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                                  EXHIBIT 10.20
                                   F&M BANCORP

                             1999 STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS

1. PURPOSES OF THE PLAN:

         To advance the interests of F&M Bancorp (the "Corporation") and its
subsidiaries by assisting in attracting and retaining qualified persons to serve
as directors of the Corporation and its subsidiaries, encouraging stock
ownership by directors, and more closely aligning the personal interests of
directors with the interests of stockholders.

2. ADMINISTRATION:

         The Plan shall be administered by a committee (the "Committee")
consisting of not less than two directors of the Corporation to be appointed by
and to serve during the pleasure of the Board of Directors. The Committee shall
have full power to construe and interpret the Plan and to promulgate such
regulations with respect to the Plan as it may deem desirable. The Committee
shall report its deliberations to the Board of Directors. Notwithstanding the
above, the selection of the Directors to whom stock options are to be granted,
the timing of such grants, the number of shares subject to any stock option, the
exercise price of any stock option, the periods during which any stock option
may be exercised and the term of any stock option shall be as hereinafter
provided, and the Committee shall have no discretion as to such matters.

3. STOCK SUBJECT TO OPTION:

         The shares to be issued upon exercise of options to be granted under
the Plan shall be 60,000 shares of the Common Stock (par value $5.00 per share)
of the Corporation (the "Common Stock") to be authorized by stockholders for
issuance under the Plan. If any unexercised option terminates for any reason,
the shares covered thereby shall become available for grant of an option again.

4. TERMS AND CONDITIONS OF OPTIONS:

         Options under this Plan are intended to be non-statutory options not
qualifying under any section of the Internal Revenue Code of 1986, as amended
(the "Code"), (commonly referred to as non-qualified options). All options
granted under this Plan shall be issued upon the following terms and conditions:

     (a)  OPTION PRICE. The option price per share with respect to each option
          shall be not less than: (i) 100% of the fair market value of the
          Common Stock on the date the option is granted.

     (b)  NUMBER OF OPTIONS. Each year each person who shall be elected to serve
          as a director of the Corporation or whose term shall continue shall be
          awarded not more than 2000 shares in option form on the day following
          the annual stockholders meeting.



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     (c)  EXERCISE OF OPTIONS.

                           (i) Except as provided in paragraph (ii) below, full
                  payment for shares acquired shall be made in cash or by
                  certified check at or prior to the time that an option, or any
                  part thereof, is exercised. The participant will have no
                  rights as a stockholder until the certificate for those shares
                  as to which the option is exercised has been issued by the
                  Corporation. No option may be exercised during the first 6
                  months from the date of grant. Thereafter, options shall be
                  exercisable in full. The Committee may impose resale
                  restrictions on all or a portion of the shares delivered upon
                  exercise of any option. All options will, however, vest and
                  become fully exercisable in the event of a change-in-control.

              Change-in-Control of the Corporation. Change-in-Control shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:


            (i)     any Person is or becomes the Beneficial Owner, directly or
                    indirectly, of securities of the Corporation (not including
                    in the securities beneficially owned by such Person any
                    securities acquired directly from the Corporation or its
                    Affiliates) representing 25% or more of the combined voting
                    power of the Corporation's then outstanding securities,
                    excluding any Person who becomes such a Beneficial Owner in
                    connection with a transaction described in clause (A) of
                    paragraph (iii) below; or
           (ii)     the following individuals cease for any reason to constitute
                    a majority of the number of directors then serving on the
                    Board; individuals who, on the date hereof, constitute the
                    Board and any new director (other than a director whose
                    initial assumption of office is in connection with an actual
                    or threatened election contest, including but not limited to
                    a consent solicitation, relating to the election of
                    directors of the Corporation) whose appointment or election
                    by the Board or nomination for election by the Corporation's
                    shareholders was approved or recommended by a vote of at
                    least two-thirds (2/3) of the directors then still in office
                    who either were directors on the date hereof or whose
                    appointment, election or nomination for election was
                    previously so approved or recommended; or
          (iii)     there is consummated a merger or consolidation of the
                    Corporation or any direct or indirect subsidiary of the
                    Corporation with any other corporation, other than (A) a
                    merger or consolidation which would result in the voting
                    securities of the Corporation outstanding immediately prior
                    to such merger or consolidation continuing to represent
                    (either by remaining outstanding or by being converted into
                    voting securities of the surviving entity or any parent
                    thereof), in combination with the ownership of any trustee
                    or other fiduciary holding securities under an employee
                    benefit plan of the Corporation or any subsidiary of the
                    Corporation, at least 60% of the combined voting power of
                    the securities of the Corporation or such surviving entity
                    or any parent thereof outstanding immediately after such
                    merger or consolidation, or (B) a merger or consolidation
                    effected to implement a recapitalization of the Corporation
                    (or similar transaction) in which no Person is or becomes
                    the Beneficial Owner, directly or indirectly, of securities
                    of the Corporation (not including in the securities
                    Beneficially Owned by such Person any securities acquired
                    directly from the Corporation or its Affiliates)
                    representing 25% or more of the combined voting power of the
                    Corporation then outstanding securities.
           (iv)     the shareholders of the Corporation approve a plan of
                    complete liquidation or dissolution of the Corporation or
                    there is consummated an agreement for the sale or
                    disposition by the Corporation of all or substantially all
                    of the Corporation's assets, other than a sale or



