employmentcontract2008.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


     

    AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

     

    THIS
EMPLOYMENT AGREEMENT (the "Agreement"), is made
and entered into as of July 1, 2003, by and between COMMERCIAL NATIONAL BANK OF
PENNSYLVANIA, a national banking association (the "Bank"), and GREGG E. HUNTER
("Executive").

     

    RECITALS

     

    The Bank
desires to assure itself of the services of Executive as an executive officer of
the Bank and certain Affiliates of the Bank for the period provided in this
Agreement, and Executive is willing to serve in the employ of the Bank pursuant
to the terms of this Agreement.

     

    NOW
THEREFORE, in consideration of these premises and the mutual promises contained
herein, and intending to be legally bound hereby, the parties agree as
follows:

     

    SECTION
1.                                Definitions.

     

    1.1.           "Affiliate" means,
with respect to the Bank, a corporation, partnership, trust, association, joint
venture, limited liability company or other entity, directly or indirectly
controlling, controlled by or under common control with the Bank. As of the date
of this Agreement, the Affiliates of the Bank are the Holding Company,
Commercial National Insurance Services, Inc, and Gooder Agency,
Inc.

     

    1.2.            "Benefits" means the
benefits described in Sections 3.3 and
3.4.

     

    1.3.            "Board" means the
Board of Directors of the Bank.

     

    1.4.            "Cause" means the
occurrence of any of the following:

     

    (a) Executive's
material breach of any of his obligations under this Agreement or any fiduciary
duty owned to the Bank, or any of its Affiliates, and his failure to cure such
breach within 30 days after written notice thereof from the Bank;

     

    (b) Executive's
failure, refusal or inability (other than due to mental or physical disability)
to perform, in any material respect, his duties to the Bank or any of its
Affiliates, which failure continues for more than fifteen (15) days after
written notice thereof from the Bank;

     

    (c) Executive's
abuse of alcohol or use of illegal drugs (other than in accordance with a
physician's prescription);

     

    (d) Executive's
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Bank or any of its Affiliates including, without limitation,
fraud, embezzlement, theft or proven dishonesty in the course of his employment;
or

    


     

    


     

     (e)           Executive's
conviction of, or entry of a plea of guilty or nolo contendere to a
misdemeanor involving moral turpitude, a felony, or any other crime which has an
adverse effect on the Bank or any of its Affiliates, or the reputation of any of
them.

     

    1.5.            "Change of Control"
means any of the following events:

     

    (a) any
individual, corporation, partnership, association, trust or other entity (other
than Executive and his associates) becomes the beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of securities of the Bank or the Holding Company representing 50% or more of the
combined voting power of the Bank's or the Holding Company's then outstanding
voting securities;

     

    (b) the
individuals who as of the date of this Agreement are members of the Board or the
Board of Directors of the Holding Company (the "Incumbent Boards"), cease for
any reason to constitute at least a majority of the Board or the Board of
Directors of the Holding Company, provided, however, that if the election, or
nomination for election by the Bank's or the Holding Company's shareholders, of
any new director was approved by a vote of at least a majority of the Incumbent
Boards, such new director will be considered to be a member of the Incumbent
Boards;

     

    (c) an
agreement by the Bank or the Holding Company to consolidate or merge with any
other entity pursuant to which the Bank or the Holding Company will not be the
continuing or surviving corporation or pursuant to which shares of the common
stock of the Bank or the Holding Company would be converted into cash,
securities or other property, other than a merger of the Bank or the Holding
Company in which holders of the common stock of the Bank or the Holding Company
immediately prior to the merger would have the same proportion of ownership of
common stock of the surviving corporation immediately after the
merger;

     

    (d) an
agreement of the Bank or the Holding Company to sell, lease, exchange or
otherwise transfer in one transaction or a series of related transactions
substantially all the assets of the Bank or the Holding Company;

     

    (e) the
adoption of any plan or proposal for a complete or partial liquidation or
dissolution of the Bank or the Holding Company; or

     

    (f) an
agreement to sell more than 50% of the outstanding voting securities of the Bank
or the Holding Company in one or a series of related transactions.

