Exhibit 10.41

 

COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

COMMUNITY BANK OF TRI-COUNTY
SALARY CONTINUATION AGREEMENT

 

THIS SALARY CONTINUATION AGREEMENT (the “Agreement”) is adopted this 21st day of
August, 2006, by and between COMMUNITY BANK OF TM-COUNTY, a state-chartered
commercial bank located in Waldorf, Maryland (the “Company-) and JAMES MULDOWNEY
BURKE (the “Executive”).

 

The purpose of this Agreement is to provide specified benefits to the Executive,
a member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development, and future business
success of the Company. This Agreement shall be unfunded for tax purposes and
for purposes of Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended from time to time.

 

Article 1
Definitions

 

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

 

1.1“Beneficiary” means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive
determined pursuant to Article 4.

 

1.2“Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that the Executive completes, signs, and returns to
the Plan Administrator to designate one or more Beneficiaries.

 

1.3“Board” means the Board of Directors of the Company as from time to time
constituted.

 

1.4“Change in Control” shall mean the occurrence of any of the following events:

 

(a)          individuals who, on the date of this Agreement, constitute the
Board of Directors of the Company (the “Incumbent Directors”) cease for any
reason to constitute at least half of the Board of Directors of the Company,
provided that any person becoming a director subsequent to such time, whose
election or nomination for election was approved by a vote of at least
two-thirds (2/3) of the Incumbent Directors then on the Board of Directors of
the Company (either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board of
Directors of the Company shall be deemed to be an Incumbent Director;

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

(b)          any “person” (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company’s then outstanding securities eligible to vote for the election
of the Board of Directors of the Company (the “Company Voting Securities”);
provided, however, that the event described in this paragraph (b) shall not be
deemed to be a Change in Control by virtue of any of the following acquisitions:
(1) by the Company or any subsidiary, (2) by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any subsidiary, (3) by
any underwriter temporarily holding securities pursuant to an offering of such
securities or (4) a transaction (other than one described in (c) below) in which
Company Voting Securities are acquired from the Company, if a majority of the
Incumbent Directors approve a resolution providing expressly that the
acquisition pursuant to this clause (4) does not constitute a Change in Control
under this paragraph (b);

 

(c)          the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or any
of its subsidiaries that requires the approval of the Company’s stockholders,
whether for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:
(1) at least 50% of the total voting power of (x) the corporation resulting from
such Business Combination (the “Surviving Corporation”), or (y) if applicable,
the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the
Surviving Corporation (the “Parent Corporation”), is represented by the Company
Voting Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which such Company
Voting Securities were converted pursuant to such Business Combination), and
such voting power among (and only among) the holders thereof is in substantially
the same proportion as the voting power of such Company Voting Securities among
the holders thereof immediately prior to the Business Combination, (2) no person
(other than any employee benefit plan (or related trust) sponsored or maintained
by the Surviving Corporation or the Parent Corporation) is or becomes the
beneficial owner, directly or indirectly, of 25% or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) and (3) at least 50% of the members of the board of directors of
the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were
Incumbent Directors at the time of the Company Board’s approval of the execution
of the initial agreement providing for such Business Combination; or

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

(d)          the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or substantially all
of the Company’s assets.

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 25% of
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding; provided, that if after such acquisition by the Company such person
becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially
owned by such person, a Change in Control of the Company shall then occur.

 

1.5“Code” means the Internal Revenue Code of 1986, as amended.

 

1.6“Corporation” means the Tri-County Financial Corporation.

 

1.7“Disability” means the Executive’s (i) inability 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; or (ii) receipt of
disability benefits for a period of 3 months under an accident and health plan
of the employer by reason of the participant’s 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.

 

1.8“Early Termination” means Separation from Service before Normal Retirement
Age except when such Separation from Service occurs: (i) within twelve (12)
months following a Change in Control; or (ii) due to death, Disability, or
Termination for Cause.

 

1.9“Effective Date” means January 1, 2006.

