CITY NATIONAL BANCSHARES CORPORATION
                        CITY NATIONAL BANK OF NEW JERSEY

                          SALARY CONTINUATION AGREEMENT

                  THIS  AGREEMENT  is made this 1st day of January,  1997 by and
among City National Bank of New Jersey,  a national  banking  association,  (the
"Company"),  City National  Bancshares  Corporation,  a New Jersey  corporation,
("CNBC") and Louis E. Prezeau (the "Executive").
                                  INTRODUCTION
                  To  encourage  the  Executive  to  remain an  employee  of the
Company,  the  Company  is  willing  to  provide  continuation  benefits  to the
Executive.  The Company will pay such continuation the benefits from its general
assets and CNBC shall guarantee the Company's obligations hereunder.
                                                      AGREEMENT
                  The Executive and the Company agree as follows:
                                                      Article 1
                                                     Definitions
                  1.1      Definitions.  Whenever  used in this  Agreement,  the
following  words and phrases  shall have the meanings specified:

1.1.1"Change  of  Control"  means  an  acquisition,   after  the  date  of  this
     Agreement,  (other than  directly  from CNBC) by an  individual,  entity or
     group  (excluding  the  Company,  CNBC or an employee  benefit  plan of the
     Company) of 30% or more of CNBC's  outstanding voting common stock followed
     within twelve (12) months by the Executive=s  Termination of Employment for
     reasons other than death, disability or retirement.
1.1.2"Code" means the Internal  Revenue Code of 1986, as amended.  References to
     a Code  section  shall be deemed to be to that section as it now exists and
     to any successor provision.
1.1.3 "Early Retirement Date" means the Executive attaining age 60.
1.1.4 "Normal Retirement Date" means the Executive attaining age 65.
1.1.5"Termination of Employment"  means the  Executive's  ceasing to be employed
     by the Company for any reason whatsoever,  voluntary or involuntary,  other
     than by reason of an approved  leave of absence.
1.1.6"Years of Service"  means the total number of  twelve-month  periods during
     which the  Executive is employed on a full-time  basis by the Company as an
     officer or in an executive  capacity,  inclusive of any approved  leaves of
     absence.
                                    Article 2
                                Lifetime Benefits
                  2.1 Normal  Retirement  Benefit.  If the Executive  terminates
employment on or after the Normal  Retirement Date for reasons other than death,
the Company  shall pay to the  Executive  the benefit  described in this Section
2.1.

2.1.1Amount of Annual Benefit.  The annual benefit under this Section 2.1 is 40%
     of the annual base salary payable to the Executive during the last complete
     fiscal year of the Company.  The annual benefit is to be paid in accordance
     with Section 2.1.2 below.
2.1.2Payment of Benefit.  The  Company  shall pay the  aggregate  benefit to the
     Executive in equal  monthly  installments  with each  installment  equal to
     1/12th of the annual benefit  defined in Section 2.1.1 above,  on the first
     day  of  each  month  commencing  with  the  month  following   Executive's
     Termination  of  Employment  on or after  the  Normal  Retirement  Date and
     continuing  until the later of the  Executive's  death or the expiration of
     179 additional months.
2.2  Early Retirement Benefit. If the Executive terminates employment before the
     Normal Retirement Date, and for reasons other than death, the Company shall
     pay to the Executive the benefit described in this Section 2.2.
2.2.1Amount of  Benefit.  The  annual  benefit  under  this  Section  2.2 is the
     benefit  calculated  under Section 2.1.1 as if the date of the  Executive's
     Termination of Employment was the Executive's Normal Retirement Date, which
     amount is then  multiplied  by a fraction,  the  numerator  of which is the
     Executive's  actual  Years of Service  through the date of the  Executive's
     Termination  of  Employment  and the  denominator  of which is the Years of
     Service  the  Executive   would  have  had  had  the  date  of  Executive's
     Termination of Employment coincided with his actual Normal Retirement Date.