     

    1.6.            "COBRA" means 29
U.S.C. §§ 1161-1169.

     

    1.7.            "Code" means the
Internal Revenue Code of 1986, as amended.

     

    1.8.            "Good Reason" means
that any of the following has occurred with respect to the
Executive:

    (a)           the
assignment to Executive of any duties inconsistent in any material respect with
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section 2 of this
Employment Agreement, or any other action by the Bank which results in a
material diminution in such position, authority, duties or
responsibilities;

    


    (b) a
diminution by the Bank in Executive's Annual Salary, or incentive or other forms
of compensation, provided that (i) a reduction in Executive's Annual Salary as
part of an across-the-board reduction of salaries of all officers of the Bank
shall not constitute Good Reason; and (ii) a reduction in Executive's
performance bonus from year to year which is related to achievement of
performance goals and consistent with how performance goals had been interpreted
prior to any Change of Control shall not constitute Good Reason;

     

    (c) Executive's
loss of membership on the Board other than as a result of or in connection with
(i) Executive's death, disability or voluntary resignation from the Board or
(ii) termination of Executive's employment by the Bank for Cause;

     

    (d) relocation
of Executive's job location to a place which is more than 50 miles from the
Bank's current headquarters in Latrobe, Pennsylvania, without Executive's
agreement; or

     

    (e) a
material breach of this Agreement by the Bank which is not cured within 30 days
after delivery of written notice thereof.

     

    1.9.           "Holding Company"
means Commercial National Financial Corporation, a Pennsylvania
corporation.

    1.10.                      "Intellectual
Property" means (a) all inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all
patents, (b) all trademarks, service marks, trade dress, logos, trade names,
fictitious names, brand names, brand marks and corporate names, together with
all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications.
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including data, source codes and related
documentation), (g) all other proprietary rights, (h) all copies and tangible
embodiments thereof (in whatever form or medium), or similar intangible personal
property which have been or are developed or created in whole or in part by
Executive: (i) at any time and at any place while Executive is employed by the
Bank and which are related to or used in connection with the business of the
Bank or its Affiliates, or (ii) as a result of tasks assigned to Executive by
the Bank or its Affiliates.

    


    1.11.                      "Proprietary
Information" means confidential, proprietary, business and technical
information or trade secrets of the Bank or of any Affiliate of the Bank. Such
Proprietary Information shall include, but shall not be limited to, the
following items and information relating to the following items: (a) information
acquired from, or about, third parties

    such as
the Bank's customers, including, but not limited to, account, general banking
and financial information relating thereto, (b) business research, studies,
procedures and costs, (c) financial data, (d) marketing data, methods, plans and
efforts, (e) the identities of the Bank's actual and prospective customers, (f)
the terms of contracts and agreements with customers, contractors and suppliers,
(g) the needs and requirements of, and the Bank's course of dealing with, actual
or prospective customers, contractors and suppliers, (h) personnel information,
(i) customer and vendor credit information, and (j) any Intellectual Property of
the Bank (whether developed by Executive or others). Failure by the Bank to mark
any of the Proprietary Information as confidential or proprietary shall not
affect its status as Proprietary Information under the terms of this
Agreement.

     

    1.12.                      "Restrictive
Covenants" means the provisions contained in Section 5.1 of this
Agreement.

     

    1.13.                      "Total After-Tax
Payments" means the total of all "parachute payments" (as that term is
defined in Section 280G(b)(2) of the Code) made to or for the benefit of
Executive (whether made hereunder or otherwise), after reduction for all
applicable federal taxes (including, without limitation, the tax described in
Section 4999 of the Code).

     

    SECTION
2.                                Employment, Term and
Duties.

