exhibit101.htm


    Exhibit
10.1

    


    AMENDED
AND RESTATED

    COMMUNITY
NATIONAL BANK SUPPLEMENTAL

    EMPLOYEE
RETIREMENT PLAN

     

    THIS
AGREEMENT is adopted as of the 9th day of December, 2008, by COMMUNITY NATIONAL
BANK (hereinafter called the "Employer").

    


    RECITALS

    A.
Effective January 1, 1999, the Employer established the Community National Bank
Supplemental Employee Retirement Plan (the “Plan”), to provide additional
retirement benefits for a select group of management and highly compensated
employees; and

    


    B. The
Employer wishes to amend the Plan to ensure continued compliance with all
applicable requirements of the Internal Revenue Code of 1986, as amended (the
“Code”), including (1) Section 409A thereof and (2) sections 162(m) and 280G
thereof, as amended by the Emergency Economic Stabilization Act of 2008
(“EESA”), if and to the extent that the Employer becomes subject to the
provisions of the EESA; and

    


    C. The
Employer intends that the Plan shall at all times continue to be administered
and interpreted in such a manner as to constitute an unfunded deferred
compensation plan for a select group of management or highly compensated
employees, so as to qualify for all available exemptions from the provisions of
ERISA.

    


    NOW,
THEREFORE, in consideration of the premises, the Employer hereby amends and
restates the Plan effective (except where otherwise specifically provided
herein) as of January 1, 2005.

    


    ARTICLE
ONE

    DEFINITIONS

    


    The
following words used in this Agreement shall have the following meanings unless
a different meaning is plainly implied by the context:

    


    1.1  "Account"
means the account maintained for a Participant under the Plan.

    


    1.2   "Average
Bonus" means the average annual bonus paid by the Employer to a Participant for
the 5 calendar years, during the 10 calendar year period immediately preceding
such Participant's termination of employment, for which such bonus was
highest.

    


    1.3   "Beneficiary"
means the person or persons designated in writing by the Participant to receive
benefits which are payable upon or after such Participant's death. If no such
person is designated, or all such persons die before all such benefits have been
paid, the Beneficiary shall be the Participant's Surviving Spouse, provided that
such spouse is not living apart from the Participant pursuant to a written
separation agreement or decree of separate maintenance at the time of the
Participant's death. If no such spouse survives, or if the Participant and his
or her spouse are so living apart at the time of his death, the Beneficiary
shall be the Participant's descendants per stirpes, including descendants by
adoption or, if no such descendant survives, the Participant's estate. Any
designated Beneficiary may renounce any part or all of the benefits otherwise
payable to him pursuant to such designation. If the Participant's beneficiary
designation specifically provides for the possibility of a renunciation by the
Beneficiary, benefits (or the portion thereof which is renounced) shall be paid
to the contingent Beneficiary named by the Participant. If the said designation
does not specifically provide for such a renunciation, then the benefits (or the
portion thereof which has been renounced) shall be distributed as though the
renouncing Beneficiary had died immediately before the Participant. A
Participant's beneficiary designation shall be given effect only if, and to the
extent that, to do so would not (i) contravene any law, regulation or court
order by which the Plan is bound or (ii) render the Plan or Employer liable to
any other person. The beneficiary designation must also, in order to be
effective, be delivered to the Plan Administrator prior to the Participant's
death.

    


    1.4   "Code"
means the Internal Revenue Code of 1986, as amended from time to time.
References to any section of the Code shall include any successor provision
thereto.

    


    1.5   "Declared
Rate" means the rate of interest, or the investment earnings, to be credited to
a Participant's Account pursuant to Section 4.2. The Declared Rate for a Plan
Year shall be determined by resolution of the Board of Directors of the
Employer, within 45 days after the last day of such Plan Year. Unless and until
such rate is so determined, the Declared Rate shall be equal to the Declared
Rate for the immediately preceding Plan Year. If and to the extent that the
Employer has set aside funds, in a separate trust, to provide for the payment of
benefits hereunder, then the Declared Rate with respect to such funds shall be
equal to the net rate of return (including realized and unrealized appreciation
or depreciation) for the year in question, as determined by the Plan
Administrator.

    


    1.6   "Disability"
means a physical and/or mental incapacity of such a nature that it prevents an
individual from engaging in or performing the principal duties of his or her
customary employment or occupation on a continuing or sustained
basis.

    


    1.6A  “EESA”
means the Emergency Economic Stabilization Act of 2008 (“EESA”), as amended from
time to time.

    


    1.7   "Eligible
Employee" means any Employee of the Employer who is selected to participate
herein in accordance with the provisions of Section 2.1 hereof.

    


    1.8   "Employee"
means any director, officer or other management or highly compensated employee
of the Employer.

