Document:

Exh. 10.1 Escrow Agreement

Exhibit 10.1
 
ESCROW AGREEMENT

THIS ESCROW AGREEMENT (“Agreement”) is made and entered into as of May 8, 2014, by and among NeoStem, Inc., a Delaware corporation (“Parent”), California Stem Cell, Inc., a Delaware corporation (“CSC”), Fortis Advisors LLC, solely in its capacity as the stockholders representative (the “CSC Representative”), and Continental Stock Transfer & Trust Company, a New York corporation (the “Escrow Agent”).

RECITALS

WHEREAS, Parent, NBS Acquistion Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Subco”), NBS Acquisition Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Parent (“Subco II”), CSC and the CSC Representative have entered into an Agreement and Plan of Merger dated as of April 11, 2014 (the “Merger Agreement”), pursuant to which, among other things, (a) Subco will merge with and into the CSC (the “First Merger”), with CSC surviving the First Merger, and (b) as soon as practicable thereafter, CSC, as the surviving company of the First Merger, will merge with and into Subco II (the “Second Merger” and together with the First Merger, the “Mergers”), with Subco II surviving the Second Merger as the Surviving Company;

WHEREAS, the Merger Agreement contemplates the establishment of an Escrow Account for the deposit by Parent of a portion of the Merger Consideration to be held in escrow until the Termination Date, and to be subsequently released and distributed to the CSC Representative for distribution to the CSC Securityholders; 

WHEREAS, the Merger Agreement contemplates the establishment of a CSC Expenses Escrow Account for the deposit by Parent of a portion of the Merger Consideration to be held in escrow until the first anniversary of the Closing Date (as defined in Merger Agreement), and to be subsequently released and distributed to the CSC Representative for distribution to the CSC Securityholders subject to the terms and conditions of the Merger Agreement; and

WHEREAS, Jason Livingston has resigned in his capacity as the initial CSC Representative and pursuant to Section 8.07(c) of the Merger Agreement, the holders of the majority in interest of the Escrow Amount have appointed Fortis Advisors LLC to fill such vacancy and serve as the CSC Representative in connection with all matters under this Agreement and the Merger Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1. Defined Terms.

1.1 Capitalized terms used herein but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Merger Agreement.

1.2 As used in this Agreement, “Escrowed Shares” refers to the 1,332,399 shares of Parent Common Stock being issued and deposited into the Escrow Account pursuant to Sections 3.04(b)(v) and (vii) of the Merger Agreement.

1.3 As used in this Agreement, “CSC Expenses Escrowed Shares” refers to the 252,454 shares of Parent Common Stock being issued and deposited into the CSC Expenses Escrow Account pursuant to Section 3.04(b)(iii) of the Merger Agreement. 

Section 2. Escrow and Indemnification.

2.1 Appointment of Escrow Agent; Shares and Stock Powers Placed in Escrow. Continental Stock Transfer & Trust Company is hereby appointed to serve as Escrow Agent hereunder, and Continental Stock Transfer & Trust Company hereby agrees to serve as Escrow Agent hereunder.  In accordance with the terms, conditions and procedures of Sections 3.04, 3.05 and 8.05 of the Merger Agreement, promptly at or immediately following the First Effective Time, (a) Parent shall issue certificates for (i) the Escrowed Shares registered in the name of the Escrow Agent evidencing 1,332,399 shares of Parent Common Stock to be held in escrow under this Agreement, and shall deliver or cause such certificates to be delivered to the Escrow Agent, and (ii) the CSC Expenses Escrowed Shares registered in the name of the Escrow Agent evidencing 252,454 shares of Parent 

Common Stock to be held in escrow under this Agreement, and shall deliver or cause such certificates to be delivered to the Escrow Agent, and (b) the CSC Representative shall deliver to the Escrow Agent an “assignment separate from certificate” (“Stock Power”) endorsed by it in blank.  

2.2 Escrow Account. The Escrow Agent agrees to accept delivery of (i) the Escrowed Shares and to hold the Escrowed Shares in a separate escrow account (such account, the “Escrow Account”), subject to the terms and conditions of this Agreement and the Merger Agreement, and (ii) the CSC Expenses Escrowed Shares and to hold the CSC Expenses Escrowed Shares in a separate account (such account, the “CSC Expenses Escrow Account”), subject to the terms and conditions of this Agreement and the Merger Agreement. 

2.3 Voting of Escrow Shares. The Escrow Agent, as record owner of the Escrowed Shares and the CSC Expenses Escrowed Shares, shall exercise all voting rights with respect to such Escrowed Shares and CSC Expenses Escrowed Shares in accordance with Section 3.05 of the Merger Agreement, upon receipt of written instructions from the CSC Representative on behalf of the CSC Securityholders.  In the absence of such instructions, the Escrow Agent shall vote the Escrowed Shares and the CSC Expenses Escrowed Shares as directed by Parent.  The Escrow Agent shall deliver to the CSC Representative any proxy materials or other documents relating to the Escrowed Shares or the CSC Expenses Escrowed Shares received from time to time by the Escrow Agent from Parent but shall not be obligated to distribute such documents to the CSC Securityholders.

2.4 Reports. Upon the request of either Parent or the CSC Representative, the Escrow Agent shall provide a statement to the requesting party that describes any deposit, distribution or investment activity or deductions with respect to shares of Parent Common Stock held in the Escrow Account or the CSC Expenses Escrow Account, as applicable, in addition to quarterly account statements from the Escrow Agent.