 

1.10“Normal Retirement Age” means the Executive attaining age sixty-five (65).

 

1.11“Normal Retirement Date” means the date of the Executive’s Separation from
Service on or after attaining Normal Retirement Age.

 

1.12“Plan Administrator” means the plan administrator described in Article 6.

 

1.13“Plan Year” means each twelve-month period commencing on January l and
ending on December 31st of each year. The initial Plan Year shall commence on
the Effective Date of this Agreement and end on the following December 31st.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

1.14“Schedule A” means the schedule attached to this Agreement and made a part
hereof. Schedule A shall be updated upon a change in any of the benefits under
Articles 2 or 3.

 

1.15“Separation from Service” means the termination of the Executive’s
employment with the Company for reasons other than death (except as provided in
Section 1.8). Whether a Separation from Service takes place is determined based
on the facts and circumstances surrounding the termination of the Executive’s
employment and whether the Company and the Executive intended for the Executive
to provide significant services for the Company following such termination_ A
termination of employment will not be considered a Separation from Service if:

 

(a)the Executive continues to provide services as an employee of the Company at
an annual rate that is twenty percent (20%) or more of the services rendered, on
average, during the immediately preceding three full calendar years of
employment (or, if employed less than three years, such lesser period) and the
annual remuneration for such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three full calendar years of
employment (or, if less, such lesser period), or

 

(b)the Executive continues to provide services to the Company in a capacity
other than as an employee of the Company at an annual rate that is fifty percent
(50%) or more of the services rendered, on average, during the immediately
preceding three full calendar years of employment (or if employed less than
three years, such lesser period) and the annual remuneration for such services
is fifty percent (50%) or more of the average annual remuneration earned during
the final three full calendar years of employment (or if less, such lesser
period).

 

1.16“Specified Employee” means a key employee (as defined in Section 416(i) of
the Code without regard to paragraph 5 thereof) of the Company if any stock of
the Company is publicly traded on an established securities market or otherwise.

 

1.17“Termination for Cause” shall have the meaning set forth in Article 5.

 

Article 2
Distributions During Lifetime

 

2.1Normal Retirement Benefit. Upon Separation from Service on or after the
Normal Retirement Date, the Company shall distribute to the Executive the
benefit described in this Section 2.1 in lieu of any other benefit under this
Article.

 

2.1.1Amount of Benefit. The annual benefit under this Section 2.1 is Sixty-Five
Thousand Dollars ($65,000), payable for a period of fifteen (15) years and
resulting in a total benefit of Nine Hundred Seventy-Five Thousand Dollars
($975,000). The Company’s Board of Directors, in its sole discretion, through a
duly adopted resolution, may increase the annual benefit under this Section
prior to the Executive’s Separation from Service.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

2.1.2Distribution of Benefit. The Company shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive equal monthly installments,
commencing on the first day of the month following Separation from Service.

 

2.2Early Termination Benefit. Upon Early Termination, the Company shall
distribute to the Executive the benefit described in this Section 2.2 in lieu of
any other benefit under this Article.

 

2.2.1Amount of Benefit. The benefit under this Section 2.2 is the Early
Termination Benefit set forth on Schedule A for the Plan Year ending prior to
Separation from Service.

 

2.2.2Distribution of Benefit. The Company shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive equal monthly installments
commencing the first day of the month following the Executive attaining Normal
Retirement Age.

 

2.3Disability Benefit. If the Executive experiences a Disability which results
in a Separation from Service prior to Normal Retirement Age, the Company shall
distribute to the Executive the benefit described in this Section 2.3 in lieu of
any other benefit under this Article.

 

2.3.1Amount of Benefit. The benefit under this Section 2.3 is the Normal
Retirement Benefit amount described in Section 2.1.1.

 

2.3.2Distribution of Benefit. The Company shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive equal monthly installments
commencing the first day of the month following the Executive attaining Normal
Retirement Age.

