Document:

Exhibit 10(xii)

                                 MONROE BANCORP

                   EXECUTIVES' 2005 DEFERRED COMPENSATION PLAN

<PAGE>

                                   ADOPTION OF
                                   -----------
                                 MONROE BANCORP
                                 --------------
                   EXECUTIVES' 2005 DEFERRED COMPENSATION PLAN
                   -------------------------------------------

         Pursuant to resolutions adopted by the Board of Directors of Monroe
Bancorp (the "Company"), the undersigned officers of the Company hereby adopt
Monroe Bancorp Executives' 2005 Deferred Compensation Plan, effective as of
January 1, 2005, on behalf of the Company, in the form attached hereto.

         Dated this 17th day of November, 2005.

                                                     MONROE BANCORP

                                                     By: /s/ Mark D. Bradford
                                                        ---------------------

                                                     Its:  President, CEO
                                                           --------------

ATTEST:

By:  /s/ Gordon M. Dyott
     -------------------

Its:  Executive Vice President and CFO
      --------------------------------

<PAGE>

                                 MONROE BANCORP
                   EXECUTIVES' 2005 DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>

                                                                                         PAGE
                                                                                         ----

<S>                                                                                     <C>
Article I INTRODUCTION......................................................................1

         Section 1.1           Purpose......................................................1
         Section 1.2           Effective Date;  Plan Year...................................1
         Section 1.3           Administration...............................................1
         Section 1.4           Employers and Affiliates.....................................1
         Section 1.5           Supplements..................................................1
         Section 1.6           Definitions..................................................1

Article II ELIGIBILITY AND PARTICIPATION....................................................2

Article III CONTRIBUTIONS AND ALLOCATIONS...................................................2

         Section 3.1           Participant Deferral Contributions...........................2
         Section 3.2           Deferral Elections...........................................3
         Section 3.3           Plan Account.................................................4
         Section 3.4           Investment Credits...........................................4
         Section 3.5           Account Allocations..........................................4
         Section 3.6           Military Service.............................................4

Article IV BENEFIT PAYMENTS.................................................................4

         Section 4.1           Time of Payment of Benefits..................................4
         Section 4.2           Manner of Payment............................................5
         Section 4.3           Manner of Payment Elections..................................6
         Section 4.4           Vesting......................................................6
         Section 4.5           Death of the Participant.....................................6
         Section 4.6           Beneficiary Designations.....................................6

Article V BENEFIT CLAIMS....................................................................6

Article VI FUNDING AND TRANSFERS............................................................7

         Section 6.1           Unfunded Status..............................................7
         Section 6.2           Investments..................................................7

                                       i
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Article VII AMENDMENT AND TERMINATION OF THE PLAN...........................................7

         Section 7.1           Amendment of the Plan........................................7
         Section 7.2           Termination of the Plan......................................7

Article VIII MISCELLANEOUS..................................................................7

         Section 8.1           Governing Law................................................7
         Section 8.2           Headings and Gender..........................................8
         Section 8.3           Withholding of Taxes.........................................8
         Section 8.4           Spendthrift Clause...........................................8
         Section 8.5           Counterparts.................................................8
         Section 8.6           No Enlargement of Employment Rights..........................8
         Section 8.7           Limitations on Liability.....................................8
         Section 8.8           Incapacity of Participant or Beneficiary.....................8
         Section 8.9           Evidence.....................................................8
         Section 8.10          Action by Employers..........................................9
         Section 8.11          Severability.................................................9
         Section 8.12          Information to be Furnished by a Participant.................9

SUPPLEMENT A - CLAIM AND REVIEW PROCEDURES.................................................10
</TABLE>

                                       ii
<PAGE>

                                   ARTICLE I

                                  INTRODUCTION
                                  ------------

         Section 1.1 Purpose.  The purpose of the Monroe Bancorp Executives'
2005 Deferred Compensation Plan (the "Plan") is to permit a select group of
management or highly compensated employees of Monroe Bancorp (the "Company"),
and of any other Employer under the Plan, to elect to defer compensation from an
Employer. It is the intention of the Company that the Plan constitute (i) an
unfunded arrangement for the purpose of providing deferred compensation for a
select group of management or highly compensated employees for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as amended and (ii) a
deferred compensation arrangement that complies with Section 409A of the
Internal Revenue Code, as amended (the "Code"). Consequently, the Plan will be
administered and its provisions interpreted consistently with that intention.

