EXHIBIT 10.1

COMMUNITY BANCSHARES, INC.

EXECUTIVE INCENTIVE PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSES

Section 1.1 Establishment of Plan. By this document Community Bancshares, Inc.
(further referenced as the “Corporation”) adopts the Community Bancshares, Inc.
Executive Incentive Plan (the “Plan”).

Section 1.2 Purpose of Plan. The purposes of the Plan are:

 

  A. To optimize the Corporation’s profitability and growth consistent with its
goals and objectives;

 

  B. To optimize retention of a highly competent executive management group by
providing Participants short-term incentive compensation, which, when combined
with base salary, long-term incentive compensation, and benefits, is fully
competitive with other Peer Banks;

 

  C. To pay incentive awards within the Plan that correlate well with the
relative contributions made by Participants;

 

  D. To encourage teamwork and involvement on the part of Participants by
connecting the major portion of the incentives paid to the performance of the
Company as a whole; and

 

  E. To encourage accountability on the part of Participants by connecting a
portion of the incentives paid to the performance results of the specific
organizational units for which the Participants are responsible.

ARTICLE II

CERTAIN DEFINITIONS

Section 2.1 Award. “Award” means the cash payment determined under this Plan to
be due to a Participant as a result of performance during a Plan Year, which
shall be paid as provided in this Plan.

Section 2.2 Award Date. “Award Date” means that date, as soon as practicable
after the applicable performance evaluations are completed, on which Awards are
paid.

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Section 2.3 Base Compensation. “Base Compensation” means the base salary of a
Participant in effect at the beginning of the Plan Year.

Section 2.4 Beneficiary. “Beneficiary” means the individual or individuals named
by a Participant in writing filed with the Corporation’s Human Resources
Department to receive a Participant’s unpaid benefit in the event of a
Participant’s death. If a Participant fails to name a Beneficiary, the
Beneficiary under this Plan will be the same as his or her beneficiary under the
Community Bancshares, Inc. Employee Stock Ownership Plan, or any successor
thereto, in effect on the date of the Participant’s death.

Section 2.4 Committee. Committee” means the Executive Compensation/Benefits
Committee of the Board of Directors of the Corporation or any successor thereto
performing similar functions. This Committee administers and interprets the
Plan; any decision made by the Committee is final and binding on the Participant
and the Participant’s Beneficiary.

Section 2.5. Officer/Director “Officer/Director” is an employee who holds a
position as one of the most senior officers of the Corporation or its
subsidiaries and is also a member of the Corporation’s Board of Directors.

Section 2.6 Participant. A “Participant” is an Officer/Director or Senior
Executive who is approved each year by the Committee to participate with respect
to the next Plan Year.

Section 2.7 Plan Year. “Plan Year” means a calendar year.

Section 2.8 Senior Executive. A “Senior Executive” is an officer who is not an
Officer/Director.

ARTICLE III

PARTICIPATION

Section 3.1 Participation. A Participant will not be qualified to receive an
Award for a Plan Year unless he or she was approved for entry into the Plan by
the Committee and is still working for the Corporation on the Award Date for
that Plan Year. However, retirement, death, disability or an approved leave of
absence will not disqualify a Participant; rather, a prorated payment, based on
the time worked during the Plan Year, will be made to the Participant or to his
or her Beneficiary, as the case may be. If a Participant leaves the
Corporation’s employ for any other reason, the Committee may, in its sole
discretion, make an Award to him or her of a prorated payment based on the time
worked during the Plan Year.

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ARTICLE IV

DETERMINATION OF AWARDS

Section 4.1 Goals. Goals will be set for the Corporation, each Participant, and
each business unit that a Participant manages. A portion of the incentives paid
will be based on the performance results of the Corporation as a whole to
encourage teamwork on the part of the Participants. For Officer/Directors the
incentives paid may be based exclusively on the corporate goals. For Senior
Executive Participants, a portion of the incentives paid will be based on the
performance results of the Participant’s specific organizational unit managed
and the Participant’s individual performance to encourage an appropriate degree
of individual focus.

The importance of sound goal setting is critical to the success of this Plan.
The goal setting process will be directly connected to the annual business plan
and resulting budget, and will begin at the top of the Corporation. Corporate
goals for performance purposes under this Plan may include one or more of the
following in any given year:

 

  •   Net Income

 

  •   Earnings per share

 

  •   Return on Average Assets

 

  •   Return on Average Equity

 

  •   Credit Quality Measures

 

  •   Efficiency Ratio

 

  •   Loan Growth

 

  •   Deposit Growth

 

  •   Non-Interest Revenue Growth.

