Document:

Employment Agreement - Conroy

EMPLOYMENT AGREEMENT 

        This
agreement, effective as of July 1, 2003 (the “Agreement”) is made by and between
MEDICAL TECHNOLOGY SYSTEMS, INC., a Delaware corporation (the “Company”), and
MICHAEL P. CONROY, a resident of the State of Florida (the “Executive”).

BACKGROUND 

        The
Company desires to continue to obtain the benefit of services by the Executive, and the
Executive desires to continue to render services to the Company. 

        The
Compensation Committee of the Board of Directors of the Company (the “Board”)
has determined that it is in the Company’s best interest and that of its stockholders
to recognize the substantial contribution that the Executive has made and is expected to
make in the future to the Company’s business and to continue to retain his services
in the future. 

        Accordingly,
in consideration of the mutual covenants and representations contained set forth below,
the Company and the Executive agree as follows: 

TERMS 

     	1.	 	Employment 

     	 	a. 	
          The Executive agrees to accept employment with the Company or one or more of the
          Company’s subsidiary corporations to render the services specified in this
          Agreement upon the terms and conditions and for the compensation provided in
          this Agreement. All compensation paid to the Executive by the Company or any
          subsidiary of the Company, and all benefits and perquisites received by the
          Executive from the Company or any of its subsidiaries, will be aggregated in
          determining whether the Executive has received the compensation and benefits
          provided for herein. 

     	 	b.	
          Term. The term (the “Term”) of this contract shall commence on
          July 1, 2003, and shall continue without interruption until March 31, 2006. 

     	2.	 	Duties. 

     	 	a. 	
          General Duties. The Executive shall serve as Vice President and Chief
          Financial Officer of the Company and shall continue to serve in those positions,
          with duties and responsibilities that are customary for such executives. 

     	 	b. 	
          Full Time Employment. During the term of this Agreement and excluding any
          periods of vacation, family or sick leave or holidays to which the Executive is
          entitled, the Executive shall devote his full business time and energy to the
          business, affairs and interests of the Company and its subsidiaries, and matters
          related thereto, and shall use his reasonable commercial efforts and ability to
          promote the interests of the Company and its subsidiaries. The Executive will
          diligently endeavor to promote the business, affairs and interests of the
          Company and its subsidiaries and perform services contemplated by this Agreement
          in accordance with the policies established by the Board from time to time. 

     	 	c. 	
          Certain Permissible Activities. The Executive may serve as a director or
          in any other capacity of any business enterprise, including an enterprise whose
          activities may involve or relate to the business of the Company or any of its
          subsidiaries but only if such service is expressly approved by the Company in
          writing. The Executive may (i) make and manage personal business investments of
          his choice, (ii) teach at educational institutions and deliver lectures, and
          (iii) serve in any capacity with any civic, educational or charitable
          organization, or any governmental entity or trade association, in each such case
          without seeking or obtaining approval by the Company so long as such activities
          and service do not materially interfere or conflict with the performance of his
          duties hereunder. It is agreed that to the extent that the Company shall have
          approved any service of the Executive pursuant to the first sentence of this
          Section 3(c) prior to a Change in Control Date (as defined in Section 7 below),
          or to the extent that the Executive may have engaged in activities pursuant to
          the second sentence of this Section 3(c) prior to such Change in Control Date,
          the continued conduct of such activities or the conduct of activities during the
          thirty-six months subsequent to such Change in Control Date shall be permissible
          and not in violation of any provisions of this Agreement and such Company
          approval may not be revoked or limited in any material respect during the
          thirty-six months following such Change in Control Date. 

     	3.	 	
          Compensation and Expenses.

     	 	a. 	
          Base Salary. For the services of the Executive to be rendered under this
          Agreement, the Company will pay the Executive an annual base salary (the
          “Base Salary”) as follows: 

     	 	(i) 	
         For the period July 1, 2003 through March 31, 2004, the amount of $160,855;

     	 	(ii) 	
         For the period April 1, 2004 through March 31, 2005, the amount of $167,289; and

     	 	(iii) 	
          For the period April 1, 2005 through March 31, 2006, the amount of $173,981.

        Provided, however, that such Base
Salary shall be pro rated accordingly over the time period that the Executive performs
services under this Agreement in any calendar year during which this Agreement shall
terminate before March 31st of such year. 

        The
Company shall pay the Executive his Base Salary in equal installments no less than
semi-monthly. 

               	 	b. 	
                    Base Salary Adjustment. The Base Salary may not be decreased hereunder
                    during the term of this Agreement, but may be increased upon review by and
                    within the sole discretion of the Board. 

               	 	c. 	
                    Bonus. Executive shall be entitled to receive bonus compensation in
                    accordance with Exhibits “A”, “B”, “C” and
                    “D”. Exhibit A may be amended annually in accordance with the
                    Company’s bonus program. 