         Section 1.2 Effective Date; Plan Year.  The "Effective Date" of the
Plan is January 1, 2005. The "Plan Year" is the 12-month period beginning on
each January 1 and ending on the next following December 31.

         Section 1.3 Administration.  The Plan will be administered by the
Compensation Committee of the Company's Board of Directors (the
"Administrator"). The Administrator, from time to time, may adopt any rules and
procedures it deems necessary or desirable for the proper and efficient
administration of the Plan that are consistent with the terms of the Plan. Any
notice or document required to be given or filed with the Administrator will be
properly given or filed if delivered to or mailed, by registered mail, postage
paid, to the Compensation Committee of the Board of Directors, Monroe Bancorp,
210 East Kirkwood, Bloomington, Indiana 47408.

         Section 1.4 Employers and Affiliates.  Any Affiliate may adopt the Plan
for the benefit of its employees with the Company's consent. For purposes of
this Plan, the term "Affiliate" means the Company and any other corporation or
trade or business whose employees are treated as being employed by the Company
under Code Section 414(b), 414(c) 414(m) or 414(o). The Company and each other
Affiliate that adopts the Plan are referred to as the "Employers" and sometimes
individually as an "Employer."

         Section 1.5 Supplements.  The provisions of the Plan may be modified by
supplements to the Plan. The terms and provisions of each supplement are a part
of the Plan and supersede any other provisions of the Plan to the extent
necessary to eliminate any inconsistencies between the supplement and any other
Plan provisions.

         Section 1.6 Definitions.  The following terms are defined in the Plan
in the following Sections:

<PAGE>

                   Term                                           Plan Section
                   ----                                           ------------

                   Account.....................................   3.3
                   Administrator...............................   1.3
                   Adverse Benefit Determination...............   A-1
                   Affiliate...................................   1.4
                   Benefit Claim...............................   A-1
                   Bonus.......................................   3.2(a)
                   Claimant....................................   A-1
                   Code........................................   1.1
                   Company.....................................   1.1
                   Compensation................................   3.1
                   Disabled....................................   4.1
                   Effective Date..............................   1.2
                   Employer....................................   1.4
                   Investment Account..........................   6.2
                   Participant Deferral Contribution...........   3.1
                   Plan........................................   1.1
                   Plan Year...................................   1.2
                   Trust.......................................   6.1

                                   ARTICLE II

                          ELIGIBILITY AND PARTICIPATION
                          -----------------------------

         Any duly elected and serving executive officer of an Employer is
eligible to become a Participant in the Plan provided the officer is designated
as a Participant by the Administrator in writing. A designated officer will
become a Participant as of the later of the Effective Date or the date specified
by the Administrator. A Participant may be removed as an active Participant by
the Administrator effective as of any date, so that he will not be entitled to
make deferrals under Article III on or after that date.

                                  ARTICLE III

                          CONTRIBUTIONS AND ALLOCATIONS
                          -----------------------------

         Section 3.1 Participant Deferral Contributions.  Subject to the terms
and limitations of this Article III, a Participant may elect, pursuant to
Section 3.2, to have all or a portion of his Compensation payable in any Plan
Year withheld by his Employer and credited as a "Participant Deferral
Contribution" under this Plan. The term "contribution" is used for ease of
reference; however, credits are merely credits to the Account, which is a
bookkeeping account. The term "Compensation" for purposes of this Plan means a
Participant's base salary, annual bonus and other cash compensation designated
by the Administrator as eligible compensation that is payable by an Employer.

                                       2
<PAGE>

         Section 3.2 Deferral Elections.  Participant Deferral Contributions
will be withheld from a Participant's pay in accordance with the following terms
and conditions.

         (a)      Requirement for Deferral Elections. As a condition to an
                  Employer's obligation to withhold and the Administrator's
                  obligation to credit Participant Deferral Contributions for
                  the benefit of a Participant pursuant to Section 3.1, the
                  Participant must complete and file a participation agreement
                  with the Administrator (in a format prescribed by the
                  Administrator). Provision may be made by the Administrator for
                  separate elections with respect to deferrals of Bonuses. For
                  purposes of this Plan, the term "Bonus" means a payment under
                  a performance-based compensation program with a performance
                  period of at least 12 months.

