Document:

ex106-2.htm

    EXHIBIT
10.6.2

    

    Bay
National Corporation 2007 Stock Incentive Plan

    

    Stock
Option Grant Agreement

    

                    This
Stock Option Grant Agreement (the “Agreement”) is entered into on [INSERT DATE],
by and between Bay National Corporation, a Maryland corporation (the
“Corporation”), and [INSERT OPTIONEE NAME] (the “Optionee”), effective as of
[INSERT GRANT DATE] (the “Grant Date”).

    

                    In
consideration of the premises, mutual covenants and agreements herein, the
Corporation and the Optionee agree as follows:

    

                    1. Grant of Option. The
Corporation hereby grants to the Optionee, pursuant to the Bay National
Corporation 2007 Stock Incentive Plan (the “Plan”), a stock option to purchase
from the Corporation, at a price of $[INSERT PRICE] per share (the “Exercise
Price”), up to [INSERT GRANT AMOUNT] shares of Common Stock of the Corporation,
$.01 par value, subject to the provisions of this Agreement and the Plan (the
“Option”). The Option shall expire at 5:00 p.m. Eastern Time on the last
business day preceding the tenth anniversary of the Grant Date (the “Expiration
Date”), unless fully exercised or terminated earlier.

    

                    2. Terminology. Unless
stated otherwise in this Agreement, capitalized terms in this Agreement shall
have the meaning set forth in the Plan.

    

                    (a)
 Vesting.  Subject
to the terms of the Plan with respect to vesting, the Options granted shall vest
in whole or in part, in accordance with the schedule attached hereto as Exhibit
A; provided
that the Optionee is in the continuous employ of, or in a service
relationship with, the Corporation from the Grant Date through the applicable
date upon which such Options become vested.  The extent to which the
Options are vested as of a particular vesting date shall be rounded down to the
nearest whole share.  However, vesting is rounded up to the nearest
whole share on the last vesting date.

    

    (b)  Right to Exercise.
The Optionee shall have the right to exercise the Options from and after the
date upon which they vest and on or before the Expiration Date or earlier
termination of the Options.  To the extent not exercised, the number
of shares as to which the Option is exercisable shall accumulate and remain
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the Expiration Date or other termination of the Option. In the
event of the Optionee’s termination of employment, the exercisability is
governed by Section 4.

    

                                    (b) Exercise Procedure.
Subject to the conditions set forth in this Agreement, the Option shall be
exercised (to the extent then exercisable) by delivery of written notice of
exercise on any business day to the Corporate Secretary of the Corporation in
such form as the Administrator may require from time to time. Such notice shall
specify the number of shares in respect to which the Option is being exercised
and shall be accompanied by full payment of the Exercise Price for such shares
in accordance with Section 3(d) of this Agreement. The exercise shall be
effective upon receipt by the Corporate Secretary of the Corporation of such
written notice accompanied by the required payment. The Option may be exercised
only in multiples of whole shares and may not be exercised at any one time as to
fewer than one hundred shares (or such lesser number of shares as to which the
Option is then exercisable). No fractional shares shall be issued pursuant to
this Option.

    

                                    (c) Effect. The exercise,
in whole or in part, of the Option shall cause a reduction in the number of
shares of Common Stock subject to the Option equal to the number of shares of
Common Stock with respect to which the Option is exercised.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

                                    (d) Method of Payment. In
addition to any other method approved by the Administrator, if any, payment of
the Exercise Price shall be by any of the following, or a combination thereof,
as determined by the Administrator in its discretion at the time of
exercise:

    

                                          (i) by
delivery of cash, certified or cashier’s check, or money order or other cash
equivalent acceptable to Administrator in its sole discretion; or

    

                                          (ii) by
a broker-assisted cashless exercise in accordance with Regulation T of the
Board of Governors of the Federal Reserve System and the following provisions.
Subject to such limitations as the Administrator may determine, at any time
during which the Common Stock is publicly traded on a national securities
exchange or Nasdaq, the Exercise Price shall be deemed to be paid, in whole or
in part, if the Optionee delivers a properly executed exercise notice, together
with irrevocable instructions: (i) to a brokerage firm approved by the
Corporation to deliver promptly to the Corporation the aggregate amount of sale
or loan proceeds to pay the Exercise Price and any withholding tax obligations
that may arise in connection with the exercise; and (ii) to the Corporation
to deliver the certificates for such purchased shares directly to such brokerage
firm.