2.2.2Payment of Benefit.  The  Company  shall pay the  aggregate  benefit to the
     Executive (or his beneficiary  pursuant to Section 3.2 hereof) in 180 equal
     consecutive  monthly  installments with each installment equal to 1/12th of
     the annual  benefit in Section 2.2.1 above,  on the first day of each month
     commencing with the month following the Executive's  Early  Retirement Date
     and continuing for 179 additional months.
2.3  Change of Control Benefit.  Upon a Change of Control while the Executive is
     in the  active  service  of  the  Company,  the  Company  shall  pay to the
     Executive  the benefit  described  in this Section 2.3 in lieu of any other
     benefit under this Agreement.
2.3.1. Amount of  Benefit.  The  benefit  under this  Section 2.3 is the present
     value (computed with an annual discount rate of 4%) of a theoretical series
     of 180  equal  monthly  payments,  with each  payment  equal to 1/12 of the
     annual Normal  Retirement  Benefit described in Section 2.1 (computed as if
     the  Executive's  Termination  of  Employment  was the  Executive's  Normal
     Retirement Date), beginning with the month following the month in which the
     Executive  would attain the age of 65 and  continuing for an additional 179
     consecutive months.
2.3.2Payment of Benefit.  The  Company  shall pay the  aggregate  benefit to the
     Executive in a lump sum within 30 days after the Change of Control.
                                    Article 3
                                 Death Benefits
3.1  Death During  Active  Service.  If the  Executive  dies while in the active
     service  of  the  Company,   the  Company  shall  pay  to  the  Executive's
     beneficiary the benefit described in this Section 3.1.
3.1.1Amount of Benefit.  The benefit under Section 3.1 is the greater of (x) the
     normal  retirement  benefit  accrued by the Company for the Executive as of
     the date of the Executive's death or (y) the original projected  retirement
     benefit as shown on Schedule A hereto.
3.1.2Payment of Benefit.  The  Company  shall pay the  aggregate  benefit to the
     beneficiary  in the amounts  described  under  Section 2.1 in equal monthly
     installments  with each installment equal to 180th of the aggregate benefit
     defined in Section 3.1.1 above,  on the first day of each month  commencing
     with the month  following  the  Executive's  death and  continuing  for 179
     additional months.
3.2  Death During Benefit Period.  If the Executive dies after benefit  payments
     have commenced under this Agreement but before receiving all such payments,
     the Company shall pay the remaining benefits to the Executive's beneficiary
     at the same time and in the same  amounts  they would have been paid to the
     Executive had the Executive survived except that for purposes of the normal
     retirement  benefit,  payments  shall  be  made,  in  accordance  with  the
     provisions of Section 2.1.2,  until the later of the Executive=s death or a
     total of 180 monthly payments have been made.
                                    Article 4
                                  Beneficiaries

                  4.1 Beneficiary Designations.  The Executive shall designate a
beneficiary by filing a written designation with the Company.  The Executive may
revoke  or  modify  the  designation  at any time by  filing a new  designation.
However,  designations  will only be  effective if signed by the  Executive  and
accepted  by the  Company  during  the  Executive's  lifetime.  The  Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is  subsequently  dissolved.  If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse,  if any,  and if none,  to the  Executive's  surviving  children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
                  4.2  Facility of Payment.  If a benefit is payable to a minor,
to a person  declared  incompetent,  or to a person  incapable  of handling  the
disposition  of his or her  property,  the Company  may pay such  benefit to the
guardian,  legal  representative  or person  having  the care or custody of such
minor,  incompetent person or incapable person. The Company may require proof of
incompetency,  minority  or  guardianship  as it may deem  appropriate  prior to
distribution of the benefit.  Such distribution  shall completely  discharge the
Company from all liability with respect to such benefit.
                                    Article 5
                               General Limitations
                  Notwithstanding   any  provision  of  this  Agreement  to  the
contrary,  the Company  shall not pay any benefit  under this  Agreement  if the
Company  terminates  the  Executive's  employment  within  three  months  of the
non-appealable  conviction  of  the  Executive  of  a  felony  criminal  offense
involving or relating to the Company or CNBC.
                                    Article 6
                          Claims and Review Procedures

                  6.1 Claims  Procedure.  The Company shall notify the Executive
or the Executive's beneficiary in writing, within thirty (30) days of his or her
written  application for benefits,  of his or her eligibility or  noneligibility
for benefits under the Agreement.  If the Company  determines that the Executive
or the  Executive's  beneficiary  is not eligible for benefits or full benefits,
the notice  shall set forth (1) the  specific  reasons  for such  denial,  (2) a
specific  reference to the  provisions  of the  Agreement on which the denial is
based, (3) a description of any additional information or material necessary for
the claimant to perfect his or her claim, and a description of why it is needed,
and (4) an  explanation  of the  Agreement's  claims review  procedure and other
appropriate  information  as to the  steps to be taken if the  Executive  or the
Executive's  beneficiary  wishes  to have the  claim  reviewed.  If the  Company
determines  that there are special  circumstances  requiring  additional time to
make a decision,  the Company  shall  notify the  Executive  or the  Executive's
beneficiary  of the  special  circumstances  and the date by which a decision is
expected to be made, and may extend the time for up to an additional  ninety-day
period.

