Stephen P. Davey Change in Control Agreement




	



November 30, 2004 



CHANGE IN CONTROL AGREEMENT 
(Stephen P. Davey, Senior Vice President)
2004 




        
        THIS
CHANGE IN CONTROL AGREEMENT (this “Agreement”), is made as of this 30th day
of November, 2004, among VALLEY NATIONAL BANK (“Bank”), a national
banking association with its principal office at 1455 Valley Road, Wayne, New Jersey,
VALLEY NATIONAL BANCORP (“Valley”), a New Jersey corporation which
maintains its principal office at 1455 Valley Road, Wayne, New Jersey (Valley and the
Bank collectively are the “Company”) and STEPHEN P. DAVEY (the “Executive”).  



BACKGROUND 



        
        WHEREAS,
the Executive has been continuously employed by the Bank for at least three full years;  



        
        WHEREAS,
the Boards of Directors of the Bank and Valley (either one, the “Board of
Directors” and, together, the “Company Boards”) believe that
the future services of the Executive are of great value to the Bank and Valley and that
it is important for the growth and development of the Bank that the Executive continue in
his position;  



        
        WHEREAS,
if the Company receives any proposal from a third person concerning a possible business
combination with, or acquisition of equities securities of, the Company, the Company
Boards believe it is imperative that the Company and the Company Boards be able to rely
upon the Executive to continue in his position, and that they be able to receive and rely
upon his advice, if they request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be distracted by the personal
uncertainties and risks created by such a proposal;  




        
        WHEREAS,
to achieve that goal, and to retain the Executive’s services prior to any such
activity, the Company Boards and the Executive have agreed to enter into this Agreement
to govern the Executive’s termination benefits in the event of a Change in Control
of the Company, as hereinafter defined.  



        
        NOW,
THEREFORE, to assure the Company that it will have the continued dedication of the
Executive and the availability of his advice and counsel notwithstanding the possibility,
threat or occurrence of a bid to take over control of the Company, and to induce the
Executive to remain in the employ of the Company, and for other good and valuable
consideration, the Company and the Executive, each intending to be legally bound hereby
agree as follows:  



        
        1.       Definitions 



        
                   a.            Base
Salary. “Base Salary”, as used in Section 9 hereof,           means
the annual cash base salary (excluding any bonus and the value of any           fringe
benefits) paid to the Executive at the time of the termination of           employment
unless such amount has been reduced after a Change in Control, in           which case
such amount shall be the highest base salary in effect during the 18           months
prior to the Change in Control.  



        
                   b.            Cause.
For purposes of this Agreement “Cause” with           respect to the
termination by the Company of Executive’s employment shall           mean (i)
willful and continued failure by the Executive to perform his duties           for the
Company under this Agreement after at least one warning in writing from           the
Board of Directors identifying specifically any such failure; (ii) the           willful
engaging by the Executive in misconduct which causes material injury to           the
Company as specified in a written notice to the Executive from the Board of
          Directors; or (iii) conviction of a crime, other than a traffic violation,
          habitual drunkenness, drug abuse, or excessive absenteeism other than for
          illness, after a warning (with respect to drunkenness or absenteeism only) in
          writing from the Board of Directors to refrain from such behavior. No act or
          failure to act on the part of the Executive shall be considered willful unless
          done, or omitted to be done, by the Executive not in good faith and without
          reasonable belief that the action or omission was in the best interest of the
          Company.  



