COMMUNITY BANK OF TRI-COUNTY
                      EXECUTIVE INCENTIVE COMPENSATION PLAN



                             As Amended and Restated
                            Effective January 1, 1998




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                          COMMUNITY BANK OF TRI-COUNTY
                      EXECUTIVE INCENTIVE COMPENSATION PLAN

                             ----------------------

                                Table of Contents
                             ----------------------

                                                                            Page

   ARTICLE I.        General Provisions.......................................1
     1.01            Purpose..................................................1
     1.02            Effective Date...........................................1

   ARTICLE II.       Definitions..............................................1
     2.01            "Affiliate"..............................................1
     2.02            "Bank"...................................................1
     2.03            "Beneficiary"............................................1
     2.04            "Bonuses"................................................1
     2.05            "Benefits"...............................................1
     2.06            "Board"..................................................1
     2.07            "Cause"..................................................1
     2.08            "Code"...................................................2
     2.09            "Committee"..............................................2
     2.10            "Common Stock"...........................................2
     2.11            "Compensation"...........................................2
     2.12            "Corporation"............................................2
     2.13            "Employee"...............................................2
     2.14            "ERISA"..................................................2
     2.15            "Multiplier".............................................2
     2.16            "NIATBI..................................................3
     2.17            "Option".................................................3
     2.18            "Participant"............................................3
     2.19            "Peer Group".............................................3
     2.20            "Plan"...................................................3
     2.21            "ROE Target Percentage"..................................3
     2.22            "Share"..................................................3
     2.23            "Stock Option Plan"......................................3
     2.24            "Vesting Event...........................................3

ARTICLE III.         Eligibility and Participation............................4

                                      (i)



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   ARTICLE IV.       Benefits Schedule........................................4
     4.01            Bonuses..................................................4
     4.02            Stock Option Grants......................................4
     4.03            Revocation for Misconduct................................4
     4.04            Payment of Benefits......................................5
     4.05            Source of Benefits.......................................5
     4.06            Minority, Disability, or Incompetency....................5
     4.07            Designation of Beneficiary...............................5

   ARTICLE V.        Plan Administration......................................5
     5.01            The Committee............................................5
     5.02            Claims Procedure.........................................6

   ARTICLE VI.       Amendment and Termination................................6
     6.01            Right to Amend or Terminate..............................6

   ARTICLE VII.      General Provisions.......................................6
     7.01            Prohibition Against Alienation...........................6
     7.02            No Enlargement of Employment Rights......................7
     7.03            Gender...................................................7
     7.04            Applicable Law...........................................7
     7.05            Titles and Headings......................................7
     7.06            Withholding..............................................7





                                      (ii)


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                          COMMUNITY BANK OF TRI-COUNTY
                      EXECUTIVE INCENTIVE COMPENSATION PLAN


ARTICLE I. General Provisions
           ------------------

         1.01 Purpose. This document sets forth the Community Bank of Tri-County
              -------
Executive Incentive Compensation Plan. The Plan is maintained for the purpose of
providing certain  Employees with incentive  compensation in the form of Bonuses
and  Stock  Options  in the  event  the Bank  meets  certain  performance  goals
indicative  of its  profitability  and  stability  in  comparison  to all  other
commercial banks headquartered in the Peer Group.

         It is intended that the Plan be an unfunded plan  maintained  primarily
for the purpose of providing cash bonuses and deferred compensation for a select
group of  management  or highly  compensated  employees  within  the  meaning of
Section 201(2) of ERISA and that benefits  provided under the Plan be taxable to
Participants  only  when  actually  received.  The plan  shall be  administered,
construed,  and  interpreted in a manner  consistent with the purpose and intent
set forth in this Section.

         1.02   Effective  Date.  The effective  date of the Plan was January 1,
                ---------------
1992. The effective date of this restatement of the Plan is January 1, 1998.

ARTICLE II. Definitions.
            -----------

         Unless the context  clearly  requires  otherwise,  the terms defined in
this  Article  II shall,  for all  purposes  of this Plan,  have the  respective
meanings specified in this Article II.

         2.01  "Affiliate"  means  any  company  that  would  be  considered  an
                ---------
affiliate of the Bank or the Corporation pursuant to Section 424 of the Code.