2.5 Dividends, Etc. Parent and the CSC Representative, on behalf of each of the CSC Securityholders, agree that any shares of Parent Common Stock or other property (including ordinary cash dividends) distributable or issuable (whether by way of dividend, stock split or otherwise) in respect of or in exchange for any Escrowed Shares or CSC Expenses Escrowed Shares (including pursuant to or as a part of a merger, consolidation, acquisition of property or stock, reorganization or liquidation involving Parent) shall not be distributed or issued to the beneficial owners of such Escrowed Shares or CSC Expenses Escrowed Shares, as applicable, but rather shall be distributed or issued to and held by the Escrow Agent in the Escrow Account or the CSC Expenses Escrow Account, as applicable. Any securities or other property received by the Escrow Agent in respect of any Escrowed Shares or CSC Expenses Escrowed Shares held in escrow as a result of any stock split or combination of shares of Parent Common Stock, payment of a stock dividend or other stock distribution in or on shares of Parent Common Stock, or change of Parent Common Stock into any other securities pursuant to or as a part of a merger, consolidation, acquisition of property or stock, reorganization or liquidation involving Parent, or otherwise, shall be held by the Escrow Agent as part of the Escrow Account or the CSC Expenses Escrow Account, as applicable.

2.6 Transferability. Except as expressly provided for herein or by operation of law, the interests of the CSC Securityholders in the Escrow Account or the CSC Expenses Escrow Account shall not, in either case, be assignable or transferable.

2.7 Trust Fund. The Escrow Account shall be held as trust funds and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of Escrow Agent, any CSC Securityholder or Parent, respectively, or of any party hereto. The Escrow Agent shall hold and safeguard (i) the Escrow Account until the Termination Date (as defined in Section 3.3 of this Agreement), and (ii) the CSC Expenses Escrow Account until the first anniversary of the Closing Date.  

Section 3. Release of Escrow Shares.

3.1 General. (a) Within ten (10) calendar days after (i) thirty (30) calendar days from the date that the Escrow Agent receives written instructions from the Parent (a “Parent Notice”) that have been concurrently delivered by Parent to the CSC Representative and have not been objected to by the CSC Representative within such thirty (30) calendar day period, (ii) joint written instructions from Parent and the CSC Representative (“Joint Instructions”) or (iii) a final and non-appealable order issued by a court of competent jurisdiction (a “Court Order”) relating to the release of (x) any Escrowed Shares from the Escrow Account or (y) any CSC Expenses Escrowed Shares from the CSC Expenses Escrow Account, or (b) in accordance with Section 3.3 hereof with respect to the Escrowed Shares only, the Escrow Agent shall release or cause to be released any such Escrowed Shares or CSC Expenses Escrowed Amounts, as applicable, and any other amounts from the Escrow Account or CSC Expenses Escrowed Account, as applicable, in the amounts, to the Persons and in the manner set forth in such Parent Notice, Joint Instructions, Court Order or, with respect to the Escrowed Shares only, as provided in Section 3.3 of this Agreement, as applicable.  If a Notice of Claim is sent under Section 8.05 of the Merger Agreement and the CSC Representative does not provide a Notice of Objection as provided in Section 8.05 within thirty (30) calendar days, the Escrow Agent shall make the distribution requested by the Notice of Claim without action by the CSC Representative.

3.2 Distributions. For purposes of this Agreement, all distributions to the CSC Securityholders shall be made based on the Consideration Spreadsheet, which is attached hereto as Schedule 1, except that no fractional shares shall be issued, and all amounts released from the Escrow Account or the CSC Expenses Escrow Account and distributed by the Escrow Agent to the CSC Securityholders shall be rounded up or down pursuant to Section 3.04(i) of the Merger Agreement.  The parties to this Agreement hereby acknowledge that notwithstanding Section 8.05(b)(ii) of the Merger Agreement, the CSC Representative shall have no obligation to distribute amounts released from the Escrow Account to the CSC Securityholders, provided that this shall not limit the CSC Representative’s right to reimbursement from the Escrow Account pursuant to Section 8.07(d) of the Merger Agreement.

3.3 Release of the Escrowed Shares. Promptly following the Termination Date, the Escrow Agent shall release and distribute to the CSC Securityholders (in accordance with the Consideration Spreadsheet) all shares of Parent Common Stock in the Escrow Account that are not subject to an unresolved Notice of Claim. The parties to this Agreement hereby acknowledge that notwithstanding Section 8.05(b)(ii) of the Merger Agreement, the CSC Representative shall have no obligation to distribute amounts released from the Escrow Account to the CSC Securityholders, provided that this shall not limit the CSC Representative’s right to reimbursement from the Escrow Account pursuant to Section 8.07(d) of the Merger Agreement.

3.4 Distributions.  Whenever a distribution of a number of shares of Parent Common Stock is to be made pursuant to the terms of this Agreement, the Escrow Agent shall requisition the appropriate number of shares from Parent’s stock transfer agent, delivering to the transfer agent the appropriate stock certificates accompanied by the respective Stock Powers, together with the specific instructions, as appropriate.  Within five (5) Business Days prior to the date the Escrow Agent is required to make a distribution of shares of Parent Common Stock or other property (including ordinary cash dividends) to the CSC Securityholders pursuant to the terms of this Agreement, the Escrow Agent shall provide the CSC Representative and the Parent with a notice specifying that a distribution will be made. The Escrow Agent shall make the appropriate distributions to the Persons listed on Schedule 1 in accordance with the terms hereof. Any distributions to Parent pursuant to the terms of this Agreement shall be made to the address set forth in Schedule 2 hereto.

3.5 Disputes. All disputes, claims, or controversies arising out of or relating to Section 3 of this Agreement that are not resolved by mutual agreement between Parent and the CSC Representative shall be resolved solely and exclusively as set forth in Section 8.05 of the Merger Agreement by the CSC Representative and the Parent.  

Section 4. Fees and Expenses.

The Escrow Agent shall be entitled to receive, from time to time, fees in accordance with Schedule 3. In accordance with Schedule 3, the Escrow Agent will also be entitled to reimbursement for reasonable and documented out-of-pocket expenses incurred by the Escrow Agent in the performance of its duties hereunder and the execution and delivery of this Agreement. All such fees and expenses shall be paid by Parent.