        
                   c.            Change
in Control. “Change in Control” means any of the           following
events: (i) when Valley or a Valley Subsidiary acquires actual           knowledge that
any person (as such term is used in Sections 13(d) and 14(d)(2)           of the Exchange
Act), other than an affiliate of Valley or a Valley Subsidiary           or an employee
benefit plan established or maintained by Valley, a Valley           Subsidiary or any of
their respective affiliates, is or becomes the beneficial           owner (as defined in
Rule 13d-3 of the Exchange Act) directly or indirectly, of           securities of Valley
representing more than twenty-five percent (25%) of the           combined voting power
of Valley’s then outstanding securities (a “Control Person”); (ii)
upon the first purchase of           Valley’s common stock pursuant to a tender or
exchange offer (other than a           tender or exchange offer made by Valley, a Valley
Subsidiary or an employee           benefit plan  established or maintained by Valley,
a Valley Subsidiary or any of their respective affiliates); (iii) the consummation of (A)
a transaction, other than a Non-Control Transaction, pursuant to which Valley is merged
with or into, or is consolidated with, or becomes the subsidiary of another corporation,
(B) a sale or disposition of all or substantially all of Valley’s assets or (C) a
plan of liquidation or dissolution of Valley; (iv) if during any period of two (2)
consecutive years, individuals (the “Continuing Directors”) who at the
beginning of such period constitute the Board of Directors of Valley (the “Valley
Board”) cease for any reason to constitute at least 60% thereof or, following a
Non-Control Transaction, 60% of the board of directors of the Surviving Corporation;
provided that any individual whose election or nomination for election as a member
of the Valley Board (or, following a Non-Control Transaction, the board of directors of
the Surviving Corporation) was approved by a vote of at least two-thirds of the Continuing
Directors then in office shall be considered a Continuing Director; or (v) upon a sale of
(A) common stock of the Bank if after such sale any person (as such term is used in
Section 13(d) and 14(d)(2) of the Exchange Act) other than Valley, an employee benefit
plan established or maintained by Valley or a Valley Subsidiary, or an affiliate of Valley
or a Valley Subsidiary, owns a majority of the Bank’s common stock or (B) all or
substantially all of the Bank’s assets (other than in the ordinary course of
business). For purposes of this paragraph: (I) Valley will be deemed to have become a
subsidiary of another corporation if any other corporation (which term shall include, in
addition to a corporation, a limited liability company, partnership, trust, or other
organization) owns, directly or indirectly, 50 percent or more of the total combined
outstanding voting power of all classes of stock of Valley or any successor to Valley;
(II) “Non-Control Transaction” means a transaction in which Valley is
merged with or into, or is consolidated with, or becomes the subsidiary of another
corporation pursuant to a definitive agreement providing that at least 60% of the
directors of the Surviving Corporation immediately after the transaction are persons who
were directors of Valley on the day before the first public announcement relating to the
transaction; (III) the “Surviving Corporation” in a transaction in
which Valley becomes the subsidiary of another corporation is the ultimate parent entity
of Valley or Valley’s successor; (IV) the “Surviving
Corporation” in any other transaction pursuant to which Valley is merged with or
into another corporation is the surviving or resulting corporation in the merger or
consolidation; and (V) “Valley Subsidiary” means any corporation in an
unbroken chain of corporations, beginning with Valley, if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other corporations in
such chain. 



        
                   d.            Continuously
Employed. “Continuously employed”, as used           in Section 9,
means continuously employed by the Bank but excludes any period of           employment
by a bank or financial institution acquired by or merged into the           Bank and
excludes any period of employment by the Bank if such period is           separated from
the current employment with the Bank by a break in service (other           a break in
service resulting solely from illness, disability or family leave).  



        
                   e.            Contract
Period. “Contract Period” shall mean the period           commencing
the day immediately preceding a Change in Control and ending on the           earlier of
(i) the first anniversary of the Change in Control or (ii) the date           the
Executive would attain age 65 or (iii) the death of the Executive. For the
          purpose of this Agreement, a Change in Control shall be deemed to have occurred
          at the date specified in the definition of Change-in-Control.  



        
                   f.            Exchange
Act. “Exchange Act” means the Securities           Exchange Act of
1934, as amended.  



        
                   g.            Good
Reason. When used with reference to a voluntary termination by           Executive of
his employment with the Company, “Good Reason”          shall mean any
of the following, if taken without Executive’s express           written consent:  



        
                                   (1)                      The
assignment to Executive of any duties inconsistent with, or the reduction of
          powers or functions associated with, Executive’s position, duties,
          responsibilities and status with the Company immediately prior to a Change in
          Control. A change in title or positions resulting merely from a merger of the
          Bank or Valley into or with another bank or company which does not downgrade in
          any way the Executive’s powers, duties and responsibilities shall not meet
          the requirements of this paragraph;  



        
                                   (2)                      A
reduction by the Company in Executive’s annual base compensation as in
          effect immediately prior to a Change in Control or the failure to award
          Executive annual increases in accordance herewith;  



