Document:

Exhibit
10.6

    

    CONSUMERS
NATIONAL BANK

    SALARY
CONTINUATION AGREEMENT

    (2011
AMENDMENT AND RESTATEMENT)

     

    THIS
CONSUMERS NATIONAL BANK SALARY CONTINUATION AGREEMENT (2011 Amendment and
Restatement) (this “Agreement”) is made this
_____ day of February, 2011, by and between CONSUMERS NATIONAL BANK, a
nationally chartered commercial bank located in Minerva, Ohio (the “Company”), and RALPH LOBER
(the “Executive”).

     

    WHEREAS, the Company and the
Executive entered into a Consumers National Bank Salary Continuation Agreement
on August 29, 2008 (the “2008
Agreement”);

     

    WHEREAS, the Company desires
to restrict, after the Executive’s Termination of Employment with the Company,
the Executive’s availability to other employers or entities that compete with
Consumers;

     

    WHEREAS, to encourage the
Executive to undertake these and other covenants, the Company is willing to
provide salary continuation benefits to the Executive that are more expansive
than those provided under the 2008 Agreement;

     

    NOW, THEREFORE, in
consideration of these premises, the mutual promises and undertakings set forth
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Executive and the Company
hereby agree to amend and restate the 2008 Agreement as follows.

     

    Article
1

    Definitions

     

    Whenever
used in this Agreement, the following words and phrases shall have the meanings
specified:

     

    1.1           “Accrual Balance” means the liability
that should be accrued by the Company, under Generally Accepted Accounting
Principles (“GAAP”), for
the Company’s obligation to the Executive under this Agreement by applying
Accounting Standards Codification Topic 715 (Compensation – Retirement Benefits)
(formerly, Accounting Principles Board Opinion Number 12, as amended by
Statement of Financial Accounting Standards Number 106) and the Discount
Rate.  Any one of a variety of amortization methods may be used to
determine the Accrual Balance.  However, once chosen, the method must
be consistently applied.  The Accrual Balance shall be reported
annually by the Company to the Executive.

     

    1.2           “Affiliate” means the Company
and any other entity with which the Company would be considered a single
employer under Sections 414(b) and 414(c) of the Code, applying fifty percent
(50%) instead of eighty percent (80%) both in Code Sections 1563(a)(1), (2), and
(3) for purposes of determining a controlled group of corporations under Code
Section 414(b) and in Treasury Regulation Section 1.414(c)-2 for purposes of
determining trades or businesses under common control under Code Section
414(c).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    1.5           “Change of Control” means the transfer of
shares of the Company’s voting common stock such that one entity or one person,
or more than one entity or one person acting as a group, acquires (or is deemed
to acquire when applying Section 318 of the Code) more than fifty percent (50%)
of the Company’s outstanding voting common stock.

     

    1.6           “Code” means the Internal
Revenue Code of 1986, as amended, or any successor statute, rule or regulation
of similar effect.

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    1.11         “Disability” means, if the Executive
is covered by a Company sponsored disability policy, total disability as defined
in such policy without regard to any waiting period.  If the Executive
is not covered by such a policy, Disability means the Executive suffering a
sickness, accident, or injury which, in the judgment of a physician satisfactory
to the Company, prevents the Executive from performing substantially all of the
Executive’s normal duties for the Company.  As a condition to
receiving any Disability benefits, the Company may require the Executive to
submit to such physical or mental evaluations and tests as the Company’s Board
of Directors deems appropriate.

     

    1.12         “Discount Rate” means the rate
used by the plan administrator for determining the Accrual
Balance.  The initial Discount Rate is six percent
(6%).  However, in order to maintain the Discount Rate within
reasonable standards according to GAAP and/or applicable bank regulatory
guidance, the Discount Rate will adjust to reflect a rate of return on a
high-quality fixed-income debt security rounded up to the nearest quarter
percentage.  For purposes of this Agreement, the Discount Rate will be
reviewed and updated annually prior to each January 1 using the twenty-
(20-) year term Moody AA Corporate Rate for a high- quality fixed-income debt
security.

     

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

     

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

     

    1.15         “Effective Date” means August 29,
2008.

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

    1.21         “Plan Year” means a twelve-
(12-) month period commencing on January 1 and ending on December 31 of each
year.  The initial Plan Year shall commence on the Effective Date of
this Agreement.

     

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

     

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

     

    1.24         “Termination of Employment”
means termination of the Executive’s employment with the Company for
reasons other than death, excepting a leave of absence approved by
Consumers.  Whether a Termination of Employment has occurred is
determined in accordance with the requirements of Code Section 409A based on
whether the facts and circumstances indicate that the Consumers and Executive
reasonably anticipated that no further services would be performed after a
certain date or that the level of bona fide services the Executive would perform
after such date (whether as an employee or as an independent contractor) would
permanently decrease to no more than twenty percent (20%) of the average level
of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding thirty-six (36) month period (or the
full period of services to Consumers if the Executive has been providing
services to Consumers less than thirty-six (36) months).  Termination
of Employment shall be construed consistently with a “separation from service”
within the meaning of Section 409A.

     

    Article
2

    Benefits

     

    2.1           Retirement
Benefit.  Upon Termination
of Employment on or after Normal Retirement Age for reasons other than death,
the Company shall pay to the Executive the benefit described in this Section 2.1
(the “Retirement
Benefit”) in lieu of any other benefit under this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.1.1   Amount of
Retirement Benefit.  The annual
benefit under this Section 2.1 is fifty-three percent (53%) of Final Pay at the
Normal Retirement Date.

