2005 Restricted Stock Plan and Trust Agreement

 

                              Community First Bank

                           2005 Restricted Stock Plan

                               and Trust Agreement

 

                                    Article I

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                        ESTABLISHMENT OF THE PLAN AND TRUST

 

         1.01 Community   First Bank ("Bank")   hereby   establishes the Restricted

Stock Plan (the "Plan") and Trust (the   "Trust")   upon the terms and   conditions

hereinafter   stated   in this   Restricted   Stock   Plan and Trust   Agreement   (the

"Agreement").

 

         1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust

assets   existing on the date of this   Agreement and all additions and accretions

thereto upon the terms and conditions hereinafter stated.

 

                                   Article II

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                               PURPOSE OF THE PLAN

 

         2.01 The   purpose of the Plan is to reward and to retain   personnel   of

experience and ability in key positions of responsibility   with the Bank and its

subsidiaries,   by providing such personnel of the Bank and its subsidiaries with

an increased equity interest in the Community First Bancorp,   Inc.   ("Company"),

the   parent   corporation   of the   Bank,   as   compensation   for   their   prior and

anticipated   future   professional   contributions and service to the Bank and its

subsidiaries.

 

                                   Article III

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                                    DEFINITIONS

 

         The following   words and phrases when used in this Plan with an initial

capital letter,   unless the context clearly indicates otherwise,   shall have the

meaning as set forth below.   Wherever   appropriate,   the masculine pronoun shall

include the feminine pronoun and the singular shall include the plural.

 

         "Bank" means Community First Bank, a federal stock savings bank.

 

         "Beneficiary" means the person or persons designated by the Participant

to   receive   any   benefits    payable   under   the   Plan   in   the   event   of   such

Participant's   death.   Such person or persons   shall be designated in writing by

the Participant and addressed to the Bank or the Committee on forms provided for

this purpose by the   Committee and delivered to the Bank and may be changed from

time to time by similar written notice to the Committee.   A   Participant=s   last

will   and   testament   or   any   codicil   thereto   shall   not   constitute   written

designation of a Beneficiary.   In the absence of such written   designation,   the

Beneficiary shall be the Participant's surviving spouse, if any, or if none, the

Participant's estate.

 

         "Board"   means the Board of   Directors   of the Bank,   or any   successor

corporation thereto.

 

         "Cause"    means   the    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 and similar offense),

or a material

 

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violation of a final cease-and-desist order or any other action which results in

a substantial financial loss to the Company or its Subsidiaries.

 

         "Change in   Control"   shall   mean:   (i) the sale of all,   or a material

portion,   of the   assets   of the   Company   or   the   Bank;   (ii)   the   merger   or

recapitalization   of the Company or the Bank   whereby the Company or the Bank is

not the surviving entity;   (iii) a change in control of the Company or the Bank,

as otherwise defined or determined by the Office of Thrift   Supervision   ("OTS")

or   regulations   promulgated   by   it;   or   (iv)   the   acquisition,   directly   or

indirectly,   of the beneficial   ownership (within the meaning of that term as it

is used   in   Section   13(d)   of the   1934   Act and   the   rules   and   regulations

promulgated   thereunder) of twenty-five percent (25%) or more of the outstanding

voting   securities of the Company by any person,   trust,   entity or group.   This

limitation   shall not apply to the   purchase of shares of up to 25% of any class

of   securities   of the Company by a   tax-qualified   employee   stock benefit plan

which is   exempt   from the   approval   requirements,   set   forth   under 12 C.F.R.

ss.574.3(c)(1)(vi)   as now in effect or as may   hereafter   be amended.   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.

 

         "Committee"   means   the   Board   of   Directors   of   the   Company   or the

Restricted   Stock Plan   Committee   appointed   by the Board of   Directors   of the

Company pursuant to Article IV hereof.

 

         "Common Stock" means shares of the common stock of the Company,   or any

successor corporation or parent thereto.

 

         "Company"   means   Community   First   Bancorp,   Inc.,   and any   successor

corporation thereto.