        
                                   (3)                      A
failure by the Company to continue any bonus plan in which Executive
          participated immediately prior to the Change in control or a failure by the
          Company to continue Executive as a participant in such plan on at least the
same           basis as Executive participated in such plan prior to the Change in
Control;  



        
                                   (4)                      The
Company’s transfer of Executive to another geographic location more           than
35 miles from his present office location, except for required travel on           the
Company’s business to an extent substantially consistent with           Executive’s
business travel obligations immediately prior to such Change in           Control;  



        
                                   (5)                      The
failure by the Company to continue in effect any employee benefit plan,           program
or arrangement (including, without limitation the Company’s           retirement
plan, life insurance plan, health and           accident plan,
disability plan, or long term stock           incentive plan)
in which Executive is participating immediately prior to a           Change in Control
(except that the Company may institute or continue plans,           programs or
arrangements providing Executive with substantially similar           benefits); the
taking of any action by the Company which would adversely affect           Executive’s
participation in or materially reduce Executive’s benefits           under, any of
such plans, programs or arrangements; the failure to continue, or           the taking of
any action which would deprive Executive, of any material fringe           benefit
enjoyed by Executive immediately prior to such Change in Control; or the
          failure by the Company to provide Executive with the number of paid vacation
          days to which Executive was entitled immediately prior to such Change in
          Control;  



        
                                   (6)                      The
failure by the Company to obtain an assumption in writing of the obligations           of
the Company to perform this Agreement by any successor to the Company and to
          provide such assumption to the Executive prior to any Change in Control; or  



        
                                   (7)                      Any
purported termination of Executive’s employment by the Company during           the
term of this Agreement which is not effected pursuant to all of the
          requirements of this Agreement; and, for purposes of this Agreement, no such
          purported termination shall be effective.  



        
                     
              h.            Pro-rata
Bonus Amount. “Pro-rata Bonus Amount”, as used           in Section
9, means an amount equal to a “portion” of the highest cash           bonus
paid to the Executive in the three calendar years immediately prior to the
          Change in Control. The “portion” of such cash bonus shall be a
          fraction, the numerator of which is the number of calendar months or part
          thereof which the Executive has worked in the calendar year in which the
          termination occurs and the denominator of which is 12.  



        
        2.            Employment.
The Company hereby agrees to employ the Executive, and the           Executive hereby
accepts employment, during the Contract Period upon the terms           and conditions
set forth herein.  



        
        3.            Position.
During the Contract Period the Executive shall be employed as a
Senior Officer by the bank, or such other corporate or divisional profit           center as shall
then be the principal successor to the business, assets and           properties of the
Company, with substantially the same title and the same duties           and
responsibilities as before the Change in Control. The Executive shall devote
          his full time and attention to the business of the Company, and shall not
during           the Contract Period be engaged in any other business activity. This
paragraph           shall not be construed as preventing the Executive from managing any
investments           of his which do not require any service on his part in the
operation of such           investments.  



        
        4.       Cash
Compensation. The Company shall pay to the Executive compensation           for his
services during the Contract Period as follows:  



        
                   a.            Base
Salary. A base annual salary equal to the annual salary in effect as           of the
Change in Control. The annual salary shall be payable in installments in
          accordance with the Company’s usual payroll method.  



        
                   b.            Annual
Bonus. An annual cash bonus equal to at least the average of the           bonuses
paid to the Executive in the three years prior to the Change in Control.           The
bonus shall be payable at the time and in the manner which the Company paid
          such bonuses prior to the Change in Control.  



        
                   c.            Annual
Review. The Board of Directors during the Contract Period shall           review
annually, or at more frequent intervals which the Board of Directors           determines
is appropriate, the Executive’s compensation and shall award him
          additional compensation to reflect the Executive’s performance, the
          performance of the Company and competitive compensation levels, all as
          determined in the discretion of the Board of Directors.  



        
        5.       Expenses
and Fringe Benefits.  



        
                   
a.            Expenses.
During the Contract Period, the Executive shall be entitled to           reimbursement
for all business expenses incurred by him with respect to the           business of the
Company in the same manner and to the same extent as such           expenses were
previously reimbursed to him immediately prior to the Change in           Control.  