    

                                    (e) Issuance of Shares Upon
Exercise. Upon due exercise of the Option, in whole or in part, in
accordance with the terms of this Agreement, the Corporation shall issue to the
Optionee, the brokerage firm specified in the Optionee’s delivery instructions
pursuant to a broker-assisted cashless exercise, or such other person exercising
the Option, as the case may be, the number of shares of Common Stock so paid
for, in the form of fully paid and non-assessable stock and shall deliver
certificates therefore as soon as practicable thereafter.

    

                                    (f) Restrictions on Exercise and
upon Shares Issued upon Exercise. Notwithstanding any other provision of
the Agreement, the Option may not be exercised at any time that the Corporation
does not have in effect a registration statement under the Securities Act of
1933, as amended, relating to the offer of Common Stock to the Optionee under
the Plan, unless the Corporation agrees to permit such exercise. Upon the
issuance of any shares of Common Stock pursuant to the exercise of the Option,
the Optionee will, upon the request of the Corporation, agree in writing that
the Optionee is acquiring such shares for investment only and not with a view to
resale, and that the Optionee will not sell, pledge or otherwise dispose of such
shares so issued unless (i) the Corporation is furnished with an opinion of
counsel to the effect that registration of such shares pursuant to the
Securities Act of 1933, as amended, is not required by that Act or by the rules
and regulations thereunder; (ii) the staff of the Securities and Exchange
Commission has issued a “no-action” letter with respect to such disposition; or
(iii) such registration or notification as is, in the opinion of counsel
for the Corporation, required for the lawful disposition of such shares has been
filed by the Corporation and has become effective; provided, however, that the
Corporation is not obligated hereby to file any such registration or
notification.  In addition, the Common Stock issued upon the exercise
of any Options shall be subject to repurchase by the Corporation for an amount
equal to the Exercise Price of such Options upon the occurrence of an event
described in Section 4(d) of this Agreement.   The Corporation
may place a legend embodying such restrictions on the certificates evidencing
such shares.

    

               4.  Termination of Employment or
Service.

    

    (a)  Exercise Period Following
Cessation of Employment or Other Service Relationship, In
General.  If Optionee ceases to be employed by, or in a service
relationship with, Bank for any reason other than death, Disability, or
discharge for Cause, (i) the unvested Options shall terminate immediately
upon such cessation, and (ii) the vested Options shall remain exercisable
during the 30-day period following such cessation, but in no event after the
Expiration Date.  Unless sooner terminated, any unexercised vested
Options shall terminate upon the expiration of such 30-day period.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (b)  Death of
Optionee.  If Optionee dies prior to the expiration or other
termination of the Options, (i) the unvested Options shall terminate
immediately upon Optionee’s death, and (ii) the vested Options shall remain
exercisable during the one-year period following Optionee’s death, but in no
event after the Expiration Date, by Optionee’s executor, personal
representative, or the person(s) to whom the Options are transferred by will or
the laws of descent and distribution.  Unless sooner terminated, any
unexercised vested Options shall terminate upon the expiration of such one-year
period.

    

    (c)  Disability of
Optionee.  If Optionee ceases to be employed by, or in a
service relationship with, Bank as a result of Optionee’s Disability,
(i) the unvested Options shall terminate immediately upon such cessation,
and (ii) the vested Options shall remain exercisable during the one-year
period following such cessation, but in no event after the Expiration
Date.  Unless sooner terminated, any unexercised vested Options shall
terminate upon the expiration of such one-year period.