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                    disposition by the Corporation of all or substantially all
                    of the Corporation's assets to an entity, at least 60% of
                    the combined voting power of the voting securities of which
                    are owned by shareholders of the Corporation in
                    substantially the same proportions as their ownership of the
                    Corporation immediately prior to such sale;
            (v)     the Corporation ceases to own, directly or indirectly,
                    securities of any subsidiary representing 50% or more of the
                    combined voting power of the subsidiary's then outstanding
                    securities; or
           (vi)     there is consummated an agreement for the sale or
                    disposition by the Corporation of all or substantially all
                    of a subsidiary's assets, other than a sale or disposition
                    by the Corporation of all or substantially all of the
                    subsidiary's assets to an entity, at least 60% of the
                    combined voting power of the voting securities of which are
                    owned by shareholders of the Corporation in substantially
                    the same proportions as their ownership of the subsidiary
                    immediately prior to such sale; provided however, that such
                    a sale or disposition should only be effective for those
                    option holders, if any, employed by the subsidiary whose
                    assets are so sold or otherwise disposed of, and not all
                    participating option holders.

          "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
          under Section 12 of the Exchange Act.

          "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
          under the Exchange Act.

          "Board" shall mean the board of directors of the Corporation.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
          amended from time to time.

          "Person" shall have the meaning given in Section 3(a)(9) of the
          Exchange Act, as modified and used in Sections 13(d) and 14(d)
          thereof, except that such term shall not include (i) the Corporation
          or any of their subsidiaries, (ii) a trustee or other fiduciary
          holding securities under an employee benefit plan of the Corporation
          or any of their Affiliates, (iii) an underwriter temporarily holding
          securities pursuant to an offering of such securities, or (iv) a
          corporation owned, directly or indirectly, by the shareholders of the
          Corporation in substantially the same proportions as their ownership
          of stock of the Corporation.

                           (ii) In the discretion of the Committee, the option
price of an option may be payable through the delivery of shares of Common Stock
with a value equal to the option price or in a combination of cash and Common
Stock with a value equal to the option price.


          (d) TERM OF OPTION.

          No option shall be granted for a term of more than 10
          years from the date such option is granted.

          (e) TERMINATION OF EMPLOYMENT. Each option, to the extent that it
          shall not have been exercised, shall terminate 90 days after the date
          on which the participant ceases to serve as a director of the
          Corporation. Nothing in this paragraph shall operate to 



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          extend the term of the option beyond the term stated in the agreement
          granting the option or to accelerate the period during which portions
          of the option may be exercised.

          (f) OPTION NONASSIGNABLE AND NONTRANSFERABLE. Each option and all
          rights thereunder, including the right to surrender the option, shall
          be nonassignable and nontransferable other than by will or the laws of
          descent and distribution or pursuant to a qualified domestic relations
          order as defined by the Code or Title I of the Employee Retirement
          Income Security Act, or the rules thereunder. The designation of a
          beneficiary by a participant in the Plan does not constitute a
          transfer. Options shall be exercisable during the optionee's lifetime
          only by the optionee or his or her guardian or legal representative.
          Upon death, options shall be exercisable by the option holder's
          personal representative. Notwithstanding the foregoing restrictions,
          in the event that Rule 16b-3 promulgated under the Securities Exchange
          Act of 1934 is amended to permit further assignment or transfer of
          options, such assignments or transfers shall be permissible under the
          Plan.

5. SURRENDER OF OPTIONS FOR CASH:

         Any option granted under the Plan, with the express statement in the
option grant recognizing this paragraph, may include a right to surrender to the
corporation up to 50% of the option to the extent then exercisable and receive
in exchange a cash payment equal to the excess of the fair market value of the
shares covered by the option or portion thereof surrendered over the aggregate
option price of such shares. For the purposes of this paragraph, fair market
value shall be determined by the Committee. Such right may be granted by the
Board of Directors upon recommendation of the Committee concurrently with the
option or thereafter by amendment upon such terms and conditions as the
Committee may recommend. Shares subject to an option or portion thereof that
have been so surrendered shall not thereafter be available for option grants
under the Plan. The Committee may from time to time recommend to the Board of
Directors the maximum amount of cash that may be paid upon surrender of options
in any year, may determine that, if the amount to be received by any optionee is
reduced in any year because of such limitation, all or a portion of the amount
not paid may be paid in any subsequent year or years, and may limit the right of
surrender to certain periods during the year.

