Exhibit 10.16

CONSULTING SERVICES AGREEMENT

THIS CONSULTING SERVICES AGREEMENT (this “Agreement”) is made as of
September 22, 2009 by and between The Provident Bank, a New Jersey chartered
savings bank (“Bank”), and Paul M. Pantozzi (“Consultant”).

WHEREAS, Consultant has retired from Bank and from Provident Financial Services,
Inc., a Delaware corporation and the holding company of Bank (“Company”) and
therefore resigned as an officer and employee of Company, Bank and their
affiliates, effective as of the close of business on August 31, 2009;

WHEREAS, in order to provide for continuity, and to assure that Consultant’s
knowledge and business expertise remain available to Company and Bank, and are
not provided to other banks and financial services companies competing with
Company and Bank, Bank desires to engage Consultant as a consultant on the terms
set forth in this Agreement; and

WHEREAS, Consultant desires to provide such consulting services to Bank on the
terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
Bank and Consultant, intending to be legally bound hereby, agree as follows:

1. Retirement and Resignation From Positions With Company, Bank, Subsidiaries
and Affiliates. Effective as of the close of business on August 31, 2009 (the
“Separation Date”), and as a result of his retirement, Consultant’s status as an
officer and employee of Company, Bank and all subsidiaries and affiliates of
Company and Bank terminated, and Consultant resigned from any and all positions
held as an officer and employee at Company, Bank, and any subsidiaries and/or
affiliates of Company and Bank, including without limitation, Consultant’s
position as Chief Executive Officer of Company and Bank (“Retirement”). In
addition, Consultant resigned as Chair and member of the Credit Risk Committee
of Bank’s Board of Directors (“Board”) and as President of The Provident Bank
Foundation (“Foundation”), effective as of the close of business on the
Separation Date. Consultant shall remain as Chairman of the Board of Foundation
through December 31, 2009, and will resign as Chairman and as a member of the
board of Foundation, effective December 31, 2009.

2. Expiration of Employment Agreement. Consultant acknowledges and agrees that
as of the Separation Date, and as a result of his Retirement, the Amended and
Restated Employment Agreement made effective as of December 31, 2008 by and
between Consultant and Company (the “Employment Agreement”) terminated and is of
no further force or effect (except for restrictions as to confidentiality,
non-competition and non-solicitation, which upon execution of this Agreement,
are included herein). Consultant further agrees that as a result of his
Retirement, Consultant shall not be entitled to, and hereby waives any claim to,
any payments or other benefit under the Employment Agreement.

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3. Benefits Available to Consultant as Former Employee. Consultant is entitled
to certain benefits as a former employee of Company and Bank pursuant to the
plans and agreements maintained by Company and Bank for his benefit (other than
the Employment Agreement), including but not limited to tax-qualified plans and
nonqualified plans, equity plans and such other plans and arrangements that may
provide post-retirement benefits to Consultant.

4. Board Service. The parties agree that Consultant shall continue as a Chairman
of the Board and as a director of Company and Bank through the annual meeting of
stockholders of Company following the year ending December 31, 2009 (the “Annual
Meeting”), at which time, unless he has been re-nominated by the Board of
Directors of Company (“Company Board”) to the Company Board and elected by
Company’s stockholders as a director of the Company and also elected as a
director of the Bank, his term of office as a director of Company and Bank shall
expire. If Consultant is re-nominated by the Company Board and elected by the
stockholders as a director of the Company and elected as a director of the Bank,
and in each case, has agreed to serve in such capacity, this Agreement shall
terminate as of the Annual Meeting. Except as provided in the foregoing as to
the Company and the Bank, Executive’s service on the Board of Directors of all
subsidiaries and affiliates of the Company and the Bank, as well as his service
as Chair and member of the Credit Risk Committee of the Board and Chairman of
the Board and President of The Provident Bank Foundation, terminated as of the
Separation Date.

5. Consulting Term. Bank hereby agrees to engage Consultant as a consultant
during the period commencing on January 1, 2010 and, unless terminated earlier
pursuant to Sections 4 or 8, continuing through February 10, 2013 (the
“Consulting Termination Date”). The period from the January 1, 2010 to the
Consulting Termination Date shall be referred to as the “Consulting Term.”