    

    (d)  Misconduct.  Notwithstanding
anything to the contrary in this Agreement, the Options shall terminate in their
entirety, regardless of whether the Options are vested, immediately upon
Optionee’s discharge of employment or other service relationship for Cause or
upon Optionee’s commission of any of the following acts during any period
following the cessation of Optionee’s employment or other service relationship
during which the Options otherwise would be exercisable: (i) fraud on or
misappropriation of any funds or property of Bank, or (ii) breach by
Optionee of any provision of any employment, non-disclosure, non-competition,
non-solicitation, assignment of inventions, or other similar agreement executed
by Optionee for the benefit of Bank, as determined by the Administrator, which
determination will be conclusive.

    

               5.  Adjustments and Business
Combinations.

    

                                    (a) Adjustments for Events
Affecting Common Stock. In the event of changes in the Common Stock of
the Corporation by reason of any stock dividend, spin-off, split-up, reverse
stock split, recapitalization, reclassification, merger, consolidation,
liquidation, business combination or exchange of shares and the like, the
Administrator shall, in its discretion, make appropriate substitutions for or
adjustments in the number, kind and price of shares covered by this Option, and
shall, in its discretion and without the consent of the Optionee, make any other
substitutions for or adjustments in this Option, including but not limited to
reducing the number of shares subject to the Option or providing or mandating
alternative settlement methods such as settlement of the Option in cash or in
shares of Common Stock or other securities of the Corporation or of any other
entity, or in any other matters which relate to the Option as the Administrator
shall, in its sole discretion, determine to be necessary or
appropriate.

    

                                    (b) Pooling of Interests
Transaction. Notwithstanding anything in the Plan or this Agreement to
the contrary and without the consent of the Optionee, the Administrator, in its
sole discretion, may make any modifications to the Option, including but not
limited to cancellation, forfeiture, surrender or other termination of the
Option in whole or in part regardless of the vested status of the Option, in
order to facilitate any business combination that is authorized by the Board to
comply with requirements for treatment as a pooling of interests transaction for
accounting purposes under generally accepted accounting principles.

    

                                    (c) Adjustments for Other
Events. The Administrator is authorized to make, in its discretion and
without the consent of the Optionee, adjustments in the terms and conditions of,
and the criteria included in, the Option in recognition of unusual or
nonrecurring events affecting the Corporation, or the financial statements of
the Corporation, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Option or the
Plan.

    

                                    (d) Binding Nature of
Adjustments. Adjustments under this Section 5 will be made by the
Administrator, whose determination as to what adjustments, if any, will be made
and the extent thereof will 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
be
final, binding and conclusive. No fractional shares will be issued pursuant to
this Option on account of any such adjustments.

     

                                    (e) Effect of Change of Control
Event. All outstanding portions of the Option, if any, shall become fully
vested upon the occurrence of any Change of Control Event, except to the extent
that provision is made in connection with the Change of Control Event for the
continuation or assumption of the Option by, or for the substitution
of  equivalent options with respect to, the surviving or successor
entity or a parent thereof, and shall be exercisable in accordance with the
Plan; provided, that unless otherwise decided in the sole discretion
of  the Administrator, the acceleration of vesting in connection with
a Change of Control Event shall be limited as provided in the Plan.

    

                    6. Non-Guarantee of
Employment. Nothing in the Plan or in this Agreement shall confer on an
individual any legal or equitable right against the Corporation or the
Administrator, except as expressly provided in the Plan or this Agreement.
Nothing in the Plan or in this Agreement shall (a) constitute inducement,
consideration, or contract for employment or service between an individual and
the Corporation; (b) confer any right on an individual to continue in the
service of the Corporation; or (c) shall interfere in any way with the
right of the Corporation to terminate such service at any time with or without
cause or notice, or to increase or decrease compensation for such service.