        
                   b.            Other
Benefits. The Executive also shall be entitled to vacations and           sick days,
in accordance with the practices and procedures of the Company, as           such existed
immediately prior to the Change in Control. During the Contract           Period, the
Executive also shall be entitled to hospital, health, medical and           life
insurance, and any other benefits enjoyed, from time to time, by senior
          officers of the Company, all upon terms as favorable as those enjoyed by other
          senior officers of the Company. Notwithstanding anything in this paragraph 5(b)
          to the contrary, if the Company adopts any change in the benefits provided for
          senior officers of the Company, and such policy is uniformly applied to all
          officers of the Company (and any successor or acquiror of the Company, if any),
          then no such change shall be deemed to be contrary to this paragraph.  



        
        6.       Termination
for Cause. The Company shall have the right to terminate the           Executive for
Cause, upon written notice to him of the termination which notice           shall specify
the reasons for the termination. In the event of termination for           Cause the
Executive shall not be entitled to any further benefits under this           Agreement.  



        
        7.       Disability.
During the Contract Period if the Executive becomes           permanently disabled, or is
unable to perform his duties hereunder for 4           consecutive months in any 12 month
period, the Company may terminate the           employment of the Executive. In such
event, the Executive shall not be entitled           to any further benefits under this
Agreement.  



        
        8.       Death
Benefits. Upon the Executive’s death during the Contract           Period, his
estate shall not be entitled to any further benefits under this           Agreement.  



        
        9.       Termination
Without Cause or Resignation for Good Reason. The Company may           terminate the
Executive without Cause during the Contract Period by written           notice to the
Executive providing four weeks notice. The Executive may resign           for Good Reason
during the Contract Period upon four weeks’ written notice           to the Company
specifying facts and circumstances claimed to support the Good           Reason. The
Executive shall be entitled to give a Notice of Termination that his           or her
employment is being terminated for Good Reason at any time during the           Contract
Period, not later than twelve months after any occurrence of an event           stated to
constitute Good Reason. If the Company terminates the Executive’s
          employment during the Contract Period without Cause or if the Executive Resigns
          for Good Reason, the Company shall, subject to section 12 hereof:  



        
                   a.            
Within 20 business days of the
termination of employment pay the Executive a lump sum equal to: (i), if the Executive has
been continuously employed by the Bank for 6 full years or more, one (1) year of Base
Salary plus a Pro-rata Bonus Amount or (ii), if the Executive has been continuously
employed by the Bank for less than 6 full years but more than 3 years, then six (6) months
of Base Salary plus a Pro-rata Bonus Amount; and 



             b.       
          Continue to provide the Executive with medical, dental and life insurance for
          the period equal to the equivalent period of the lump sum payment (i.e. 6 months
          or 1 year) as were provided at the time of the termination of his employment
          with the Company, at the Company’s cost (subject to normal co-pays,
          deductible and employee contributions). Upon expiration of benefit coverages,
          full COBRA benefits (18 months) will be made available to Executive. 



        
        The
Executive shall not have a duty to mitigate the damages suffered by him in connection
with the termination by the Company of his employment without Cause or a resignation for
Good Reason during the Contract Period. If the Company fails to pay the Executive the
lump sum amount due him hereunder or to provide him with the health, hospitalization and
insurance benefits due under this section, the Executive, after giving 10 days’ written
notice to the Company identifying the Company’s failure, shall be entitled to
recover from the Company all of his reasonable legal fees and expenses incurred in
connection with his enforcement against the Company of the terms of this Agreement. The
Executive shall be denied payment of his legal fees and expenses only if a court finds
that the Executive sought payment of such fees without reasonable cause.  



        
        10.       Resignation
Without Good Reason. The Executive shall be entitled to           resign from the
employment of the Company at any time during the Contact Period           without Good
Reason, but upon such resignation the Executive shall not be           entitled to any
additional compensation for the time after which he ceases to be           employed by
the Company, and shall not be entitled to any of the other benefits           provided
hereunder. No such resignation shall be effective unless in writing           with four
weeks’ notice thereof.  



        
        11.       Non-Disclosure
of Confidential Information.  



        
                   a.            Non-Disclosure
of Confidential Information. Except in the course of his           employment with
the Company and in the pursuit of the business of the Company or           any of its
subsidiaries or affiliates, the Executive shall not, at any time           during or
following the Contract Period, disclose or use, any confidential           information or
proprietary data of the Company or any of its subsidiaries or           affiliates. The
Executive agrees that, among other things, all information           concerning the
identity of and the Company’s relations with its customers           is confidential
information.  



