exhibit103.htm


    Exhibit
10.3

     

    


    COMMUNITY
BANCORP. AND SUBSIDIARY

    OFFICER
INCENTIVE PLAN

    


    


    1.  Purposes

    


    The purpose of the Community Bancorp.
and Subsidiary Officer Incentive Plan (the "Plan") is to attract, retain
and motivate highly-qualified management employees by providing
appropriate performance-based short-term incentive awards.

    


    2.  Definitions

    


    The following terms, as used herein,
shall have the following meanings:

    


    “Additional Bonus Pool” has
the meaning set forth in Section 3.02.

    


    “Bank” means the Company’s
wholly-owned subsidiary, Community National Bank, a national banking
association, or any successor financial institution.

    


    "Board" means the Board of
Directors of the Company.

    


    "Bonus" means an annual
incentive bonus award granted pursuant to the Plan, the payment of which
shall be contingent upon the attainment of Performance Goals with respect to the
applicable Calculation Period.

    


    “Calculation Period” means (i), with
respect to Participants who are Executive Officers, the twelve month period
ending on September 30; and (ii) with respect to eligible Participants who are
Other Participants, a calendar year.

    


    "Code" means the Internal
Revenue Code of 1986, as amended from time to time.

    


    "Committee" means the
Compensation Committee of the Board.

    


    "Company" means Community
Bancorp., a corporation organized under the laws of the State of Vermont, or any
successor corporation.

    


    “ESSA” has the meaning set
forth in Section 6.07.

    


    “Executive Officer Bonus Pool”
has the meaning set forth in Section 3.02.

    


    “Executive Officers” and “Executive Officer
Participants” mean those executive officers of the Company or the Bank
who are designated from time to time by the Board or the Committee as Executive
Officer Participants in this Plan.

    


    “IDC” means IDC Financial
Publishing, Inc., a banking industry performance ranking service.

    


    “Other Participant Bonus Pool”
has the meaning set forth in Section 3.02.

    


    “Other Participants” means the
officers of the Company or the Bank (other than Executive Officer Participants)
and other salaried employees, who are designated from time to time by the Board
or the Committee as Participants in this Plan.

    


    "Participant" means, a
management employee of the Company or the Bank who meets the eligibility
requirements in Section 3.01 and who has been designated by the Board or the
Committee to participate in the Plan with respect to any annual Calculation
Period.

    


    "Performance Goals" means the criteria and
objectives established pursuant to Section 3, which must be met as a condition
to payment of Bonuses under this Plan.

    


    "Plan" has the meaning set
forth in Section 1.

    


    3.  Eligibility;
Bonus Pools; Performance Goals

    


    3.01.  Eligibility and
Designation for Participation.  Except as the Board may otherwise determine,
only executive officers, other officers and other salaried employees who have
been employed by the Company or the Bank for at least 12 months on the last day
of the applicable Calculation Period shall be eligible for participation in the
Plan with respect to such Calculation Period. The eligible participants for each
bonus pool shall be designated annually by the Board or the
Committee.  Part-time employees who are otherwise eligible to
participate in the Plan shall be eligible for a one-half Bonus payment from the
Other Participant Bonus Pool and from the Additional Bonus Pool.

    


    3.02.  Bonus
Pools.  Subject to Section 6.03 and to attainment of specified
performance criteria as contemplated in Sections 3.03 and 3.04, there shall be
established each year a pool for payment of Bonuses to Executive Officers
(“Executive Officer Bonus
Pool”) and a pool for payment of Bonuses to Other Participants (“Other Participant Bonus
Pool”).  In its
discretion the Board, in consultation with the Committee, may establish an
additional pool for payment of additional Bonuses to Other Participants (“Additional Bonus Pool”), subject to attainment of
supplemental Performance Goals exceeding those established for payment of
Bonuses from the Other Participant Bonus Pool.

    


    3.03.  Minimum Performance
Target.  The Board, in consultation with the Committee, shall
establish annually a minimum performance target below which no Bonuses will be
paid under this Plan. Such minimum performance target may be based on any
factors the Board deems appropriate, including without limitation, attainment of
a specified percentage return on assets or return on equity.

