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        Exhibit 10.1       
      
        
      
    

SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (the “Agreement”), dated June 6,
2007, is entered into by and between Yardville National Bancorp, Patrick M.
Ryan, George Muller, Martin Tuchman, F. Kevin Tylus, Christopher S. Vernon,
Robert Workman, James E. Bartolomei, Elbert G. Basolis, Jr., Lorraine Buklad,
Jay G. Destribats, Anthony M. Giampetro, Sidney L. Hofing, Gilbert W. Lugossy,
Samual D. Marrazzo, and Louis R. Matlack (collectively “YNB”) and Lawrence B.
Seidman, Dennis Pollack, and Seidman and Associates, LLC (collectively
“Seidman”) (collectively, YNB and Seidman are referred to as the “Parties”);
WHEREAS, on or about March 3, 2006, Seidman instituted a shareholder
disenfranchisement lawsuit against YNB with the Superior Court of New Jersey,
Chancery Division, Passaic County, under a matter entitled Seidman, et al. v.
Yardville National Bancorp, et al. (Docket No. PAS-C-41-06) (the “Action”);
 
WHEREAS, on or about February 8, 2007, the Court entered an Order of Judgment
that resolved all the issues in the case; and
 
WHEREAS, on or about February 9, 2007, Seidman & Associates, LLC instituted a
summary proceeding under the caption Seidman, et al. v. Yardville National
Bancorp, et al. (Docket No. PAS-C-20-07) for a declaration to require Yardville
National Bancorp to hold its annual meeting of shareholders on or before June 4,
2007;
 

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WHEREAS, on or about March 21, 2007, the Court entered an Order requiring
Yardville National Bancorp to hold its annual meeting of shareholders on or
before July 12, 2007; and
 
WHEREAS, on or about March 29, 2007, the Court entered an Order Awarding
Attorney’s Fees and Costs that awarded Seidman certain fees and costs associated
with the Action; and
 
WHEREAS, YNB and Seidman filed appeals with the Superior Court of New Jersey
Appellate Division under Docket Number A-004348-06-T5 to challenge the February
8th Order and the March 29th Order (the “Appeal”); and
 
WHEREAS, the Parties now wish to amicably settle and resolve all disputes and
controversies relating to the Action, the date for the 2007 Annual Meeting of
Shareholders, and the Appeal in order to avoid the uncertainty and costs
associated with on-going litigation; and
WHEREAS, the Parties have consulted with their respective attorneys prior to
executing this Agreement.
 
NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the undersigned Parties do hereby agree as follows:
 
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1.  Payment.  YNB agrees to pay Seidman the sum of One Hundred Thousand
Fifty-Three and 6/100 Dollars ($100,053.06) (the “Settlement Payment”) within
ten (10) days of Seidman’s delivery of a fully executed copy of this
Agreement.  The Settlement Payment is made in order to settle all disputes,
claims and controversies between the Parties.  Upon receipt of the Settlement
Payment, Seidman agrees to execute and file warrants to satisfy the monetary
judgments entered in the Action.  The warrants shall only satisfy the monetary
portion of the judgments entered in Action and not constitute a waiver of YNB’s
ability to appeal paragraphs 4 and 6 of the February 8, 2007 Order entered in
the Action.
 
2.  Consent to Vacate the March 21, 2007 Order.  The Parties agree to the entry
of a Consent Order that shall be entered by the Honorable Margaret M. McVeigh,
P.J.Ch. which shall vacate the Court’s March 21, 2007 Order that requires the
2007 annual meeting of shareholders to take place on July 12, 2007.  The Consent
Order shall be prepared and submitted to the Court by YNB’s counsel.
 
3.  Resolution of the Appeal.  Seidman agrees that he will withdraw the
cross-appeal filed in the Appeal under Docket Number A-004348-06-T5.  YNB agrees
that it will withdraw all portions of its appeal, except its appeal of
Paragraphs 4 and 6 of the February 8, 2007 Order entered in the Action.  Seidman
agrees not to oppose YNB’s appeal of Paragraphs 4 and 6 of the Court’s February
8, 2007 Order.  The Parties further agree that they will use their best efforts
to resolve the Appeal by jointly seeking to have the Appellate Division enter an
Order that vacates Paragraphs 4 and 6 of the February 8, 2007 Order entered in
the Action.  In connection with the foregoing, in the event that Seidman’s
counsel is asked by YNB to attend any conferences or otherwise provide services,
YNB shall promptly reimburse Seidman for the reasonable fees and expenses of his
counsel.
 
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4.  2007 Annual Meeting of Shareholder.  On or prior to the date of this
Agreement, Yardville National Bancorp has entered into an Agreement and Plan of
Merger (as amended, supplemented, restated or otherwise modified from time to
time, the “Merger Agreement”), pursuant to which Yardville National Bancorp will
merge with and into an unaffiliated corporation (the “Merger”), which provides,
among other things, that Yardville National Bancorp will promptly take all steps
necessary to duly call, give notice of, convene, and hold a special meeting of
its shareholders for the purpose of considering the Merger Agreement and the
Merger.  In the event that the Merger Agreement is terminated for any reason
prior to the consummation of the Merger, Yardville National Bancorp shall cause
an annual meeting of shareholders to be held within sixty (60) days of the
effective date of such termination.
 
5.  Seidman’s Withdrawal of the Slate of Director Candidates.  If an annual
meeting of shareholders is held in accordance with paragraph 4 of this
Agreement, Seidman & Associates, LLC shall withdraw its slate of director
candidates seeking election to the Yardville National Bancorp Board.
 
6.  Withdrawal of Proposal to Declassify Yardville National Bancorp’s Board. If
an annual meeting of shareholders is held in accordance with paragraph 4 of this
Agreement, Seidman & Associates, LLC shall withdraw its shareholder proposal to
hold an election on the adoption of a resolution to declassify Yardville
National Bancorp’s Board of Directors and hold annual elections of each director
seat.
 
