Document:

exv10w1

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS AGREEMENT (the “Agreement”), made this 28th day of September, 2004 by
and among YARDVILLE NATIONAL BANCORP, a New Jersey corporation (the “Company”),
YARDVILLE NATIONAL BANK, a wholly owned subsidiary of the Company (the “Bank”),
and F. KEVIN TYLUS (the “Executive”).

W I T N E S S E T H

     WHEREAS, the Company and the Bank desire to retain the services of the
Executive as Senior Executive Vice President and Chief Administrative Officer
of the Bank and the Company; and

     WHEREAS, the Executive and the respective Boards of Directors of the Bank
and the Company desire to enter into an employment agreement setting forth the
terms and conditions of the Executive’s employment and the related rights and
obligations of each of the parties.

     NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is hereby agreed as follows:

     1. Employment. The Executive shall be employed as Senior Executive Vice
President and Chief Administrative Officer of the Bank and the Company,
reporting directly to the President/CEO. The Executive shall have
responsibility for, and shall perform all duties and shall have all powers
which are commonly incident to his offices or which, consistent with those
offices, are delegated to him by the President/CEO or the Board of Directors of
the Company or the Bank. The Executive shall render such administrative and
management services as are customarily provided by persons employed in similar
executive capacities.

     2. Location and Facilities. The Executive will be furnished with the
working facilities and staff customary for executive officers with the title
and duties set forth in Section 1 and as are necessary for him to perform his
duties. The location of such facilities and staff shall be at the principal
administrative offices of the Company and the Bank, or at such other site or
sites customary for such offices.

     3. Term.

	a.	 	The term of this Agreement shall be (i) the
initial term, consisting of the period commencing on October
1, 2004 (the “Effective Date”) and ending on the third
anniversary of the Effective Date, plus (ii) any and all
extensions of the initial term made pursuant to this Section
3.
	 
	b.	 	On each anniversary of the Effective Date prior
to a termination of the Agreement, the term under this
Agreement shall be extended automatically for an additional
one (1) year period beyond the then

45

 

	 	 	effective expiration date without action by any party,
provided that neither the Company and the Bank, on the one
hand, nor Executive, on the other, shall have given written
notice at least sixty (60) days prior to such anniversary
date of their or his desire that the term not be extended.

     4. Base Compensation.

	a.	 	The Company and the Bank agree to pay the
Executive during the term of this Agreement a base salary at
the rate of $257,500 per year, payable in accordance with
customary payroll practices.
	 
	b.	 	The Board of Directors of the Bank (or a
designated Committee thereof) shall review annually the rate
of the Executive’s base salary based upon factors they deem
relevant, and may maintain or increase his salary, provided
that no such action shall reduce the rate of salary below the
rate in effect on the Effective Date.
	 
	c.	 	In the absence of action by the Board of
Directors of the Bank (or a designated Committee thereof), the
Executive shall continue to receive salary at the annual rate
specified on the Effective Date or, if another rate has been
established under the provisions of this Section 4, the rate
last properly established by action of the Board of Directors
of the Bank under the provisions of this Section 4.

     5. Bonuses. The Executive shall be entitled
to participate in any compensation programs that
the Company or the Bank may award from time to
time to senior management employees, pursuant to
bonus plans or otherwise. For 2004 and
subsequent years, Executive shall have a cash
bonus opportunity as set forth in Appendix A to
this Agreement.

     6. Benefit Plans.

	a.	 	The Executive shall be entitled to participate in
such life insurance, medical, dental, pension, profit sharing,
and retirement plans, stock compensation plans and other
benefit programs and arrangements as may be approved from time
to time by the Company and the Bank for the benefit of their
employees. As soon as practicable following the first
anniversary of the effective date of this Agreement, if the
Agreement is still in effect on such date, the Board of the
Bank shall take such action as may be necessary to designate
the Executive as a participant in the Bank’s Second Amended
and Restated Supplemental Executive Retirement Plan (the
“SERP”) with a Target Benefit (as defined in the SERP) of 60
percent.

46

 

	b.	 	Upon the October meeting date of the Organization
and Compensation Committee, the Executive shall be granted
stock options under the Yardville National Bancorp 1997 Stock
Option Plan (“Stock Option Plan”) Plan covering 25,000 shares
of the Company’s common stock. All such grants shall become
exercisable immediately and shall, in all respects, be
subject to the terms and conditions of the Stock Option Plan.
	 
	c.	 	Additional compensation by way of restrictive
stock grants (if available and approved by the Organization
and Compensation Committee) or cash, in the amount of $166,667
per year for three years to be paid in January 2006, January
2007 and January 2008. Since the January 2008 payment
referred to above is beyond the initial term of this
Agreement, said payment will be due and owing to the Executive
in October 2007 in the event the Agreement is not extended
beyond that date.