6. Consulting Services.

(a) During the Consulting Term, Consultant shall make himself available to
provide such advisory services as are reasonably requested by Bank’s Board
and/or its Chief Executive Officer and President, including, without limitation,
advising with respect to: (i) existing and new customer relationships,
(ii) expansion strategies for existing and new market areas, (iii) strategies
for developing and implementing new banking products and services, and (iv) such
other banking-related services or advice as the Board may reasonably request
(the “Consulting Services”). In no event shall Consultant be required to render
more than eight hours of service a week under this Agreement. Consultant agrees
to provide the Consulting Services at such times and locations as Company
reasonably requires. Consultant agrees to use his best efforts to perform the
Consulting Services in a professional and competent manner. Consultant is not
hereby being granted nor will he have any authority, apparent or otherwise, to
bind or commit Company, Bank or any subsidiary or affiliate of Company or Bank
in any manner after the Separation Date.

(b) Bank and Consultant acknowledge and agree that because the Consulting
Services required hereunder shall be no more than 20 percent of the average
level of bona fide services performed by Consultant as Chief Executive Officer
of Company and Bank and their affiliates, in the aggregate, over the immediately
preceding 36-month period during which Consultant was an employee of Company and
Bank and their affiliates, Consultant has had a “Separation from Service” from
Company and Bank for purposes of Section 409A of the Internal Revenue Code
(“Code”) and Treasury Regulation section 1.409A-1(h)(ii).

 

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7. Consulting Compensation and Expense.

(a) In consideration for the services agreed to be performed during the
Consulting Term, Consultant shall receive a monthly fee (the “Fee”) of $20,000
(i.e., an aggregate annual Fee of $240,000), which shall be paid monthly in
arrears by Bank through December 31, 2012, after which time, no further Fee or
other amounts shall be payable hereunder. During any period that Consultant
receives the monthly Fee set forth herein, Consultant shall not receive fees
(retainer, meeting or otherwise) for his services as a member of the board of
directors or any board committee of Company or Bank. In addition to the monthly
Fee, Consultant shall be eligible for the annual medical examination benefit
available to Bank’s senior executives, but only for so long as the Bank
continues to provide this benefit to senior executives.

(b) Consultant shall pay and be responsible for all of his home office expenses,
including postage, printing, and cell phone expenses. Bank shall reimburse
Consultant for other reasonable expenses incurred in connection with rendering
the Consulting Services hereunder in accordance with policies adopted by Bank
from time to time and subject to the approval of Bank’s Chief Executive Officer
and President. The expense reimbursements described herein are intended to
satisfy the requirements for a “reimbursement plan” described in Treasury
Regulation Section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy
such requirements.

8. Termination of the Consulting Term.

(a) Death. Consultant’s engagement hereunder and this Agreement shall terminate
upon his death.

(b) Disability. If Consultant becomes physically or mentally disabled during the
Consulting Term such that he is unable to provide the Consulting Services for a
period of six (6) consecutive months in any twelve (12) month period (a
“Disability”), Company, at its option, may suspend the compensation described in
Section 7 above until such time as Consultant is able to provide the Consulting
Services, at which time, said payments would be reinstated for the remainder of
the Consulting Term, if any.

(c) Termination by Company For Cause. Bank may terminate this Agreement and
Consultant’s engagement hereunder as a consultant for Cause. For purposes of
this Agreement, “Cause” shall mean personal dishonesty, willful misconduct,
breach of fiduciary duty involving personal profit, material breach of Company’s
or Bank’s Code of Business Conduct and Ethics, willfully engaging in actions
that in the reasonable opinion of the Board will likely cause substantial
financial harm or substantial injury to the business reputation of Company or
Bank, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than routine traffic violations or similar
offenses) or final cease-and-desist or regulatory order, or material breach of
any provision of the Agreement. If Company terminates this Agreement for Cause,
Consultant shall not receive any further payments of the Fee.

 

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(d) Termination Upon Re-election to Board of Directors. This Agreement shall
terminate in the event that Consultant is re-elected to the Board of Directors
of Company and the Bank at the Annual Meeting, Consultant agrees in each case to
serve, and therefore continues as a director of Company and Bank. In the event
of a termination in accordance with this sub-section (d), there shall be no
further obligation to pay the Fee, other than payment for services rendered
before such termination.

(e) Termination Without Cause. In the event Bank terminates this Agreement
without Cause, the remaining monthly Fee due to Consultant for the remainder of
the Consulting Term shall be accelerated and shall be paid by Bank in a lump sum
payment within ten (10) business days of such termination.

