EMPLOYMENT CONTRACT
This AGREEMENT is made effective as of this 31st day of January, 2003 by and
between THE YARDVILLE NATIONAL BANCORP (the "Holding Company"), a corporation
organized under the laws of the State of New Jersey, and Xxx X. Xxxxxxxxxx (the
"Executive").
RECITALS
WHEREAS, the Bank desires to employ and retain the services of the
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the Bank on
a full-time basis for said period;
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
During the period of his employment hereunder, the Executive shall serve as
Chairman of the Board of the Yardville National Bank (the "Bank") reporting
to the Board of Directors of the Bank and Yardville National Bancorp
reporting to Board of Directors of the Holding Company (collectively, the
"Board"). During said period, it is anticipated the Executive will devote a
substantial amount of time to such duties as are customarily and
appropriately vested in the Chairman of the Board. Failure to re-elect
Executive as Chairman of the Board of the Bank or the Holding Company shall
constitute a Breach of this Agreement.
2. TERMS AND DUTIES
(A) The period of the Executive's employment under this Agreement shall
commence as of January 31, 2003 and shall continue for a period of
twenty-four (24) full calendar months thereafter, unless terminated by the
Bank on account of death, disability or cause (as herein defined). This
Agreement is subject to approval, for continuation, by the Board of Directors
of the Yardville National Bancorp, at the conclusion of each contract period.
Renewals shall be on the same terms and conditions as set forth herein,
except for such modification of compensation and benefits as may hereafter be
agreed upon between the parties hereto from time to time. This Agreement
shall be deemed to continue for an additional twelve (12) months from each
succeeding anniversary date of the Agreement, it being the intention of the
parties that, unless notice is given to the contrary by either party, the
Agreement shall be extended for an additional one year period so that there
be a full twelve month term remaining.
(B) During the period of employment, the Executive shall devote full time
attention to such employment and shall perform such duties as are customarily
and appropriately vested in the Chairman of the Board of Directors of the
Holding Company and Bank from time to time may be perceived by the Board.
3. DEFINITIONS
For purposes of the Agreement,
(A) "Cause" means any of the following:
(i) the willful commission of an act that causes or that probably will
cause substantial economic damage to the Bank or substantial injury to
the Bank's business reputation; or,
(ii) the commission of an act of fraud in the performance of the
Executive's duties; or
(iii) a continuing willful failure to perform the duties of the
Executive's position with the Bank; or
(iv) the order of a bank regulatory agency or court requiring the
termination of the Executive's employment.
(B) "Change in Control": means any of the following:
(i) the acquisition by any person or group acting in concert of
beneficial ownership of forty percent (40%) or more of any class of
equity security of the Bank or the Bank's Holding Company, or
(ii) the approval by the Board of the sale of all or substantially all of
the assets of the Bank or Holding Company; or,
(iii) the approval by the Board of any merger, consolidation, issuance of
securities or purchase of assets, the result of which would be the
occurrence of any event described in clause (i) or (ii) above.
(C) "Disability" means a mental or physical illness or condition rendering
the Executive incapable of performing his normal duties for the Bank.
(D) Willfulness" means an act or failure to act done not in good faith and
without reasonable belief that the action or omission was in the best
interest of the Bank.
4. COMPENSATION AND REIMBURSEMENT
(A) During the period of this agreement, the Bank shall pay to the Executive
an annual salary of not less than $270,000.00 any increase in the annual
salary for the second year of this agreement will be subject to the
recommendation and approval of the Directors' Organization and Compensation
Committee. This Committee will utilize the services of an outside consultant
to assist in the determination of the second year annual salary.
(B) The Executive shall be entitled to participate in or receive Benefits
under any retirement plan, salary continuation plan, pension plan,
profit-sharing plan, stock plan, group term replacement plan,
health-and-accident plan, medical coverage or any other employee benefit plan
or prerequisite arrangement currently available or which may hereafter be
adopted by the Bank for its senior executives and key management employees,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Nothing paid to the Executive
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.
(C) The Executive shall be provided, by the Bank, with an automobile for his
individual use.
(D) In addition to the salary provided for under Section 4:
(i) The Bank shall pay for all reasonable travel and other reasonable
expenses incurred by the Executive in performing his obligations under
this Agreement.
(ii) The Executive shall be eligible for an annual cash bonus, based upon
the Bank's performance during the fiscal year.
In the first year of the contract period the cash bonus allowance will be
set at .93% of profits, after taxes and prior to shareholder dividend
payments, if earnings, in the fiscal year, exceed $15,000,000.00. If
earnings should fall below $15,000,000.00 the cash bonus allowance will
be set at .84%, after taxes and prior to shareholder dividend payment.
The cash bonus for year two of this agreement will be subject to the
recommendation and approval of the Directors' Organization and
Compensation Committee. This Committee will utilize the services of an
outside consultant to assist in its determination of the second year
bonus.
All cash bonuses, for the Executive, are subject to the recommendation
and approval of the Directors' Organization and Compensation Committee
and all bonus provisions will be reviewed annually for appropriate
revisions.
