EXHIBIT 10.5

CONSUMERS NATIONAL BANK

SALARY CONTINUATION AGREEMENT

THIS AGREEMENT is made this 29 day of August, 2008, by and between CONSUMERS
NATIONAL BANK, a nationally chartered commercial bank located in Minerva, Ohio
(the “Company”), and Ralph Lober (the “Executive”).

INTRODUCTION

To encourage the Executive to remain an employee of the Company, the Company is
willing to provide salary continuation benefits to the Executive. The Company
will pay the benefits from its general assets.

AGREEMENT

The Executive and the Company agree as follows:

Article 1

Definitions

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

1.1 “Accrual Balance” means the liability that should be accrued by the Company,
under Generally Accepted Accounting Principles (“GAAP”), for the Company’s
obligation to the Executive under this Agreement, by applying Accounting
Principles Board Opinion Number 12 (“APB 12”) as amended by Statement of
Financial Accounting Standards Number 106 (“FAS 106”) and the Discount Rate. Any
one of a variety of amortization methods may be used to determine the Accrual
Balance. However, once chosen, the method must be consistently applied. The
Accrual Balance shall be reported annually by the Company to the Executive.

1.2 “Change of Control” means the transfer of shares of the Company’s voting
common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 50 percent of the
Company’s outstanding voting common stock followed within twelve (12) months by
the Executive’s Termination of Employment for reasons other than death,
Disability or retirement.

1.3 “Code” means the Internal Revenue Code of 1986, as amended.

1.4 “Disability” means, if the Executive is covered by a Company sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Executive is not covered by such a policy, Disability
means the Executive suffering a sickness, accident or injury which, in the
judgment of a physician satisfactory to the Company, prevents the Executive from
performing substantially all of the Executive’s normal duties for the Company.
As a condition to receiving any Disability benefits, the Company may require the
Executive to submit to such physical or mental evaluations and tests as the
Company’s Board of Directors deems appropriate.

1.5 “Discount Rate” means the rate used by the plan administrator for
determining the Accrual Balance.

 

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The initial Discount Rate is six percent (6%). However, in order to maintain the
Discount Rate within reasonable standards according to GAAP and/or applicable
bank regulatory guidance, the Discount Rate will adjust to reflect a rate of
return on a high-quality fixed-income debt security rounded up to the nearest
quarter percentage. For purposes of this Agreement, the Discount Rate will be
reviewed and updated annually using the 20 year term Moody AA Corporate Rate for
a high-quality fixed-income debt security.

1.6 “Early Termination” means Termination of Employment before Normal Retirement
Age for reasons other than death, Disability, Termination for Cause or following
a Change of Control.

1.7 “Early Termination Date” means the month, day and year in which Early
Termination occurs.

1.8 “Effective Date” means August 29, 2008.

1.9 “Final Pay” means the average of the base pay plus annual performance-based
incentive plan paid to the Executive by the Company for the last three (3) full
calendar years prior to Normal Retirement Age.

1.10 “Normal Retirement Age” means the Executive’s 65th birthday.

1.11 “Normal Retirement Date” means the later of the Normal Retirement Age or
Termination of Employment.

1.12 “Plan Year” means a twelve-month period commencing on January 1 and ending
on December 31 of each year. The initial Plan Year shall commence on the
effective date of this Agreement.

1.13 “Specified Employee” means a key employee (as defined in Section 416(i) of
the Code without regard to paragraph 5 thereof) of the Company if any stock of
the Company is publicly traded on an established securities market or otherwise.

1.14 “Termination for Cause” See Article 5.

1.15 “Termination of Employment” means termination of the Executive’s employment
with the Company for reasons other than death. Whether a Termination of
Employment has occurred is determined in accordance with the requirements of
Code Section 409A based on whether the facts and circumstances indicate that the
Company and Executive reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the
Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period (or the full period of services to the Company if
the Executive has been providing services to the Company less than thirty-six
(36) months).

Article 2

Lifetime Benefits

2.1 Normal Retirement Benefit. Upon Termination of Employment on or after Normal
Retirement Age for reasons other than death, the Company shall pay to the
Executive the benefit described in this Section 2.1 in lieu of any other benefit
under this Agreement.

2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is fifty
three percent (53%) of Final Pay, as defined in Article 1.7, at the Normal
Retirement Date.

 

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2.1.2 Payment of Benefit. The Company shall pay the annual benefit to the
Executive in 12 equal monthly installments payable on the first day of each
month commencing with the month following the Executive’s Normal Retirement
Date. The annual benefit shall be paid to the Executive for 15 years.