     

    2.1.2   Payment
of Retirement Benefit.  Subject
to Section 2.5, the Company shall pay the annual Retirement Benefit to the
Executive in twelve (12) equal monthly installments payable on the first day of
each month commencing with the month following the Executive’s Normal Retirement
Date for fifteen (15) years.

     

    2.2         Early
Termination Benefit.  Upon Early
Termination, the Company shall pay to the Executive the benefit described in
this Section 2.2 (the “Early
Termination Benefit”) in lieu of any other benefit under
this Agreement.

     

    2.2.1   Amount of
Early Termination Benefit.  The Early
Termination Benefit is the vested Accrual Balance determined as of the month
preceding Termination of Employment.  The Early Termination Benefit is
determined by vesting the Executive in six and two-thirds percent (6.67%) of the
Accrual Balance for the Plan Year during employment with the Company in which
the Executive attains age fifty (50), and an additional six and two-thirds
percent (6.67%) of said amount for each succeeding year during Company
employment thereafter until the Executive becomes one hundred percent (100%)
vested in the Accrual Balance.

     

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

     

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

     

    2.3.1   Amount of
Disability Benefit.  The
Disability Benefit is one hundred percent (100%) of the Accrual Balance
determined as of the end of the month preceding Termination of
Employment.

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.4.1   Amount of
Change in Control Benefit.  The
Change in Control Benefit is the greater of (i) two (2) times the Executive’s
base salary in effect immediately preceding the Termination of Employment or
(ii) one hundred percent (100%) of the Accrual Balance determined as of the end
of the month preceding Termination of Employment.

     

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

     

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

     

    2.5         Potential
Restriction on Timing of Distributions.  Notwithstanding
any provision of this Agreement to the contrary, if the Executive is considered
a Specified Employee at Termination of Employment under such procedures as
established by the Company in accordance with Section 409A, and if payments
under this Article 2 would be considered deferred compensation under Section
409A, and finally if an exemption from the six- (6-) month delay requirement of
Section 409A is not available, the benefit distributions that are made upon
Termination of Employment may not commence earlier than the first day of the
seventh month after the month in which the Executive’s Termination of Employment
occurs.  Therefore, in the event this Section 2.5 is applicable to the
Executive, any distribution which would otherwise be paid to the Executive
within the first six months following the Termination of Employment shall be
accumulated and paid to the Executive in a lump sum on the first day of the
seventh month following the month of the Termination of
Employment.  All subsequent distributions shall be paid in accordance
with the original payment schedule specified herein.

     

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

     

    2.7         Change in
Form or Timing of Distributions.  All changes in
the form or timing of distributions hereunder must comply with the following
requirements.  The changes:

     

    (a)           may
not accelerate the time or schedule of any distribution, except as provided in
Section 409A and the regulations thereunder;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           must,
for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.4, delay the
commencement of distributions for a minimum of five (5) years from the date the
first distribution was originally scheduled to be made;

     

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

     

    (d)           must
be made not less than twelve (12) months before the date that the payment is
scheduled to be paid.

     

    Article
3

    Payments
on Account of Death

     

    3.1         Death
During Active Service.  If the Executive
dies while in the active service of the Company, the Company shall pay to the
Executive’s beneficiary the benefit described in this Section
3.1.  This benefit shall be paid in lieu of the benefits under Article
2.

     

    3.1.1   Amount of
Benefit.  The
annual benefit under this Section 3.1 is the same amount that would have been
paid under Section 2.1.

     

    3.1.2   Payment
of Benefit.  The
Company shall pay the benefit to the Executive’s beneficiary in twelve (12)
equal monthly installments payable on the first day of each month commencing
with the month following the Executive’s death for fifteen (15)
years.

     

    3.2         Death
During Payment of Retirement Benefit.  If the Executive
dies after any Retirement Benefit payments have commenced under this Agreement
but before receiving all such payments, the Company shall pay the remaining
benefits to the Executive’s beneficiary at the same time and in the same amounts
they would have been paid to the Executive had the Executive
survived.

     

    3.3         Death
After Termination of Employment But Before Payment of Retirement Benefit
Commences.  If the Executive
is entitled to a Retirement Benefit under this Agreement, but dies prior to the
commencement of such benefit payments, the Company shall pay the same benefit
payments to the Executive’s beneficiary that the Executive was entitled to prior
to death, except that the benefit payments shall commence on the first day of
the month following the date of the Executive’s death.

     

    Article
4

    Beneficiaries

     

    4.1         Beneficiary
Designations.  The Executive
shall designate a beneficiary by filing a written designation with the
Company.  The Executive may revoke or modify the designation at any
time by filing a new designation.  However, designations will only be
effective if signed by the Executive and accepted by the Company during the
Executive’s lifetime.  The Executive’s beneficiary designation shall
be deemed automatically revoked if the beneficiary predeceases the Executive, or
if the Executive names a spouse as beneficiary and the marriage is subsequently
dissolved.  If the Executive dies without a valid beneficiary
designation, all payments shall be made to the Executive’s estate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.2         Facility
of Payment.  If a benefit is
payable to a minor, to a person declared incapacitated, or to a person incapable
of handling the disposition of his or her property, the Company may pay such
benefit to the guardian, legal representative, or person having the care or
custody of such minor, incapacitated person, or incapable person.  The
Company may require proof of incapacity, minority, or guardianship as it may
deem appropriate prior to distribution of the benefit.  Such
distribution shall completely discharge the Company from all liability with
respect to such benefit.

