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EXHIBIT (c)(10)(C)
CHANGE-IN-CONTROL AGREEMENT
(FIRST SENIOR VICE PRESIDENT)
THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made as of this 15th
day of April, 1996, among VALLEY NATIONAL BANK ("Bank"), a national banking
association with its principal office at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx,
XXXXXX NATIONAL BANCORP ("Valley"), a New Jersey Corporation which maintains its
principal office at 0000 Xxxxxx Xxxx, Xxxxx, Xxx Xxxxxx (Valley and the Bank
collectively are the "Company") and Xxxx X. Xxxx (the "Executive").
BACKGROUND
WHEREAS, the Executive has been continuously employed by the Bank for
at least three full years;
WHEREAS, the Executive throughout his tenure has worked diligently in
his position in the business of the Bank and Valley;
WHEREAS, the Board of Directors of the Bank and Valley believe that the
future services of the Executive are of great value to the Bank and Valley and
that it is important for the growth and development of the Bank that the
Executive continue in his position;
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WHEREAS, if the Company receives any proposal from a third
person concerning a possible business combination with, or acquisition of
equities securities of, the Company, the Board of Directors of the Company (the
"Board") believes it is imperative that the Company and the Board be able to
rely upon the Executive to continue in his position, and that they be able to
receive and rely upon his advice, if they request it, as to the best interests
of the Company and its shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such a proposal;
WHEREAS, to achieve that goal, and to retain the Executive's
services prior to any such activity, the Board of Directors and the Executive
have agreed to enter into this Agreement to govern the Executive's termination
benefits in the event of a Change in Control of the Company, as hereinafter
defined.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his advice and
counsel notwithstanding the possibility, threat or occurrence of a bid to take
over control of the Company, and to induce the Executive to remain in the employ
of the Company, and
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for other good and valuable consideration, the Company and the Executive, each
intending to be legally bound hereby agree as follows:
1. Definitions
a. Base Salary. "Base Salary", as used in Section 9 hereof,
means the annual cash base salary (excluding any bonus and the value of any
fringe benefits) paid to the Executive at the time of the termination of
employment unless such amount has been reduced after a Change in Control, in
which case such amount shall be the highest base salary in effect during the 18
months prior to the Change in Control.
b. Cause. For purposes of this Agreement "Cause" with respect
to the termination by the Company of Executive's employment shall mean (i)
willful and continued failure by the Executive to perform his duties for the
Company under this Agreement after at least one warning in writing from the
Company's Board of Directors identifying specifically any such failure; (ii) the
willful engaging by the Executive in misconduct which causes material injury to
the Company as specified in a written notice to the Executive from the Board of
Directors; or (iii) conviction of a crime, other than a traffic violation,
habitual drunkenness, drug
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abuse, or excessive absenteeism other than for illness, after a warning (with
respect to drunkenness or absenteeism only) in writing from the Board of
Directors to refrain from such behavior. No act or failure to act on the part of
the Executive shall be considered willful unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that the action or
omission was in the best interest of the Company.
c. Change in Control. "Change in Control" means any of the
following events: (i) when Valley or a Subsidiary acquires actual knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act), other than an affiliate of Valley or a Subsidiary or an employee benefit
plan established or maintained by Valley, a Subsidiary or any of their
respective affiliates, is or becomes the beneficial owner (as defined in Rule
13d-3 of the Exchange Act) directly or indirectly, of securities of Valley
representing more than twenty-five percent (25%) of the combined voting power of
Valley's then outstanding securities (a "Control Person"), (ii) upon the first
purchase of Valley's common stock pursuant to a tender or exchange offer (other
than a tender or exchange offer made by Valley, a Subsidiary or an employee
benefit plan established or maintained by Valley, a
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Subsidiary or any of their respective affiliates), (iii) upon the approval by
Valley's stockholders of (A) a merger or consolidation of Valley with or into
another corporation (other than a merger or consolidation which is approved by
at least two-thirds of the Continuing Directors (as hereinafter defined) or the
definitive agreement for which provides that at least two-thirds of the
directors of the surviving or resulting corporation immediately after the
transaction are Continuing Directors (in either case, a "Non-Control
Transaction")), (B) a sale or disposition of all or substantially all of
Valley's assets or (C) a plan of liquidation or dissolution of Valley, (iv) if
during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board (the "Continuing Directors") cease for any
reason to constitute at least two-thirds thereof or, following a Non-Control
Transaction, two-thirds of the board of directors of the surviving or resulting
corporation; provided that any individual whose election or nomination for
election as a member of the Board (or, following a Non-Control Transaction, the
board of directors of the surviving or resulting corporation) was approved by a
vote of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director, or (v) upon a
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sale of (A) common stock of the Bank if after such sale any person (as such term
is used in Section 13(d) and 14(d)(2) of the Exchange Act) other than Valley, an
employee benefit plan established or maintained by Valley or a Subsidiary, or an
affiliate of Valley or a Subsidiary, owns a majority of the Bank's common stock
or (B) all or substantially all of the Bank's assets (other than in the ordinary
course of business). No person shall be considered a Control Person for purposes
of clause (i) above if (A) such person is or becomes the beneficial owner,
directly or indirectly, of more than ten percent (10%) but less than twenty-five
percent (25%) of the combined voting power of Valley's then outstanding
securities if the acquisition of all voting securities in excess of ten percent
(10%) was approved in advance by a majority of the Continuing Directors then in
office or (B) such person acquires in excess of ten percent (10%) of the
combined voting power of Valley's then outstanding voting securities in
violation of law and by order of a court of competent jurisdiction, settlement
or otherwise, disposes or is required to dispose of all securities acquired in
violation of law.
