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              ANB CORPORATION 1996 DIRECTORS' STOCK OPTION PLAN



    1.   PURPOSE.  The purpose of the ANB Corporation 1996 Directors' Stock
Option Plan (the "Plan") is to provide to non-employee members of the Board
of Directors of ANB Corporation (the "Corporation"), an opportunity to
acquire common voting stock of the Corporation ("Common Stock"), thereby
encouraging such non-employee directors' ownership in the Corporation and
providing a long-term incentive for non-employee directors to enhance
shareholder value. The Plan provides for the granting of solely nonqualified
stock options ("NSOs").

    2.   ADMINISTRATION OF THE PLAN.  The Plan shall be administered,
construed and interpreted by a committee comprised of at least two (2)
non-eligible members of Board of Directors (the "Committee"), who shall be
designated from time to time by the Board of Directors of the Corporation. If
a member of the Committee, for any reason, shall cease to serve, the vacancy
shall be filled by the Board of Directors. Any member of the Committee may
be removed, at any time, with or without cause, by the Board of Directors. No
member of the Committee shall be eligible, at any time when he/she is such a
member or within one (1) year prior to his/her appointment to the Committee,
to be granted an option under the Plan. The decision of a majority of the
members of the Committee shall constitute the decision of the Committee, and
the Committee may act either at a meeting at which a majority of the members
of the Committee is present or by a written consent signed by all members of
the Committee.

    (a)  RULE 16b-3 COMPLIANCE.  Notwithstanding any Plan provision to the
         contrary, the Plan is intended to meet the requirements of Rule
         16b-3(c)(2)(ii) adopted under the Securities Exchange Act of 1934,
         as amended (or its successor) ("Act"), and accordingly is intended
         to be self-governing. To this end, the Plan requires no
         discretionary action by any administrative body with regard to any
         transaction hereunder. To the extent, if any, that any questions of
         interpretation arise, such questions shall be resolved by the
         Committee. Transactions under the Plan are intended to comply with
         all applicable conditions of Rule 16b-3 under the Securities
         Exchange Act of 1934 (of its successors). To the extent any
         provision of this Plan or any action by the Committee or the Board
         fails to so comply, it shall be deemed null and void to the extent
         permitted by law and deemed advisable by the Committee.

    (b)  STOCK OPTIONS AGREEMENTS.  Each option granted under the Plan shall
         be evidenced by a written stock option agreement which contains
         terms and conditions established by the Committee consistent with
         the provisions of the Plan. The Committee also shall have authority to
         prescribe, amend or rescind rules and regulations relating to the
         Plan, and to make all other determinations and interpretations
         necessary or advisable in connection with the administration of the
         Plan. The Committee's determinations and interpretations shall be final
         and conclusive.


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    3.   ELIGIBILITY.  Options may be granted hereunder only to non-employee
members of the Board of Directors.

    4.   STOCK SUBJECT TO THE PLAN.  There shall be reserved for issuance
upon the exercise of options granted under the Plan Ninety-six thousand
(96,000) shares of Common Stock, without par value, which may be authorized
but unissued shares of the Corporation. Subject to the provisions of Section 9,
the shares for which options may be granted under the Plan shall not exceed that
number.  If any option shall expire or terminate for any reason without having
been exercised in full, the unpurchased shares subject thereto shall (unless
the Plan shall have terminated) become available for the grant of other
options under the Plan.

    The Committee annually shall grant to each non-employee director
("Optionee") who is a director on the date of grant an option to acquire
four thousand (4,000) shares of Common Stock ("Election Options"). Election
Options shall be granted on the first (1st) day of the month following the
month in which the Annual Meeting of Shareholders is held. The Committee
shall not have any authority to exercise discretion with respect to an
Optionee's eligibility for Election Options or with respect to the number of
the Election Options granted. The first Election Options shall be granted on
May 1, 1996.