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7.  Yardville National Bancorp’s Nomination of Candidates.  If an annual meeting
of shareholders is held in accordance with paragraph 4 of this Agreement,
Yardville National Bancorp shall nominate the following slate of candidates for
election to the Yardville National Bancorp Board of Directors at the 2007 annual
meeting of shareholders: Elbert G. Basolis, Jr., Dennis Pollack, Patrick
Robinson, Patrick M. Ryan and F. Kevin Tylus.
 
8.  Adoption of Declassification Amendment.  If an annual meeting of
shareholders is held in accordance with paragraph 4 of this Agreement, Yardville
National Bancorp shall cause to be submitted to a vote of the shareholders an
amendment to its certificate of incorporation to declassify its Board and hold
annual elections for each director seat on the Board beginning at the 2008
annual meeting of shareholders.
 
9.  Share Voting Agreement.  If an annual meeting of shareholders is held in
accordance with paragraph 4 of this Agreement, Seidman agrees to be present, in
person or by proxy, and to vote or cause to be voted, in person or by proxy, all
of the shares which it beneficially owns, in favor of the slate of candidates
the Yardville National Bancorp Board of Directors nominates for election at the
2007 annual meeting of shareholders.
 
10.  No Admission.  This Agreement is executed pursuant to a compromise and
settlement entered into without any admission of liability by the Parties, but
solely for the purpose of avoiding costly litigation on disputed claims and
avoiding uncertainty, controversy and legal expense.
 
11.  Amendment.  This Agreement shall be binding upon the Parties and may not be
amended, supplemented, changed, or modified in any manner, orally or otherwise,
except by an instrument in writing of concurrent or subsequent date signed by
the Parties.
 
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12.  Entire Agreement.  This Agreement contains and constitutes the entire
understanding and agreement between the Parties and cancels all prior or
contemporaneous oral or written understandings, negotiations, agreements,
commitments, warranties, representations, and promises in connection herewith.
 
13.  Severability.  If any provision in this Agreement is declared or determined
by any court or arbitrator to be illegal or invalid, the validity of the
remaining parts, terms, or provisions shall not be affected, and the illegal or
invalid part, term, or provision shall be deemed not to be a part of this
Agreement.
 
14.  Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original, and the counterparts shall together
constitute one and the same agreement, notwithstanding that all Parties are not
a signatory to the original or the same counterpart.  Furthermore the Parties
mutually agree that this Agreement may be executed by a faxed signature in
counterparts which taken together should be considered an original.
 
15.  Headings.  The headings of the sections contained herein are for
convenience only and are not to be used to define, limit or construe their
contents.
 
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16.  Successors.  All of the rights and obligations of the Parties under this
Agreement shall bind and inure to the benefit of the respective successors,
grantees and assigns of the Parties.
 
17.  Representation by Counsel.  The Parties hereby acknowledge that each has
been represented by legal counsel of its own choice throughout all of the
negotiations which preceded the execution of this Agreement and that each of
them has executed this Agreement with the consent and on the advice of such
legal counsel.  The Parties further acknowledge that each of them and their
counsel have had an adequate opportunity to make whatever investigations or
inquiry that they may deem necessary or desirable in connection with the subject
matter of this Agreement prior to the execution hereof and the delivery and
acceptance of the consideration specified herein.  Each party has reviewed and
revised, or had the opportunity to revise this Agreement, and accordingly the
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.
 
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By signing below, the Parties acknowledge that they have consulted with legal
counsel regarding this Agreement and have carefully read and fully understand
all of the provisions of this Agreement and that they are voluntarily entering
into this Agreement.
 
Dated:  June 6, 2007
/s/ Lawrence B. Seidman
 
Lawrence B. Seidman

 
SEIDMAN & ASSOCIATES, LLC
 
Dated:  June 6, 2007
By: /s/ Lawrence B. Seidman
 
Lawrence B. Seidman

Dated:  June 6, 2007
   
Dennis Pollack

 
YARDVILLE NATIONAL BANCORP
 
Dated:  June 6, 2007
/s/ By: Patrick M. Ryan
 
Patrick M. Ryan , CEO

 
Dated:  June 6, 2007
/s/ Patrick M. Ryan
 
Patrick M. Ryan

Dated:  June 6, 2007
/s/ George Muller
 
George Muller

Dated:  June 6, 2007
/s/ Martin Tuchman
 
Martin Tuchman

Dated:  June 6, 2007
/s/ F. Kevin Tylus
 
F. Kevin Tylus

Dated:  June 8, 2007
/s/ Christopher S. Vernon
 
Christopher S. Vernon

Dated:  June 6, 2007
/s/ Robert Workman
 
Robert Workman

Dated:  June 6, 2007
/s/ James E. Bartolomei
 
James E. Bartolomei

Dated:  June 6, 2007
/s/ Elbert G. Basolis, Jr.
 
Elbert G. Basolis, Jr.

Dated:
   
Lorraine Buklad

Dated:  June 6, 2007
/s/ Jay G. Destribats
 
Jay G. Destribats

Dated:  June 6, 2007
/s/ Anthony M. Giampetro
 
Anthony M. Giampetro

 
Dated:  June 8, 2007
/s/ Sidney L. Hofing
 
Sidney L. Hofing

Dated:  June 6, 2007
/s/ Gilbert W. Lugossy  
 
Gilbert W. Lugossy

Dated:  June 6, 2007
/s/ Samuel D. Marrazzo
 
Samuel D. Marrazzo

Dated:  June 6, 2007
/s/ Louis R. Matlack     
 
Louis R. Matlack

 

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