 

         "Conversion"   means the effective date of the stock charter of the Bank

and simultaneous   acquisition of all of the outstanding stock of the Bank by the

Company.

 

         "Director" means a member of the Board of the Bank.

 

         "Director   Emeritus"   means a person   serving as a   director   emeritus,

advisory   director,   consulting   director,   or other similar   position as may be

appointed   by the Board of   Directors   of the   Company   or the Bank from time to

time.

 

         "Disability"   means any physical or mental impairment which renders the

Participant   incapable of continuing in the employment or service of the Bank or

any Subsidiary in his current capacity as determined by the Committee.

 

         "Effective   Date"   shall mean the date of   stockholder   approval of the

Plan by the Company's stockholders.

 

         "Eligible   Participant"   means an   Employee,   Director or director of a

Subsidiary who may receive a Plan Share Award under the Plan.

 

          "Employee"   means   any   person   who   is   employed   by   the   Bank   or   a

Subsidiary.

 

         "Participant"   means an Employee or Director   who receives a Plan Share

Award under the Plan.

 

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         "Plan   Shares" means shares of Common Stock held in the Trust which are

awarded or issuable to a Participant pursuant to the Plan.

 

         "Plan Share Award" or "Award"   means a right   granted to a   Participant

under this Plan to earn or to receive Plan Shares.

 

         "Plan Share Reserve" means the shares of Common Stock held by the Trust

pursuant to Sections 5.03 and 5.04.

 

         "Subsidiary"   means   those   subsidiaries   of the Bank   which,   with the

consent of the Board, agree to participate in this Plan.

 

         "Trustee"   or   "Trustee   Committee"   means   that   person(s)   or   entity

nominated by the Committee   and approved by the Board   pursuant to Sections 4.01

and 4.02 to hold   legal   title to the Plan   assets   for the   purposes   set forth

herein.

 

                                   Article IV

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                           ADMINISTRATION OF THE PLAN

 

                  4.01 Role of the Committee. The Plan shall be administered and

interpreted   by the Board of Directors   of the Bank or a Committee   appointed by

said Board, which shall consist of not less than two non-employee members of the

Board,   which   shall   have all of the powers   allocated   to it in this and other

sections of the Plan. All persons   designated as members of the Committee   shall

be   "Non-Employee   Directors"   within   the   meaning   of   Rule   16b-3   under   the

Securities Exchange Act of 1934, as amended ("1934 Act"). The interpretation and

construction by the Committee of any provisions of the Plan or of any Plan Share

Award granted   hereunder shall be final and binding.   The Committee shall act by

vote or written   consent of a majority   of its   members.   Subject to the express

provisions   and   limitations   of the Plan,   the   Committee may adopt such rules,

regulations   and   procedures   as it deems   appropriate   for the   conduct   of its

affairs.   The Committee   shall report its actions and decisions   with respect to

the Plan to the Board at appropriate   times,   but in no event less than one time

per   calendar   year.   The   Committee   shall   recommend   to the Board one or more

persons or entity to act as Trustee in   accordance   with the   provision   of this

Plan and Trust and the terms of Article VIII hereof.

 

                  4.02 Role of the Board.   The members of the   Committee and the

Trustee shall be appointed or approved by, and will serve at the pleasure of the

Board. The Board may in its discretion from time to time remove members from, or

add members to, the   Committee,   and may remove,   replace or add   Trustees.   The

Board shall have all of the powers allocated to it in this and other sections of

the   Plan,   may take any   action   under or with   respect   to the Plan   which the

Committee is authorized to take, and may reverse or override any action taken or

decision   made by the   Committee   under or with   respect to the Plan,   provided,

however,   that the Board may not revoke any Plan Share Award already made except

as provided in Section 7.01(b) herein.