         (b)      Timing of Execution and Delivery of Elections. To be effective
                  to defer any portion of a Participant's Compensation,
                  including a Bonus, a participation agreement must be filed
                  with the Administrator with respect to that Compensation on or
                  prior to the last day of the calendar year preceding the Plan
                  Year in which the services giving rise to the Compensation are
                  performed. For example, to defer Compensation payable with
                  respect to services performed during the 2006 Plan Year, an
                  election must be filed on or before December 31, 2005.
                  Notwithstanding the preceding sentence, a participation
                  agreement may be filed with the Administrator with respect to
                  a Bonus until a date that is no later than six months before
                  the end of the performance period for which the Bonus is
                  payable if the Bonus is not both substantially certain to be
                  paid and readily ascertainable at the time of the election.
                  For example, a participation agreement for a Bonus
                  attributable to the 2006 calendar year, payable in early 2007,
                  may be filed on or before June 30, 2006 so long as the Bonus
                  is not substantially certain to be paid and readily
                  ascertainable by that date.

         (c)      Initial Eligibility. In the case of the first Plan Year in
                  which an individual becomes a Participant, the participation
                  agreement may be filed at any time within 30 days of the date
                  the individual becomes a Participant (rather than the date
                  specified under subsection (b)). This initial election will
                  only apply to Compensation, including a Bonus, paid for
                  services performed after the filing of the participation
                  agreement. This special initial eligibility election rule will
                  not apply if the Participant is or has been a participant in a
                  deferred compensation arrangement required to be aggregated
                  with this Plan under the rules of Section 409A.

         (d)      Modification of Deferral Elections. Once made, a deferral
                  election will remain in effect, unless and until the election
                  is revoked or a new election filed. The revocation or new
                  election must be filed in accordance with the requirements of
                  subsection (b) above. No election may be changed for
                  Compensation payable for a Plan Year after the last day of the
                  election period described in subsection (b). For example, any
                  election in place for 2006 Compensation may not be changed
                  after December 31, 2005.

                                       3
<PAGE>

         Section 3.3 Plan Account.  The Administrator will establish and
maintain an "Account" under the Plan for each Participant and will increase and
decrease a Participant's Account as provided in Section 3.5.

         Section 3.4 Investment Credits.  A Participant's Account will be
increased or decreased to reflect the increase or decrease in the value of the
Investment Account established for the Participant pursuant to Section 6.2.

         Section 3.5 Account Allocations.  As of each accounting date, each
Participant's Account will be:

         (i)      increased by the amount credited to the Account under Section
                  3.1 since the last accounting,

         (ii)     increased or decreased by the amount determined under Section
                  3.4 since the last accounting,

         (iii)    decreased by any payment made under Article IV, and

         (iv)     decreased by the expenses incurred for the administration and
                  maintenance of the Plan, in such amounts and at such times
                  determined by the Administrator.

         The accounting date under this Section will be any date determined by
the Administrator. However, the accounting required under this Section must be
made, at a minimum, as of the last day of each Plan Year quarter.

         Section 3.6 Military Service.  Notwithstanding any provision of this
Plan to the contrary, contributions and benefits with respect to qualified
military service will be provided in accordance with Code Section 414(u).

                                   ARTICLE IV

                                BENEFIT PAYMENTS
                                ----------------

         Section 4.1 Time of Payment of Benefits.  A Participant will receive or
will begin to receive payment of his vested Account balance (as determined under
Article III and Section 4.4) as soon as administratively practicable following
the date specified for payment or the commencement of payment by the
Participant.

         (a)      Timing of Execution and Delivery of Election. A Participant
                  may elect the date his vested Account balance will be paid or
                  will begin to be paid by completing and filing a participation
                  agreement or other election form approved by the Administrator
                  with the Administrator. The specified date must be a date at

                                       4
<PAGE>

                  least two years from the beginning of the Plan Year for which
                  the first deferral under the Plan is made. To be effective,
                  the election under this Section must be made at the time the
                  Participant first makes a deferral election under this Plan
                  (or under any other plan required to be aggregated with this
                  Plan pursuant to the requirements of Code Section 409A). In
                  lieu of specifying a date certain, a Participant may elect to
                  have payment made or commenced as soon as practicable
                  following the date he is no longer employed by any Employer.
                  If no date is specified, payment will be made or commenced as
                  soon as practicable following the date the Participant is no
                  longer employed by any Employer.

