Exhibit 10.6

CHANGE IN CONTROL SEVERANCE AGREEMENT
COMMONWEALTH NATIONAL BANK

This Agreement is made and entered into, effective as of May 30, 2008, by and
between Commonwealth National Bank, a national bank with its principal office
and place of business at 33 Waldo Street, Worcester, Massachusetts (“Bank”) and
Charles R. Valade, a resident of Sutton, Massachusetts (“Executive”).  This
Agreement constitutes a restatement, in its entirety, of the agreement entered
into by and between the parties effective as of May 18, 2006.

WITNESSETH:

WHEREAS, Executive is employed by Bank and its parent, CNB Financial Corp. (the
“Company”), as President and Chief Executive Officer;

WHEREAS, the Board of Directors of Bank considers it to be in the best interests
of Bank and the stockholders of Company to foster the continued employment of
Executive in the event of a Potential Change-in-Control (as hereinafter
defined);

WHEREAS, Bank desires to assure Executive of what it considers to be fair and
reasonable terms in the event of a Change-in-Control (as hereinafter defined);

NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, the parties hereto, intending to be legally bound, do hereby mutually
covenant and agree as follows:

1.           Term of Agreement.

This Agreement shall be effective as of the date and year first above written
(the “Commencement Date”), and shall continue in effect through the date ending
on the second anniversary of the Commencement Date (the “Term”); provided,
however, that commencing on the date two years after the Commencement Date (the
“Initial Renewal Date”), and on the first day of each calendar month following
the calendar month in which falls the Initial Renewal Date (each such date and
the Initial Renewal Date shall be hereinafter referred to as the “Renewal
Date”), unless previously terminated, the Term shall be automatically extended
so as to terminate twenty-five (25) calendar months from such Renewal Date,
unless at least 60 days prior to the Renewal Date, Bank shall give notice to
Executive that the Term shall not be so extended; provided, however, that no
such notice by Bank shall be effective if prior to the date of such notice (i) a
“Potential Change in Control” shall have occurred and the event giving rise
thereto has not been terminated, abandoned or rescinded or (ii) a “Change in
Control” shall have occurred.

2.           Definitions.

For purposes of this Agreement, the following terms shall have the following
meanings:

(a)           A “Change in Control” shall be deemed to have occurred if, during
the term of this Agreement:

(i)           any Person directly or indirectly or acting through one or more
other Persons owns, controls or has power to vote more than 50% of the voting
common stock of Bank or a Controlling Person; or

(ii)           any Person acquires or agrees to acquire all or substantially all
of the assets and business of Bank or a Controlling Person; or

(iii)           any Person (A) is a party to a merger, consolidation or any
other form of reorganization having substantially the same effect as a merger or
consolidation, with Bank or a Controlling Person and (B) immediately prior to
such transaction the Person had total assets as of the end of its most recent
fiscal year equal to or greater than 100% of the total assets of Bank or the
Controlling Person, as applicable, as of the end of its most recent fiscal year;
or

 
 

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(iv)           during any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period constitute the Board of
Directors of Bank cease for any reason to constitute a majority of such Board,
unless the election, or the nomination for election of each new Director was
approved by a vote of a majority of the Directors then still in office who were
Directors at the beginning of such period; or

(v)           the Board of Directors of Bank, by vote of two-thirds (2/3) of all
the Directors (excluding Executive if Executive is a Director), adopts a
resolution to the effect that a “Change in Control” has occurred for purposes of
this Agreement.

(b)           A “Potential Change in Control” shall be deemed to have occurred
if:

(i)           Bank or any Controlling Person enters into a letter of intent,
memorandum of understanding, or definitive agreement providing for, or publicly
announces that it is considering, one or more transactions, the consummation of
which would result in the occurrence of a Change in Control;

(ii)           any Person (including Bank) publicly announces an intention to
take or to consider taking actions which if consummated would constitute a
Change in Control; or

(iii)           the Board of Directors of Bank, by vote of two-thirds (2/3) of
all the Directors (excluding Executive if Executive is a Director) adopts a
resolution to the effect that a “Potential Change in Control” has occurred for
purposes of this Agreement.

