Exhibit (10iii)

                           MONOCACY BANCSHARES, INC.
                           1994 STOCK INCENTIVE PLAN


         1. Purpose. The purpose of this Stock Incentive Plan (the "Plan") is to
advance the development,  growth and financial condition of Monocacy Bancshares,
Inc. (the  "Corporation")  and each subsidiary thereof as defined in Section 424
of the Internal  Revenue Code of 1986,  as amended  (the  "Code"),  by providing
incentives  through  participation  in the  appreciation of capital stock of the
Corporation  so  as  to  secure,  retain  and  motivate  personnel  who  may  be
responsible  for the operation and management of the affairs of the  Corporation
and any such subsidiary now or hereafter existing ("Subsidiary").

         2. Term.  The Plan shall become  effective as of the date it is adopted
by  the  Corporation's  Board  of  Directors  (the  "Board"),  so  long  as  the
Corporation's  stockholders  duly  approve  the Plan  within  twelve (12) months
either before or after the date of the Board's adoption of the Plan. Any and all
options and rights awarded under the Plan ("Awards") before it is so approved by
the  Corporation's  stockholders  shall  be  conditional  upon  and  may  not be
exercised  before timely  obtainment of such approval,  and shall lapse upon the
failure thereof.  If the Plan is so approved,  it shall continue in effect until
all  Awards  either  have  lapsed  or been  exercised,  satisfied  or  cancelled
according to their terms under the Plan.

         3. Stock.  The shares of stock that may be issued  under the Plan shall
not exceed in the aggregate 65,000 shares of the Corporation's common stock, par
value $5.00 per share (the "Stock"), as may be adjusted pursuant to paragraph 18
hereof.  Such shares of Stock may be either  authorized  and unissued  shares of
Stock, or authorized  shares of Stock issued by the Corporation and subsequently
reacquired by it as treasury stock. Under no circumstances  shall any fractional
shares of Stock be issued or sold under the Plan or any Award.  Except as may be
otherwise  provided  in the Plan,  any Stock  subject  to an Award  that for any
reason lapses or terminates  prior to its exercise as to such Stock shall become
and again be available  under the Plan. The  Corporation  shall reserve and keep
available,  and shall duly apply for any  requisite  governmental  authority  to
issue or sell the number of shares of Stock  needed to satisfy the  requirements
of the Plan  while in  effect.  The  Corporation's  failure  to obtain  any such
governmental  authority deemed necessary by the Corporation's  legal counsel for
the  lawful  issuance  and  sale of  Stock  under  the Plan  shall  relieve  the
Corporation  of any duty,  or  liability  for the  failure to issue or sell such
Stock as to which such authority has not been obtained.

         4.  Administration.  The Plan shall be administered by a committee (the
"Committee")  consisting of two (2) or more directors from the Board serving for
such terms as determined,  selected and appointed by the Board.  The Board shall
fill all vacancies occurring in the Committee's membership,  and at any time and
for any reason may add additional members to the Committee or may remove members
from the Committee and appoint their successors.  Except as otherwise  permitted
under Section  16(b) of the  Securities  Exchange Act of 1934,  as amended,  and
applicable

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rules and regulations  thereto,  a member of the Committee must be a director of
the  Corporation  and  during  the  year  prior  to  commencing  service  on the
Committee,  and while a member of the Committee,  was not granted or awarded any
Awards,  allocations  or other  options or rights of or with respect to Stock or
any other equity securities of the Corporation or its affiliates pursuant to the
Plan or any other plan of the  Corporation or its affiliates  which provides for
grants or awards.  A majority of the Committee's  membership  shall constitute a
quorum for the  transaction of all business of the Committee,  and all decisions
and actions  taken by the  Committee  shall be  determined  by a majority of the
members of the Committee  attending a meeting at which a quorum of the Committee
is present.