 

2.4Change in Control Benefit. Upon a Change in Control, followed within twelve
(12) months by a Separation from Service, the Company shall distribute to the
Executive the benefit described in this Section 2.4 in lieu of any other benefit
under this Article.

 

2.4.1Amount of Benefit. The benefit under this Section 2.4 is the Normal
Retirement Benefit amount described in Section 2.1.1.

 

2.4.2Distribution of Benefit. The Company shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive equal monthly installments
commencing the first day of the month following the Executive attaining Normal
Retirement Age.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

2.5Restriction on Timing of Distribution. Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified Employee
at Separation from Service under such procedures as established by the Company
in accordance with Section 409A of the Code, benefit distributions that are made
upon Separation from Service may not commence earlier than six (6) months after
the date of such Separation from Service. Therefore, in the event this Section
2.5 is applicable to the Executive, any distribution which would otherwise be
paid to the Executive within the first six months following the Separation from
Service shall be accumulated and paid to the Executive in a lump sum on the
first day of the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner specified under this
Article 11 of the Plan with respect to the applicable benefit.

 

2.6Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the
inclusion of any amount into the Executive’s income as a result of the failure
of this non-qualified deferred compensation plan to comply with the requirements
of Section 409A of the Code, to the extent such tax liability can be covered by
the amount which the Company has accrued with respect to the obligations
described in this Article 2, a distribution shall be made as soon as is
administratively practicable following the discovery of the plan failure.

 

2.7Change in Form or Timing of Distributions. For distribution of benefits under
this Article 2, the Executive and the Company may, subject to the terms of
Section 8.1, amend the Agreement to delay the timing or change the form of
distributions. Any such amendment:

 

(a)may not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations thereunder;

 

(b)must, for benefits distributable under Section 2.2, 2.3 and 2.4, be made at
least twelve (12) months prior to the first scheduled distribution;

 

(c)must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay
the commencement of distributions for a minimum of five (5) years from the date
the first distribution was originally scheduled to be made; and

 

(d)must take effect not less than. twelve (12) months after the amendment is
made.

 

Article 3
Distribution at Death

 

3.1Death During Active Service. If the Executive dies before Separation from
Service and prior to Normal Retirement Age, the Company shall distribute to the
Beneficiary the benefit described in this Section 3.1. This benefit shall be
distributed in lieu of the benefits under Article 2.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

3.1.1Amount of Benefit. The benefit under this Section 3.1 is the Normal
Retirement Benefit amount described in Section 2.1.1.

 

3.1.2Distribution of Benefit. The Company shall distribute the benefit to the
Beneficiary in one hundred eighty (180) consecutive equal monthly installments
for commencing the first day of the month following receipt by the Company of
the Executive’s death certificate.

 

3.2Death During Distribution of a Benefit. If the Executive dies after any
benefit distributions have commenced under this Agreement but before receiving
all such distributions, the Company shall distribute to the Beneficiary the
remaining benefits at the same time and. in the same amounts that would have
been distributed to the Executive had the Executive survived.

 

3.3Death After Separation from Service But Before Benefit Distributions
Commence. If the Executive is entitled to benefit distributions under this
Agreement, but dies prior to the commencement of said benefit distributions, the
Company shall distribute to the Beneficiary the same benefits that the Executive
was entitled to prior to death except that the benefit distributions shall
commence within thirty (30) days following receipt by the Company of the
Executive’s death certificate.

 

Article 4
Beneficiaries

 

4.1Beneficiary. The Executive shall have the right, at any time, to designate a
Beneficiary to receive any benefit distributions under this Agreement upon the
death of the Executive. The Beneficiary designated under this Agreement may be
the same as or different from the beneficiary designation under any other plan
of the Company in which the Executive participates.