(c)           A “Person” shall include a natural person, corporation, or other
entity. When two or more persons act as a partnership, limited partnership,
syndicate, or other group for the purpose of acquiring, holding, or disposing of
Beneficial Ownership of Company common stock, such partnership, syndicate, or
group shall be considered a Person. Beneficial Ownership shall be determined
under the then current provisions of Securities Exchange Act Rule 13d-3;17
C.F.R. § 240.13d-3.

(d)           A “Controlling Person” shall mean a Person who directly or
indirectly or acting through one or more other Persons beneficially owns,
controls or has power to vote 50% or more of the voting common stock of Bank,
including without limitation, any holding company of Bank.

3.           Duties Upon Potential Change-in-Control.

In the event that a Potential Change-in-Control shall occur while Executive is
employed by Bank, Executive shall use his reasonable best efforts to fulfill
Executive’s responsibilities to Bank in the interests of Bank and the
shareholders of Company and in order to explore and pursue fully the Potential
Change-in-Control.

4.           Change in Control Payments and Benefits.

(a)           Payment upon a Change in Control. Subject to the provisions of
Section 4(e), no later than ten (10) days following a Change in Control, Bank
shall make the following payment to Executive:

(i)           A lump sum amount, in cash, equal to two and one-half times the
sum of:

 
(A)
Executive’s annual base salary in effect immediately prior to the Change in
Control; and

 
(B)
the greater of (I) Executive’s annual incentive bonus for the year in which the
Change in Control occurs or, (II) if no such incentive bonus has yet been
determined for such year, the greater of the Executive’s annual incentive bonus
actually earned by Executive in the year immediately preceding the year in which
the Change in Control occurs or the target annual incentive bonus for the year
in which the Change in Control occurs.

(b)           Payments and Benefit upon Termination in Connection with a Change
in Control. If within twenty-four (24) months following a Change in Control,
Executive terminates employment with Bank for Good Reason or Bank terminates
Executive’s employment without Cause, Bank shall provide the following payments
and benefits to Executive:

 
 

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(i)           Bank shall pay Executive’s full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given, no
later than the fifth day following the Date of Termination. Executive shall also
receive all other amounts to which Executive is entitled under any benefit plan
of Bank at the time such payments are due thereunder, subject, however, to the
provisions of Section 4(d) hereof.

(ii)           An amount in cash equal to Executive’s annual incentive bonus
that would be payable in cash for such year multiplied by a fraction, (A) the
numerator of which equals the number of full or partial days in such annual
performance period during which Executive was employed by Bank and (B) the
denominator of which is 365.

(iii)           Stock options, restricted stock or other stock awards held by
Executive at Executive’s Date of Termination, the vesting of which is service
based, if not then vested and exercisable, will become fully vested and become
exercisable at Executive’s Date of Termination, and, in other respects
(including the period following termination during which such options may be
exercised) such options, restricted stock or other stock awards shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such options, restricted stock or other stock awards were
granted.

(iv)           Any performance objectives upon which the earning of
performance-based restricted stock or deferred stock awards, including
outstanding stock plan awards and other long-term incentive awards, is
conditioned shall be deemed to have been met at target level at Executive’s Date
of Termination.

(v)           Following Executive’s Date of Termination, Bank shall arrange to
provide Executive with life and health insurance benefits no less favorable than
those which Executive was receiving immediately prior to Notice of Termination,
with Executive paying the same portion of the cost of such coverage as existed
at such time. If Executive elects after Date of Termination continued coverage
under Bank’s health plan in accordance with the applicable provisions of the
Consolidated Omnibus Reconciliation Act of 1985 (“COBRA”), Executive shall
continue to receive such individual and/or family health benefits coverage as
Executive was receiving at Executive’s Date of Termination with Executive paying
the same portion of the cost of such coverage as existed at such time, for so
long during the continuation period as Executive elects to continue coverage and
pays Executive’s portion of the costs of coverage. The foregoing coverages shall
continue for a maximum of 30 months following Executive’s Date of Termination,
provided that the coverages and reimbursement by the Bank of any expense
incurred by Executive for such coverages or payment by the Bank directly to the
person or entity providing such coverages for Executive shall not extend or be
made beyond December 31st of the second calendar year following the year in
which the Date of Termination occurs.