     7. Vacation and Leave.

	a.	 	The Executive shall be entitled to vacations and
other leave in accordance with Bank policy for senior
executives, or otherwise as approved by the Boards of
Directors of the Company or the Bank.
	 
	b.	 	In addition to paid vacations and other leave,
the Executive shall be entitled, without loss of pay, to
absent himself voluntarily from the performance of his duties
for such additional periods of time and for such valid and
legitimate reasons as the Boards of Directors of the Company
and the Bank may in their discretion determine. Further, the
Boards of Directors may grant to the Executive a leave or
leaves of absence, with or without pay, at such time or times
and upon such terms and conditions as the Boards of Directors,
in their discretion, may determine.

     8. Expense Payments and Reimbursements. The Executive shall be reimbursed
for or provided with all reasonable out-of-pocket business expenses that he
shall incur in connection with his services under this Agreement (including,
but not limited to, automobile and club-related expenses) upon substantiation
of such expenses in accordance with applicable policies of the Company or the
Bank. In addition, the Bank shall reimburse Executive for certain relocation
expenses incurred by his immediate prior employer if and when those expenses
are paid by the Executive to his prior employer, and the Executive provides the
Bank with proof of said payment.

     9. Automobile Allowance. During the term of this Agreement, the Executive
shall be entitled to a Company automobile or automobile allowance on terms no
less favorable than those in effect immediately prior to the execution of this
Agreement. Executive shall comply with reasonable reporting and expense
limitations on the use of such automobile as may be established by the Company
or the Bank from time to time, and the Company or the Bank shall annually
include on Executive’s Form W-2 any amount of income attributable to
Executive’s personal use of the automobile.

47

 

     10. Loyalty and Confidentiality.

	a.	 	During the term of this Agreement the Executive: (i) shall devote all his
time, attention, skill, and efforts to the faithful performance of his
duties hereunder; provided, however, that from time to time, the Executive
may serve on the boards of directors of, and hold any other offices or
positions in, companies or organizations which will not present any conflict
of interest with the Company and the Bank or any of their subsidiaries or
affiliates, unfavorably affect the performance of Executive’s duties
pursuant to this Agreement, or violate any applicable statute or regulation;
and (ii) shall not engage in any business or activity contrary to the
business affairs or interests of the Company and the Bank.
	 
	b.	 	Nothing contained in this Agreement shall prevent
or limit the Executive’s right to invest in the capital stock
or other securities of any business dissimilar from that of
the Company and the Bank, or, solely as a passive, minority
investor, in any business.
	 
	c.	 	The Executive agrees to maintain the confidentiality of any and all
information concerning the operations or financial status of the Company and
the Bank; the names or addresses of any borrowers, depositors and other
customers; any information concerning or obtained from such customers; and any
other information concerning the Company and the Bank to which he may be
exposed during the course of his employment. The Executive further agrees
that, unless required by law or specifically permitted by the Boards of
Directors in writing, he will not disclose to any person or entity, either
during or subsequent to his employment, any of the above-mentioned information
which is not generally known to the public, nor shall he employ such
information in any way other than for the benefit of the Company and the Bank.

     11. Termination and Termination Pay. Subject to Section 12 of this
Agreement, the Executive’s employment under this Agreement may be terminated in
the following circumstances:

	a.	 	Death. The Executive’s employment under
this Agreement shall terminate upon his death during the
term of this Agreement, in which event the Executive’s
estate shall be entitled to receive the compensation due to
the Executive through the last day of the calendar month in
which his death occurred.
	 
	b.	 	Retirement. Notwithstanding anything in
this Agreement to the contrary, this Agreement shall
terminate upon the retirement of the Executive under the
retirement benefit plan or plans in which he participates
under Section 6 of this Agreement or otherwise.
	 
	c.	 	Disability.

     i. The Company, the Bank, or the Executive may
terminate the Executive’s employment after having
established the

48

 

Executive’s Disability. For purposes of this
Agreement, “Disability” means the Executive’s suffering
a sickness, accident or injury which has been
determined by the carrier of any individual or group
disability insurance policy covering the Executive, or
by the Social Security Administration, to be a
disability rendering the Executive totally and
permanently disabled. The Boards of Directors of the
Company and the Bank shall determine in good faith
whether or not the Executive is disabled for purposes
of this Agreement. As a condition to any benefits, the
Board may require the Executive to submit proof of the
carrier’s or the Social Security Administration’s
determination of disability.

     ii. In the event of the Executive’s termination of employment by reason
of Disability, the Executive shall continue to receive one-hundred
percent (100%) of his monthly base salary (at the annual rate in effect
on his date of termination) through the earlier of the date of the
Executive’s death, the date he attains age 65 or the date which is three
(3) years after the Executive’s termination date. Such payments shall be
reduced by the amount of any short- or long-term disability benefits
payable to the Executive under any other disability program sponsored by
the Company or the Bank.