     

    2.1.           Employment and Term.
The Bank hereby employs Executive and Executive hereby accepts employment with
the Bank as its Chief Executive Officer, and shall serve as an officer and/or
director of the Bank and such of the Bank's Affiliates as the Board may
determine for a period continuing until June 30, 2012 (the "Term"); provided, however, that if
written notice not to extend the Term by either party is not received at least
120 days prior to June 30, 2012 (or any subsequent anniversary of June 30, 2012,
if this Agreement is extended pursuant to this Section 2.1), then the Term will
be automatically extended to the next anniversary of June 30, 2012.

     

    2.2.           Duties.  Executive
will render his services hereunder to the Bank, and its Affiliates and shall use
his best efforts, judgment and energy in the performance of the duties assigned
to him. During the Term, Executive will devote substantially all of his business
time and services to the Bank and its Affiliates to perform such duties as may
be customarily incident to his position and as may reasonably be assigned from
time to time by the Board. During the Term, Executive will not serve as a
director of any corporation other than the Bank and any of its Affiliates,
without the prior consent of the Bank; provided, however, that
Executive may, at his discretion, serve as a director of a family-owned,
charitable, community and other not-for-profit entities, subject to Executive's
duty to inform the Bank of his assumption of any such directorship.

     

    SECTION
3.                                
Compensation and
Benefits.

     

    3.1.           Annual
Salary.  Executive hereby agrees to accept, as compensation for
all services rendered by Executive in any capacity hereunder and for the
Restrictive Covenants made by Executive in Section 5 hereof, a
base salary as set on an annual basis by the Executive Compensation Committee of
the Board (as the same may hereafter be increased, the "Annual  Salary")
commencing on the date hereof and continuing until expiration or termination of
the Term. The Annual Salary and all other payments made by the Bank to Executive
will be inclusive of all applicable income, social security and other taxes and
charges which are required by law to be withheld by the Bank, which taxes and
other charges will be withheld and paid in accordance with the Bank's normal
payroll practices from time to time in effect. The Annual Salary will be
reviewed on an annual basis by the Executive Compensation Committee of the Board
and may be adjusted, as determined by such Executive Compensation
Committee.

     

    3.2.           Bonus. The Executive
Compensation Committee of the Board may, but shall not be required to, award
Executive a performance bonus based on the performance of the Bank and
Executive. The Executive Compensation Committee of the Board shall have sole
discretion to determine whether to pay a performance bonus to Executive and to
determine the amount of any such bonus.

     

    3.3.            Benefits. Executive
will be entitled to receive the same benefits enjoyed by other executive
officers of the Bank from time to time (as determined by the Executive
Compensation Committee in good faith, in its absolute discretion), as well as
the benefits described below in Section 3.4. Such
benefit plans shall include participation in the Bank's Profit-Sharing Plan,
health coverage, life insurance and disability (short and long term) benefits,
each on the same basis as offered to the other executive-level employees of the
Bank.

     

    3.4.            Vacation.  Executive
will be entitled to five weeks of vacation per calendar
year.  Executive shall also be entitled to 6 incidental days per
calendar year.  Executive shall not be entitled to receive any payment
for unused vacation days or incidental days (together "benefit
days").  Executive shall be entitled to carry over a total of five (5)
unused benefit days to the next calendar year and must use these five (5)
carried over benefit days within the first quarter of such next calendar year or
they become void.

     

    SECTION
4.                                Payment of Expenses.
The Bank will pay or reimburse all reasonable and necessary expenses incurred by
Executive in the performance of his duties hereunder, in accordance with the
Bank's practices and policies regarding the payment or reimbursement of expenses
from time to time in effect.

     

    SECTION
5.                                Non-Compete;
Confidentiality; Non-Solicitation.

     

    5.1.            Restrictive
Covenants. These Restrictive Covenants will survive the expiration of
this Agreement or the termination of Executive's employment; provided, however,
that the Restrictive Covenants will not apply following a termination by the
Bank without Cause pursuant to Section 6.1(d) or a
termination by Executive after the occurrence of a Change of Control pursuant to
Section
6.2(c).