Section 5. Limitation of Escrow Agent’s Liability.

5.1  The Escrow Agent undertakes to perform such duties as are specifically set forth in this Agreement only and shall have no duty under any other agreement or document, and no implied covenants or obligations shall be read into this Agreement against the Escrow Agent.  The Escrow Agent shall incur no liability with respect to any action taken by it or for any inaction on its part in reliance upon any notice, direction, instruction, consent, statement or other document reasonably believed by it, and in all instances in good faith, to be genuine and duly authorized, nor for any other action or inaction except for its own gross negligence, bad faith or willful misconduct.  In all questions arising under this Agreement, the Escrow Agent may rely on the advice of counsel, and for anything done, omitted or suffered in good faith by the Escrow Agent based upon such advice, the Escrow Agent shall not be liable to anyone. In no event shall the Escrow Agent be liable for incidental, punitive or consequential damages.

5.2  Parent and the CSC Representative, acting on behalf of the CSC Securityholders hereby agree to indemnify the Escrow Agent and its officers, directors, employees and agents for, and hold it and them harmless against, any loss, liability or expense incurred without gross negligence, bad faith or willful misconduct on the part of the Escrow Agent, arising out of or in connection with the Escrow Agent’s carrying out its duties hereunder. This right of indemnification shall survive the termination of this Agreement and the resignation of the Escrow Agent.

Section 6. Termination.

This Agreement shall terminate upon the release by the Escrow Agent of the final amounts held in the Escrow Account and the CSC Expenses Account in accordance with Section 3 of this Agreement.

Section 7. Successor Escrow Agent.

7.1  In the event the Escrow Agent becomes unavailable or unwilling to continue as escrow agent under this Agreement, the Escrow Agent may resign and be discharged from its duties and obligations hereunder by giving its written resignation to the parties to this Agreement. Such resignation shall take effect not less than sixty (60) calendar days after it is given to all the other parties hereto.  In such event, Parent may appoint a successor Escrow Agent (acceptable to the CSC Representative, acting reasonably).  If Parent fails to appoint a successor Escrow Agent within fifteen (15) calendar days after receiving the Escrow Agent’s written resignation, the Escrow Agent shall have the right to apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent. The successor Escrow Agent shall execute and deliver to the Escrow Agent an instrument accepting such appointment, and the successor Escrow Agent shall, without further acts, be vested with all the estates, property rights, powers and duties of the predecessor Escrow Agent as if originally named as Escrow Agent herein. The Escrow Agent shall act in accordance with written instructions from Parent and the CSC Representative as to the transfer of the Escrow Account and the CSC Expenses Escrow Account to a successor Escrow Agent.

7.2  The Escrow Agent may be removed (with or without cause) at any time upon mutual agreement by Parent and the CSC Representative, provided that the Escrow Agent receives no less than thirty (30) calendar days prior written notice of such removal.  Upon the effectiveness of such removal, the Escrow Agent shall have no further obligation hereunder except to hold the Escrow Account and the CSC Expenses Escrow Account as depositary.  The Escrow Agent shall refrain from taking any action until it receives joint written instructions from Parent and the CSC Representative designating a successor escrow agent.  The Escrow Agent shall deliver the Escrow Account and the CSC Expenses Escrow Account to such successor escrow agent in accordance with such instructions.

Section 8. CSC Representative.

Unless and until Parent and the Escrow Agent shall have received written notice of the appointment of a successor CSC Representative, Parent and the Escrow Agent shall be entitled to rely on, and shall be fully protected in relying on, the power and authority of the CSC Representative to act on behalf of the CSC Securityholders.

Section 9. Miscellaneous.

9.1 Attorneys’ Fees.  In any action at law or suit in equity to enforce or interpret this Agreement or the rights of any of the parties hereunder, the prevailing party in such action or suit shall be entitled to receive a reasonable sum for its attorneys’ fees and all other reasonable costs and expenses incurred in such action or suit.

9.2 Notices. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, by courier or express delivery service or by facsimile) to the address or facsimile telephone number set forth beneath the name of such party below (or to such other address or facsimile telephone number as such party shall have specified in a written notice given to the other parties hereto):

if to Parent:

NeoStem, Inc.
420 Lexington Avenue, Suite 350
New York, NY 10170
Facsimile: (646) 514-7787
Attention: Catherine M. Vaczy, General Counsel 

with a copy, which shall not constitute notice, to:

Lowenstein Sandler LLP
65 Livingston Avenue
Roseland, NJ 07068
Facsimile: (973) 597-2565

Attention: Alan Wovsaniker and Ethan Skerry

if to the CSC Representative:

Fortis Advisors LLC
Attention: Notice Department
Facsimile: (858) 408-1843
Email: notices@fortisrep.com

if to the Escrow Agent:

Continental Stock Transfer & Trust Company
17 Battery Place, 8th Floor
New York, NY 10004
Attention: John W. Comer, Jr.
Facsimile: (212) 616-7615

Notwithstanding the foregoing, notices addressed to the Escrow Agent shall be effective only upon receipt, which shall be promptly confirmed by Escrow Agent.  If any notice or other document is required to be delivered to the Escrow Agent and any other Person, the Escrow Agent may assume without inquiry that notice or other document was received by such other Person on the date on which it was received by the Escrow Agent.

9.3 Headings. The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

9.4 Counterparts and Exchanges by Facsimile or Other Electronic Transmission. This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed Agreement (in counterparts or otherwise) by facsimile or other means of electronic transmission shall be sufficient to bind the parties to the terms and conditions of this Agreement.

9.5 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. 