     iii. In addition, during any period of the
Executive’s Disability in which he is receiving payments
under this Section 11(c), the Executive and his
dependents shall, to the greatest extent possible,
continue to be covered under all benefit plans
(including, without limitation, retirement plans and
medical, dental and life insurance plans) of the Company
and the Bank in which Executive participated prior to
his Disability, on the same terms as if Executive were
actively employed by the Company and the Bank through
the earlier of the date of the Executive’s death, the
date he attains age 65 or the date which is three (3)
years after the Executive’s termination date.

	d.	 	Just Cause.

     i. The Boards of Directors of the Company or the Bank may, by written
notice to the Executive in the form and manner specified in this
paragraph, immediately terminate his employment with the Company or the
Bank, respectively, at any time, for Just Cause. The Executive shall
have no right to receive compensation or other benefits for any period
after termination for Just Cause, except for previously vested benefits.
Termination for “Just Cause” shall mean termination because of, in the
good faith determination of the Company’s or the Bank’s Board of
Directors, the Executive’s:

	(1)	 	Personal dishonesty;
	 
	(2)	 	Incompetence;

49

 

	(3)	 	Willful misconduct;
	 
	(4)	 	Breach of fiduciary duty
involving personal profit;
	 
	(5)	 	Intentional failure to
perform duties under this Agreement;
	 
	(6)	 	Willful violation of any
law, rule or regulation (other than traffic
violations or similar offenses) that reflects
adversely on the reputation of the Bank, any
felony conviction, any violation of law involving
moral turpitude, or any violation of a final
cease-and-desist order; or
	 
	(7)	 	Material breach of any
provision of this Agreement.

     ii. Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Just Cause by the Company or the Bank unless
there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds (?) of
the entire membership of the Boards of Directors of the Company or the
Bank at a meeting of such Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the Executive
to be heard before the Board with counsel), finding that, in the good
faith opinion of such Board, the Executive was guilty of conduct
described above and specifying the particulars thereof.

	e.	 	Voluntary Termination by Executive. In addition
to his other rights to terminate employment under the
Agreement, the Executive may voluntarily terminate employment
during the term of this Agreement upon at least sixty (60)
days prior written notice to the Boards of Directors of the
Company and the Bank, in which case the Executive shall
receive only his compensation, vested rights and employee
benefits up to the date of his termination.
	 
	f.	 	Without Just Cause or With Good Reason.

     i. In addition to termination pursuant
to Sections 11(a) through 11(e), (x) the Boards of
Directors of the Company or the Bank, may, by written
notice to the Executive, immediately terminate his
employment at any time for a reason other than Just
Cause (a termination “Without Just Cause”) and (y) the
Executive may, by written notice to the Boards of the
Company and the Bank, immediately terminate this
Agreement at any time within ninety (90) days following
an event constituting “Good Reason” as defined below (a
termination “With Good Reason”).

     ii. Subject to Section 12 hereof, in the event of
termination under this Section 11(f), the Executive
shall be entitled

50

 

to receive his annual base salary and the bonus that
would have been paid for the remaining term of the
Agreement, including any renewals or extensions
thereof, determined by reference to the highest annual
rate of base salary in effect pursuant to Section 4 of
this Agreement in any of the twelve (12) months
immediately preceding the date of such termination and
the highest annual cash bonus paid (or accrued on
behalf of) the Executive in any of the three (3)
completed calendar years immediately preceding the date
of termination. In addition, the Executive shall be
entitled to any payments due to him under Section 6(c)
of this Agreement. The sum due under this Section
11(f) shall be paid in one lump sum within thirty (30)
calendar days of such termination. Also, in such
event, the Executive shall, for a thirty-six (36) month
period, continue to participate in any benefit plans of
the Company and the Bank that provide health (including
medical and dental), or life insurance, or similar
coverage, upon terms no less favorable than the most
favorable terms provided to senior executives of the
Company or the Bank during such period. In the event
that the Company or the Bank is unable to provide such
coverage by reason of the Executive no longer being an
employee, the Company or the Bank shall provide the
Executive with comparable coverage on an individual
policy basis or, if individual coverage is not
available, provide a cash payment equivalent to the
value of such coverage.

     iii. “Good Reason” shall exist if, without
the Executive’s express written consent, the Company or
the Bank materially breach any of their respective
obligations under this Agreement. Without limitation,
such a material breach shall be deemed to occur upon any
of the following:

	(1)	 	A material reduction in the Executive’s
responsibilities or authority, or a requirement
that the Executive report to any person or group
other than the Boards of Directors of the Company
and the Bank (or any other effective reduction in
reporting responsibilities) in connection with
his employment with the Company or the Bank;
	 
