Exhibit 10.8

CONSUMERS NATIONAL BANK

SALARY CONTINUATION AGREEMENT

 

This Salary Continuation Agreement (“Agreement”) is made as of the Effective
Date (as hereafter defined), by and between CONSUMERS NATIONAL BANK, a
nationally chartered commercial bank located in Minerva, Ohio (the “Company”),
and ______________ (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
Standards Codification Topic 715 (Compensation – Retirement Benefits) (formerly,
Accounting Principles Board Opinion Number 12, as amended by Statement of
Financial Accounting Standards Number 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 “Affiliate” means the Company and any other entity with which the Company
would be considered a single employer under Sections 414(b) and 414(c) of the
Code, applying fifty percent (50%) instead of eighty percent (80%) both in Code
Sections 1563(a)(1), (2), and (3) for purposes of determining a controlled group
of corporations under Code Section 414(b) and in Treasury Regulation Section
1.414(c)-2 for purposes of determining trades or businesses under common control
under Code Section 414(c).

 

1.3 “Board” means the Board of Directors of the Company.

 

 

 

 

1.4 “Cause” means (i) fraud; (ii) embezzlement; (iii) conviction of, or plea of
nolo contendere to, any felony; (iv) a material breach of, or the willful
failure or refusal by the Executive to perform and discharge the Executive’s
duties, responsibilities, and obligations under this Agreement; (v) any act of
moral turpitude or willful misconduct by the Executive intended to result in
personal enrichment of the Executive at the expense of Consumers or any of its
Affiliates or which has a material adverse impact on the business or reputation
of Consumers (such determination to be made by the Board in its reasonable
judgment); (vi) intentional material damage to the property or business of
Consumers; (vii) gross negligence; or (viii) the ineligibility of the Executive
to perform the Executive’s duties because of a ruling, directive, or other
action by any agency of the United States or any state of the United States
having regulatory authority over Consumers; but in each case only if (a) the
Executive has been provided with written notice of any assertion that there is a
basis for termination for Cause, which notice shall specify in reasonable detail
specific facts regarding any such assertion, (b) such written notice is provided
to the Executive in a reasonable time (and in any event no less than three (3)
business days) before the Board meets to consider any possible termination for
Cause, (c) at or prior to the meeting of the Board to consider the matters
described in the written notice, an opportunity is provided to the Executive and
his counsel to be heard before the Board with respect to the matters described
in the written notice, (d) any resolution or other Board action held with
respect to any deliberation regarding or decision to terminate the Executive for
Cause is duly adopted by a vote of at least two-thirds (2/3) of the entire Board
(excluding the Executive) at a meeting of the Board duly called and held, and
(e) the Executive is promptly provided with a copy of the resolution or other
corporate action taken with respect to such termination. No act or failure to
act by the Executive shall be considered willful unless done or omitted to be
done by him not in good faith and without reasonable belief that his action or
omission was in the best interests of Consumers.

 

1.5 “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.

 

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

 

1.7 “Company” means Consumers National Bank, an Ohio Banking Corporation.

 

1.8 “Confidential Information” means all business and other information relating
to the business of Consumers, including without limitation, technical or
nontechnical data, programs, methods, techniques, processes, financial data,
financial plans, product plans, and lists of actual or potential customers,
which (i) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other Persons,
and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy or confidentiality. Such information and compilations of
information shall be contractually subject to protection under this Agreement
whether or not such information constitutes a trade secret and is separately
protectable at law or in equity as a trade secret.

 

1.9 “Consumers” means the Company, Consumers Bancorp, Inc., and any Affiliate.

 

1.10 “Customer” means any individual, joint venturer, entity of any sort, or
other business partner of Consumers with, for, or to whom Consumers has provided
Financial Products or Services during the final two (2) years of the Executive’s
employment with Consumers, or any individual, joint venturer, entity of any
sort, or business partner whom Consumers has identified as a prospective
customer of Financial Products or Services within the final year of the
Executive’s employment with Consumers.

 

 

 

 

1.11 “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.