     

    (a)            Non-Compete.  Executive
shall not, during the Term and for a period of one (1) year thereafter (the
"Restricted
Period"), in any city, town or county in which the Executive's normal
business office is located or the Bank or any of its Affiliates has an office or
has filed an application for regulatory approval to establish an office,
determined as of the effective date of such termination, do any of the
following, directly or indirectly, without the prior written consent of the Bank
(except in Executive's capacity as an employee of the Bank, and in the best
interests of the Bank):

     

     

    (i) work for
or advise, consult, serve with, or otherwise become interested in (as owner,
stockholder, lender, partner, co-venturer, director, officer, employee, agent or
consultant), directly or indirectly, any person, firm, corporation, association
or other entity whose business materially competes with the depository, lending
or other business activities of the Bank or its Affiliates;

     

    (ii) influence
or attempt to influence any customer of the Bank or any of its Affiliates to
terminate or modify any written or oral agreement or course of dealing with the
Bank or such Affiliate; or

     

    (iii) influence
or attempt to influence any person to either (A) terminate or modify any
employment, consulting, agency, distributorship or other arrangement with the
Bank or any of its Affiliates, or (B) employ, or arrange to have any other
person or entity employ, any person who has been employed by the Bank of any of
its Affiliates as an employee, consultant, agent or distributor of the Bank or
such Affiliate at any time during the Restricted Period.

     

    Notwithstanding
the foregoing, Executive may hold less than five percent (5%) of the outstanding
securities of any class of any publicly traded securities of any
company.

     

    (b)            Confidentiality.

     

    (i) Executive
recognizes and acknowledges that the Proprietary Information is a valuable,
special and unique asset of the business of the Bank. As a result, both during
the Term and thereafter, Executive shall not, without the prior written consent
of the Bank or its Affiliates, for any reason either directly or indirectly
divulge to any third-party or use for his own benefit, or for any purpose other
than the exclusive benefit of the Bank, any Proprietary Information revealed,
obtained or developed in the course of his employment by the Bank; provided, however, that
nothing herein contained shall restrict Executive's ability to make such
disclosures during the Term as may be necessary or appropriate to the effective
and efficient discharge of his duties as an employee hereunder or as such
disclosures may be required by law; and further provided, that
nothing herein contained shall restrict Executive from divulging or using for
his own benefit or for any other purpose any Proprietary Information which is
publicly available, so long as such information did not become available to the
public as a direct or indirect result of Executive's breach of this Section
5.1(b).  In the event that Executive or any of his
representatives becomes legally compelled to disclose any of the Proprietary
Information, Executive will provide the Bank with prompt written notice so that
the Bank may seek a protective order or other appropriate remedy.

    (ii) Executive
recognizes that banking and account information acquired by Executive in the
course of his employment with respect to customers of the Bank are confidential
pursuant to the laws of the Commonwealth of Pennsylvania and the United States
of America, and Executive will strictly conform to all such laws and
administrative regulations and will take all action necessary or appropriate to
cause all persons under Executive's supervisory responsibility to conform to all
such laws and regulations.

    


    


    


    


    (c)            Property of the
Bank.

     

    (i) All
right, title and interest in and to Proprietary Information shall be and remain
the sole and exclusive property of the Bank. During the Term, Executive shall
not remove from the Bank's offices or premises any documents, records,
notebooks, files, correspondence, reports, memoranda or similar materials of or
containing Proprietary Information, or other materials or property of any kind
belonging to the Bank unless necessary or appropriate (as reasonably determined
by Executive) in accordance with Executive's duties and responsibilities to the
Bank and, in the event that such materials or property are removed, all of the
foregoing shall be returned to their proper files or places of safekeeping as
promptly as possible after the removal shall serve its specific purpose.
Executive shall not make, retain, remove and/or distribute any copies of any of
the foregoing for any reason whatsoever except as may be necessary in the
discharge of his assigned duties and shall not divulge to any third person the
nature of and/or contents of any of the foregoing or of any other oral or
written information to which he may have access or with which for any reason he
may become familiar, except as disclosure shall be necessary or appropriate (as
reasonably determined by Executive) in the performance of his duties; and upon
the termination of his employment with the Bank, he shall leave with or return
to the Bank all originals and copies of the foregoing then in his possession,
whether prepared by Executive or by others.