(f) Termination by Consultant. This Agreement may be terminated by Consultant
upon thirty (30) days prior written notice to the Bank. Upon such termination,
Consultant shall be entitled to a pro-rated Fee for the period prior to such
termination, and thereafter, no further fee shall be due to Consultant under
this Agreement.

9. Confidential Information. Consultant recognizes and acknowledges that the
knowledge of the business activities, plans for business activities, and all
other proprietary information of Company and Bank, as it may exist from time to
time, are valuable, special and unique assets of the business of Company and
Bank. Consultant will not, during or after his Separation Date or his Consulting
Termination Date, whichever is later, disclose any knowledge of the past,
present, planned or considered business activities or any other similar
proprietary information of Company and Bank, to any person, firm, corporation,
or other entity for any reason or purpose whatsoever unless expressly
authorized, in writing, by the Board or required by law. Notwithstanding the
foregoing, Consultant may disclose any general knowledge of banking, financial
and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of Company and Bank.
Further, Consultant may disclose information regarding the business activities
of Company and Bank, to any bank regulator having regulatory jurisdiction over
the activities of Company and Bank pursuant to a formal regulatory request,
provided, Consultant gives written notice to Company and Bank no later than five
(5) business days prior to doing so. In the event of a breach or threatened
breach by Consultant of the provisions of this Section, Company and Bank, after
written notice to Consultant of its or their intention to pursue such action
given at least five (5) business days prior to doing so, will be entitled to
seek injunctive relief restraining Consultant from disclosing, in whole or in
part, the knowledge of the past, present, planned or considered business
activities of Company and Bank, or any other similar proprietary information, or
from rendering any services to any person, firm, corporation, or other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be disclosed. Nothing herein will be construed as prohibiting Company and Bank,
from pursuing any other remedies available to Company and Bank for such breach
or threatened breach, including the recovery of damages from Consultant,
provided that Company and/or Bank give written notice to Consultant of its or
their intention to pursue any such action at least five business days before
doing so.

 

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10. Non-Competition and Non-Solicitation. Consultant hereby covenants and agrees
that, for a period equal to the longer of: (i) six months following any
termination or expiration of this Agreement; or (ii) one year following his
Separation Date, he shall not, without the prior written consent of Bank, either
directly or indirectly:

(a) solicit, offer employment to, or take any other action intended (or that a
reasonable person acting in like circumstances would expect) to have the effect
of causing any officer or employee of Company or Bank, or any of their
respective subsidiaries or affiliates, to terminate his or her employment and
accept employment or become affiliated with, or provide services for
compensation in any capacity whatsoever to any other business;

(b) solicit, provide any information, advice or recommendation or take any other
action intended (or that a reasonable person acting in like circumstances would
expect) to have the effect of causing any customer of Company or Bank, or any
subsidiary or affiliate of Company or Bank to terminate an existing business or
commercial relationship with Company, Bank or any subsidiary or affiliate of
Company or Bank; or

(c) become an officer, employee, consultant, director, independent contractor,
agent, joint venturer, partner, shareholder or trustee of any savings bank,
savings and loan association, savings and loan or savings bank holding company,
credit union, bank or bank holding company (including any affiliate of any of
the foregoing). Notwithstanding the foregoing, after January 1, 2011, this
restriction shall only apply with respect to a savings bank, savings and loan
association, savings and loan or savings bank holding company, credit union,
bank or bank holding company (including any affiliate of any of the foregoing)
that: (i) has a headquarters or a branch office within any county in which
Company or Bank has business operations or has filed an application for
regulatory approval to establish an office (the “Restricted Territory”) or
(ii) otherwise competes with Company or Bank. Notwithstanding anything to the
contrary herein, Consultant shall not be prohibited from owning or controlling
up to one percent of the outstanding equity securities of a corporation that is
publicly traded on a national securities exchange or in the over-the-counter
market so long as Consultant, other than with respect to such ownership, shall
not engage in any activity with such person that otherwise would violate this
Section 10(c). Notwithstanding anything to the contrary in this Agreement, at
least five business days prior to commencing any legal or equitable action under
Section 9 or this Section 10, Company and/or Bank shall provide written notice
to Consultant of its or their intention to bring such action.