     

    Article
5

    General
Limitations

     

    5.1         Termination
for Cause.  Notwithstanding
any provision of this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement if the Company terminates the Executive’s
employment for Cause.

     

    5.2         Suicide
or Misstatement.  The Company shall
not pay any benefit under this Agreement if the Executive commits suicide within
two (2) years after the date of this Agreement, or if the Executive has made any
material misstatement of fact on any application for life insurance purchased by
the Company.

     

    Article
6

    Claims
and Review Procedures

     

    6.1         Claims
Procedure.  An Executive or
beneficiary (“claimant”) who has not received benefits under this Agreement that
he or she believes should be distributed shall make a claim for such benefits as
follows:

     

    6.1.1   Initiation
- Written Claim.  The claimant
initiates a claim by submitting to the Plan Administrator a written claim for
the benefits.  If such a claim relates to the contents of a notice
received by the claimant, the claim must be made within sixty (60) days after
such notice was received by the claimant.  All other claims must be
made within one hundred eighty (180) days of the date on which the event that
caused the claim to arise occurred.  The claim must state with
particularity the determination desired by the claimant.

     

    6.1.2   Timing of
Plan Administrator Response.  The Plan
Administrator shall respond to such claimant within ninety (90) days after
receiving the claim (forty-five (45) days for a claim based upon
Disability).  If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional ninety (90) days
(thirty (30) days in the case of Disability) by notifying the claimant in
writing, prior to the end of the initial ninety (90) (or, if applicable,
forty-five (45)) day period, that an additional period is
required.  The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to render its
decision.

     

    6.1.3   Notice of
Decision.  If the Plan
Administrator denies part or all of the claim, the Plan Administrator shall
notify the claimant in writing of such denial.  The Plan Administrator
shall write the notification in a manner calculated to be understood by the
claimant.  The notification shall set forth that the claim has been
allowed in full or that the Plan Administrator has reached a conclusion
contrary, in whole or in part, to the claimant’s requested
determination:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a)           The
specific reasons for the decision;

     

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

     

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

     

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

     

    (e)           A
statement of the claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

     

    6.2         Review
Procedure.  If the Plan
Administrator denies part or all of the claim, the claimant shall have the
opportunity for a full and fair review by the Plan Administrator of the denial
as follows:

     

    6.2.1   Initiation
- Written Request.  To initiate the
review, the claimant, within sixty (60) days (one hundred eighty (180) for a
claim based upon Disability) after receiving the Plan Administrator’s notice of
denial, must file with the Plan Administrator a written request for
review.

     

    6.2.2   Additional
Submissions - Information Access.  The claimant
shall then have the opportunity to submit written comments, documents, records,
and other information relating to the claim.  The Plan Administrator
shall also provide the claimant, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
(as defined in applicable ERISA regulations) to the claimant’s claim for
benefits.

     

    6.2.3   Considerations
on Review.  In considering
the review, the Plan Administrator shall take into account all materials and
information the claimant submits relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.  Any review of a decision involving a claim based upon
Disability shall not be conducted by an individual(s) who made the adverse
benefit determination that is the subject of the appeal, nor the subordinate of
such individual(s).  If a decision on review of a claim based upon
Disability is based upon a medical judgment, a health care professional who has
appropriate training and experience in the field of medicine involved in the
medical judgment will be consulted.

     

    6.2.4   Timing of
Plan Administrator Response.  The Plan
Administrator shall respond in writing to such claimant within sixty (60) days
(forty-five (45) days for a claim based upon Disability) after receiving the
request for review.  If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional sixty (60) days
(forty-five (45) days for a claim based upon Disability) by notifying the
claimant in writing, prior to the end of the initial sixty- (60-)
(forty-five-  (45-)) day period, that an additional period is
required.  The notice of extension must set forth the special
circumstances and the date by which the Plan Administrator expects to render its
decision.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.2.5   Notice of
Decision.  The Plan
Administrator shall notify the claimant in writing of its decision on
review.  The Plan Administrator shall write the notification in a
manner calculated to be understood by the claimant.  The notification
shall set forth:

     

    (a)           The
specific reasons for the decision;

     

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

     

    (c)           A
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits; and

     

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

    

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

     

    Article
7

    Amendments
and Termination

     

    7.1         Amendments.  This Agreement
may be amended only by a written agreement signed by the Company and the
Executive.  However, the Company may unilaterally amend this Agreement
to conform with written directives to the Company from its auditors or Company
regulators or to comply with legislative changes or tax law, including without
limitation Section 409A.

     

    7.2         Plan
Termination Generally.  The Company and
Executive may terminate this Agreement at any time.  The benefit
hereunder shall be the Accrual Balance as of the date the Agreement is
terminated.  However, if the Board determines in good faith that the
Executive is no longer a member of a select group of management or highly
compensated employees, as that phrase applies to ERISA, for reasons other than
death, Disability, or retirement, the Company may terminate this
Agreement.  Upon such termination, the Executive shall be one hundred
percent (100%) vested in the Accrual Balance.  Except as provided in
Section 7.3, the termination of this Agreement shall not cause a distribution of
benefits under this Agreement.  Rather, after such termination,
benefit distributions will be made at the earliest distribution event permitted
under Article 2 or Article 3.