(vi)           A cash equivalent amount equal to the additional benefits under
the Bank’s 401(k) Plan or other similar qualified plan (plus estimated earnings
thereon) that Executive would have been entitled to had Executive continued in
the employ of Bank for a 30-month period following Executive’s Date of
Termination and made contributions under said plan at a rate, as a percentage of
salary, equal to the rate at which Executive had made contributions to said plan
in the plan year immediately preceding Executive’s Date of Termination.
(vii)           Bank shall reimburse Executive at least quarterly for amounts
actually expended by Executive for outplacement and job search activities
(including, but not limited to, reasonable office and secretarial expenses) in
amounts in the aggregate up to 20% of Executive’s annual base salary and annual
incentive compensation taken into account under Section 4(a)(i)(A) and (B)
hereof, provided that such expenditures are actually incurred and submitted for
reimbursement by Executive within the 24-month period following Executive’s Date
of Termination and are appropriately documented by invoices and proof of
payment. Such submitted expenses shall be reimbursed by Bank the earlier of 30
days after submission by the Executive of such expenses for reimbursement or
December 31st of the second calendar year following the Date of Termination.

(viii)           Bank shall not be obligated to continue any disability or
disability income insurance on behalf of Executive following Executive’s Date of
Termination. To the extent permitted under any contracts, programs or policies
of such nature in effect at the time of such termination, Executive may continue
at Executive’s sole cost and expense for a period of up to eighteen (18) months.

 
 

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(ix)           Following Executive’s Date of Termination, Executive shall
continue to receive such perquisites, other than those specified in the
preceding subparagraphs above, as Executive was receiving immediately prior to
Executive’s Date of Termination by reimbursing Executive for the costs of such
perquisites on the same cost sharing with Bank as was in effect immediately
prior to Executive’s Date of Termination on or before the earlier of 30 days
after submission of such costs for reimbursement by Executive or December 31st
of the second calendar year following the year in which the Date of Termination
occurs.

(x)           Bank shall reimburse Executive for the amount of any reasonable
legal fees and expenses incurred by Executive in any successful action (whether
or not arbitration or litigation shall be involved) to obtain or enforce any
right or benefit provided to Executive by Bank hereunder or as confirmed or
acknowledged hereunder on or before 30 days after submission of such costs for
reimbursement by Executive or December 31st of the second calendar year
following the year in which the Date of Termination occurs.

(c)           Termination Process. The following process shall apply with
respect to any purported termination of Executive’s employment by Bank or by
Executive during the twenty-four (24) months following a Change in Control.

(i)           Any such purported termination of Executive’s employment shall be
communicated by the terminating party to the other party by written Notice of
Termination.  Notwithstanding the foregoing, if Executive terminates employment
for “Good Reason,” the written Notice of Termination must be provided within
ninety (90) days following the date on which occurs the initial existence of any
circumstance as provided in Section 4(g)(iii) hereof that constitutes a Good
Reason.

(ii)           Within fifteen (15) days following communication of a Notice of
Termination by Bank or Executive, Bank shall deliver to Executive a written
statement of all payments and benefits (“Benefit Statement”) pertaining to
Executive to be made pursuant to this Agreement and otherwise to Executive by
Bank. Bank and Executive shall endeavor in good faith to address and resolve as
soon as possible any questions, issues or disagreements relating to said Benefit
Statement within fifteen (15) days following delivery to Executive of said
Benefit Statement.