         2.02  "Bank" means Community Bank of Tri County.
                ----

         2.03  "Beneficiary"  means  the  person  or  persons  designated  as  a
                -----------
Participant's  beneficiary  or  beneficiaries  in  accordance  with Section 4.07
hereof.

         2.04  "Bonuses" means cash bonuses payable to Participants  pursuant to
                -------
Section 4.01 hereof.

         2.05  "Benefits"  shall  mean  as  to  any  Participant  any  incentive
                --------
compensation provided under Article IV hereof.

         2.06  "Board" means the Board of Directors of the Bank.
                -----

         2.07  "Cause"  means   personal   dishonesty,   incompetence,   willful
                -----
misconduct,  breach of fiduciary duty involving  personal  profits,  intentional
failure to perform stated duties,  willful violation of a material  provision of
any law, rule or regulation (other than traffic  violations or similar offense),
or a material  violation of a final  cease-and-desist  order or any other action

<PAGE>

which results in a substantial  financial loss to the Bank. A  determination  of
"Cause" shall be made by the Board within its sole discretion.

         2.08 "Code"  means the Internal  Revenue Code of 1986,  as amended from
               ----
time to time.  References to a Code section shall include any comparable section
or sections of future  legislation  that amends,  supplements or supersedes such
section.

         2.09 "Committee" means the members of the Compensation Committee of the
               ---------
Board who are  non-employee  directors  within the  meaning of Rule 16b-3 of the
General  Rules and  Regulations  under the  Securities  Exchange Act of 1934, as
amended.  In the  absence at any time of a duly  appointed  Committee,  the Plan
shall be administered by the Board.

         2.10 "Common Stock" means the common stock, par value $.01 per share of
               ------------
the Corporation.

         2.11 "Compensation"  means a Participant's base salary for the calendar
               ------------
year,  as adjusted from year to year  pursuant to the Board's  consideration  of
changes  both  in the  cost-of-living  and in the  compensation  being  paid  to
similar-situated executive employees in the Peer Group. Base salary will include
only  amounts  paid by the Bank and will  exclude  amounts  paid by third  party
providers, such as disability.

         2.12 "Corporation" means Tri-County Financial Corporation.
               -----------

         2.13  "Employee"  means any  individual  who  performs  service  in the
                --------
business of the Employer  excluding any individual who performs such services as
a self-employed person.

         2.14 "ERISA" means the Employee Retirement Income Security Act of 1974,
               -----
as amended from time to time.

         2.15 "Multiplier" means for any calendar year the average of --
               ----------

                    (i) 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, and

                    (ii) the percentage  obtained when the median  percentage of
noncurrent to gross loans of the Peer Group is divided by the  percentage of the
Bank's  noncurrent to gross  loans;/1/  provided that the  Multiplier  shall not
exceed  1.0 for any  year  before  2002.  Either  of these  percentages  will be
negative if the Bank does not outperform the other banks in its Peer Group.  The
Committee  shall  make  its  determinations  of ROE and NPL in  accordance  with
generally accepted 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.
____________
/1/   For example,  the Multiplier would be 1.75--the average of 50% and 300% --
if (i) the Bank's  ROE was 15% and the  median ROE for its Peer Group  times the
ROE  Target Percentage  was 10%, and (ii) the  Bank's  noncurrent  to gross loan
percentage was 2% and the median percentage for its Peer Group was 6%.
<PAGE>

         2.16  "NIATBI"  means the net income  (after taxes and before  Benefits
                ------
accrued  for the  fiscal  year)  of the Bank and its  Affiliates,  and  shall be
determined by the Committee in accordance  with  generally  accepted  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.

         2.17  "Option," "Option Price," and "Optioned Shares" have the meanings
                ------    ------------        ---------------
set forth in the Stock Option Plan.

         2.18  "Participant"  means an Employee who has become a Participant  in
                -----------
the Plan as provided in Article III.

         2.19 "Peer Group" means the peer base of commercial  banks in the fifth
               ----------
Federal  Reserve  district  (Richmond,  VA);  provided  that the  Committee  may
redefine the Peer Group before any fiscal year to which the change relates.

         2.20 "Plan" means the Community Bank of Tri-County  Executive Incentive
               ----
Compensation  Plan  as  herein  set  forth  and as it may  from  time to time be
amended.