	(2)	 	Assignment to the Executive of duties of
a non-executive nature or duties for which he is
not reasonably equipped by his skills and
experience;
	 
	(3)	 	Failure of the Executive
to be nominated or renominated to the Boards of
Directors of the Company or the Bank;
	 
	(4)	 	A reduction in salary or benefits contrary to
the terms of this Agreement, or, following a
Change in Control

51

 

	 	 	as defined in Section 12 of this Agreement, any
reduction in salary or material reduction in
benefits below the amounts to which he was
entitled prior to the Change in Control;
	 
	(5)	 	Termination of incentive
and benefit plans, programs or arrangements, or
reduction of the Executive’s participation, to
such an extent as to materially reduce their
aggregate value below their aggregate value as of
the Effective Date; or
	 
	(6)	 	A requirement that the
Executive relocate his principal business office
or his principal place of residence outside of the
area consisting of a thirty-five (35) mile radius
from the current main office of the Bank, or the
assignment to the Executive of duties that would
reasonably require such a relocation.

     iv. Notwithstanding the foregoing, a reduction in
base salary or a reduction or elimination of the
Executive’s participation or benefits under one or more
benefit plans maintained by the Company or the Bank as
part of a good faith, overall reduction in salary or
reduction or elimination of such plan or plans or
benefits thereunder, applicable to all participants in
a manner that does not discriminate against the
Executive (except as such discrimination may be
necessary to comply with law), shall not constitute an
event of Good Reason or a material breach of this
Agreement, provided that benefits of the type or to the
general extent as those offered under such plans prior
to such reduction or elimination are not available to
other officers of the Company or the Bank, or any
company that controls either of them, under a plan or
plans in or under which the Executive is not entitled
to participate.

     v. Notwithstanding anything in this
Agreement to the contrary, during the twelve (12) month
period beginning on the effective date of a Change in
Control (as defined in Section 12(a)), and continuing
through the first anniversary of such date, the
Executive may voluntarily terminate his employment under
this Agreement for any reason and such termination shall
constitute termination With Good Reason.

	g.	 	Continuing Covenant Not to Compete or Interfere
with Relationships. Regardless of anything herein to the
contrary, following a termination by the Company, the Bank or
the Executive pursuant to Section 11(f) and continuing until
the six month anniversary of the effective date of such
termination, (i) the obligations of the Executive under
Section 10(c) of this Agreement will continue in effect (ii)
the Executive shall not serve as an officer, director or
employee of any bank holding company, bank, savings

52

 

	 	 	association, savings and loan holding company, or mortgage
company which offers products or services competing with
those offered by the Company or the Bank from any office
within fifty (50) miles from the main office or any branch of
the Bank and shall not interfere with the relationship of the
Company or the Bank and any of its employees, agents, or
representatives.

     12. Termination in Connection with a Change in Control.

	a.	 	“Change in Control” means any one of the following events occurs:

     i. Merger: the Company merges into or
consolidates with another corporation, or merges another
corporation into the Company and as a result less than a
majority of the combined voting power of the resulting
corporation immediately after the merger or
consolidation is held by persons who were stockholders
of the Company immediately before the merger or
consolidation;

     ii. Acquisition of Significant Share
Ownership: a report on Schedule 13D or another form or
schedule (other than Schedule 13G) is filed or is
required to be filed under Sections 13(d) or 14(d) of
the Securities Exchange Act of 1934, if the schedule
discloses that the filing person or persons acting in
concert has or have become the beneficial owner of 25%
or more of a class of the Company’s voting securities,
but this clause (b) shall not apply to beneficial
ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or
indirectly beneficially owns fifty percent (50%) or more
of its outstanding voting securities;

     iii. Change in Board Composition: during
any period of two consecutive years, individuals who
constitute the Company’s Board of Directors at the
beginning of the two-year period cease for any reason to
constitute at least a majority of the Company’s Board of
Directors; provided, however, that for purposes of this
clause (c) each director who is first elected by the
board (or first nominated by the board for election by
stockholders) by a vote of at least three-fourths
(3/4) (b) of the directors who were directors at the
beginning of the period shall be deemed to have been a
director at the beginning of the two-year period; or

     iv. Sale of Assets: The Company sells to
a third party all or substantially all of the Company’s
assets.

	b.	 	If within the period beginning six (6) months
prior to and ending three (3) years after a Change in Control,
(i) the Company or the Bank shall terminate the Executive’s
employment Without Just Cause, or (ii) the Executive shall
voluntarily terminate his employment With Good Reason,