     

    7.3         Plan
Terminations Under Section 409A.  Notwithstanding
anything to the contrary in Section 7.2, if this Agreement terminates in the
following circumstances:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (a)           Within
thirty (30) days before, or twelve (12) months after a change in the ownership
or effective control of the Company, or in the ownership of a substantial
portion of the assets of the Company as described in Section 409A(2)(A)(v) of
the Code; provided that all distributions are made no later than twelve (12)
months following such termination of the Agreement and further provided that all
the Company’s arrangements which are substantially similar to the Agreement are
terminated so the Executive and all participants in the similar arrangements are
required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of the termination of the arrangements in
accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(B);

     

    (b)           Within
twelve (12) months of the Company’s dissolution under Code Section 331 or with
the approval of a bankruptcy court; provided that the amounts deferred under the
Agreement are included in the Executive’s gross income in the latest of (i) the
calendar year in which the Agreement terminates; (ii) the first calendar year in
which the amount is no longer subject to a substantial risk of forfeiture; or
(iii) the first calendar year in which the distribution is administratively
practical; or

     

    (c)           Upon
the Company’s termination of this and all other non-account balance plans
(subject to the limitations in connection with a downturn in the financial
health of the Company in Section 409A); provided that all distributions are made
no earlier than twelve (12) months and no later than twenty-four (24) months
following such termination, and the Company does not adopt any new non-account
balance plans for a minimum of three (3) years following the date of such
termination;

     

    the
Company may distribute the vested Accrual Balance, determined as of the date of
the termination of the Agreement, to the Executive in a lump sum subject to the
above terms.

     

    Article
8

    Covenants
against Competition, Solicitation, or

    Disclosure
of Confidential Information

     

    8.1 Competition.  For and in
consideration of the payments described in Articles 2 and 3, the Executive shall
not, either separately, jointly, or in association with others, directly or
indirectly, as an agent, employee, owner, partner, member, stockholder, or
otherwise, compete with Consumers or establish, engage in, or become interested
in any business, trade, or occupation that competes with Consumers in the
Financial Products or Services industry in any county in any of the States of
the United States in which Consumers’ business is currently being conducted
during the Executive’s employment with Consumers, or is being conducted when the
Executive’s Termination of Employment occurs and all counties that are
contiguous to such counties.  The Executive acknowledges and agrees
that during the term of the Executive’s employment the Executive has acquired
special and confidential knowledge regarding the operations of
Consumers.  Furthermore, although not a term or condition of this
Agreement, the Company and the Executive acknowledge and agree that the
Executive’s services have been used and are being used by Consumers in
executive, managerial, and supervisory capacities throughout the areas in which
Consumers conducts business.  The Executive acknowledges and agrees
that the non-compete restrictions contained herein are reasonable and fair in
scope and necessary to protect the legitimate business interests of
Consumers.  Notwithstanding anything contained in this Section 8.1 the
contrary, nothing contained herein shall be construed to prohibit the Executive
from owning equity in other businesses that are competitive with Consumers;
provided that such ownership in any competitive business does not exceed the
value of the Executive’s equity ownership in Consumers.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    8.4 Duration;
No Impact on Existing Obligations under Law or Contract.  The
covenants in this Article 8 shall apply during the Executive’s employment with
Consumers and throughout the twenty-four (24) month period immediately following
the Executive’s Termination of Employment, whether or not Consumers has engaged
the services of the Executive pursuant to an agreement to provide consulting
services upon the Executive’s Termination of Employment with Consumers;
provided, however, that such twenty-four (24) month period shall automatically
be reduced to six (6) months upon the occurrence of a Change of
Control.  The twenty-four (24) (or, if applicable, six (6)) month
durational period referenced herein shall be tolled and shall not run during any
such time that the Executive is in breach of this Agreement and/or in violation
of any of the covenants contained herein, and once tolled hereunder shall not
begin to run again until such time as all such breach and/or violations have
ceased.  The Executive acknowledges and agrees that nothing in this
Agreement is intended to or shall have any impact on the Executive’s obligations
as an officer or employee of Consumers to refrain from competing against,
soliciting Customers, officers, or employees of, or disclosing Confidential
Information of Consumers while the Executive is serving as an officer or
employee of Consumers or thereafter, whether the Executive’s obligations arise
under applicable law or under an employment agreement or otherwise.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    Article
9

    Miscellaneous

     

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

     

    9.2 No
Guarantee of Employment.  This Agreement is
not an employment policy or contract.  It does not give the Executive
the right to remain an employee of Consumers, nor does it interfere with
Consumers’ right to discharge the Executive.  It also does not require
the Executive to remain an employee nor interfere with the Executive’s right to
terminate employment at any time.

     

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

     

    9.4 Reorganization.  The Company shall
not merge or consolidate into or with another company, or reorganize, or sell
substantially all of its assets to another company, firm, or person unless such
succeeding or continuing company, firm, or person agrees to assume and discharge
the obligations of the Company under this Agreement.  Upon the
occurrence of such event, the term “Company” as used in this
Agreement shall be deemed to refer to the successor or survivor
company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

    9.7 Unfunded
Arrangement.  The Executive and
beneficiary are general unsecured creditors of the Company for the payment of
benefits under this Agreement.  The benefits represent the mere
promise by the Company to pay such benefits.  The rights to benefits
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by
creditors.  Any insurance on the Executive’s life is a general asset
of the Company to which the Executive and beneficiary have no preferred or
secured claim.

     

    9.8 Entire
Agreement.  This Agreement
supersedes and amends and restates the 2008 Agreement, and constitutes the
entire agreement between the Company and the Executive as to the subject matter
hereof.  No rights are granted to the Executive by virtue of this
Agreement other than those specifically set forth herein.