    5.   TERMS OF OPTION.  The stock option agreement between the Corporation
and the Optionee shall be subject to the following terms and conditions:

    (a)  OPTION PRICE.  The price to be paid for each share of Common Stock
         upon the exercise of each option shall not be less than the Fair
         Market Value of such stock determined on the date the option is
         granted. For all purposes of the Plan, the term "Fair Market Value"
         shall be the mean between the reported closing bid and asked prices
         for the shares of Common Stock as quoted by the National Association of
         Securities Dealers Automated Quotation System ("NASDAQ"). If the Common
         Stock is not quoted by NASDAQ, its Fair Market Value shall be
         determined by the Committee based upon the quotations of the entities
         which make a market in the Corporation's Common Stock and such other
         factors as the Committee shall deem appropriate.

    (b)  PERIOD OF EXERCISE OF OPTION.  All options granted under the Plan
         shall not be exercisable after the expiration of ten (10) years from
         the date on which such option is granted.

    (c)  EXERCISE OF OPTIONS.  Except as otherwise provided herein, each
         Optionee must serve as a director of the Corporation for one (1)
         year from the date the option is granted before he/she can exercise
         any part thereof. After such one (1) year period, options will be
         exercisable as provided herein. Each option will be divided into
         four (4) installments with each installment to be approximately
         equal in size. The first installment shall not be exercisable until
         after one (1) year from the date the option is granted, and each
         succeeding installment shall not be exercisable until


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         one (1) year from the date that the prior installment became
         exercisable. When the right to exercise any installment accrues, the
         shares of Common Stock included in that installment may be purchased
         at that time or from time to time thereafter during the term of the
         option. Provided, however, an option, unless it has earlier expired
         and subject to the provisions hereof and to any provisions in the
         Option Agreement, may be exercised (1) immediately upon or at any
         time after the Optionee attains age seventy (70) or (2) at any time
         during the thirty (30) day period immediately following the day on
         which a Change in Control of the Corporation occurs.

         (i)    The option price of each share of Common Stock purchased upon
                the exercise of an option shall be paid in full in cash at the
                time of such exercise. Provided, however, an Optionee may, with
                the approval of the Committee, exercise his/her option in whole
                or in part by tendering to the Corporation whole shares of
                Common Stock without par value, owned by him/her or any
                combination of whole shares of Common Stock and cash, which have
                a Fair Market Value equal to the cash exercise price of the
                shares with respect to which the option is being exercised.

         (ii)   An option may be exercised only by written notice to the
                Corporation, mailed to the attention of its Treasurer, signed
                by the Optionee (or such other person or persons as shall
                demonstrate to the Corporation his/her or their right to
                exercise the option), specifying the number of shares with
                respect to which it is being exercised and accompanied by
                payment of the option price for such shares. Subject to the
                provisions of Sections 7 and 8, the certificate or certificates
                for the shares as to which the option is exercised shall be
                registered in the name of the person or persons who exercised
                the option and shall be delivered to or upon the order of such
                person or persons, as soon as practicable after such written
                notice is received by the Corporation. An Optionee shall not
                have any rights of a shareholder in respect to the shares of
                stock subject to an option until such shares are actually
                issued.

         (iii)  If an Optionee ceases to serve as a director of the
                Corporation for any reason other than for cause, as defined in
                Section 5(c)(vi) or after attaining age seventy (70) or on
                account of death, he/she may, but only within the thirty (30)
                day period immediately following such termination of director
                status and in no event later than the expiration date specified
                in the option agreement, exercise his/her option to the extent
                that he/she was otherwise entitled to exercise the option at
                the date of such termination of director status.


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         (iv)   If an Optionee ceases to serve as a director of the
                Corporation on or after the Optionee attains age seventy (70),
                he/she may, but only within the twelve (12) month period
                immediately following the effective date on which the Optionee
                ceases to serve as a director and in no event later than the
                expiration date specified in the stock option agreement,
                exercise his/her option to the extent that he/she was entitled
                to exercise it at the effective date of such termination of
                director status.

         (v)    If an Optionee dies (whether prior to or after ceasing to
                serve as a director) while he/she is entitled to exercise an
                option, such option, to the extent that the Optionee was
                entitled to exercise on the date of his/her death, may be
                exercised during the twelve (12) month period immediately
                following the Optionee's death, by the person or persons to
                whom his/her rights to such option shall pass by his/her will
                or by the applicable laws of descent and distribution.
                Provided, however, no such option may be exercised later than
                the expiration date specified in the option agreement.