53

 

	 	 	the Company and the Bank shall, within thirty (30) calendar
days of the termination of the Executive’s employment, make a
lump-sum cash payment to him equal to three (3) times the sum
of the Executive’s (x) highest annual rate of base salary
during the thirty-six (36) month period preceding the
effective date of the Change in Control and (y) the highest
annual bonus or similar incentive compensation paid to the
Executive or accrued on the Executive’s behalf during the
three (3) most recently completed calendar years preceding
the effective date of the Change in Control and (z) any
payments still due to the Executive under Section 6(c) of
this Agreement. This cash payment shall be made in lieu of
any payment also required under Section 11(f) of this
Agreement because of a termination in such period. Also, in
such event, the Executive shall, for a thirty six (36) month
period, continue to participate in any benefit plans of the
Company and the Bank that provide health (including medical
and dental) or life insurance, or similar coverage upon terms
no less favorable than the most favorable terms provided to
senior executives of the Bank during such period. In the
event that the Company or the Bank is unable to provide the
coverage referred to in the preceding sentence by reason of
the Executive no longer being an employee, the Company and
the Bank shall provide the Executive with comparable coverage
on an individual policy basis or, if individual coverage is
not available, provide a cash payment equivalent to the value
of such coverage.

     13. Indemnification and Liability Insurance.

	a.	 	Indemnification. The Company and the Bank agree
to indemnify the Executive (and his heirs, executors, and
administrators), and to advance expenses related thereto, to
the fullest extent permitted under applicable law and
regulations against any and all expenses and liabilities
reasonably incurred by him in connection with or arising out
of any action, suit, or proceeding in which he may be involved
by reason of his having been a director or executive of the
Company or the Bank or any of their subsidiaries (whether or
not he continues to be a director or Executive at the time of
incurring any such expenses or liabilities). Such expenses
and liabilities shall include, but shall not be limited to,
judgments, court costs, and attorney’s fees and the cost of
reasonable settlements, such settlements to be approved by the
Boards of Directors of the Company or the Bank, if such action
is brought against the Executive in his capacity as an
Executive or director of the Company or the Bank or any of
their subsidiaries. Indemnification for expenses shall not
extend to matters for which the Executive has been terminated
for Just Cause. Nothing contained herein shall be deemed to
provide indemnification otherwise prohibited by applicable law
or regulation. Notwithstanding anything herein to the
contrary, the obligations of this Section 13 shall survive the
term of this Agreement by a period of six (6) years.
	 
	b.	 	Insurance. During the period in which
indemnification of the Executive is required under this
Section 13, the Company or the Bank shall provide the

54

 

	 	 	Executive (and his heirs, executors, and administrators) with
coverage under a directors’ and officers’ liability policy at
the expense of the Company and the Bank, at least equivalent
to such coverage provided to directors and senior Executives
of the Company or the Bank.

     14. Reimbursement of Executive’s Expenses to Enforce this Agreement. The
Company or the Bank shall reimburse the Executive for all out-of-pocket
expenses, including, without limitation, reasonable attorney’s fees, incurred
by the Executive in connection with successful enforcement by the Executive of
the obligations of the Company or the Bank to the Executive under this
Agreement. Successful enforcement shall mean the grant of an award of money or
the requirement that the Company or the Bank take some action specified by this
Agreement (i) as a result of court order; or (ii) otherwise by the Company or
the Bank following an initial failure of the Company or the Bank to pay such
money or take such action promptly after written demand therefore from the
Executive stating the reason that such money or action is or was due under this
Agreement.

     15. Adjustment of Certain Payments and Benefits.

	a.	 	Tax Indemnification. Anything in this
Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any
payment, benefit or distribution made or provided by the
Company or the Bank to or for the benefit of the Executive
(whether made or provided pursuant to the terms of this
Agreement or otherwise) (each referred to herein as a
“Payment”), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”) or any interest or penalties are
incurred by the Executive with respect to such excise tax
(the excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
“Excise Tax”), the Executive shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount
such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
	 
	b.	 	Determination of Gross-Up Payment. Subject
to the provisions of Section 15(c), all determinations
required to be made under this Section 15, including
whether and when a Gross-Up Payment is required, the amount
of such Gross-Up Payment and the assumptions to be utilized
in arriving at such determination, shall be made by a
certified public accounting firm reasonably acceptable to
the Company and the Bank as may be designated by the
Executive (the “Accounting Firm”) which shall provide
detailed supporting calculations to the Company, the Bank
and the Executive within fifteen (15) business days of the
receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the
Company and the Bank. All fees and expenses of the

55

 