The goals for the Corporation and the weightings placed on each will be approved
by the Committee at the beginning of each Plan Year. The individual and business
unit goals and the weightings placed on each will be approved by the Chief
Executive Officer. The corporate goals, unit goals and individual goals will be
weighted and the total weightings will equal 100%. Once determined, goals for
all Participants will be documented on the Executive Incentive Plan Goals and
Objectives Scorecard.

Section 4.2 Performance Ratings. A corporate rating will be determined at year
end based on the Committee’s evaluation of the Corporation’s results against the
annual corporate goals approved by the Committee at the beginning of the Plan
Year. Business unit and individual ratings will be determined based on the Chief
Executive Officer’s evaluation of the individual and unit results against the
annual goals approved at the beginning of the Plan Year. One of the following
five general achievement levels will apply for each goal resulting in a
performance rating from 1 to 5.

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Performance Rating

  

Performance Description

1

  

Achieves unique and exceptional performance

2

  

Consistently meets and frequently exceeds goals

3

  

Consistently meets goals

4

  

Improve performance to meet goals

5

  

Needs substantial improvement to meet goals

The ratings will be weighted, and corporate rating, business unit rating and
individual rating will be added together to determine the overall rating.

Section 4.3 Participant Levels. Each Participant will be assigned a “Participant
level” ranging from 1 to 4, with 1 being the level with the highest bonus
opportunity. Designation of Participant levels will be made by the Committee, in
the case of Officer/Directors, and by the Chief Executive Officer, in the case
of all other Participants.

Section 4.4 Calculation of Awards. The actual Awards will be determined based on
the Participant’s overall rating, the Participant level, and the Base
Compensation as shown in the following table.

Award Ranges

(As a Percent of Base Compensation)

 

Overall Rating

   Participant Level    1   2   3   4

1.0-1.49

   30-50%   10-30%   0-20%   0-10%

1.5-2.49

   20-40%   0-20%   0-10%   0-5%

2.5-3.49

   10-30%   0-10%   0-5%   0-2%

3.5-4.49

   0%   0%   0%   0%

4.5-5.0

   0%   0%   0%   0%

However, in no event shall Awards be paid in excess of the total bonus pool
which has been established by the Committee at the beginning of the Plan Year.
In the event that the aggregate Awards as calculated based on the foregoing
provisions exceed the bonus pool, they shall be reduced on a pro rata basis
until they are equal to the bonus pool. The maximum amount which may be paid to
a Participant for any given Plan Year under this Plan is $250,000.

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ARTICLE V

DISTRIBUTION OF AWARDS

Section 5.1 Distributions. Awards will be paid in the form of a cash bonus on an
annual basis within 60 days of the end of the Plan Year and will be net of any
required federal, FICA, state or local tax withholdings. If a Participant dies
prior to the Award Date, the designated Beneficiary will be paid the amount of
the Award in a single cash sum. Notwithstanding the foregoing, the Corporation’s
Board of Directors shall have the authority in its sole discretion to authorize
pro rata payment of Awards during the Plan Year based on a pro rata realization
of goals.

ARTICLE VI

MISCELLANEOUS

Section 6.1 No Assignment of Benefits. The Corporation will not under any
circumstances make any payment under this Plan to any assignee or creditor of a
Participant or of his or her Beneficiary. Before a Participant actually receives
a payment under this Plan, neither the Participant, nor a designated
Beneficiary, has any right, even in anticipation of receiving a payment, to
assign, pledge, grant a security interest in, transfer or otherwise dispose of
any interest under this Plan. Furthermore, a Participant’s rights cannot be
assigned or transferred even by operation of law.

Section 6.2 No Employment Rights. This Plan gives the Participant no right to be
retained in the Corporation’s employment.

Section 6.3 Amendment or Termination of Plan. The Committee can end or change
this Plan at any time. However, neither the Committee nor the Board of Directors
of the Corporation can take away any Award which a Participant has already been
paid, or any Award a Participant might receive for the Plan Year when the
Committee acts unless the Committee determines that such reward has been or
would be paid based on fraudulent or erroneous data or the employee has been
terminated for cause.

Section 6.4 Governing Law. This Plan is to be governed and interpreted as
provided in the laws of the State of Alabama.

Section 6.5 No Rights to Awards. Neither an executive nor any officer or
employee of the Corporation or any of its subsidiaries has any claim or right to
be included in the Plan or to be granted an Award unless and until (i) he or she
has become a Participant for the Plan Year in question and (ii) his or her Award
has been made.