The parties hereto agree that money damages would not be an adequate remedy for
any breach of Section 9 or this Section 10, and any breach of the terms of
Section 9 or this Section 10 would result in irreparable injury and damage to
the Bank for which Bank would not have an adequate remedy at law. Therefore, in
the event of a breach or a threatened breach of Section 9 or in this Section 10,
the Bank, in addition to any other rights and remedies existing in its favor at
law or in equity, shall be entitled to specific performance or immediate
injunctive or other equitable relief from a Court in order to enforce, or
prevent any violations of, the provisions of Section 9 or this Section 10
(without posting a bond or other security), without having to prove damages. The
terms of this Section 10 shall not prevent the Bank from pursuing any other
available remedies for any breach or threatened breach of this Agreement.

11. Status. Consultant and Bank agree that Consultant shall perform the
Consulting Services as an independent contractor and shall have no power or
authority to bind Company,

 

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Bank or any subsidiary or affiliate thereof. Company will report all fees paid
to Consultant by filing a Form 1099-MISC with the Internal Revenue Service as
required by law. Because the Consulting Services will be performed by Consultant
as an independent contractor and not an employee, unless otherwise required by
the law, Bank will not make any withholdings from any payments
hereunder. Consultant agrees to accept exclusive liability for complying with
all applicable local, state and federal laws governing self-employed
individuals, including obligations such as payment of taxes, social security,
disability and other contributions based on the Fee. Except for benefits to
which Consultant became entitled as an officer or employee of Company and Bank
prior to the Separation Date, or as specifically set forth in this Agreement,
Consultant will not receive any employee benefits under any Bank-sponsored
benefit plans or participate in Bank-sponsored health insurance for the period
that Consultant serves as a consultant. Consultant further agrees to indemnify
and hold harmless Bank against any and all liabilities to any taxing authority
for any taxes (except Company’s share of Social Security, if any), interest or
penalties with regard to or arising from the payment of fees.

12. Release of Claims. In consideration of Bank’s obligations hereunder,
Consultant, Consultant’s heirs, successors, and assigns, hereby knowingly and
voluntarily release and forever discharge Bank and its subsidiaries and
affiliates, together with all of their respective current and former officers,
directors, consultants, agents, representatives and employees, and each of their
predecessors, successors and assigns (collectively, the “Releasees”), from any
and all debts, demands, actions, causes of actions, accounts, covenants,
contracts, agreements, claims, damages, omissions, promises, and any and all
claims and liabilities whatsoever, of every name and nature, known or unknown,
suspected or unsuspected, both in law and equity (“Claims”), which Consultant
ever had, now has, or may hereafter claim to have against the Releasees by
reason of any matter, cause or thing whatsoever arising from the beginning of
time to the time Consultant executes this Agreement (the “General
Release”). This General Release of Claims shall apply to any Claim of any type,
including, without limitation, any and all Claims of any type that Consultant
may have arising under the common law, under Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act
(“ADEA”), the Older Workers Benefit Protection Act, the Americans With
Disabilities Act, the Family and Medical Leave Act, the Employee Retirement
Income Security Act (“ERISA”), the Sarbanes-Oxley Act of 2002 or the New Jersey
Law Against Discrimination (“NJLAD”), N.J.S.A. 19:5-1 et. seq., the
Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et. seq. (“CEPA”), each
as amended, and any other Federal, state or local statutes, regulations,
ordinances or common law, or under any policy, agreement, contract,
understanding or promise, written or oral, formal or informal, between any of
the Releasees and Consultant, and shall further apply, without limitation, to
any and all Claims in connection with, related to or arising out of Consultant’s
employment, or the termination of Consultant’s employment with Company;
provided, however, that this General Release shall not apply to or impair
(i) claims for vested benefits (excluding any severance or termination benefits,
which are specifically waived hereunder) pursuant to any other Company employee
benefit plan, as defined in ERISA, in which Consultant was a participant before
the Separation Date; (ii) any rights to indemnification Consultant may have
under the by-laws of Company or applicable law; or (iii) any claims that may
arise from any violation of this Agreement. For the purpose of implementing a
full and complete release, Consultant understands and agrees that this Agreement
is intended to include all claims, if any, which Consultant may have and which
Consultant does not now know or suspect to exist in Consultant’s favor against
Company or any of the Releasees and that this Agreement extinguishes those
claims.

