Exhibit 10.3
 
NONQUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT (the “Agreement”), entered into as of the Grant Date (as defined
in paragraph 1), by and between the Participant (as defined in paragraph 1) and
Corus Bankshares, Inc. (the “Company”);

WITNESSETH THAT:

WHEREAS, the Company maintains the Equity Award and Incentive Plan (formerly
named the 2006 Stock Option Plan (the “Plan”)), which is incorporated into and
forms a part of this Agreement, and the Participant has been selected by the
committee administering the Plan (the “Committee”) to receive a non-qualified
stock option award (the “Award”) under the Plan as set forth in this Agreement;

NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as
follows:

1.  Terms of Award. The following terms used in this Agreement shall have the
meanings set forth in this paragraph 1:

(a)
The “Participant” is [name].

(b)
The “Grant Date” is [grant date].

(c)
The number of “Covered Shares” shall be [number of shares] shares of Stock.

(d)
The “Exercise Price” is $[exercise price] per share.

Other terms used in this Agreement are defined pursuant to paragraph 8 or
elsewhere in this Agreement.

2.  Award and Exercise Price. This Agreement specifies the terms of the option
(the “Option”) granted to the Participant to purchase the number of Covered
Shares of Stock at the Exercise Price per share as set forth in paragraph 1. The
Option is not intended to constitute an “incentive stock option” as that term is
used in Code section 422.
 

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3.  Date of Exercise. Subject to the limitations of this Agreement, the Option
shall be exercisable with respect to each Installment shown on the following
schedule on or after the Vesting Date applicable to that Installment (provided
that the Participant’s Date of Termination has not occurred before that Vesting
Date):

“INSTALLMENT”
 
“VESTING DATE” APPLICABLE TO INSTALLMENT
20% of Covered Shares
 
One-year anniversary of Grant Date
20% of Covered Shares
 
Two-year anniversary of Grant Date
20% of Covered Shares
 
Three-year anniversary of Grant Date
20% of Covered Shares
 
Four-year anniversary of Grant Date
20% of Covered Shares
 
Five-year anniversary of Grant Date

 
The Option may be exercised on or after the Date of Termination only with
respect to that portion of the Option that was exercisable immediately prior to
the Date of Termination, or as to which it became exercisable on the Date of
Termination in accordance with sub-paragraphs 3(a) and 3(b), and only for the
period prior to the Expiration Date (defined in paragraph 4).

Notwithstanding the foregoing provisions of this paragraph 3, the Option shall
become exercisable with respect to all of the Covered Shares (to the extent it
is not then otherwise exercisable) as follows:

(a)
The Option shall become fully exercisable upon the Participant’s Date of
Termination, if the Participant’s Date of Termination occurs by reason of the
Participant’s death or Disability.

(b)
The Option shall become fully exercisable upon a Change in Control with respect
to the Participant, if the Participant’s Date of Termination does not occur
before the Change in Control.

If the employment of a Participant shall terminate for Cause, rights under all
outstanding Options shall terminate upon the Participant’s Date of Termination
and no portion of any outstanding Option shall be exercisable on or after such
termination.

4.  Expiration. The Option shall not be exercisable after the Company’s close of
business on the last business day that occurs prior to the Expiration Date. The
“Expiration Date” shall be earliest to occur of:

(a)
the ten-year anniversary of the Grant Date;

(b)
if the Participant’s Date of Termination occurs by reason of death, the one-year
anniversary of the Date of Termination;

(c)
if the Participant’s Date of Termination occurs by reason of Disability or
retirement, the 90 day anniversary of the Date of Termination; or

 
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(d)
if the Participant’s Date of Termination occurs for reasons other than death,
Disability, or retirement (and except as otherwise provided in paragraph 3 with
respect to a Date of Termination for Cause), the one month anniversary of the
Date of Termination.

5. Method of Option Exercise. Subject to the terms of this Agreement and the
Plan, the Option may be exercised in whole or in part by filing a written notice
with the Secretary of the Company at its corporate headquarters prior to the
Company’s close of business on any business day after such Option becomes
exercisable up until and including the last business day that occurs prior to
the Expiration Date, provided that the Option may not be exercised at any one
time for less than 100 shares or the number of shares then purchasable under the
Option, whichever is less. Such notice shall specify the number of shares of
Stock which the Participant elects to purchase, and shall be accompanied by
payment of the Exercise Price for such shares of Stock indicated by the
Participant’s election. Payment shall be by cash or by check payable to the
Company. At the election of the Participant: (i) all or a portion of the
Exercise Price may be paid by the Participant by delivery of shares of Stock
owned by the Participant for not less than six months prior to the payment date
having an aggregate Fair Market Value (valued as of the date of exercise) that
is equal to the amount of cash that would otherwise be required; and (ii) the
Participant may pay the Exercise Price by irrevocably authorizing a third party
to sell shares of Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding resulting from
such exercise. The Committee may disapprove of any election or may suspend or
terminate the right to make elections.