    


    1.9   "Employer"
means Community National Bank.

    


    1.10   "Employment
Agreement" means a written employment agreement between the Employer and the
Participant, as amended from time to time.

    


    1.11   "ERISA"
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

    


    1.12   "Participant"
means an Eligible Employee who is participating in the Plan.

    


    1.13   "Plan"
means the target benefit pension plan set forth in this document, as amended
from time to time.

    


    1.14   "Plan
Administrator" means the Employer.

    


    1.15   "Plan
Year" means the calendar year.

    


    1.15A  “Regulations”
means any and all regulations and other guidance issued by the Internal Revenue
Service and/or the U.S. Treasury Department that describes the scope,
requirements and effective date of Section 162(m), 280G or 409A of the
Code.

    


    1.16   "Replacement
Percentage" means seventy five percent (75%) of the Participant's Average
Bonus.

    


    1.16A  “Restricted
Deferral” means any deferral of compensation (including investment earnings or
losses thereon) that is subject to the requirements of section 162(m), 280G or
409A of the Code, as interpreted by the Regulations.

    


    1.17   "Retirement"
means an Eligible Employee's retirement at age 65 or such other age as is
mutually agreed, in writing, between the Employer and the Eligible Employee. For
purposes of determining whether a Participant is entitled to a distribution of
benefits attributable to a Restricted Deferral, "Retirement" means an Eligible
Employee's termination of employment upon retirement at age 65 or such other age
as is mutually agreed, in writing, between the Employer and the Eligible
Employee.

    


    1.18   "Retirement
Date" means a Participant's 65th birthday.

    


    1.18A  “Section”
means the cited section of the Code, as amended from time, including any
successor thereto.

    


    1.18B  “Specified
Employee” means a specified employee described in Section 409A(a)(2)(B)(i) of
the Code.

    


    1.19   "Surviving
Spouse" means a person who (a) survives the Participant and (b) on the date of
the Participant's death, is legally married to the Participant in accordance
with the laws of the State in which they are domiciled.

    


    1.19A  “Unforeseeable
Emergency” shall have the meaning ascribed to such term in subsection
(a)(2)(B)(ii) of Code Section 409A.

    


    1.20   "Years
of Service" means the Participant's Years of Service as defined in the
Employer's 401(k) Plan.

    


    ARTICLE
TWO

    ELIGIBILITY
REQUIREMENTS

    


    2.1   Eligibility

    


    (a)   An
Employee is eligible to become a Participant in the Plan if (i) such Employee is
designated as a Participant by the Plan Administrator in writing and (ii) such
Employee is an executive officer of the Employer. As a condition of
participation, the Plan Administrator may require the Employee to execute a
participation agreement in (or similar to) the form annexed hereto as Exhibit
C.

    


    (b)   Once
an Employee becomes a Participant, he shall remain a Participant until
termination of employment with the Employer, and thereafter until all benefits
to which he (or his Beneficiary) is entitled under the Plan have been
paid.   

    


    ARTICLE
THREE

    PLAN
ADMINISTRATION

    


    3.1   Responsibility
for Administration of the Plan

    


    (a)   The
Plan Administrator shall be responsible for the management, operation and
administration of the Plan. The Plan Administrator may employ others to render
advice with regard to its responsibilities under this Plan. It may also allocate
its responsibilities to others and may exercise any other powers necessary for
the discharge of its duties.

    


    (b)   The
primary responsibility of the Plan Administrator is to administer the Plan for
the benefit of the Participants and their Beneficiaries, subject to the specific
terms of the Plan. The Plan Administrator shall administer the Plan in
accordance with its terms and shall have the power to determine all questions
arising in connection with the administration, interpretation and application of
the Plan. Any such determination shall be conclusive and binding upon all
persons. The Plan Administrator shall have all powers and discretion necessary
or appropriate to accomplish its duties under the Plan. At all times, and
notwithstanding any other provision of this Plan, the Plan shall be interpreted
and administered in such a manner as to comply fully with all applicable
requirements of Sections 162(m), 280G and 409A.

    


    3.2   Indemnity
by Employer

    


    To the
extent not insured against by any insurance company pursuant to the provisions
of any applicable insurance policy, the Employer shall indemnify and hold
harmless the Plan Administrator and its agents and representatives from any and
all claims, demands, suits or proceedings in connection with the Plan which may
be brought by any Employee, Participant, former Participant, Beneficiary or
legal representative, or by any other person, corporation, entity, government or
agency thereof, provided, however, that such indemnification shall not apply to
any liability arising out of any such person's acts of willful misconduct in
connection with the Plan.