 

                  4.03   Limitation   on   Liability.   No member of the Board,   the

Committee   or the   Trustee   shall be liable for any   determination   made in good

faith with respect to the Plan or any Plan Share Awards granted.   If a member of

the Board,   Committee   or any Trustee is a party or is   threatened   to be made a

party to any   threatened,   pending   or   completed   action,   suit or   proceeding,

whether   civil,   criminal,   administrative   or   investigative,   by any reason of

anything done or not done by him in such   capacity   under or with respect to the

Plan, the Company and the Bank shall indemnify such member against expenses

 

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(including   attorney's   fees),   judgments,   fines and amounts paid in settlement

actually and reasonably   incurred by him or her in connection   with such action,

suit or   proceeding   if he or she acted in good   faith and in a manner he or she

reasonably believed to be in the best interests of the Company, the Bank and its

Subsidiaries   and,   with respect to any criminal   action or   proceeding,   had no

reasonable cause to believe his conduct was unlawful.   Notwithstanding   anything

herein to the contrary, in no event shall the Bank take any actions with respect

to this   Section   4.03   which   is not in   compliance   with   the   limitations   or

requirements   set forth at 12 C.F.R.   545.121,   as may be   amended   from time to

time.

 

                                    Article V

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                        CONTRIBUTIONS; PLAN SHARE RESERVE

 

                  5.01   Amount   and   Timing   of   Contributions.    The   Board   of

Directors   of the Bank shall   determine   the amounts (or the method of computing

the amounts) to be contributed by the Bank to the Trust   established   under this

Plan.   Such   contribution   amounts   shall be paid to the   Trustee at the time of

contribution.   No contributions to the Trust by Participants   shall be permitted

except with respect to amounts necessary to meet tax withholding obligations.

 

                   5.02 Initial Investment.   Any funds held by the Trust prior to

investment   in the   Common   Stock   shall   be   invested   by the   Trustee   in such

interest-bearing   account or accounts at the Bank as the Trustee shall determine

to be appropriate.

 

                   5.03   Investment   of Trust Assets.   Following   approval of the

Plan   by   stockholders   of   the   Company   and   receipt   of any   other   necessary

regulatory approvals, the Trust shall purchase Common Stock of the Company in an

amount equal to up to 100% of the Trust's cash assets,   after   providing for any

required   withholding as needed for tax purposes,   provided,   however,   that the

Trust shall not purchase more than 8,331 shares of Common Stock. The Trustee may

purchase shares of Common Stock in the open market or, in the   alternative,   may

purchase   authorized but unissued   shares of the Common Stock or treasury shares

from the Company in an amount sufficient to fund the Plan Share Reserve.

 

                  5.04 Effect of Allocations,   Returns and Forfeitures Upon Plan

Share Reserves. Upon the allocation of Plan Share Awards under Sections 6.02 and

6.05, or the decision of the Committee to return Plan Shares to the Company, the

Plan Share   Reserve   shall be   reduced   by the   number of Shares   subject to the

Awards so allocated or   returned.   Any Shares   subject to an Award which are not

earned because of forfeiture by the   Participant   pursuant to Section 7.01 shall

be added to the Plan Share Reserve.

 

                                   Article VI

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                            ELIGIBILITY; ALLOCATIONS

 

                  6.01 Eligibility. Eligible Participants may receive Plan Share

Awards   within   the sole   discretion   of the   Committee.   Directors   who are not

otherwise Employees shall receive Plan Share Awards pursuant to Section 6.05.

 

                  6.02   Allocations.   The Committee will determine   which of the

Eligible Participants will be granted Plan Share Awards and the number of Shares

covered by each Award,   provided,   however, that in no event shall any Awards be

made which will violate the Charter or Bylaws of the Bank or its Subsidiaries or

any   applicable   federal   or state law or   regulation.   In the event   Shares are

forfeited for any reason or additional Shares are purchased by the Trustee,   the

Committee may, from time to time,

 

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determine which of the Eligible   Participants   will be granted Plan Share Awards

to be awarded from forfeited Shares. In selecting those Eligible Participants to

whom Plan Share Awards will be granted and the number of shares   covered by such

Awards,   the Committee shall consider the prior and anticipated future position,

duties and