     2.

               	 	d. 	
                    Expenses. In addition to any compensation received pursuant to Section 3,
                    the Company will reimburse or advance funds to the Executive for all reasonable,
                    ordinary and necessary travel, educational, seminar, trade shows, entertainment,
                    and miscellaneous expenses incurred in connection with the performance of his
                    duties under this Agreement, provided that the Executive properly accounts for
                    such expenses to the Company in accordance with the Company’s practices.
                    Such reimbursement shall include travel, lodging and food costs for
                    Executive’s immediate family to the extent they accompany Executive on
                    business related travel. 

               	 	e. 	
                    Subsidiary and Affiliate Payments. In recognition of the fact that in the
                    course of the performance of his duties hereunder the Executive may provide
                    substantial benefits to the Company’s subsidiaries or affiliated companies,
                    the Executive and the Company may at any time and from time to time agree that
                    all or any portion of the compensation due the Executive under this Agreement
                    may be paid directly to the Executive by one or more of the Company’s
                    subsidiaries or affiliated companies. 

     	4.	 	Benefits 

               	 	a. 	
                      Vacation. For each year during the Term during which the Executive is employed,
                the Executive shall be entitled to 20 vacation days (which shall accrue and vest, except set
                forth below on each April 1st) without loss of compensation or other benefits to
                which he is entitled under this Agreement. 

               	 	  	
                     If the Executive is unable to take all of his vacation days during a year for which he
                becomes vested, then the Executive, at his sole option, may elect (a) to carry over any
                unused vacation to the next calendar year to be used solely in that next year or (b) to
                receive an appropriate pro rata portion of his Base Salary corresponding to the year in
                which the vacation days vested.

               	 	  	
                    The Executive shall take his vacation at such times as the Executive may select and the
                    affairs of the Company or any of its subsidiaries or affiliates may permit.

     	 	b. 	
          Employee Benefit Programs. In addition to the compensation to which the
          Executive is entitled pursuant to the provisions of Section 3 of this Agreement,
          during the Term, the Executive will be entitled to participate in any stock
          option plan, stock purchase plan, pension or retirement plan, insurance or other
          employee benefit plan that is maintained at that time by the Company for its
          employees, including programs of life, disability, basic medical and dental,
          supplemental medical and dental insurance. 

     	 	 	
         Notwithstanding any provision of this Agreement to the contrary, the Company shall not be obligated to
         provide the Executive with any of the benefits contained in this Section 4 (b) if the
         Executive, for any reason, is or becomes uninsurable with respect to coverage relating to
         any such benefit(s).

     	 	c. 	
          Automobile Allowance. During the term of this Agreement, the Company
          shall pay Executive an additional $750.00 per month as an automobile allowance
          to be applied to any automobile expense incurred by Executive. 

     	 	d. 	
          Financial and Tax Planning. During the term of this Agreement, and as
          additional consideration hereunder, Executive shall be reimbursed for personal
          financial planning, tax preparation services and accounting and legal fees
          related to such financial and tax planning, up to a maximum of $2,000 per year. 

     3.

     	5.	 	Termination 

     	 	a. 	
          Termination for Cause. The Company may terminate the Executive’s
          employment pursuant to this Agreement at any time for cause upon written notice.
          Such termination will become effective upon the giving of such notice. Upon any
          such termination for cause, the Executive shall have no right to compensation,
          bonus or reimbursement under Section 3 or to participate in any employee benefit
          programs or other benefits to which he may be entitled under Section 4 for any
          period subsequent to the effective date of termination. For purposes of this
          Agreement, the term “cause” shall mean: 

     	 	(i) 	
          the Executive’s conviction of a felony and all appeals with respect thereto
               have been extinguished or abandoned by the Executive; 

     	 	(ii) 	
          the Executive’s conviction of misappropriating assets or otherwise
               defrauding the Company or any of its subsidiaries or affiliates;  

     	 	(iii) 	
          a material breach by the Executive of any provision of this Agreement, after
               thirty (30) days written notice, and thirty days to materially cure such breach. 

     	 	b. 	
          Death or Disability. This Agreement and the Company’s obligations
          under this Agreement will terminate upon the death or disability of the
          Executive. For purposes of this Section 5(b), “disability” shall mean
          that for a period of six months in any twelve-month period the Executive is
          incapable of substantially fulfilling the duties set forth in this Agreement
          because of physical, mental or emotional incapacity resulting from injury,
          sickness or disease as determined by an independent physician mutually
          acceptable to the Company and the Executive. Upon any such termination upon
          death or disability, the Company will pay the Executive or his legal
          representative, as the case may be, his Base Salary (which may include any
          accrued, but unused vacation time) at such time pursuant to Section 3(a) through
          the date of such termination of employment (or, if terminated as a result of a
          disability, until the date upon which the disability policy maintained pursuant
          to Section 4 (b) (ii) begins payment of benefits) plus any other compensation
          that may be due and unpaid. In the event of death or disability of the
          Executive, any obligations that the Executive may owe the Company for repayment
          of loans or other amounts shall be forgiven. 

