reasonable period of time after receipt of a
                           Benefit Claim, but not later than 90 days (45 days in
                           the case of a Disability Claim) after receipt of the
                           Benefit Claim by the Plan.

                           If special circumstances require an extension of time
                           for processing the Benefit Claim, the Committee will
                           notify the Claimant of the extension prior to the
                           termination of the initial period described above.
                           The notice will indicate the special circumstances
                           requiring the extension of time and the date by which
                           the Plan expects to make the benefit determination.

                                      -12-
<PAGE>

                           In no event will the extension exceed a period of 90
                           days from the end of the initial period.

                           In the case of a Disability Claim, the extension
                           period will not exceed 30 days, unless prior to the
                           end of first 30-day extension period, the Committee
                           determines that, due to matters beyond its control, a
                           decision cannot be rendered within the extension
                           period, in which case the period for making the
                           determination may be extended for an additional 30
                           days. Every Disability Claim notice will specifically
                           explain the standards on which entitlement to a
                           benefit is based, the unresolved issues that prevent
                           a decision on the claim, the additional information
                           needed to resolve those issues and the Claimant's
                           right to provide the specified information within 45
                           days. If the extension is in effect due to the
                           Claimant's failure to submit information necessary to
                           decide a Disability Claim, the period for making the
                           benefit determination will be tolled from the date on
                           which the notice of the extension is sent to the
                           Claimant until the date on which the Claimant
                           responds to the request for information. The term
                           "Disability Claim" means a request for a Plan benefit
                           made by a Claimant due to the purported Disability of
                           a Plan Participant.

                  (c)      Manner and Content of Notification of Benefit
                           Determinations. All notices given by the Committee
                           under the Plan will be given to a Claimant, or to his
                           authorized representative, in a manner that satisfies
                           the standards of 29 CFR 2520.104b-1(b) as appropriate
                           with respect to the particular material required to
                           be furnished or made available to that individual.
                           The Committee may provide a Claimant with either a
                           written or an electronic notice of the Plan's benefit
                           determination. Any electronic notification will
                           comply with the standards imposed by 29 CFR
                           2520.104b-1(c)(1)(i), (iii) and (iv). In the case of
                           an Adverse Benefit Determination, the notice will set
                           forth, in a manner calculated to be understood by the
                           Claimant:

                           (i)      The specific reasons for the adverse
                                    determination;

                           (ii)     Reference to the specific Plan provisions
                                    (including any internal rules, guidelines,
                                    protocols, criteria, etc.) on which the
                                    determination is based;

                           (iii)    A description of any additional material or
                                    information necessary for the Claimant to
                                    complete the claim and an explanation of why
                                    such material or information is necessary;

                           (iv)     For a Disability Claim, the identification
                                    of any medical or vocational experts whose
                                    advice was obtained on behalf of the Plan in

                                      -13-
<PAGE>

                                    connection with Claimant's Adverse Benefit
                                    Determination, without regard to whether the
                                    advice was relied upon; and

                           (v)      A description of the Plan's review
                                    procedures and the time limits applicable to
                                    such procedures.

                  (d)      Appeal of Adverse Benefit Determinations. A Claimant
                           who receives an Adverse Benefit Determination and
                           desires a review of that determination must file, or
                           his authorized representative must file on his
                           behalf, a written request for a review of the Adverse
                           Benefit Determination, not later than 60 days (180
                           days for a Disability Claim) after receiving the
                           determination.

                           The written request for a review must be filed with
                           the Committee. Upon receiving the written request for
                           review, the Committee will advise the Claimant, or
                           his authorized representative, in writing that:

                           (i)      The Claimant, or his authorized
                                    representative, may submit written comments,
                                    documents, records, and any other
                                    information relating to the claim for
                                    benefits; and

                           (ii)     The Claimant will be provided, upon request
                                    of the Claimant or his authorized
                                    representative, reasonable access to, and
                                    copies of, all documents, records, and other
                                    information relevant to the Claimant's
                                    Benefit Claim, without regard to whether
                                    those documents, records, and information
                                    were considered or relied upon in making the
                                    Adverse Benefit Determination that is the
                                    subject of the appeal.

