EXHIBIT 10(iii)-1

CNB FINANCIAL CORPORATION

Form 10-K For The Year Ended December 31, 2005

Material Contracts

EXECUTIVE EMPLOYMENT CONTRACT

MADE this 1st day of January 2005, by and between CNB FINANCIAL CORPORATION, a
Pennsylvania business corporation and COUNTY NATIONAL BANK, a national banking
institution, with principal office at One South Second Street, P.O. Box 42,
Clearfield, Pennsylvania, 16830, (hereinafter collectively referred to as
“CNB”);

A N D

WILLIAM F. FALGER, an adult individual, residing 112 Latimer Street, Clearfield,
Pennsylvania, 16830, (hereinafter “MR. FALGER”).

WHEREAS, MR. FALGER has been employed by CNB as a Senior Executive for some
time; and,

WHEREAS, MR. FALGER currently serves as CNB Financial Corporation’s President
and CEO and President and CEO of CNB; and,

WHEREAS, the parties first entered a written Executive Employment Contract on
August     , 2001 which has subsequently been renewed; and,

WHEREAS, the parties wish to amend certain provisions therein; and,

WHEREAS, the parties desire to memorialize their new contractual relation in
writing.

NOW WITNESSETH:

The parties for themselves, their heirs, successors and assigns, in
consideration of their mutual promises contained herein, intending to be legally
bound, hereby agree to the following terms and conditions.

1. EMPLOYMENT: CNB will employ MR. FALGER as its President and CEO, and MR.
FALGER agrees to serve in those capacities. MR. FALGER promises that during the
term of this Agreement he shall dedicate his full time, attention and energies
to his employment with CNB. MR. FALGER further promises that he will report to
CNB’s Board of Directors, carry out its decisions and otherwise abide by and
enforce the policies of CNB.

MR. FALGER shall also perform such other reasonable duties as may hereafter be
assigned to him by CNB consistent with his abilities and position, including but
not limited to services to CNB’s parent CNB Financial Corporation and its other
subsidiaries.

MR. FALGER will not engage in any other employment during the term of this
Agreement, nor shall he engage in self-employed activities.

MR. FALGER also recognizes that CNB’s success and recognition depend on his
involvement with charitable and social organizations. In this regard, MR. FALGER
agrees to engage in such social and charitable activities or organizations as
are consistent with his personal responsibilities and with his position with
CNB.

MR. FALGER shall also comply with all other CNB procedures and polices now or
hereafter in effect.

MR. FALGER further agrees that he and the members of his family shall comport
themselves at all times in a manner that reflects upon CNB in a positive
fashion.

2. TERM: The term of this Agreement shall be for three (3) years commencing on
January 1, 2001, and ending on December 31, 2004, unless terminated sooner
pursuant to the other provisions of this Agreement.

The parties agree that this contract shall automatically renew itself for
success of terms of one (1) year unless either party gives the other ninety
(90) days written notice of his or its intent not to renew the contract prior to
the end of the then current term.

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3. COMPENSATION: MR. FALGER shall be paid a base salary to be established
annually by the Board of Directors. MR. FALGER shall also receive such annual
increases, stock, stock options and bonuses as may from time to time be awarded
by the Board of Directors.

CNB will provide MR. FALGER with a vehicle. CNB will pay for gasoline,
lubricants, maintenance, insurance and all other expenses associated with this
vehicle.

CNB will also provide MR. FALGER with a family membership at the
Clearfield-Curwensville Country Club.

4. OTHER BENEFITS: MR. FALGER shall also participate in CNB’s retirement plan,
health insurance plan, life insurance plan and receive such other benefits as
CNB from time to time may provide to its employees.

MR. FALGER shall also be entitled to vacation, leave for illness and so forth as
now or hereafter granted by CNB’s personnel policies.