         (vi)   If an Optionee is removed from the Board of Directors of the
                Corporation for cause, no previously unexercised option
                granted hereunder may be exercised. Rather, all unexercised
                options shall terminate effective on the date the Optionee
                receives notice of his/her removal for cause. As used in this
                Plan, "for cause" shall be defined as follows: (A) the willful
                and continued failure of an Optionee to perform his/her
                required duties as a director of the Corporation; (B) action
                by an Optionee as a director which involves willful
                misfeasance or gross negligence; (C) the requirement or
                direction of a federal or state regulatory agency having
                jurisdiction over the Corporation to terminate the
                directorship of an Optionee; (D) conviction of an Optionee of
                the commission of any criminal offense involving dishonesty or
                breach of trust; or (E) any intentional breach by an optionee
                of a material term, condition or covenant of any agreement
                between the Optionee and the Corporation.

         (vii)  No option may be exercised in whole or in part until the plan
                has been approved by the Board and the shareholders of the
                Corporation.

         (viii) Nothing contained in the Plan or in any option agreement
                executed pursuant to the Plan shall confer upon the Optionee
                any right to continued service as a director of the Corporation
                or limit in any way the right of the shareholders of the
                Corporation and the members of the Board to remove him/her
                from the Board of Directors.

    6.   NONTRANSFERABILITY OF OPTION. An option may not be transferred by an
Optionee other than by will or the laws of descent and distribution, and
during the lifetime of the Optionee shall be exercisable (to the extent
exercisable) only by him/her. No option or any rights or


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privileges pertaining thereto shall be transferred, assigned, pledged or
hypothecated by him/her in any way, whether by operation of law or otherwise
and shall not be subject to execution, attachment, or similar process.

    7.   INVESTMENT REPRESENTATIONS. Unless the shares subject to an option
are registered under the applicable federal and state securities laws, each
Optionee, by accepting an option, shall be deemed to agree for
himself/herself and his/her legal representatives that any option granted to
him/her and any and all shares of Common Stock purchased upon the exercise of
the option shall be acquired for investment and not with a view to, or for
the sale in connection with, any distribution thereof, and each notice of the
exercise of any portion of an option shall be accompanied by a representation
in writing, signed by the Optionee or his/her legal representatives, as the
case may be, that the shares of Common Stock are being acquired in good faith
for investment and not with a view to, or for sale in connection with, any
distribution thereof (except in the case of the Optionee's legal
representatives for distribution, but not for sale, to his/her legal heirs,
legatees and other testamentary beneficiaries). Any shares issued pursuant to
an exercise of an option shall bear a legend evidencing such representations
and restrictions.

    8.   ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES ACT. The
Corporation may postpone the issuance and delivery of shares of Common Stock
upon the exercise of any option hereunder until: (a) the admission of such
shares to listing on any stock exchange on which shares of the Corporation of
the same class are then listed and (b) the completion of such registration or
other qualification of such shares under any state or federal law, rule or
regulation as the Corporation shall determine to be necessary or advisable.
Any person exercising an option hereunder shall make such representation and
furnish such information as, in the opinion of counsel for the Corporation,
may be appropriate to permit the Corporation, in lieu of the existence or
non-existence of an effective registration statement with respect to such
shares under the Securities Act of 1933, as amended, to issue the shares in
compliance with the provision of that or any comparable act.

    9.   CHANGES IN STOCK.

    (a)  ADJUSTMENT OF SHARES. In the event of any change in the Common Stock
         of the Corporation through stock splits, stock dividends, split-ups,
         recapitalizations, reclassifications, conversions, or otherwise, or in
         the event that other stock shall be converted into or substituted for
         the present Common Stock as the result of any merger, consolidation,
         reorganization, or similar transaction which results in a Change in
         Control of the Corporation, then the Committee shall make appropriate
         adjustment or substitution in the aggregate number, price and kind of
         shares available under the Plan and in the number, price and kind of
         shares covered under any options granted or to be granted under the
         Plan. Specifically, the number of shares subject to options granted
         and to be granted and the purchase price per share upon the exercise
         of the option shall be correspondingly adjusted, so that, by virtue
         of such change in the Common Stock of the Corporation, each Optionee


