Exhibit 10.2

 

                    , 2005

 

«Sal» «FirstName» «LastName»

«Address1»

«City», «State» «PostalCode»

 

Dear «Salutation»:

 

STOCK OPTION AGREEMENT

(NON-QUALIFIED STOCK OPTIONS)

STOCK OPTION #NQ05-«Option»

 

The Administrator of the Columbia Bancorp 1997 Stock Option Plan (the “Plan”)
takes pleasure in extending to you an option (the “Option”) to purchase shares
of Common Stock of Columbia Bancorp (the “Common Stock”) pursuant to the Plan.
The Option shall be subject to the following terms and conditions:

 

(1) Non-Qualified Stock Option. The Option is intended not to qualify as an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended or replaced (the “Code”).

 

(2) Number of Shares. The Option covers «Shares» shares of Common Stock (the
“Shares”).

 

(3) Option Price. The exercise price per share of Common Stock covered by the
Option shall be $             (“Exercise Price Per Share”; hereinafter “Exercise
Price” means the exercise price with respect to all Shares acquired pursuant to
each exercise of the Option).

 

(4) Exercise of Option. [For an Option to a Non-Employee Director: This Option
may be exercised at any time on or after the Date of Grant.] [For an Option of
200 Shares or Less, other than an Option to a Non-Employee Director: Except as
provided in Section 5(c) of the Plan, this Option may not be exercised during
the first year after the Date of Grant, as defined in Paragraph (6) hereof.
Unless terminated earlier pursuant to other provisions hereof, this Option shall
become exercisable in full after one year after the Date of Grant.] [For an
Option of More than 200 Shares, other than an Option to a Non-Employee Director:

 

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Except as provided in Section 5(c) of the Plan, this Option (A) may not be
exercised during the first year after the Date of Grant, and (B) unless
terminated earlier pursuant to other provisions hereof, the Option may be
exercised to acquire up to: (i) twenty-five percent (25%) of the Shares after
one year after the Date of Grant; (ii) fifty percent (50%) after two years;
(iii) seventy-five percent (75%) after three years; and (iv) one hundred percent
(100%) after four years].

 

(5) Termination of Employment. Except as provided in Paragraph (5)(C) hereof,
this Option, to the extent it is not then exercisable, shall terminate when your
employment with Columbia Bancorp (the “Company”) and all Subsidiaries
terminates. Except as provided in Paragraphs (5)(A), (5)(B) and 5(C) hereof, the
Option, to the extent it is exercisable but has not been exercised (the
“Unexercised Option”), shall also terminate when your employment with the
Company and its Subsidiaries terminates.

 

(A) Retirement or Voluntary Resignation. If you terminate employment with the
Company and its Subsidiaries due to (i) Retirement, as defined hereinafter, or
(ii) voluntary resignation with the consent of the Board of Directors of the
Company or a Subsidiary, the Unexercised Option may be exercised until the
expiration of three (3) months after the date your employment terminates.
“Retirement” means a retirement from employment with the Company and its
Subsidiaries either on or after the first day of the month coinciding with or
next following your sixty-fifth (65th) birthday.

 

(B) Disability or Death. If you terminate employment with the Company and its
Subsidiaries because of (i) death or (ii) Disability, as defined hereinafter,
the Unexercised Option may be exercised (in the case of death, by your executor,
personal representative, or the person to whom the Unexercised Option shall have
been transferred by will or the laws of descent and distribution, as the case
may be) until the expiration of one (1) year after the date of your termination
of employment. If you die during the three (3) month post-termination exercise
period provided to you under Paragraph 5(A) above, or during the one (1) year
post-Disability exercise period provided to you under this Paragraph 5(B), the
Unexercised Option may be exercised by your executor, personal representative,
or the person to whom the Unexercised Option shall have been transferred by will
or the laws of descent and distribution, as the case may be, until the
expiration of one (1) year after the date of your death. “Disability” means a
permanent mental or physical disability due to accident or illness that renders
you unable to perform substantially all of the duties of your occupation with
the Company and the Subsidiaries for a period of at least one hundred eighty
(180) days, provided that you establish such disability to the satisfaction of
the Administrator. Evidence of such Disability shall include the certificate of
a competent licensed physician selected by you and approved by the Administrator
which confirms that you have a Disability as defined herein.

 

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(C) Directors and Consultants. The foregoing provisions of this Paragraph (5)
shall not apply if the Option is granted to a director or consultant of the
Company or a Subsidiary who is not also an employee of the Company or a
Subsidiary on the date of grant.

 

(6) Term of Option. This Option is effective as of the date the Administrator
approved the Option,                     , 20     (the “Date of Grant”).
Notwithstanding anything herein to the contrary, this Option may not be
exercised, in whole or in part, after                     , 20    .