 

1.12 “Discount Rate” means the rate used by the plan administrator for
determining the Accrual Balance. The initial Discount Rate is five percent (5%).
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 prior to each
January 1 using the twenty- (20-) year term Moody AA Corporate Rate for a high-
quality fixed-income debt security.

 

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

 

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

 

1.15 “Effective Date” means _____________________.

 

1.16 “Final Pay” means the average of the base pay paid to the Executive by the
Company for the last three (3) full calendar years prior to Normal Retirement
Age.

 

1.17 “Financial Products or Services” means any product or service that a
financial institution or a financial holding company could offer by engaging in
any activity that is financial in nature or incidental to such a financial
activity under Section 4(k) of the Bank Holding Company Act of 1956 and that is
offered by Consumers on the date of the Executive’s Termination of Employment,
including but not limited to banking activities and activities that are closely
related and a proper incident to banking, or other products or services of the
type in which the Executive was involved during the Executive’s employment with
Consumers.

 

1.18 “Normal Retirement Age” means the Executive’s sixty-fifth (65th) birthday.

 

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

 

1.20 “Plan Administrator” means the Company or such committee or person as the
Board shall appoint.

 

 

 

 

1.21 “Plan Year” means a twelve- (12-) 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.

 

1.22 “Section 409A” means Section 409A of the Code and the regulations and other
guidance issued thereunder by the United States Department of Treasury and
Internal Revenue Service.

 

1.23 “Specified Employee” means an employee who at the time of Termination of
Employment is a key employee of Consumers, if any stock of Consumers is publicly
traded on an established securities market or otherwise. For purposes of this
Agreement, an employee is a key employee if the employee meets the requirements
of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the
regulations thereunder and disregarding Section 416(i)(5)) at any time during
the twelve- (12-) month period ending on December 31 (the “identification
period”). If the employee is a key employee during an identification period, the
employee is treated as a key employee for purposes of this Agreement during the
twelve- (12-) month period that begins on the first day of January following the
close of the identification period.

 

1.24 “Termination of Employment” means termination of the Executive’s employment
with the Company for reasons other than death, excepting a leave of absence
approved by Consumers. Whether a Termination of Employment has occurred is
determined in accordance with the requirements of Section 409A based on whether
the facts and circumstances indicate that the Consumers 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 Consumers if the Executive has been providing services to Consumers
less than thirty-six (36) months). Termination of Employment shall be construed
consistently with a “separation from service” within the meaning of Section
409A.

 

1.25 “Voluntary Termination” means termination by the Executive of the
Executive’s employment with the Company for reasons other than death,
Disability, or Retirement.

 

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 (the “Retirement Benefit”)
in lieu of any other benefit under this Agreement.

 

2.1.1 Amount of Normal Retirement Benefit. The annual benefit under this Section
2.1 is fifty percent (50%) of Final Pay at the Normal Retirement Date.

 

 

 

 

2.1.2 Payment of Normal Retirement Benefit. Subject to Section 2.5, the Company
shall pay the annual Retirement Benefit to the Executive in twelve (12) equal
monthly installments payable on the first day of each month commencing with the
month following the Executive’s Normal Retirement Date for fifteen (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 (the “Early Termination
Benefit”) in lieu of any other benefit under this Agreement.

 

2.2.1 Amount of Early Termination Benefit. The Early Termination Benefit is an
amount equal to one (1) times the Executive’s annual base salary in effect
immediately preceding the Termination of Employment.

 

2.2.2 Payment of Early Termination Benefit. Subject to Section 2.5, the Early
Termination Benefit to the Executive shall be paid in a lump sum within sixty
(60) days following Termination of Employment; provided that if such sixty-
(60-) day period begins in one calendar year and ends in another, the Executive
shall not have the right to designate the calendar year of payment.

 

2.3 Disability Benefit. If the Executive incurs a Termination of Employment due
to Disability prior to Normal Retirement Age, the Company shall pay to the
Executive the benefit described in this Section 2.3 (the “Disability Benefit”)
in lieu of any other benefit under this Agreement.