(iii)           Thereafter, Executive shall have a period of fifteen (15) days
either to invoke the dispute resolution provisions of Section 13 hereof by
notice to Bank or to provide Bank with a waiver in writing of his right to do
so. Any failure by Executive to do either of the foregoing shall for all
purposes of this Agreement be deemed to constitute a written waiver of
Executive’s right to invoke the dispute resolution provisions of Section 13
hereof, but shall not otherwise affect or impair Executive’s rights or claims
under this Agreement. Within five (5) business days thereafter, Bank shall
either request from an independent tax advisor a determination of tax
deductibility pursuant to Section 4(e) with respect to all payments and benefits
reflected on the Benefits Statement or deliver to Executive a waiver in writing
of its right to do so. Any failure by Bank to do either of the foregoing shall
for all purposes of this Agreement be deemed to constitute a written waiver of
Bank’s right to invoke application of the provisions of Section 4(e).

(d)           Time of Payment. Subject to the provisions of subsection (e)
hereof, the payments provided for in the second sentence of clause (i) and in
clauses (ii), (vi) and (vii) of Section 4(b) hereof, excluding, however, Bank’s
reasonable estimate of any amounts that are in dispute, shall be made not later
than thirty (30) business days following Executive’s Date of Termination.

(e)           Limitation of Benefits Under Certain Circumstances. If the
payments and benefits pursuant to Section 4 of this Agreement, either alone or
together with other payments and benefits Executive has the right to receive
from Bank, would constitute a “parachute payment” under Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), the payments and
benefits pursuant to Section 4 shall be reduced or revised, in the manner
determined by Executive, by the amount, if any, which is the minimum necessary
to result in no portion of the payments and benefits under Section 4 being
non-deductible to Bank pursuant to Section 280G of the Code and subject to the
excise tax imposed under Section 4999 of the Code.  Bank’s independent public
accountants will determine any reduction in the payments and benefits to be made
pursuant to Section 4; Bank will pay for the accountant’s opinion.  If Bank
and/or Executive do not agree with the accountant’s opinion, Bank will pay to
Executive the maximum amount of payments and benefits pursuant
 
 
 

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to Section 4, as selected by Executive, that the opinion indicates have a high
probability of not causing any of the payments and benefits to be non-deductible
to Bank and subject to the excise tax imposed under Section 4999 of the
Code.  Bank may also request, and Executive has the right to demand that Bank
request, a ruling from the IRS as to whether the disputed payments and benefits
pursuant to Section 4 have such tax consequences.  Bank will promptly prepare
and file the request for a ruling from the IRS, but in no event will Bank make
this filing later than thirty (30) days from the date of the accountant’s
opinion referred to above.  The request will be subject to Executive’s approval
prior to filing; Executive shall not unreasonably withhold his approval.  Bank
and Executive agree to be bound by any ruling received from the IRS and to make
appropriate payments to each other to reflect any IRS rulings, together with
interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code.  Nothing contained in this Agreement shall result in a reduction of
any payments or benefits to which Executive may be entitled upon termination of
employment other than pursuant to Section 4 hereof, or a reduction in the
payments and benefits specified in Section 4, below zero.

(f)           Separation from Service.  For purpose of this Agreement,
Executive’s involuntary termination of employment or voluntary termination of
employment for “Good Reason” shall mean “Separation from Service” as defined in
Section 409A of the Code, and the Treasury Regulations promulgated thereunder,
provided, however, that the Bank and Executive reasonably anticipate that the
level of bona fide services Executive would perform after termination would
permanently decrease to a level that is less than 50% of the average level of
bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period.

(g)           Certain Definitions. Except as otherwise indicated in this
Agreement, the following definitions shall be applicable under this Section 4.

(i)           Disability. “Disability” shall mean Executive’s absence from the
full-time performance of Executive’s duties with Bank for six consecutive months
as a result of Executive’s incapacity due to physical or mental illness or
disability, and within 15 days after written Notice of Termination is thereafter
given, Executive shall not have returned to the full-time performance of
Executive’s duties.