 

4.2Beneficiary Designation: Change. The Executive shall designate a Beneficiary
by completing and signing the Beneficiary Designation Form, and delivering it to
the Plan Administrator or its designated agent. The Executive’s beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage
is subsequently dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Plan Administrator’s rules and procedures,
as in effect from time to time. Upon the acceptance by the Plan Administrator of
a new Beneficiary Designation Form, all Beneficiary designations previously
filed shall be cancelled. The Plan Administrator shall be entitled to rely on
the last Beneficiary Designation Form filed by the Executive and accepted by the
Plan Administrator prior to the Executive’s death.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

4.3Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by the
Plan Administrator or its designated agent.

 

4.4No Beneficiary Designation. If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then
the Executive’s spouse shall be the designated Beneficiary. If the Executive has
no surviving spouse, the benefits shall be made to the personal representative
of the Executive’s estate.

 

4.5Facility of Distribution. If the Plan Administrator determines in its
discretion that a benefit is to be distributed to a minor, to a person declared
incompetent, or to a person incapable of handling the disposition of that
person’s property, the Plan Administrator may direct distribution of such
benefit to the guardian, legal representative or person having the care or
custody of such minor, incompetent person or incapable person. The Plan
Administrator may require proof of incompetence, minority or guardianship as it
may deem appropriate prior to distribution of the benefit. Any distribution of a
benefit shall be a distribution for the account of the Executive and the
Executive’s Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Agreement for such distribution amount.

 

Article 5
General Limitations

 

5.1Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not pay any benefit under this Agreement if the
Company terminates the Executive’s employment for Cause. Cause shall mean a good
faith determination of the Company’s Board of Directors that the Executive has:
(a) engaged in acts of personal dishonesty which have resulted in loss to the
Company, or one of its affiliates, (b) intentionally failed to perform stated
duties, (c) committed a willful violation of any law, rule, regulation (other
than traffic violations or similar offenses), (d) become subject to the entry of
a final cease and desist order which results in substantial loss to the Company
or one of its affiliates, (e) been convicted of a crime or act involving moral
turpitude, (f) willfully breached the Company’s code of conduct and business
ethics, (g) been disqualified or barred by any governmental or self-regulatory
authority from serving in the Executive’s then-current employment capacity or
(h) willfully attempted to obstruct or failed to cooperate with any
investigation authorized by the Board of Directors or any governmental or
self-regulatory entity. No act or failure to act on the part of the Executive
shall be considered “willful” unless it is done, or omitted to be done, by the
Executive in bad faith or without reasonable belief that the Executive’s action
or omission was in the best interests of the Company. Any act or failure to act
that is based upon authority given pursuant to a resolution duly adopted by the
Board of Directors, or upon the advice of legal counsel for the Company, shall
be conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

5.2Suicide or Misstatement. No benefits shall be distributed if the Executive
commits suicide within three years after the Effective Date of this Agreement,
or if an insurance company which issued a life insurance policy covering the
Executive and owned by the Company denies coverage (i) for material
misstatements of fact made by the Executive on an application for such life
insurance, or (ii) for any other reason.

 

5.3Required Regulatory Provision. No payments will be made under this Agreement
that would violate of 12 U.S.C. Sec. 1828(k) or 12 U.S.C. Sec. 1818(e) or any
regulation promulgated thereunder.

 

Article 6
Administration of Agreement

 

6.1Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or person(s)
as the Board shall appoint. The Plan Administrator shall administer this
Agreement according to its express terms and shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and (ii) decide or resolve
any and all questions including interpretations of this Agreement, as may arise
in connection with the Agreement to the extent the exercise of such discretion
and authority does not conflict with Section 409A of the Code and regulations
thereunder.

 

6.2Agents. In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Company.

 

6.3Binding Effect of Decisions. The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Agreement.

 

6.4Indemnity of Plan Administrator. The Company shall indemnify and hold
harmless the members of the Plan Administrator against any and all claims,
losses, damages, expenses or liabilities arising from any action or failure to
act with respect to this Agreement, except in the case of willful misconduct by
the Plan Administrator or any of its members.