 

2.3.1 Amount of Disability Benefit. The Disability Benefit 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 Disability Benefit. Subject to Section 2.5, the Disability
Benefit to the Executive shall be a fixed annuity payable in one hundred eighty
(180) equal monthly installments, with interest credited on the unpaid balance
at an annual rate equal to the Discount Rate, compounded monthly, payable on the
first day of each month commencing with the month following Termination of
Employment.

 

2.4 Change of Control Benefit. Upon the Executive’s Termination of Employment
within twelve (12) months following a Change of Control for reasons other than
death, Disability, or Retirement, the Company shall pay to the Executive the
benefit described in this Section 2.4 (the “Change in Control Benefit”) in lieu
of any other benefit under this Agreement.

 

2.4.1 Amount of Change in Control Benefit. The Change in Control Benefit is the
greater of (i) one (1) times the Executive’s base salary in effect immediately
preceding the Termination of Employment or (ii) 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 Change in Control Benefit. Subject to Section 2.5, the Company
shall pay the Change in Control Benefit to the Executive in a lump sum within
sixty (60) days following Termination of Employment; provided that if such
sixty- (60-) day period begins in one calendar year and ends in another, the
Executive shall not have the right to designate the calendar year of payment.

 

 

 

 

2.4.3 Excess Parachute Payment. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any Change in Control Benefit under
this Agreement to the extent the benefit would create an excise tax under the
excess parachute rules of Sections 280G and 4999 of the Code.

 

2.5 Potential 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, and if payments
under this Article 2 would be considered deferred compensation under Section
409A, and finally if an exemption from the six- (6-) month delay requirement of
Section 409A is not available, the benefit distributions that are made upon
Termination of Employment may not commence earlier than the first day of the
seventh month after the month in which the Executive’s Termination of Employment
occurs. 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 the seventh month following
the month of the Termination of Employment. All subsequent distributions shall
be paid in accordance with the original payment schedule specified herein.

 

2.6 Distributions Upon Income Inclusion Under Section 409A. Upon the inclusion
of any amount in 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, to the extent such tax liability can be covered by the Accrual
Balance, a distribution shall be made within ninety (90) days following the
discovery of the plan failure; provided that if such ninety- (90-) day period
begins in one calendar year and ends in another, the Executive shall have no
right to specify the calendar year of distribution.

 

2.7 Change in Form or Timing of Distributions 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;

 

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

 

(d) must be made not less than twelve (12) months before the date that the
payment of the first distribution was originally scheduled to be made.

 

 

 

 

Article 3
Payments on Account of Death

 

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 benefit under this Section 3.1 is one hundred
percent (100%) of the Accrual Balance determined as of the end of the month
preceding the Executive’s Date of Death.

 

3.1.2 Payment of Benefit. The Company shall pay the benefit to the Executive’s
beneficiary in one hundred eighty (180) equal monthly installments payable on
the first day of each month commencing with the month following the Executive’s
death.

 

3.2 Death During Payment of Retirement Benefit. If the Executive dies after any
Retirement 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 Retirement
Benefit Commences. If the Executive is entitled to a Retirement Benefit under
this Agreement, but dies prior to the commencement of such 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 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; Voluntary Termination. Notwithstanding any provision
of this Agreement to the contrary, the Company shall not pay any benefit under
this Agreement if there is a (i) Termination of Employment for Cause, or (ii) if
there is a Voluntary Termination.

 

5.2 Suicide or Misstatement. The Company shall not pay any benefit under this
Agreement if the Executive commits suicide within two (2) years after the
Effective 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
(forty-five (45) days for a claim based upon Disability). 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 ninety (90) days (thirty (30) days in the case of Disability) by
notifying the claimant in writing, prior to the end of the initial ninety (90)
(or, if applicable, forty-five (45)) 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
that the claim has been allowed in full or that the Plan Administrator has
reached a conclusion contrary, in whole or in part, to the claimant’s requested
determination:

 

(e) The specific reasons for the decision;

 

 

 

 

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

 

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

 

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

 

(i) 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 (one hundred eighty (180) for a claim based upon Disability)
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. Any review of a
decision involving a claim based upon Disability shall not be conducted by an
individual(s) who made the adverse benefit determination that is the subject of
the appeal, nor the subordinate of such individual(s). If a decision on review
of a claim based upon Disability is based upon a medical judgment, a health care
professional who has appropriate training and experience in the field of
medicine involved in the medical judgment will be consulted.