    


    3.3   Plan
Administrator

    


    The Plan
Administrator shall be the "administrator" (as defined in Section 3(16)(A) of
ERISA) of the Plan, and shall be responsible for the performance of (a) all
reporting and disclosure obligations under ERISA, and (b) all other obligations
required or permitted to be performed by the Plan Administrator under ERISA. The
Plan Administrator may appoint one or more persons to discharge the duties of
the Plan Administrator.

    


    3.4   Information
from Employer

    


    The
Employer shall supply full and timely information to the Plan Administrator on
all matters as may be required properly to administer the Plan. The Plan
Administrator may rely upon the correctness of all such information supplied by
the Employer and shall have no duty or responsibility to verify such
information. The Plan Administrator shall also be entitled to rely conclusively
upon all tables, valuations, certifications, opinions and reports furnished by
any actuary, accountant, controller, counsel or other person employed or engaged
by the Employer or Plan Administrator with respect to the Plan.

    


    ARTICLE
FOUR

    CREDITS
TO THE PARTICIPANT'S ACCOUNT

    


    4.1   Employer
Credits

    


    (a)   The
Employer shall credit to a Participant's Account, for the first Plan Year for
which he or she is a Participant, a dollar amount equal to the level annual
deposit required to provide for such Participant an annuity for life, commencing
at his or her Retirement Date and payable monthly, in an amount equal to the
target benefit computed under paragraph 1 of Exhibit A hereto, and using the
actuarial assumptions specified in paragraph 2 of Exhibit A hereto. For each
succeeding Plan Year for which the Participant is entitled to a credit, the
Employer shall credit to the Participant's Account a dollar amount equal to the
level annual deposit which, if made each year from such succeeding year through
and until the last Plan Year beginning before the Participant's Retirement Date,
will (when added to the projected future value (at Retirement Date) of the
Participant's Account, as of the first day of such year, and using the actuarial
assumptions specified in paragraph 2 of Exhibit A hereto) provide the annuity
described in the preceding sentence. The credit shall be made as of the last day
of the Plan Year in question.

    


    (b)   The
following persons shall be entitled to receive an Employer credit, pursuant to
this Section 4.1:

    


    (i)      Any
Participant who is still an Eligible Employee on the last day of the Plan Year
in question.

    


    (ii)     Any
Participant who terminated employment during the Plan Year by reason of
Retirement.

    


    (iii)     Any
Participant who terminated employment during the Plan Year by reason of
Disability.

     

    4.2   Interest
Credits

    


    (a)   Until
a Participant's Account balance becomes payable in accordance with Article Five,
as of the last day of each Plan Year, an interest credit, equal to the Declared
Rate multiplied by the amount standing to the credit of the Participant's
Account as of the end of such year, but disregarding any Employer credit for
such year pursuant to Section 4.1(a), shall be made to the Participant's
Account.

    


    (b)   In
addition, if the Account balance (or any portion thereof) becomes payable on a
date other than the last day of a Plan Year, a prorated credit, based upon the
Declared Rate for such year, the amount so paid and the number of days in the
Plan Year preceding such date, shall be made to the Participant's Account. If
the Declared Rate has not yet been determined for such year, then interest shall
be credited at the rate of 7.5% per annum.

    


    ARTICLE
FIVE

    PAYMENT
OF BENEFITS

    


    5.1   Payment
of Benefits on Retirement

    


    (a)   All
amounts credited to the Participant's Account shall become payable to such
Participant, as of the date of such Participant's Retirement.

    


    (b)   The
amount credited to the Participant's Account shall be paid to the Participant
either (i) in a single sum or (ii) in substantially equal, semi-annual
installment payments over the Participant's life expectancy, as elected in
writing by the Participant within 30 days after the date on which he or she
begins to participate hereunder. If no such election is delivered to the Plan
Administrator by such date, then the benefit shall be paid in a single
sum.

    


    Except as
otherwise permitted by this Section and subsection (a)(4) of Code Section 409A,
and in any transitional relief accorded by the Internal Revenue Service under
Code Section 409A, a Participant’s election as to the time and form of payment
shall be irrevocable and any change must comply with this Section.  A
Participant may change the time and/or form of payment specified in a previous
election by executing and delivering to the Employer a new election but only if
(i) except for distribution due to the Participant’s death, Disability or an
Unforeseeable Emergency, the distribution of the Participant’s deferrals will be
further deferred by a period of at least five (5) years from the time the
deferrals would have otherwise been distributed to the Participant; and (ii) the
change in the election is made at least twelve (12) months prior to the date of
the first scheduled payment under the Plan.  Any change in an election
shall not take effect until 12 months after the date such change election is
made.

    


    Life
expectancy shall be determined (as of the date on which payments begin) from the
unisex tables contained in Treasury regulation 1.72-9, as amended from time to
time, and shall be rounded to the nearest whole number of years. In addition to
such installment payments of principal, the Employer will pay, with the second
and each subsequent installment, interest on the unpaid balance of principal, in
accordance with Section 4.2(b) hereof, for the 6 month period since the due date
of the immediately preceding installment payment.