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         shall have the right to purchase: (i) that number of shares of
         common stock hereunder which have a Fair Market Value, as of the date
         of such change in the Common Stock, equal to the Fair Market Value of
         the shares of Common Stock of the Corporation theretofore subject to
         his/her option, and (ii) for a purchase price per share which, when
         multiplied by the number of shares of common stock after such change
         in the Common Stock of the Corporation which were subject to the
         option, shall equal the aggregate exercise price at which the Optionee
         could have acquired all of the shares of Common Stock theretofore
         optioned to the Optionee. The Committee's determination in this
         respect shall be final and conclusive. Provided, however, that the
         Corporation shall not, and shall not permit its Subsidiaries to,
         recommend, facilitate, or agree or consent to a transaction or series
         of transactions which would result in a Change of Control of the
         Corporation unless an until the person or persons or entity or
         entities acquiring or succeeding to the assets or capital stock of the
         Corporation or any of its Subsidiaries as a result of such transaction
         or transactions agrees to be bound by the terms of the Plan insofar as
         it pertains to options theretofore granted but unexercised and agrees
         to assume and perform the obligations of the Corporation hereunder.

    (b)  CONVERSION OF SHARES. In the event of a Change in Control of the
         Corporation pursuant to which another person or entity acquires control
         of the Corporation (such other person or entity being the
         "successor"), the kind of shares of Common Stock which shall be
         subject to the Plan and to each outstanding option shall, automatically
         by virtue of such Change in Control of the Corporation, be converted
         into and replaced by shares of common stock, or such other class of
         securities having rights and preferences no less favorable than common
         stock of the successor, and the number of shares subject to the option
         and the purchase price per share upon exercise of the option shall be
         correspondingly adjusted, so that, by virtue of such Change in Control
         of the Corporation, each Optionee shall have the right to purchase:
         (i) that number of shares of common stock of the successor which have
         a Fair Market Value equal, as of the date of such Change in Control of
         the Corporation, to the Fair Market Value, as of the date of such
         Change in Control, of the shares of Common Stock of the Corporation
         theretofore subject to his/her option, and (ii) for a purchase price
         per share which, when multiplied by the number of shares of common
         stock of the successor subject to the option, shall equal the aggregate
         exercise price at which the Optionee could have acquired all of the
         shares of Common Stock theretofore optioned to the Optionee.

    10.  AMENDMENT.

    (a)  AUTHORITY TO AMEND. The Board of Directors (except as otherwise
         required by applicable law, rule or regulations, including without any
         limitation any


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          shareholder approval of the safe harbor rule promulgated under the
          Securities Exchange Act of 1933) may at any time without the
          approval of the shareholders of the Corporation, amend, suspend or
          discontinue the Plan at any time and, with the consent of the
          Optionee, the terms and provisions of his option.

      (b) LIMITATIONS ON AMENDMENTS. Notwithstanding the provisions of
          subsection (a), the Board of Directors may not amend Section 4
          more than once every six months, other than to comport with changes
          in the Internal Revenue Code, the Employee Retirement Income
          Security Act, or the rules thereunder, and without the approval of the
          shareholders of the Corporation, make any alteration which would:
          (i) increase the aggregate number of shares subject to options
          under the Plan, except as provided in Section 9; (ii) decrease the
          minimum option price, except as provided in Section 9; (iii) permit
          any member of the Committee to become eligible to receive the grant
          of an option under the Plan; (iv) withdraw administration of the Plan
          from the Committee or the Board of Directors; (v) extend the term of
          the Plan or the maximum period during which any option may be
          exercised; (vi) change the manner of determining the option price;
          (vii) change the class of individuals eligible to receive the grant
          of an option under the Plan; or (viii) without the consent of the
          holder of an option, alter or impair any option previously granted
          under the Plan. No amendment to the Plan may, without the consent of
          the Optionees, make any changes in any outstanding options theretofore
          granted under the Plan which would adversely affect the rights of such
          Optionees.