         (b)      Death or Disability. If the Participant dies or becomes
                  Disabled prior to the specified payment date, payment will be
                  made or commenced as soon as practicable following the date of
                  death or the date the Administrator determines that the
                  Participant is Disabled. For purposes of this Plan, the term
                  "Disabled" means the inability of the Participant in question
                  to engage in any substantial gainful activity by reason of any
                  medically determinable physical or mental impairment which can
                  be expected to result in death or can be expected to last for
                  a continuous period of not less than 12 months. A Participant
                  who, by reason of any medically determinable physical or
                  mental impairment that can be expected to result in death or
                  last for a continuous period of not less than 12 months, is
                  receiving income placement benefits for a period of not less
                  than three months under an accident and health plan sponsored
                  by an Employer will be deemed to be Disabled. The
                  Administrator will be the sole and final judge of whether a
                  Participant is Disabled for purposes of this Plan, after
                  consideration of any evidence it may require, including the
                  reports of any physician or physicians it may designate.

         (c)      Modification of Elections. An election as to the date payment
                  will be made or commenced may be modified by a Participant by
                  filing a new participation agreement or election form with the
                  Administrator; provided, however, that: (i) the new election
                  will not take effect until at least 12 months after the date
                  the new election is filed, (ii) the single lump sum payment or
                  the first payment of installment payments will be delayed for
                  a period of not less than five years from the date the payment
                  or first payment would otherwise have been made, and (iii) the
                  new election is filed with the Administrator at least 12
                  months prior to the date of the first scheduled payment under
                  the Plan.

         (d)      Key Employees. If a Participant is a key employee (as defined
                  in Internal Revenue Code Section 416) as of the December 31
                  preceding the March 31 preceding the date payment of the
                  Participant's vested Account balance is made or commenced and
                  if the Participant has elected to receive or commence payment
                  upon his termination of employment, the payment or payments
                  will not be made or commence before the earlier of (i) the
                  first day of the month following the 6th month anniversary of
                  the Participant's termination of employment or (ii) the
                  Participant's death.

         Section 4.2 Manner of Payment.  The vested balance of a Participant's
Account will be distributed in cash or kind, as determined by the Administrator,
in:

                                       5
<PAGE>

         (a)      A single lump sum payment;

         (b)      Quarterly, semi-annual or annual installment payments over a
                  period of 2 to 20 years; or

         (c)      A combination of the methods specified in subsections (a) and
                  (b).

         Section 4.3 Manner of Payment Elections.  A Participant may elect the
manner in which his vested Account balance will be paid to him under Section 4.2
and to his beneficiaries under Section 4.5 in accordance with the terms and
conditions of this Section. To elect installment payments under subsection
4.2(b) or a combination of a single lump sum payment and installment payments
under subsection 4.2(c), a Participant must file a participation agreement or an
election form with the Administrator (on a form or forms prescribed by the
Administrator). To be effective, the Participant's election of a payment method
must be filed with the Administrator at the time the Participant first makes a
deferral election under the Plan. An election as to the form of payment may not
be changed after the payment has been made or payments have commenced. Prior to
that time, a Participant may change his election by filing a new election form
with the Administrator; provided, however, that: (i) the new election will not
take effect until at least 12 months after the date the new election is filed;
(ii) the first payment with respect to which such election is made must be
deferred for a period of not less than five years from the date such payment
would otherwise have been made; and (iii) the new election is filed at least 12
months prior to the date of the first scheduled payment under the Plan. If no
election is made or if the election is not timely or properly made, distribution
will be made in the form of a single lump sum payment.

         Section 4.4 Vesting.  A Participant will be fully "vested" in his
Account balance at all times.

         Section 4.5 Death of the Participant.  In the event a Participant dies
before he has received his entire Account balance, the unpaid balance will be
paid to his designated beneficiary or beneficiaries as soon as administratively
practicable after the Participant's death in a single lump sum payment or in
installments (as described in Section 4.2) as elected under Section 4.3.

         Section 4.6 Beneficiary Designations.  A Participant may designate a
beneficiary or beneficiaries to receive any amount payable under Section 4.5. A
Participant may change his designation of beneficiaries at any time by filing
with the Administrator a written notice of the change on a form approved by the
Administrator. If no designation is in effect on the Participant's death, or if
the designated beneficiary does not survive the Participant, his beneficiary
will be his surviving spouse, if any, and then his estate.