    

                    7. No Rights as
Stockholder. The Optionee shall not have any of the rights of a
stockholder with respect to the shares of Common Stock that may be issued upon
the exercise of the Option (including, without limitation, any rights to receive
dividends or noncash distributions with respect to such shares) until such
shares of Common Stock have been issued to him or her upon the due exercise of
the Option. No adjustment shall be made for dividends or distributions or other
rights for which the record date is prior to the date such certificate or
certificates are issued.

    

                8. Nonqualified Nature of the
Option. The Options are not intended to
qualify as incentive stock options within the meaning of Code section 422,
and this Agreement shall be so construed.  Optionee acknowledges that,
upon exercise of the Options, Optionee will recognize taxable income in an
amount equal to the excess of the then Fair Market Value of the Option Shares
over the Exercise Price and must comply with the provisions of Section 9 of
this Agreement with respect to any tax withholding obligations that arise as a
result of such exercise.

    

                    9. Withholding of
Taxes.

    

                                    (a) In General. At the
time the Option is exercised in whole or in part, or at any time thereafter as
requested by the Corporation, the Optionee hereby authorizes withholding from
payroll or any other payment of any kind due the Optionee and otherwise agrees
to make adequate provision for foreign, federal, state and local taxes required
by law to be withheld, if any, which arise in connection with the Option. The
Corporation may require the Optionee to make a cash payment to cover any
withholding tax obligation as a condition of exercise of the Option. If the
Optionee does not make such payment when requested, the Corporation may refuse
to issue any stock certificate under the Plan until arrangements satisfactory to
the Administrator for such payment have been made.

    

                                    (b) Means of Payment. The
Administrator may, in its sole discretion, permit the Optionee to satisfy, in
whole or in part, any withholding tax obligation which may arise in connection
with the Option by any of the following means or by a combination of such means:
(i) tendering a cash payment, (ii) authorizing the Corporation to deduct
any such tax obligations from any payment of any kind otherwise due to the
Optionee, (iii) authorizing the Corporation to withhold shares of Common
Stock otherwise issuable to the Optionee pursuant to the exercise of this
Option, or (iv) delivering to the Corporation unencumbered shares of Common
Stock already owned by the Optionee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    10. Compliance with Regulations
of the FRB and OCC; Forfeiture.  Subject to the terms of the
Plan, the grant of Options made hereby are subject to the rules and regulations
promulgated by the Federal Reserve Board (“FRB”) and the Office of the
Comptroller of Currency (“OCC”).  In accordance with certain
provisions of such regulations, the Options granted hereby must be exercised or
forfeited in the event the Company or its affiliates, including Bay National
Bank, becomes critically undercapitalized (as defined in 12 C.F.R. § 6.4, or any
successor law or regulation), is subject to FRB or OCC enforcement action, or
receives a capital directive under 12 C.F.R § 6.21 or any successor law or
regulation.

    

    11. The Corporation’s
Rights. The existence of this Option shall not affect in any way the
right or power of the Corporation or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations or other changes in the
Corporation’s capital structure or its business, or any merger or consolidation
of the Corporation, or any issue of bonds, debentures, preferred or other stocks
with preference ahead of or convertible into, or otherwise affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of the Corporation’s
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

    

                    12. Optionee. Whenever
the word “Optionee” is used in any provision of this Agreement under
circumstances where the provision should logically be construed, as determined
by the Administrator, to apply to the estate, personal representative or
beneficiary to whom this Option may be transferred by will, by the laws of
descent and distribution, or pursuant to a qualified domestic relations order as
defined in Code section 414(p), the word “Optionee” shall be deemed to include
such person.

    

                    13. Transferability of
Option. This Option is not transferable other than by will or the laws of
descent and distribution, pursuant to a qualified domestic relations order as
defined in Code section 414(p), or as otherwise permitted by the Administrator,
in its sole discretion. During the lifetime of the Optionee, the Option may be
exercised only by the Optionee, by such permitted transferees or, during the
period the Optionee is under a legal disability, by the Optionee’s guardian or
legal representative. Except as provided above, the Option may not be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution, attachment
or similar process.

