exhibit10_1.htm


    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    Exhibit
              10.1
      
      

                    
      
    

        

      


      SETTLEMENT
        AGREEMENT AND MUTUAL
        RELEASE

      This
        Settlement Agreement and Mutual Release (the “Agreement”), dated
        June 6, 2007, is entered into by and between Yardville National Bancorp,
        Patrick
        M. Ryan, George Muller, Martin Tuchman, F. Kevin Tylus, Christopher S. Vernon,
        Robert Workman, James E. Bartolomei, Elbert G. Basolis, Jr., Lorraine Buklad,
        Jay G. Destribats, Anthony M. Giampetro, Sidney L. Hofing, Gilbert W. Lugossy,
        Samual D. Marrazzo, and Louis R. Matlack (collectively “YNB”) and Lawrence B.
        Seidman, Dennis Pollack, and Seidman and Associates, LLC (collectively
“Seidman”) (collectively, YNB and Seidman are referred to as the
“Parties”);

      WHEREAS,
        on or about March 3, 2006, Seidman instituted a shareholder
        disenfranchisement lawsuit against YNB with the Superior Court of New Jersey,
        Chancery Division, Passaic County, under a matter entitled Seidman, et al. v.
        Yardville National Bancorp, et al. (Docket No. PAS-C-41-06) (the
“Action”);

       

      WHEREAS,
        on or about February 8, 2007, the Court entered an Order of
        Judgment that resolved all the issues in the case; and

       

      WHEREAS,
        on or about February 9, 2007, Seidman & Associates, LLC
        instituted a summary proceeding under the caption Seidman, et al. v.
        Yardville National Bancorp, et al. (Docket No. PAS-C-20-07) for a
        declaration to require Yardville National Bancorp to hold its annual meeting
        of
        shareholders on or before June 4, 2007;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      WHEREAS,
        on or about March 21, 2007, the Court entered an Order
        requiring Yardville National Bancorp to hold its annual meeting of shareholders
        on or before July 12, 2007; and

       

      WHEREAS,
        on or about March 29, 2007, the Court entered an Order
        Awarding Attorney’s Fees and Costs that awarded Seidman certain fees and costs
        associated with the Action; and

       

      WHEREAS,
        YNB and Seidman filed appeals with the Superior Court of New
        Jersey Appellate Division under Docket Number A-004348-06-T5 to challenge
        the
        February 8th Order and the March 29th Order (the
“Appeal”); and

       

      WHEREAS,
        the Parties now wish to amicably settle and resolve all
        disputes and controversies relating to the Action, the date for the 2007
        Annual
        Meeting of Shareholders, and the Appeal in order to avoid the uncertainty
        and
        costs associated with on-going litigation; and

      WHEREAS,
        the Parties have consulted with their respective attorneys
        prior to executing this Agreement.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants set forth in
        this Agreement, the undersigned Parties do hereby agree as follows:

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      1.  Payment.  YNB
        agrees to pay Seidman the sum of One Hundred Thousand Fifty-Three and 6/100
        Dollars ($100,053.06) (the “Settlement Payment”) within ten (10) days of
        Seidman’s delivery of a fully executed copy of this Agreement.  The
        Settlement Payment is made in order to settle all disputes, claims and
        controversies between the Parties.  Upon receipt of the Settlement
        Payment, Seidman agrees to execute and file warrants to satisfy the monetary
        judgments entered in the Action.  The warrants shall only satisfy the
        monetary portion of the judgments entered in Action and not constitute a
        waiver
        of YNB’s ability to appeal paragraphs 4 and 6 of the February 8, 2007 Order
        entered in the Action.

       

      2.  Consent
        to Vacate the March 21, 2007 Order.  The Parties
        agree to the entry of a Consent Order that shall be entered by the Honorable
        Margaret M. McVeigh, P.J.Ch. which shall vacate the Court’s March 21, 2007 Order
        that requires the 2007 annual meeting of shareholders to take place on July
        12,
        2007.  The Consent Order shall be prepared and submitted to the Court
        by YNB’s counsel.