6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION:

         If the outstanding shares of the Common Stock are increased, decreased,
or changed into, or exchanged for a different number or kind of shares or
securities of the Corporation, without receipt of consideration by the
Corporation, through reorganization, merger, statutory share exchange,
recapitalization, reclassification, stock split-up, stock dividend, stock
consolidation, or otherwise, an appropriate and proportionate adjustment shall
be made in the number and kind of shares as to which options may be granted. A
corresponding adjustment in the price per share and number and kind of shares
allocated to unexercised options, or portions thereof, which shall have been
granted prior to any such change shall likewise be made. Any such adjustment,
however, in an outstanding option shall be made without change in the total
price applicable to the unexercised portion of the option but with a
corresponding adjustment in the price for each share subject to the option.
Adjustments under this section shall be made by the Board of Directors, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final and conclusive. No fractional shares of Common Stock shall be
issued under the Plan on account of any such adjustment.



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7. EFFECTIVE DATE OF THE PLAN:

         The Plan shall become effective upon approval by the Board of
Directors, subject to approval by the stockholders of the Corporation.

8. TERMINATION DATE:

         No options may be granted under the Plan after December 31, 2005.
Subject to Section 4(d), options granted before the termination date for the
Plan may extend beyond that date.

9. STOCK OPTION AGREEMENTS AND COMMON STOCK RECEIVED UPON EXERCISE:

         (a) STOCK OPTION AGREEMENT. Options awarded to participants under the
Plan shall be evidenced by a stock option agreement (the "Agreement"). Each
Agreement shall designate the number of shares of Common Stock to be acquired by
the participant upon exercise of the stock option and the price per share at
which the option may be exercised, subject to any adjustment as provided herein.
Each Agreement shall be executed by the Corporation and by the participant,
shall be binding upon each of them, and may be executed in separate
counterparts, each of which shall be deemed to be an original and all of which
taken together constitute one and the same agreement.

         (b) RESTRICTION ON EXERCISE: The stock options granted hereunder may
not be exercised if the issuance of the Common Stock upon such exercise or the
method of payment of consideration for such Common Stock would constitute a
violation of any applicable federal or state securities or other law or
regulation. As a condition to the exercise of any stock option granted
hereunder, the Corporation may require the participant to make any
representation and warranty to the Corporation as may be required or advisable
under any applicable law or regulation.

         (c) RESTRICTED STOCK. If the shares of Common Stock that will be
received upon the exercise of stock options granted under the Plan have not been
registered under the Securities Act of 1933 or any applicable state securities
laws they will be restricted stock. The certificates representing such shares of
Common Stock will bear the following legend:

         THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE (THE
         "SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED (THE "ACT") AND HAVE BEEN ISSUED PURSUANT TO EXCEPTIONS UNDER
         THE ACT AND UNDER APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE
         SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
         REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SHARES UNDER SUCH
         ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
         REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNDER APPLICABLE STATE
         SECURITIES LAWS OR UNLESS SOLD PURSUANT TO AND IN COMPLIANCE WITH RULE
         144 OF SUCH ACT.

10. COMPLIANCE WITH LAWS AND REGULATIONS:

         The grant, holding and vesting of all options under the Plan shall be
subject to any and all requirements and restrictions that may, in the opinion of
the Committee, be necessary or advisable for the purposes of complying with any
statute, rule or regulation of any governmental authority, or any agreement,
policy or rule of any stock exchange or other regulatory organization governing
any market on which the Common Stock is traded. The Corporation may withhold or
require payment for income and/or employment taxes as required by law.



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11. AMENDMENT OF THE PLAN:

         The Plan may be amended by the Board of Directors; however, no
amendment to the Plan materially increasing the benefits accruing to
participants or materially increasing the number of shares of Common Stock that
may be issued upon the exercise or surrender of stock options under the Plan
(except adjustments pursuant to Section 6) or materially modifying any
requirements as to eligibility for participation in the Plan shall be effective
unless approved by the stockholders of the Corporation. No amendment shall
become effective without the prior approval of the stockholders of the
Corporation if stockholder approval would be required for continued compliance
with Rule 16b-3 of the Exchange Act.

12. MISCELLANEOUS:

         (a) EXPENSES. The Corporation shall bear all expenses and costs in
connection with the administration of the Plan.
         (b) DESIGNATION OF BENEFICIARIES. A participant may designate a
beneficiary to receive any distribution under the Plan upon his or her death.
         (c) APPLICABLE LAW. The validity, interpretation and administration of
this Plan and any rules, regulations, determinations or decisions made
hereunder, and the rights of any and all persons having or claiming to have any
interest herein or hereunder, shall be determined exclusively in accordance with
the laws of the State of Maryland, without regard to the choice of laws
provisions thereof.
         (d) HEADINGS. The headings herein are for reference purposes only and
shall not affect the meaning or interpretation of the Plan.
         (e) NOTICES. All notices or other communications made or given pursuant
to this Plan shall be in writing and shall be sufficiently made or given if
hand-delivered or mailed by certified mail, addressed to any participant at the
address contained in the records of the Corporation or to the Corporation at its
principal office.
         (f) FEDERAL SECURITIES LAW REQUIREMENT. Awards granted hereunder shall
be subject to all conditions required under Rule 16b-3 to qualify the award for
any exception from the provisions of Section 16(b) of the Securities Exchange
Act of 1934 available under that Rule.