(ii)           Cause. “Cause” shall mean termination on account of (A) the
willful and continued failure by Executive to substantially perform Executive’s
duties with Bank (other than any such failure resulting from Executive’s
incapacity due to physical or mental illness or Disability or any failure after
the issuance of a Notice of Termination by Executive for Good Reason) which
failure is demonstrably and materially damaging to the financial condition or
reputation of Bank and/or its affiliates, and which failure continues more than
three (3) business days after a written demand for substantial performance is
delivered to Executive by the Board, which demand specifically identifies the
manner in which the Board believes that Executive has not substantially
performed Executive’s duties or (B) the willful engaging by Executive in conduct
which is demonstrably and materially injurious to Bank or its affiliates,
monetarily or otherwise. Notwithstanding the foregoing, Executive shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to Executive a copy of the resolution duly adopted by the affirmative
vote of not less than a majority in number of the entire membership of the Board
of Directors (excluding Executive if Executive is then a Director) at a meeting
of the Board (after reasonable notice to Executive and an opportunity for
Executive, together with Executive’s counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, Executive was guilty of
conduct set forth above in this Section 4(g)(ii) and specifying the particulars
thereof in detail. For purposes of this Section, no act or failure to act by
Executive shall be considered “willful” unless it is done, or omitted to be
done, in bad faith and without reasonable belief that Executive’s action or
omission was in the best interests of the Bank. Any act, or failure to act,
based upon the advice of counsel for the Bank shall be conclusively presumed to
be done, or omitted to be done, by Executive in good faith and in the best
interests of the Bank.

(iii)           Good Reason. “Good Reason” shall mean, without Executive’s
express written consent, the occurrence upon or after a Change in Control of any
of the following circumstances unless, in the case of subsections (A), (B), (C),
(D), (E), (F) or (G) hereof, such circumstances are fully corrected prior to the
Date of Termination specified in the Notice of Termination given in respect
thereof (provided, however, Bank will not be provided an opportunity to cure
hereunder more than once):

(A)           a material and substantial reduction or other material and adverse
change by the Bank in Executive’s position, authorities, or level of
responsibilities as in effect immediately prior to the Change in Control;

 
 

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(B)           a material reduction in Executive’s annual base salary as in
effect immediately prior to the Change in Control;

(C)           the relocation of the principal place of Executive’s employment to
a location more than thirty-five (35) miles from Executive’s principal place of
employment immediately prior to the Change in Control;

(D)           the failure by Bank to continue in effect any material
compensation or benefit plan in which Executive participated immediately prior
to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan,
or the failure by Bank to continue Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amounts of benefits provided and the level of Executive’s
participation relative to other participants, as existed at the time of the
Change in Control;

(E)           the failure of Bank to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated in
Section 11 hereof;

(F)           any purported termination of Executive’s employment that is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 4(g)(v) hereof, which purported termination shall not be effective for
purposes of this Agreement; or

(G)           any other action or inaction that constitutes a material breach by
the Bank under the terms of this Agreement.

(iv)           Notice of Termination. “Notice of Termination” shall mean notice
indicating the specific termination provision in this Agreement relied upon and
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision so
indicated.

(v)           Date of Termination. “Date of Termination” shall mean (A) if
Executive’s employment is terminated for Disability, 15 days after Notice of
Termination is given (provided that Executive shall not have returned to the
full-time performance of Executive’s duties during such 15-day period) or (B) if
Executive’s employment is terminated for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination for Cause, shall
not be less than 30 days from the date such Notice of Termination is given and,
in the case of a termination for Good Reason, shall not be less than 30 nor more
than 60 days from the date such Notice of Termination is given).

5.           Mitigation.

So long as Executive shall not be in breach of any provisions of Sections 7 or
8, Executive shall not be required to mitigate the amount of payment provided
for under this Agreement by seeking other employment or otherwise, nor shall the
amount of payment or benefit provided for under this Agreement be reduced by any
compensation earned by Executive as the result of employment by another employer
permitted by this Agreement.