    

                    14. Notices. All notices
and other communications made or given pursuant to this Agreement shall be in
writing and shall be sufficiently made or given if hand delivered or mailed by
certified mail, addressed to the Optionee at the address contained in the
records of the Corporation, or addressed to the Administrator, care of the
Corporation for the attention of its Corporate Secretary at its principal office
or, if the receiving party consents in advance, transmitted and received via
telecopy or via such other electronic transmission mechanism as may be available
to the parties.

    

                    15. Entire Agreement.
This Agreement and the Plan contain the entire agreement between the parties
with respect to the Option granted hereunder. Any oral or written agreements,
representations, warranties, written inducements, or other communications made
prior to the execution of this Agreement with respect to the Option granted
hereunder shall be void and ineffective for all purposes.

    

                    16. Amendment. This
Agreement may not be modified, except as provided in the Plan or in a written
document signed by each of the parties hereto.

    

                    17. Conformity with Plan.
This Agreement is intended to conform in all respects with, and is subject to
all applicable provisions of, the Plan, which is incorporated herein by
reference. Inconsistencies between this Agreement and the Plan shall be resolved
in accordance with the terms of the Plan. In the event of any ambiguity in this
Agreement or any matters as to which this Agreement is silent, the Plan shall
govern. A copy of the Plan is available upon request to the
Administrator.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

                    18. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland, other than the conflict of laws principles
thereof.

    

                    19. Headings. The
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.

    

     

    [Signatures
appear on the following page.]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

                    IN
WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its
duly authorized officer as of the date first above written.

    

    
      
        
          
            
              
                
                  	 	
                          BAY
      NATIONAL CORPORATION

                        
	 
      
	 	
                          By:                                                       
      

                        
	 	
                          Print
      Name:                                         
      

                        
	 	
                          Title:                                                     
      

                        

                

              

            

          

        

      

    

    

    

    

    The
undersigned hereby acknowledges that he/she has carefully read this Agreement
and the prospectus of the Plan and agrees to be bound by all of the provisions
set forth in such documents.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	 
      	
                                OPTIONEE:

                              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                                DATE:                                           
      

                              	 
      	                                                  	 
      
	 
      	 
      	 
      	Print
      Name:	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    EXERCISE
FORM

    

    

    

    Bay
National Corporation

    2328 West
Joppa Road

    Lutherville,
Maryland 21093

    

    

    Gentlemen:

    

         I
hereby exercise the Option granted to me on __________, by Bay National
Corporation (the “Corporation”), subject to all the terms and provisions thereof
and of the Bay National Corporation 2007 Stock Incentive Plan (the “Plan”), and
notify you of my desire to purchase ___ incentive shares and ___ non-qualified
shares of Common Stock of the Corporation at a price of $_______  per
share pursuant to the exercise of said Option.

    

    Payment
Amount: $____________________

    
      
        
          	 
      	 
      	 
      
	
                  Date:  ____________________                                                           

                	 
      	
                  

                                                                                                                                                    

                  

                
	 
      	 
      	
                  Optionee
      Signature

                
	 
      	 
      	 
      
	 
      	 
      	
                  Received
      by Bay National Corporation on

                
	 
      	 
      	 
      
	 
      	 
      	
                                                                                             
      

                

        

      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Broker
Information:

    
      
        
          

        

      

    

    
      Firm
Name

    

    
      
        
          

        

      

    

    
      
        	 
      	 
      	 
      
	
                Contact
      Person

              	 
      	 
      

      

    

    
      
        	 
      	 
      	 
      
	
                Broker
      Address

              	 
      	 
      

      

    

    
      
        	 
      	 
      	 
      	 
      	 
      
	
                City,
      State, Zip Code

              	 
      	
                Phone
      Number

                 

              	 
      	 
      

      

    

    
      
        	 
      	 
      	 
      
	
                Broker
      Account Number

              	 
      	 
      

      

    

    
      
        
          	 
      	 
      	 