 

6.5Company information. To enable the Plan Administrator to perform its
functions, the Company shall supply full and timely information to the Plan
Administrator on all matters relating to the date and circumstances of the
Disability, death, or Separation from Service of the Executive and such other
pertinent information as the Plan Administrator may reasonably require.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

6.6Annual Statement. The Plan Administrator shall provide to the Executive,
within one hundred twenty (120) days after the end of each Plan Year, a
statement setting forth the benefits to be distributed under this Agreement.

 

Article 7
Claims And Review Procedures

 

7.1For all claims, the following procedures will apply:

 

7.1.1Claims Procedure. Any individual (“Claimant”) who has not received benefits
under this Agreement that he or she believes should be paid shall make a claim
for such benefits as follows:

 

7.1.1.1Initiation — Written Claim. The Claimant initiates a claim by submitting
to the Company a written claim for the benefits.

 

7.1.1.2Timing of Company Response. The Company shall respond to such Claimant
within ninety (90) days after receiving the claim. If the Company determines
that special circumstances require additional time for processing the claim, the
Company can extend the response period by an additional ninety (90) days by
notifying the Claimant in writing, prior to the end of the initial ninety (90)
day period, that an additional period is required. The notice of extension must
set forth the special circumstances and the date by which the Company expects to
render its decision.

 

7.1.1.3Notice of Decision. If the Company denies part or all of the claim, the
Company shall notify the Claimant in writing of such denial. The Company shall
write the notification in a manner calculated to be understood by the Claimant.
The notification shall set forth:

 

(a)The specific reasons for the denial,

 

(b)A reference to the specific provisions of this Agreement on which the denial
is based,

 

(c)A description of any additional information or material necessary for the
Claimant to perfect the claim and an explanation of why it is needed,

 

(d)An explanation of this Agreement’s review procedures and the time limits
applicable to such procedures, and

 

(e)A statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

7.1.2Review Procedure. If the Company denies part or all of the claim, the
Claimant shall have the opportunity for a full and fair review by the Company of
the denial, as follows:

 

7.1.2.1Initiation — Written Request. To initiate the review, the Claimant,
within 60 days after receiving the Company’s notice of denial, must file with
the Company a written request for review.

 

7.1.2.2Additional Submissions — Information Access. The Claimant shall then have
the opportunity to submit written comments, documents, records and other
information relating to the claim. The Company shall also provide the Claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the Claimant’s claim for benefits.

 

7.1.2.3Considerations on Review. In considering the review, the Company shall
take into account all materials and information the Claimant submits relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

 

7.1.2.4Timing of Company Response. The Company shall respond in writing to such
Claimant within 60 days after receiving the request for review. If the Company
determines that special circumstances require additional time for processing the
claim, the Company can extend the response period by an additional 60 days by
notifying the Claimant in writing, prior to the end of the initial 60-day
period, that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company expects to
render its decision.

 

7.1.2.5Notice of Decision. The Company shall notify the Claimant in writing of
its decision on review. The Company shall write the notification in a manner
calculated to be understood by the Claimant. The notification shall set forth:

 

(a)The specific reasons for the denial,

 

(b)A reference to the specific provisions of this Agreement on which the denial
is based,

 

(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 (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits, and

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

(d)A statement of the Claimant’s right to bring a civil action under ERISA
Section 502(a).

 

Article 8
Amendments and Termination

 

8.1Amendments. This Agreement may be amended only by a written agreement signed
by the Company and the Executive. However, the Company may unilaterally amend
this Agreement to conform with written directives to the Company from its
auditors or banking regulators or to comply with legislative or tax law,
including without limitation Section 409A of the Code and any and all
regulations and guidance promulgated thereunder.

