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EMPLOYMENT CONTRACT
This AGREEMENT is made effective as of this 31st day of January, 1999 by and
between THE YARDVILLE NATIONAL BANCORP (the "Holding Company"), a corporation
organized under the laws of the State of New Jersey, and Xxxxxxx X. Xxxx (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, Executive shall serve as
President and Chief Executive Officer of the Yardville National Bank (the
"Bank") reporting to the Board of Directors of the Bank and as Chief Executive
Officer of the Holding Company reporting to the Board of Directors of the
Holding Company (collectively, the "Board"). During said period, Executive shall
also serve as a director of the Bank and as a director of the Holding Company.
Failure to re-elect Executive as President and Chief Executive Officer of the
Bank or the Holding Company or failure to re-elect 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, 1999 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
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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 and attention to such employment and shall perform such duties as are
customarily and appropriately vested in the President and Chief Executive
Officer 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
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 $225,000.00 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, 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.
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(ii) The Executive shall be eligible for an annual cash bonus,
based upon the Bank's performance during the fiscal year.
The cash bonus allowance will be set at 2% of profits, after
taxes and prior to shareholder dividend payments, if earnings,
in the fiscal year, exceed $5,000,000.00
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
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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.
(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 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 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
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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, at the annual salary currently being
paid with said payment to be a lump sum payment 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, 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.
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.
(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 of his
options.
10. 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.
11. MODIFICATION AND WAIVER
This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
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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 WITNESS WHEREOF, the parties have hereunto executed this Agreement
on the 31st day of January, 1999.
ATTEST: YARDVILLE NATIONAL BANCORP
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Xxx X. Xxxxxxxxxx
Chairman of the Board
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F. Xxxxx Xxxxx, Chairman
Directors' Organization &
Compensation Committee
WITNESS
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Xxxxxxx X. Xxxx
the Executive