2.2 Early Termination Benefit. Upon Early Termination, the Company shall pay to
the Executive the benefit described in this Section 2.2 in lieu of any other
benefit under this Agreement.

2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the vested
Accrual Balance determined as of the month preceding Termination of Employment.
This benefit is determined by vesting the Executive in 6.67% of the Accrual
Balance for the Plan Year in which the Executive attains age fifty (50), and an
additional 6.67% of said amount for each succeeding year thereafter until the
Executive becomes 100% vested in the Accrual Balance.

2.2.2 Payment of Benefit. The Company shall pay the benefit to the Executive by
calculating a fixed annuity payable in 180 equal monthly installments, crediting
interest on the unpaid balance at an annual rate equal to the Discount Rate,
compounded monthly. The monthly installments shall be payable on the first day
of each month commencing with the month following Termination of Employment.

2.3 Disability Benefit. If the Executive terminates employment due to Disability
prior to Normal Retirement Age, the Company shall pay to the Executive the
benefit described in this Section 2.3 in lieu of any other benefit under this
Agreement.

2.3.1 Amount of Benefit. The benefit under this Section 2.3 is one hundred
percent (100%) of the Accrual Balance determined as of the end of the month
preceding Termination of Employment.

2.3.2 Payment of Benefit. The Company shall pay the benefit to the Executive by
calculating a fixed annuity payable in 180 equal monthly installments, crediting
interest on the unpaid balance at an annual rate equal to the Discount Rate,
compounded monthly. The monthly installments shall be payable on the first day
of each month commencing with the month following Termination of Employment.

2.4 Change of Control Benefit. Upon a Change of Control, the Company shall pay
to the Executive the benefit described in this Section 2.4 in lieu of any other
benefit under this Agreement.

2.4.1 Amount of Benefit. The benefit under this Section 2.4 is one hundred
percent (100%) of the Accrual Balance determined as of the end of the month
preceding Termination of Employment.

2.4.2 Payment of Benefit. The Company shall pay the benefit amount to the
Executive in a lump sum within 60 days following Termination of Employment.

2.4.3 Excess Parachute Payment. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement to
the extent the benefit would create an excise tax under the excess parachute
rules of Section 280G of the Code.

2.5 Restriction on Timing of Distributions. Notwithstanding any provision of
this Agreement to the contrary, if the Executive is considered a Specified
Employee at Termination of Employment under such procedures as established by
the Company in accordance with Section 409A of the Code, benefit distributions
that are made upon Termination of Employment may not commence earlier than six
(6) months after the date of such Termination of Employment. Therefore, in the
event this Section 2.5 is applicable to the Executive, any distribution which
would otherwise be paid to the Executive within the first six months following
the Termination of Employment shall be accumulated and paid to the Executive in
a lump sum on the first day of

 

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the seventh month following the Termination of Employment. All subsequent
distributions shall be paid in the manner specified.

2.6 Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the
inclusion of any amount into the Executive’s income as a result of the failure
of this non-qualified deferred compensation plan to comply with the requirements
of Section 409A of the Code, to the extent such tax liability can be covered by
the Accrual Balance, a distribution shall be made as soon as is administratively
practicable following the discovery of the plan failure.

2.7 Change in Form or Timing of Distributions. All changes in the form or timing
of distributions hereunder must comply with the following requirements. The
changes:

 

  (a) may not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations thereunder;

 

  (b) must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4,
delay the commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be made; and

 

  (c) must take effect not less than twelve (12) months after the election is
made.

Article 3

Death Benefits

3.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive’s beneficiary the
benefit described in this Section 3.1. This benefit shall be paid in lieu of the
benefits under Article 2.

3.1.1 Amount of Benefit. The annual benefit under this Section 3.1 is the same
amount that would have been paid under Section 2.1.

3.1.2 Payment of Benefit. The Company shall pay the annual benefit to the
Executive’s beneficiary in 12 equal monthly installments payable on the first
day of each month commencing with the month following the Executive’s death. The
annual benefit shall be paid to the Executive’s beneficiary for 15 years.

3.2 Death During Payment of a Lifetime Benefit. If the Executive dies after any
Lifetime Benefit payments have commenced under this Agreement but before
receiving all such payments, the Company shall pay the remaining benefits to the
Executive’s beneficiary at the same time and in the same amounts they would have
been paid to the Executive had the Executive survived.