    


    For
purposes of determining whether a Participant is entitled to a distribution of
benefits attributable to a Restricted Deferral, the Plan shall comply with all
applicable distribution requirements under Section 162(m), 280G or 409A(a)(2) of
the Code and the Regulations including, in the case of a Specified Employee, the
provisions of Section 409A(a)(2)(B)(i).

    


    5.2   Payment
of Benefits on Disability

    


    If the
Plan Administrator determines, on the basis of medical evidence provided by or
on behalf of a Participant, that such Participant has suffered a Disability
before his Retirement and that such Participant has terminated employment with
the Employer on account of such Disability, the Plan Administrator shall pay to
the disabled Participant his or her Account balance in the manner provided in
Section 5.1 above. The Plan Administrator shall have the right to require
reasonable proof of the Participant's Disability and for that purpose may
require the Participant to be examined, at its expense, by a physician selected
by the Plan Administrator.

    


    For
purposes of determining whether a Participant is entitled to a distribution of
benefits attributable to a Restricted Deferral, the Plan shall comply with all
applicable distribution requirements under Section 162(m), 280G or 409A(a)(2) of
the Code and the Regulations including, in the case of a Specified Employee, the
provisions of Section 409A(a)(2)(B)(i).

    


    5.3   Acceleration
of Payments

    


    The Plan
Administrator may make payment of all or a part of the Participant's Account
balance before any payments would otherwise be due, if, based on a change in the
Federal tax or revenue laws, a published ruling or similar announcement issued
by the Internal Revenue Service, a regulation issued by the Secretary of the
Treasury, a decision by a court of competent jurisdiction involving a
Participant or a Beneficiary, or a closing agreement made under Section
 7121 of the Code that is approved by the Internal Revenue Service and
involves a Participant, the Plan Administrator determines that a Participant has
or will receive income under the Plan for Federal income tax purposes with
respect to amounts that are or will be payable under the Plan, before they are
to be paid to the Participant. If any such accelerated payment is determined to
be necessary, all affected Participants will receive such accelerated payments
in the same form of distribution; provided, however, that in determining whether
a Participant is entitled to an acceleration of payments attributable to a
Restricted Deferral, the Plan shall comply with all applicable distribution
requirements under Section 162(m), 280G or 409A(a)(2) and (3) of the Code and
the Regulations including, in the case of a Specified Employee, the provisions
of Section 409A(a)(2)(B)(i).

    


    5.4   Termination
of Employment

    


    If a
Participant, who has an amount credited to his or her Account, terminates
employment with the Employer, the amount credited to such Participant's Account
at such termination of employment shall become payable to such Participant,
beginning on the later of (1) the date of termination of employment or (2) the
earliest date on which the Participant has both attained age 55 years and
completed 10 Years of Service, in the manner described in Section 5.1, as though
such date were the date of such Participant's Retirement.

    


    For
purposes of determining whether a Participant is entitled to a distribution of
benefits attributable to a Restricted Deferral, the Plan shall comply with all
applicable distribution requirements under Section 162(m), 280G or 409A(a)(2) of
the Code and the Regulations including, in the case of a Specified Employee, the
provisions of Section 409A(a)(2)(B)(i).

    


    5.5   Death
Benefits

    


    (a)   If
benefit payments hereunder had begun to be made to the Participant prior to his
or her death, then any remaining payments shall continue to be made to the
Participant's Beneficiary, in the same amount and at the same intervals as
payments were made to the Participant prior to his or her death. No death
benefit will be payable to the Beneficiary if the Participant had already
received, prior to his or her death, all payments.

    


    (b)   If
benefit payments had not begun to be made to the Participant prior to his or her
death, then the amount credited to the Participant's Account shall be paid out
over the life expectancy of, and to, the Beneficiary. Life expectancy shall be
determined (as of the date on which the first payment is due) from the unisex
tables contained in Treasury regulation section 1.72-9, as amended from time to
time, and shall be rounded to the nearest whole number of years. In addition to
such payments of principal, the Employer will pay, with the second and each
subsequent installment, interest on the unpaid balance of principal, in
accordance with Section 4.2(b) hereof, for the 6 month period since the due date
of the immediately preceding installment payment.

    


    For
purposes of determining whether a Participant is entitled to a distribution of
benefits attributable to a Restricted Deferral, the Plan shall comply with all
applicable distribution requirements under Section 162(m), 280G or 409A(a)(2) of
the Code and the Regulations including, in the case of a Specified Employee, the
provisions of Section 409A(a)(2)(B)(i).