 

8.2Plan Termination Generally. This Agreement may be terminated only by a
written agreement signed by the Company and the Executive. However, the Company
may unilaterally amend this Agreement to conform with written directives to the
Company from its auditors or banking regulators or to comply with legislative or
tax law, including without limitation Section 409A of the Code and any and all
regulations and guidance promulgated thereunder. The benefit shall be frozen as
of the date the Agreement is terminated. Except as provided in Section 8.3, the
termination of this Agreement shall not cause a distribution of benefits under
this Agreement. Rather, upon such termination benefit distributions will be made
at the earliest distribution event permitted under Article 2 or Article 3.

 

8.3Plan Terminations Under Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if the Company terminates this Agreement in the
following circumstances:

 

(a)Within thirty (30) days before, or twelve (12) months after a change in the
ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company as described in Section
409A(2)(A)(v) of the Code, provided that all distributions are made no later
than twelve (12) months following such termination of the Agreement and further
provided that all the Company’s arrangements which are substantially similar to
the Agreement are terminated so the Executive and all participants in the
similar arrangements are required to receive all amounts of compensation
deferred under the terminated arrangements within twelve (12) months of the
termination of the arrangements;

 

(b)Upon the Company’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the
Executive’s gross income in the latest of (i) the calendar year in which the
Agreement terminates; (ii) the calendar year in which the amount is no longer
subject to a substantial risk of forfeiture; or (iii) the first calendar year in
which the distribution is administratively practical; or

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

(c)Upon the Company’s termination of this and all other non-account balance
plans (as referenced in Section 409A of the Code or the regulations thereunder),
provided that all distributions are made no earlier than twelve (12) months and
no later than twenty-four (24) months following such termination, and the
Company does not adopt any new non-account balance plans for a minimum of five
(5) years following the date of such termination;

 

the Company may distribute the amount which the Company has accrued with respect
to the Company’s obligations under Article 2 hereof, determined as of the date
of the termination of the Agreement, to the Executive in a lump sum subject to
the above terms.

 

Article 9
Miscellaneous

 

9.1Binding Effect. This Agreement shall bind the Executive and the Company, and
their beneficiaries, survivors, executors, administrators and transferees.

 

9.2No Guarantee of Employment. This Agreement is not a contract for employment.
It does not give the Executive the right to remain as an employee of the
Company, nor does it interfere with the Company’s right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive’s right to terminate employment at any time.

 

9.3Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

 

9.4Tax Withholding and Reporting. The Company shall withhold any taxes that are
required to be withheld, including, but not limited to, taxes owed under Section
409A of the Code and regulations thereunder, from the benefits provided under
this Agreement. The Executive acknowledges that the Company’s sole liability
regarding taxes is to forward any amounts withheld to the appropriate taxing
authority(ies). Further, the Company shall satisfy all applicable reporting
requirements, including those under Section 409A of the Code and regulations
thereunder.

 

9.5Applicable Law. The Agreement and all rights hereunder shall be governed by
the laws of the State of Maryland, except to the extent preempted by the laws of
the United States Of America.

 

9.6Unfunded Arrangement. The Executive and the Beneficiary are general unsecured
creditors of the Company for the distribution of benefits under this Agreement.
The benefits represent the mere promise by the Company to distribute such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive’s life or other
informal funding asset is a general asset of the Company to which the Executive
and Beneficiary have no preferred or secured claim.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

9.7Reorganization. The Company shall not merge or consolidate into or with
another bank, or reorganize, or sell substantially all of its assets to another
bank, firm, or person unless such succeeding or continuing bank, firm, or person
agrees to assume and discharge the obligations of the Company under this
Agreement. Upon the occurrence of such event, the term “Company” as used in this
Agreement shall be deemed to refer to the successor or survivor bank.

 

9.8Entire Agreement. This Agreement constitutes the entire agreement between the
Company and the Executive as to the subject matter hereof. No rights are granted
to the Executive by virtue of this Agreement other than those specifically set
forth herein.

 

9.9Interpretation. Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

 

9.10Alternative Action. in the event it shall become impossible for the Company
or the Plan Administrator to perform any act required by this Agreement, the
Company or Plan Administrator may in its discretion perform such alternative act
as most nearly carries out the intent and purpose of this Agreement and is in
the best interests of the Company, provided that such alternative acts do not
violate Section 409A of the Code.