         2.21  "ROE  Target  Percentage"  shall be 70% for  1998,  and  shall be
                -----------------------
determined  each future  calendar  year by the  Committee  as it  exercises  its
discretion to establish this percentage as of any future January 1st. Any change
that the Committee makes  hereunder  shall be effective until further  Committee
action taken before January 1st of the year to which the change relates.

         2.22  "Share" means one share of Common Stock.
                -----

         2.23 "Stock  Option Plan" means the  Tri-County  Financial  Corporation
               ------------------
1996 Stock Option and Incentive Plan, as amended from time to time.

         2.24 "Vesting Event" means the first to occur of the following events:
               -------------

                    (i) termination of a Participant's  employment with the Bank
and its Affiliates due to the  Participant's  retirement after age 65, death, or
disability (as determined by the Committee);

                    (ii) the  occurrence  of a "change in  control" or "offer to
effect a change in  control"  of the Bank or of the  Corporation.  A "change  in
control" of the Bank or of the  Corporation is defined as the acquisition of the
beneficial ownership (as that term is defined in Rule 13d-3 of the General Rules
and Regulations under the Securities Exchange Act of 1934) of 25% or more of the
voting securities of the Bank or of the Corporation,  as the case may be, by any
person or by persons  acting as a group  within the meaning of Section  13(d) of
the  Securities  Exchange Act of 1934; and "offer" shall refer to every offer to
buy or acquire,  solicitation of an offer to sell,  tender offer for, or request
of  invitation  for  tenders  of,  the voting  securities  of the Bank or of the
Corporation for value, as such term is defined under 12 C.F.R. ss.563b.3(i). The
term  "person"  refers to an individual or a  corporation,  partnership,  trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization  or any other form of entity not  specifically  listed herein.  The
decision of the Committee as to whether a change in

<PAGE>

control,  or  offer to  effect  a  change  in  control,  has  occurred  shall be
conclusive and binding as to all affected Participants.

ARTICLE III. Eligibility and Participation
             -----------------------------

         Each Employee who has been selected by the Committee in its  discretion
as eligible to  participate  in the Plan shall be eligible to participate in the
Plan.  The Committee  may, in its sole  discretion,  limit  eligibility  for any
reason  including,  but not limited to, ensuring that the Plan at all times is a
plan described in Section 201(2) of ERISA. An eligible Employee who has complied
with such  procedures,  if any, as the Committee in the discretion may establish
from time to time for becoming a Participant  shall become a Participant  in the
Plan at such time as the Committee designates at the time the person is selected
for participation in the Plan.

ARTICLE IV. Benefits Schedule
            -----------------

         4.01 Bonuses.  For each calendar year  beginning on or after January 1,
              -------
1998, the total Bonuses that the Bank shall pay in cash to Participants  who are
Employees on December 31st of the year to which the Bonuses  relate (or who were
employed on the date of a Vesting Event, if earlier in the year) shall equal the
product  of the  Multiplier  and 10% of the  Bank's  NIATBI;  provided  that the
Committee  may in its  discretion  change this  percentage as of any January 1st
that  occurs  after the date on which the  Committee  acts.  Any change that the
Committee  makes hereunder  shall be effective  until further  Committee  action
taken before January 1st of the year to which the change relates.  The Committee
shall divide the total amount  available for Bonuses pro rata based on the ratio
of the  Participant's  Allocation  Base to the  total  Allocation  Bases for all
Participants  who are entitled to Bonuses for the year.  Such  Allocation  Bases
shall be  determined  according  to the  following  schedule,  unless  the Chief
Executive  Officer  recommends  otherwise  and such  changes  are  confirmed  by
resolution  adopted  at the  first  meeting  of the  calendar  year  to  which a
particular Bonus or Bonuses relate:

                    Participant's Title              Allocation Base
                    -------------------              ---------------

                    President                        10% of Compensation

                    Senior Vice President            7.5% of Compensation

                    Vice President                   5% of Compensation

                    Assistant Vice President         3.5% of Compensation

         4.02 Stock  Option  Grants.  For each  calendar  year after 1997,  each
              ---------------------
Participant shall be granted, under the Stock Option Plan, an Option to purchase
Shares  having a fair market value,  as determined in accordance  with the Stock
Option  Plan,  equal to 60% 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 and shall be fully and immediately exercisable.