                  (e)      Benefit Determination on Review. All appeals by a
                           Claimant of an Adverse Benefit Determination will
                           receive a full and fair review by an appropriate
                           named fiduciary of the Plan. In the case of a
                           Disability Claim, the named fiduciary will not be:
                           (i) the party who made the Adverse Benefit
                           Determination that is the subject of the appeal, nor
                           (ii) the subordinate of that party. In performing
                           this review for a Disability Claim, the named
                           fiduciary will take into account all comments,
                           documents, records, and other information submitted
                           by the Claimant (or the Claimant's authorized
                           representative) relating to the claim, without regard
                           to whether the information was submitted or
                           considered in the initial benefit determination, and
                           will not afford deference to the initial Adverse
                           Benefit Determination. For a Disability Claim, the
                           named fiduciary will consult with a healthcare
                           professional who has appropriate training and
                           experience in the field of medicine involved in the
                           medical judgment and who was not consulted in
                           connection with the Adverse Benefit Determination and
                           who is not the subordinate of such an individual if

                                      -14-
<PAGE>

                           the named fiduciary believes that such a consultation
                           is necessary to properly complete the review process.

                  (f)      Notification of Benefit Determination on Review. The
                           Committee will notify a Claimant, in accordance with
                           subsection (g) below, of the Plan's benefit
                           determination on review within a reasonable period of
                           time, but not later than 60 days (45 in the case of a
                           Disability Claim) after the Plan's receipt of the
                           Claimant's request for review of an Adverse Benefit
                           Determination. If, however, special circumstances
                           require an extension of time for processing the
                           review by the named fiduciary, the Claimant will be
                           notified, prior to the termination of the initial 60
                           (or 45) day period, of the special circumstances
                           requiring the extension and the date by which the
                           Plan expects to render the Plan's benefit
                           determination on review, which will not be later than
                           120 days (90 days in the case of a Disability Claim)
                           after receipt of a request for review. Provided,
                           however, in the case of a Plan with a Committee or
                           other group designated as the appropriate named
                           fiduciary that holds regularly scheduled meetings at
                           least quarterly, the time limit of this subsection
                           will be modified in accordance with 29 CFR
                           2560.503-1(i)(1)(ii) or 29 CFR 2560.503-1(i)(3)(ii),
                           whichever is applicable.

                           If the extension period is in effect for a Disability
                           Claim but the extension is due to the Claimant's
                           failure to submit information necessary to decide a
                           claim, the period for making the benefit
                           determination on review will be tolled from the date
                           on which notification of the extension is sent to the
                           Claimant until the date on which the Claimant
                           responds to the request for additional information.

                  (g)      Manner and Content of Notification of Benefit
                           Determination on Review. The Committee will provide a
                           Claimant with notification of its benefit
                           determination on review in a method described in
                           subsection (c) above.

                           In the case of an Adverse Benefit Determination on
                           review, the notification must set forth, in a manner
                           calculated to be understood by the Claimant:

                           (a)      The specific reasons for the adverse
                                    determination on review;

                           (b)      Reference to the specific Plan provisions
                                    (including any internal rules, guidelines,
                                    protocols, criteria, etc.) on which the
                                    benefit determination on review is based;

                           (c)      A statement that the Claimant is entitled to
                                    receive, upon request and free of charge,
                                    reasonable access to, and copies of, all
                                    documents, records and other information
                                    relevant to the Claimant's Benefit Claim,
                                    without regard to whether those records were

                                      -15-
<PAGE>

                                    considered or relied upon in making the
                                    Adverse Benefit Determination on review,
                                    including any reports, and the identities,
                                    of any experts whose advice was obtained.

                  (h)      Court Action. No Participant or beneficiary shall
                           have the right to seek judicial review of a denial of
                           benefits, or to bring any action in any court to
                           enforce a claim for benefits, prior to filing a claim
                           for benefits and exhausting his rights to review
                           under this Section 6.4.

         IN WITNESS WHEREOF, the Company has caused this amendment to be
executed on its behalf by its duly authorized officers this 18th day of
December, 2003.

                                      MONROE BANCORP


                                      By:  /s/ Mark D. Bradford
                                           --------------------

                                      Its: President and Chief Executive Officer
                                           -------------------------------------

ATTEST:


By: /s/ R. Scott Walters
    --------------------

Its: Secretary
     ---------






                                      -16-

</TEXT>
</DOCUMENT>