       

      3.  Resolution
        of the Appeal.  Seidman agrees that he will withdraw the
        cross-appeal filed in the Appeal under Docket Number
        A-004348-06-T5.  YNB agrees that it will withdraw all portions of its
        appeal, except its appeal of Paragraphs 4 and 6 of the February 8, 2007 Order
        entered in the Action.  Seidman agrees not to oppose YNB’s appeal of
        Paragraphs 4 and 6 of the Court’s February 8, 2007 Order.  The Parties
        further agree that they will use their best efforts to resolve the Appeal
        by
        jointly seeking to have the Appellate Division enter an Order that vacates
        Paragraphs 4 and 6 of the February 8, 2007 Order entered in the
        Action.  In connection with the foregoing, in the event that Seidman’s
        counsel is asked by YNB to attend any conferences or otherwise provide services,
        YNB shall promptly reimburse Seidman for the reasonable fees and expenses
        of his
        counsel.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      4.  2007
        Annual Meeting of Shareholder.  On or prior to the date
        of this Agreement, Yardville National Bancorp has entered into an Agreement
        and
        Plan of Merger (as amended, supplemented, restated or otherwise modified
        from
        time to time, the “Merger Agreement”), pursuant to which Yardville National
        Bancorp will merge with and into an unaffiliated corporation (the “Merger”),
        which provides, among other things, that Yardville National Bancorp will
        promptly take all steps necessary to duly call, give notice of, convene,
        and
        hold a special meeting of its shareholders for the purpose of considering
        the
        Merger Agreement and the Merger.  In the event that the Merger
        Agreement is terminated for any reason prior to the consummation of the Merger,
        Yardville National Bancorp shall cause an annual meeting of shareholders
        to be
        held within sixty (60) days of the effective date of such termination.

       

      5.  Seidman’s
        Withdrawal of the Slate of Director Candidates.  If an
        annual meeting of shareholders is held in accordance with paragraph 4 of
        this
        Agreement, Seidman & Associates, LLC shall withdraw its slate of director
        candidates seeking election to the Yardville National Bancorp Board.

       

      6.  Withdrawal
        of Proposal to Declassify Yardville National
        Bancorp’s Board. If an annual meeting of
        shareholders is held in accordance with paragraph 4 of this Agreement, Seidman
        & Associates, LLC shall withdraw its shareholder proposal to hold an
        election on the adoption of a resolution to declassify Yardville National
        Bancorp’s Board of Directors and hold annual elections of each director
        seat.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      7.  Yardville
        National Bancorp’s Nomination of Candidates.  If an
        annual meeting of shareholders is held in accordance with paragraph 4 of
        this
        Agreement, Yardville National Bancorp shall nominate the following slate
        of
        candidates for election to the Yardville National Bancorp Board of Directors
        at
        the 2007 annual meeting of shareholders: Elbert G. Basolis, Jr., Dennis Pollack,
        Patrick Robinson, Patrick M. Ryan and F. Kevin Tylus.

       

      8.  Adoption
        of Declassification Amendment.  If an annual meeting of
        shareholders is held in accordance with paragraph 4 of this Agreement, Yardville
        National Bancorp shall cause to be submitted to a vote of the shareholders
        an
        amendment to its certificate of incorporation to declassify its Board and
        hold
        annual elections for each director seat on the Board beginning at the 2008
        annual meeting of shareholders.

       

      9.  Share
        Voting Agreement.  If an annual meeting of shareholders
        is held in accordance with paragraph 4 of this Agreement, Seidman agrees
        to be
        present, in person or by proxy, and to vote or cause to be voted, in person
        or
        by proxy, all of the shares which it beneficially owns, in favor of the slate
        of
        candidates the Yardville National Bancorp Board of Directors nominates for
        election at the 2007 annual meeting of shareholders.

       

      10.  No
        Admission.  This Agreement is executed pursuant to a
        compromise and settlement entered into without any admission of liability
        by the
        Parties, but solely for the purpose of avoiding costly litigation on disputed
        claims and avoiding uncertainty, controversy and legal expense.

       

      11.  Amendment.  This
        Agreement shall be binding upon the Parties and may not be amended,
        supplemented, changed, or modified in any manner, orally or otherwise, except
        by
        an instrument in writing of concurrent or subsequent date signed by the
        Parties.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      12.  Entire
        Agreement.  This Agreement contains and constitutes the
        entire understanding and agreement between the Parties and cancels all prior
        or
        contemporaneous oral or written understandings, negotiations, agreements,
        commitments, warranties, representations, and promises in connection
        herewith.