<PAGE>
         4.03 Revocation for Misconduct.  Notwithstanding anything herein to the
              -------------------------
contrary,  the  Board  may,  by  resolution,  immediately  revoke,  rescind  and
terminate any Benefits  earned under this Plan, to the extent a Participant  has
not  collected  a Bonus or  exercised  an  Option,  as the  case may be,  if the
Participant  voluntarily or involuntarily  leaves employment with the Bank or an
Affiliate for Cause,  or is discovered  after  termination of employment to have
engaged in conduct that would have justified termination for Cause.

         4.04  Payment  of  Benefits.  All  Benefits  under  this Plan  shall be
               ---------------------
provided by the Bank directly to  Participants,  and the Committee shall have no
responsibility  thereto  other than to inform the Bank,  as soon as  practicable
after the end of each  calendar  year,  in  writing,  as to the  Benefits  to be
provided.

         4.05 Source of Benefits.  The Benefits  payable under the Plan shall be
              ------------------
paid by the Bank out of its  general  assets and shall not be funded by trust or
otherwise.  Nothing contained in this Plan shall constitute, or be treated as, a
trust  or  create  any  fiduciary  relationship.  The  Bank  shall  be  under no
obligation to segregate any assets for the purpose of providing  Benefits  under
the Plan and no person or entity which is entitled to payment under the terms of
the Plan shall have any claim,  right,  security interest,  or other interest in
any fund, trust,  account,  insurance contract, or asset of the Employer. To the
extent that a  Participant  or any other person  acquires a right to receive any
Benefit under the Plan, such right shall be limited to that of a recipient of an
unfunded,  unsecured  promise to pay amounts in the future and the Participant's
(or other  person's)  position  with respect to such amounts  shall be that of a
general unsecured creditor of the Employer.

         4.06 Minority,  Disability,  or  Incompetency.  If any Benefit  becomes
              ----------------------------------------
payable under this Plan to a minor,  to a person under legal  disability or to a
person not  adjudicated  incompetent  but who the  Committee  in its  discretion
determines to be incapable by reason of illness or mental or physical disability
of managing his  financial  affairs,  the Committee may direct that such Benefit
shall be paid to the legal  representative or custodian of such person or to any
relative or friend of such person, or that such amount be paid directly for such
person's  support  and  maintenance.  Payments  so  made  in  good  faith  shall
completely  discharge the Committee and the Bank of any and all  obligations and
liabilities with respect to such payments.

         4.07  Designation  of  Beneficiary.  A  Participant  may file  with the
               ----------------------------
Committee a written  designation  of a Beneficiary  who is to receive his vested
benefits in the event of the Participant's  death prior to his or her collection
of said benefits.  Such designation of Beneficiary may be changed at any time by
written notice to the Committee.  The designation  last filed with the Committee
shall be  controlling.  In the  event of the death of a  Participant  and in the
absence of a beneficiary  validly designated under the Plan who is living at the
time of the Participant's  death, the Participant's estate shall be deemed to be
the Beneficiary for purposes of this plan.

ARTICLE V.     Plan Administration
               -------------------

         5.01  The  Committee.  In  its  sole  and  absolute  discretion,  which
               --------------
discretion  when  exercised  shall be final  and  binding  on all  parties,  the
Committee shall have the  responsibility  and authority to control the operation
and  administration of the Plan in accordance with its terms including,  without
limiting  the  generality  of the  foregoing,  the  powers  and  duties:  (i) to
interpret,


<PAGE>

apply  and  administer  the  Plan,  to  decide  all  questions  of  eligibility,
participation,  status,  benefits,  and rights of Participants and Beneficiaries
under the Plan;  (ii) to  establish  and amend such rules and  procedures  as it
deems necessary or appropriate to the proper  administration  of the Plan; (iii)
to employ or retain such agents as it deems  necessary or advisable to assist in
the  administration  of the Plan,  and to  delegate to the extent  permitted  by
applicable law such powers and duties as it deems  necessary or advisable,  (iv)
to prepare and file all statements, returns, and reports required to be filed by
the Plan  with any  agency of  government;  (v) to  comply  with all  disclosure
requirements  of all  applicable  state and federal law; and (vi) to perform all
functions otherwise assigned to it under the terms of the Plan.