(a)  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Subject to Section 3.5 of this Agreement, in any action between the parties arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement: (a) each of the parties irrevocably and unconditionally consents and submits to the non-exclusive jurisdiction and venue of the state and federal courts located in the State of New York; (b) if any such action is commenced in a state court, then, subject to applicable law, no party shall object to the removal of such action to any federal court located in the State of New York; and (c) each of the parties irrevocably waives the right to trial by jury.
(b)  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

9.6 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and each of their respective permitted successors and assigns, if any. No direct or indirect interest in the Escrow Account or the CSC Expenses Escrow Account or the shares of Parent Common Stock held in the Escrow Account or the CSC Expenses Escrow Account may be sold, assigned, transferred or pledged except by operation of law.

9.7 Waiver. No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and 

delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

9.8 Amendment. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of Parent, the CSC Representative and the Escrow Agent; provided, however, that any amendment executed and delivered by the CSC Representative shall be deemed to have been approved by and duly executed and delivered by all of the CSC Securityholders.

9.9 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

9.10 Parties in Interest. Except as expressly provided herein, none of the provisions of this Agreement, express or implied, is intended to provide any rights or remedies to any Person other than the parties hereto and their respective successors and assigns, if any.

9.11 Entire Agreement. This Agreement and the Merger Agreement set forth the entire understanding of the parties hereto relating to the subject matter hereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter hereof.

9.12 Cooperation. The CSC Representative on behalf of the CSC Securityholders and Parent agree to cooperate fully with each other and the Escrow Agent and to execute and deliver such further documents, certificates, agreements, stock powers and other instruments and to take such other actions as may be reasonably requested by Parent, the CSC Representative or the Escrow Agent to evidence or reflect the transactions contemplated by this Agreement and to carry out the intent and purposes of this Agreement.

9.13 Construction.

(a)  For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neutral genders; the feminine gender shall include the masculine and neutral genders; and the neutral gender shall include masculine and feminine genders.

(b)  The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(c)  As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

(d)  Except as otherwise indicated, all references in this Agreement to “Sections,” “Schedules” and “Exhibits” are intended to refer to Sections of this Agreement, Schedules to this Agreement and Exhibits to this Agreement.

[Remainder of page intentionally left blank][Escrow Agreement Signature Page] 

IN WITNESS WHEREOF, the parties have duly caused this Agreement to be executed as of the day and year first above written.

IN WITNESS WHEREOF, the parties have duly caused this Agreement to be executed as of the day and year first above written.

	
	
	 

	NEOSTEM, INC.

	 /s/ Robin L. Smith

	Name: Robin L. Smith, M.D., M.B.A.

	Title: Chairman and Chief Executive Officer

	 

	CALIFORNIA STEM CELL, INC.

	 /s/ Hans Keirstead

	Name: Hans Keirstead

	Title: 

	CSC REPRESENTATIVE

	By: /s/ Ryan Simkin

	Name: Fortis Advisors LLC

	CONTINENTAL STOCK & TRANSFER COMPANY

	

Name: John W. Comer, Jr.
Title: Vice President101SchuppEmploymentAgreement

EXHIBIT 10.1

Execution Version
Employment Agreement
This Employment Agreement (the "Agreement") is made and entered into as of May 7, 2014 by and among Rudy Schupp (the "Executive"), Valley National Bancorp, a New Jersey corporation (the “Corporation”) and Valley National Bank, a national banking association (the "Bank").
WHEREAS, the Corporation and the Bank desire to employ the Executive on the terms and conditions set forth herein; and
WHEREAS, the Executive desires to be employed by the Corporation and the Bank on such terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants, promises and obligations set forth herein, the parties agree as follows:
1.Term. The Executive's employment hereunder shall be effective as of the date (the "Effective Date") of the closing of the merger (the “Merger”) provided for in Agreement and Plan of Merger, dated May 7, 2014 between Corporation and 1st United Bancorp, Inc. (the "Merger Agreement")  and shall continue until the third anniversary thereof, unless terminated earlier pursuant to Section 5 of this Agreement.  If the Merger Agreement terminates for any reason before the Merger becomes effective, this Agreement will terminate and be of no further force and effect and there will be no liability of any kind under this Agreement. The period during which the Executive is employed by the Bank hereunder is hereinafter referred to as the "Employment Term".
2.    Position and Duties.
2.1    Position. During the Employment Term, the Executive shall serve as the Executive Vice President and President of the Florida division of the Bank, reporting to the President of the Bank. In such position, the Executive shall have such duties, authority and responsibility as shall be determined from time to time by the President of the Bank, which duties, authority and responsibility are consistent with the Executive's position. 
2.2    Duties. During the Employment Term, the Executive shall devote substantially all of his business time and attention to the performance of the Executive's duties 

hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the performance of such services either directly or indirectly without the prior written consent of the board of directors of the Corporation (the “Board”).  Notwithstanding the foregoing, the Executive will be permitted to, with the prior written consent of the Board (which consent will not be unreasonably withheld or delayed), act or serve as a director, trustee, committee member or principal of any type of for-profit business, as long as such activities are disclosed in writing to the Bank and do not interfere or conflict with the performance of the Executive's duties and responsibilities to the Bank as provided hereunder, including, but not limited to, the obligations set forth in Section 2 hereof.  The Executive has received prior written consent from the President of the Bank or the Board to serve the for-profit businesses identified in Exhibit A hereto.  
3.    Place of Performance. The principal place of Executive's employment shall be the Bank's offices in West Palm Beach, Florida; provided that, the Executive may be required to travel on Bank business during the Employment Term.
4.    Compensation.
4.1    Base Salary. The Bank shall pay the Executive an annual rate of base salary of $340,000 in periodic installments in accordance with the Bank's customary payroll practices, but no less frequently than monthly. The Executive's base salary shall be reviewed at least annually by the Compensation Committee of the Board (the "Compensation Committee") and the Compensation Committee may, but shall not be required to, adjust the base salary during the Employment Term. The Executive's annual base salary, as in effect from time to time, is hereinafter referred to as "Base Salary".
4.2    Annual Bonus.  For each calendar year of the Employment Term, the Executive shall be eligible to receive an annual bonus (the "Annual Bonus") of up to one-hundred percent (100%) of Base Salary. However, the decision to provide any Annual Bonus and the amount and terms of any Annual Bonus shall be in the discretion of the Compensation Committee. 
4.3    Equity Awards. During the Employment Term, the Executive shall be eligible to receive annual equity awards under the Corporation’s 2009 Long-Term Stock Incentive Plan (the “2009 LTIP”) or any successor plan, as determined by the Board or the Compensation Committee, in its discretion.