 

6.2.4 Timing of Plan Administrator Response. The Plan Administrator shall
respond in writing to such claimant within sixty (60) days (forty-five (45) days
for a claim based upon Disability) 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 (forty-five (45) days for a claim based
upon Disability) by notifying the claimant in writing, prior to the end of the
initial sixty- (60-) (forty-five- (45-)) 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:

 

(j) The specific reason for the decision

 

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

 

(l) 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

 

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

 

6.3 Legal Action. A claimant's compliance with the foregoing provisions of this
Article 6 is a mandatory prerequisite to a claimant's right to commence any
legal action with respect to any claim for benefits under the Agreement.

 

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 Company regulators or to comply with legislative changes or tax law,
including without limitation Section 409A.

 

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 Board 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:

 

(n) 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 in accordance with Treasury Regulation Section
1.409A-3(j)(4)(ix)(B);

 

 

 

 

(o) Within twelve (12) months of the Company’s dissolution under Code Section
331 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
first 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

 

(p) Upon the Company’s termination of this and all other non-account balance
plans (subject to the limitations in connection with a downturn in the financial
health of the Company in Section 409A); 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 three (3) 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.

 

Article 8
Covenants against Competition, Solicitation, or Disclosure of Confidential
Information

 

8.1 Competition. For and in consideration of the payments described in Articles
2 and 3, the Executive shall not, without the prior written consent of the
Administrator, either separately, jointly, or in association with others,
directly or indirectly, as an agent, employee , owner, partner, member, or
stockholder or otherwise, compete with Consumers or establish, engage in, or
become interested in, any business, trade, or occupation that competes with
Consumers in the Financial Products or Services industry through association
with a financial institution that operates a corporate headquarters within 50
(fifty) miles of a physical branch or loan office location of Consumers existent
during the Executive’s employment with Consumers or is existent on the date of
the Executive’s Termination of Employment. The Executive acknowledges and agrees
that during the terms of the Executive’s employment the Executive has acquired
special and confidential knowledge regarding the operations of Consumers.
Furthermore, although not a term or condition of this Agreement, the Company,
the Bank, and the Executive acknowledge and agree that the Executive services
have been used and are being used by Consumers in executive, managerial and
supervisory capacities throughout the areas in which Consumers does business .
The Executive acknowledges and agrees that the noncompete restrictions contained
herein are reasonable and fair in scope and necessary to protect the legitimate
interests of Consumers. Notwithstanding anything contained in this Section 1.1
to the contrary, nothing contained herein shall be construed to prohibit the
Executive from owning equity in other businesses that are competitive with
Consumers; provided that, while employed by Consumers, such ownership in any
competitive business does not exceed the value of the Executives equity
ownership in Consumers without the prior written consent of the Administrator
and does not meet or exceed five percent (5%) of the issued and outstanding
equity of such competitive business.

 

 

 

 

8.2 Solicitation. For and in consideration of the payments described in Articles
2 and 3, the Executive shall not (x) directly or indirectly solicit or attempt
to solicit any Customer of Consumers to accept or purchase Financial Products or
Services of the same nature, kind, or variety currently being provided to the
Customer by Consumers or being provided to the Customer by Consumers when the
Executive’s Termination of Employment occurs, (y) directly or indirectly
influence or attempt to influence any Customer, joint venturer, or other
business partner of Consumers to alter that person or entity’s business
relationship with Consumers in any way, and (z) accept the Financial Products or
Services business of any Customer or provide Financial Products or Services to
any Customer on behalf of anyone other than Consumers. In addition, the
Executive shall not solicit or attempt to solicit and shall not encourage or
induce in any way any employee, joint venturer, or business partner of Consumers
to terminate an employment or contractual relationship with Consumers, and shall
not hire any person employed by Consumers during the one- (1-) year period
immediately before the Executive’s Termination of Employment or any person
employed by Consumers during the term of this covenant pursuant to this Section
8.2.