     	 	c. 	
          Voluntary Termination. Prior to the termination of this Agreement, the
          Executive may, on sixty days prior written notice to the Company, at any time
          terminate his employment. Upon any such termination, the Company shall pay the
          Executive his Base Salary at such time pursuant to Section 3(a) through the date
          of such termination of employment (which shall include any vested and accrued,
          but unused vacation time). 

     	 	d. 	
          Additional Severance Upon Triggering Event. Upon any event, which (a)
          causes a change of control as defined in Section 7.a.; and (b) the Executive is
          terminated without cause (i.e., any reason other than death, disability or
          termination for cause), ([a] and [b] referred to as a Triggering Event), the
          following shall occur immediately and without further notice or action by
          Executive: 

          	 	(i) 	
               All of the Company’s obligations under this Agreement to Executive shall
               accelerate and become immediately performable and due and payable except for
               salary for the balance of the term of this agreement, which shall become due and
               payable only to the extent set forth in Section (d)(ii). 

     4.

          	 	(ii) 	
               In addition to any and all other compensation to Executive under this Agreement,
               the Company shall pay to Executive an amount equal to 2.99 times the
               Executive’s base salary for the fiscal year of the Company following the
               fiscal year in which the triggering event occurs; 

          	 	(iii) 	
               At his option, notwithstanding the payment of the above items, Executive may
               terminate his obligations to the Company under this Agreement, including any
               loans payable to the Company; and 

               	 	(iv) 	
                    The Company shall immediately assign to Executive any life insurance policy
                    insuring Executive’s life. The Company shall, prior to the assignment,
                    satisfy the balance of all premiums owed on the assigned policies and shall
                    insure that the designated beneficiary is not changed. 

               	 	(v) 	
                    If any of the above benefits are deemed to violate Internal Revenue Code 280G
                    and related regulations thereunder, as amended, then any excess benefits will be
                    paid during the next tax year if permitted by applicable law. 

     	6.	 	Restrictive Covenants 

               	 	a. 	
                    Competition with the Companies. The Executive covenants and agrees that,
                    during the Term of this Agreement, the Executive will not, without the prior
                    written consent of Company, directly or indirectly (whether as a sole
                    proprietor, partner, stockholder, director, officer, employee or in any other
                    capacity as principal or agent) , compete with the Company. Notwithstanding this
                    restriction, Executive shall be entitled to invest in stock of other competing
                    public companies so long as his ownership is less than 5% of such company’s
                    outstanding shares. 

               	 	b. 	
                    Disclosure of Confidential Information. The Executive acknowledges that
                    during his employment he will gain and have access to confidential information
                    regarding the Company and its subsidiaries and affiliates. The Executive
                    acknowledges that such confidential information as acquired and used by the
                    Company or any of its subsidiaries or affiliates constitutes a special, valuable
                    and unique asset in which the Company or any of its subsidiaries or affiliates,
                    as the case may be, hold a legitimate business interest. All records, files,
                    materials and confidential informant (the “Trade Secrets”) obtained by
                    the Executive in the course of his employment with the Company shall be hereby
                    deemed confidential and proprietary and shall remain the exclusive property of
                    the Company or any of its subsidiaries or affiliates, as the case may be. The
                    Executive will not, except in connection with and as required by his performance
                    of his duties under this Agreement, for any reason use for his own benefit or
                    the benefit of any person or entity with which he may be associated, disclose
                    any Trade Secrets to any person, firm, corporation, association or other entity
                    for any reason or purpose whatsoever without the prior written consent of the
                    Board of Directors of the Companies, unless such information previously shall
                    have become public knowledge through no action by or omission of the Executive. 

               	 	c. 	
                    Subversion, Disruption or Interference. At no time during the term hereof
                    shall Executive, directly or indirectly, interfere, induce, influence, combine
                    or conspire with, or attempt to induce, influence, combine or conspire with, any
                    of the employees or sponsors of, or consultants to, the Company to terminate
                    their relationship with or compete or ally against the Company or any of its
                    subsidiaries or affiliates of the Company in the business in which the Company
                    or any one of its subsidiaries or affiliates is presently engaged. 

     5.

               	 	d. 	
                    Enforcement of Restrictions. The parties hereby agree that any violation
                    by Executive of the covenants contained in this Section 6 will cause irreparable
                    damage to the Company or any of its subsidiaries and affiliates and may, as a
                    matter of course, be restrained by process issued out of a court of competent
                    jurisdiction, in addition to any other remedies provided by law. 