     

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

     

    (a)           Interpreting
the provisions of the Agreement;

     

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

     

    (c)           Maintaining
a record of benefit payments; and

     

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

     

    9.10  
    Named
Fiduciary.  The Company shall
be the named fiduciary and plan administrator under this
Agreement.  It may delegate to others certain aspects of the
management and operational responsibilities including the employment of advisors
and the delegation of ministerial duties to qualified individuals.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9.11       Compliance
with Section 409A.  This Agreement shall at all times be
administered, and the provisions of this Agreement shall be interpreted
consistent with, the requirements of Section 409A.

     

     

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

     

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

     

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

     

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

     

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

     

    [Signature
page follows]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Executive and a duly authorized officer of the Company have
signed this Agreement.

     

    
      
        
          	
                  EXECUTIVE:

                	 
      	
                  COMPANY:

                
	 
      	 
      	 
      
	
                  RALPH
      LOBER

                	 
      	
                  CONSUMERS
      NATIONAL BANK

                
	 
      	 
      	 
      
	
                  By:

                	 
      	 
      	
                  By:

                	 
      
	 
      	 
      	 
      	 
      	 
      
	
                  Date:

                	 
      	 
      	
                  Title:

                	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                  Date:Exhibit
10.7

    NONCOMPETITION
AGREEMENT

     

    This
NONCOMPETITION AGREEMENT (this “Agreement”) is entered into as
of the ____ day of ____________, 2011 (the “Effective Date”), by and
between Consumers Bancorp, Inc., an Ohio corporation (the “Company”), Consumers National
Bank, an Ohio Banking Corporation (the “Bank”),
and _________________ (the “Executive”).

     

    WHEREAS, Executive has
provided guidance, leadership, and direction in the growth, management, and
development of the Company, the Bank, and the Affiliates, and has learned trade
secrets, confidential procedures, and information, and technical and sensitive
plans of Consumers.

     

    WHEREAS, the Company desires
to restrict, after the Executive’s Termination of Employment with the Company
and the Bank, the Executive’s availability to other employers or entities that
compete with Consumers;

     

    NOW, THEREFORE, in
consideration of these premises, the mutual promises and undertakings set forth
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Executive, the Company and the
Bank hereby agree as follows.

     

    1.  Administration
of this Agreement.

     

    (a)  Administrator
Duties.  This Agreement shall be administered by the
Compensation Committee of the Board or by such committee or person as the Board
shall appoint (the “Administrator”).  The
Executive may not be a member of the Administrator.  The Administrator
shall have the discretion and authority to (x) make, amend, interpret, and
enforce all appropriate rules and regulations for the administration of this
Agreement and (y) decide or resolve any and all questions that may arise,
including interpretations of this Agreement.

     

    (b)  Agents.  In
the administration of this Agreement the Administrator may employ agents and
delegate to them such administrative duties as it sees fit (including acting
through a duly appointed representative) and may from time to time consult with
counsel, who may be counsel to the Company.

     

    (c)  Binding
Effect of Decisions.  The decision or action of the
Administrator concerning any question arising out of the administration,
interpretation, and application of this Agreement and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in this Agreement.

     

    (d)  Indemnity
of Administrator.  The Company shall indemnify and hold
harmless the members of the Administrator against any and all claims, losses,
damages, expenses, or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the
Administrator or any of its members.  No individual shall be liable
while acting as Administrator for any action or determination made in good faith
regarding this Agreement, and any such individual shall be entitled to
indemnification and reimbursement in the manner provided in the Company’s
charter and bylaws/regulations and under applicable law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)  Information.  To
enable the Administrator to perform its functions, the Company and the Bank
shall supply full and timely information to the Administrator on all matters
relating to the date and circumstances of the Termination of Employment of the
Executive and such other pertinent information as the Administrator may
reasonably require.

     

    (f)   Action by
the Administrator.  In addition to acting at a meeting in
accordance with applicable laws, any action of the Administrator concerning this
Agreement may be taken by a written instrument signed by the Administrator
(including, if the Board or a Board committee serves as the Administrator, by
written consent in accordance with Ohio law and the charter and
bylaws/regulations of the Company, and any such action so taken by written
consent shall be effective as if it had been taken by a majority of the members
at a meeting duly called and held).

     

    2.  Definitions

     

    (a)   Affiliate
shall mean the Bank and any other entity that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with the Company.

     

    (b)   Board
shall mean the Board of Directors of the Company.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)  Change in
Control shall mean the transfer of shares of the Company’s voting common
stock such that one entity or one person acquires (or is deemed to acquire when
applying Section 318 of the Code) more than fifty percent (50%) of the Company’s
outstanding voting common stock.

     

    (e)  Code
shall mean the Internal Revenue Code of 1986, as amended, or any successor
statute, rule or regulation of similar effect.

     

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

     

    (g)  Consumers
shall mean the Company, the Bank, and any Affiliate.