 

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13. Notices. Any notice, report or payment required or permitted to be given or
made under this Agreement by one party to the other shall be deemed to have been
duly given or made if personally delivered or, if mailed, when mailed by
registered or certified mail, postage prepaid, to the other party at the
following addresses (or at such other address as shall be given in writing by
one party to the other):

If to Consultant:

Paul M. Pantozzi

17 Rivergate Way

Long Branch, New Jersey 07740

If to Bank:

The Provident Bank

830 Bergen Avenue

Jersey City, New Jersey 07306

Attn: General Counsel

with a copy to:

John J. Gorman, Esq.

Luse Gorman Pomerenk & Schick, P.C.

5335 Wisconsin Ave., N.W., Suite 780

Washington, D.C. 20015

14. Entire Agreement. This Agreement (a) contains the complete and entire
understanding and agreement of Consultant and Company with respect to the
subject matter hereof; and (b) supersedes all prior and contemporaneous
understandings, conditions and agreements, oral or written, express or implied,
respecting the engagement of Consultant in connection with the subject matter
hereof.

15. Modification or Waiver. The provisions of this Agreement may be amended and
waived only with the prior written consent of Bank and Consultant. No course of
dealing between the parties to this Agreement shall be deemed to affect or to
modify, amend or discharge any provision or term of this Agreement. No delay on
the part of Bank or Consultant in the exercise of any of their respective rights
or remedies shall operate as a waiver thereof, and no single or partial exercise
by Bank or Consultant of any such right or remedy shall preclude other or
further exercises thereof. A waiver of right or remedy on any one occasion shall
not be construed as a bar to or waiver of any such right or remedy on any other
occasion.

16. Severability. Whenever possible each provision and term of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such

 

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applicable law, then such provision or term shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or affecting in
any manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement.

17. No Strict Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any party.

18. Consultant’s Representations. Consultant represents and warrants to Bank
that (i) his execution, delivery and performance of this Agreement does not and
shall not conflict with, or result in the breach of or violation of, any other
agreement, instrument, order, judgment or decree to which he is a party or by
which he is bound, (ii) he is not a party to or bound by any employment
agreement, non-competition agreement or confidentiality agreement with any other
person or entity that would prevent his from performing under this Agreement and
(iii) upon the execution and delivery of this Agreement by Bank, this Agreement
shall be the valid and binding obligation of the parties hereto, enforceable in
accordance with its terms.

19. Counterparts. This Agreement may be executed and delivered by each party
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original and both of which taken together shall constitute
one and the same agreement.

20. Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of Bank and any successor to Bank, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business or assets of Bank, whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor shall thereafter be deemed the
“Bank” for purposes of this Agreement) and such successor shall deliver a
written affirmation of its obligations hereunder to Consultant. This Agreement
will inure to the benefit of and be enforceable by Consultant’s personal or
legal representatives, executors, administrators, successors, heirs, and
legatees, but otherwise will not be assignable, transferable or delegable by
Consultant. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as otherwise
expressly provided in this Section 20.

21. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of New Jersey.

22. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement, other than a dispute or controversy arising under Sections 9 or
10, shall be settled exclusively by arbitration, conducted before a panel of
three arbitrators sitting in a location selected by Consultant within Jersey
City, New Jersey, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s award in
any court having jurisdiction; provided, however, that Consultant shall be
entitled to seek specific performance of his right to be paid the Fee during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.

23. Delivery by Facsimile. This Agreement, the agreements referred to herein,
and each other agreement or instrument entered into in connection herewith or
therewith or contemplated hereby or thereby, and any amendments hereto or
thereto, to the extent signed and

 

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delivered by means of facsimile or other electronic means, shall be treated in
all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person.

24. Survivorship. Any provision of this Agreement that by its terms is intended
to continue to apply after any termination or expiration of the Consulting Term
or the Agreement shall survive such termination or expiration and continue to
apply in accordance with its terms.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Consultant and Bank have caused this Agreement to be duly
executed and delivered on the date and year first above written.

 

Attest:     The Provident Bank

/s/ John F. Kuntz

    By:  

/s/ Thomas W. Berry

     

Thomas W. Berry

Chair, Compensation Committee

Witness:     Consultant

/s/ Mary Louise Festa

   

/s/ Paul M. Pantozzi

    Paul M. Pantozzi

 

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