 

(7) Manner of Exercise. You or any person exercising the Option may do so only
by delivering written notice thereof to the Administrator and delivering to the
Company the payments required under Paragraphs 7(A) and 7(B). Such notice shall
be in such form as the Administrator may require at its sole discretion.

 

(A) Payment of Exercise Price. Full payment for the Exercise Price shall be made
at or prior to the time that the Option, or any part thereof, is exercised (or,
in the discretion of the Administrator, at such later time as the certificates
for such Shares are delivered). Such payment shall be made: (i) by cash or
certified check; (ii) by tender (via delivery or attestation to the Company of
other shares of Common Stock of the Company which have a Fair Market Value on
the date of tender equal to the Exercise Price, provided that such shares have
been owned by you for a period of at least six months free of any substantial
risk of forfeiture or were purchased on the open market without assistance,
direct or indirect, from the Company; or (iii) by a broker-assisted cashless
exercise in accordance with Regulation T of the Board of Governors of the
Federal Reserve System and other applicable laws through a brokerage firm
pre-approved by the Administrator.

 

(B) Withholding Taxes. You shall pay to the Company, or make provision
satisfactory to the Administrator for payment of, any federal and state income
and employment taxes required to be withheld with respect to the Option no later
than the date of the event creating the tax liability. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to you, including the shares of Common Stock deliverable to
you upon exercise of the Option but any such deduction against shares shall not
exceed the statutory minimum withholding amount. In the event that payment to
the Company of such tax obligations is made in shares of Common Stock, such
shares shall be valued at Fair Market Value on the applicable date for such
purposes.

 

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(8) Right As Stockholder. You will have no rights as a stockholder solely
because of the grant or exercise of the Option before the Company issues to you
the certificates for the Shares as to which the Option has been exercised.

 

(9) Option Non-Assignable and Non-Transferable. The Option and all rights
granted hereunder, including the right to surrender the Option, is not
assignable or transferable other than by will or the laws of descent and
distribution and, during your lifetime, is exercisable only by you or your
guardian or legal representative.

 

(10) Restricted Stock. You will receive Shares restricted in terms of
transferability, as will be indicated in a legend printed on the stock
certificate in the event that there is not an effective registration statement
with respect to such Shares at the time of their issue.

 

(11) Terms of Plan. The Option is granted under and subject to the provisions of
the Plan, attached hereto and made a part hereof. Unless stated otherwise
herein, capitalized terms herein shall have the same meaning as defined in the
Plan.

 

(12) Notices. Any notice required or permitted to be given to the Administrator
shall be sufficient if in writing and hand delivered, or sent by registered or
certified mail, to:

 

Personnel, Compensation and Stock Option Committee

Columbia Bancorp

7168 Columbia Gateway Drive

Columbia, Maryland 21046

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

 

(13) Non-Guarantee of Employment. Nothing in the Plan or in this Non-Qualified
Stock Option Agreement shall confer any right on an individual to continue in
the employ of the Company or any Subsidiary or shall interfere in any way with
the right of the Company or a Subsidiary to terminate such employment at any
time with or without cause or notice and whether or not such discharge results
in the Option becoming unexercisable.

 

(14) Binding Effect. The covenants and agreements of this Non-Qualified Stock
Option Agreement contained herein shall be binding upon, and inure to the
benefit of, the heirs, legal representatives, successors, and assigns of the
respective parties hereto.

 

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(15) Entire Agreement. Except as provided in Paragraph (11) hereof, this
Non-Qualified Stock Option Agreement contains the entire agreement between the
Company and you with respect to the subject matter contained herein. Any oral or
written agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Non-Qualified Stock Option
Agreement shall be void and ineffective for all purposes.

 

(16) Governing Law. The validity, construction and effect of this Non-Qualified
Stock Option Agreement, and of any rules, regulations, determinations or
decisions made by the Administrator relating thereto, and the rights of any and
all persons having or claiming to have any interest hereunder, shall be
determined exclusively in accordance with applicable federal laws and the laws
of the State of Maryland, without regard to its conflict of laws principles.

 

(17) Amendment. This Non-Qualified Stock Option Agreement may be amended from
time to time by the Administrator in its discretion; provided, however, that it
may not be amended in a manner that would have a materially adverse effect on
the Option as determined in the discretion of the Administrator, except as
provided in the Plan or in a written document signed by you and the Company.

 

The copy of the Option enclosed should be signed by you, dated, and returned to
the Company prior to                     , 20     to acknowledge your receipt of
the Option and your approval of each of the terms and conditions hereof. If the
Option has not been returned to the Company by such date, accepted and approved
by you in writing, it shall terminate.

 

Very truly yours, ADMINISTRATOR, COLUMBIA
BANCORP 1997 STOCK OPTION PLAN By:  

 

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    John A. Scaldara, Jr.     President & Chief Operating Officer

 

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Accepted and Approved: STOCK OPTION #NQ05-«Option»

 

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«FirstName» «LastName» Dated:                     , 20     Enclosures

 

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