                                   ARTICLE V

                                 BENEFIT CLAIMS
                                 --------------

While a Participant or beneficiary need not file a claim to receive his benefit
under the Plan, if he wishes to do so, a claim must be made in writing and filed
with the Administrator. If a claim is denied, the Administrator will furnish the

                                       6
<PAGE>

claimant with written notice of its decision. A claimant may request a review of
the denial of a claim for benefits by filing a written request with the
Administrator. The Administrator will afford the claimant a full and fair review
of such request. The claim and claim review process will be conducted in
accordance with the provisions of Supplement A.

                                   ARTICLE VI

                              FUNDING AND TRANSFERS
                              ---------------------

         Section 6.1 Unfunded Status.  The Employers will contribute funds to an
irrevocable "rabbi trust" (the "Trust") to provide for the benefits created by
this Plan. The Trust will be maintained in such a fashion that the Plan at all
times for purposes of ERISA and the Code will be unfunded and will constitute a
mere promise by the Employers to make Plan benefit payments in the future. Any
and all rights created under this Plan will be unsecured contractual rights
against the Employers.

         Section 6.2 Investments.  Subject to the provisions of Section 6.1, the
Company will establish an investment account for each Participant under the
Trust (the "Investment Account"). The Investment Account will, consequently, at
all times remain an asset of the Employers and will be subject to the claims of
the Employers' general creditors. A Participant may request that the Investment
Account be allocated among available investment options established by the
Administrator under the Investment Account. The initial allocation request may
be made at the time of enrollment. Investment allocation requests will remain
effective until changed in accordance with procedures established by the
Administrator.

                                  ARTICLE VII

                      AMENDMENT AND TERMINATION OF THE PLAN
                      -------------------------------------

         Section 7.1 Amendment of the Plan.  The Company may amend the Plan at
any time in its sole discretion. Notwithstanding the foregoing, the Company may
not amend the Plan to reduce a Participant's Account balance as determined on
the day preceding the effective date of the amendment.

         Section 7.2 Termination of the Plan.  The Company may terminate the
Plan at any time in its sole discretion. Absent an amendment to the contrary,
Plan benefits that had accrued prior to the termination will be paid at the
times and in the manner provided for by the Plan at the time of the termination.

                                       7
<PAGE>

                                  ARTICLE VIII

                                 MISCELLANEOUS
                                 -------------

         Section 8.1 Governing Law.  The Plan shall be construed, regulated and
administered according to the laws of the State of Indiana, without reference to
that state's choice of law principles, except in those areas preempted by the
laws of the United States of America in which case the federal laws will
control.

         Section 8.2 Headings and Gender.  The headings and subheadings in the
Plan have been inserted for convenience of reference only and will not affect
the construction of the Plan provisions. In any necessary construction, the
masculine will include the feminine and the singular the plural, and vice versa.

         Section 8.3 Withholding of Taxes.  The Employers will withhold from any
amount payable under this Plan all federal, state, city and local taxes as
legally required.

         Section 8.4 Spendthrift Clause.  No benefit or interest available under
the Plan will be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment or garnishment by
creditors of a Participant or a Participant's beneficiary, either voluntarily or
involuntarily.

         Section 8.5 Counterparts.  This Plan may be executed in any number of
counterparts, each one constituting but one and the same instrument, and may be
sufficiently evidenced by any one counterpart.

         Section 8.6 No Enlargement of Employment Rights.  Nothing contained in
the Plan may be construed as a contract of employment between the Employers and
any person, nor may the Plan be deemed to give any person the right to be
retained in the employ of an Employer or limit the right of an Employer to
employ or discharge any person with or without cause.

                                       8
<PAGE>

         Section 8.7 Limitations on Liability.  Notwithstanding any other
provision of the Plan, neither the Employers nor any individual acting as an
employee or agent of an Employer will be liable to a Participant or any
beneficiary for any claim, loss, liability or expense incurred in connection
with the Plan, except when the same has been judicially determined to be due to
the gross negligence or willful misconduct of that person.

         Section 8.8 Incapacity of Participant or Beneficiary.  If any person
entitled to receive a distribution under the Plan is physically or mentally
incapable of personally receiving and giving a valid receipt for any payment due
(unless a prior claim for the distribution has been made by a duly qualified
guardian or other legal representative), then, unless and until a claim for the
distribution has been made by a duly appointed guardian or other legal
representative of the person, the Administrator may provide for the distribution
to be made to any other individual or institution then contributing toward or
providing for the care and maintenance of the person. Any payment made for the
benefit of the person under this Section will be a payment for the account of
such person and a complete discharge of any liability of the Employers and the
Plan.