     

    (ii) Executive
agrees that all the Intellectual Property will be considered "works made for
hire" as that term is defined in Sections 101 and 201 of the Copyright Act (17
U.S.C. §§ 101 and 201) and that all right, title and interest in such
Intellectual Property will be the sole and exclusive property of the Bank. To
the extent that any of the Intellectual Property may not by law be considered a
work made for hire, or to the extent that, notwithstanding the foregoing,
Executive retains any interest in the Intellectual Property, Executive hereby
irrevocably assigns and transfers to the Bank any and all right, title, or
interest that Executive may have in the Intellectual Property under patent,
copyright. trade secret and trademark law, in perpetuity or for the longest
period otherwise permitted by law, without the necessity of further
consideration. The Bank will be entitled to obtain and hold in its own name all
copyrights, patents, trade secrets, and trademarks with respect to such
Intellectual Property. Executive further agrees to execute any and all documents
and provide any further cooperation or assistance reasonably required by the
Bank to perfect, maintain or otherwise protect its rights in the Intellectual
Property.

    


    5.2.          Acknowledgements.  Executive
acknowledges that the Restrictive Covenants are reasonable and necessary to
protect the legitimate interests of the Bank and its Affiliates and that the
duration and geographic scope of the Restrictive Covenants are reasonable given
the nature of this Agreement and the position Executive will hold within the
Bank. Executive further acknowledges that the Restrictive Covenants are included
herein in order to induce the Bank to compensate Executive pursuant to this
Agreement and that the Bank would not have entered into this Agreement or
otherwise continued to employ Executive in the absence of the Restrictive
Covenants.

    


    


    


    5.3.           Rights and Remedies Upon
Breach.

    (a) Specific
Enforcement.  Executive acknowledges that any breach by him of
the Restrictive Covenants will cause continuing and irreparable injury to the
Bank for which monetary damages would not be an adequate remedy. Executive shall
not, in any action or proceeding to enforce any of the provisions of this
Agreement, assert the claim or defense that such an adequate remedy at law
exists. In the event of such breach by Executive, the Bank shall have the right
to enforce the Restrictive Covenants by seeking injunctive or other relief in
any court and this Agreement shall not in any way limit remedies of law or in
equity otherwise available to the Bank. If an action at law or in equity is
necessary to enforce or interpret the terms of this agreement, the prevailing
party shall be entitled to recover, in addition to any other relief, reasonable
attorneys' fees, costs and disbursements.

     

    (b) Extension of Restrictive
Period.  In the event that Executive breaches any of the
Restrictive Covenants contained in Section 5.1(a), then
the Restricted Period shall be extended for a period of time equal to the period
of time that Executive is in breach of such restriction.

     

    (c) Accounting.  If
Executive is determined by any court, arbitrator, mediator or other adjudicative
body to have breached any of the Restrictive Covenants, the Bank will have the
right and remedy to require Executive to account for and pay over to the Bank
all compensation, profits, monies, accruals, increments or other benefits
derived or received by Executive as the result of any action constituting a
breach of the Restrictive Covenants. This right and remedy will be in addition
to, and not in lieu of, any other rights and remedies available to the Bank
under law or in equity.

     

    5.4.           Judicial
Modification.  If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, such court shall have the
power to modify such provision and, in its modified form, such provision shall
then be enforceable.

     

    5.5.           Disclosure of Restrictive
Covenants.  Executive agrees to disclose the existence and
terms of the Restrictive Covenants to any employer that Executive may work for
during the Restricted Period.

     

    5.6.           Restrictions Enforceable in
All Jurisdictions.  If a court of any jurisdiction holds the
Restrictive Covenants unenforceable by reason of their breadth or scope or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the right of the Bank to the relief provided above in
the courts of any other jurisdiction within the geographical scope of such
Restrictive Covenants.