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4.4    Fringe Benefits and Perquisites. During the Employment Term, the Executive shall be eligible to receive fringe benefits and perquisites as are available to other similarly situated executives of the Bank as determined by the Compensation Committee in its sole discretion.  In addition, the Executive is entitled to the following perquisites:
(i)    At the Executive’s election, the Bank shall provide to the Executive either: (A) an automobile allowance in the amount of $1,200 for each calendar month or portion thereof during the Employment Term, or (B) full-time use of a company car, to be selected by the Executive (subject to a $1,200 per month limitation), which the company car shall be replaced at its 48-month anniversary by another company car selected by the Executive.  The Executive shall also be reimbursed for the purchase of gasoline for the company car.  
(ii)    The Corporation and/or the Bank shall reimburse the Executive for the costs, up to an aggregate of $22,000 per year, associated with one country club membership and one dining club membership of the Executive’s choosing.
4.5    Employee Benefits. During the Employment Term, the Executive shall be entitled to participate in employee 401(k), life, health and disability benefit plans, practices and programs maintained by the Company and the Bank, as in effect from time to time as determined by the Compensation Committee (collectively, "Employee Benefit Plans"). The Bank reserves the right to amend or cancel any Employee Benefit Plans at any time in its sole discretion, subject to the terms of such Employee Benefit Plan and applicable law.
4.6    Vacation; Paid Time-off. During the Employment Term, the Executive shall be entitled to receive paid vacation days per calendar year (prorated for partial years) in accordance with the Bank's vacation policies for its senior executive officers, as in effect from time to time. The Executive shall receive other paid time-off in accordance with the Bank's policies for senior executive officers as such policies may exist from time to time.
4.7    Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement or arrangement with the Bank which is subject to recovery under the Bank’s clawback policies then in effect and any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such policy, law, government regulation or stock exchange listing requirement.

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4.8    Expense Reimbursement.  The Executive shall be reimbursed by the Bank for all reasonable travel, entertainment and other expenses incurred during the course of performing his obligations under this Agreement upon substantiation of such expenses in accordance with the applicable policies and procedures of the Bank.  
5.    Termination of Employment. The Employment Term and the Executive's employment hereunder may be terminated by either the Bank or the Executive at any time and for any reason; provided that, unless otherwise provided herein, either party shall be required to give the other party at least sixty (60) days advance written notice of any termination of the Executive's employment. Upon termination of the Executive's employment during the Employment Term, the Executive shall be entitled to the compensation and benefits described in this Section 5 and shall have no further rights to any compensation or any other benefits from the Bank or any of its affiliates. 
5.1    Termination For Cause or Without Good Reason.  
(a)    The Executive's employment hereunder may be terminated by the Bank for Cause or by the Executive without Good Reason. If the Executive's employment is terminated by the Bank for Cause or by the Executive without Good Reason, the Executive shall be entitled to receive:
		
	(i)
	any accrued but unpaid Base Salary and accrued but unused vacation which shall be paid within one (1) week following the Termination Date (as defined below) in accordance with the Bank's customary payroll procedures; 

		
	(ii)
	any earned but unpaid Annual Bonus with respect to any completed calendar year immediately preceding the Termination Date, which shall be paid on the otherwise applicable payment date; provided that, if the Executive's employment is terminated by the Bank for Cause, then any such accrued but unpaid Annual Bonus shall be forfeited;

		
	(iii)
	reimbursement for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the Bank's expense reimbursement policy; and

		
	(iv)
	such employee benefits (including equity compensation), if any, to which the Executive may be entitled under the Bank's employee 

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benefit plans as of the Termination Date; provided that, in no event shall the Executive be entitled to any payments in the nature of severance or termination payments except as specifically provided herein.
Items 5.1(a)(i) through 5.1(a)(iv) are referred to herein collectively as the "Accrued Amounts".
(b)    For purposes of this Agreement, "Cause" shall mean:
		
	(i)
	the Executive's willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness);

		
	(ii)
	the Executive's willful failure to comply with any valid and legal directive of the Executive’s supervisor, the President of the Bank or the Board;

		
	(iii)
	the Executive's engagement in dishonesty, illegal conduct or misconduct, which is, in each case, injurious to the Bank or its affiliates;

		
	(iv)
	the Executive's embezzlement, misappropriation or fraud, whether or not related to the Executive's employment with the Bank;

		
	(v)
	the Executive's conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude; and

		
	(vi)
	any material failure by the Executive to comply with the Bank's written policies or rules, as they may be in effect from time to time during the Employment Term.

Except for a failure, breach or refusal which, by its nature, cannot reasonably be expected to be cured, the Executive shall have thirty (30) business days from the delivery of written notice by the Bank within which to cure any acts constituting Cause; provided however, that, if the Bank reasonably expects irreparable injury from a delay of thirty (30) business days, the Bank may give the Executive notice of such shorter period within which to cure as is reasonable under the circumstances, or may take other action, which 

5

may include the termination of the Executive's employment without notice and with immediate effect.  The Bank may place the Executive on paid leave for up to sixty (60) days while it is determining whether there is a basis to terminate the Executive's employment for Cause. This will not constitute Good Reason.
(c)    For purposes of this Agreement, "Good Reason" shall mean the occurrence of any of the following, in each case during the Employment Term without the Executive's written consent:
		
	(i)
	a material reduction in the Executive's Base Salary other than a general reduction in Base Salary that affects all similarly situated executives in substantially the same proportions; or

		
	(ii)
	a relocation of the Executive's principal place of employment by more than twenty-five (25) miles.