     	7.	 	Change of Control 

               	 	a. 	
                    For the purposes of this Agreement, a “Change of Control” shall be
                    deemed to have taken place if any person, other than the JADE Partnership or the
                    Siegel Family Revocable Trust, including a “group” as defined in
                    Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the
                    owner or beneficial owner of the Company’s securities, after the date of
                    this Agreement, having more than 50% of the combined voting power of the then
                    outstanding securities of the Company that may be cast for the election of
                    directors of the Company (other than as a result of an issuance of securities
                    specifically approved by the Company and specifically excluded from the
                    provisions of this Section 7 by subsequent written agreement of the Executive);
                    provided, however, that a Change of Control shall not be deemed to have occurred
                    if the person who becomes the owner of more than 50% of the combined voting
                    power of the Company is Todd E. Siegel or an entity (or entities) controlled by
                    Todd E. Siegel. 

               	 	b. 	
                    The Company and Executive agree that, if Executive is in the employ of the
                    Company on the date on which a Change of Control occurs (the “Change of
                    Control Date”) , the Company will continue to employ the Executive and the
                    Executive will remain in the employ of the Company for the period commencing on
                    the Change of Control Date and ending on the expiration of the Term, to exercise
                    such authority and perform such executive duties as are commensurate with the
                    authority being exercised and duties being performed by the Executive
                    immediately prior to the Change of Control Date. If after a Change of Control,
                    the Executive is requested, and, in his sole and absolute discretion, consents
                    to change his principal business location outside of Pinellas or Hillsborough
                    Counties, Florida, the Company will reimburse the Executive for his relocation
                    expenses, including without limitation, moving expenses, temporary living and
                    travel expenses for a time while arranging to move his residence to the changed
                    location, closing costs, if any, associated with the sale of his existing
                    residence and the purchase of a replacement residence at the changed location,
                    plus an additional amount representing a gross-up of any state or federal taxes
                    payable by Executive as a result of any such reimbursements. If the Executive
                    shall not consent to change his business location, the Executive may continue to
                    provide the services required of him under this Agreement in Pinellas County,
                    Florida and the Company shall continue to maintain an office for the Executive
                    at that location similar to the Company’s office prior to the Change of
                    Control Date. 

               	 	c. 	
                    During the remaining Term after the Change of Control Date, the Company will (i)
                    continue to honor the terms of this Agreement, including as to Base Salary and
                    other compensation set forth in Section 3, and (ii) continue employee benefits
                    as set forth in Section 4 at levels in effect on the Change of Control Date (but
                    subject to such reductions as may be required to maintain such plans in
                    compliance with applicable federal law regulating employee benefits). 

     6.

               	 	d. 	
                    If during the remaining Term on or after the Change of Control Date (i) the
                    Executive’s employment is terminated by the Company other than for cause
                    (as defined in Section 5), or (ii) there shall have occurred a material
                    reduction in Executive’s compensation or employment related benefits, or a
                    material change in Executive’s status, working conditions or management
                    responsibilities, or a material change in the business objectives or policies of
                    the Company and the Executive voluntarily terminates employment within sixty
                    days of any such occurrence, or the last in a series of occurrences, then the
                    Executive shall be entitled to receive, subject to the provisions of
                    subparagraphs (e) and (f) below, a lump-sum payment equal to 299% of
                    Executive’s current Base Salary in addition to any other compensation that
                    may be due and owing to the Executive under Section 3 and Section 4. 

               	 	e. 	
                    The amounts payable to the Executive under any other compensation arrangement
                    maintained by the Company which became payable, after payment of the lump-sum
                    provided for in paragraph (d), upon or as a result of the exercise by Executive
                    of rights which are contingent on a Change of Control (and would be considered a
                    “parachute payment” under Internal Revenue Code 280G and regulations
                    thereunder), shall be reduced to the extent necessary so that such amounts, when
                    added to such lump-sum, do not exceed 299% of the Executive’s Base Salary
                    (as computed in accordance with provisions of the Internal Revenue Code of 1986,
                    as amended and any regulations promulgated thereunder) for determining whether
                    the Executive has received an excess parachute payment. Any such excess amount
                    shall be deferred and paid in the next tax year. 

               	 	f. 	
                    In the event of a proposed Change in Control, the Company will allow the
                    Executive to participate in all meetings and related negotiations related. 

     	8.	 	 Assignability. The rights and
                    obligations of the Company under this
                    Agreement shall inure to the benefit of and be binding upon the successors and
                    assigns of the Company, provided that such successor or assign shall acquire all
                    or substantially all of the assets and business of the Company. The
                    Executive’s rights and obligations under this Agreement may not be assigned
                    or alienated and any attempt to do so by the Executive will be void and
                    constitute a material breach hereunder. 

     	9.	 	 Indemnification.
                    The Company and the Executive acknowledge that the
                    Executive’s service as an officer of the Company exposes the Executive to
                    risks of personal liability arising from, and pertaining to, the
                    Executive’s participation in the management of the Company. The Company
                    shall defend, indemnify and hold harmless the Executive from any actual cost,
                    loss, damages, attorneys fees, or liability suffered or incurred by the
                    Executive arising out of, or connected to, the Executive’s service as an
                    officer of the Company or any of its current, former, or future subsidiaries to
                    the fullest extent allowed by law. The Company will not have any obligation to
                    the Executive under this section for any loss suffered if the Executive
                    voluntarily pays, settles, compromises, confesses judgment for, or admits
                    liability with respect to without the approval of the Company. Within thirty
                    days after the Executive receives notice of any claim or action which may give
                    rise to the application of this section, the Executive shall notify the Company
                    in writing of the claim or action. The Executive’s failure to timely notify
                    the Company of the claim or action will relieve the Company from any obligation
                    to the Executive under this section.  

