Exhibit 10.1

 
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) made effective as of November 1,
2011 by and between CITY NATIONAL BANK OF NEW JERSEY, a national banking
association, with its principal office at 900 Broad Street, Newark, New Jersey
07102 (the “Bank”), CITY NATIONAL BANCSHARES CORPORATION, a New Jersey
corporation   with its principal office at 900 Broad Street, Newark, New Jersey
07102 (“CNBC” and  sometimes collectively with the Bank referred to as the
“Employer”), and PRESTON D. PINKETT, III, a resident of Gladstone, New Jersey,
and who has an address of 1 Valley View Avenue, Gladstone, New Jersey 07934 (the
“Executive”).

WHEREAS, the Bank is a wholly-owned subsidiary of CNBC; and

WHEREAS, each of the Bank and CNBC desire to retain the services of Executive as
its President and Chief Executive Officer for the period provided in this
Agreement and subject to the terms and conditions hereof; and

WHEREAS, Executive is willing to serve as a full time employee as President and
Chief Executive Officer of the Bank and CNBC on the terms and conditions
specified herein,

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the other terms and conditions hereinafter provided, the parties hereto
agree as follows:

1.           POSITION AND RESPONSIBILITIES.
 
(a)           Subject to the provisions of 1(b), during the term of his
employment hereunder, Executive shall serve as President and Chief Executive
Officer of the Bank and CNBC. Executive shall have such duties as are
customarily or appropriately vested in the President and Chief Executive Officer
of a national bank and a bank holding company, and as from time to time may be
prescribed by the Boards of Directors of the Bank and CNBC (collectively,
the “Board”). During the period of his employment hereunder, Executive shall
devote substantially all of his business time, attention, skill, and efforts to
the faithful performance of his duties hereunder, including activities and
services related to the organization, operation and management of the Employer.
 
(b)           Notwithstanding any provision to the contrary contained in this
Agreement, the Board may, in its reasonable discretion and without any prior
notice to the Executive, (i) relieve the Executive from the title and
responsibilities of President and Chief Executive Officer of the Bank, and (ii)
further define the Executive’s responsibilities with specific goals and
objectives as presented to the Executive in a writing from the Board.
 
2.           TERM.  The period of Executive's employment under this Agreement
shall be deemed to have commenced as of the effective date first above written
and shall continue until the first anniversary of such date (the
“Term”).  Employer and Executive shall use reasonable efforts to negotiate an
extension of the Term; provided Employer and Executive believe it is in their
respective best interests to do so.
 

 
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3.             COMPENSATION AND RELATED MATTERS.
 
(a)           Compensation. As compensation for the responsibilities and duties
described in Section 1, the Employer shall pay Executive a salary during the
Term of Three Hundred and Thirty Five Thousand Dollars ( $335,000 ) in cash and
non-cash compensation totaling $60,000 in the aggregate (collectively, the “Base
Salary”).  The non-cash compensation shall be in the form of twenty thousand
(20,000) shares of CNBC’s common stock, valued for these purposes at $3.00 per
share.  The Base Salary shall accrue evenly during the Term and shall be paid to
Executive in accordance with Employer’s normal payroll procedures, including,
without limitation, after standard payroll deductions.
 
(b)           Employee Benefits. So long as Executive shall be employed
hereunder, the Employer shall provide Executive, at no cost to Executive, with
all such benefits as are provided uniformly to similarly situated full-time
employees who are employed at the Bank on an interim basis.
 
(c)           Expenses. In addition to the salary and other benefits provided
hereunder, the Employer shall reimburse Executive for all reasonable expenses
incurred and accounted for by Executive in performing his obligations under this
Agreement. Employer's reimbursement obligation hereunder shall be subject to
Employer's reimbursement policies and procedures as adopted and amended from
time to time.
 
(d)           Vacation. Executive shall be entitled to five (5) weeks paid
vacation during the Term. Time spent at a banking convention shall not be
counted as vacation time.  Executive will not be compensated for unused vacation
time.
 