         The Committee  shall be responsible for the management and operation of
the Plan and,  subject to its  provisions,  shall have full,  absolute and final
power and  authority,  exercisable  in its sole  discretion:  to  interpret  and
construe  the  provisions  of the Plan,  adopt,  revise  and  rescind  rules and
regulations  relating  to the  Plan  and  its  administration,  and  decide  all
questions of fact arising in the  application  thereof;  to determine  what,  to
whom, when and under what facts and circumstances  Awards shall be made, and the
form, number, terms, conditions and duration thereof,  including but not limited
to when  exercisable,  the number of shares of Stock subject thereto,  and Stock
option purchase prices;  to adopt,  revise and rescind  procedural rules for the
transaction of the Committee's business,  subject to any directives of the Board
not  inconsistent  with the  provisions  or  intent  of the  Plan or  applicable
provisions of law; and to make all other determinations and decisions,  take all
actions and do all things necessary or appropriate in and for the administration
of the Plan.  The  Committee's  determinations,  decisions and actions under the
Plan, including but not limited to those described above, need not be uniform or
consistent,  but may be different  and  selectively  made and  applied,  even in
similar  circumstances and among similarly situated persons.  Unless contrary to
the provisions of the Plan, all  decisions,  determinations  and actions made or
taken by the Committee  shall be final and binding upon the  Corporation and all
interested  persons,  and  their  heirs,  personal  and  legal  representatives,
successors,  assigns and  beneficiaries.  No member of the  Committee  or of the
Board shall be liable for any decision, determination or action made or taken in
good  faith  by  such  person   under  or  with  respect  to  the  Plan  or  its
administration.

         5.  Awards.  Awards  may be made  under  the Plan in the  form of:  (a)
"Qualified  Options" to purchase  Stock that are intended to qualify for certain
tax treatment as incentive stock options under Sections 421 and 422 of the Code,
(b)  "Non-Qualified  Options" to purchase Stock that are not intended to qualify
under Sections 421-424 of the Code, (c) Stock appreciation  rights ("SARs"),  or
(d)  "Restricted  Stock".  More  than one Award may be  granted  to an  eligible
person,  and the grant of any Award  shall not  prohibit  the grant of any other
Award, either to the same person or otherwise, or impose any obligation upon the
person to whom  granted  to  exercise  the  Award.  All Awards and the terms and
conditions  thereof shall be set forth in written  agreements,  in such form and
content as approved by the Committee  from time to time, and shall be subject to
the provisions of the Plan whether or not contained in such agreements. Multiple
Awards for a particular person may be set forth in a single written agreement or
in multiple  agreements,  as determined by the Committee,  but in all cases each
agreement  for one or more  Awards  shall  identify  each of the Awards  thereby
represented  as a Qualified  Option,  Non-Qualified  Option,  SAR, or Restricted
Stock, as the case may be. Every Award made to a person (a "Recipient") shall be
exercisable during his or her lifetime only

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by the Recipient,  and shall not be salable,  transferable  or assignable by the
Recipient  except by his or her Will or pursuant to  applicable  laws of descent
and distribution.

         6.  Eligibility.  Persons eligible to receive Awards shall be those key
officers and other  management  employees of the Corporation and each Subsidiary
as determined by the Committee. In no case, however, shall any current member of
the  Committee  be eligible to receive any  Awards.  A person's  eligibility  to
receive Awards shall not confer upon him or her any right to receive any Awards;
rather,  the  Committee  shall  have  the  sole  authority,  exercisable  in its
discretion  consistent  with the provisions of the Plan, to select when, to whom
and under what facts and circumstances  Awards will be made. Except as otherwise
provided,  a person's  eligibility to receive, or actual receipt of Awards under
the Plan shall not limit or affect his or her benefits  under or  eligibility to
participate in any other incentive or benefit plan or program of the Corporation
or its affiliates.

         7.       Qualified Options.  In addition to other applicable provisions
of the Plan, all Qualified Options and Awards thereof shall be under and subject
to the following terms and conditions:

                  (a) No  Qualified  Option  shall be awarded more than ten (10)
         years  after the date the Plan is  adopted by the Board or the date the
         Plan is approved by the Corporation's  stockholders,  whichever date is
         earlier;

                  (b) The time  period  during  which  any  Qualified  Option is
         exercisable,  as determined by the Committee, shall not commence before
         the  expiration of six (6) months or continue  beyond the expiration of
         ten (10) years after the date such Option is awarded;

                  (c)  If the  Recipient  of a  Qualified  Option  ceases  to be
         employed by the Corporation or any Subsidiary for any reason other than
         his or her death, the Committee may permit the Recipient  thereafter to
         exercise such Option during its remaining term for a period of not more
         than three (3) months after such  cessation of employment to the extent
         that  the  Option  was  then  and  remains  exercisable,   unless  such
         employment  cessation was due to the Recipient's  disability as defined
         in  Section  22(e)(3)  of the Code,  in which case such three (3) month
         period  shall be  twelve  (12)  months;  if the  Recipient  dies  while
         employed by the  Corporation or a Subsidiary,  the Committee may permit
         the Recipient's qualified personal representatives,  or any persons who
         acquire  the  Qualified  Option  pursuant to his or her Will or laws of
         descent and distribution, thereafter to exercise such Option during its
         remaining  term for a period of not more than twelve (12) months  after
         the  Recipient's  death  to the  extent  that the  Option  was then and
         remains exercisable; the Committee may impose terms and conditions upon
         and for said exercise of such Qualified  Option after such cessation of
         the Recipient's employment or his or her death;

                  (d) The  purchase  price of a share of  Stock  subject  to any
         Qualified  Option,  as determined by the  Committee,  shall not be less
         than the Stock's  fair market value at the time such Option is awarded,
         as determined  under paragraph 13 hereof,  or less than the Stock's par
         value.