     6.

     	10.	 	
                    Severability. If any provision of this Agreement otherwise is deemed to
                    be invalid or unenforceable or is prohibited by the laws of the state or
                    jurisdiction where it is to be performed, this Agreement shall be considered
                    divisible as to such provision and such provision shall be inoperative in such
                    state or jurisdiction and shall not be part of the consideration moving from
                    either of the parties to the other. The remaining provisions of this Agreement
                    shall be valid and binding and of like effect as though such provision were not
                    included. 

     	11.	 	
                    Prior Employment Agreements. The Executive represents that he has not
                    executed any agreement with any previous Company which may impose restrictions
                    on his employment with the Company. 

     	12.	 	
                    Notice. Notices given pursuant to the provisions of this Agreement shall
                    be sent by certified mail, postage prepaid, or by overnight courier, or
                    telecopier to the following addresses: 

     		 	
                     If to the Company: 

     		 	
                    Medical Technology Systems, Inc.
12920-M Automobile Blvd.
Clearwater, FL  34622

     		 	
                     If to the Executive: 

     		 	
                   Michael P. Conroy
20 Stanton Circle
Oldsmar, FL  34677

        Either
party may, from time to time, designate any other address to which any such notice to it
or him shall be sent. Any such notice shall be deemed to have been delivered upon the
earlier of actual receipt or four days after deposit in the mail, if by certified mail. 

     	13.	 	
                   Miscellaneous. 

     	 	a. 	
          Governing Law. This Agreement shall be governed by and construed and
          enforced in accordance with the laws Florida without giving effect to the
          conflict of laws rules thereof. 

     	 	b. 	
          Waiver/Amendment. The waiver by any party to this Agreement of a breach
          of any provision hereof by any other party shall not be construed as a waiver of
          any subsequent breach by any party. No provision of this Agreement may be
          terminated, amended, supplemented, waived or modified other than by an
          instrument in writing signed by the party against whom the enforcement of the
          termination, amendment, supplement, waiver or modification is sought. 

     	 	c. 	
          Attorney’s Fees. In the event any action is commenced to enforce any
          provision of this agreement, the prevailing party shall be entitled to
          reasonable attorneys fees, costs and expenses. 

     8.

     	 	d. 	
          Entire Agreement. This Agreement, and the attached Exhibits A and B,
          comprise the entire agreement between the Executive and the Company. This
          Agreement supersedes all prior agreements and understandings between the parties
          with respect to the subject matter hereof and may not be modified or terminated
          orally. No modification, termination, or attempted waiver shall be valid unless
          it is in writing and is executed by each of the parties. 

     	 	e. 	
          Counterparts. This Agreement may be executed in counterparts, all of
          which shall constitute one and the same instrument. 

        IN
WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the day
and year first above written. 

						
	 	WITNESSES:	 	 	EXECUTIVE	 
	 	 	 	 	 	 
	 	
	
	 	
	 
	 	 	 	 	MICHAEL P. CONROY	 
	 	Print Name:	
	 	 	 
	 	 	 	 	 	 
	 	
	
	 	 	 
	 	 	 	 	 	 
	 	Print Name:	
	 	 	 

	 	 	 	 	COMPANY	 
	 	 	 	 	 	 	 
	 	 	 	 	MEDICAL TECHNOLOGY SYSTEMS, INC.,	 
	 	
	
	 	a Delaware corporation	 
	 	 	 	 	 	 	 
	 	Print Name:	
	 	By:	
	 
	 	 	 	 	 	 	 
	 	
	
	 	Print Name:	
	 
	 	 	 	 	 	 	 
	 	Print Name:	
	 	As:	
	 

     9.

EXHIBIT A 

Annual Bonus 

The executive shall receive an annual
bonus determined as follows: 

     	1.	
          Annual base salary times 50% (“Bonus Base”). 

     	2.	
          Bonus Base times  * % of Bonus Base as provide below. 

     	 	•	
          The bonus compensation schedule shall be adjusted for each fiscal year no later
          than the first day of the new fiscal year. 

     	 	•	
          The annual bonus shall be payable no later than June 30th following
          the fiscal year ending March 31, 2003. The Company may at it option, elect to
          make payments prior to June 30 of any year. 

*As provided on attached schedule. 

