Change in Control Agreement - Eric W. Gould



 EXHIBIT 10 (A) (2) 
  

CHANGE-IN-CONTROL AGREEMENT 
 Eric W.
Gould 
  
 THIS EMPLOYMENT AGREEMENT (the
“Agreement”), is made as of this 11th day of February 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 ERIC W. GOULD (the “Executive”). 
  
 BACKGROUND 
  
 WHEREAS, the Executive has been continuously employed by the Bank for at least three full years; 
  
 WHEREAS, the Executive throughout his tenure has worked diligently in his
position in the business of the Bank and Valley; 
  
 WHEREAS, the
Board of Directors of the Bank and Valley 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 Board of Directors of the Company (the “Board”) believes it is imperative that the Company and the Board 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 Board of Directors 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 Company’s 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 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 Subsidiary or an employee benefit plan established or maintained by Valley, a 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 Subsidiary or an employee benefit plan established or maintained by Valley, a Subsidiary or any of their respective affiliates), (iii) upon the approval
by Valley’s stockholders of (A) a merger or consolidation of Valley with or into another corporation (other than a merger or consolidation which is approved by at least two-thirds of the Continuing Directors (as hereinafter defined) or the
definitive agreement for which provides that at least two-thirds of the directors of the surviving or resulting corporation immediately after the transaction are Continuing Directors (in either case, a “Non-Control Transaction”)), (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 who at the beginning of such period constitute the
Board (the “Continuing Directors”) cease for any reason to constitute at least two-thirds thereof or, following a Non-Control Transaction, two-thirds of the board of directors of the surviving or resulting corporation; provided that
any individual whose election or nomination for election as a member of the Board (or, following a Non-Control Transaction, the board of directors of the surviving or resulting 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 Subsidiary, or an affiliate of Valley or a 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). No person shall be considered a Control Person for purposes of clause (i) above if (A) such person is or becomes the beneficial owner, directly or indirectly, of more than ten percent (10%) but less than twenty-five
percent (25%) of the combined voting power of Valley’s then outstanding securities if the acquisition of all voting securities in excess of ten 

  

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percent (10%) was approved in advance by a majority of the Continuing Directors then in office or (B) such person acquires in excess of ten percent (10%) of
the combined voting power of Valley’s then outstanding voting securities in violation of law and by order of a court of competent jurisdiction, settlement or otherwise, disposes or is required to dispose of all securities acquired in violation
of law. 
  
 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 Company 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, benefit equalization plan, life insurance plan, health and accident plan, disability plan, deferred compensation plan or long term stock incentive plan) in which Executive is 

  

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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. 
  
 i. Subsidiary. “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. 
  
 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 by the bank as a Senior Officer, 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. 
  

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 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 of the
Company during the Contract Period shall review annually, or at more frequent intervals which the Board 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. Benefit Equalization Plan. During the Contract Period, if the Executive was entitled to benefits
under the Company’s Benefit Equalization Plan (“BEP”) prior to the Change in Control, the Executive shall be entitled to continued benefits under the BEP after the Change in Control and such BEP may not be modified to reduce or
eliminate such benefits during the Contract Period. 
  
 c. Club Membership and Automobile. If prior to the Change in Control, the Executive was entitled to membership in a country club and/or the use of an automobile, he shall be entitled to the same membership and/or use of an automobile
at least comparable to the automobile provided to him prior to the Change in Control. 
  
 d. 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(d) 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 

  

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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: 
  

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 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, two (2) years 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 three years, then one (1) year 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 lump sum payment (e.g.
1 or 2 years) as were provided at the time of termination of his employment with the Company, at the Company’s cost. 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. 
  

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 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. 
  

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 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 Personnel and Compensation Committee 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) twenty-four months after the date of such written notice. Notwithstanding anything to the contrary contained herein, the Initial Term shall cease
when the Executive attains 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. 
  

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 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.

  

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 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:
	 	 	 	 VALLEY NATIONAL BANCORP

					
	 	 	/s/    WILMA FALDUTO        	 	 	 	By:	 	/s/    GERALD H. LIPKIN        
	 	 	
	 	 	 	 	 	

	 	 	Wilma Falduto, Secretary	 	 	 	 	 	Gerald H. Lipkin, Chairman
and Chief Executive Officer

  

									
	 ATTEST:
	 	 	 	 VALLEY NATIONAL BANK

					
	 	 	/s/    Wilma Falduto        	 	 	 	By:	 	/s/    Gerald H. Lipkin        
	 	 	
	 	 	 	 	 	

	 	 	Wilma Falduto, Secretary	 	 	 	 	 	Gerald H. Lipkin, Chairman
and Chief Executive Officer

  

									
	 WITNESS:
	 	 	 	 
					
	 	 	/s/    Donna L. Romas        	 	 	 	By:	 	/s/    Eric W. Gould        
	 	 	
	 	 	 	 	 	

	 	 	Donna L. Romas	 	 	 	 	 	Eric W. Gould, Executive

  
 January 19, 2001 
 “Executive’s” Valley 
 National Bank Service Date