COMMUNITY BANK OF TRI-COUNTY
EXECUTIVE INCENTIVE COMPENSATION PLAN
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2003 Amendment
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WHEREAS, Community Bank of Tri-County (the "Bank") maintains the Community
Bank of Tri-County Executive Incentive Compensation Plan (the "Plan"), and the
Bank's Board of Directors has determined that it is in the best interests of the
Bank to amend the Plan in the manner set forth herein;
NOW, THEREFORE, the Plan is hereby amended as follows, effective as of
January 1, 2004.
1. New Sections 2.12A, 2.12B and 2.12C are added to the Plan immediately
after Section 2.12 and before Section 2.13 to provide as follows:
2.12A "EPS" means diluted earnings per share of Common Stock,
expressed as a dollar amount, as computed by the Corporation for purposes
of financial statement reporting.
2.12B "EPS Increase" means the amount, if any, by which the EPS for a
calendar year exceeds the EPS for the immediately preceding calendar year.
Such increase, if any, shall be expressed as a percentage of the EPS for
the immediately preceding calendar year.
2.12C "EPS Target Increase" means the amount by which the targeted EPS
for a calendar year, as determined by the Committee in its discretion for
purposes of this Plan prior to or as soon as practicable following January
1 of such year, will exceed the EPS for the immediately preceding calendar
year. Such excess shall be expressed as a percentage of the EPS for the
immediately preceding calendar year.
2. Section 2.15 of the Plan is amended in its entirety to provide as
follows:
2.15 "Multiplier" means for any calendar year the average of (i), (ii)
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and (iii), where --
(i) is the percentage obtained when the Bank's return-on-equity
("ROE") is divided by the product of the median ROE of the Peer Group
and the ROE Target Percentage,
(ii) is the percentage obtained when the median percentage of
noncurrent to gross loans ("NPL") of the Peer Group is divided by the
percentage of the Bank's NPL; and
(iii) is the percentage obtained when the EPS Increase for the
calendar year is divided by the EPS Target Increase for the calendar
year(1); provided that (a) in no event shall such percentage exceed
150% for purposes of this clause (iii), and (b) such percentage shall
be deemed to be 0% for purposes of this clause (iii) if the actual
percentage is less than 50%.
(1) For example, the Multiplier would be 145% - - the average of 50%
and 300% and 85% - - if (i) the Bank's ROE was 5% and the median ROE
for its Peer Group times the ROE Target Percentage was 10%, (ii) the
Bank's noncurrent to gross loan percentage was 2% and the median
percentage for its Peer Group was 6%, and (iii) the EPS Increase was
85% of the EPS Target Increase.
Either of the percentages set forth in clauses (i) and (ii),
above, will be below 100% if the Bank does not outperform the other
banks in its Peer Group. If the Bank performs at a level below 50% of
Peer Performance, the factor for these clauses shall be zero. The
Committee shall make its determinations of ROE, NPL and EPS in
accordance with generally accepting accounting principles, subject to
the Committee's discretion to take into account or to disregard any
financial events that are extraordinary in the opinion of the
Committee.
3. Section 4.02 of the Plan is amended in its entirety to provide
as follows:
4.02 Stock Option Grants. Each Participant shall be granted,
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under the Stock Option Plan, an Option to purchase a specified number
of Shares such that the value of the Option, as determined by the
Committee in accordance with the Black-Scholes option pricing model or
such other valuation methodology used by the Corporation for purposes
of compliance with FASB Statement No. 123, is equal to 50% of the
Bonus (if any) to which the Participant is entitled under Section 4.01
hereof for the calendar year, unless the Committee determines
otherwise by resolution adopted before the first day of the calendar
year to which a particular grant or grants relate. The Option Price
for each Option shall equal the fair market value of the Optioned
Shares on the date of grant, as determined in accordance with the
Stock Option Plan, and shall be fully and immediately exercisable.
4. Nothing contained herein shall be held to alter, vary or affect any
of the terms, provisions, or conditions of the Plan or any agreement
entered into thereunder, other than as stated above.
Dated As Of : October 23, 2003 COMMUNITY BANK OF TRI-COUNTY
By: /s/ Michael L. Middleton
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Its President