EXHIBIT A 

Annual Bonus 

 FISCAL YEAR 2004 - BONUS COMPENSATION SCHEUDLE

	 	EBITDA $	 	% OF EBITDA	 	% OF BONUS BASE
	 	
	 	
		

				
	 	 	$7,381,352	 	120% and above	 	140%	 
	 	 	$7,073,796	 	115% - 119.9%	 	130%	 
	 	 	$6,766,240	 	110% - 114.9%	 	120%	 
	 	 	$6,458,683	 	105% - 109.9%	 	110%	 
	Budget EBITDA	 	$6,151,127	 	100% - 104.9%	 	100%	*
	 	 	$6,089,616	 	99% - 99.9%	 	98%	 
	 	 	$6,028,104	 	98%	 	95%	 
	 	 	$5,966,593	 	97%	 	80%	 
	 	 	$5,905,082	 	96%	 	70%	 
	 	 	$5,843,571	 	95%	 	60%	 
	 	 	$5,782,059	 	94%	 	50%	 
	 	 	$5,720,548	 	93%	 	40%	 
	 	 	$5,659,037	 	92%	 	30%	 
	 	 	$5,600,000	 	91%	 	25%	 

EXHIBIT B 

Long-Term Incentive
Bonus 

     	1.	
          Each executive will earn a long-term incentive bonus based upon the average
          return on capital achieved by the company over a three-year time period. 

     	2.	
          Return on capital is the percentage derived by dividing the net income available
          to common shareholders for each fiscal year by the total long-term capital
          invested in the company at the end of each fiscal year. 

     	3.	
          Long-term capital is the sum of (1) stockholders equity; and (2) total long-term
          debt, minus the amount borrowed on the revolving line of credit. 

     	4.	
          The amount of the long-term incentive bonus is determined based upon the
          following formula. 

     	 	
          (Annual Salary x 30%) x Percentage of Bonus Earned 

     	5.	
          Percentage of Bonus Earned is determined based upon the average return on
          capital achieved as follows: 

			
	Average ROC Achieved 	 	Percentage of Bonue Earned 
	
	 	

	16.0%-20.0%     
                        	 	25.0%
	21.0%	 	50.0%
	21.6%	 	55.0%
	22.2%	 	60.0%
	22.8%	 	65.0%
	23.4%	 	70.0%
	24.0%	 	75.0%
	24.6%	 	80.0%
	25.2%	 	85.0%
	25.8%	 	90.0%
	26.4%	 	95.0%
	
	 	

	27.0%	 	100.0% 
	 	 	 
	If 3-Year Average ROC Exceeds Target ROC  
	 	 	 
	27.6%	 	105.0%
	28.2%	  	110.0%
	28.8%	 	115.0%
	29.4%	 	120.0%
	30.0%	 	125.0%
	30.6%	 	130.0%
	31.2%	 	135.0%
	31.8%	 	140.0%
	32.4%	 	145.0%
	33.0%	 	150.0%

     	6.	
          The average ROC is determined at the end of each fiscal year and paid to the
          executive as follows: 

          	 	a. 	
               In the year ending March 31, 2004, one-third (1/3) of the LTIB earned shall be
               paid no later than June 30, 2004; one-third (1/3) no later than June 30, 2005;
               and one-third (1/3) no later than June 30, 2006. 

          	 	b. 	
               In the fiscal year ending March 31, 2005, one-half (1/2) on June 30, 2005 and
               one-half on June 30, 2006. 

          	 	c. 	
               In the fiscal year ending March 31, 2006, on hundred per cent (100%) on June 30,
               2006. 

EXHIBIT C 

One-Time Bonus 

        The
executive shall receive a one-time payment of sixty-five thousand dollars ($65,000) upon
the signing of the Agreement. 

EXHIBIT D 

Common Stock Bonus 

        The
executive shall receive fifty thousand (50,000) shares of unregistered common stock of the
Company on June 30, 2006 provided the executive has remained an employee of the Company up
to and including June 30, 2006.EMPLOYMENT AGREEMENT

EXHIBIT
10.1      Employment Agreement between
Commercial National Bank of Pennsylvania and Gregg E. Hunter, dated
July 1, 2003

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

Recitals

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

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

Definitions.

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

“Benefits” means the benefits described in
Sections 3.3 and 3.4.

“Board” means the Board of Directors of the
Bank.

“Cause” means the occurrence of any of the
following:

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

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

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

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

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

“Change of Control” means any of the
following events:

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

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

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

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

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

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

“COBRA” means 29 U.S.C. §§
1161-1169.

“Code” means the Internal Revenue Code of
1986, as amended.

“Good Reason” means that any of the
following has occurred with respect to the Executive:

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

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

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

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

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

“Holding Company” means Commercial National
Financial Corporation, a Pennsylvania corporation.