     

    SECTION
6.                                Termination.  Executive's
employment hereunder may be terminated by the Bank or Executive as described in
this Section
6.

    


    6.1.           Termination by the
Bank.  Executive's employment may be terminated by the Bank in
any one of the followings ways, prior to the expiration of the
Term:

    


    (a) Death.  If
Executive dies, this Agreement shall terminate on the date of
death.

     

    (b) Disability.  If
Executive either (i) becomes disabled and is receiving long-term disability
benefits pursuant to his disability, or (ii) becomes permanently disabled, the
Bank may terminate Executive's employment by notice to Executive. For purposes
of this Section 6.1(b), "permanently disabled" shall mean mental or physical
incapacity, or both, which in the judgment of the Company's Board of Directors,
renders Executive unable to perform substantially all of his duties hereunder
and which appears reasonably certain to continue for at least three consecutive
months without substantial improvement. Such judgment of the Board of Directors
shall be based upon a certification of such incapacity by a physician chosen by
the Board, who may be either Executive's regularly attending, duly licensed,
physician or a duly licensed physician selected by the Board, following such
physician's physical examination of Executive.

     

    (c) For
Cause.  The Bank may terminate the Executive's employment for
Cause upon 15 days prior written notice to Executive.

     

    (d) Without
Cause.  Subject to Section 6.3, the Bank may, without Cause,
terminate Executive's employment pursuant hereto, effective 60 days after
written notice is provided to Executive.

     

    6.2.           Termination by
Executive.

     

    (a) At
Will.  Executive shall have a right to terminate this Agreement
at any time by giving 60 days' advance written notice to the Bank.

     

    (b) Good
Reason.  Executive may terminate this Agreement for Good Reason
upon 15 days' prior written notice to the Bank.

     

    (c) Change in
Control.  Executive may terminate this Agreement at any time
upon written notice to the Bank within 90 days after the occurrence of a Change
of Control.

     

    6.3.          Termination Without Cause or
For Good Reason.  If Executive's employment by the Bank is
terminated by the Bank without Cause or by Executive for Good Reason, Executive
shall be entitled to:

     

    (a) payment
of all accrued and unpaid Annual Salary and Benefits through the date of such
termination;

    


    (b) payment
of monthly severance payments equal to one-twelfth of the sum of (i) Executive's
Annual Salary, plus (ii) the amount credited to Executive's account under the
Bank's Profit-Sharing Plan for the most recently completed fiscal year, for a
period of twelve (12) months, or, at the discretion of the Board, a single sum
payment equal to the discounted present value of such monthly payments
(discounted at the prime rate in effect at the Bank's principal banking
subsidiary);

    


    (c)            continuation
of group health benefits for Executive for a period of twelve (12) months
following termination. The continuation of group health benefits provided hereby
will be in lieu of any benefits otherwise available to Executive pursuant to
COBRA.

    Notwithstanding
the foregoing, no amount will be paid under this Section 6.3 unless
Executive executes and delivers to the Bank a release substantially identical to
that attached hereto as Exhibit I in a manner
consistent with the requirements of the Older Workers Benefit Protection
Act.

     

    6.4.           Termination Upon Change in
Control.  If Executive terminates his Employment following a
Change of Control pursuant to Section 6.2(c), Executive shall be entitled
to:

     

    (a) payment
of all accrued and unpaid Annual Salary and Benefits through the date of such
termination;

     

    (b) payment
of monthly severance payments equal to one-twelfth of the sum of (i) Executive's
Annual Salary, plus (ii) the amount credited to Executive's account under the
Bank's Profit-Sharing Plan for the most recently completed fiscal year, for a
period of twenty-four (24) months, or, at the option of Executive, a single sum
payment equal to the total of such monthly payments;

     

    (c) continuation
of group health benefits for Executive for a period of twenty-four (24) months
following termination. The continuation of group health benefits provided hereby
will be in lieu of any benefits otherwise available to Executive pursuant to
COBRA; and

     

    (d) a maximum
of six months outplacement assistance with a provider selected by the Bank and
at the Bank's expense.