6.           Release.

As a condition of receiving payments or benefits provided for in this Agreement
(other than payments under Section 4(a) of this Agreement), at the request of
Bank, or its successor, Executive shall execute and deliver for the benefit of
Bank and any Controlling Person, a general release in substantially the form set
forth in Attachment A hereto, and such release shall become effective in
accordance with its terms. The failure or refusal of Executive to sign such a
release or the revocation of such a release shall cause the termination of any
and all obligations of Bank to make payments or provide benefits hereunder, and
the forfeiture of Executive’s right to receive any such payments and benefits.
Executive acknowledges that Bank has advised Executive to consult with an
attorney prior to signing this Agreement and that Executive has had an
opportunity to do so.

 
 

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7.           Confidential Information.

Executive understands that in the course of Executive’s employment by Bank,
Executive will receive or have access to, or has received or had access to,
confidential information concerning the business or purposes of Bank which Bank
desires to protect. Such confidential information shall be deemed to include,
but not be limited to, Bank’s customer lists and information, and employee
lists, including, if known, personnel information and data. Executive agrees
that Executive will not at any time reveal to anyone outside Bank or use for
Executive’s own benefit any such information without specific written
authorization by Bank, which may be withheld by Bank in its sole discretion.
Executive further agrees not to use any such confidential information or trade
secrets in competing with Bank at any time.
 
8.           Non-Competition and Non-Disclosure; Non-Disparagement; Certain
Forfeitures.

(a)           Non-Competition. In consideration for the compensation and
benefits provided for by this Agreement, as affected by the provisions of
Section 4(e) above, without the consent in writing of the Board of Directors of
Bank, which may be withheld by Bank for any reason or no reason in Bank’s sole
discretion, Executive will not, at any time that Executive shall be employed by
Bank, or at any time during the period of eighteen (18) months following
Executive’s Date of Termination, acting alone or in conjunction with others,
directly or indirectly (i) engage (either as owner, investor, partner,
stockholder, employer, employee, consultant, advisor, or director) in any
business of any bank, bank holding company, savings bank, savings and loan
association, savings and loan holding company, or other institution engaged in
the business of accepting deposits and/or making loans, or any direct or
indirect subsidiary or affiliate of any such entity, that conducts business or
maintains an office within a thirty (30) mile radius of the Bank’s headquarters
at 33 Waldo Street, Worcester, MA; (ii) solicit or otherwise induce any customer
of Bank or any of its affiliates to curtail or cancel their business with Bank
or any such affiliate; (iii) solicit or otherwise induce or attempt to influence
any employee of Bank or any affiliate to terminate employment; or (iv) solicit,
hire or retain as an employee or independent contractor, or assist any third
party in the solicitation, hire, or retention as an employee or independent
contractor, any person who during the twelve months prior to the Date of
Termination was an employee of Bank or any such affiliate; provided, however,
that activities engaged in by Executive by or on behalf of Bank are not
restricted by this covenant. The provisions of clauses (i), (ii), (iii), and
(iv) above are separate and distinct commitments, each independent of the other
subparagraphs. It is agreed that the ownership by Executive of not more than one
percent (1%) of the equity securities of any company having securities listed on
an exchange or regularly traded in the over-the-counter market shall not, of
itself, be deemed inconsistent with clause (i) of this Section 8(a).

(b)           Non-Disparagement. Executive shall not, at any time during the
term of this Agreement or thereafter, willfully make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which is intended to, directly or
indirectly, disparage and cause financial harm to Bank or any of its affiliates
or their respective officers, directors, employees, advisors, businesses or
reputations. Notwithstanding the foregoing, nothing in this Agreement shall
preclude Executive from making truthful statements that are required by
applicable law, regulation or legal process.