3.3 Death After Termination of Employment But Before Payment of a Lifetime
Benefit Commences. If the Executive is entitled to a Lifetime Benefit under this
Agreement, but dies prior to the commencement of said benefit payments, the
Company shall pay the same benefit payments to the Executive’s beneficiary that
the Executive was entitled to prior to death except that the benefit payments
shall commence on the first day of the month following the date of the
Executive’s death.

Article 4

Beneficiaries

4.1 Beneficiary Designations. The Executive shall designate a beneficiary by
filing a written

 

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designation with the Company. The Executive may revoke or modify the designation
at any time by filing a new designation. However, designations will only be
effective if signed by the Executive and accepted by the Company during the
Executive’s lifetime. The Executive’s beneficiary designation shall be deemed
automatically revoked if the beneficiary predeceases the Executive, or if the
Executive names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Executive dies without a valid beneficiary designation, all
payments shall be made to the Executive’s estate.

4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incapacitated
person or incapable person. The Company may require proof of incapacity,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.

Article 5

General Limitations

5.1 Termination for Cause. Notwithstanding any provision of this Agreement to
the contrary, the Company shall not pay any benefit under this Agreement if the
Company terminates the Executive’s employment for:

(a) Gross negligence or gross neglect of duties;

(b) Commission of a felony or of a gross misdemeanor involving moral turpitude;
or

(c) Fraud, disloyalty, dishonesty or willful violation of any law or significant
Company policy committed in connection with the Executive’s employment and
resulting in an adverse effect on the Company.

5.2 Suicide or Misstatement. The Company shall not pay any benefit under this
Agreement if the Executive commits suicide within two years after the date of
this Agreement, or if the Executive has made any material misstatement of fact
on any application for life insurance purchased by the Company.

Article 6

Claims and Review Procedures

 

6.1 Claims Procedure. An Executive or Beneficiary (“claimant”) who has not
received benefits under this Agreement that he or she believes should be
distributed shall make a claim for such benefits as follows:

 

  6.1.1 Initiation – Written Claim. The claimant initiates a claim by submitting
to the Plan Administrator a written claim for the benefits. If such a claim
relates to the contents of a notice received by the claimant, the claim must be
made within sixty (60) days after such notice was received by the claimant. All
other claims must be made within one hundred eighty (180) days of the date on
which the event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the claimant.

 

  6.1.2

Timing of Plan Administrator Response. The Plan Administrator shall respond to
such claimant within ninety (90) days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator

 

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can extend the response period by an additional ninety (90) days by notifying
the claimant in writing, prior to the end of the initial ninety (90) day period,
that an additional period is required. The notice of extension must set forth
the special circumstances and the date by which the Plan Administrator expects
to render its decision.

 

  6.1.3 Notice of Decision. If the Plan Administrator denies part or all of the
claim, the Plan Administrator shall notify the claimant in writing of such
denial. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:

 

  (a) The specific reasons for the denial;

 

  (b) A reference to the specific provisions of this Agreement on which the
denial is based;

 

  (c) A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed;

 

  (d) An explanation of this Agreement’s review procedures and the time limits
applicable to such procedures; and

 

  (e) A statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

 

6.2 Review Procedure. If the Plan Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial as follows:

 

  6.2.1 Initiation – Written Request. To initiate the review, the claimant,
within sixty (60) days after receiving the Plan Administrator’s notice of
denial, must file with the Plan Administrator a written request for review.

 

  6.2.2 Additional Submissions – Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 

  6.2.3 Considerations on Review. In considering the review, the Plan
Administrator shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.

 

  6.2.4 Timing of Plan Administrator Response. The Plan Administrator shall
respond in writing to such claimant within sixty (60) days after receiving the
request for review. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional sixty (60) days by
notifying the claimant in writing, prior to the end of the initial sixty
(60) day period, that an additional period is required. The notice of extension
must set forth the special circumstances and the date by which the Plan
Administrator expects to render its decision.

 

  6.2.5 Notice of Decision. The Plan Administrator shall notify the claimant in
writing of its decision on review. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth:

 

  (a) The specific reasons for the denial;

 

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  (b) A reference to the specific provisions of this Agreement on which the
denial is based;

 

  (c) A statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits; and

 

  (d) A statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).