	 	 	Accounting Firm shall be borne solely by the Company and the
Bank. Any Gross-Up Payment, as determined pursuant to this
Section 15, shall be paid by the Company to the Executive
within five business days of the later of (i) the due date
for the payment of any Excise Tax, and (ii) the receipt of
the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application
of Section 4999 of the Code, at the time of the initial
determination by the Accounting Firm hereunder, it is
possible that a Gross-Up Payment will not have been made by
the Company and the Bank which should have been made (an
“Underpayment”), consistent with the calculations required to
be made hereunder. In the event that the Company and the
Bank exhaust their remedies pursuant to Section 15(c) and the
Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company or the Bank to or for
the benefit of the Executive.
	 
	c.	 	Treatment of Claims. The Executive shall
notify the Company and the Bank in writing of any claim by
the Internal Revenue Service that, if successful, would
require a Gross-Up Payment to be made. Such notification
shall be given as soon as practicable, but no later than
ten business days, after the Executive is informed in
writing of such claim and shall apprise the Company and the
Bank of the nature of such claim and the date on which such
claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the thirty (30) day
period following the date on which it gives such notice to
the Company and the Bank (or any shorter period ending on
the date that payment of taxes with respect to such claim
is due). If the Company or the Bank notifies the Executive
in writing prior to the expiration of this period that it
desires to contest such claim, the Executive shall:

i. give the Company and the Bank any information reasonably requested by
the Company and the Bank relating to such claim;

ii. take such action in connection with contesting such claim as the
Company and the Bank shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company
and the Bank;

iii. cooperate with the Company and the Bank in
good faith in order to effectively contest such claim;
and

iv. permit the Company and the Bank to participate in any proceedings
relating to such claim; provided, however, that the Company and the Bank
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and
indemnity and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or related taxes, interest or penalties imposed as a result of

56

 

such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 15(c), the Company
and the Bank shall control all proceedings taken in connection with such
contest and, at their option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority with respect to such claim and may, at their option,
either direct the Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner. Further, the Executive
agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company and the Bank shall determine;
provided, however, that if the Company directs the Executive to pay such
claim and sue for a refund, the Company and the Bank shall advance the
amount of such payment to the Executive, on an interest-free basis
(including interest or penalties with respect thereto). Furthermore, the
Company’s and the Bank’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issues raised by the Internal Revenue Service
or any other taxing authority.

	d.	 	Adjustments to the Gross-Up Payment. If, after
the receipt by the Executive of an amount advanced by the
Company pursuant to Section 15(c), the Executive becomes
entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s compliance with the
requirements of Section 15(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or
credited thereon after applicable taxes). If, after the
receipt by the Executive of an amount advanced by the Company
pursuant to Section 15(c), a determination is made that the
Executive shall not be entitled to any refund with respect to
such claim and such denial of refund occurs prior to the
expiration of thirty (30) days after such determination, then
such advance shall be forgiven and shall not be required to be
repaid and the amount of such advance shall offset, to the
extent thereof, the amount of the Gross-Up Payment required to
be paid.

     16. Injunctive Relief. If there is a breach or threatened breach of
Section 11(g) of this Agreement, the Company or the Bank and the Executive
agree that there is no adequate remedy at law for such breach, and that the
Company and the Bank each shall be entitled to injunctive relief restraining
the Executive from such breach or threatened breach, but such relief shall not
be the exclusive remedy hereunder for such breach. The parties hereto likewise
agree that the Executive, without limitation, shall be entitled to injunctive
relief to enforce the obligations of the Company and the Bank under Section 12
of this Agreement.

     17. Successors and Assigns.

	a.	 	This Agreement shall inure to the benefit of and
be binding upon any corporate or other successor of the
Company or the Bank that acquires, directly or indirectly, by
merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Company or the
Bank.

57

 

	b.	 	Since the Bank and the Company are contracting
for the unique and personal skills of the Executive, the
Executive shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written
consent of the Bank and the Company.

     18. No Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment or otherwise and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to the Executive in any
subsequent employment.

     19. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch office of the United States Postal Service, by registered or
certified mail, postage prepaid, addressed to the Company and/or the Bank at
their principal business offices and to the Executive at his home address as
maintained in the records of the Company and the Bank.

     20. Joint and Several Liability; Payments by the Company and the Bank. To
the extent permitted by law, except as otherwise provided herein, the Company
and the Bank shall be jointly and severally liable for the payment of all
amounts due under this Agreement. The Company hereby agrees that it shall be
jointly and severally liable with the Bank for the payment of all amounts due
under this Agreement and shall guarantee the performance of the Bank’s
obligations hereunder, provided that the Company shall not be required by this
Agreement to pay to the Executive a salary or any bonuses or any other cash
payments, except in the event that the Bank does not fulfill its obligations to
the Executive for such payments.

     21. No Plan Created by this Agreement. The Executive, the Company and the
Bank expressly declare and agree that this Agreement was negotiated among them
and that no provisions of this Agreement are intended to, or shall be deemed
to, create any “plan” for purposes of the Employee Retirement Income Security
Act of 1974 (ERISA) or any other law or regulation, and each party expressly
waives any right to assert the contrary. Any assertion in any judicial or
administrative filing, hearing, or process that such a plan was created by this
Agreement shall be deemed a material breach of this Agreement by the party
making such an assertion.