(c)           Injunction. Executive hereby acknowledges that Executive’s
services are unique and extraordinary, and are not readily replaceable, and
hereby expressly agrees that Bank, in enforcing the covenants contained in
Sections 7 and 8 herein, in addition to any other remedies provided for herein
or otherwise available at law, shall be entitled in any court of equity having
jurisdiction to an injunction restraining him in the event of a breach, actual
or threatened, of the agreements and covenants contained in such Sections.
 
(d)           Scope. The parties hereto believe that the restrictive covenants
contained in Sections 7 and 8 hereof are reasonable. However, if at any time it
shall be determined by any court of competent jurisdiction that these Sections
or any portion of them as written, are unenforceable because the restrictions
are unreasonable, the parties hereto agree that such portions as shall have been
determined to be unreasonably restrictive shall thereupon be deemed so amended
as to make such restrictions reasonable in the determination of such court, and
the said covenants, as so modified, shall be enforceable between the parties to
the same extent as if such amendments had been made prior to the date of any
alleged breach of said covenants.

9.           Right of Discharge.

Subject to the obligations to make the payments specified in Section 4, it is
expressly agreed that Bank shall have the right to discharge or terminate
Executive at any time and for any reason, or no reason.

 
 

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10.           Exclusivity.

It is understood and agreed that if any payments are due and made to Executive
under this Agreement then no payments will be due or required, and Bank shall
not in any respect be obligated to Executive, under any other severance pay
plan, agreement, or arrangement that might otherwise be applicable to Executive,
or under or by reason of any employment severance pay or similar agreement
between Bank and Executive.

11.           Successors; Binding Agreement.

(a)           This Agreement shall be binding upon and inure to the benefit of
and be enforceable by any and all successors and assigns of Bank. Bank shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Bank, and in the case of an acquisition of Bank in which the corporate
existence of Bank continues, the ultimate parent company following such
acquisition, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that Bank would be required to perform it if no
such succession had taken place. As used in this Agreement, “Bank” shall mean
Bank as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

(b)           This Agreement shall be binding upon and inure to the benefit of
and be enforceable by Executive and Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. In the event of Executive’s death following becoming
entitled to payments hereunder but prior to completion of such payments, all
amounts otherwise payable to Executive hereunder shall, unless otherwise
provided herein, be paid in accordance with the terms of this Agreement to
Executive’s devisee, legatee or other designee specifically named in a writing
signed by Executive and delivered to Bank or, if there is no such designee, to
Executive’s estate.

12.           Notice.

Notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when (a) personally
delivered, (b) sent by Federal Express or other similar overnight service or (c)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth below, or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt. In the case of Federal Express or other similar overnight
service, such notice or advice shall be effective and deemed delivered when
sent, and, in the cases of certified or registered mail, shall be effective and
deemed delivered two days after deposit into the mail by delivery to the U.S.
Post Office.

If to Executive, to:
Charles R. Valade
18 Lanes End
Sutton, MA 01590-2983

If to Bank, to:
Commonwealth National Bank
33 Waldo Street
Worcester, MA 01613-0830
Attn: Chairman, Board of Directors

13.           Dispute Resolution.

(a)           Negotiation. Bank and Executive shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement promptly by
negotiation between the designated representative of the Board of Directors of
Bank and Executive. Any party may give the other party written notice of any
dispute in accordance with the notice procedures set forth in Section 12. Within
15 days after delivery of the notice, the receiving party shall submit to the
other, in accordance with the notice procedures set forth in Section 12, a
written response. The notice and response shall include a statement of that
party’s position and summary of arguments supporting that position. Within 15
days after delivery of the initial notice, the parties shall meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All negotiations pursuant to this
clause are confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence.

 
 

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(b)           Mediation. If the dispute has not been resolved by negotiation as
provided herein within 30 days after delivery of the initial notice of
negotiation, or if the parties failed to meet within 30 days after delivery of
such notice, the parties shall endeavor to settle the dispute by mediation;
provided, however, that if one party fails to participate in the negotiation as
provided herein, the other party may initiate mediation prior to the expiration
of the 90 days.