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

“Proprietary Information” means
confidential, proprietary, business and technical information or
trade secrets of the Bank or of any Affiliate of the Bank. 
Such Proprietary Information shall include, but shall not be
limited to, the following items and information relating to the
following items: (a) information acquired from, or about, third
parties such as the Bank’s customers, including, but not
limited to, account, general banking and financial information
relating thereto, (b) business research, studies, procedures and
costs, (c) financial data, (d) marketing data, methods, plans and
efforts, (e) the identities of the Bank’s actual and
prospective customers, (f) the terms of contracts and agreements
with customers, contractors and suppliers, (g) the needs and
requirements of, and the Bank’s course of dealing with,
actual or prospective customers, contractors and suppliers, (h)
personnel information, (i) customer and vendor credit information,
and (j) any Intellectual Property of the Bank (whether developed by
Executive or others).  Failure by the Bank to mark any of the
Proprietary Information as confidential or proprietary shall not
affect its status as Proprietary Information under the terms of
this Agreement. 

“Restrictive Covenants” means the provisions
contained in Section 5.1 of this Agreement.

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

Employment, Term and Duties. 

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

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

Compensation and Benefits.

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

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

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

Vacation.  Executive will be entitled to five weeks
of vacation per calendar year.  Executive shall not be
entitled to receive any payment for unused vacation or to carry
over unused vacation from year to year.  Executive shall also
be entitled to six incidental days per year which, if not used by
Executive, shall be paid for by the Bank.

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

Non-Compete; Confidentiality; Non-Solicitation.

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

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

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

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

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

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

Confidentiality. 

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

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

Property of the Bank. 

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

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

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

Rights and Remedies Upon Breach.

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

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

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

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

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

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

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

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

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

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

For Cause.  The Bank may terminate the
Executive’s employment for Cause upon 15 days prior written
notice to Executive.

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

Termination by Executive.

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

Good Reason.  Executive may terminate this
Agreement for Good Reason upon 15 days’ prior written notice
to the Bank.

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

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

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

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

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

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

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

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

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

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

a maximum of six months outplacement assistance with a provider
selected by the Bank and at the Bank’s expense.

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

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

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

Miscellaneous.

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

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

Notice.  Any notice or communication required or
permitted under this Agreement will be made in writing and (a) sent
by overnight courier, (b) mailed by certified or registered mail,
return receipt requested or (c) sent via facsimile.  Any
notice or communication to Executive will be sent to his most
current home address on file with the Bank.  Any notice or
communication to the Bank will be sent to the Bank’s
principal executive office, care of the Bank’s Chairman of
the Bank’s Executive Compensation Committee, with a copy to
David J. Lowe, Esq., Pepper Hamilton LLP, One Mellon Center, 500
Grant Street, Pittsburgh, Pennsylvania 15219 (or via facsimile to
(412) 281-0717).

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

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

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

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

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

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

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

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

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

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

		
COMMERCIAL NATIONAL BANK
OF PENNSYLVANIA

By:                                                                  

Title:                                                                

		
EXECUTIVE

By:                                                                  

       Gregg E. Hunter

Exhibit
I

Release and
Non-Disparagement Agreement

THIS MUTUAL RELEASE AND
NON-DISPARAGEMENT AGREEMENT (the “Release”) is
made as of the ___ day of _______, _____ by and between GREGG E.
HUNTER (“Executive”) and COMMERCIAL NATIONAL
BANK OF PENNSYLVANIA (the “Bank”).

WHEREAS, Executive’s
employment by the Bank will terminate; and

WHEREAS, in connection
with that termination and pursuant to Section 6.3 or 6.4 of
the Employment Agreement by and between the Bank and Executive
dated July 1, 2003 (the “Employment Agreement”),
the Bank has agreed to pay Executive certain amounts, subject to
the execution of this Agreement.

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

Resignation.  Executive hereby resigns as the
Bank’s Chief Financial Officer, as an employee of the Bank,
and as an employee, officer, director or board committee member of
the Bank and any Affiliate of the Bank, effective as of the date of
this Release.

Acknowledgements.  Executive acknowledges that: (i)
the payments described in Sections 6.3 and 6.4 of the
Employment Agreement constitute full settlement of all his rights
under the Employment Agreement, (ii) he has no entitlement under
any other severance or similar arrangement maintained by the Bank,
and (iii) except as otherwise provided specifically in this
Release, the Bank does not and will not have any other liability or
obligation to him.  Executive further acknowledges that, in
the absence of his execution of this Release, he would not
otherwise be entitled to the payments described in Section
6.3/6.4 of the Employment Agreement.

Release and Covenant Not to Sue.

Mutual Release.  The Bank (including, for purposes
of this Section 3, its Affiliates) hereby fully and forever
releases and discharges Executive (and his heirs, executors and
administrators), and Executive hereby fully and forever releases
and discharges Bank (including, for purposes of this Section
3, all predecessors and successors, subsidiaries, affiliates,
assigns, officers, directors, trustees, Executives, agents and
attorneys, past and present) from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of
action, obligations, controversies, debts, costs, expenses,
damages, judgments, orders and liabilities, of whatever kind or
nature, direct or indirect, in law, equity or otherwise, whether
known or unknown, arising through the date of this Release, out of
Executive’s employment by the Bank or the termination
thereof, including, but not limited to, any claims for relief or
causes of action under the Age Discrimination in Employment Act, 29
U.S.C. § 621 et seq., or any other federal, state or
local statute, ordinance or regulation regarding discrimination in
employment and any claims, demands or actions based upon alleged
wrongful or retaliatory discharge or breach of contract under any
state or federal law. 