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         8.       Non-Qualified Options.  In   addition   to   other  applicable
provisions of the Plan,  all  Non-Qualified  Options and Awards thereof shall be
under and subject to the following terms and conditions:

                  (a) The time period during which any  Non-Qualified  Option is
         exercisable,  as determined by the Committee, shall not commence before
         the  expiration of six (6) months or continue  beyond the expiration of
         ten (10) years after the date such Option is awarded;

                  (b) If a Recipient of a Non-Qualified Option, before its lapse
         or full  exercise,  ceases to be eligible under the Plan, the Committee
         may permit the Recipient  thereafter to exercise such Option during its
         remaining  term,  to the extent  that the  Option was then and  remains
         exercisable,  for such time period and under such terms and  conditions
         as may be prescribed by the Committee;

                  (c) The  purchase  price of a share of  Stock  subject  to any
         Non-Qualified Option, as determined by the Committee, shall not be less
         than the Stock's  fair market value at the time such Option is awarded,
         as determined under paragraph 13 hereof.

         9.       Stock  Appreciation  Rights.  In  addition to other applicable
provisions of the Plan, all SARs and Awards thereof shall be  under  and subject
to the following terms and conditions:

                  (a) SARs may be granted  either alone,  or in connection  with
         another  previously  or  contemporaneously  granted  Award  (other than
         another  SAR) so as to  operate  in  tandem  therewith  by  having  the
         exercise of one affect the right to exercise the other, as and when the
         Committee may determine; however, no SAR shall be awarded in connection
         with a  Qualified  Option  more than ten (10) years  after the date the
         Plan is  adopted by the Board or the date the Plan is  approved  by the
         Corporation's stockholders, whichever date is earlier;

                  (b) Each SAR shall  entitle  its  Recipient  to  receive  upon
         exercise  of the SAR all or a  portion  of the  excess  of (i) the fair
         market  value at the time of such  exercise  of a  specified  number of
         shares of Stock as determined by the  Committee,  over (ii) a specified
         price as  determined by the Committee of such number of shares of Stock
         that,  on a per share  basis,  is not less than the Stock's fair market
         value at the time the SAR is awarded;

                  (c) Upon  exercise  of any SAR,  the  Recipient  shall be paid
         either  in cash or in  Stock,  or in any  combination  thereof,  as the
         Committee shall determine;  if such payment is to be made in Stock, the
         number of shares thereof to be issued pursuant to the exercise shall be
         determined by dividing the amount  payable upon exercise by the Stock's
         fair market value at the time of exercise;

                  (d) The time period  during which any SAR is  exercisable,  as
         determined by the Committee,  shall not commence  before the expiration
         of six (6) months or continue  beyond the  expiration of ten (10) years
         after the date such SAR is awarded; however, no SAR

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         connected with another Award shall be exercisable  beyond the last date
         that such other connected Award may be exercised;

                  (e)  If a  Recipient  of a  SAR,  before  its  lapse  or  full
         exercise,  ceases to be  eligible  under the Plan,  the  Committee  may
         permit  the  Recipient  thereafter  to  exercise  such SAR  during  its
         remaining  term,  to the  extent  that  the SAR was  then  and  remains
         exercisable,  for such time period and under such terms and  conditions
         as may be prescribed by the Committee;

                  (f) No SAR shall be awarded in  connection  with any Qualified
         Option unless the SAR (i) lapses no later than the  expiration  date of
         such connected Option, (ii) is for not more than the difference between
         the Stock purchase  price under such  connected  Option and the Stock's
         fair  market  value  at  the  time  the  SAR  is  exercised,  (iii)  is
         transferable only when and as such connected Option is transferable and
         under  the  same  conditions,  (iv) may be  exercised  only  when  such
         connected  Option may be exercised,  and (v) may be exercised only when
         the Stock's fair market value  exceeds the Stock  purchase  price under
         such connected Option.