     

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

     

    (i)   Disability
or Disabled shall mean, if the Executive is covered by a
Consumers-sponsored disability policy, total disability as defined in such
policy without regard to any waiting period.  If the Executive is not
covered by such a policy, Disability shall mean the Executive’s suffering a
sickness, accident, or injury which, in the judgment of a physician satisfactory
to Consumers, prevents the Executive from performing substantially all of the
Executive’s normal duties for Consumers.  As a condition to receiving
any Disability benefits, the Company may require the Executive to submit to such
physical or mental evaluations and tests as the Board deems
appropriate.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (k)  Good
Reason shall mean without the Executive’s written consent, (i) a material
diminution in authority, duties or responsibilities; (ii) any reduction by
Consumers in the Executive’s Base Salary; (iii) any failure of Company to obtain
the assumption of, or the agreement to perform, this Agreement by any successor
as contemplated in Section 12 hereof; (iv) Consumers materially breaches this
Agreement; or (v) Consumers requiring the Executive to be permanently assigned
to a location other than the current or future headquarters of the Company,
except for required travel on Consumers’ business to an extent substantially
consistent with the Executive’s present business travel obligations and as
described under Section 3; or, in the event the Executive consents to any
relocation, and such relocation is more than fifty (50) miles from the
Executive’s previous location,  the failure by Consumers to pay (or
reimburse the Executive) for all reasonable moving expenses incurred by the
Executive relating to a change of the Executive’s principal residence in
connection with such relocation and to indemnify the Executive against any loss
realized on the sale of the Executive’s principal residence in connection with
any such change of residence.  Good Reason shall be deemed to occur
only when the Executive provides notice to the Company and the Bank of the
Executive’s judgment that a Good Reason event has occurred within ninety (90)
days of such occurrence, and the Company and the Bank will have at least thirty
(30) days during which it may remedy the condition.

     

    (l)  Person
shall mean any individual, corporation, limited liability company, bank,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity.

     

    (m)  Retirement
shall mean Executive’s Voluntary Termination of Employment on or after
attainment of age sixty-five (65).

     

    (n)  Section
409A shall mean Section 409A of the Code and the regulations and other
guidance issued thereunder by the United States Department of Treasury and
Internal Revenue Service.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (p)  Termination
of Employment shall mean that the Executive shall have ceased to be
employed by Consumers for reasons other than death, excepting a leave of absence
approved by Consumers.  Whether a termination of employment has
occurred is determined based on whether the facts and circumstances indicate
that Consumers and the Executive reasonably anticipated that no further services
would be performed after a certain date or that the level of bona fide services
the Executive would perform after such date (whether as an employee or as an
independent contractor) would permanently decrease to no more than twenty
percent (20%) of the average level of bona fide services performed (whether as
an employee or an independent contractor) over the immediately preceding
thirty-six (36) month period (or the full period of services to Consumers if the
Executive has been providing services to Consumers less than thirty-six (36)
months).  Termination of Employment shall be construed consistently
with a “separation from service” within the meaning of Section
409A.

     

    (q)  Voluntary
Termination of Employment shall mean the Termination of Employment by the
Executive of the Executive’s employment with Consumers, which is not the result
of Good Reason.

     

    3.  Term.

     

    (a)  The term of
this Agreement shall commence upon the Effective Date and will continue for an
initial term of one (1) year.  Commencing on the Effective Date, as
each day lapses during such initial term, one (1) additional day shall be
automatically added to the term so that the term of the Agreement after each
one- (1-) day renewal shall always be one (1) year, unless terminated as
provided in Section 3(b).

     

    (b)  This Agreement
may be terminated effective on or after the one- (1-) year anniversary of the
Effective Date upon at least one (1) year’s advance written notice of
termination by either party to the other party.

     

    4.  Covenants against
Competition, Solicitation, or Disclosure of Confidential
Information.

     

    (a)  Competition.  For and in
consideration of the payments described in Section 5, the Executive shall not,
without the prior written consent of the Administrator, either separately,
jointly, or in association with others, directly or indirectly, as an agent,
employee , owner, partner, member, or stockholder or otherwise, compete with
Consumers or establish, engage in, or become interested in, any business, trade,
or occupation that competes with Consumers in the Financial Products or Services
industry through association with a financial institution that operates a
corporate headquarters within 50 (fifty) miles of a physical branch or loan
office location of Consumers existent during the Executive’s employment with
Consumers or is existent on the date of  the Executive’s Termination
of Employment.  The Executive acknowledges and agrees that during the
terms of the Executive’s employment the Executive has acquired special and
confidential knowledge regarding the operations of
Consumers.  Furthermore, although not a term or condition of this
Agreement, the Company, the Bank, and the Executive acknowledge and agree that
the Executive services have been used and are being used by Consumers in
executive, managerial and supervisory capacities throughout the areas in which
Consumers does business .  The Executive acknowledges and agrees that
the noncompete restrictions contained herein are reasonable and fair in scope
and necessary to protect the legitimate interests of
Consumers.  Notwithstanding anything contained in the Section 4(a) to
the contrary, nothing contained herein shall be construed to prohibit the
Executive from owning equity in other businesses that are competitive with
Consumers; provided that, while employed by Consumers, such ownership in any
competitive business does not exceed the value of the Executives equity
ownership in Consumers without the prior written consent of the Administrator
and does not meet or exceed  five percent (5%) of the issued and
outstanding equity of such competitive business.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)  Solicitation.  For
and in consideration of the monthly payments described in Section 5, the
Executive shall not (x) directly or indirectly solicit or attempt to solicit any
Customer of Consumers to accept or purchase Financial Products or Services of
the same nature, kind, or variety currently being provided to the Customer by
Consumers or being provided to the Customer by Consumers when the Executive’s
Termination of Employment occurs, (y) directly or indirectly influence or
attempt to influence any Customer, joint venturer, or other business partner of
Consumers to alter that person or entity’s business relationship with Consumers
in any way, and (z) accept the Financial Products or Services business of any
Customer or provide Financial Products or Services to any Customer on behalf of
anyone other than Consumers.  In addition, the Executive shall not
solicit or attempt to solicit and shall not encourage or induce in any way any
employee, joint venturer, or business partner of Consumers to terminate an
employment or contractual relationship with Consumers, and shall not hire any
person employed by Consumers during the two- (2-) year period immediately before
the Executive’s Termination of Employment or any person employed by Consumers
during the term of this covenant pursuant to this Section 4(b).