5. CONFIDENTIAL INFORMATION: MR. FALGER acknowledges and agrees that as an
inducement to CNB to employ him and enter this written contract with him, that
he shall not disclose, directly or indirectly, intentionally or unintentionally,
during the term of this contract or at any time after its termination, any of
CNB’s proprietary information, account information, customer lists, customer
information, policies, pricing, strategy, codes, strategic plan, plans for
expansion or business development or other information of a confidential nature
(hereinafter referred to as “Confidential Information”), whatsoever regarding
CNB without first obtaining the prior, written consent from CNB’s Board of
Directors that such disclosure is authorized. Communications with CNB’s
employees, customers and business relations are excepted from the foregoing
prohibition during the term of this Agreement to the extent that such
communications are consistent with MR. FALGER’s duties.

Confidential Information shall include all information recorded, memorialized or
communicated in any form whether written, printed, verbal, video, electronic,
magnetic, digital or otherwise.

Upon termination of this contract for any reason, MR. FALGER promises that he
shall promptly return to CNB or its designated representative any Confidential
Information, keys, credit cards, or other property, such as his vehicle, in his
possession.

MR. FALGER further promises that he will not take, keep, or record copies,
duplications or reproductions of the Confidential Information or other property
subject to this Agreement after termination of this Agreement.

6. COVENANT NOT TO COMPETE: As additional consideration to CNB for entering this
Agreement, and for granting the severance benefits described in paragraph 7
below which are a new benefit, MR. FALGER covenants that he shall not compete
against CNB, its parent, affiliates or subsidiaries, either directly or
indirectly, by taking employment, gratuitously assisting or serving as an
independent contractor, consultant, partner, director or officer with a
competitor of CNB, or starting his own business which would compete directly or
indirectly with CNB, or have a material interest in any business, corporation,
partnership, LLC, savings and loan, bank or other venture which competes
directly or indirectly with CNB either while he is employed by CNB or for a
period of three (3) years following the date on which MR. FALGER is last
employed by CNB. For the purpose of defining and enforcing this covenant, CNB’s
competitors will be identified at the time it seeks enforcement of this
covenant. This determination shall be based on CNB’s market area and CNB’s plans
for expansion or acquisition into other market areas at the time enforcement of
this covenant is sought.

The parties also agree that indirect competition shall include the instances
stated above but involving MR. FALGER’s spouse, child or in-laws.

The parties further agree that MR. FALGER’s covenant not to compete shall apply
in the event of his regular retirement or voluntary termination of his
employment hereunder. MR. FALGER agrees in this regard that the security
provided by this agreement is adequate consideration for his covenant not to
compete.

7. SEVERANCE PAY: If MR. FALGER’s employment is terminated without cause,
whether or not a change in control of CNB has occurred, MR. FALGER shall be
entitled to severance benefits equal to 2.99 times his base salary for the year
in which his employment ends plus 2.99 times the average of Mr. Falger’s
incentive pay bonuses for the three (3) years preceding the year in which his
employment is terminated hereunder. This severance pay shall be tendered to MR.
FALGER in cash within 30 days following the end of his employment with CNB. MR.
FALGER shall also be entitled to this severance pay if he voluntarily terminates
his employment with CNB after a change in control for any of the following
reasons:

A. Reduction in title or responsibilities;

B. Assignment of duties or responsibilities inconsistent with MR. FALGER’s
status as President and CEO;

C. A reduction in salary or other benefits; and, or,

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D. Reassignment to a location greater than 25 miles from the location of MR.
FALGER’s office on the date of change and control.

For the purposes of this Agreement, a “change in control” shall include but not
be limited to the following:

1. Sale of all or substantially all of CNB’s or CNB Financial Corporation’s
stock;

2. Sale of all or substantially all of CNB’s or CNB Financial Corporation’s
assets;

3. Acquisition by a third party or group acting in concert of stock sufficient
to elect a majority of directors to the Board of CNB or CNB Financial
Corporation; or,

4. Ownership of more than 50% of CNB Financial Corporation stock by a single
person or entity or more than one person or entity acting as a group.