     22. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
otherwise specifically provided for herein.

     23. Applicable Law. Except to the extent preempted by federal law, the
laws of the State of New Jersey shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.

     24. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the remaining provisions hereof.

     25. Headings. Headings contained herein are for convenience of reference
only.

58

 

     26. Entire Agreement. This Agreement, together with any modifications
agreed to in writing by the parties, shall constitute the entire agreement
among the parties with respect to the subject matter hereof, other than written
agreements with respect to specific plans, programs or arrangements described
in Sections 5 and 6. This agreement supercedes and replaces in its entirety
any previous employment agreements between or among the Company, the Bank and
the Executive.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.

	 	 	 	 	 	 	 
	Attest:	 	YARDVILLE NATIONAL BANCORP
	 
	 	 	 	 	 	Patrick M. Ryan
	 
	 	 	 	

	

	 	 	 	By:
	 	Patrick M. Ryan
	

	 	Daniel J. O’Donnell,
Secretary

	 	Title:
	 	President /CEO
	 
	 	 	 	 	 	 
	Attest:	 	YARDVILLE NATIONAL BANK
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	Patrick M. Ryan
	 
	 	 	 	

	

	 	 	 	By:
	 	Patrick M. Ryan
	

	 	Daniel J. O’Donnell, Secretary

	 	Title:
	 	President / CEO
	 
	 	 	 	 	 	 
	Daniel J. O’Donnell	 	 	 	F. Kevin Tylus
	
 	 	 	 	
 
	

	 	Witness
	 	 	 	            F. Kevin Tylus

59

 

APPENDIX A

For year 2004, the Executive shall be entitled to the following bonuses:

	1.	 	Initial sign-on bonus of $50,000 to be paid on October 1, 2004.
	 
	2.	 	Based on the final 2004 fiscal year numbers, the Executive shall be paid
a bonus of one quarter of 1.0% of any after tax/prior to shareholders’
dividend profit (the “Profit”) provided the Bank reaches a target Profit
of $17,850,000.00. If the target Profit is not reached, then the
Executive will be paid a bonus of one quarter of .85% on the lower Profit
amount provided, however, that no bonus would be paid if the Profit were
less than $10,000,000.00.

For fiscal year 2005, the Executive’s bonus will be determined at the
discretion of the Organization and Compensation Committee. It is the intent of
the parties to this agreement that if the bonus is calculated similar to year
2004, then the Executive’s bonus for 2005 will not be less than 1% of the
Profit, if the 2005 targeted Profit number (whatever it may be) is reached or .85% if the Profit is less than the targeted Profit.

60exv10w2

 

Exhibit 10.2

			
	DIRECTOR NAME:
	 	EXERCISE PRICE:

NUMBER OF SHARES:

YARDVILLE NATIONAL BANCORP

STOCK OPTION AGREEMENT

     Yardville National Bancorp, a New Jersey corporation (the “Company”), this          
day of          ,          , (the “Option Date”), pursuant to its 2003 Stock Option Plan for
Non-Employee Directors (the “Plan”) hereby grants to (the “Director”), an
option to purchase shares of the Common Stock (“Common Stock”), no par value,
of the Company in the amount and on the terms and conditions hereinafter set
forth.

	1.	 	Incorporation of Plan by Reference. The provisions of the Plan, a copy
of which is being furnished herewith to the Director, are incorporated by
reference herein and shall govern as to all matters not expressly provided
for in this Agreement. Terms not defined herein have the meanings set
forth in the Plan. In the event of any conflict between the terms of this
Agreement and the Plan, the terms of the Plan shall govern.
	 
	2.	 	Grant of Option. The Company hereby grants to the Director an option
(the “Option”) to purchase all or part of an aggregate of shares of
Common Stock on the terms and conditions herein set forth.
	 
	3.	 	Purchase Price. per share subject to adjustment as provided
The purchase price            in Section 6 below and subject to the terms
of the Common Stock            and conditions of the Plan.
subject to the
Option shall be $
	 
	4.	 	Terms of Option.

(a) Vesting. This Option shall not be exercisable until the dates
shown below except that all options shall vest in the event of any
proposed sale or conveyance or any proposed or effected change in
control of the Company (as set forth in Section 8(b)(iii) of the
Plan):

Page 1 of 4

 

	 	 	 	 	 	 	 
	 

	 	Number of Shares

As To Which Option

May Be Exercised
	 	First Date On

 Which Option

May Be Exercised
	 	Last Date On Which

Such Portion May Be

Exercised

Any portion of the Option not exercised by its Last Date shall lapse at
the close of business on that date and be null and void thereafter.