The Executive cannot terminate his employment for Good Reason unless he has provided written notice to the Bank of the existence of the circumstances providing grounds for termination for Good Reason within thirty (30) days of the initial existence of such grounds and the Bank has had at least thirty (30) days from the date on which such notice is provided to cure such circumstances. If the Executive does not give notice of the termination of his employment for Good Reason within thirty (30) days after the first occurrence of the applicable grounds, then the Executive will be deemed to have waived his right to terminate for Good Reason with respect to such grounds.
5.2    Without Cause or for Good Reason. The Employment Term and the Executive's employment hereunder may be terminated by the Executive for Good Reason or by the Bank without Cause. In the event of such termination, the Executive shall be entitled to receive the Accrued Amounts and, subject to the Executive's continued compliance with Section 6, Section 7, Section 8 and Section 9 of this Agreement and his execution of a release of claims in favor of the Corporation and the Bank, its affiliates and their respective officers and directors in substantially the form attached hereto as Exhibit B (the "Release") and such Release becoming effective within thirty (30) days following the Termination Date (such thirty (30)-day period, the "Release Execution Period"), the Executive shall be entitled to receive his normal Base Salary Payments that Executive would have earned had he remained employed until the greater of (i) twelve (12) months from the Termination Date, and (ii) the end of the Employment Term.  In the event the Executive’s employment is terminated by the Executive for Good Reason or by the Bank 

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without Cause on or within one (1) year following a change in control of the Corporation or the Bank (as defined under Code Section 409A), the Executive shall instead be entitled to receive, within sixty (60) days of such termination, a lump sum payment equal to the greater of: (i) twenty-four (24) months of his normal Base Salary Payments; or (ii) his normal Base Salary Payments that Executive would have earned had he remained employed until the end of the Employment Term.  The treatment of any outstanding equity awards shall be determined in accordance with the terms of the 2009 LTIP and the applicable award agreements.  In the event that Executive violates the provisions of Section 6, Section 7, Section 8 or Section 9 of this Agreement, the Company and the Bank may cease making the payments due to Executive pursuant to this Section 5.2.
5.3    Death or Disability.  
(a)    The Executive's employment hereunder shall terminate automatically upon the Executive's death during the Employment Term, and the Bank may terminate the Executive's employment on account of the Executive's Disability. 
(b)    If the Executive's employment is terminated during the Employment Term on account of the Executive's death or Disability, the Executive (or the Executive's estate and/or beneficiaries, as the case may be) shall be entitled to receive only the Accrued Amounts.
(c)    Notwithstanding any other provision contained herein, all payments made in connection with the Executive's Disability shall be provided in a manner which is consistent with federal and state law.
(d)    For purposes of this Agreement, Disability shall mean the Executive is entitled to receive long-term disability benefits under the Bank's long-term disability plan, or if there is no such plan, the Executive's inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities under this Agreement for one hundred eighty (180) days out of any three hundred sixty-five (365) day period or one hundred twenty (120) consecutive days.  
5.4    Notice of Termination. Any termination of the Executive's employment hereunder by the Bank or by the Executive during the Employment Term (other than termination pursuant to Section 5.3(a) on account of the Executive's death) shall be communicated by written notice of termination ("Notice of Termination") to the other party hereto in accordance with Section 21. The Notice of Termination shall specify: 

7

(a)    The termination provision of this Agreement relied upon; 
(b)    To the extent applicable, the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated; and
(c)    The applicable Termination Date.
5.5    Termination Date. The Executive's Termination Date shall be: 
(a)    If the Executive's employment hereunder terminates on account of the Executive's death, the date of the Executive's death; 
(b)    If the Executive's employment hereunder is terminated on account of the Executive's Disability, the date that it is determined that the Executive has a Disability;
(c)    If the Bank terminates the Executive's employment hereunder for Cause, the date the Notice of Termination is delivered to the Executive;
(d)    If the Bank terminates the Executive's employment hereunder without Cause, the date specified in the Notice of Termination, which shall be no less than sixty (60) days following the date on which the Notice of Termination is delivered; 
(e)    If the Executive terminates his employment hereunder (i) without Good Reason, the date specified in the Executive's Notice of Termination, which shall be no less than sixty (60) days following the date on which the Notice of Termination is delivered, (ii) with Good Reason, the date specified in the Executive's Notice of Termination, which shall be no less than ten (10) days following the date on which the Notice of Termination is delivered, plus, if applicable, an additional thirty (30) days during which the Company shall have the right to cure as provided in Section 5.1(c) hereof; provided that, in either case, the Bank may waive all or any part of the notice period for no consideration by giving written notice to the Executive and for all purposes of this Agreement, the Executive's Termination Date shall be the date determined by the Bank; and
Notwithstanding anything contained herein, the Termination Date shall not occur until the date on which the Executive incurs a "separation from service" within the meaning of Section 409A.

