NO COMPENSATION COMMITTEE REPORT 2005

Compensation Committee. Our Board of Directors also has a Personnel and Compensation Committee (the “Compensation Committee”), of which directors Appleton (Chairman), Beswick, Feldkamp, Meyer, Weisser and Welebir are members. The Compensation Committee met seven (7) times during 2004. All of the members of the Compensation Committee are “independent” under the Nasdaq rules. The primary functions of this committee are to (i) oversee and make recommendations to the Board of Directors concerning the compensation of the Company’s Chief Executive Officer (“CEO”) and senior management; (ii) consider and make recommendations to the Board of Directors concerning 1^st Centennial’s incentive compensation plans and equity-based plans in which directors and executive officers may be participants; (iii) administer and implement such plans, including, but not limited to approving option grants and restricted stock or other awards to our Named Executive Officers (as defined on page 9 below); (iv) evaluate the performance of our CEO in light of our goals and objectives, and set the CEO’s compensation levels based on this evaluation; (v) annually review and make recommendations to the Board concerning the compensation arrangements for all executive officers; (vi) assess the desirability of, and make recommendations to the Board with respect to, any proposed new incentive compensation plans for executive officers, equity-based plans for all employees and increases in shares reserved under existing equity plans; (vii) review and make recommendations to the Board concerning any employment agreements, salary continuation agreements or other contractual arrangements with any officers; (viii) monitor the disclosures in our annual proxy statement relating to executive compensation; (ix) review and administer the non-audit-related portions of our Code of Ethics; and (x) review and make recommendations to the Board concerning personnel policies and any similar

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documents relating to personnel matters which require Board approval. The Board has adopted a Personnel and Compensation Committee charter, which may be found on our web site at www.1^stcent.com.

-- Proxy Statement April 2005