         10.      Restricted Stock.  In addition to other  applicable provisions
of the Plan, all Restricted Stock and Awards thereof shall be under and  subject
to the following terms and conditions:

                  (a) Restricted Stock shall consist of shares of Stock that may
         be acquired by and issued to a Recipient  at such time,  for such or no
         purchase price, and under and subject to such transfer,  forfeiture and
         other  restrictions,  conditions or terms as shall be determined by the
         Committee,  including but not limited to prohibitions against transfer,
         substantial risks of forfeiture within the meaning of Section 83 of the
         Code,  and  attainment  of  performance  or other goals,  objectives or
         standards,  all for or applicable to such time periods as determined by
         the Committee;

                  (b) Except as otherwise provided in the Plan or the Restricted
         Stock Award,  a Recipient of shares of Restricted  Stock shall have all
         the rights as does a holder of Stock,  including without limitation the
         right to vote such shares and receive  dividends with respect  thereto;
         however,  during the time  period of any  restrictions,  conditions  or
         terms  applicable to such Restricted  Stock, the shares thereof and the
         right to vote the same and receive dividends thereon shall not be sold,
         assigned, transferred, exchanged, pledged, hypothecated,  encumbered or
         otherwise disposed of except as permitted by the Plan or the Restricted
         Stock Award;

                  (c) Each  certificate  issued for shares of  Restricted  Stock
         shall be deposited with the Secretary of the Corporation, or the office
         thereof,  and shall bear a legend in  substantially  the following form
         and content:

                  This  Certificate  and the shares of Stock hereby  represented
                  are  subject  to the  provisions  of the  Corporation's  Stock
                  Incentive  Plan and a certain  agreement  entered into between
                  the owner  and the  Corporation  pursuant  to said  Plan.  The
                  release of this

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                  Certificate  and the shares of Stock hereby  represented  from
                  such provisions  shall occur only as provided by said Plan and
                  agreement,  a copy of which  are on file in the  office of the
                  Secretary of the Corporation.

         Upon the lapse or  satisfaction  of the  restrictions,  conditions  and
         terms applicable to such Restricted Stock, a certificate for the shares
         of Stock  free  thereof  without  such  legend  shall be  issued to the
         Recipient;

                  (d) If a  Recipient's  employment  with the  Corporation  or a
         Subsidiary   ceases  for  any   reason   prior  to  the  lapse  of  the
         restrictions,  conditions or terms  applicable to his or her Restricted
         Stock,  all  of the  Recipient's  Restricted  Stock  still  subject  to
         unexpired   restrictions,   conditions  or  terms  shall  be  forfeited
         absolutely  by the  Recipient  to the  Corporation  without  payment or
         delivery  of  any   consideration  or  other  thing  of  value  by  the
         Corporation or its affiliates, and thereupon and thereafter neither the
         Recipient  nor his or her  heirs,  personal  or legal  representatives,
         successors,   assigns,   beneficiaries,  or  any  claimants  under  the
         Recipient's Last Will or laws of descent and  distribution,  shall have
         any rights or claims to or interests in the forfeited  Restricted Stock
         or any certificates  representing shares thereof, or claims against the
         Corporation or its affiliates with respect thereto.

         11. Exercise.  Except as otherwise  provided in the Plan, Awards may be
exercised in whole or in part by giving  written notice thereof to the Secretary
of the  Corporation,  or  his  or her  designee,  identifying  the  Award  being
exercised,  the  number of  shares  of Stock  with  respect  thereto,  and other
information pertinent to exercise of the Award. The purchase price of the shares
of Stock  with  respect  to which an Award is  exercised  shall be paid with the
written notice of exercise,  either in cash or in Stock at its then current fair
market value, or in any combination  thereof,  as the Committee shall determine;
provided,  that if the Stock  tendered  as payment  for a  Qualified  Option was
acquired  through the exercise of a Qualified  Option,  the Recipient  must have
held such Stock for a period not less than the holding period  described in Code
Section  422(a)(1).  Funds received by the Corporation  from the exercise of any
Award shall be used for its general corporate purposes.


         The number of shares of Stock  subject to an Award  shall be reduced by
the number of shares of Stock with respect to which the  Recipient has exercised
rights under the Award.  If a SAR is awarded in connection  with another  Award,
the number of shares of Stock that may be  acquired by the  Recipient  under the
other  connected  Award  shall be  reduced by the number of shares of Stock with
respect to which the  Recipient  has exercised his or her SAR, and the number of
shares of Stock subject to the Recipient's SAR shall be reduced by the number of
shares of Stock acquired by the Recipient pursuant to the other connected Award.