d. Continuously Employed. "Continuously employed", as used in
Section 9, means continuously employed by the Bank but
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excludes any period of employment by a bank or financial institution acquired by
or merged into the Bank and excludes any period of employment by the Bank if
such period is separated from the current employment with the Bank by a break in
service (other a break in service resulting solely from illness, disability or
family leave).
e. Contract Period. "Contract Period" shall mean the period
commencing the day immediately preceding a Change in Control and ending on the
earlier of (i) the first anniversary of the Change in Control or (ii) the date
the Executive would attain age 65 or (iii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to have occurred
at the date specified in the definition of Change-in-Control.
f. Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
g. Good Reason. When used with reference to a voluntary
termination by Executive of his employment with the Company, "Good Reason" shall
mean any of the following, if taken without Executive's express written consent:
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(1) The assignment to Executive of any duties inconsistent
with, or the reduction of powers or functions associated with, Executive's
position, duties, responsibilities and status with the Company immediately prior
to a Change in Control. A change in title or positions resulting merely from a
merger of the Company into or with another bank or company which does not
downgrade in any way the Executive's powers, duties and responsibilities shall
not meet the requirements of this paragraph;
(2) A reduction by the Company in Executive's annual base
compensation as in effect immediately prior to a Change in Control or the
failure to award Executive annual increases in accordance herewith;
(3) A failure by the Company to continue any bonus plan in
which Executive participated immediately prior to the Change in control or a
failure by the Company to continue Executive as a participant in such plan on at
least the same basis as Executive participated in such plan prior to the Change
in Control;
(4) The Company's transfer of Executive to another geographic
location more than 35 miles from his present office location, except for
required travel on the Company's business to an extent substantially consistent
with Executive's
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business travel obligations immediately prior to such Change in Control;
(5) The failure by the Company to continue in effect any
employee benefit plan, program or arrangement (including, without limitation the
Company's retirement plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred compensation plan or long
term stock incentive plan) in which Executive is participating immediately prior
to a Change in Control (except that the Company may institute or continue plans,
programs or arrangements providing Executive with substantially similar
benefits); the taking of any action by the Company which would adversely affect
Executive's participation in or materially reduce Executive's benefits under,
any of such plans, programs or arrangements; the failure to continue, or the
taking of any action which would deprive Executive, of any material fringe
benefit enjoyed by Executive immediately prior to such Change in Control; or the
failure by the Company to provide Executive with the number of paid vacation
days to which Executive was entitled immediately prior to such Change in
Control;
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(6) The failure by the Company to obtain an assumption in
writing of the obligations of the Company to perform this Agreement by any
successor to the Company and to provide such assumption to the Executive prior
to any Change in Control; or
(7) Any purported termination of Executive's employment by
the Company during the term of this Agreement which is not effected pursuant to
all of the requirements of this Agreement; and, for purposes of this Agreement,
no such purported termination shall be effective.
h. Pro-rata Bonus Amount. "Pro-rata Bonus Amount", as used in
Section 9, means an amount equal to a "portion" of the highest cash bonus paid
to the Executive in the three calendar years immediately prior to the Change in
Control. The "portion" of such cash bonus shall be a fraction, the numerator of
which is the number of calendar months or part thereof which the Executive has
worked in the calendar year in which the termination occurs and the denominator
of which is 12.
i. Subsidiary. "Subsidiary" means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total
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combined voting power of all classes of stock in one of the other corporations
in such chain.
2. Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby accepts employment, during the Contract
Period upon the terms and conditions set forth herein.
3. Position. During the Contract Period the Executive shall be
employed by the bank as a Senior Officer, or such other corporate or divisional
profit center as shall then be the principal successor to the business, assets
and properties of the Company, with substantially the same title and the same
duties and responsibilities as before the Change in Control. The Executive shall
devote his full time and attention to the business of the Company, and shall not
during the Contract Period be engaged in any other business activity. This
paragraph shall not be construed as preventing the Executive from managing any
investments of his which do not require any service on his part in the operation
of such investments.
4. Cash Compensation. The Company shall pay to the Executive
compensation for his services during the Contract Period as follows:
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a. Base Salary. A base annual salary equal to the annual
salary in effect as of the Change in Control. The annual salary shall be payable
in installments in accordance with the Company's usual payroll method.
b. Annual Bonus. An annual cash bonus equal to at least the
average of the bonuses paid to the Executive in the three years prior to the
Change in Control. The bonus shall be payable at the time and in the manner
which the Company paid such bonuses prior to the Change in Control.
c. Annual Review. The Board of Directors of the Company during
the Contract Period shall review annually, or at more frequent intervals which
the Board determines is appropriate, the Executive's compensation and shall
award him additional compensation to reflect the Executive's performance, the
performance of the Company and competitive compensation levels, all as
determined in the discretion of the Board of Directors.
5. Expenses and Fringe Benefits.
a. Expenses. During the Contract Period, the Executive shall
be entitled to reimbursement for all business expenses incurred by him with
respect to the business of the Company in the same manner and to the same extent
as such expenses
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were previously reimbursed to him immediately prior to the Change in Control.
b. Benefit Equalization Plan. During the Contract Period, if
the Executive was entitled to benefits under the Company's Benefit Equalization
Plan ("BEP") prior to the Change in Control, the Executive shall be entitled to
continued benefits under the BEP after the Change in Control and such BEP may
not be modified to reduce or eliminate such benefits during the Contract Period.
c. Club Membership and Automobile. If prior to the Change in
Control, the Executive was entitled to membership in a country club and/or the
use of an automobile, he shall be entitled to the same membership and/or use of
an automobile at least comparable to the automobile provided to him prior to the
Change in Control.
d. Other Benefits. The Executive also shall be entitled to
vacations and sick days, in accordance with the practices and procedures of the
Company, as such existed immediately prior to the Change in Control. During the
Contract Period, the Executive also shall be entitled to hospital, health,
medical and life insurance, and any other benefits enjoyed, from
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time to time, by senior officers of the Company, all upon terms as favorable as
those enjoyed by other senior officers of the Company. Notwithstanding anything
in this paragraph 5(d) to the contrary, if the Company adopts any change in the
benefits provided for senior officers of the Company, and such policy is
uniformly applied to all officers of the Company (and any successor or acquiror
of the Company, if any), then no such change shall be deemed to be contrary to
this paragraph.
6. Termination for Cause. The Company shall have the right to
terminate the Executive for Cause, upon written notice to him of the termination
which notice shall specify the reasons for the termination. In the event of
termination for Cause the
Executive shall not be entitled to any further benefits under this Agreement.
7. Disability. During the Contract Period if the Executive
becomes permanently disabled, or is unable to perform his duties hereunder for 4
consecutive months in any 12 month period, the Company may terminate the
employment of the Executive. In such event, the Executive shall not be entitled
to any further benefits under this Agreement.
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8. Death Benefits. Upon the Executive's death during the
Contract Period, his estate shall not be entitled to any further benefits under
this Agreement.
9. Termination Without Cause or Resignation for Good Reason.
The Company may terminate the Executive without Cause during the Contract Period
by written notice to the Executive providing four weeks notice. The Executive
may resign for Good Reason during the Contract Period upon four weeks' written
notice to the Company specifying facts and circumstances claimed to support the
Good Reason. The Executive shall be entitled to give a Notice of Termination
that his or her employment is being terminated for Good Reason at any time
during the Contract Period, not later than twelve months after any occurrence of
an event stated to constitute Good Reason. If the Company terminates the
Executive's employment during the Contract Period without Cause or if the
Executive Resigns for Good Reason, the Company shall, subject to section 12
hereof:
a. Within 20 business days of the termination of employment
pay the Executive a lump sum equal to: (i), if the Executive has been
continuously employed by the Bank for 6 full years or more, two (2) years of
Base Salary plus a Pro-rata Bonus Amount or (ii), if the Executive has been
continuously employed by
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the Bank for less than 6 full years but more than three years, then one (1) year
of Base Salary plus a Pro-rata Bonus Amount; and
b. Continue to provide the Executive with medical, dental and
life insurance for the period equal to the equivalent lump sum payment (e.g. 1
or 2 years) as were provided at the time of termination of his employment with
the Company, at the Company's cost. Upon expiration of benefit coverages, full
COBRA benefits (18 months) will be made available to Executive.