      
	
                  Electronic
      Transfer Number:Unassociated Document

    EXHIBIT
10.18

    

    UNITED
STATES OF AMERICA

    DEPARTMENT
OF THE TREASURY

    COMPTROLLER
OF THE CURRENCY

    

    
      
        
          
            
              	
                      In
      the Matter of:

                      Bay
      National Bank

                      Lutherville,
      MD

                    	
                      )

                      )

                      )

                    	 
      

            

          

        

      

    

    

    STIPULATION
AND CONSENT TO THE ISSUANCE

    OF
A CONSENT ORDER

    

    The
Comptroller of the Currency of the United States of America (“Comptroller”)
intends to initiate cease and desist proceedings against Bay National Bank,
Lutherville, MD (“Bank”) pursuant to 12 U.S.C. § 1818(b).

     

    The Bank,
in the interest of compliance and cooperation, consents to the issuance of a
Consent Order, dated February 6, 2009 (“Order”);

     

    In
consideration of the above premises, the Comptroller, through his authorized
representative, and the Bank, through its duly elected and acting Board of
Directors, hereby stipulate and agree to the following:

    

     

     

    ARTICLE
I

     

    JURISDICTION

     

    (1) The Bank
is a national banking association chartered and examined by the Comptroller
pursuant to the National Bank Act of 1864, as amended, 12 U.S.C. § 1
et seq.

     

    (2) The
Comptroller is “the appropriate Federal banking agency” regarding the Bank
pursuant to 12 U.S.C. §§ 1813(q) and 1818(b).

     

    (3) The Bank
is an “insured depository institution” within the meaning of 12 U.S.C.
§ 1818(b)(1).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

     

    AGREEMENT

     

    (1) The Bank,
without admitting or denying any wrongdoing, hereby consents and agrees to the
issuance of the Order by the Comptroller.

     

    (2) The Bank
further agrees that said Order shall be deemed an “order issued with the consent
of the depository institution” as defined in 12 U.S.C. § 1818(h)(2),
and consents and agrees that said Order shall become effective upon its issuance
and shall be fully enforceable by the Comptroller under the provisions of
12 U.S.C. § 1818(i).  Notwithstanding the absence of
mutuality of obligation, or of consideration, or of a contract, the Comptroller
may enforce any of the commitments or obligations herein undertaken by the Bank
under his supervisory powers, including 12 U.S.C. § 1818(i), and not as a
matter of contract law.  The Bank expressly acknowledges that neither
the Bank nor the Comptroller has any intention to enter into a
contract.

     

    (3) The Bank
also expressly acknowledges that no officer or employee of the Comptroller has
statutory or other authority to bind the United States, the U.S. Treasury
Department, the Comptroller, or any other federal bank regulatory agency or
entity, or any officer or employee of any of those entities to a contract
affecting the Comptroller’s exercise of his supervisory
responsibilities.

     

    
 

    ARTICLE
III

     

    WAIVERS

     

    (1) The Bank,
by signing this Stipulation and Consent, hereby waives:

     

    (a)           the
issuance of a Notice of Charges pursuant to 12 U.S.C.
§ 1818(b);

     

    
      	
               
      

            	
              (b)

            	
              any
      and all procedural rights available in connection with the issuance of the
      Order;

               

            

    

    
      	
               
      

            	
              (c)

            	
              all
      rights to a hearing and a final agency decision pursuant to 12 U.S.C.
      § 1818(i), 12 C.F.R. Part 19;

               

            

    

    
      	
               
      

            	
              (d)

            	
              all
      rights to seek any type of administrative or judicial review of the Order;
      and

               

            

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       (e)
any
and all rights to challenge or contest the validity of the Order.

       

    

    

    ARTICLE
IV

     

    OTHER
ACTION

     

    (1) The Bank
agrees that the provisions of this Stipulation and Consent shall not inhibit,
estop, bar, or otherwise prevent the Comptroller from taking any other action
affecting the Bank if, at any time, it deems it appropriate to do so to fulfill
the responsibilities placed upon it by the several laws of the United States of
America.