     11. TERMINATION. The Board of Directors may terminate the Plan at any
time and no options shall be granted thereafter. Such termination, however,
shall not affect the validity of any option theretofore granted under the
Plan. In any event, no option may be granted under the Plan after the date
which is ten (10) years from the date the Board of Directors adopts the Plan.

     12. SUCCESSORS. This Plan shall be binding upon the successors and
assigns of the Corporation.

     13. GOVERNING LAW. The terms of any options granted hereunder and the
rights and obligations hereunder of the Corporation, the Optionees and their
successors in interest shall, except to the extent governed by federal law, be
governed by Indiana law.

     14. GOVERNMENT AND OTHER REGULATIONS. The obligations of the Corporation
to issue or transfer and deliver shares under options granted under the Plan
shall be subject to compliance with all applicable laws, governmental rules
and regulations, and administrative action.

     15. LIMITATION OF LIABILITY. No member of the Board of Directors of the
Corporation shall be personally liable for any action, omission, or
determination made in good faith in connection with the Plan.


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    16. NO GUARANTEE OF CONTINUED SERVICE AS A DIRECTOR. Nothing contained in
the Plan or in any stock option agreement executed pursuant to the Plan shall
confer upon the Optionee any right to continued service as a director of the
Corporation or limit in any way the right of the Corporation to remove
him/her as a director, with or without cause, at any time.

     17. DEFINITIONS.

     (a) The term "Board" or "Board of Directors" used herein shall mean the
         Board of Directors of the Corporation, unless the context clearly
         requires otherwise, and to the extent that any powers and discretion
         vested in the Board of Directors are delegated to any Committee of the
         Board, the term "Board" or "Board of Directors" shall also mean such
         Committee.

     (b) The term "Subsidiary" or "Subsidiaries" used herein shall mean any
         banking institution or other corporation more than fifty percent (50%)
         or whose total combined voting stock of all classes is held by the
         Corporation or by another corporation qualifying as a Subsidiary within
         this definition.

     (c) The term "Change in Control of the Corporation" used herein shall
         mean (i) any merger, consolidation or similar transaction which
         involves the Corporation or any Subsidiary and in which persons who
         are the shareholders of the Corporation immediately prior to such
         transaction own, immediately after such transaction, shares of the
         surviving or combined entity which possess voting rights equal to or
         less than fifty percent (50%) of the voting rights of all shareholders
         of such entity, determined on a fully diluted basis; (ii) any sale,
         lease, exchange, transfer or other disposition of all or any
         substantial part of the consolidated assets of the Corporation; (iii)
         any tender, exchange, sale or other disposition (other than
         dispositions of the stock of the Corporation or any Subsidiary in
         connection with bankruptcy, insolvency, foreclosure, receivership or
         other similar transactions) or purchases (other than purchases by the
         Corporation or any corporation-sponsored employee benefit plan, or
         purchases by members of the Board of Directors or any Subsidiary) of
         shares which represent more than twenty-five percent (25%) of the
         voting power of the Corporation or any Subsidiary, (iv) during any
         period of two (2) consecutive years during the term of the Plan
         specified in Section 18, individuals who at the date of the adoption
         of the Plan constitute the Board of Directors cease for any reason to
         constitute at least a majority thereof, unless the election of each
         director at the beginning of such period has been approved by directors
         representing at least a majority of the directors then in office who
         were directors on the date of the adoption of the Plan; (v) a majority
         of the Board of Directors recommends the acceptance of or accept any
         agreement, contract, offer or other arrangement providing for, or any
         series of transactions resulting in, any of the transactions described
         above.

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     18. EFFECTIVE DATE AND TERM OF THE PLAN. The Plan shall become effective
only upon approval by the Board of Directors and Shareholders of the
Corporation. Options may be granted under the Plan for a period of ten (10)
years commencing on May 1, 1996.

                                       ANB CORPORATION



                                       By: /s/ James R. Schrecongost
                                          ---------------------------------
                                          James R. Schrecongost, President



ATTEST: [SEAL]


By: /s/ James W. Convy
   --------------------------
   James W. Convy, Secretary



APPROVED BY THE SHAREHOLDERS OF THE CORPORATION ON APRIL 17, 1996.


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