         Section 8.9 Evidence.  Evidence required of anyone under the Plan may
be by certificate, affidavit, document or other information which the person
relying on the evidence considers pertinent and reliable, and signed, made or
presented by the proper party or parties.

         Section 8.10 Action by Employers.  Any action required of or permitted
by an Employer under the Plan will be by resolution of the Employer's Board of
Directors, by the Compensation Committee of the Board of Directors, or by a
person or persons authorized by resolution of the Compensation Committee or the
Board of Directors.

         Section 8.11 Severability.  In the event any provisions of the Plan are
held to be illegal or invalid for any reason, the illegality or invalidity will
not affect the remaining parts of the Plan, and the Plan will be construed and
endorsed as if the illegal or invalid provisions had never been contained in the
Plan.

         Section 8.12 Information to be Furnished by a Participant.  A
Participant, or any other person entitled to benefits under the Plan, must
furnish the Administrator with any and all documents, evidence, data or other
information the Administrator considers necessary or desirable for the purpose
of administering the Plan. Benefit payments under the Plan are conditioned on a
Participant (or other person who is entitled to benefits) furnishing full, true
and complete data, evidence or other information to the Administrator, and on
the prompt execution of any document reasonably related to the administration of
the Plan requested by the Administrator.

                                       9
<PAGE>

                                  SUPPLEMENT A
                                  ------------

                          CLAIMS AND REVIEW PROCEDURES
                          ----------------------------

         Section A-1 Procedures Governing the Filing of Benefit Claims.  All
Benefit Claims must be filed on the appropriate claim forms available from the
Administrator and in accordance with the procedures established by the
Administrator for claim purposes. A "Benefit Claim" means a request for a Plan
benefit or benefits, made by a Claimant or by an authorized representative of a
Claimant, that complies with the Plan's procedures for making benefit claims.
"Claimant" means a Participant, a surviving spouse of a Participant, a
beneficiary, or an Alternate Payee, who is claiming entitlement to the payment
of any benefit under the Plan.

         Section A-2 Notification of Benefit Determinations.  The Administrator
will notify a Claimant, in accordance with Section A-3 below, of the Plan's
benefit determination within a reasonable period of time after receipt of a
Benefit Claim, but not later than 90 days after receipt of the Benefit Claim by
the Plan. If special circumstances require an extension of time for processing
the Benefit Claim, the Administrator will notify the Claimant of the extension
prior to the termination of the initial period described above. The notice will
indicate the special circumstances requiring the extension of time and the date
by which the Plan expects to make the benefit determination. In no event will
the extension exceed a period of 90 days from the end of the initial period.

         Section A-3 Manner and Content of Notification of Benefit
Determinations.  All notices given by the Administrator under the Plan will be
given to a Claimant, or to his authorized representative, in a manner that
satisfies the standards of 29 CFR 2520.104b-1(b) as appropriate with respect to
the particular material required to be furnished or made available to that
individual. The Administrator may provide a Claimant with either a written or an
electronic notice of the Plan's benefit determination. Any electronic
notification will comply with the standards imposed by 29 CFR
2520.104b-1(c)(1)(i), (iii) and (iv). In the case of an Adverse Benefit
Determination, the notice will set forth, in a manner calculated to be
understood by the Claimant:

         (a)      The specific reasons for the adverse determination;

         (b)      Reference to the specific Plan provisions (including any
                  internal rules, guidelines, protocols, criteria, etc.) on
                  which the determination is based;

         (c)      A description of any additional material or information
                  necessary for the Claimant to complete the claim and an
                  explanation of why such material or information is necessary;
                  and

         (d)      A description of the Plan's review procedures and the time
                  limits applicable to such procedures.

The term "Adverse Benefit Determination" means a denial, reduction, or
termination of, or a failure to provide or make payment (in whole or in part)
for, any benefit claimed to be payable under the Plan.

                                       10
<PAGE>

         Section A-4 Appeal of Adverse Benefit Determinations.  A Claimant who
receives an Adverse Benefit Determination and desires a review of that
determination must file, or his authorized representative must file on his
behalf, a written request for a review of the Adverse Benefit Determination, not
later than 60 days after receiving the determination. The written request for a
review must be filed with the Administrator. Upon receiving the written request
for review, the Administrator will advise the Claimant, or his authorized
representative, in writing that:

         (a)      The Claimant, or his authorized representative, may submit
                  written comments, documents, records, and any other
                  information relating to the claim for benefits; and

         (b)      The Claimant will be provided, upon request of the Claimant or
                  his authorized representative, reasonable access to, and
                  copies of, all documents, records, and other information
                  relevant to the Claimant's Benefit Claim, without regard to
                  whether those documents, records, and information were
                  considered or relied upon in making the Adverse Benefit
                  Determination that is the subject of the appeal.

