If we could show you an IRS approved incentive and retention plan for your key executives that can
compete with Community Bank sock option plans, and which has minimal corporate accounting and
regulatory issues, would you be interested in knowing more about it?What is it?

What is it?

An IRS approved Executive Supplemental Retirement Benefit Plan that is unencumbered by
FASB liability issues and regulatory oversight of other non-qualified benefit programs (IRS
section 409a) and meets legal banking requirements (Regulation O, OCS2004-56.)

How does it work?

• The Bank selects a group of executives to be covered and allocates agreed upon annual
  premium(s) to invest in the program.
• Corporate owned life insurance contracts are purchased on the executive, based on the allocated
  premiums.
• Split dollar agreements (pursuant to Treasury Regulation 1.61-2(b)(3)) are executed by both
  parties detailing the shared cash and death benefits under the program.
• A separate deferred compensation agreement is executed to provide for retirement benefits if the
  executive remains in employment.

Results for the Executive:

• The Executive receives an extremely attractive incentive cash retirement benefits for little or no
  out of pocket cost.
• Executive also receives a significant pre and post retirement death benefit.

Results for the bank:

• Bank provides long term incentive and retention tool for key executive talent.
• The Bank books the plan as a corporate asset (policy cash values) on its balance sheet.
• Regulatory issues are minimized, and administration is simplified.