        
                   b.            Specific
Performance. Executive agrees that the Company does not have an           adequate
remedy at law for the breach of this section and agrees that he shall           be
subject to injunctive relief and equitable remedies as a result of the breach
          of this section. The invalidity or unenforceability of any provision of this
          Agreement shall not affect the force and effect of the remaining valid
portions.  



        
                   c.            Survival.
This section shall survive the termination of the           Executive’s employment
hereunder and the expiration of this Agreement.  



        
        12.       Certain
Reduction of Payments by the Company.  



        
                   a.                      Anything
in this Agreement to the contrary notwithstanding, prior to the payment           of any
lump sum amount payable hereunder, the certified public accountants of           the
Company immediately prior to a Change of Control (the “Certified           Public
Accountants”) shall determine as promptly as practical and in           any
event within 20 business days following the termination of employment of
          Executive whether any payment or distribution by the Company to or for the
          benefit of the Executive (whether paid or payable or distributed or
          distributable pursuant to the terms of this Agreement or otherwise) (a
          “Payment”) would more likely than not be nondeductible by the
          Company for Federal income purposes because of Section 280G of the Internal
          Revenue Code of 1986, as amended (the “Code”), and if it is
          then the aggregate present value of amounts payable or distributable to or for
          the benefit of Executive pursuant to this Agreement (such payments or
          distributions pursuant to this Agreement are thereinafter referred to as
          “Agreement Payments”) shall be reduced (but not below zero) to
          the reduced Amount. For purposes of this paragraph, the “Reduced
          Amount” shall be an amount expressed in present value which maximizes
          the aggregate present value of Agreement Payments without causing any Payment
to           be nondeductible by the Company because of said Section 280G of the Code.  



        
                   b.                      If
under paragraph (a) of this section the Certified Public Accountants           determine
that any Payment would more likely than not be nondeductible by the           Company
because of Section 280G of the Code, the Company shall promptly give the
          Executive notice to that effect and a copy of the detailed calculation thereof
          and of the Reduced Amount, and the Executive may then elect, in his sole
          discretion, which and how much of the Agreement Payments shall be eliminated or
          reduced (as long as after such election the aggregate present value of the
          Agreement Payments equals the Reduced Amount), and shall advise the Company in
          writing of his election within 20 business days of his receipt of notice. If no
          such election is made by the Executive within such 20-day period, the Company
          may elect which and how much of the Agreement Payments shall be eliminated or
          reduced (as long as after such election the Aggregate present Value of the
          Agreement Payments equals the Reduced Amount) and shall notify the Executive
          promptly of such election. For purposes of this paragraph, present Value shall
          be determined in accordance with Section 280G(d)(4) of the Code. All
          determinations made by the Certified Public Accountants shall be binding upon
          the Company and Executive shall be made within 20 business days of a
termination           of employment of Executive. With the consent of the Executive, the
Company may           suspend part or all of the lump sum payment due under Section 9
hereof and any           other payments due to the Executive hereunder until the
Certified Public           Accountants finish the determination and the Executive (or the
Company, as the           case may be) elect how to reduce the Agreement Payments, if
necessary. As           promptly as practicable following such determination and the
elections           hereunder, the Company shall pay to or distribute to or for the
benefit of           Executive such amounts as are then due to Executive under this
Agreement and           shall promptly pay to or distribute for the benefit of Executive
in the future           such amounts as become due to Executive under this Agreement.  



        
                   c.                      As
a result of the uncertainty in the application of Section 280G of the Code,           it
is possible that Agreement Payments may have been made by the Company which
          should not have been made (“Overpayment”) or that additional
          Agreement Payments which will have not been made by the Company could have been
          made (“Underpayment”), in each case, consistent with the
          calculation of the Reduced Amount hereunder. In the event that the Certified
          Public Accountants, based upon the assertion of a deficiency by the Internal
          Revenue Service against the Company or Executive which said Certified Public
          Accountants believe has a high probability of success, determines that an
          Overpayment has been made, any such Overpayment shall be treated for all
          purposes as a loan to Executive which Executive shall repay to the Company
          together with interest at the applicable Federal rate provided for in Section
          7872(f)(2)(A) of the Code; provided, however, that no amount shall be payable
by           Executive to the Company in and for the extent such payment would not reduce
the           amount which is subject to taxation under Section 4999 of the Code. In the
event           that the Certified Public Accountants, based upon controlling precedent,
          determine that an Underpayment has occurred, any such Underpayment shall be
          promptly paid by the Company to or for the benefit of the Executive together
          with interest at the applicable Federal rate provided for in Section
          7872(f)(2)(A) of the Code.  