         The Committee  may permit an  acceleration  of  previously  established
exercise  terms of any Awards or the lapse of  restrictions  thereon  as,  when,
under  such  facts and  circumstances,  and  subject  to such  other or  further
requirements  and conditions as the Committee may deem necessary or appropriate.
In addition:  (a) if the Corporation or its stockholders execute an agreement to
dispose of all or substantially all of the Corporation's assets or capital stock
by means of sale, merger,

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consolidation,  reorganization,  liquidation or otherwise,  as a result of which
the  Corporation's  stockholders as of immediately  before such transaction will
not own at least fifty percent (50%) of the total  combined  voting power of all
classes of voting capital stock of the surviving  entity (be it the  Corporation
or otherwise) immediately after the consummation of such transaction,  thereupon
any and all Awards  immediately shall become and remain exercisable with respect
to the total number of shares of Stock still  subject  thereto for the remainder
of their  respective  terms unless the  transaction is not  consummated  and the
agreement expires or is terminated, in which case thereafter all Awards shall be
treated as if said agreement never had been executed; (b) if there is an actual,
attempted or threatened change in the ownership of at least twenty-five  percent
(25%) of all classes of voting capital stock of the  Corporation,  as determined
by the Committee in its sole discretion, through the acquisition of, or an offer
to acquire such  percentage  of the  Corporation's  voting  capital stock by any
person or entity,  or persons or entities  acting in concert or as a group,  and
such acquisition or offer has not been duly approved by the Board, thereupon any
and all Awards  immediately shall become and remain  exercisable with respect to
the total number of shares of Stock still  subject  thereto for the remainder of
their  respective  terms;  or (c) if during  any  period of two (2)  consecutive
years,  the  individuals  who at the  beginning of such period  constituted  the
Board,  cease for any reason to  constitute  at least a  majority  of the Board,
unless the election of each director of the Board, who was not a director of the
Board  at the  beginning  of such  period,  was  approved  by a vote of at least
two-thirds  of the  directors  then  still in office who were  directors  at the
beginning of such period,  thereupon any and all Awards immediately shall become
and remain exercisable with respect to the total amount of shares of Stock still
subject  thereto  for the  remainder  of  their  respective  terms.  If an event
described in (a), (b) or (c) occurs,  the Committee shall immediately notify the
Recipients  in writing of the  occurrence  of such event and their  rights under
this paragraph 11.

         12. Withholding. Whenever the Corporation is about to issue or transfer
Stock pursuant to any Award,  the Corporation may require the Recipient to remit
to the Corporation an amount sufficient to satisfy fully any federal,  state and
other jurisdictions' income and other tax withholding  requirements prior to the
delivery of any certificates for such shares of Stock.  Whenever payments are to
be made in cash to any  Recipient  pursuant to his or her  exercise of an Award,
such  payments  shall be made net after  deduction of all amounts  sufficient to
satisfy fully any federal,  state and other jurisdictions'  income and other tax
withholding requirements.

         13. Value.  Where used in the Plan, the "fair market value" of Stock or
Options or rights with  respect  thereto,  including  Awards,  shall mean and be
determined  by:  (a) in the event  that the  Stock is  listed on an  established
exchange,  the closing  price of the Stock on the relevant  date or, if no trade
occurred on that day, on the next preceding day on which a trade  occurred,  (b)
in the event that the Stock is not  listed on an  established  exchange,  but is
then  quoted  on  the  National  Association  of  Securities  Dealers  Automated
Quotation System  ("NASDAQ"),  the average of the average of the closing bid and
asked  quotations  of the  Stock  for the  five  (5)  trading  days  immediately
preceding  the  relevant  date,  or (c) in the event  that the Stock is not then
listed on an  established  exchange  or quoted on  NASDAQ,  the  average  of the
average  of the  closing  bid and  asked  quotations  of the  Stock for five (5)
trading  days  immediately  preceding  the  relevant  date as  reported  by such
brokerage  firms which are then making a market in the Stock.  In the event that
the Stock is not listed on an established  exchange and no closing bid and asked
quotations are available, fair market value shall be determined

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in good faith by the  Committee.  In the case of (b) or (c) above,  in the event
that no  closing  bid or asked  quotation  is  available  on one or more of such
trading days, fair market value shall be determined by reference to the five (5)
trading days  immediately  preceding  the relevant date on which closing bid and
asked quotations are available.