     

    (c)  Disclosure
of Confidential Information.  For and in consideration of the
monthly payments described in Section 5, the Executive shall not reveal to any
person, firm, or corporation any Confidential Information of any nature
concerning Consumers or the business of Consumers.  The covenant in
this Section 4(c) does not prohibit disclosure required by an order of a court
having jurisdiction, a subpoena from an appropriate governmental agency, or
disclosure made by the Executive in the ordinary course of business and within
the scope of the Executive’s authority.

     

    (d)  Duration;
No Impact on Existing Obligations under Law or Contract.  The
covenants in this Section 4 shall apply during the Executive’s employment with
Consumers and throughout the twelve (12) month period immediately following the
Executive’s Termination of Employment, whether or not Consumers has engaged the
services of the Executive pursuant to an agreement to provide consulting
services upon the Executive’s Termination of Employment with Consumers;
provided, however, that such twelve (12) month period shall automatically be
reduced to six (6) months upon the occurrence of a Change in
Control.  The twelve (12) (or, if applicable, six (6)) month
durational period referenced herein shall be tolled and shall not run during any
such time that the Executive is in breach of this Agreement and/or in violation
of any of the covenants contained herein, and once tolled hereunder shall not
begin to run again until such time as all such breach and/or violations have
ceased.  The Executive acknowledges and agrees that nothing in this
Agreement is intended to or shall have any impact on the Executive’s obligations
as an officer or employee of Consumers to refrain from competing against,
soliciting Customers, officers, or employees of, or disclosing Confidential
Information of Consumers while the Executive is serving as an officer or
employee of Consumers or thereafter, whether the Executive’s obligations arise
under applicable law or under an employment agreement or otherwise.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)  Remedies.  The
Executive acknowledges and agrees that remedies at law for the Executive’s
breach of the covenants contained herein are inadequate and that for violation
of the covenants contained herein, in addition to any and all legal and
equitable remedies that may be available, the covenants may be enforced by an
injunction in a suit in equity without the necessity of proving actual damage,
and that a temporary injunction may be granted immediately upon the commencement
of any such suit, and without notice.  The parties hereto intend that
the covenants contained in this Section 4 shall be deemed to be a series of
separate covenants, one for each county of each state in which Consumers does
business.  If in any judicial proceeding a court refuses to enforce
any or all of the separate covenants, the unenforceable covenants shall be
deemed eliminated from the provisions hereof for the purposes of that proceeding
to the extent necessary to permit the remaining separate covenants to be
enforced.  Furthermore, if in any judicial proceeding a court refuses
to enforce any covenant because of the covenant’s duration or geographic scope,
the covenant shall be construed to have only the maximum duration or geographic
scope permitted by law.

     

    (f)  Forfeiture
of Payments Under This Agreement.  If the Executive breaches
any of the covenants in this Section 4, the Executive’s right to any of the
payments specified in Section 5 after the date of the breach shall be forever
forfeited and the right of the Executive’s designated beneficiary or estate to
any payments under this Agreement shall likewise be forever
forfeited.  This forfeiture is in addition to and not instead of any
injunctive or other relief that may be available to the Company and the
Bank.  The Executive further acknowledges and agrees that any breach
of any of the covenants in this Section 4 shall be deemed a material breach by
the Executive of this Agreement.

     

    5.  Noncompete
Payments.

     

    (a)  Payments.  In
consideration of the Executive’s covenants as described in Section 4
hereto:

     

    (i)  Upon
the Executive’s Termination of Employment by the Company or the Bank for Cause
or upon a Voluntary Termination of Employment by the Executive, except for a
Termination for Good Reason or Retirement, the Company shall pay to the
Executive a monthly payment, in an amount equal to one hundred United States
dollars (US$100), for a period of twelve (12) consecutive months, beginning the
first day of the month following the Executive’s Termination of Employment;
or

     

    (ii)  Upon
the a Termination of Employment without Cause by the Company; or a Termination
of Employment for Good Reason by the Executive; the Company shall pay to the
Executive an amount equal to the aggregate of one (1) times the Executive’s
annual rate of base salary, excluding any bonus or incentive payment, then being
paid to the Executive.  The aggregate amount payable identified in
this Section 5(a)(ii) shall be paid in twelve (12) equal consecutive monthly
payments beginning on the first day of the month following the Executive’s
Termination of Employment.

     

    (b)  Potential
Six-Month Delay under Section 409A.  If, when Termination of
Employment occurs, the Executive is a Specified Employee and if the
noncompetition payments under this Section 5 would be considered deferred
compensation under Section 409A, and finally if an exemption from the six- (6-)
month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
available, the Executive’s noncompetition payments for the first six (6) months
following the Executive’s Termination of Employment shall be paid to the
Executive in a single lump sum on the first day of the seventh month after the
month in which the Executive’s Termination of Employment occurs.  The
remaining payments shall be paid in accordance with the original payment
schedule.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)  Death and
Disability.  Notwithstanding anything herein to the contrary,
no amounts shall be payable under this Agreement in the event of the Executive’s
Termination of Employment as a result of death or Disability except as provided
in Section 6(b).  Further, all payments under this Agreement shall
cease upon Executive’s death, except as provided in Section 6(b).