Covenant Not to Sue.  Executive expressly
represents that he has not filed a lawsuit or initiated any other
administrative proceeding against the Bank and that he has not
assigned any claim against the Bank to any other person or
entity.  The Bank expressly represents that it has not filed a
lawsuit or initiated any other administrative proceeding against
Executive and that it has not assigned any claim against Executive
to any other person or entity.  Both the Executive and the
Bank further promise not to initiate a lawsuit or to bring any
other claim against the other arising out of or in any way related
to Executive’s employment by the Bank or the termination of
that employment.  This Release will
not prevent Executive from filing a charge with the Equal
Employment Opportunity Commission (or similar state agency) or
participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state agency);
provided, however, that any claims by Executive for personal
relief in connection with such a charge or investigation (such as
reinstatement or monetary damages) will be barred.

Claims Not Released.  The forgoing will not be
deemed to release the Bank or Executive from claims solely (a) to
enforce this Release, (b) to enforce Section 6.3/6.4 of the
Employment Agreement (c) to enforce Section 5 of the
Employment Agreement, or (d) for indemnification under the
Bank’s By-Laws, under applicable law, under any
indemnification agreement between the Bank and Executive or under
any similar arrangement.

Non-Competition and Confidentiality Obligations. 
Executive acknowledges that Section 5 of the Employment
Agreement survives the termination of his employment. 
Executive affirms that the restrictions contained in Section
5 of the Employment Agreement are reasonable and necessary to
protect the legitimate interests of the Bank, that he received
adequate consideration in exchange for agreeing to those
restrictions, and that he will abide by those restrictions.

Non-Disparagement.  The Bank will not disparage
Executive or Executive’s performance or otherwise take any
action which could reasonably be expected to adversely affect
Executive’s personal or professional reputation. 
Similarly, Executive will not disparage Bank or any of its
directors, officers, agents or Executives or otherwise take any
action which could reasonably be expected to adversely affect the
personal or professional reputation of Bank or any of its
directors, officers, agents or employees.

Cooperation.  Executive further agrees that he will
cooperate fully with the Bank and its counsel with respect to any
matter (including litigation, investigations, or governmental
proceedings) which relates to matters with which Executive was
involved during his employment with Bank.  Executive shall
render such cooperation in a timely manner on reasonable notice
from the Bank.

Rescission Right.  Executive expressly acknowledges
and recites that (a) he has read and understands this Release in
its entirety, (b) he has entered into this Release knowingly and
voluntarily, without any duress or coercion; (c) he has been
advised orally and is hereby advised in writing to consult with an
attorney with respect to this Release before signing it; (d) he was
provided twenty-one (21) calendar days after receipt of the Release
to consider its terms before signing it; and (e) he is provided
seven (7) calendar days from the date of signing to terminate and
revoke this Release in which case this Release shall be
unenforceable, null and void.  Executive may revoke this
Release during those seven (7) days by providing written notice of
revocation to the Bank.

Challenge.  If Executive violates or challenges the
enforceability of this Release, no further payments under
Section 6.3/6.4 of the Employment Agreement will be paid or
provided to Executive.

Miscellaneous.

No Admission of Liability.  This Release is not to
be construed as an admission of any violation of any federal, state
or local statute, ordinance or regulation or of any duty owed by
the Bank to Executive.  There have been no such violations,
and the Bank specifically denies any such violations.

No Reinstatement.  Executive agrees that he will
not apply for reinstatement with the Bank or seek in any way to be
reinstated, re-employed or hired by the Bank in the future.

Successors and Assigns.  This Release will inure to
the benefit of and be binding upon the Bank and Executive and their
respective successors, executors, administrators, heirs and (in the
case of the Bank) permitted assigns. The Bank may assign this
Release to any successor to all or substantially all of its assets
and business by means of liquidation, dissolution, merger,
consolidation, transfer of assets, or otherwise.  Executive
may not make any assignment of this Release or any interest
herein.

Severability.  The provisions of this Release are
severable.  If any provision or the scope of any provision is
found to be unenforceable or is modified by a court of competent
jurisdiction, the other provisions or the affected provisions as so
modified shall remain fully valid and enforceable.

Entire Agreement; Amendments.  Except as otherwise
provided herein, this Release contains the entire agreement and
understanding of the parties hereto relating to the subject matter
hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature relating
subject matter hereof.  This Release may not be changed or
modified, except by an Release in writing signed by each of the
parties hereto.

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

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

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

		
COMMERCIAL NATIONAL BANK
OF PENNSYLVANIA

By:                                                                  

Title:                                                                

		
EXECUTIVE

By:                                                                  

       Gregg E. Hunter

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