    


    3.04.  Annual Performance
Goals and Available Bonus Funds.  Unless otherwise determined
by the Board, no later than 90 days after the commencement of a Calculation
Period, the Board, in consultation with the Committee, shall establish
Performance Goals and formulas for determining available funds for the payment
of Bonuses with respect to such Calculation Period.  Separate
Performance Goals and formulas shall be established for payment of bonuses under
the Executive Officer Bonus Pool, the Other Participant Bonus Pool and the
Additional Bonus Pool. Performance Goals and the formulas for determining
available funds for payment of Bonuses may include such factors and be based on
such financial measures, including, without limitation, audited or unaudited net
income, as the Board deems appropriate.  Without limiting the
generality of the foregoing, Performance Goals and the formula for determination
of available funds for payment of Bonuses to Executive Officer Participants may
include consideration of the Bank’s and/or the Company’s performance compared to
that of peer institutions, as measured by an independent rating service such as
IDC.

    


    3.05.  Individual
Incentives.  The Executive Officers are authorized to establish
from time to time individual incentive compensation arrangements for designated
officers, other than Executive Officers.  Any incentive compensation
paid to a Participant pursuant to such an arrangement with respect to services
rendered during a Calculation Period shall reduce such Participant’s allocation
of any funds under the Other Participant Bonus Pool, but not under the
Additional Bonus Pool.  The amount or formula for determining any such
reduction shall be determined by the Executive Officers in their
discretion.

    


    3.06.  Allocation of
Executive Officer Bonus Pool.  Unless otherwise determined by
the Board, no later than 90 days after the commencement of a Calculation Period,
the Board, in consultation with the Committee, shall establish for each
Executive Officer Participant an individual allocation percentage for allocation
of available Bonus funds (if any) under the Executive Bonus Pool for such
Calculation Period.  Such allocations may be based on such factors as
the Board deems appropriate, which may include, without limitation, the
executive’s level of responsibilities and full-time or part-time employment
status.

    


    3.07.  Allocation of Other
Participant Bonus Pool and Additional Bonus Pool.  Unless
otherwise determined by the Board, no later than 90 days after the commencement
of a Calculation Period, the Board, in consultation with the Committee and the
President and Chief Executive Officer, shall establish the method for allocating
available Bonus funds (if any) under the Other Participant Bonus Pool and the
Additional Bonus Pool for such Calculation Period.  Participant
allocations may be based on such individual or categorical criteria as the Board
deems appropriate.  Participant allocations of the Other Participant
Bonus Pool (but not allocations under the Additional Bonus Pool) shall take into
account any incentive compensation paid to a Participant under any arrangement
referred to in Section 3.05.

    


    4.  Payment
of Bonuses

    


    4.01.  In General.
 All Bonuses awarded under this Plan shall be paid in
cash.  Except as otherwise determined by the Board in its discretion,
a Participant’s right to payment of a Bonus under this Plan shall vest only upon
expiration of the applicable Calculation Period and only if the Participant is
employed by the Company or the Bank on the last day of such Calculation
Period.  The Board or the Committee shall calculate the Bonus (if any)
to be paid to each Participant with respect to a particular Calculation Period
as soon as practicable following the end of such Calculation Period.
Notwithstanding anything herein to the contrary, payment of a Bonus to a
Participant with respect to services rendered during a Calculation Period
shall be made only if and to the extent the Performance Goals for the
applicable bonus pool for such Calculation Period have been
attained.

    


    4.02. Discretionary Adjustments.  Notwithstanding
any other provision of this Plan, in determining whether Performance Goals
have been achieved for any Participant or group of Participants, the Board may
in its discretion exclude items it deems to be extraordinary, nonrecurring
items, regardless of whether such items are excludable, or the manner in which
such items are otherwise treated for financial reporting purposes,
under generally accepted accounting principles (GAAP), as in effect in the
United States from time to time.

    


    4.03. Time of Payment. All
payments in respect of Bonuses granted under this Plan shall be made no
later than (i) in the case of Executive Officer Participants, two and one-half
months after the end of the calendar year during which the applicable
Calculation Period for such Bonuses expires; and (ii) in the case of Other
Participants, two and one-half months after the end of the calendar year
constituting the applicable Calculation Period for such Bonuses.

    


    4.04. Form of
Payment.  Payment of each Participant's Bonus for any Plan Year
shall be made in cash, in a lump sum, less the appropriate withholding taxes as
set forth in Section 6.02.