         5.02  Claims  Procedure.  Claims for  Benefits  under the Plan shall be
               -----------------
filed  in  writing  with  the  Committee.  Written  notice  of  the  Committee's
disposition of a claim  generally  shall be furnished to the claimant  within 60
days after the application therefor is filed.  However, if special circumstances
exist of which the  Committee  notifies the claimant  within such 60 day period,
the Committee may extend such period to the extent  necessary,  but in the event
beyond 180 days after the claim is filed. In the event the claim is denied,  the
reasons for the denial  shall be  specifically  set forth in writing,  pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. Any claimant who has
been denied a Benefit  shall be  entitled,  upon  request to the  Committee,  to
appeal  the  denial  of his  claim  within  60 days  following  the  Committee's
determination  described  in the  preceding  sentence.  Upon  such  appeal,  the
claimant,  or  his  representative,  shall  be  entitled  to  examine  pertinent
documents, submit issues and comments in writing to the Committee, and meet with
the  Committee.  The  Committee  shall  review  its  decision  and issue a final
decision to the claimant in writing,  generally  within 60 days  following  such
appeal.  However, if special circumstances exist of which the Committee notifies
the claimant within such 60 day period,  the Committee may extend such period to
the extent necessary, but in no event beyond 120 days following such appeal.

ARTICLE VI.   Amendment and Termination
              -------------------------

         6.01 Right to Amend or  Terminate.  The Bank  reserves the right at any
              ----------------------------
time to terminate or amend the Plan in any manner and for any reason;  provided,
that no amendment or termination  shall,  without the consent of the Participant
or, if applicable,  the  Beneficiary,  adversely  affect such  Participant's  or
Beneficiary's  rights with  respect to  Benefits  accrued as of the date of such
amendment or termination.

ARTICLE VII.  General Provisions
              ------------------

         7.01 Prohibition Against Alienation.  Benefits payable to a Participant
              ------------------------------
or  Beneficiary  under the terms of this Plan shall not be subject in any manner
to alienation,  anticipation, sale, transfer, assignment, pledge, hypothecation,
attachment,  receivership,  or encumbrance of any kind, nor shall it pass to any
trustee in  bankruptcy  or be reached  or applied by any legal  process  for the
payment of any  obligations of the  Participant or  Beneficiary,  except at such
times  and in  such  manner  as  provided  in  this  Plan.  Notwithstanding  the
foregoing,  or any other provision of this Plan, a Participant who holds Options
may  transfer  such  Options  (but not  incentive  stock  options) to his or her
spouse,  lineal ascendants,  lineal descendants,  or to a duly established trust
for the benefit of one or more of these individuals.  Options so transferred may
thereafter be

<PAGE>

transferred  only to the Participant who originally  received the grant or to an
individual or trust to whom the Participant could have initially transferred the
Options pursuant to this Section 7.01. Options which are transferred pursuant to
this Section 7.01 shall be exercisable  by the transferee  according to the same
terms and conditions as applied to the Participant.

         7.02 No Enlargement  of Employment  Rights.  Nothing  contained in this
              -------------------------------------
Plan shall give or be  construed as giving any Employee the right to be retained
in the  service  of the Bank or shall  interfere  with the  right of the Bank to
discharge or otherwise terminate any Employee's employment at any time.

         7.03 Gender.  Whenever any masculine  terminology is used in this Plan,
              ------
it  shall be taken  to  include  the  feminine,  unless  the  context  otherwise
indicates.

         7.04  Applicable  Law. This Plan shall be construed and regulated,  and
               ---------------
its validity and effect and the rights hereunder of all parties interested shall
at all  times  be  determined,  in  accordance  with  the  laws of the  State of
Maryland, except to the extent such state law is preempted by federal law.

         7.05 Titles and Headings.  The titles and headings  included herein are
              -------------------
included for convenience only and shall not be construed as in any way affecting
or modifying the text of the Plan, which text shall control.

         7.06 Withholding. The Bank reserves the right to withhold from payments
              -----------
of  Benefits  such  amounts  of  income,  payroll,  and other  taxes as it deems
advisable,  and if the amount of such cash payment is not  sufficient,  the Bank
may require the  Participant or Beneficiary to pay the Bank the amount  required
to be withheld as a condition of delivering Benefits under the Plan.

         WHEREFORE,  the undersigned  executes this Community Bank of Tri-County
Executive  Incentive  Compensation Plan this 19th day of February, 1999.


                                         Community Bank of Tri-County


                                         By: /s/ Michael L. Middleton, President
                                             -----------------------------------

Attest:  /s/ H. Beaman Smith, Secretary
         ------------------------------