(e)            Conventions. Employer shall reimburse Executive for all
reasonable expenses related to his attendance at  such banking conventions
occurring during the Term that are selected by the Executive (such as the
National Bankers Association, the New Jersey Bankers Association and the
American Bankers Association, etc.) and approved in advance by the Board.
 
(f)           Auto Allowance.  Executive will be paid a monthly auto allowance
of One Thousand Two Hundred Dollars ($1,200.00) during the Term. From this auto
allowance Executive will be responsible for initiating and paying for all
applicable auto insurance for the vehicle as well as undertaking all maintenance
related to the vehicle.
 
4.            TERMINATION.  Upon termination of Executive's employment for any
reason whatsoever, Executive shall be entitled to receive only the amount of any
compensation and benefits accrued and unpaid pursuant to Section 3 of this
Agreement, and shall be entitled to no further compensation or benefits
hereunder.
 
5.            NON-COMPETITION; NON-DISCLOSURE.
 
(a)           Executive agrees not to disclose, during or after the term of his
employment, any knowledge of the past, present, planned or considered business
activities of the Employer or affiliates thereof to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever.  Notwithstanding the foregoing, Executive may disclose any knowledge
of, banking, financial and/or economic principles, concepts or ideas which are
not solely and exclusively derived from the business plans and activities of the
Employer. In the event of a breach or threatened breach by the Executive of the
provisions of this Section, the Employer shall be entitled to an injunction
restraining Executive from disclosing, in whole or in part, the knowledge of the
past, present, planned or considered business activities of the Employer or
affiliates thereof, or from rendering any services to any person, firm,
corporation, association or other entity to whom such knowledge, in whole or in
part, has been disclosed or is threatened to be disclosed. Nothing herein will
be construed as prohibiting the Employer from pursuing any other remedies
available to the Employer for such breach or threatened breach, including the
recovery of damages from Executive.
 

 
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(b)           Upon (i) voluntary termination by the Executive of his employment
hereunder for any reason other than as a result of a material breach of this
Agreement by the Employer, (ii) termination of Executive's employment by the
Employer for cause, or (iii) expiration of this Agreement as a result of the
Executive’s failure to accept Employer’s offer of a renewal of this Agreement on
substantially similar terms as contained herein, Executive agrees not to compete
with the Employer or any of its affiliates for a period of one (1) year
following such termination within a 30 mile radius from the Bank's main office
located at 900 Broad Street, Newark, New Jersey or within a three mile
radius  from the location of any branch of the Bank existing as of the date of
such termination.  Executive agrees that during such period and within said
radius, Executive will not work for or advise, consult or otherwise serve with,
directly or indirectly, any entity whose business materially competes with the
depository, lending or other business activities of the Employer or any
affiliate. The parties hereto, recognizing that irreparable injury will result
to the Employer, its business and property in the event of Executive's breach of
this Section, agree that in the event of any such breach by the Executive, the
Employer will be entitled, in addition to any other remedies and damages
available, to an injunction to restrain the violation hereof by the Executive,
the Executive's partners, agents, servants, employers, employees and all persons
acting for or with the Executive.
 
6.             BINDING EFFECT. This Agreement shall be binding upon, and inure
to the benefit of, Executive, the Bank, CNBC and their respective heirs,
personal representatives, successors and assigns.
 
7.             MODIFICATION, TARP CAPITAL PURCHASE PROGRAM AND WAIVER.
 
(a)           This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto.  The Executive hereby
acknowledges and agrees that, for as long as CNBC is a participant in and is
subject to the Troubled Asset Relief Program (“TARP”) rules and guidance, with
debt or equity held by the U.S. Department of the Treasury (the “Treasury”), the
Employer will be bound by the executive compensation and corporate governance
requirements of Section 111 of the Emergency Economic Stabilization Act of 2008,
as amended, and any and all implementing regulations or guidance issued by the
Treasury.  The Executive further agrees that despite any contrary provision
within this Agreement (including, without limitation, the first sentence of this
Section 7(a)), the Board shall have the right to modify, unilaterally and
without the Executive’s consent, any of the provisions of this Agreement,
including but not limited to reducing the amount of compensation and benefits
provided herein, if in the Board’s sole judgment the modification is necessary
to comply with the mandatory application of the Treasury’s rules and guidance
governing executive compensation of participants of the TARP Capital Purchase
Program, as such rules and guidance may be supplemented or amended from time to
time after the date of this Agreement.  The Board’s power under this Section 7
to modify the provisions of this Agreement shall expire when the Bank, or it’s
parent corporation, is no longer a participant in and subject to the TARP
Capital Purchase Program rules and guidance.