8

5.6    Resignation of All Other Positions. Upon termination of the Executive's employment hereunder for any reason, the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer or member of the board of directors (or a committee thereof) of the Bank or any of its affiliates.
5.7    Post-Termination Health and Dental Benefits.  The Corporation or the Bank shall reimburse the Executive, during the Coverage Period (as defined below), the premiums associated with the Executive maintaining health insurance coverage (including medical and dental) for himself, his spouse and his dependents under insurance policies under which he and they are covered during the Coverage Period (up to $1,864 per month, provided, however, that on January 1 of each year during the Coverage Period, such maximum monthly amount shall increase by five percent (5%)).  The reimbursements shall be paid annually by the Corporation or the Bank to the Executive within 45 days following December 31 of each calendar year during, or immediately after, the Coverage Period, provided the Executive provides satisfactory evidence of such premium payments.  “Coverage Period” is defined as the lesser of: (i) fifteen (15) years following the Executive’s date of termination with the Bank (for any reason) or (ii) the date that both the Executive and his spouse have died.    
5.8    Lump Sum Payments for Life Insurance.  The Bank shall pay the Executive the sum of $23,277 on the date of termination of employment with the Bank for any reason, in lieu of any post-retirement life insurance.
6.    Cooperation. The parties agree that certain matters in which the Executive will be involved during the Employment Term may necessitate the Executive's cooperation in the future. Accordingly, following the termination of the Executive's employment for any reason, to the extent reasonably requested by the Board, the Executive shall cooperate with the Bank in connection with matters arising out of the Executive's service to the Bank; provided that, the Bank shall make reasonable efforts to minimize disruption of the Executive's other activities. The Bank shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation.
7.    Confidential Information. The Executive understands and acknowledges that during the Employment Term, he will have access to and learn about Confidential Information, as defined below.
7.1    Confidential Information Defined.  

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(e)    Definition.
For purposes of this Agreement, "Confidential Information" includes, but is not limited to, all information not generally known to the public, in spoken, printed, electronic or any other form or medium, relating directly or indirectly to: regulatory reports, examinations and agreements, business processes, practices, methods, policies, plans, documents, operations, services, strategies, techniques, agreements, contracts, terms of agreements, transactions, potential transactions, negotiations, pending negotiations, know-how, trade secrets, computer programs, computer software, records, supplier information, vendor information, financial information, results, accounting information, accounting records, legal information, marketing information, advertising information, pricing information, credit information, payroll information, staffing information, personnel information, employee lists, supplier lists, vendor lists, developments, reports, internal controls, market studies, sales information, revenue, costs, product plans, customer information, customer lists, client information and client lists of the Bank or its businesses or any existing or prospective customer, supplier, investor or other associated third party, or of any other person or entity that has entrusted information to the Bank in confidence. 
The Executive understands that the above list is not exhaustive, and that Confidential Information also includes other information that is marked or otherwise identified as confidential or proprietary, or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and circumstances in which the information is known or used. 
The Executive understands and agrees that Confidential Information includes information developed by him in the course of his employment by the Bank as if the Bank furnished the same Confidential Information to the Executive in the first instance. Confidential Information shall not include information that is generally available to and known by the public at the time of disclosure to the Executive; provided that, such disclosure is through no direct or indirect fault of the Executive or person(s) acting on the Executive's behalf.
(f)    Disclosure and Use Restrictions.
The Executive agrees and covenants: (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, publish, communicate or make available Confidential Information, or allow it to be disclosed, published, communicated or made available, in whole or part, to any entity or person 

10

whatsoever (including other employees of the Bank) not having a need to know and authority to know and use the Confidential Information in connection with the business of the Bank and, in any event, not to anyone outside of the direct employ of the Bank except as required in the performance of the Executive's authorized employment duties to the Bank (and then, such disclosure shall be made only within the limits and to the extent of such duties); and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media or other resources containing any Confidential Information, or remove any such documents, records, files, media or other resources from the premises or control of the Bank, except as required in the performance of the Executive's authorized employment duties to the Bank (and then, such disclosure shall be made only within the limits and to the extent of such duties). Nothing herein shall be construed to prevent disclosure of Confidential Information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation or order. 
The Executive understands and acknowledges that his obligations under this Agreement with regard to any particular Confidential Information shall commence immediately upon the Executive first having access to such Confidential Information (whether before or after he begins employment by the Bank) and shall continue during and after his employment by the Bank until such time as such Confidential Information has become public knowledge other than as a result of the Executive's breach of this Agreement or breach by those acting in concert with the Executive or on the Executive's behalf.
8.    Restrictive Covenants.
8.1    Acknowledgment. The Executive understands that the nature of the Executive's position gives him access to and knowledge of Confidential Information and places him in a position of trust and confidence with the Bank. The Executive understands and acknowledges that the intellectual services he  provides to the Bank  are unique, special or extraordinary.
The Executive further understands and acknowledges that the Bank's ability to reserve these for the exclusive knowledge and use of the Bank is of great competitive importance and commercial value to the Bank, and that improper use or disclosure by the Executive is likely to result in unfair or unlawful competitive activity.

11

8.2    Non-competition. Because of the Bank's legitimate business interest as described herein and the good and valuable consideration offered to the Executive, during the Employment Term and for the three (3) year period thereafter, to run consecutively, beginning on the last day of the Executive's employment with the Bank, for any reason or no reason and whether employment is terminated at the option of the Executive or the Bank, the Executive agrees and covenants not to engage in Prohibited Activity or become employed with an entity which engages in Prohibited Activity within fifty (50) miles of any location(s) in which the Corporation or the Bank has banking or other offices or has filed an application for regulatory approval to establish an office.  
For purposes of this Section 8, "Prohibited Activity" is activity in which the Executive contributes his knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director, stockholder, officer, volunteer, intern or any other similar capacity to an entity engaged in any business in which the Bank or any of its subsidiaries in currently engaged in (the “Bank Business”). Prohibited Activity also includes activity that may require or inevitably requires disclosure of trade secrets, proprietary information or Confidential Information.
Nothing herein shall prohibit the Executive from purchasing or owning less than two percent (2%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group that controls, such corporation.
8.3    Non-solicitation of Employees. The Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Bank during a period of three (3) years, to run consecutively, beginning on the last day of the Executive's employment with the Bank.
8.4    Non-solicitation of Customers. The Executive understands and acknowledges that because of the Executive's experience with and relationship to the Bank, he will have access to and learn about much or all of the Bank's customer information. "Customer Information" includes, but is not limited to, names, phone numbers, addresses, e-mail addresses and other information identifying facts and circumstances specific to the customer and relevant to the Bank Business. 