         14. Amendment. To the extent permitted by applicable law, the Board may
amend, suspend, or terminate the Plan at any time; provided,  however, that: (a)
no amendment may be adopted that permits an Award to be granted to any member of
the  Committee;  (b) with respect to qualified  options,  except as specified in
paragraph 18 hereof,  no amendment  may be adopted that will increase the number
of shares reserved for Awards under the Plan, change the option price, or change
the  provisions  required  for  compliance  with  Section  422 of the  Code  and
regulations issued thereunder;  and (c) notwithstanding anything to the contrary
herein,  no amendment may be adopted to increase the number of  securities  that
may be issued  under the Plan,  except as  specified  in  paragraph  18  hereof,
materially increase the benefits accruing to recipients or materially modify the
requirements for eligibility to participate in the Plan, without the approval of
the shareholders of the Corporation,  to the extent that shareholder approval is
required  under Section 16 of the  Securities  Exchange Act of 1934, as amended,
and the regulations thereunder, as from time to time in effect. The amendment or
termination of this Plan shall not, without the consent of the Recipients, alter
or  impair  any  rights  or  obligations  under  any  Award  previously  granted
hereunder.

         In addition and subject to the  foregoing,  the Committee may prescribe
other or additional  terms,  conditions and provisions with respect to the grant
or exercise of any or all Awards as the  Committee  may  determine  necessary or
appropriate  for such Awards and the Stock subject  thereto to qualify under and
comply with all applicable  laws,  rules and  regulations,  and changes therein,
including but not limited to the provisions of Sections 421 and 422 of the Code,
Section 16 of the  Securities  Exchange Act of 1934, as amended,  and Rule 16b-3
promulgated  by the  Securities and Exchange  Commission.  Without  limiting the
generality of the preceding sentence, each Qualified Option, and any SAR awarded
in connection  therewith,  shall be subject to such other and additional  terms,
conditions  and provisions as the Committee may deem necessary or appropriate in
order to qualify such Option, or connected Option and SAR, as an incentive stock
option under Section 422 of the Code, including but not limited to the following
provisions:

                  (i) the aggregate  fair market value,  at the time such Option
         is  awarded,  of the Stock  subject  thereto  and of any Stock or other
         capital stock with respect to which incentive stock options  qualifying
         under  Sections 421 and 422 of the Code are  exercisable  for the first
         time by the  Recipient  during any calendar year under the Plan and any
         other  plans of the  Corporation  or its  affiliates,  shall not exceed
         $100,000.00; and

                  (ii) No Qualified Option, or any SAR in connection  therewith,
         shall be  awarded  to any  person  if at the time of such  Award,  such
         person owns Stock  possessing  more than ten percent (10%) of the total
         combined   voting  power  of  all  classes  of  capital  stock  of  the
         Corporation or its affiliates, unless at the time such Option or SAR is
         awarded  the Stock  purchase  price  under such  Option is at least one
         hundred  and ten percent  (110%) of the fair market  value of the Stock
         subject to such Option and the Option (and any SAR connected

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         therewith) by its terms is not exercisable after the expiration of five
         (5) years from the date it is awarded.

From time to time,  the  Committee  may  rescind,  revise and add to any of such
terms,  conditions and provisions as may be necessary or appropriate to have any
Awards be or remain  qualified and in compliance with all applicable laws, rules
and regulations,  and may delete, omit or waive any of such terms, conditions or
provisions that are no longer required by reason of changes in applicable  laws,
rules or regulations.

         15. Continued Employment. Nothing in the Plan or any Award shall confer
upon any Recipient or other persons any right to continue in the  employment of,
or maintain any particular  relationship with the Corporation or its affiliates,
or limit or affect any rights,  powers or privileges that the Corporation or its
affiliates  may have to supervise,  discipline  and terminate  such Recipient or
other persons, and the employment and other relationships thereof.  However, the
Committee may require as a condition of making and/or  exercising any Award that
its Recipient agree to, and in fact provide  services,  either as an employee or
in another  capacity,  to or for the Corporation or any Subsidiary for such time
period  following  the date the Award is made and/or  exercised as the Committee
may  prescribe.  The  immediately  preceding  sentence  shall  not  apply to any
Qualified Option to the extent such application would result in disqualification
of said Option as an incentive  stock  option under  Sections 421 and 422 of the
Code.

         16.  General   Restrictions.   Each  Award  shall  be  subject  to  the
requirement  and  provision  that if at any time  the  Committee  determines  it
necessary  or desirable  as a condition  of or in  consideration  of making such
Award,  or the  purchase  or  issuance  or Stock  thereunder,  (a) the  listing,
registration  or  qualification  of the Stock subject to the Award, or the Award
itself, upon any securities exchange or under any federal or state securities or
other laws, (b) the approval of any governmental  authority, or (c) an agreement
by the Recipient  with respect to disposition  of any Stock  (including  without
limitation that at the time of the Recipient's  exercise of the Award, any Stock
thereby  acquired is being and will be acquired  solely for investment  purposes
and without any  intention to sell or  distribute  such Stock),  then such Award
shall not be consummated in whole or in part unless such listing,  registration,
qualification,  approval or agreement shall have been appropriately  effected or
obtained  to the  satisfaction  of the  Committee  and  legal  counsel  for  the
Corporation.

