Employment Continuation and Non-Competition and Agreement




	



EMPLOYMENT
CONTINUATION AND 

NON-COMPETITION AGREEMENT 


BY AND BETWEEN 



JAMES G. LAWRENCE 


VALLEY NATIONAL BANCORP, 

a New Jersey Corporation 


and 


VALLEY NATIONAL BANK, 
a national bank 


DATED: As of September 5, 2000 
















	




EMPLOYMENT
CONTINUATION AND
NON-COMPETITION AGREEMENT 



        
        THIS
EMPLOYMENT CONTINUATION AND NON-COMPETITION AGREEMENT (this “Agreement”),
is entered into as of September 5, 2000 by and among Valley Bancorp, a New Jersey
corporation (“Valley”), Valley National Bank, a national bank (the “Bank”),
(Valley and the Bank are jointly hereinafter referred to as the “Company”) and
James G. Lawrence (hereinafter referred to as the “Executive”).  



BACKGROUND 



        
        WHEREAS,
 the  Executive  is currently  employed by The  Merchants  Bank of New York  ("Merchants
Bank") and Merchants New York Bancorp, Inc. ("Merchants"); and 



        
        WHEREAS,Valley
and the Bank have entered into an Agreement and Plan of Merger, dated September 5, 2000
(the “Merger Agreement”) pursuant to which Merchants will be merged into Valley
and Merchants Bank will be merged into the Bank, and the Executive will become an
employee of the Bank;  



        
        WHEREAS,
the Boards of Directors of the Bank and Valley each are of the opinion that it would
be of substantial value to the Company to continue the employment of the Executive and
obtain from the Executive covenants not to compete during the term of his employment by
Valley and for a period of up to two (2) years thereafter; and  



        
        WHEREAS,
to achieve such a goal, the Boards of Directors of the Company and the Executive have
agreed to enter into this Agreement;  



        
        NOW,
THEREFORE, for good and valuable consideration, the Company and the Executive, each
intending to be legally bound hereby, agree as follows:  



ARTICLE I 



TERM OF AGREEMENT 



        
        The
term of this Agreement shall commence on the date hereof and shall terminate on the date
which is two (2) years following the termination (for any reason whatsoever) of Executive’s
employment with the Company (hereinafter the “Term”), unless this Agreement
expressly provides for a shorter period. Notwithstanding the foregoing, this Agreement
shall be void and of no force and effect unless the Merger contemplated by the Merger
Agreement is consummated and the Executive is employed by Merchants Bank at the Effective
Time (as such term is defined in the Merger Agreement) and shall not take effect until
such time.  



ARTICLE II 



CONTINUED EMPLOYMENT;
ADDITIONAL COMPENSATION 



        
        As
consideration for the covenants of the Executive hereunder, the Company agrees to employ
the Executive and the Executive agrees to be employed by the Company with the same salary
(excluding Board of Director fees from Merchants and Merchants Bank) and substantially
the same benefits as are enjoyed by the Executive currently as an employee of Merchants
Bank. The Company will continue to pay to the Executive an annual bonus equal to 12.5% of
his base salary, in the same manner and with the same timing as is the current practice
of Merchants or, if the Company terminates that practice, it shall increase the Executive’s
base salary to cover the foregone bonus. In addition, the Company shall pay the Executive
an additional $24,000 per year for each year that he continues as an employee of the
Company. The Executive will also be eligible to participate in the Company’s annual
incentive plan for executives. The Company and the Executive will on the date hereof
enter into a Change in Control Agreement. The Company agrees, except as otherwise
provided in the Change in Control Agreement, to be bound by and honor the employment
agreement dated January 25, 2000, between the Executive and Merchants (the “Employment
Agreement”) and the special pension benefits arrangements the Executive has with
Merchants Bank, evidenced to the Executive by a letter dated August 21, 1998, (the “Special
Pension Benefits”). Provided however, that the Executive agrees with the Company
that his Employment Agreement is hereby amended to provide that he will serve as an
Executive Vice-President of the Bank, with the additional title, “President-Merchants
Division” of the Bank, reporting to the Chief Executive Officer of the Bank, and
will not serve as a director of Merchants, Merchants Bank, Valley or the Bank.  