 
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(b)           No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that
specifically waived.

8.             SEVERABILITY. If, for any reason, any provision of this
Agreement, or any part of any provision, is held invalid, such invalidity shall
not affect any other provision of this Agreement or any part of such provision
not held so invalid and each such other provision and part thereof shall to the
full extent consistent with law continue in full force and effect.
 
9.             HEADINGS FOR REFERENCE ONLY. The headings of Sections and
paragraphs herein are included solely for convenience of reference and shall not
control the meaning or interpretation of any of the provisions of this
Agreement.
 
10.           GOVERNING LAW. This Agreement has been executed and delivered in
the State of New Jersey, and its validity, interpretation, performance, and
enforcement shall be governed by the laws of the State of New Jersey.
 
11.           ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration, in
accordance with the rules of the American Arbitration Association. Judgment may
be entered on the arbitrator's award in any court having jurisdiction.
 
12.           CONSTRUCTION.  All references to the singular shall include the
plural, and vice-versa, and reference to one gender shall include the other
gender, as the context requires.
 
13.           NOTICES. All notices required or permitted to be given herein
shall be in writing and delivered to the parties at the following addresses:
 
If to the Employer:
City National Bank of New Jersey
900 Broad Street
Newark, New Jersey 07102
Attn:  Chairman of the Board of Directors

If to Executive:
PRESTON D. PINKETT, III
1 Valley View Avenue
Gladstone, New Jersey 07934

or, at such other address as each party may designate in writing to the other
parties. All notices shall be effective, if by mail, two days after mailing, and
in all other instances upon delivery.

 
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14.           INDEMNIFICATION AND COOPERATION. Employer agrees to continue and
maintain a directors' and officers' liability insurance policy covering the
Executive to the extent the Employer provides such coverage for other executive
officers, including, without limitation, insurance coverage after the
termination of this Agreement. Employer shall indemnify Executive to the same
extent the Employer indemnifies its then current executive officers, including,
without limitation, indemnification after the termination of this Agreement.
Following the termination of this Agreement, to the extent reasonably requested
by Employer, Executive shall cooperate with Employer on matters involving
Executive's unique personal knowledge, including the defense of any action
brought by any third party against Employer. The obligation of Executive to
cooperate as provided for above shall be conditioned upon (a) reasonable prior
notice to the Executive by the Employer of any request for such cooperation, (b)
no interference as a result of such cooperation with Executive's other
activities, (c) no conflict of interest between Executive and Employer exists in
the subject matter of such cooperation, (d) Executive is compensated for his
time devoted to such cooperation in excess of three (3) hours in any calendar
month, and (e) Executive is provided with prompt expense reimbursements and
advances for reasonable out-of-pocket expenses incurred in connection with such
cooperation.
 

[Signatures are on following page]
 
 
 
 
 
 
 

 
 
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IN WITNESS WHEREOF, the Bank, CNBC and Executive have caused this Agreement to
be executed effective the first date written above.

 
CITY NATIONAL BANK OF NEW JERSEY,
 
a national banking association
                   
By:
/s/ Eugene Giscombe
   
Eugene Giscombe, Chairman of the Board
                   
CITY NATIONAL BANCSHARES CORPORATION,
 
a New Jersey corporation
             
By:
/s/ Eugene Giscombe
   
Eugene Giscombe, Chairman of the Board
                   
/s/ Preston Pinkett III
 
PRESTON D. PINKETT, III, Executive
     

[Signature page to Employment Agreement—Preston D. Pinkett, III]
 
 
 
 
 
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