EMPLOYMENT CONTRACT
This AGREEMENT is made effective as of this thirty-first day of
January, 1998 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. Xxxxxx (the "Officer").
RECITALS
WHEREAS, the Holding Company desires to employ and retain the services
of the Officer for the period provided in this Agreement; and
WHEREAS, Officer 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 Officer shall serve
as Executive Vice President and Chief Financial Officer of The Yardville
National Bank (the "Bank") reporting to the President of The Bank.
2. TERMS AND DUTIES
(a) The period of the Officer's employment agreement shall commence as
of January 31, 1998, 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 President/Chief Executive Officer and 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.
(b) During the period of employment, the Officer shall devote full time
and attention to such employment and shall perform such duties as are
customarily and appropriately vested in the Executive Vice President and Chief
Financial Officer of a commercial bank.
3. DEFINITIONS
For purposes of the Agreement,
(a) "Cause" means any of the following:
(i) the willful commission of an act that causes 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 Officer's duties; or
(iii) a continuing willful failure to perform the duties of the
Officer's position with the Bank; or
(iv) the order of a bank regulatory agency or court requiring the
termination of the Officer's employment.
(b) "Change in Control" means any of the following:
(i) the acquisition by any person or group acting in the concert of
beneficial ownership of forty percent (40%) or more of any
class equity security of the Bank or the Bank's Holding
Company, or
(ii) the approval by the Board, and appropriate regulatory
authorities of the sale of all or substantially all of the
assets of the bank or Holding Company, or
(iii) the approval by the Board and appropriate regulatory
authorities of any merger, consolidation, issuance of
securities or purchase of assets, the result of which would be
the occurrence of an event described in clause (i) or
(ii) above.
(c) "Disability" means a mental or physical illness or condition
rendering the Officer 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 the Officer an
annual salary of not less than $100,000.00, and an annual salary of not less
than $110,000.00 in the second year of the contract period; which salary shall
be paid in bi-weekly installments. 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 or 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, pension 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.
STOCK OPTIONS
(a) the Bank agrees to grant to the Executive the right, privilege, and
option to purchase 5,000 shares of its common stock of the bank Holding Company
(at the private placement price of $16.00 (subject to shares becoming available
through existing or additional approvals by shareholders) subject to the terms
and conditions of the Holding Company's 1988 Stock Option Plan (the "Plan"). It
is the intention of this Agreement that the Executive be granted options that
will not be subject to state or federal income taxes when they are exercised,
but rather only when the resultant stock is sold, assuming that such date of
sale is at least two years after the date such options were granted one year
after the date such stock was acquired by the executive. it is understood that
the Holding Company will receive no tax benefits or tax deduction in connection
with these options.
(b) the options as to the 4,700 shares may be exercised by the
Executive at any time during a period commencing with the vesting date of such
options and ending three (3) years after the option grant date, except to the
extent that said time period may be decreased in accordance with the provisions
contained in Subsection 5(c), 5(f) and
The options shall vest in accordance with the following schedule:
Number of Options Vesting Date
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1570 November 25, 1993
1570 November 25, 1994
1560 November 25, 1995
The rights to exercise shall be cumulative, and any option exercised in
a prior year may be exercised in a subsequent year throughout the ten year
option period.
(c) In connection with any proposed sale or conveyance of all or
substantially all of the assets of the Bank or Holding Company or recently
accomplished Change in Control of the Holding Company, the vesting schedule of
all options granted hereunder to the Executive shall accelerate and 100% of all
options shall immediately vest to the Executive.
(d) If and to the extent that the number of issued shares of common
stock of the Holding Company shall be increased or reduced by any change in the
par value, split-stock, or the like, the number of shares proportionately
adjusted. If the Holding Company is reorganized, consolidated or merged with
another corporation in the same proportion and at an equivalent price and
subject to the same conditions. For the purposes of the preceding sentence, the
excess of the aggregate fair market value of all shares subject to the option
immediately after the reorganization, consolidation or merger over the aggregate
option price of such shares, and a new option or assumption of the old option
shall not give the Executive additional benefits which he did not have under the
old option.
(e) The options granted hereunder are transferable by the Executive.
5. TERMINATION FOR CAUSE
(a) The Officer 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 the Officer may be legally entitled to participate by
virtue of COBRA or any other State or Federal Law concerning employee rights to
benefits upon termination.
6. TERMINATION BY THE OFFICER
(a) In the event of the Officer's voluntary termination, the Officer
shall not have the right to receive compensation or benefits as provided
hereunder after such date of termination, except to the extent that the Officer
may be legally entitled to participate by virtue of COBRA or any other State or
Federal Law concerning employee rights to benefits upon termination.
7. CHANGE OF CONTROL
(a) In the event that within three (3) years after a Change in Control
(as herein defined), the officer's employment is terminated by the Bank, other
than for death, disability or cause, the Officer shall be entitled to receive
two year's salary at the annual salary currently being paid, which payment shall
be made in lump sum promptly after the occurrence of such termination.
(b) The Officer will have the option within six (6) months after a
Change in Control (as herein defined), to elect to resign his position. If the
officer's voluntary departure is for other than death, disability or cause the
Executive shall be entitled to receive two (2) years salary at the annual salary
currently being paid, which payment shall be made in a lump sum promptly after
the occurrence of such voluntary resignation.
8. TERMINATION UPON DISABILITY
(a) in the event that the Officer experiences a Disability during the
period of his employment, his salary shall continue at the same rate as was in
effect on the date of the occurrence of such Disability, reduced by any
concurrent disability benefit payments provided under disability insurance
maintained by the Bank. If such Disability continues for a period of six (6)
consecutive months, the Bank at its option may thereafter, upon written notice
to the Officer or his personal representative, terminate the Officer's
employment with no further notice.
9. GOVERNING LAW
This Agreement and other obligations of the parties hereto shall be
interpreted, construed and enforced in accordance with the laws of the State of
New Jersey.
10. 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 hereto executed this Agreement on
the 31st day of January, 1998.
ATTEST: Yardville National Bancorp
/s/ Xxxxxxxx X. Fone /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
President/CEO
WITNESS
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Executive Vice President
Chief Financial officer