 2
















	



ARTICLE III 



NON-COMPETITION
COVENANTS 



        
        3.1     
Non-Competition. The Executive agrees that while he is employed by the Bank and
for a period of two years following his termination of employment with the Bank for any
reason whatsoever (the “Two Year Post-Employment Period”), the Executive will
not, directly or indirectly, as shareholder, employee, director, officer, principal or
agent, or in any other capacity (other than on behalf of the Company and in pursuit of
Company business): (i) own, manage, operate, consult with or be employed by, directly or
indirectly, through a holding company or affiliate, any bank, savings bank, savings and
loan, trust company or lending organization which maintains a branch office or a lending
office within 25 miles of New York City, or any bank, savings bank, savings and loan,
trust company or lending organization which conducts substantially all of its business
over the internet, or (ii) solicit the Banking Business (as defined herein) of persons or
entities who are known to the Executive to be customers of the Company or any of its
subsidiaries (“Company Customers”), or encourage any Company Customers to
terminate or reduce the amount of Banking Business they do with the Company or any of its
subsidiaries, or (iii) solicit, induce or encourage any employee of the Bank to leave the
employment of the Bank; provided, however, that this provision shall not prohibit
the Executive from owning common stock of Valley (in any amount) or from owning bonds,
preferred stock or up to two percent (2%) of the outstanding common shares of any such
institution or its parent holding company if the shares of the parent holding company or
of the institution are publicly traded. “Banking Business” means the
traditional depository and loan relationships between banks and their customers and shall
not include ancillary businesses such as the sale of mutual funds or life insurance
products. Commencing with the fourth anniversary of the date of the execution of this
Agreement, the Two Year Post-Employment Period shall be reduced to one year. If at any
time while Executive remains employed by the Bank (i) there is a Change in Control, as
that term is defined in the Valley National Bancorp 1999 Long-Term Stock Incentive Plan,
(the “Plan”), as interpreted by the Valley National Bancorp Board of Directors
in connection with the Plan, and (ii) within 6 months after the date on which the Change
in Control occurs, the Executive’s employment with the Bank is terminated for any
reason other than for Cause , as that term is defined in the Plan, the covenants not to
compete contained in this Section 3.1 shall terminate on the same day as the termination
of Executive’s employment.  



 3

















	



        
        3.2     
Reasonableness of Restraints. Executive acknowledges that he has carefully read
and considered all of the terms and conditions of the foregoing covenants in Section 3.1,
including the restraints imposed upon him thereby, the Executive agrees that such
restraints are necessary for the reasonable and proper protection of Valley and the Bank
and that such restraints are reasonable with respect to subject matter, length of time
and area covered. However, both the Company and the Executive agree that if a court finds
this agreement unenforceable due to restrictions unreasonable in scope, duration or
geographical area, then such court may reform this agreement so that the restrictions in
it are reasonable and this agreement is enforceable.  



        
        3.3     
Specific Performance. In the event of an actual or threatened breach by Executive
of any of the covenants contained in Section 3.1, it is agreed that the remedies at law
of Valley and the Bank would be inadequate and Valley and the Bank and their respective
successors shall be entitled to injunctive relief restraining Executive from committing
or attempting such breach. The remedy set forth in this Section 3.3 shall be in addition
to any other remedies available to Valley and the Bank for such breach or threatened
breach.  





 4
















	



        
        3.4     
Jurisdiction. Executive consents to and agrees to the exclusive jurisdiction of
the courts of New Jersey with respect to the enforcement of these provisions.  



        
        3.5     
     Survival.  This Article II shall  survive the  termination  or expiration of the
Term of this Agreement.  



ARTICLE IV 



MISCELLANEOUS 



        
        4.1     
     Changes.  This Agreement may not be modified,  changed,  amended, or altered except
in a writing signed by the Executive and by the Chief Executive Officer of Valley. 



        
        4.2     
Notices. All notices given or required to be given herein shall be in writing and
be hand-delivered or sent by United States first-class certified or registered mail,
return receipt requested, postage prepaid, to the Executive at the last-known address for
the Executive, and to Valley at the principal executive office for Valley (or any
successor thereto), to the attention of the Chief Executive Officer. All such notices
shall be effective when received or open refusal of the addressee to accept delivery.
Either party by a notice in writing to the other party may change or designate the place
for receipt of such notices.  



        
        4.3     
Successors. This Agreement shall inure to the benefit of and be binding upon the
Company, and its successors, including any company with or into which the Company may be
consolidated or merged, and this provision shall apply in the event of any subsequent
merger or consolidation.  



        
        4.4     
Entire Agreement. This Agreement contains the entire agreement between the parties
hereto with respect to the matters contemplated hereby, and supersedes all prior
negotiations, arrangements or understandings, written or oral, with respect thereto.  





 5
















	



        
        4.5     
Governing Law. This Agreement shall be governed in all respects and be interpreted
by and under the laws of the State of New Jersey, without reference to the conflict of
laws provisions of the State of New Jersey.  



        
        IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the date and
year first written above.  












	ATTEST:



By:  
——————————————

    
              		VALLEY NATIONAL BANCORP



By:  
——————————————

    
              






	ATTEST:



By:  
——————————————

    
              		VALLEY NATIONAL BANK



By:  
——————————————

    
              






	WITNESS:



By:  
——————————————

    
              		



By:  
——————————————

    
              





	



 6