    


    5.  Administration

    


    5.01.  Board and
Committee.  The Plan shall be administered by the Board, with
the assistance of Committee.  The Board shall have the authority
in its sole discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all
the powers and authorities either specifically granted to it under the Plan
or necessary or advisable in the administration of the Plan, including,
without limitation, (i) to grant Bonuses, (ii) to determine the persons to
whom and the time or times at which Bonuses shall be granted, (iii) to
determine the terms, conditions, restrictions and Performance Goals
relating to any bonus pool or Bonus payment, (iv) to make adjustments in
the Performance Goals in response to changes in applicable laws,
regulations, or accounting principles, (v) to construe and interpret the Plan,
(vi) to prescribe, amend and rescind rules and regulations relating to the Plan,
and (vii) to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Board may delegate to the Committee or
the Executive Officers such administrative duties in connection with the Plan as
it may deem advisable.

    


    5.02.  Written Record;
Decisions Final and Binding.  All participant designations,
Performance Goals, bonus payment formulas, and bonus allocation determinations
made or established by the Board or the Committee from time to time under this
Plan shall be in writing.  All decisions, determinations and
interpretations of the Board or the Committee acting under delegated
authority, including, without limitation, decisions as to an employee's
selection as a Participant, whether individual or corporate Performance Goals
have been attained and the amount of Bonus to which any Participant is entitled,
shall be final and binding on all persons, including the Company, the Bank, the
Participant (or any person claiming any rights under the Plan from or through
any Participants) and any shareholder.

    


    5.03.  Limitation of
Liability.  No member of the Board or the Committee, nor any
Executive Officer exercising delegated authority under the Plan, shall be liable
for any action taken or determination made in good faith with respect to
the Plan or any Bonus granted hereunder.

    


    6.  General
Provisions

    


    6.01.  No right to Continued
Employment.  Nothing in this Plan or in any Bonus granted
hereunder shall (i) confer upon any Participant the right to continue in the
employ of the Company or the Bank or any entitlement to any remuneration or
benefits not determined in accordance with this Plan, or (ii) interfere with or
limit in any way the right of the Company or the Bank to terminate a
Participant's employment.

    


    6.02.  Withholding
Taxes.  The Company or the Bank employing any Participant shall
deduct from all payments and distributions under this Plan any taxes required to
be withheld by federal, state or local or other
governmental authority.

    


    6.03. Amendment and Termination of the
Plan.  In its discretion, the Board may at any time and from
time to time alter, amend, suspend, or terminate the Plan in whole or in
part.  Additionally, the Committee or the Board may make such
amendments as it deems necessary to comply with other applicable laws,
rules and regulations, including any amendment to preserve an exemption
from Code Section 409A for short-term deferrals.

    


    6.04.  Discretionary Plan; Participant Rights.  This
Plan is a discretionary plan, which may be administered and interpreted in such
manner as the Board deems appropriate.  No Participant shall have any
claim to be granted any Bonus under the Plan other than with respect to any
completed Calculation Period for which applicable Performance Goals have been
attained, and there shall be no obligation for uniformity of treatment among
Participants.

    


    6.05. Unfunded Status of
Bonuses.  The Plan is intended to constitute an unfunded plan
for incentive compensation and no funds or other assets shall be segregated for
any Bonus payments hereunder.  With respect to any vested Bonus
payment which at any time has not yet been made to a Participant, nothing
contained in this Plan shall confer on such Participant any rights that are
greater than those of a general creditor of the Company.

    


    6.06.  Administration and
Interpretation of Plan.  This Plan shall be administered and
interpreted in a manner consistent with applicable law and with preserving the
exemption from Code Section 409A applicable to short-term
deferrals.

    


    6.07.  Compliance with
EESA.  If applicable to the Company, this Plan and all payments
made hereunder shall be made in compliance with Section 111 of the federal
Economic Emergency Stabilization Act of 2008 (“EESA”).  Notwithstanding
anything in this Plan to the contrary, any Bonus payment owing to a Participant
who is a Senior Executive Officer (as defined in EESA) shall be reduced or
otherwise modified to the extent necessary to comply with Section 111 of EESA
(if applicable).

    


    6.08.  Governing Law. The Plan and
the rights of all persons claiming hereunder shall be construed and
determined in accordance with the laws of the State of Vermont.