         Section A-5 Benefit Determination on Review.  All appeals by a Claimant
of an Adverse Benefit Determination will receive a full and fair review by an
appropriate named fiduciary of the Plan.

         Section A-6 Notification of Benefit Determination on Review.  The
Administrator will notify a Claimant, in accordance with Section A-7, of the
Plan's benefit determination on review within a reasonable period of time, but
not later than 60 days after the Plan's receipt of the Claimant's request for
review of an Adverse Benefit Determination. If, however, special circumstances
require an extension of time for processing the review by the named fiduciary,
the Claimant will be notified, prior to the termination of the initial 60 day
period, of the special circumstances requiring the extension and the date by
which the Plan expects to render the Plan's benefit determination on review,
which will not be later than 120 days after receipt of a request for review.

         Section A-7 Manner and Content of Notification of Benefit Determination
on Review.  The Administrator will provide a Claimant with notification of its
benefit determination on review in a method described in Section A-3. In the
case of an Adverse Benefit Determination on review, the notification must set
forth, in a manner calculated to be understood by the Claimant:

         (a)      The specific reasons for the adverse determination on review;

         (b)      Reference to the specific Plan provisions (including any
                  internal rules, guidelines, protocols, criteria, etc.) on
                  which the benefit determination on review is based; and

                                       11
<PAGE>

         (c)      A statement that the Claimant is entitled to receive, upon
                  request and free of charge, reasonable access to, and copies
                  of, all documents, records and other information relevant to
                  the Claimant's Benefit Claim, without regard to whether those
                  records were considered or relied upon in making the Adverse
                  Benefit Determination on review, including any reports, and
                  the identities, of any experts whose advice was obtained.

                                       12Exhibit 10(xiii)

                                 MONROE BANCORP
                   DIRECTORS' 2005 DEFERRED COMPENSATION PLAN
                             PARTICIPATION AGREEMENT

         This Agreement made this ____day of ______________, ________ (the
"Effective Date"), by and between Monroe Bancorp (the "Company") and
_________________________________ (the "Participant"):

                                   WITNESSETH
         WHEREAS, the Participant has been designated by the Company as eligible
to participate in the Monroe Bancorp Directors' 2005 Deferred Compensation Plan
(the "Plan"); and

         WHEREAS, the Participant desires to participate in the Plan;

         NOW, THEREFORE, the Company and the Participant hereby agree as
follows:

1. The Participant hereby elects to defer the receipt of the following portion
of his or her Compensation (as defined in Section 3.1 of the Plan) which he or
she would otherwise receive on account of services rendered to the Company as a
director:

                                (SELECT ONLY ONE)

                  _____        Percent (_______%) of my Compensation

                  _____        Dollars ($________) of my Compensation

The foregoing elections will apply for Compensation payable for the first Plan
Year beginning after the Effective Date and for each Plan Year thereafter.

The election may be amended prospectively by the Participant by delivering a new
Participation Agreement to the Cashier of the Bank. However, a new election will
not be effective unless delivered prior to the commencement of the Plan Year for
which it is to apply.

         2. The Participant understands that his or her Plan benefit will
normally be paid as soon as practicable following the date the Participant
terminates service as a director of the Company. However, the Participant
understands that by checking the line below and by filling in a date, the
payment or commencement of payment of his or her Plan benefit may be delayed.

                  _____       I hereby elect to delay the payment of my benefit
                              until _______________, if this date is later than
                              the date I cease to be a director of the Company.
                              (Fill in a specific date at least two years from
                              the Effective Date.)

This election may be changed, but only as provided in Section 4.1 of the Plan.
Notwithstanding the foregoing election, payment will be made or will commence as
soon as practicable following the Participant's ceasing to be a director due to
death or Disability.