     

    6.  Payment After a Change in
Control.

     

    (a)  Termination
of Employment After a Change in Control.  If the
Executive’s Termination of Employment occurs within twelve (12) consecutive
months after a Change in Control is consummated and if the Executive would
otherwise be entitled to receive payments under Section 5(a)(i) or 5(a)(ii), the
Executive shall be entitled to receive in a single lump sum, within five (5)
days after the date of the Termination of Employment (provided that if such
five- (5-) day period begins in one calendar year and ends in another, the
Executive shall not have a right to designate the calendar year of payment), the
aggregate payment due under Section 5, without present value discount for the
time value of money; provided that Section 5(b) shall apply, if
applicable.  The obligations of the Executive under Section 4 shall
continue for a period of six (6) consecutive months following the date of
Termination of Employment.

     

    (b)  Death
Subsequent to a Change in Control.  Notwithstanding anything
herein to the contrary, in the event of the Executive’s death subsequent to a
Termination of Employment after a Change in Control and prior to payment of the
amount specified in Section 6(a), all amounts due and unpaid shall be paid to
the Executive’s designated beneficiary in a single lump sum within thirty (30)
days of the date of death; provided that if such thirty- (30-) day period begins
in one calendar year and ends in another, such beneficiary shall have no right
to designate the calendar year of payment.

     

    7.  Claims
Procedure.  The Executive, or a designated beneficiary of the
Executive, who has not received benefits under this Agreement that he or she
believes should be paid shall make a claim for such benefits by submitting to
the Administrator a written claim for the benefits.  The claim must
state with particularity the determination desired by the
claimant.  All determinations and decisions made by the Administrator
regarding claims for benefits under this Agreement will be final, conclusive,
and binding on all persons, including Consumers, the Executive, and the
Executive’s estate and designated beneficiary(ies).

     

    8.  Assignment
of Rights; Spendthrift Clause.  None of the Executive, the
Executive’s estate, or the Executive’s beneficiary shall have any right to sell,
assign, transfer, pledge, attach, encumber, or otherwise convey the right to
receive any payment hereunder.  To the extent permitted by law,
benefits payable under this Agreement shall not be subject to the claim of any
creditor of the Executive, the Executive’s estate, or the Executive’s designated
beneficiary(ies) or subject to any legal process by any creditor of the
Executive, the Executive’s estate, or the Executive’s designated
beneficiary(ies).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9.  Suicide.  If
the Executive commits suicide within two (2) years after the Effective Date, all
payments provided for herein shall be forfeited.

     

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

     

    11.  Successors;
Binding Agreement.  By an assumption agreement in form and
substance satisfactory to the Executive, the Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform this Agreement had
no succession occurred.

     

    12.  Amendment
of Agreement.  This Agreement may not be altered or amended
except by a written agreement signed by the Company, the Bank, and the
Executive.  However, if the Company determines to its reasonable
satisfaction that an alteration or amendment of this Agreement is necessary or
advisable so that the Agreement complies with the Code or any other applicable
tax law, then upon written notice to Executive, the Company and the Bank may
unilaterally amend this Agreement in such manner and to such an extent as the
Company and the Bank reasonably considers necessary or advisable to ensure
compliance with the Code or other applicable tax law.  Nothing in this
Section 12 shall be deemed to limit the Company’s and the Bank’s right to
terminate this Agreement without stated cause pursuant to Section
3(b).

     

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

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    16.  Entire
Agreement.   This Agreement constitutes the entire
agreement between Executive, the Company, and the Bank concerning the subject
matter. No rights are granted to the Executive under this Agreement other than
those specifically set forth.

     

    17.  No
Guarantee of Employment.  This Agreement is not an employment
policy or contract.  It does not give the Executive the right to
remain an employee of Consumers nor does it interfere with Consumer’s right to
discharge the Executive.  It also does not require the Executive to
remain an employee or interfere with the Executive’s right to terminate
employment at any time.

     

    18.  Tax
Withholding.  If taxes are required by the Code or other
applicable tax law to be withheld by the Company and the Bank from payments
under this Agreement, the Company shall withhold any taxes that are, it its sole
opinion, required to be withheld.

     

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

     

    20.  Compliance
with Section 409A.  To the extent applicable, the Company, the
Bank, and the Executive intend that this Agreement shall comply with Section
409A and that the Agreement shall be construed in a manner to comply with
Section 409A.

     

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

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the
Executive and a duly authorized officer of the Company and of the Bank have
executed this Noncompetition Agreement as of the date first written
above.

    

    
      
        
          
            	 
      	
                    COMPANY
      AND BANK:

                  
	 
      	
                    Consumers
      Bancorp, Inc.

                  
	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                    Title:

                  	 
      
	 
      	 
      	 
      
	 
      	
                    Date:

                  	 
      
	 
      	 
      
	 
      	
                    Consumers
      National Bank

                  
	 
      	 
      
	 
      	
                    By:

                  	 
      
	 
      	 
      	 
      
	 
      	 
      	
                    Title:

                  	 
      
	 
      	 
      	 
      
	 
      	
                    Date:

                  	 
      
	 
      	 
      
	 
      	
                    EXECUTIVE

                  
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 	
                    Date:

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