Article 7

Amendments and Termination

 

7.1 Amendments. This Agreement may be amended only by a written agreement signed
by the Company and the Executive. However, the Company may unilaterally amend
this Agreement to conform with written directives to the Company from its
auditors or Companying regulators or to comply with legislative changes or tax
law, including without limitation Section 409A of the Code and any and all
Treasury regulations and guidance promulgated thereunder.

 

7.2 Plan Termination Generally. The Company and Executive may terminate this
Agreement at any time. The benefit hereunder shall be the Accrual Balance as of
the date the Agreement is terminated. However, if the Company’s Board of
Directors determines in good faith that the Executive is no longer a member of a
select group of management or highly compensated employees, as that phrase
applies to ERISA, for reasons other than death, Disability or retirement, the
Company may terminate this Agreement. Upon such termination, the Executive shall
be one hundred percent (100%) vested in the Accrual Balance. Except as provided
in Section 7.3, the termination of this Agreement shall not cause a distribution
of benefits under this Agreement. Rather, after such termination benefit
distributions will be made at the earliest distribution event permitted under
Article 2 or Article 3.

 

7.3 Plan Terminations Under Section 409A. Notwithstanding anything to the
contrary in Section 7.2, if this Agreement terminates in the following
circumstances:

 

  (a) Within thirty (30) days before, or twelve (12) months after a change in
the ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company as described in
Section 409A(2)(A)(v) of the Code, provided that all distributions are made no
later than twelve (12) months following such termination of the Agreement and
further provided that all the Company’s arrangements which are substantially
similar to the Agreement are terminated so the Executive and all participants in
the similar arrangements are required to receive all amounts of compensation
deferred under the terminated arrangements within twelve (12) months of the
termination of the arrangements;

 

  (b) Upon the Company’s dissolution or with the approval of a bankruptcy court
provided that the amounts deferred under the Agreement are included in the
Executive’s gross income in the latest of (i) the calendar year in which the
Agreement terminates; (ii) the calendar year in which the amount is no longer
subject to a substantial risk of forfeiture; or (iii) the first calendar year in
which the distribution is administratively practical; or

 

  (c) Upon the Company’s termination of this and all other non-account balance
plans (as referenced in Section 409A of the Code or the regulations thereunder),
provided that all distributions are made no earlier than twelve (12) months and
no later than twenty-four (24) months following such termination, and the
Company does not adopt any new non-account balance plans for a minimum of five
(5) years following the date of such termination;

the Company may distribute the vested Accrual Balance, determined as of the date
of the termination of the Agreement, to the Executive in a lump sum subject to
the above terms.

 

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Article 8

Miscellaneous

8.1 Binding Effect. This Agreement shall bind the Executive and the Company, and
their beneficiaries, survivors, executors, successors, administrators and
transferees.

8.2 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the
Company, nor does it interfere with the Company’s right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive’s right to terminate employment at any time.

8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

8.4 Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement. Upon the occurrence of such event, the term “Company” as
used in this Agreement shall be deemed to refer to the successor or survivor
company.

8.5 Tax Withholding. The Company shall withhold any taxes that are required to
be withheld from the benefits provided under this Agreement.

8.6 Applicable Law. The Agreement and all rights hereunder shall be governed by
the laws of Ohio, except to the extent preempted by the laws of the United
States of America.

8.7 Unfunded Arrangement. The Executive and beneficiary are general unsecured
creditors of the Company for the payment of benefits under this Agreement. The
benefits represent the mere promise by the Company to pay such benefits. The
rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Executive’s life is a general asset of the
Company to which the Executive and beneficiary have no preferred or secured
claim.

8.8 Entire Agreement. This Agreement constitutes the entire agreement between
the Company and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

8.9 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:

(a) Interpreting the provisions of the Agreement;

(b) Establishing and revising the method of accounting for the Agreement;

(c) Maintaining a record of benefit payments; and

(d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

 

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8.10 Named Fiduciary. The Company shall be the named fiduciary and plan
administrator under this Agreement. It may delegate to others certain aspects of
the management and operational responsibilities including the employment of
advisors and the delegation of ministerial duties to qualified individuals.

8.11 Compliance with Section 409A. This Agreement shall at all times be
administered and the provisions of this Agreement shall be interpreted
consistent with the requirements of Section 409A of the Code and any and all
regulations thereunder, including such regulations as may be promulgated after
the Effective Date of this Agreement.

IN WITNESS WHEREOF, the Executive and the Company have signed this Agreement.

 

EXECUTIVE:     COMPANY:     CONSUMERS NATIONAL BANK

 

    By  

 

    Title  

 

 

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