     

    Notwithstanding
the foregoing, no amount will be paid under this Section 6.4 unless Executive
executes and delivers to the Bank a release substantially identical to that
attached hereto as Exhibit I in a manner
consistent with the requirements of the Older Workers Benefit Protection
Act.

     

    6.5.           
Any Other
Termination.  If Executive's employment by the Bank is
terminated for any reason other than as set forth in Sections 6.3 and 6.4
(including, but not limited to, termination (a) by the Bank for Cause, (b) as a
result of Executive's death, (c) as a result of Executive being disabled or (d)
by Executive at will, the Bank's obligation to Executive (or, in the case of
Executive's death, to Executive's estate) will be limited solely to the payment
of accrued and unpaid Annual Salary and Benefits through the date of such
termination. All Annual Salary and Benefits will cease at the time of such
termination, subject to the terms of any benefits or compensation plans then in
force and applicable to Executive, and, except as otherwise provided in this
Section 6.5 or
pursuant to COBRA, the Bank shall have no further liability or obligation
hereunder by reason of such termination.

     

    6.6.           Adjustments to Maximize
Payments to Executive.  Payments under this Agreement will be
made without regard to whether the deductibility of such payments (or
any

     

    other
payments) would be limited or precluded by Section 280G of the Code and without
regard to whether such payments would subject the Executive to the federal
excise tax levied on certain "excess parachute payments" under Section 4999 of
the Code-, provided, however,
that if the Total After-Tax Payments would be increased by the limitation
or elimination of any amount payable to Executive (whether under this Agreement
of otherwise), then the amount payable to Executive will be reduced to the
extent necessary to maximize the Total After-Tax Payments. The determination of
whether and to what extent payments to Executive are required to be reduced in
accordance with the preceding sentence will be made at the Bank's expense by an
independent, certified public accountant selected by the Bank and reasonably
acceptable to Executive. In the event of any underpayment or overpayment to
Executive (as determined after the application of this Section 6.6), the
amount of such underpayment or overpayment will be immediately paid by the Bank
to the Executive or refunded by the Executive to the Bank. as the case may be,
with interest at the applicable federal rate provided for in Section 7872(f)(2)
of the Code.

     

    SECTION
7.                                Miscellaneous.

     

    7.1.           Other
Agreements.  Executive represents and warrants to the Bank that
there are no restrictions, agreements or understandings whatsoever to which he
is party (or by which he is otherwise bound) that would prevent or make unlawful
his execution of this Agreement or employment by the Bank, or that would in any
way prohibit, limit or impair (or purport to prohibit, limit or impair) his
provision of services to the Bank.

     

    7.2.           Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the Bank and Executive and their respective successors, executors,
administrators, heirs and (in the case of the Bank) permitted assigns. The Bank
may, without the consent of Executive, assign this Agreement to any successor to
all or substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation. transfer of assets. or otherwise. Executive
may not make any assignment of this Agreement or any interest
therein.

     

    7.3.           Notice.  Any
notice or communication required or permitted under this Agreement will be made
in writing and (a) sent by overnight courier, (b) mailed by certified or
registered mail, return receipt requested or (c) sent via facsimile. Any notice
or communication to Executive will be sent to his most current home address on
file with the Bank.. Any notice or communication to the Bank will be sent to the
Bank's principal executive office, care of the Bank's Chairman of the Bank's
Executive Compensation Committee, with a copy to William T. Harvey, Esquire,
Tucker Arensberg, P.C., 1500 One PPG Place, Pittsburgh, PA 15222 (or via
facsimile to (412) 594-5619).

    


    7.4.           Entire Agreement;
Amendments.  This Agreement contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof, and
merges and supersedes all other prior or contemporaneous discussions, agreements
and understandings of every nature relating to the employment of Executive by
the Bank. This Agreement may not be changed or modified, except by an Agreement
in writing signed by each of the parties hereto.