<PAGE>

         3. In the event of the Participant's death before receipt of all
benefits payable to him or her under the Plan, any remaining benefits will be
paid to:

         Primary Beneficiary(s):
         -----------------------
         Name                                Relationship           Percentage

         _______________________________     ______________         ___________

         Contingent Beneficiary(s)
         Name                                Relationship           Percentage

         _______________________________     ______________         ___________

         _______________________________     ______________         ___________

         _______________________________     ______________         ___________

         If more than one beneficiary is designated to receive payments, all
amounts due under the Plan will be paid in the percentages indicated, per
stirpes, to such beneficiaries. If the Participant wishes to make a beneficiary
designation other than as allowed by this section, the Participant should attach
an addendum to this Participation Agreement which clearly indicates the
person(s), trust(s) or the estate which is to receive death benefits under the
Plan and the percentage which is to be paid to each.

         In the event that no beneficiary is designated or all designated
beneficiary or beneficiaries predecease the Participant, such amount will be
paid as provided in the Plan.

         4. Payment of all amounts to the Participant under the Plan will be
made as elected below:

                                                 (SELECT ONLY ONE)
         ______       (a)      In a single sum.

         ______       (b)      In substantially equal installments over a period
                               of ___ years (not to exceed 20 years).

                               _______ Quarterly
                               _______ Semi-annually
                               _______ Annually

         ______       (c)      ______% in a single sum with the remainder paid
                               in substantially equal installments over a period
                               of _____ years (not to exceed 20 years).

                               _______ Quarterly
                               _______ Semi-annually
                               _______ Annually

                                      -2-
<PAGE>

This election may be changed, but only as provided in Section 4.3 of the Plan.

         5. If the Participant dies before receiving any payment from the Plan,
payment of all amounts to the beneficiary(s) will be made as elected below:

                                                 (SELECT ONLY ONE)
         _______      (a)      In a single sum.

         _______      (b)      In substantially equal installments over a period
                               of ______ years (not to exceed 20 years).

                               _______ Quarterly
                               _______ Semi-annually
                               _______ Annually

         _______      (c)      ______% in a single sum with the remainder paid
                               in substantially equal installments over a period
                               of _____ years (not to exceed 20 years).

                               _______ Quarterly
                               _______ Semi-annually
                               _______ Annually

         6. If the Participant dies after payments from the Plan have begun,
payment of any remaining amounts to the beneficiary(s) will be made as elected
below:

                                                 (SELECT ONLY ONE)
         _______      (a)      Continue installment payments in the same manner
                               as paid to Participant.

         _______      (b)      In a single sum.

         7. This Agreement will be subject to and governed by all terms and
provisions of the Plan, including the terms defined therein, and the Plan is
hereby incorporated by reference and made a part hereof.

         8. Nothing in this Agreement will obligate the Company to retain the
Participant in his or her capacity as a director of the Company.

         9. This Agreement may not be modified or amended except by an agreement
in writing signed by both parties prior to the Plan Year to which such
modification or amendment relates. This Agreement is binding upon the heirs,
administrators, executors and assigns of the Participant and the successors and
assigns of the Company. Provided, however, the requirements of this Paragraph
will not affect the Participant's right to amend this Agreement, concerning the
form and time of payment, pursuant to the applicable provisions of the Plan, so
long as such amendment is delivered to the Cashier of the Bank as provided in
Paragraph 1.

         10. The Participant will not have any right to assign, pledge,
hypothecate, anticipate or in any way create a lien upon any amounts payable
under the Plan. No amounts payable under the Plan will be subject to assignment
or transfer or otherwise be alienable, either by voluntary or involuntary act or
by operation of law, or subject to attachment, execution, garnishment,
sequestration or other seizure under legal, equitable or other process, or be
liable in any way for the debts or defaults of the Participant and his or her

                                      -3-
<PAGE>

beneficiaries. No loan will be made by the Company to the Participant of any
amounts payable to him or her under the Plan.

         11. The Participant acknowledges that he or she has read and received a
copy of the Plan.

         12. Elections under Paragraphs 2, 4, 5 and 6 shall be effective for the
Plan Year with respect to which the Agreement is executed and for all
Compensation deferred, and earnings thereon, in prior years of participation in
the Plan, subject to the restrictions of the Plan. For such purpose, such
election will constitute an amendment of all prior elections.

         IN WITNESS WHEREOF, the parties hereunto have executed this Agreement
on the day and year first above written.

                                   PARTICIPANT

                                   ___________________________________________

                                   MONROE BANCORP

                                   By:
                                          ____________________________________

                                   Title:
                                          ____________________________________

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