    


    


    5.6   Forfeiture
of Benefits

    


    At the
discretion of the Plan Administrator, the total amount credited to a
Participant's Account shall be forfeited, and the Employer will have no further
obligation hereunder to such Participant, if

    


    
      	
               
      

            	
              (i)

            	
              The
      Participant engages in competition with the Employer in violation of any
      written Noncompetition Agreement between the Employer and the Employee;
      or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              The
      Participant performs any act of willful malfeasance or gross negligence in
      a matter of material importance to the Employer, and such acts are
      discovered by the Employer at any time prior to the death of the
      Participant.

            


    

    


    The Plan
Administrator shall have sole discretion with respect to the application of the
provisions of this Section 5.6 and such exercise of discretion shall be
conclusive and binding upon the Participant, his or her Beneficiary and all
other persons.

    


    5.7   Vesting

    In no
event shall any amount previously credited to a Participant's Account be
forfeited or revoked, except as provided in Sections 5.6, 8.3(b) and 9.7
hereof.

    


    5.8   Facility
of Payment

    


    If a
distribution is to be made to a minor, or to a person who is otherwise
incompetent, then the Plan Administrator may, in its discretion, make such
distribution (1) to the legal guardian, or if none, to a parent of a minor payee
with whom the payee maintains his residence, or (2) to the conservator or
committee or, if none, to the person having custody of an incompetent payee. Any
such distribution shall fully discharge the Plan Administrator, Employer and
Plan from further liability on account thereof.

    


    5.9   Late
Payments

    


    If any
installment of principal and/or interest (other than an amount payable under an
annuity contract) is not paid in full within five days after its due date, then
the unpaid amount (including interest) shall bear interest at a rate equal to
150% of the Bank of Boston prime rate in effect on the due date of such
installment, compounded daily, for the period from the original due date of such
installment to the date of actual payment.

    


    ARTICLE
SIX

    CLAIMS
PROCEDURE

    


    The
following claims procedure shall control the determination of benefit payments
under this Plan.

    


    6.1   Claim
for Benefits

    


    If a
Participant or the Participant's Beneficiary ("Claimant") believes that he or
she is entitled to receive benefits under this Plan, but has not received such
benefits, he or she must submit a written claim for benefits to the Plan
Administrator, on a form to be supplied by the Plan Administrator. The Plan
Administrator's decision on the claim for benefits shall determine whether the
Claimant shall be entitled to receive benefits under this Plan.

    


    6.2   Denial
of Claim

    


    A claim
for benefits under the Plan will be denied if the Plan Administrator determines
that the Claimant is not entitled to receive benefits under this Plan. Notice of
the denial shall be furnished to the Claimant within a reasonable period of time
after receipt of the claim for benefits by the Plan Administrator.

    


    6.3   Content
of Notice

    


    If a
claim for benefits is denied, then within ninety (90) days after receipt by the
Plan Administrator of such claim, the Plan Administrator will give to the
Claimant a written notice setting forth, in a manner calculated to be understood
by the Claimant, the following information:

    


    (a)   The
specific reason or reasons for the denial;

    


    (b)   Specific
reference to pertinent Plan provisions on which the denial is
based;

    


    (c)   A
description of any additional material or information necessary for the Claimant
to perfect the claim, and an explanation of why such material or information is
necessary; and

    


    (d)   An
explanation of the Plan's claims review procedure, as set forth
below.

    


    6.4   Review
Procedure

    


    The
purpose of the review procedure is to provide a method by which a Claimant may
have a reasonable opportunity to appeal a denial of a claim to the Plan
Administrator, for a full and fair review. To accomplish that purpose, the
Claimant or his duly authorized representative:

    


    (a)   May
require a review upon written application to the Plan
Administrator;

    


    (b)   May
review pertinent Plan documents; and

    


    (c)   May
submit issues and comments in writing.

    


    The
Claimant (or his or her duly authorized representative) must request a review by
filing a written application for review with the Plan Administrator within sixty
(60) days after receipt by the Claimant of written notice of the denial of his
or her claim, pursuant to Sections 6.2 and 6.3 hereof.

    


    6.5   Decision
on Review

    


    The
decision on review of a denied claim shall be made in the following
manner:

    


    (a)   The
decision on review shall be made by the Plan Administrator which may, in its
discretion, hold a hearing on the denied claim. Such decision shall be made
promptly, and not later than sixty (60) days after receipt of the request for
review, unless special circumstances (such as the need to hold a hearing)
require an extension of time for processing, in which case a decision shall be
rendered as soon as possible, but not later than one hundred and twenty (120)
days after receipt of the request for review.

    


    (b)   The
decision on review shall be in writing and shall include specific reasons for
the decision, written in a manner calculated to be understood by the Claimant,
and specific reference to the pertinent Plan provisions upon which the decision
is based.