(c)           Arbitration. Any dispute arising under or in connection with this
Agreement which has not been resolved by mediation as provided herein within 30
days after initiation of the mediation procedure, shall be finally resolved by
arbitration in accordance with the rules of the American Arbitration Association
then currently in effect. The place of arbitration shall be Worcester or Boston,
Massachusetts. For purposes of entering any judgment upon an award rendered by
the arbitrators, Bank and Executive hereby consent to the jurisdiction of any or
all of the following courts: (i) the United States District Court for the
District of Massachusetts, (ii) any of the courts of the Commonwealth of
Massachusetts, or (iii) any other court having jurisdiction. Venue shall be in
Worcester, Massachusetts. Bank and Executive hereby agree that a judgment upon
an award rendered by the arbitrators may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Subject to
subsection (e) of this Section 13, Bank shall bear all costs and expenses
arising in connection with any arbitration proceeding pursuant to this Section
13(c). Notwithstanding any provision in this Section 13(c), Bank shall be
obligated to pay any and all undisputed amounts under this Agreement pursuant to
Section 4 above, and Executive shall be entitled to seek specific performance of
Executive’s right to be paid during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

(d)           Interest on Unpaid Amounts. Any amount which has become payable
pursuant to the terms of this Agreement or any decision by arbitrators or
judgment by a court of law pursuant to this Section 13 but which has not been
timely paid shall bear interest at the prime rate as quoted by Bank at the time
such amount first becomes payable and remain fixed at that rate until such
amounts are paid.

(e)           Costs of Proceedings. Bank shall pay all costs and expenses,
including all attorneys’ fees and disbursements, of Bank and, at least monthly,
Executive, in connection with any proceedings undertaken pursuant to this
Section 13, whether or not instituted by Bank, or Executive, relating to the
interpretation or enforcement of any provision of this Agreement; provided that
if Executive instituted the proceeding and a finding is entered that Executive
instituted the proceeding without a good faith belief that Executive would
prevail on at least one material issue, Executive shall pay all of Executive’s
costs and expenses, including attorneys’ fees and disbursements and reimburse
Bank for all of such costs and expenses of Executive theretofore paid by Bank,
within 60 days after the final determination of all of such proceedings.

14.           Regulatory Limitation.

Notwithstanding any other provision of this Agreement, Bank shall not be
obligated to make, and Executive shall have no right to receive, any payment,
benefit or amount under this Agreement which would violate any law, regulation
or regulatory order applicable to Bank or its parent at the time such payment,
benefit or amount is due, including, without limitation, Section 1828(k)(1) of
Title 12 of the United States Code and any regulation or order thereunder of the
Federal Deposit Insurance Corporation (“Prohibited Payment”). If and to the
extent Bank shall at a later date be relieved of the restriction on its ability
to make any Prohibited Payment, then at such time Bank shall promptly make
payment of any such amounts to Executive.

15.           Miscellaneous.

Except as to a waiver described in Section 4(c) above, no provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by Executive and such officer as
may be designated by the Board of Directors of Bank, acting upon the direction
of said Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts without regard to its conflicts of law principles. All references
to sections of the Exchange Act, the Code or the United States Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law.

 
 

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16.           Validity.

The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

17.           Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same
instrument.

18.           Entire Agreement.

This Agreement sets forth the entire agreement of the parties hereto in respect
of the subject matter contained herein and during the term of this Agreement
supersedes the provisions of all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of either party hereof with
respect to the subject matter contained herein. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.

IN WITNESS WHEREOF, Bank has caused this amended and restated Agreement under
seal to be executed by a duly authorized officer, and Executive has executed
this Agreement, as of November 4, 2008.

 
COMMONWEALTH NATIONAL BANK
         
By: ___/s/ Harris L. MacNeill____________
 
Name: Harris L. MacNeill
 
Its Chairman of the Compensation Committee of the Board
 
of Directors
         
EXECUTIVE
         
By: ___/s/ Charles R. Valade____________
 
Name: Charles R. Valade

 

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