       

      13.  Severability.  If
        any provision in this Agreement is declared or determined by any court or
        arbitrator to be illegal or invalid, the validity of the remaining parts,
        terms,
        or provisions shall not be affected, and the illegal or invalid part, term,
        or
        provision shall be deemed not to be a part of this Agreement.

       

      14.  Counterparts.  This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original, and the counterparts shall together constitute one and the same
        agreement, notwithstanding that all Parties are not a signatory to the original
        or the same counterpart.  Furthermore the Parties mutually agree that
        this Agreement may be executed by a faxed signature in counterparts which
        taken
        together should be considered an original.

       

      15.  Headings.  The
        headings of the sections contained herein are for convenience only and are
        not
        to be used to define, limit or construe their contents.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      16.  Successors.  All
        of the rights and obligations of the Parties under this Agreement shall bind
        and
        inure to the benefit of the respective successors, grantees and assigns of
        the
        Parties.

       

      17.  Representation
        by Counsel.  The Parties hereby acknowledge that each has
        been represented by legal counsel of its own choice throughout all of the
        negotiations which preceded the execution of this Agreement and that each
        of
        them has executed this Agreement with the consent and on the advice of such
        legal counsel.  The Parties further acknowledge that each of them and
        their counsel have had an adequate opportunity to make whatever investigations
        or inquiry that they may deem necessary or desirable in connection with the
        subject matter of this Agreement prior to the execution hereof and the delivery
        and acceptance of the consideration specified herein.  Each party has
        reviewed and revised, or had the opportunity to revise this Agreement, and
        accordingly the rule of construction to the effect that any ambiguities are
        to
        be resolved against the drafting party shall not be employed in the
        interpretation of this Agreement.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      By
        signing below, the Parties acknowledge that they have consulted
        with legal counsel regarding this Agreement and have carefully read and fully
        understand all of the provisions of this Agreement and that they are voluntarily
        entering into this Agreement.

       

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Lawrence B. Seidman

              
	 	
                Lawrence
                  B. Seidman

              


      

      


       

      SEIDMAN
&
ASSOCIATES,
        LLC

       

      
        	
                Dated:  June
                  6, 2007

              	
                By:
                  /s/ Lawrence B. Seidman

              
	 	
                Lawrence
                  B. Seidman

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	 
	 	
                Dennis
                  Pollack

              


      

      


       

      YARDVILLE
        NATIONAL BANCORP

       

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  By: Patrick M. Ryan

              
	 	
                Patrick
                  M. Ryan , CEO

              


      

       

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Patrick M. Ryan

              
	 	
                Patrick
                  M. Ryan

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  George Muller

              
	 	
                George
                  Muller

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Martin Tuchman

              
	 	
                Martin
                  Tuchman

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  F. Kevin Tylus

              
	 	
                F.
                  Kevin Tylus

              


      

      


      
        	
                Dated:  June
                  8, 2007

              	
                /s/
                  Christopher S. Vernon

              
	 	
                Christopher
                  S. Vernon

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Robert Workman

              
	 	
                Robert
                  Workman

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  James E. Bartolomei

              
	 	
                James
                  E. Bartolomei

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Elbert G. Basolis, Jr.

              
	 	
                Elbert
                  G. Basolis, Jr.

              


      

      


      
        	
                Dated:

              	 
	 	
                Lorraine
                  Buklad

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Jay G. Destribats

              
	 	
                Jay
                  G. Destribats

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Anthony M. Giampetro

              
	 	
                Anthony
                  M. Giampetro

              


      

      
 

      
        	
                Dated:  June
                  8, 2007

              	
                /s/
                  Sidney L. Hofing

              
	 	
                Sidney
                  L. Hofing

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Gilbert W. Lugossy   

              
	 	
                Gilbert
                  W. Lugossy

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Samuel D. Marrazzo

              
	 	
                Samuel
                  D. Marrazzo

              


      

      


      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Louis R. Matlack      

              
	 	
                Louis
                  R. Matlack

              


      

      


      


       


      
        
          
          

        

        
          8