 

9.11Headings. Article and section headings are for convenient reference only and
shall not control or affect the meaning or construction of any of its
provisions.

 

9.12Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced as if
such illegal and invalid provision has never been inserted herein.

 

9.13Notice. Any notice or filing required or permitted to be given to the
Company or Plan Administrator under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, to the
address below:

 

  Community Bank of Tri-County     P.O. Box 38     Waldorf, MD 20601  

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

 

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COMMUNITY BANK OF TRI-COUNTY Salary Continuation Agreement

 

Any notice or filing required or permitted to be given to the Executive under
this Agreement shall be sufficient if writing and hand-delivered, or sent by
mail, to the last known address of the Executive.

 

9.14Compliance with Section 409A. This Agreement shall at all times be
administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and any and all
regulations thereunder, including such regulations as may be promulgated after
the Effective Date of this Agreement.

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the
Company have signed this Agreement.

 

EXECUTIVE:   COMPANY               COMMUNITY BANK OF TRI-COUNTY         /s/
James Muldowney Burke   By /s/ Michael L. Middleton   James Muldowney Burke  
Title President  

 

 

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Community Bank of Tri-county Salary Continuation Agreement

 

FIRST AMENDMENT
TO THE
COMMUNITY BANK OF TRI-COUNTY
SALARY CONTINUATION AGREEMENT
DATED AUGUST 21, 2006
FOR
JAMES MULDOWNEY BURKE

 

THIS FIRST AMENDMENT is adopted this 13th day of April, 2007, by and between
Community Bank of Tri-County, a state-chartered commercial bank located in
Waldorf, Maryland (the “Company”) and James Muldowney Burke (the “Executive”).

 

The Company and the Executive executed the Salary Continuation Agreement on
August 21, 2006 effective January 1, 2006 (the “Agreement”).

 

The undersigned hereby amend the Agreement for the purpose of changing the
Disability and Change in Control benefit amounts. Therefore, the following
changes shall be made:

 

Section 2.3.1 of the Agreement shall be deleted in its entirety and replaced
with the following:

 

2.3.1Amount of Benefit. The benefit under this Section 2.3 is the Disability
Benefit set forth on Schedule A for the Plan Year ending prior to Separation
from Service.

 

Section 2.4.1 of the Agreement shall be deleted in its entirety and replaced
with the following:

 

2.4.1Amount of Benefit. The benefit under this Section 2.4 is the Change in
Control Benefit set forth on Schedule A for the Plan Year ending prior to
Separation from Service.

 

Section 2.4.2 of the Agreement shall be deleted in its entirety and replaced
with the following:

 

2.4.2Distribution of Benefit. The Company shall distribute the benefit to the
Executive in one hundred eighty (180) consecutive monthly installments
commencing the first day of the month following Separation from Service.

 

Section 2.7 of the Agreement shall be deleted in its entirety and replaced with
the following:

 

2.7Change in Form or Timing of Distributions. For distribution of benefits under
this Article 2, the Executive and the Company may, subject to the terms of
Section 8.1, amend the Agreement to delay the timing or change the form of
distributions. Any such amendment:

 

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Community Bank of Tri-county Salary Continuation Agreement

 

(a)may not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations thereunder;

 

(b)must, for benefits distributable under Sections 2.2 and 2.3, be made at least
twelve (12) months prior to the first scheduled distribution;

 

(c)must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay
the commencement of distributions for a minimum of five (5) years from the date
the first distribution was originally scheduled to be made; and

 

(d)must take effect not less than twelve (12) months after the amendment is
made.

 

IN WITNESS OF THE ABOVE, the Company and the Executive hereby consent to this
First Amendment.