 

8.3 Disclosure of Confidential Information. For and in consideration of the
payments described in Articles 2 and 3, the Executive shall not reveal to any
person, firm, or corporation any Confidential Information of any nature
concerning Consumers or the business of Consumers. The covenant in this Section
8.3 does not prohibit disclosure required by an order of a court having
jurisdiction, a subpoena from an appropriate governmental agency, or disclosure
made by the Executive in the ordinary course of business and within the scope of
the Executive’s authority.

 

8.4 Duration; No Impact on Existing Obligations under Law or Contract. The
covenants in this Article 8 shall apply during the Executive’s employment with
Consumers and throughout the twelve (12) month period immediately following the
Executive’s Termination of Employment, whether or not Consumers has engaged the
services of the Executive pursuant to an agreement to provide consulting
services upon the Executive’s Termination of Employment with Consumers;
provided, however, that such twelve (12) month period shall automatically be
reduced to six (6) months upon the occurrence of a Change of Control. The twelve
(12) (or, if applicable, six (6) month durational period referenced herein shall
be tolled and shall not run during any such time that the Executive is in breach
of this Agreement and/or in violation of any of the covenants contained herein,
and once tolled hereunder shall not begin to run again until such time as all
such breach and/or violations have ceased. The Executive acknowledges and agrees
that nothing in this Agreement is intended to or shall have any impact on the
Executive’s obligations as an officer or employee of Consumers to refrain from
competing against, soliciting Customers, officers, or employees of, or
disclosing Confidential Information of Consumers while the Executive is serving
as an officer or employee of Consumers or thereafter, whether the Executive’s
obligations arise under applicable law or under an employment agreement or
otherwise.

 

 

 

 

8.5 Remedies. The Executive acknowledges and agrees that remedies at law for the
Executive’s breach of the covenants contained herein are inadequate and that for
violation of the covenants contained herein, in addition to any and all legal
and equitable remedies that may be available, the covenants may be enforced by
an injunction in a suit in equity without the necessity of proving actual
damage, and that a temporary injunction may be granted immediately upon the
commencement of any such suit, and without notice. The parties hereto intend
that the covenants contained in this Article 8 shall be deemed to be a series of
separate covenants, one for each county of each state in which Consumers does
business. If in any judicial proceeding a court refuses to enforce any or all of
the separate covenants, the unenforceable covenants shall be deemed eliminated
from the provisions hereof for the purposes of that proceeding to the extent
necessary to permit the remaining separate covenants to be enforced.
Furthermore, if in any judicial proceeding a court refuses to enforce any
covenant because of the covenant’s duration or geographic scope, the covenant
shall be construed to have only the maximum duration or geographic scope
permitted by law.

 

8.6 Forfeiture of Payments Under This Agreement. If the Executive breaches any
of the covenants in this Article 8, the Executive’s right to any of the payments
specified in Article 2 after the date of the breach shall be forever forfeited
and the right of the Executive’s designated beneficiary or estate to any
payments under this Agreement shall likewise be forever forfeited. This
forfeiture is in addition to and not instead of any injunctive or other relief
that may be available to the Company. The Executive further acknowledges and
agrees that any breach of any of the covenants in this Article 8 shall be deemed
a material breach by the Executive of this Agreement.

 

Article 9
Miscellaneous

 

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

 

9.2 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
Consumers, nor does it interfere with Consumers’ 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.

 

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

 

9.4 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.

 

 

 

 

9.5 Reporting and Withholding. The Company shall report all income in connection
with, and withhold any taxes that are required to be withheld from, the benefits
provided under this Agreement.