5. TERMINATION FOR CAUSE
(A) The Executive shall not have the right to receive compensation or other
benefits provided hereunder for any period after termination for Cause,
except to the extent that Executive may be legally entitled to participate by
virtue of COBRA or any other State or Federal Law concerning employee rights
to benefits upon termination.
(B) Any unexercised stock option granted to the Executive shall become null
and void effective upon the Executive's receipt of notice of termination for
Cause and shall not be exercisable by the Executive at any time subsequent to
such termination for Cause.
(C) The Executive shall not be deemed to have been terminated for Cause
unless and until there is delivered to him a copy of a resolution duly
adopted by the affirmative vote of not less than two-thirds of the full Board
at a meeting of such Board called and held for the purpose (after the
Executive, together with counsel, has been given the opportunity to be heard
before the Board), finding the Executive guilty of conduct set forth above in
the definition of "Cause" in Subsection 3(A) and specifying the particulars
thereof in detail.
6. CHANGE IN CONTROL
(A) In the event that within three (3) years after a Change in Control (as
herein defined), the Executive's employment is terminated by the Bank, other
than for death, disability or Cause, the Executive shall be entitled to
receive three (3) years' salary at the base salary currently being paid, and
the cash bonus paid for the most recent prior calendar year, which payment
shall be made in a lump sum within 30 days after the occurrence of such
termination.
(B) The Executive will have the option within six (6) months after a Change
in Control (as herein defined), to elect to resign his position. If the
Executive's voluntary departure is for other than death, disability or cause
the Executive shall be entitled to receive three (3) years' salary at an
annual salary currently being paid, which payment shall be made in a lump sum
within 30 days after the occurrence of such voluntary resignation.
(C) Under the provisions of Section 7 the Executive is entitled to receive a
lump sum payment of three (3) years' salary at the annual salary currently
being paid at the time of the event and the cash bonus paid for the most
recent prior calendar year. The Holding Company's independent accountants
will determine if an excess payment (as defined in Section 4999 of the
Internal Revenue Code of 1954, as amended (the "Code") exists after
reductions permitted pursuant to Section 280G (b) (4) of the Code (such
excess parachute payment after taking into account such reductions, if any,
being hereafter referred to as the "Excess Parachute Payment"). As soon as
practicable after the Excess Parachute Payment, if any, has been so
determined, the Holding Company will pay to the Executive, subject to
applicable withholding requirements under state or federal law
(i) twenty (20%) percent of the Excess Parachute Payment, and
(ii) such additional amount, if any (including Federal and State income
and excise taxes applicable thereto) as may be necessary to compensate
the Executive for the payment of state and federal income and excise
taxes on the aforesaid payment, as outlined in Section C.
7. TERMINATION UPON DISABILITY
(A) In the event that the Executive experiences a Disability during the
period of his employment, his salary shall continue at the same rate as was
in effect on the day of the occurrence of such Disability, reduced by an
concurrent disability benefit payments provided under disability insurance
maintained by the Holding Company. If such Disability continues for a period
of six (6) consecutive months, the Holding Company at its option may
thereafter, upon written notice to the Executive or his personal
representative, terminate the Executive's employment with no further notice.
8. OTHER TERMINATION BY THE HOLDING COMPANY
(A) In the event the Executive's employment is terminated by the Holding
Company, other than for disability, death or Cause, and in the absence of
occurrence of a Change in Control, the Executive will be entitled to payment
of the remaining term of this agreement or twelve (12) months salary,
whichever is greater, at the annual salary currently being paid with said
payment to be a lump sum payable within 30 days after termination.
9. TERMINATION BY THE EXECUTIVE
(A) In the event of the Executive's voluntary termination, the Executive
shall not have the right to receive compensation or benefits as provided
hereunder after such date of termination, except to the extent that Executive
may be legally entitled to participate by virtue of COBRA or any other State
or Federal Law concerning employee rights to benefits upon termination.
10. SOURCE OF PAYMENTS
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or checks from the general funds of the Bank,
as the case may be.
11. MODIFICATION AND WAIVER
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
12. NOTICES
Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and if sent by registered mail to his residence in
the case of the Executive or to its principal place of business in the case
of the Bank.
13. GOVERNING LAW
This Agreement and the obligations of the parties hereto shall be
interpreted, construed and enforced in accordance with the laws of the State of
New Jersey.
14. ENTIRE AGREEMENT
This instrument contains the entire agreement of the parties. It may
not be changed orally, but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
IN WITHNESS WHEREOF, the parties have hereunto executed this Agreement
on the 31st day of January 2003.
ATTEST: YARDVILLE NATIONAL BANCORP
/s/ /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
President & CEO
/s/ /s/ F. Xxxxx Xxxxx
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F. Xxxxx Xxxxx, Chairman
Directors' Organization &
Compensation Committee
WITNESS
/s/ /s/ Xxx X. Xxxxxxxxxx
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Xxx X. Xxxxxxxxxx
Chairman of the Board