    


    6.6   Arbitration

    


    (a)   If
a Participant, former Participant or Beneficiary of either, whose claim has been
reviewed pursuant to Section 6.5, is dissatisfied with the final decision made
pursuant thereto, he or she shall have the additional right to appeal the matter
to arbitration in accordance with (i) the provisions of the Employment Agreement
or (ii) if there is no Employment Agreement, or if the Employment Agreement does
not include an arbitration clause, in accordance with the rules of the American
Arbitration Association, provided (in either event) that he or she submits a
written request for arbitration to the Employer and to the Plan Administrator
(on a form which may be obtained from the Plan Administrator) within sixty days
after receipt of the final decision. The question for the arbitrator shall be
whether the claim denied by the final decision should be allowed, in whole or in
part.

    


    (b)   All
fees incurred in connection with the arbitration shall be borne by the appealing
party, including the arbitrator's fee and expenses, unless the arbitrator, in
his or her award, shall otherwise assess such fees and expenses. The decision of
the arbitrator shall be final and binding upon the Plan Administrator, the
Employer, the Plan, and the appealing party.

    


    (c)   The
claims review and arbitration procedures specified in this Article shall be the
sole and exclusive review and appeal procedures available to any Participant,
former Participant or Beneficiary of either, who is dissatisfied with an
eligibility determination, benefit award or other decision made pursuant to the
provisions of this Article; provided, however, that this Article shall not be
construed as eliminating the right (if any) of any such person to seek relief
under ERISA, once the administrative remedies specified herein have been
exhausted.

    


    ARTICLE
SEVEN

    INALIENABILITY
OF BENEFITS

    


    7.1   Spendthrift
Clause

    


    The right
of any Participant, former Participant or Beneficiary to any benefit or payment
under the Plan, shall not be subject to voluntary or involuntary transfer,
alienation, pledge or assignment and, to the fullest extent permitted by law,
shall not be subject to attachment, execution, garnishment, sequestration or
other legal or equitable process. If a Participant, former Participant or
Beneficiary who is receiving, or is entitled to receive in the future, benefits
under the Plan, attempts to assign, transfer, pledge or dispose of such right,
or if an attempt is made to subject said right to such process, such assignment,
transfer or disposition shall be null and void.

    


    ARTICLE
EIGHT

    AMENDMENT
AND TERMINATION

    


    8.1   Right
to Amend Plan

    


    The
Employer may amend the Plan at any time, and from time to time, without notice
to or consent of any Employee, Participant, former Participant, Beneficiary or
any other person, pursuant to written resolutions adopted by its Board of
Directors. Any such amendment shall take effect as of the date specified therein
and, to the extent permitted by law, may be made with retroactive
effect.

    


    8.2   Right
to Terminate Plan

    


    The
Employer contemplates that the Plan will be permanent and that it will continue
to be able to maintain the Plan. Nevertheless, in recognition of the fact that
future conditions and circumstances cannot now be entirely foreseen, the
Employer reserves the right to terminate the Plan, without notice to or consent
of any other person. For purposes of determining whether a Participant is
entitled to a distribution of benefits attributable to a Restricted Deferral,
following termination of the Plan, the Plan shall comply with all applicable
distribution requirements under Section 409A(a)(2) of the Code and the
Regulations including, in the case of a Specified Employee, the provisions of
Section 409A(a)(2)(B)(i).

    


    8.3   Termination
of Benefit

    


    (a)   In
the case of a Plan termination without the establishment of a comparable
replacement plan, each Participant on the termination date shall be vested in
his Account balance as of the termination date. A Participant's Account shall
continue to be credited with interest, pursuant to Section 4.2, until the date
of payment, and shall become payable on the date specified in Article Five
above. The Plan Administrator may, in its discretion, distribute all Account
balances either (i) in a method described in Section 5.1 or (ii) in a lump sum,
at any time after termination of the Plan. All participants under the Plan must
receive the same type of distribution (i.e., in a method described in Section
5.1 or in a lump sum).

    


    (b)   In
the case of a Plan termination where the Employer, within 12 months following
the date of termination, establishes a comparable replacement Plan, each
Participant shall, from and after the date of adoption of the comparable
replacement plan, cease to have any further right to benefits hereunder and
shall, instead, become entitled to benefits under the replacement plan. If no
such replacement plan is established within 12 months after the date of
termination of this Plan, then the provisions of Section 8.3(a) shall
apply.

    


    (c)   For
purposes of this Section 8.3, a comparable replacement plan is one (i) which can
reasonably be expected to provide to each Participant a benefit whose present
value, at the time of adoption, is at least equal to the value of the
Participant's Account hereunder, at such time, and (ii) whose terms are
otherwise not significantly less favorable to the Participant than the terms of
this Plan.