6.  Withholding. All deliveries and distributions under this Agreement are
subject to withholding of all applicable taxes. At the election of the
Participant, and subject to such rules and limitations as may be established by
the Committee from time to time, such withholding obligations may be satisfied
through the surrender of Shares (i) which the Participant already owns, or (ii)
to which the Participant is otherwise entitled under the Plan; provided,
however, that Shares described in this clause (ii) may be used to satisfy not
more than the Company’s minimum statutory withholding obligation (based on
minimum statutory withholding rates for Federal and state tax purposes,
including payroll taxes, that are applicable to such taxable income).

7. Transferability. The Option is not transferable other than as designated by
the Participant by will or by the laws of descent and distribution, and during
the Participant’s life, may be exercised only by the Participant.

8. Security Laws. The Option shall not be exercisable if and to the extent the
Company determines that such exercise would violate applicable state or Federal
securities laws or the rules and regulations of any securities exchange or
market on which the Stock is traded. If the Company makes such a determination,
it shall use all reasonable efforts to obtain compliance with such laws, rules
and regulations. In making any determination hereunder, the Company may rely on
the opinion of counsel for the Company. If, by reason of the foregoing
restrictions, the Option is not exercisable, the Company shall settle the Award
by a payment of cash equal to the product of the applicable number of Covered
Shares multiplied by the excess of the market value per share of the Stock over
the Exercise Price.
 
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9. Definitions. For purposes of this Agreement, the terms used in this Agreement
shall be subject to the following:

(a)
“Cause” has the meaning set forth in section 2.1(f) of the Plan.

(b)
“Change in Control” has the meaning set forth in section 2.1(e) of the Plan.

 
(b)
“Code” has the meaning set forth in section 2.1(g) of the Plan.

(c)
“Date of Termination.” The Participant’s “Date of Termination” shall be the
first day occurring on or after the Grant Date on which the Participant is not
employed by the Company or any Subsidiary, regardless of the reason for the
termination of employment; provided that a termination of employment shall not
be deemed to occur by reason of a transfer of the Participant between the
Company and a Subsidiary or between two Subsidiaries; and further provided that
the Participant’s employment shall not be considered terminated while the
Participant is on a leave of absence from the Company or a Subsidiary approved
by the Participant’s employer.

(d)
“Disability” has the meaning set forth in section 2.1(j) of the Plan.

(e)
“Stock” or “Shares” means the common stock of the Company.

(f)
“Subsidiary” has the meaning set forth in section 2.1(v) of the Plan.

Except where the context clearly indicates the contrary, a word, term, or phrase
used in this Agreement shall have the same meaning ascribed to such word, term
of phrase within the Plan.

10.  Heirs and Successors. This Agreement shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company’s assets and business. If any rights
exercisable by the Participant or benefits deliverable to the Participant under
this Agreement have not been exercised or delivered, respectively, at the time
of the Participant’s death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be delivered to the Designated Beneficiary,
in accordance with the provisions of this Agreement and the Plan. The
“Designated Beneficiary” shall be the beneficiary or beneficiaries designated by
the Participant in a writing filed with the Company in such form and at such
time as the Company shall require. If a deceased Participant fails to designate
a beneficiary, or if the Designated Beneficiary does not survive the
Participant, any rights that would have been exercisable by the Participant and
any benefits distributable to the Participant shall be exercised by or
distributed to the legal representative of the estate of the Participant. If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the Designated Beneficiary’s exercise
of all rights under this Agreement or before the complete distribution of
benefits to the Designated Beneficiary under this Agreement, then any rights
that would have been exercisable by the Designated Beneficiary shall be
exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary shall
be distributed to the legal representative of the estate of the Designated
Beneficiary.
 
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11.  Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding on
all persons.

12.  Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of this Agreement shall be subject to the terms of the Plan, a copy of
which may be obtained by the Participant from the office of the Secretary of the
Company; and this Agreement is subject to all interpretations, amendments, rules
and regulations promulgated by the Committee from time to time pursuant to the
Plan.

13.  Not An Employment Contract. The Option will not confer on the Participant
any right with respect to continuance of employment or other service with the
Company or any Subsidiary, nor will it interfere in any way with any right the
Company or any Subsidiary would otherwise have to terminate or modify the terms
of such Participant’s employment or other service at any time.

14.  Notices. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailing but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant’s address indicated by the
Company’s records, or if to the Company, at the Company’s principal executive
office.

15.  Fractional Shares. In lieu of issuing a fraction of a share upon any
exercise of the Option, resulting from an adjustment of the Option pursuant to
paragraph 4.2(d) of the Plan or otherwise, the Company will be entitled to pay
to the Participant an amount equal to the fair market value of such fractional
share.

16.  No Rights As Shareholder. The Participant shall not have any rights of a
shareholder with respect to the shares subject to the Option, until a stock
certificate has been duly issued following exercise of the Option as provided
herein.

17.  Amendment. This Agreement may be amended by written agreement of the
Participant and the Company, without the consent of any other person.
 
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IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company
has caused these presents to be executed in its name and on its behalf, all as
of the Grant Date.
 

     
CORUS BANKSHARES, INC.
            By:    

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Its:
             
Participant
             

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[name of participant]

 
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