8. TERMINATION: This Agreement shall be terminated on the occurrence of any of
the following events and if terminated under this paragraph, MR. FALGER shall
not be entitled to severance benefits under Paragraph 7:

A. The execution of a written agreement between CNB and MR. FALGER to terminate
this Agreement;

B. MR. FALGER’s death;

C. MR. FALGER’s breach of any term or condition of this Agreement;

D. MR. FALGER’s failure or refusal to comply with such reasonable policies,
directions, standards and regulations that CNB may establish from time to time;

E. MR. FALGER’s inability to fully and competently perform his duties hereunder
for a period of 30 continuous days due to physical, mental or psychology
illness, injury or condition; or,

F. MR. FALGER ceases to qualify for his offices and responsibilities under this
Agreement pursuant to any statute or regulation, now or hereafter issued by the
United States of America, the Federal Reserve, the Office of the Comptroller of
Currency or other regulatory agency or body duly invested with authority over
CNB, its parent or affiliate(s).

9. NOTICES: All notices or communications required by or bearing upon this
Agreement or between the parties shall be in writing and sent by First Class
Mail to the parties as follows unless otherwise specified above:

 

CNB Financial Corporation    William F. Falger County National Bank    112
Latimer Street Attention: Chairman of the Board    Clearfield, PA 16830 One
South Second Street, P.O. Box 42    Clearfield, PA 16830   

10. NON-ASSIGNMENT: The parties acknowledge the unique nature of services to be
provided by MR. FALGER under this Agreement, the high degree of responsibility
borne by him and the personal nature of his relationship to CNB’s Board of
Directors and customers. Therefore, the parties agree that MR. FALGER may not
assign this Agreement.

11. ARBITRATION: The parties agree that all disputes or questions arising under
this Agreement or because of their employment relationship shall be submitted to
arbitration by three (3) arbitrators. Each party shall select one
(1) arbitrator, and then those two (2) arbitrators shall select a third
(3) arbitrator. The arbitrators’ decision need not be unanimous. Arbitration
shall be conducted at a private location in Clearfield County convenient to the
parties. The arbitrators must reach and give notice of their decision within
five (5) days after completion of an arbitration. The

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Pennsylvania Uniform Arbitration Act, 42 Pa.C.S.A. §§7301 et sec. shall govern
arbitrations hereunder. CNB shall compensate the arbitrators and stenographer if
used. CNB shall also pay for the arbitration room. Each party shall pay their
attorney fees and other costs.

12. GENERAL PROVISIONS:

A. This Agreement shall be governed by the laws of Pennsylvania;

B. In construing or interpreting this Agreement, “CNB” and “MR. FALGER” shall
mean, wherever applicable, the singular or plural, the masculine or the
feminine, individual, individuals, partnership or corporation, as the case may
be;

C. This Agreement represents the sole agreement of the parties on these subjects
and supersedes all prior communications, representations and negotiations,
whether oral or written;

D. This Agreement can only be modified or amended by the prior written consent
of both parties hereto;

E. Jurisdiction and venue shall rest in the Court of Common Pleas of Clearfield,
Pennsylvania, for all suits, claims and causes of action whatsoever;

F. Failure by either party to pursue remedies or assert rights under this
Agreement shall not be construed as waiver of that party’s rights or remedies,
nor shall a party’s failure to demand strict compliance with the terms and
conditions of this Agreement prohibit or estop that party from insisting upon
strict compliance in the future; and

G. The parties deem that the terms of this Agreement are unique, and in addition
to their other Rights and remedies at law, and at equity, either party shall
have the right to specifically enforce the terms of this Agreement.

H. This Agreement shall bind the parties’ heirs, successors, representatives,
related corporations and assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date written
above for the purposes herein contained.

 

CNB FINANCIAL CORPORATION     MR. FALGER By:                 President      
William F. Falger By:              Secretary      

 

COUNTY NATIONAL BANK By:        President By:        Secretary