    


    For
purposes of determining whether a Participant is entitled to a distribution of
benefits attributable to a Restricted Deferral, the Plan shall comply with all
applicable distribution requirements under Section 162(m), 280G or 409A(a)(2) of
the Code and the Regulations including, in the case of a Specified Employee, the
provisions of Section 409A(a)(2)(B)(i).

    


    8.4   Corporate
Successors

    


    The Plan
shall not be automatically terminated by a transfer or sale of assets of the
Employer, or by the merger or consolidation of the Employer into or with any
other corporation or other entity, but the Plan shall be continued after such
sale, merger or consolidation only if and to the extent that the transferee,
purchaser or successor entity agrees to continue the Plan. If the Plan is not
continued by the transferee, purchaser or successor entity, then the Plan shall
terminate in accordance with the provisions of Sections 8.2 and
8.3.

    


    ARTICLE
NINE

    MISCELLANEOUS

    


    9.1   Governing
Law

    


    The Plan
shall be construed, regulated, interpreted and administered under and in
accordance with the laws of the State of Vermont, without regard to its laws
regarding choice of laws, to the extent not pre-empted by ERISA or any other
federal statute.

    


    9.2   Construction

    


    It is the
intention of the Employer that the Plan shall comply with the provisions of
ERISA and the Code, and the applicable provisions of any other laws, and the
provisions of this Agreement shall be construed to effectuate such intention. If
any provision of this Agreement shall be prohibited under any provision of ERISA
or the Code or other applicable federal law, as amended from time to time, or if
any provision not contained in this Agreement shall hereafter be required to be
included, the Employer shall forthwith amend this Agreement. Pending such
amendment, this Agreement shall be construed as if the provision which shall be
prohibited had been stricken from this Agreement, and as if any omitted
provision which shall be required to be included herein had been fully set forth
herein. At all times, and notwithstanding any other provision of this Plan, the
Plan shall be interpreted and administered in such a manner as to comply fully
with all applicable requirements of  Sections 162(m), 280G and
409A.

    


    If the
Employer becomes subject to any or all of the limitations on executive
compensation, deferred compensation and/or excess parachute payments pursuant to
the amendments made by the EESA to sections 162(m) and 280G of the Code, then
the Employer shall promptly take all steps required to bring itself into full
compliance with such requirements including, but not limited to, the adoption of
any required amendments to this Plan and the execution of additional documents
to evidence such compliance. At all times on and after the date on which any
such requirement first becomes applicable to the Employer, and regardless of
whether any required documents have yet been adopted, the Employer and Plan
Administrator shall comply fully in operation with all applicable requirements
imposed by the EESA and any guidance issued thereunder by any governmental
agency.

    


    9.3   Receipt
and Release

    


    Before
making any payment to a Participant, former Participant or Beneficiary, the Plan
Administrator may require the payee to execute a receipt and release for such
payment, in a form satisfactory to the Plan Administrator.

    


    9.4   Employment
Relations

    


    The
adoption and maintenance of the Plan shall not constitute a contract between the
Employer and any Employee or be consideration for, or an inducement or condition
of, the employment of any person. Nothing herein contained shall (i) give any
Employee the right to be retained in the employ of the Employer; (ii) give the
Employer the right to require any Employee to remain in its employ; (iii) affect
any Employee's right to terminate his or her employment at any time; (iv) give
any Employee any right not specifically conferred hereby; or (v) give any
Employee the right that the Plan continue in effect, either as originally
adopted or at all.

    


    9.5   Exemption
from ERISA

    


    (a)   The
Plan is intended to qualify for an exemption from ERISA as a "top hat" plan
maintained primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees.

    


    (b)   THIS
PLAN IS UNFUNDED. PAYMENTS TO ANY PARTICIPANT OR BENEFICIARY SHALL BE MADE FROM
(I) THE GENERAL ASSETS OF THE EMPLOYER OR (II) ANY SEPARATE TRUST OR FUND
ESTABLISHED BY THE EMPLOYER FOR THAT PURPOSE, WHEN SUCH PAYMENTS ARE DUE. THE
RIGHTS OF THE PARTICIPANTS AND THEIR BENEFICIARIES ARE UNSECURED. NO PARTICIPANT
OR BENEFICIARY HAS ANY SPECIFIC OR PREFERENTIAL RIGHT OR CLAIM TO ANY ASSET OF
THE EMPLOYER. NOTHING CONTAINED IN THE PLAN SHALL CONSTITUTE A GUARANTY BY THE
EMPLOYER OR ANY OTHER ENTITY OR PERSON THAT THE ASSETS OF THE EMPLOYER WILL BE
SUFFICIENT TO PAY ANY BENEFIT HEREUNDER. WITH RESPECT TO ANY ENTITLEMENT TO
BENEFITS HEREUNDER, A PARTICIPANT OR BENEFICIARY SHALL BE AN UNSECURED GENERAL
CREDITOR OF THE EMPLOYER.