12

The Executive understands and acknowledges that loss of this customer relationship and/or goodwill will cause significant and irreparable harm. 
The Executive agrees and covenants, during a period of three (3) years, to run consecutively, beginning on the last day of the Executive's employment with the Bank, not to directly or indirectly solicit, contact (including but not limited to e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with the Bank's current, former or prospective customers for purposes of offering or accepting goods or services similar to or competitive with those offered by the Bank.   The Corporation and the Bank agree that their executive officers will not at anytime disparage the Executive or engage in conduct resulting in, or likely to result in, the damage to the business or professional reputation of the Executive.  
8.5    Consideration.  In consideration of the covenants of the Executive set forth in Section 8 hereof, the Executive shall receive a payment equal to $1,333,333.33, which shall be payable to the Executive by or at the direction of the Bank in a cash lump sum on or before the Effective Date.  
9.    Non-disparagement. The Executive agrees and covenants that he will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Bank or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties.   
10.    Acknowledgement. The Executive acknowledges and agrees that the services to be rendered by him to the Bank are of a special and unique character; that the Executive will obtain knowledge and skill relevant to the Bank's industry, methods of doing business and marketing strategies by virtue of the Executive's employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interests of the Bank. 
The Executive further acknowledges that the amount of his compensation reflects, in part, his obligations and the Bank's rights under Section 7, Section 8 and Section 9 of this Agreement; that he has no expectation of any additional compensation, royalties or other payment of any kind not otherwise referenced herein in connection herewith; that he will not be subject to undue hardship by reason of his full compliance with the terms and conditions of Section 7, Section 8 and Section 9 of this Agreement or the Bank's enforcement thereof.

13

11.    Remedies. In the event of a breach or threatened breach by the Executive of Section 7, Section 8 or Section 9 of this Agreement, the Executive hereby consents and agrees that the Bank shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.
12.    Governing Law: Jurisdiction and Venue. This Agreement, for all purposes, shall be construed in accordance with the laws of the State of Florida without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in the State of Florida. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.
13.    Entire Agreement. Unless specifically provided herein, this Agreement contains all of the understandings and representations between the Executive and the Bank pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. The parties mutually agree that the Agreement can be specifically enforced in court and can be cited as evidence in legal proceedings alleging breach of the Agreement. 
14.    Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by the Executive and by the President and Chief Executive Officer of the Bank. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

14

15.    Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement. 
The parties further agree that any such court is expressly authorized to modify any such unenforceable provision of this Agreement (including, without limitation, Section 8 hereof) in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law. 
The parties expressly agree that this Agreement as so modified by the court shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein.
16.    Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any section or paragraph.
17.    Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
18.    Tolling. Should the Executive violate any of the terms of the restrictive covenant obligations articulated herein including, without limitation, Section 8 hereof, the obligation at issue will run from the first date on which the Executive ceases to be in violation of such obligation.
19.    Section 409A.

15

19.1    General Compliance. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a "separation from service" under Section 409A.  To the extent that the Release Execution Period spans two tax years of the Executive, then no payments will be made until the later of (1) the end of the revocation period, or (2) the first business day of the second tax year, unless an applicable exemption under Section 409A applies.  Notwithstanding the foregoing, the Bank makes no representations or warranties that the payments and benefits provided under this Agreement will comply with Section 409A and in no event shall the Bank be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Executive on account of non-compliance with Section 409A.
19.2    Specified Employees. Notwithstanding any other provision of this Agreement, if any payment or benefit provided to the Executive in connection with his termination of employment is determined to constitute "nonqualified deferred compensation" within the meaning of Section 409A and the Executive is determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i), then solely to the extent necessary to comply with Section 409A, such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the Termination Date (the "Specified Employee Payment Date") or, if earlier, on the Executive's death. The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
19.3    Reimbursements. To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following:

16

(a)    the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year;
(b)    any reimbursement of an eligible expense shall be paid to the Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and
(c)    any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.
20.    Successors and Assigns. This Agreement is personal to the Executive and shall not be assigned by the Executive. Any purported assignment by the Executive shall be null and void from the initial date of the purported assignment. If the Executive dies while he is entitled to payments under Section 5.2 or the benefits under Section 5.7 of this Agreement, the payments or benefits shall continue to be made to his spouse or if he has no spouse at the time of his death, his estate, as applicable.  The Bank may assign this Agreement to any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Bank. This Agreement shall inure to the benefit of the Bank and permitted successors and assigns.
21.    Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, or by overnight carrier to the parties at the addresses set forth below (or such other addresses as specified by the parties by like notice):
If to the Corporation and the Bank:
Valley National Bank
1455 Valley Road
Wayne, New Jersey 07470
Attn: Gerald H. Lipkin, President
If to the Executive:

11874 Lakeshore Place
North Palm Beach, FL 33408

17

22.    Representations of the Executive. The Executive represents and warrants to the Bank that:
22.1    The Executive's acceptance of employment with the Bank and the performance of his duties hereunder will not conflict with or result in a violation of, a breach of, or a default under any contract, agreement or understanding to which he is a party or is otherwise bound.
22.2    The Executive's acceptance of employment with the Bank and the performance of his duties hereunder will not violate any non-solicitation, non-competition or other similar covenant or agreement of a prior employer.
23.    Withholding. The Bank shall have the right to withhold from any amount payable hereunder any Federal, state and local taxes in order for the Bank to satisfy any withholding tax obligation it may have under any applicable law or regulation.
24.    Survival. Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.
25.    Acknowledgment of Full Understanding. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS AGREEMENT. 

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
	
		
	 
	VALLEY NATIONAL BANCORP

	 
	By:  /s/ Gerald H. Lipkin
Name: Gerald H. Lipkin
Title: President and CEO

VALLEY NATIONAL BANK

By:  /s/ Gerald H. Lipkin
Name: Gerald H. Lipkin
Title: President

	
		
	 
	EXECUTIVE

	 
	Signature: /s/ Rudy Schupp

Print Name: Rudy Schupp

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