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Employment Agreement

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (Agreement) is entered into as of the ___day of December 2006, between FIRST NATIONAL BANK OF ORRVILLE and NATIONAL BANCSHARES CORPORATION (collectively, the Bank) and DAVID C. VERNON, an individual (Employee).

WHEREAS, the Bank desires to employ Employee as its President and Chief Executive Officer, and Employee is willing to serve the Bank in said capacities;

NOW, THEREFORE, Employee and the Bank, in consideration of the mutual covenants and agreements contained herein, agree as follows:

1. Term of Employment. The term of the employment arrangement provided for herein (the Employment Period) shall begin on November 14, 2006, and shall continue for a minimum period of twelve (12) full months. After 12 months, employment shall continue until terminated by either party upon 30 days written notice.

2. Duties. Employee agrees to serve the Bank as its President and Chief Executive Officer, and in such capacity to have responsibility for the operation of the Bank, and to perform all duties for the Bank as may be reasonably requested by the Board of Directors or its designee.Employee will devote his efforts diligently and faithfully to the business and welfare of the Bank in accordance with and in furtherance of the policies and directives of the Board. Provided, however, that Employee shall not be precluded from engaging in other incidental business activities or investments including, but not limited to, serving on boards of directors and hold other offices and positions in companies which in the Boards judgment will not present any conflict of interest with the Bank or otherwise interfere with the performance of his duties for the bank or the obligations contained in this Agreement. Bank acknowledges that Employee presently serves as Vice Chairman of CFBank and agrees that Employees performance of his duties as Vice Chairman of CFBank shall not be precluded by this agreement or by the Bank.

3. Compensation.

3.1 Salary. The Bank will pay Employee for his services an annual base salary of Two Hundred Twenty-Five Thousand and 00/100 Dollars ($225,000.00) (the Base Salary), less such deductions and withholdings as are required by law, all in accordance with the Banks regular payroll procedures. The Bank agrees to review Employees base salary at least annually consistent with the past practices of the Bank. Any increase, however, shall be made in the sole and absolute discretion of the Banks Board of Directors.

3.2 Bonus. Employee shall be entitled to bonuses approved by the Board of Directors of the Bank. Nothing paid to the Employee under any such plan or arrangement will be deemed to be in lieu of other compensation to which the Executive is entitled under this Agreement.

3.3 Share Appreciation Bonus. Employee shall receive bonus compensation, in addition to any Bonus which may be granted under section 3.2 based on the increased value of the publicly traded common shares of the Bank (NASDAQ NBOH) as calculated using the following formula: On the anniversary date of this agreement the average daily closing price for the 10 days prior to the date of this agreement (Beginning Price) will be compared to the average daily closing price for the 10 days prior to the twelve month anniversary date (Ending Price). If the Ending Price is greater than the Beginning Price the increase in price will be multiplied by thirty-five thousand (35,000) threshold and the result of this calculation will be the Share Appreciation Bonus compensation amount paid to the Employee on the anniversary date of the agreement. This same calculation will be made on the anniversary date each year after the first twelve months using the 10 day average closing price from the previous year Share Appreciation Bonus calculation as the Beginning Price or the original 10 day average closing price, whichever is higher. If Employee is terminated after twelve months in accordance with this Employment Agreement for any reason other than Cause Employee will receive a Share Appreciation Bonus for such less than twelve month period calculated using the average closing price for the 10 days prior to the termination date as the Ending Price and the 10 day average closing price used in the most recent Share Appreciation Bonus calculation as the Beginning Price.

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