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EMPLOYMENT CONTRACT
This AGREEMENT is made effective as of this 31st day of January, 1997 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; and
WHEREAS, the Executive is willing to serve in the employ of the Bank;
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, Executive shall serve as
Chairman of the Board of Directors of Yardville National Bank (the "Bank")
reporting to the Board of Directors of the Bank and as Chairman of the Board of
Directors of the Holding Company reporting to the Board of Directors of the
Holding Company (collectively, the "Board"). Failure to reelect the Executive as
Chairman of the Board of the Bank or the Holding Company or failure to reelect
Executive as a member of the Board of Directors of the Bank or of 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, 1997 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
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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 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 and attention to such employment and shall perform such duties as are
customarily and appropriately vested in the Chairman of the Board of Directors
of a commercial bank and 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,
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(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 employment, the Bank shall pay to the Executive
an annual salary of not less than $160,000.00 shall be paid in either bi-weekly
or monthly installments as the Executive prefers.
Such salary shall be reviewed by the Board or a duly appointed committee thereof
at least annually and any adjustments in the amount of salary on said review
shall be fixed by the Board from time to time.
(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, executive 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:
(a) The Bank shall pay for all reasonable travel and other
reasonable expenses incurred by the Executive in performing his
obligations under this Agreement.
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5. STOCK OPTIONS
Incentive Stock Options will be periodically negotiated for the
Executive under the terms and conditions of the shareholder approved Employee
Stock Option Plan.
6. 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.
7. 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 annual salary currently being paid, which payment
shall be made in a lump sum promptly 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 promptly
after the occurrence of such voluntary resignation.
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(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. 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 28OG(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 exercise 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.
8. 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 any
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.
9. 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, at the annual salary currently being paid
with said payment to be a lump sum payment upon termination.
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(b) Vested stock options granted to the Executive shall be exercisable
by the Executive at any time within three (3) months from the effective date of
termination, but only to the extent exercisable by him on the date of such
termination and in no event later than the expiration date of his option.
10. 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.
(b) Vested stock options granted to the Executive shall be exercisable
by the Executive at any time within three (3) months from the effective date of
termination by the Executive, but only to the extent exercisable by him on the
date of such termination and in no event later than the expiration date of his
options.
11. SOURCE OF PAYMENTS
It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Bank, as
the case may be.
12. MODIFICATION AND WAIVER
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
13. 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.
14. 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.
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15. 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 WITNESS WHEREOF, the parties have hereunto executed this Agreement on
the 31st day of January, 1997.
ATTEST: YARDVILLE NATIONAL BANCORP
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F. Xxxxx Xxxxx, Chairman
Directors' Organization &
Compensation Committee
WITNESS
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Xxx X. Xxxxxxxxxx
Chairman of the Board