	 	(b)	 	Final Termination. Notwithstanding anything to
the contrary set forth in Section 4 (a). The Option shall no
longer be exercisable five years from the date hereof or such
shorter time as is prescribed in the Plan or in this
Agreement.
	 
	 	(c)	 	Restrictions. This Option is subject to all the
terms and conditions set forth in the Plan including, but not
limited to, the following:

	 	(i)	 	This Option is not transferable, as
provided in Section 8 (d) of the Plan;
	 
	 	(ii)	 	This Option lapses one year after the
termination, for any reason, whatsoever (other than
disability or death), of Director’s employment with the
Company, as provided in Section 8 (e) of the Plan; and
	 
	 	(iii)	 	This Option may be exercised by the
Director, or his legal representative for a period of
twelve months after the Director becomes disabled or
after the death of the Director, as provided in Section
8 (f) and (j) of the Plan.

	 	(d)	 	Exercise. This Option shall be exercised by
notice to the Company accompanied by full payment in cash (or
            shares of Common Stock of the Company), as set forth in
Section 8 (c) of the Plan.
	 
	 	(e)	 	Securities Law Restrictions. The Company is
under no obligation to file a registration statement under the
Securities Act of 1933 with respect to the

Page 2 of 4

 

	 	 	 	Common Stock issued upon exercise of the Option. As provided
by Section 14 (b) of the Plan, unless a registration
statement under the Act has been filed and remains effective
with respect to the Common Stock, the Company shall require
that the offer and sale of such shares be exempt from the
registration provisions of the Act. As a condition of such
exemptions, the Company shall require a representation and
undertaking, in form and substance satisfactory to the
Company Stock, for his own account for investment and not
with a view to the distribution or resale thereof and should
otherwise require such representations and impose such
conditions as shall establish to the Company’s satisfaction
that the offer and sale of the Common Stock issuable upon the
exercise of the Option will not constitute a violation of the
Act or any similar state act affecting the offer and sale of
the Common Stock. If the Common stock is issued in an exempt
transaction, the shares shall bear the following restrictive
legend:

“These shares have not been registered under the
Securities Act of 1933. No transfer of the shares may
be affected without an opinion of counsel to the
company stating that the transfer is exempt from
registration under the Act and any applicable state
securities laws or that the transfer of the shares is
covered by an effective registration statement with
respect to the shares.”

	5.	 	Restrictions on Transfer. This Option may not be transferred, assigned,
pledged or hypothecated and shall not be subject to execution, attachment
or similar process. In the event the terms of this paragraph are not
complied with by the Director, or if the Option is subject to execution,
attachment or similar process, this Option shall immediately lapse and
become null and void.
	 
	6.	 	Anti-Dilution Provisions. If prior to expiration of the Option there
shall occur any change in the outstanding Common Stock of the Company by
reason of any stock dividend, stock split, combination or exchange of
            shares, merger, consolidation, recapitalization, reorganization,
liquidation, or the like, and as often as the same shall occur, than the
kind and number of shares subject to the Option or purchase price per
share of Common Stock, or both, shall be adjusted by the Stock Option
Committee in such a manner as it may deem equitable, the determination of
which shall be binding and conclusive.
	 
	7.	 	Acceptance of Provisions. The execution of this Agreement by the
Director shall constitute the Director’s acceptance of and agreement to
all terms and conditions of the Plan and this Agreement.

Page 3 of 4

 

	8.	 	Notices. All notices and other communications required or permitted
under the Plan and this Agreement shall be in writing and shall be given
either by (i) personal delivery or regular mail, in each case against
receipt, or (ii) first class registered or certified mail, return receipt
requested or (iii) FAX transmission. Any such communication shall be
deemed to have been given (i) on the date of receipt in the cases referred
to in clauses (i) or (iii) of the preceding sentence and (ii) on the
second day after the date of mailing in the cases referred to in clause
(ii) of the preceding sentence. All such communication to the Company
shall be addressed to it, to the attention of its Secretary or Treasurer,
at its then principal office and to the Director at his last address
appearing on the records of the Company, or in each case, to such other
person or address as may be designated by like notice hereunder.
	 
	9.	 	Miscellaneous. This Agreement and the Plan contain a complete statement
of all the arrangements between the parties with respect to their subject
matter, and this Agreement may not be changed except by writing executed
by both parties. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to
agreements made and to be performed exclusively in New Jersey. The
headings in this Agreement are solely for convenience of reference and
shall not affect its meaning or interpretation.

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Patrick My Ryan, President & CEO 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	

Director

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	

Acceptance Date

 	 
	 	 	 
	 	 	 
	 	 	 
	 

Page 4 of 4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]