    

     

    IN
TESTIMONY WHEREOF, the undersigned, authorized by the Comptroller as his
representative, has hereunto set her hand on behalf of the
Comptroller.

    

    

    

    
      	
              MaryAnn
      H. Kennedy

              Assistant
      Deputy Comptroller

              Washington
      DC Satellite Field Office

            	 
      	
              Date

            

    

    

    

    

    

    

    

    IN
TESTIMONY WHEREOF, the undersigned, as the duly elected and acting Board of
Directors of the Bank, have hereunto set their hands on behalf of the
Bank.

    

    

    

    

    
      
        
          	
                   

                	 
      	
                   

                
	
                  

                    Charles
      E. Bounds

                  

                   

                	 
      	
                  

                    Date

                  

                
	
                  

                    Gary
      T. Gill

                  

                   

                	 
      	
                  

                    Date

                  

                
	
                  R.
      Michael Gill

                   

                	 	

                  Date

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            
              	
                       

                       

                    	 
      	
                       

                    
	
                      

                        John
      R. Lerch

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      

                        Donald
      G. McClure, Jr.

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      

                        Hugh
      Mohler

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      

                        Robert
      L. Moore

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      

                        James
      P. O’Conor

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      

                        H.
      Victor Rieger, Jr.

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      

                        William
      B. Rinnier

                      

                       

                    	 
      	
                      

                        Date

                      

                    
	
                      Edwin
      A. Rommell, III

                       

                    	 	Date

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    
      
        
          
            
              
                	
                         

                         

                      	 
      	
                         

                      
	
                        

                          Henry
      H. Stansbury

                        

                         

                      	 
      	
                        

                          Date

                        

                      
	
                        

                          Kenneth
      H. Trout

                        

                         

                      	 
      	
                        

                          Date

                        

                      
	
                        

                          Eugene
      M. Waldron, Jr.

                        

                         

                      	 
      	
                        
                          Date

                        

                      
	
                        Carl
      A. J. Wright

                         

                      	 	Date

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
A

    Bay
National Bank

    Lutherville,
MD

    

    
      
        
          	
                  CRITICIZED
      ASSET REPORT AS OF:

                	 
      
	 
      
	
                  BORROWER(S):

                   

                   

                
	
                  ASSET
      BALANCE(S) AND OCC RATING (SM, SUBSTANDARD, DOUBTFUL OR
LOSS):

                   

                
	
                  $

                	
                  CRITICISM

                	 
      
	
                   

                  AMOUNT
      CHARGED OFF TO DATE

                	 
      
	
                   

                  FUTURE
      POTENTIAL CHARGE-OFF

                	 
      
	 
      	 
      
	
                  PRESENT
      STATUS (Fully explain any increase in outstanding balance; include past
      due status, nonperforming, significant progress or deterioration,
      etc.):

                   

                   

                   

                   

                
	
                  FINANCIAL
      AND/OR COLLATERAL SUPPORT (include brief summary of most current financial
      information, appraised value of collateral and/or estimated value and date
      thereof, bank's lien position and amount of available equity, if any,
      guarantor(s) info, etc.):

                   

                   

                   

                   

                
	
                  
                    PROPOSED
      PLAN OF ACTION TO ELIMINATE ASSET CRITICISM(S) AND TIME FRAME FOR ITS
      ACCOMPLISHMENT:

                  

                   

                   

                   

                
	
                  IDENTIFIED
      SOURCE OF REPAYMENT AND DEFINED REPAYMENT PROGRAM (repayment program
      should coincide with source of repayment):

                   

                   

                   

                
	
                  Use
      this form for reporting each criticized asset that exceeds one hundred and
      fifty thousand dollars ($150,000) and retain the original in the credit
      file for review by the examiners.  Submit your reports
      monthly until
      notified otherwise, in writing, by the Assistant Deputy
      Comptroller.

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