The Executive shall not have a duty to mitigate the damages suffered by
him in connection with the termination by the Company of his employment without
Cause or a resignation for Good Reason during the Contract Period. If the
Company fails to pay the Executive the lump sum amount due him hereunder or to
provide him with the health, hospitalization and insurance benefits due under
this section, the Executive, after giving 10 days' written notice to the Company
identifying the Company's failure, shall be entitled to recover from the Company
all of his reasonable legal fees and expenses incurred in connection with his
enforcement against the Company of the terms of this Agreement. The Executive
shall be denied payment of his legal fees and expenses only if a court finds
that the Executive sought payment of such fees without reasonable cause.
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10. Resignation Without Good Reason. The Executive shall be
entitled to resign from the employment of the Company at any time during the
Contact Period without Good Reason, but upon such resignation the Executive
shall not be entitled to any additional compensation for the time after which he
ceases to be employed by the Company, and shall not be entitled to any of the
other benefits provided hereunder. No such resignation shall be effective unless
in writing with four weeks' notice thereof.
11. Non-Disclosure of Confidential Information.
a. Non-Disclosure of Confidential Information. Except in
the course of his employment with the Company and in the pursuit of the business
of the Company or any of its subsidiaries or affiliates, the Executive shall
not, at any time during or following the Contract Period, disclose or use, any
confidential information or proprietary data of the Company or any of its
subsidiaries or affiliates. The Executive agrees that, among other things, all
information concerning the identity of and the Company's relations with its
customers is confidential information.
b. Specific Performance. Executive agrees that the Company
does not have an adequate remedy at law for the breach of this section and
agrees that he shall be subject to injunctive relief and equitable remedies as a
result of the breach of this
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section. The invalidity or unenforceability of any provision of this Agreement
shall not affect the force and effect of the remaining valid portions.
c. Survival. This section shall survive the termination of the
Executive's employment hereunder and the expiration of this Agreement.
12. Certain Reduction of Payments by the Company.
a. Anything in this Agreement to the contrary notwithstanding,
prior to the payment of any lump sum amount payable hereunder, the certified
public accountants of the Company immediately prior to a Change of Control (the
"Certified Public Accountants) shall determine as promptly as practical and in
any event within 20 business days following the termination of employment of
Executive whether any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
"Payment") would more likely than not be nondeductible by the Company for
Federal income purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and if it is then the aggregate present value of
amounts payable or distributable to or for the benefit of Executive pursuant to
this Agreement (such payments or
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distributions pursuant to this Agreement are thereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the reduced
Amount. For purposes of this paragraph, the "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be nondeductible by the
Company because of said Section 280G of the Code.
b. If under paragraph (a) of this section the Certified Public
Accountants determine that any Payment would more likely than not be
nondeductible by the Company because of Section 280G of the Code, the Company
shall promptly give the Executive notice to that effect and a copy of the
detailed calculation thereof and of the Reduced Amount, and the Executive may
then elect, in his sole discretion, which and how much of the Agreement Payments
shall be eliminated or reduced (as long as after such election the aggregate
present value of the Agreement Payments equals the Reduced Amount), and shall
advise the Company in writing of his election within 20 business days of his
receipt of notice. If no such election is made by the Executive within such
20-day period, the Company may elect which and how much of the Agreement
Payments shall be eliminated or reduced (as long as after such election the
Aggregate present Value of the Agreement Payments
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equals the Reduced Amount) and shall notify the Executive promptly of such
election. For purposes of this paragraph, present Value shall be determined in
accordance with Section 280G(d)(4) of the Code. All determinations made by the
Certified Public Accountants shall be binding upon the Company and Executive
shall be made within 20 business days of a termination of employment of
Executive. With the consent of the Executive, the Company may suspend part or
all of the lump sum payment due under Section 9 hereof and any other payments
due to the Executive hereunder until the Certified Public Accountants finish the
determination and the Executive (or the Company, as the case may be) elect how
to reduce the Agreement Payments, if necessary. As promptly as practicable
following such determination and the elections hereunder, the Company shall pay
to or distribute to or for the benefit of Executive such amounts as are then due
to Executive under this Agreement and shall promptly pay to or distribute for
the benefit of Executive in the future such amounts as become due to Executive
under this Agreement.