        
        13.       Term
and Effect Prior to Change in Control.  



        
                   a.    
          Term. Except as otherwise provided for hereunder, this Agreement shall
          commence on the date hereof and shall remain in effect for a period of 3 years
          from the date hereof (the “Initial Term”) or until the end of
          the Contract Period, whichever is later. The Initial Term shall be automatically
          extended for an additional one year period on the anniversary date hereof (so
          that the Initial Term is always 3 years) unless, prior to a Change in Control,
          the Chief Executive Officer of the Bank notifies the Executive in writing at any
          time that the Contract is not so extended, in which case the Initial Term shall
          end upon the later of (i) 3 years after the date hereof, or (ii) nine months
          after the date of such written notice. Notwithstanding anything to the contrary
          contained herein, the Initial Term shall cease when the Executive reaches age
          65. 




        
                   b.            No
Effect Prior to Change in Control. This Agreement shall not effect any
          rights of the Company to terminate the Executive prior to a Change in Control
or           any rights of the Executive granted in any other agreement or contract or
plan           with the Company. The rights, duties and benefits provided hereunder shall
only           become effective upon and after a Change in Control. If the full-time
employment           of the Executive by the Company is ended for any reason prior to a
Change in           Control, this Agreement shall thereafter be of no further force and
effect.  



        
        14.       Severance
Compensation and Benefits Not in Derogation of Other Benefits.           Anything to
the contrary herein contained notwithstanding, the payment or           obligation to pay
any monies, or granting of any benefits, rights or privileges           to Executive as
provided in this Agreement shall not be in lieu or derogation of           the rights and
privileges that the Executive now has or will have under any           plans or programs
of or agreements with the Company, except that if the           Executive received any
payment hereunder, he shall not be entitled to any           payment under the Company’s
severance policy for officers and directors.  



        
        15.       Miscellaneous.
This Agreement is the joint and several obligation of the           Bank and Valley. The
terms of this Agreement shall be governed by, and           interpreted and construed in
accordance with the provisions of, the laws of New           Jersey. This Agreement
supersedes all prior agreements and understandings with           respect to the matters
covered hereby, including expressly any prior agreement           with the Company
concerning change in control benefits. The amendment or           termination of this
Agreement may be made only in a writing executed by the           Company and the
Executive, and no amendment or termination of this Agreement           shall be effective
unless and until made in such a writing. This Agreement shall           be binding upon
any successor (whether direct or indirect, by purchase, merge,           consolidation,
liquidation or otherwise) to all or substantially all of the           assets of the
Company. This Agreement is personal to the Executive and the           Executive may not
assign any of his rights or duties hereunder but this           Agreement shall be
enforceable by the Executive’s legal representatives,           executors or
administrators. This Agreement may be executed in two or more           counterparts,
each of which shall be deemed an original, and it shall not be           necessary in
making proof of this Agreement to produce or account for more than           one such
counterpart.  


















	




        
        IN
WITNESS WHEREOF, Valley National Bank and Valley National Bancorp each have caused this
Agreement to be signed by their duly authorized representatives pursuant to the authority
of their Boards of Directors, and the Executive has personally executed this Agreement,
all as of the day and year first written above.  












	ATTEST:



  
——————————————

                                          , Secretary
 		VALLEY NATIONAL BANCORP



By:  
——————————————

    Gerald H. Lipkin, Chairman 
    and Chief Executive Officer







	ATTEST:



  
——————————————

                                          , Secretary
 		VALLEY NATIONAL BANK



By:  
——————————————

    Gerald H. Lipkin, Chairman 
    and Chief Executive Officer






	WITNESS:



  
——————————————

            
 		




——————————————

Stephen P. Davey, Executive