    


    9.6   Disclosure

    


    Each
Participant, and each Beneficiary of a deceased Participant, shall be entitled
to receive a copy of the Plan and the Plan Administrator will make available for
inspection by any such Participant or Beneficiary a copy of any rules and
regulations adopted by the Plan Administrator in administering the
Plan.

    


    9.7   Unclaimed
Benefits

    


    Each
Participant, and each Beneficiary of a deceased Participant, shall keep the Plan
Administrator informed of his or her current address. The Plan Administrator
shall not be obligated to search for any person. If the location of a
Participant or Beneficiary is not made known to the Plan Administrator within
three (3) years after the date on which any payment of the Participant's Account
may be made, payment may be made as though the Participant or Beneficiary had
died at the end of the three year period. If, within one additional year after
such three year period has elapsed, or within three years after the actual death
of a Participant, whichever occurs first, the Plan Administrator is unable to
locate any Beneficiary of the Participant, then the Employer shall have no
further obligation to pay any benefit hereunder to such Participant or
Beneficiary, or to any other person, and such benefit shall be irrevocably
forfeited.

    


    9.8   Gender
and Number

    


    Wherever
appropriate, words used in the Plan in the singular shall include the plural,
the plural shall include the singular, and the masculine shall include the
feminine.

     

     

    IN
WITNESS WHEREOF, the Employer has caused this Agreement to be executed as of the
day and year first above written.

    


    COMMUNITY
NATIONAL BANK- Employer

    


    


    
      	
              By:_______________________________

            	
              By:_______________________________

            
	 
      	 
      
	
              Its
      Duly Authorized Officer

            	
              Witness

            


    


    
      
         


      

      
        
          

        

      

       

    

    


    EXHIBIT
A

    TARGET
BENEFIT FORMULA AND ACTUARIAL ASSUMPTIONS

    


    1.   Target
Benefit Formula

    


    (a)   The
annual target benefit for each Participant listed in Exhibit B, expressed as a
single life annuity for the life of the Participant and commencing at such
Participant's Retirement Date, shall be equal to the Replacement Percentage of
the Participant's Average Bonus.

    


    (b)   If
the Participant has less than 20 Years of Service at Retirement Date, or
terminates employment before Retirement Date and would have completed less than
20 Years of Service had he or she continued in employment until Retirement Date,
the Replacement Percentage shall be reduced pro rata for each Year of Service
less than 20.

    


    2.   Actuarial
Assumptions

    


    The
actuarial assumptions used for all purposes of the Plan shall be as
follows:

    The
assumed rate of interest shall be 7.5% per annum pre-retirement and 6% per annum
post-retirement.

    Pre-retirement
mortality shall be assumed to be zero.

    Post-retirement
mortality shall be determined by reference to the UP-1984 Mortality
Table.

     

    
      
         


      

      
        
          

        

      

       

    

    


    EXHIBIT
B

    PARTICIPANTS

    


     Stephen
P. Marsh

    


     Rosemary
Rowe

    


    Alan
Wing

    


    Richard
C. White

     

    
      
         


      

      
        
          

        

      

       

    

    


    EXHIBIT
C

    PARTICIPATION
AGREEMENT

     

    Name of
Executive:

    Effective
Date of Participation:

    


    The
undersigned Plan Administrator has designated the undersigned Executive as a
Participant in the above Plan. In consideration of his or her designation as a
Participant, the undersigned Executive hereby agrees and acknowledges as
follows:

    


    1.   That
he or she has received a copy of the Plan, as currently in effect

    


    2.   That
he or she agrees to be bound by all of the terms and conditions of the Plan and
to perform any and all acts required from him or her thereunder.

    


    3.   That
he or she acknowledges that the Plan contains an agreement to arbitrate. After
signing this Agreement, the Executive and Plan Administrator understand that
they will not be able to bring a lawsuit concerning any dispute that might arise
which is covered by the arbitration agreement unless it involves a question of
constitutional or civil rights. Instead, the parties agree to submit any such
dispute to an impartial arbitrator.

    


    4.   That
the Beneficiary of any benefit payable under the Plan upon or after the
Executive's death shall be:

    Name of
Beneficiary:_________________________________

    Relationship
to Executive:_____________________________

    


    5.
   The Executive hereby elects to receive his or her benefits
under the Plan (check one)

    ____   In
a single sum

    ____   In
installments as described in section 5.1

    


    The
Executive may not change the election of the form of payment, but may change the
Beneficiary at any time by delivering a written beneficiary designation to the
Plan Administrator.

     

    
      	
              ______________________________

            	
              _____________________________

            
	
              Executive

            	
              Plan
      Administrator