 

9.6 Applicable Law, Venue, Waiver of Right to Jury Trial. The Agreement and all
rights hereunder shall be governed by the laws of Ohio, without regard to its
conflict of laws provisions, except to the extent preempted by the laws of the
United States of America. The Executive and Consumers agree that the exclusive
venue for resolution of any disputes regarding or arising out of this Agreement
or the Executive’s employment shall be the state and federal courts located in
Stark County, Ohio, or the federal courts located in the jurisdiction of the
county wherever the corporate headquarters of the Company may be located in the
future. The Executive and Consumers further agree to waive any right to a jury
trial with respect to any disputes regarding or arising out of this Agreement or
the Executive’s employment with Consumers. The Executive and Consumers each
acknowledge and agree that this selection of venue and waiver of the right to a
jury trial is knowingly, freely, and voluntarily given, is made after
opportunity to consult with counsel of their choosing about this Agreement and
its provisions, and is in the best interests of each party hereto.

 

9.7 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.

 

9.8 Entire Agreement. This Agreement supersedes and amends and restates the
February 11, 2011 Noncompetition Agreement between the Company and the Executive
that was effective as of the Effective Date, and 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.

 

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

 

(q) Interpreting the provisions of the Agreement;

 

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

 

(s) Maintaining a record of benefit payments; and

 

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

 

9.10 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.

 

 

 

 

9.11 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.

 

9.12 Tax Treatment. Notwithstanding any other provision of this Agreement, the
federal, state, and local income and/or other tax treatment of payments and
benefits under this Agreement shall not be, and is not, warranted or guaranteed.
Neither Consumers, its directors (including, without limitation, the Board),
officers, employees, agents, attorneys, nor any of their designees shall be
liable for any taxes, penalties, or other monetary amounts owed by the Executive
or any other person as a result of the Agreement, any deferral or payment under
the Agreement, or the administration of the Agreement.

 

9.13 Notices. All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
hand or mailed, certified or registered mail, return receipt requested, with
postage prepaid, to the following addresses or to such other address as either
party may designate by like notice. If to the Company, notice shall be given to
the Board or to such other or additional person or persons as the Company shall
have designated to the Executive in writing. If to the Executive, notice shall
be given to the Executive at the Executive’s address appearing on the Company’s
records, or to such other or additional person or persons as the Executive shall
have designated to the Company in writing.

 

9.14 Severability. If any provision of this Agreement is held invalid, such
invalidity shall not affect any other provision of this Agreement not held
invalid, and each such other provision shall continue in full force and effect
to the full extent consistent with law. If any provision of this Agreement is
held invalid in part, such invalidity shall not affect the remainder of the
provision not held invalid, and the remainder of such provision together with
all other provisions of this Agreement shall continue in full force and effect
to the full extent consistent with law.

 

9.15 Interpretation. Caption headings and subheadings herein are included solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Agreement. Words used in the singular in this Agreement
shall include the plural, and words used in the masculine shall include the
feminine.

 

9.16 EESA Limitations. Notwithstanding anything herein to the contrary, the
terms of this Agreement shall be construed subject to the limitations of the
Emergency Economic Stabilization Act of 2008 (“EESA”). It is expressly
understood that this Agreement will be enforced in a manner which is consistent
with Section 111 of EESA, as amended, and rules and regulations currently issued
and to be issued thereunder. Until such time that the United States Treasury
ceases to own any debt or equity or equity securities of Consumers acquired
pursuant to the Capital Purchase Program, Consumers and Executive agree that all
payments under this Agreement shall be limited to the extent necessary to comply
with Section 111 of EESA, as amended.

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the Executive and the Company have signed this Agreement as
of the Effective Date but on the dates indicated below.

 

EXECUTIVE:     COMPANY:                 CONSUMERS NATIONAL BANK          
Signature:     By:             Printed Name:     Title:             Date:    
Date:  

 

 

 

 

BENEFICIARY DESIGNATION

 

CONSUMERS NATIONAL BANK

SALARY CONTINUATION AGREEMENT

 

Printed Name: _________________

 

I designate the following as beneficiary of any death benefits under this
Agreement:

 

Primary:  

  

   

  

Contingent:  

 

   

  

Note:   To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.

  

I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.

 

 

Signature       

 

Date      

 

 

Accepted by the Company this ______ day of _________________, 20___.

 

By    

 

Title