         17. Rights.  Except as otherwise provided in the Plan, the Recipient of
any Award shall have no rights as a holder of the Stock subject  thereto  unless
and until one or more  certificates  for the shares of such Stock are issued and
delivered to the Recipient.  No adjustments shall be made for dividends,  either
ordinary or  extraordinary,  or any other  distributions  with respect to Stock,
whether made in cash,  securities or other property,  or any rights with respect
thereto,  for which the record  date is prior to the date that any  certificates
for Stock subject to an Award are issued to the Recipient pursuant to his or her
exercise  thereof.  No Award,  or the grant  thereof,  shall limit or affect the
right or power of the  Corporation  or its  affiliates  to  adjust,  reclassify,
recapitalize,  reorganize  or otherwise  change its or their capital or business
structure, or to merge, consolidate,  dissolve,  liquidate or sell any or all of
its or their business, property or assets.


                                       9

<PAGE>



         18. Adjustments. In the event of any change in the number of issued and
outstanding  shares of Stock which  results  from a stock split,  reverse  stock
split,  payment of a stock dividend or any other change in the capital structure
of the  Corporation,  the  Committee  shall  proportionately  adjust the maximum
number of shares subject to each outstanding Award, and (where  appropriate) the
purchase  price per share  thereof (but not the total  purchase  price under the
Award),  so that upon exercise or realization of such Award, the Recipient shall
receive  the same number of shares he or she would have  received  had he or she
been the  holder  of all  shares  subject  to his or her  outstanding  Award and
immediately before the effective date of such change in the number of issued and
outstanding shares of Stock. Such adjustments shall not, however,  result in the
issuance of fractional  shares. Any adjustments under this paragraph 18 shall be
made by the Committee, subject to approval by the Board. No adjustments shall be
made that would  cause a  Qualified  Option to fail to continue to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

         In the event the Corporation is a party to any merger, consolidation or
other  reorganization,  any and all outstanding Awards shall apply and relate to
the  securities  to which a  holder  of Stock is  entitled  after  such  merger,
consolidation  or other  reorganization.  Upon any liquidation or dissolution of
the   Corporation,   any  and  all  outstanding   Awards  shall  terminate  upon
consummation of such liquidation or dissolution,  but prior to such consummation
shall be exercisable to the extent that the same otherwise are exercisable under
the Plan.

         19. Forfeiture.  Notwithstanding anything to the contrary in this Plan,
if the Committee finds after full consideration of the facts presented on behalf
of the Corporation and the involved  Recipient,  that he or she has been engaged
in fraud,  embezzlement,  theft,  commission  of a felony,  or dishonesty in the
course of his or her employment by the  Corporation  or any Subsidiary  that has
damaged it, or that the Recipient has disclosed trade secrets of the Corporation
or its  affiliates,  the  Recipient  shall  forfeit all rights  under and to all
unexercised Awards, and all exercised Awards under which the Corporation has not
yet delivered  payment or certificates for shares of Stock (as the case may be),
all of which Awards and rights shall be automatically cancelled. The decision of
the Committee as to the cause of the Recipient's  discharge from employment with
the Corporation or any Subsidiary and the damage thereby suffered shall be final
for purposes of the Plan,  but shall not affect the finality of the  Recipient's
discharge by the Corporation or Subsidiary for any other purposes. The preceding
provisions  of this  paragraph  shall not apply to any  Qualified  Option to the
extent such application  would result in  disqualification  of said Option as an
incentive stock option under Sections 421 and 422 of the Code.

         20.  Indemnification.  In and with respect to the administration of the
Plan,  the  Corporation  shall  indemnify  each present and future member of the
Committee  and/or of the Board,  who shall be entitled without further action on
his or her part to  indemnity  from the  Corporation  for all  damages,  losses,
judgments, settlement amounts, punitive damages, excise taxes, fines, penalties,
costs  and  expenses   (including   without   limitation   attorneys'  fees  and
disbursements)  incurred  by such  member  in  connection  with any  threatened,
pending or completed action,  suit or other  proceedings of any nature,  whether
civil,  administrative,  investigative or criminal,  whether formal or informal,
and  whether  by or in the  right or name of the  Corporation,  any class of its
security  holders,  or  otherwise,  in which  such  member  may be or have  been
involved, as a party or otherwise, by reason of his or her