c. As a result of the uncertainty in the application of
Section 280G of the Code, it is possible that Agreement Payments may have been
made by the Company which should not have been made ("Overpayment") or that
additional Agreement
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Payments which will have not been made by the Company could have been made
("Underpayment"), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Certified Public Accountants, based upon
the assertion of a deficiency by the Internal Revenue Service against the
Company or Executive which said Certified Public Accountants believe has a high
probability of success, determines that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan to Executive which
Executive shall repay to the Company together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided,
however, that no amount shall be payable by Executive to the Company in and for
the extent such payment would not reduce the amount which is subject to taxation
under Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
13. Term and Effect Prior to Change in Control.
a. Term. Except as otherwise provided for hereunder, this
Agreement shall commence on the date hereof and
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shall remain in effect for a period of 3 years from the date hereof (the
"Initial Term") or until the end of the Contract Period, whichever is later. The
Initial Term shall be automatically extended for an additional one year period
on the anniversary date hereof (so that the Initial Term is always 3 years)
unless, prior to a Change in Control, the Personnel and Compensation Committee
of the Bank notifies the Executive in writing at any time that the Contract is
not so extended, in which case the Initial Term shall end upon the later of (i)
3 years after the date hereof, or (ii) twenty-four months after the date of such
written notice. Notwithstanding anything to the contrary contained herein, the
Initial Term shall cease when the Executive attains age 65.
b. No Effect Prior to Change in Control. This Agreement shall
not effect any rights of the Company to terminate the Executive prior to a
Change in Control or any rights of the Executive granted in any other agreement
or contract or plan with the Company. The rights, duties and benefits provided
hereunder shall only become effective upon and after a Change in Control. If the
full-time employment of the Executive by the Company is ended for any reason
prior to a Change in Control, this Agreement shall thereafter be of no further
force and effect.
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14. Severance Compensation and Benefits Not in Derogation of
Other Benefits. Anything to the contrary herein contained notwithstanding, the
payment or obligation to pay any monies, or granting of any benefits, rights or
privileges to Executive as provided in this Agreement shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of or agreements with the Company, except that if
the Executive received any payment hereunder, he shall not be entitled to any
payment under the Company's severance policy for officers and directors.
15. Miscellaneous. This Agreement is the joint and several
obligation of the Bank and Valley. The terms of this Agreement shall be governed
by, and interpreted and construed in accordance with the provisions of, the laws
of New Jersey. This Agreement supersedes all prior agreements and understandings
with respect to the matters covered hereby, including expressly any prior
agreement with the Company concerning change in control benefits. The amendment
or termination of this Agreement may be made only in a writing executed by the
Company and the Executive, and no amendment or termination of this Agreement
shall be effective unless and until made in such a writing. This Agreement shall
be binding upon any successor (whether direct or indirect, by
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purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal to
the Executive and the Executive may not assign any of his rights or duties
hereunder but this Agreement shall be enforceable by the Executive's legal
representatives, executors or administrators. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
IN WITNESS WHEREOF, Valley National Bank and Valley National
Bancorp each have caused this Agreement to be signed by
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their duly authorized representatives pursuant to the authority of
their Boards of Directors, and the Executive has personally
executed this Agreement, all as of the day and year first written
above.
ATTEST: VALLEY NATIONAL BANCORP
/s/ XXXX X. XXXXX By: /s/ XXXXXX X. XXXXXX
--------------------------------- ----------------------------------
, Secretary Xxxxxx X. Xxxxxx, Chairman
and Chief Executive Officer
ATTEST: VALLEY NATIONAL BANK
/s/ XXXX X. XXXXX By: /s/ XXXXXX X. XXXXXX
--------------------------------- ----------------------------------
, Secretary Xxxxxx X. Xxxxxx, Chairman
and Chief Executive Officer
WITNESS:
/s/ XXXXX XXXXXXX /s/ XXXX X. XXXX
--------------------------------- ----------------------------------
Xxxx X. Xxxx, Executive
1/10/92
---------------------------------
"Executive" Valley
National Bank
Service Date
This contract dated 4/15/96 supersedes previously issued change of control
contract for Senior Vice Presidents to Xxxx X. Xxxx.
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