 

EXECUTIVE:   COMMUNITY BANK OF TRI-COUNTY         /s/ James Muldowney Burke   By
/s/ William J. Pasenelli James Muldowney Burke   Title CFO & EVP              

 

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Community Bank of Tri-county Salary Continuation Agreement

 

SECOND AMENDMENT
TO THE
COMMUNITY BANK OF TRI-COUNTY
SALARY CONTINUATION AGREEMENT
DATED AUGUST 21, 2006
AND AMENDED APRIL 13, 2007
FOR
JAMES MULDOWNEY BURKE

 

THIS SECOND AMENDMENT is adopted this 30th day of December, 2007, by and between
Community Bank of Tri-County, a state-chartered commercial bank located in
Waldorf, Maryland (the “Company”) and James Muldowney Burke (the “Executive”).

 

The Company and the Executive executed the Salary Continuation Agreement on
August 21, 2006 effective January 1, 2006 a First Amendment on April 13, 2007
(the “Agreement”).

 

The undersigned hereby amend the Agreement for the purpose of changing the
Change in Control definition, increasing the Normal Retirement Benefit and
updating the plan termination provision. Therefore, the following changes shall
be made:

 

Section 1.4 of the Agreement shall be deleted in its entirety and replaced with
the following:

 

1.4“Change in Control” means a change in the ownership or effective control of
the Bank, or in the ownership of a substantial portion of the assets of the
Bank, as such change is defined in Code Section 409A and regulations thereunder.

 

Section 2_1_1 of the Agreement shall be deleted in its entirety and replaced
with the following:

 

2.1.1Amount of Benefit. The annual benefit under this Section 2.1 is One Hundred
Thousand Dollars ($101,000) for a period of fifteen (15) years resulting in a
total benefit of One Million Five Hundred Thousand Fifteen Dollars ($1,515,000).
The Company’s Board of Directors, in its sole discretion, through duly adopted
resolution, may increase the annual benefit under this Section prior to the
Executive’s Separation from Service.

 

Section 8.3 of the Agreement shall be deleted in its entirety and replaced with
the following:

 

8.3Plan Terminations Under Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if the Company terminates this Agreement in the
following circumstances:

 

(a)Within thirty (30) days before, or twelve (12) months after a Change in
Control, provided that all distributions are made no later than twelve (12)
months following such termination of the Agreement and further provided that all
the Company’s arrangements which are substantially similar to the Agreement are
terminated so the Executive and all participants in the similar arrangements are
required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the termination of the arrangements;

 

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Community Bank of Tri-county Salary Continuation Agreement

 

(b)Upon the Company’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the
Executive’s gross income in the latest of (i) the calendar year in which the
Agreement terminates; (ii) the calendar year in which the amount is no longer
subject to a substantial risk of forfeiture; or (iii) the first calendar year in
which the distribution is administratively practical; or

(c)Upon the Company’s termination of this and all other arrangements that would
be aggregated with this Agreement pursuant to Treasury Regulations Section
1.409A-1(c) if the Executive participated in such arrangements (“Similar
Arrangements”), provided that (i) the termination and liquidation does not occur
proximate to a downturn in the financial health of the Company, (ii) all
termination distributions are made no earlier than twelve (12) months and no
later than twenty-four (24) months following such termination, and (iii) the
Company does not adopt any new arrangement that would be a Similar Arrangement
for a minimum of three (3) years following the date the Company takes all
necessary action to irrevocably terminate and liquidate the Agreement;

 

The Company may distribute the amount which the Company has accrued with respect
to the Company’s obligations hereunder, determined as of the date of the
termination of the Agreement, to the Executive in a lump sum subject to the
above terms.

 

Schedule A shall be deleted and replaced with the attached Schedule A.

 

IN WITNESS OF THE ABOVE, the Company and the Executive hereby consent to this
Second Amendment.

 

 

Executive:   Community Bank of-County                 /s/ James Muldowney Burke
  By /s/ Michael L. Middleton   James Muldowney Burke   Title President  

 

 

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