                                       10

<PAGE>



being or having been a member of the Committee  and/or of the Board,  whether or
not he or she  continues to be such a member.  The  provisions,  protection  and
benefits of this paragraph shall apply and exist to the fullest extent permitted
by  applicable  law to and for the benefit of all present and future  members of
the Committee  and/or of the Board,  and their  respective  heirs,  personal and
legal  representatives,  successors and assigns, in addition to all other rights
that they may have as a matter of law, by contract, or otherwise,  except (a) as
may not be allowed by applicable  law, (b) to the extent there is entitlement to
insurance  proceeds  under  insurance  coverage  provided by the  Corporation on
account of the same matter or proceeding for which indemnification  hereunder is
claimed,  or (c) to the extent there is entitlement to indemnification  from the
Corporation,  other than under this paragraph,  on account of the same matter or
proceeding for which indemnification hereunder is claimed.

         21. Miscellaneous. Any reference contained in this Plan to a particular
section or provision of law,  rule or  regulation,  including but not limited to
the Internal Revenue Code of 1986 and the Securities  Exchange Act of 1934, both
as amended,  shall include any  subsequently  enacted or promulgated  section or
provision of law,  rule or  regulation,  as the case may be, of similar  import.
With respect to persons subject to Section 16 of the Securities  Exchange Act of
1934, as amended,  transactions  under this Plan are intended to comply with all
applicable  conditions  of  Rule  16b-3  or  any  successor  rule  that  may  be
promulgated  by the Securities  and Exchange  Commission,  and to the extent any
provision of this Plan or action by the Committee  fails to so comply,  it shall
be deemed null and void, to the extent  permitted by  applicable  law and deemed
advisable by the  Committee.  Where used in this Plan:  the plural shall include
the singular,  and unless the context otherwise  clearly requires,  the singular
shall include the plural;  and, the term "affiliates"  shall mean each and every
Subsidiary  and any parent of the  Corporation.  The  captions  of the  numbered
paragraphs  contained in this Plan are for convenience only, and shall not limit
or affect the meaning,  interpretation  or construction of any of the provisions
of the Plan.


                            - - - - - - - - - - - -
                                      END
                            - - - - - - - - - - - -

                                       11

<PAGE>



                                   SIGNATURES

                  Pursuant to the  requirements  of the  Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
registration statement to be signed on its behalf by the undersigned,  thereunto
duly authorized in the City of Taneytown, State of Maryland on           , 1994.

                                           MONOCACY BANCSHARES, INC.

                                       By:
                                           ____________________________________
                                           Frank W. Neubauer, President and
                                           Chief Executive Officer


                               POWER OF ATTORNEY

                  KNOWN  ALL MEN BY  THESE  PRESENTS,  that  each  person  whose
signature  appears below  constitutes and appoints Frank W. Neubauer and Michael
K. Walsch,  and each of them, his true and law  attorney-in-fact,  as agent with
full power of substitution and resubstitution for him and in his name, place and
stead,  in  any  and  all  capacity,  to  sign  any or all  amendments  to  this
registration  statement  and to file the same,  with all exhibits  thereto,  and
other  documents  in  connection  therewith,  with the  Securities  and Exchange
Commission,  granting  unto said  attorney-in-fact  and  agents  full  power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the  premises,  as fully and to all intents and purposes
as they might or could do in person,  hereby  ratifying and  confirming all that
said  attorneys-in-fact  and agents,  or their  substitute or  substitutes,  may
lawfully do or cause to be done by virtue hereof.

                  Pursuant to the  requirements  of the  Securities Act of 1933,
this  registration  statement  has been signed by the  following  persons in the
capacities and on the date indicated.

                                     Capacity                    Date
                                     --------                    ----

______________________   President and Chief Executive                    , 1994
Frank W. Neubauer        Officer and Director (Principal
                         Executive Officer)

______________________   Senior Vice President                            , 1994
Michael K. Walsch        and Treasurer (Principal
                         Financial and Accounting
                         Officer)

______________________   Chairman of the Board                            , 1994
Donald R. Hull           and Director


                                       12

<PAGE>


______________________   Vice Chairman of the Board                       , 1994
Eric E. Glass            and Director


______________________   Director                                         , 1994
David M. Abramson


______________________   Director                                         , 1994
E. Wayne Baumgardner


______________________   Director                                         , 1994
George B. Crouse


______________________   Director                                         , 1994
Harry B. Dougherty, Sr.


______________________   Director                                         , 1994
Glenn E. Eaves


______________________   Director                                         , 1994
George A. Fream


______________________   Director                                         , 1994
Jacob M. Yingling

                                       13