    


    7.5.           Waiver.  Any
waiver by either party of any breach of any term or condition in this Agreement
shall not operate as a waiver of any other breach of such term or condition or
of any other term or condition, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision hereof or
constitute or be deemed a waiver or release of any other rights, in law or in
equity.

     

    7.6.           Governing
Law.  This Agreement shall be governed by, and enforced in
accordance with, the laws of the Commonwealth of Pennsylvania without regard to
the application of the principles of conflicts or choice of laws.

     

    7.7.           Survival of
Provisions.  The provisions of this Agreement set forth in
Sections 5, 6 and
7 (including any pertinent definitions) will survive the termination or
expiration of this Agreement.

     

    7.8.           Severability.  Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or the effectiveness or
validity of any provision in any other jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

     

    7.9.           Section
Headings.  The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

    7.10.                      Mediation and
Arbitration.  Any claim, controversy, or dispute arising
between the parties with respect to this Agreement (a "Dispute"), shall be
referred to non­binding mediation for resolution. The parties will jointly
select a neutral mediator for such mediation. If such mediation effort is not
successful in resolving the Dispute, the Dispute shall be referred for final and
binding arbitration, without appeal to court thereafter. The arbitration shall
be conducted pursuant to the terms of the Federal Arbitration Act and the
Commercial Arbitration Rules of the American Arbitration Association, except
that discovery may be had in accordance with the Federal Rules of Civil
Procedure. The venue for the arbitration shall be the office of the American
Arbitration Association closest to the Bank's headquarters (the "AAA  Office"). The
arbitration shall be conducted before a panel of three arbitrators selected as
follows: Within 15 business days after a Demand for Arbitration is filed with
the AAA Office, each party shall select an arbitrator and, within 10 business
days after the end of such 15-day period, such two arbitrators shall select a
third arbitrator. Each arbitrator must either have professional experience
relating to the business or legal aspects of the subject of the arbitration or
be a retired judge. No arbitrator shall (i) have any material interest in the
result of the arbitration or (ii) be, or shall ever have been, an affiliate,
equity holder or creditor of, or an attorney, accountant, agent or consultant
for, any party to such arbitration proceeding. The arbitrators shall meet
promptly, fix the time, date and place of the hearing and notify the parties.
The parties shall stipulate that the arbitration hearing shall last no longer
than five business days. A majority of the panel shall render a decision within
10 days of the completion of the hearing. The panel of arbitrators shall
promptly transmit an executed copy of its decision to the parties. The decision
of the arbitrators shall be final, binding and conclusive upon the parties. Each
party shall have the right to have the decision enforced by any court of
competent jurisdiction. Notwithstanding any other provision of this Section, any
Dispute in which a party seeks equitable relief may be brought in any court
having jurisdiction. Each party shall be responsible for payment of such party's
legal fees and one-half of the costs of the arbitrators. The obligations of the
parties under this Section shall be specifically enforceable and shall survive
any termination of this Agreement.

    


    7.11.                      No Mitigation of
Damages.  In the event that Executive's employment with the
Bank is terminated by the Bank without Cause or is terminated by Executive for
Good Reason or upon a Change in Control, Executive shall not be required to
mitigate his damages.

     

    7.12.                      Counterparts and
Facsimiles.  This Agreement may be executed, including
execution by facsimile signature. in one or more counterparts, each of which
shall be deemed an original, and all of which together shall be deemed to be one
and the same instrument.

     

    IN
WITNESS WHEREOF, the Bank has caused this Agreement to be executed by its duly
authorized officer, and Executive has executed this Agreement effective as of
the date first above written.

     

    


    COMMERCIAL
NATIONAL BANK OF PENNSYLVANIA

    


    By:           George
Welty                                                      

    Title:        Chairman of the
Board                                                      

    


    EXECUTIVE

    


    By:           Gregg
E  Hunter