                  6.2 Review  Procedure.  If the  Executive  or the  Executive's
beneficiary is determined by the Company not to be eligible for benefits,  or if
the Executive or the Executive's beneficiary believes that he or she is entitled
to greater or different benefits,  the Executive or the Executive's  beneficiary
shall have the  opportunity to have such claim reviewed by the Company by filing
a petition for review with the Company  within sixty (60) days after  receipt of
the notice issued by the Company. Said petition shall state the specific reasons
which the Executive or the Executive's  beneficiary  believes entitle him or her
to benefits or to greater or  different  benefits.  Within sixty (60) days after
receipt by the Company of the  petition,  the Company shall afford the Executive
or the Executive's  beneficiary (and counsel,  if any) an opportunity to present
his or her position to the Company  orally or in writing,  and the  Executive or
the  Executive's  beneficiary  (or  counsel)  shall have the right to review the
pertinent  documents.  The Company shall notify the Executive or the Executive's
beneficiary  of its decision in writing  within the  sixty-day  period,  stating
specifically  the basis of its  decision,  written in a manner  calculated to be
understood  by the  Executive or the  Executive's  beneficiary  and the specific
provisions of the Agreement on which the decision is based.  If,  because of the
need for a hearing, the sixty-day period is not sufficient,  the decision may be
deferred for up to another sixty-day period at the election of the Company,  but
notice  of this  deferral  shall be given to the  Executive  or the  Executive's
beneficiary.
                                    Article 7
                           Amendments and Termination
                  Subject to the provisions of the next sentence, this Agreement
may be amended or terminated only by a written agreement authorized by the Board
of Directors of the Company provided that all benefits accrued by the Company as
of the date of such  termination or amendment for payment of benefits  hereunder
shall be fully vested and shall be payable in  accordance  with the terms hereof
unless  the  Executive  consents  otherwise  in  writing.   Notwithstanding  the
foregoing, at any time after the date of this Agreement, there is an acquisition
by an individual,  entity or a group (excluding the Company, CNBC or an employee
benefit plan of the Company) of 30% or more of CNBC's  outstanding voting common
stock,  this  Agreement may be amended or terminated  only by written  agreement
authorized by the Company's Board of Directors and signed by the Company and the
Executive.
                                    Article 8
                                  Miscellaneous
                  8.1      Binding  Effect.  This  Agreement  shall  bind the
Executive  and the  Company,  and  their  beneficiaries, survivors, executors, 
administrators and transferees.

                  8.2  No  Guaranty  of  Employment.  This  Agreement  is not an
employment  policy  or  contract.  It does not give the  Executive  the right to
remain an employee of the  Company,  nor does it  interfere  with the  Company's
right to  discharge  the  Executive.  It also does not require the  Executive to
remain  an  employee  nor  interfere  with the  Executive's  right to  terminate
employment at any time.
                  8.3 Non-Transferability.  Benefits under this Agreement cannot
be sold, transferred, assigned, pledged, attached or encumbered in any manner.
                  8.4 Tax Withholding. The Company shall withhold any taxes that
are required to be withheld from the benefits provided under this Agreement.
                  8.5  Applicable  Law. The Agreement  and all rights  hereunder
shall be governed by the laws of New Jersey,  except to the extent  preempted by
the laws of the United States of America.
                  8.6 Unfunded  Arrangement.  The Executive and  beneficiary are
general  unsecured  creditors  of the Company for the payment of benefits  under
this  Agreement.  The benefits  represent the mere promise by the Company to pay
such  benefits.  The  rights  to  benefits  are not  subject  in any  manner  to
anticipation,  alienation,  sale,  transfer,  assignment,  pledge,  encumbrance,
attachment,  or garnishment by creditors.  Any insurance on the Executive's life
is a general asset of the Company to which the Executive and beneficiary have no
preferred or secured claim.
                  8.7 Guaranty.  The Company's  obligations under this Agreement
are hereby guaranteed, irrevocably and unconditionally by CNBC.

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

EXECUTIVE                                   COMPANY:

                        CITY NATIONAL BANK OF NEW JERSEY




___________________________                 By:_________________________________
Louis E. Prezeau                                Name:
                                                Title:


CITY NATIONAL BANCSHARES                                      CORPORATION



By:__________________________________                                    
     Name:
     Title:

                                   Schedule A

                        CITY NATIONAL BANK OF NEW JERSEY
                         SUMMARY OF PROJECTED BENEFITS
                            SALARY CONTINUATION PLAN

                                                   Projected
                                                    15 year
                     Current        Retirement      Annual
Executive              Age             Age          Payout

Louis Prezeau          53              65          $ 85,517

Assumption:
 Discount Rate:              7.50%
 Compensation Inflator:      5.00%



                      CITY NATIONAL BANCSHARES CORPORATION
                        CITY NATIONAL BANK OF NEW JERSEY
                           (collectively, the "Bank")

                          SALARY CONTINUATION AGREEMENT

                             BENEFICIARY DESIGNATION



I designate the following as  beneficiary of any death benefits under the Salary
Continuation Agreement:


Primary: ______________________________________________________________________

_______________________________________________________________________________


Contingent: ___________________________________________________________________

_______________________________________________________________________________


Note:To name a trust as beneficiary,  please provide the name of the trustee and
     the exact date of the trust agreement.

I understand  that I may change these  beneficiary  designations by filing a new
written  designation  with the Bank. I further  understand that the designations
will be automatically  revoked if the beneficiary  predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.

Signature: ________________                                              

Date:  ____________________                                        

Accepted by the Bank this _______ day of _________________, 199__.


CITY NATIONAL BANCSHARES CORPORATION           CITY NATIONAL BANK OF NEW JERSEY

By:                                              By:                         

Title:                                           Title: