Document:

Exhibit

Exhibit 10.2

AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
This Amended and Restated Indemnification Agreement (this “Agreement”), dated as of April 24, 2013, is by and between Rumson-Fair Haven Bank and Trust Company, a New Jersey commercial bank (the “Company”) and James G. Aaron (“Indemnitee”).
WHEREAS, Indemnitee is a director and/or an officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of commercial banks;
WHEREAS, the board of directors of the Company (the “Board”) has determined that enhancing the ability of the Company to retain and attract as directors and officers the most capable persons is in the best interests of the Company and that the Company therefore should seek to assure such persons that indemnification is available; and
WHEREAS, in recognition of the need to provide Indemnitee with substantial protection against personal liability, in order to procure Indemnitee’s continued service as a director and/or officer of the Company and to enhance Indemnitee’s ability to serve the Company in an effective manner, and in order to provide such protection pursuant to express contract rights (intended to be enforceable irrespective of, among other things, any amendment to the Company’s certificate of incorporation or bylaws (collectively, the “Constituent Documents”), any change in the composition of the Board or any change in control or business combination transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of, and the advancement of Expenses (as defined in Section 1(d) below) to, Indemnitee as set forth in this Agreement; and
 WHEREAS, this Agreement replaces the Indemnification Agreement between the Company and the Bank (the “Original Agreement”) which is amended and restated effective as of the date of the Original Agreement as if the Original Agreement had always been this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the Indemnitee's agreement to continue to provide services to the Company, the parties agree as follows:
1.Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:
(a)“Claim” means any proceeding, threatened or contemplated civil, criminal, administrative or arbitration action, suit or proceeding and any appeal therein and any inquiry or investigation which could lead to such action, suit or proceeding.
(b)“New Jersey Court” shall have the meaning ascribed to it in Section 9(e) below.
(c)“Disinterested Director” means a director of the Company who is not and was not a party to the Claim in respect of which indemnification is sought by Indemnitee.
(d)“Expenses” means any and all reasonable expenses, including attorneys’ and experts’ fees, court costs, transcript costs, travel expenses, duplicating, printing and binding costs, telephone charges, and all other reasonable  costs and expenses incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim. Expenses also shall include (i) Expenses reasonably incurred in connection with any appeal resulting from any Claim, including without limitation the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 5 only, Expenses reasonably  incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise.  Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.  All Expenses included in a demand by Indemnitee hereunder must be certified by affidavit of Indemnitee’s counsel as being reasonable.

84894962.2

(e)“Expense Advance” means any payment of Expenses advanced to Indemnitee by the Company pursuant to Section 4 or Section 5 hereof.
(f)“Indemnifiable Event” means any event or occurrence, whether occurring  on or after the effective date of this Agreement, related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, member, manager, trustee or agent of any other corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise (collectively with the Company, “Enterprise”) or by reason of an action or inaction by Indemnitee in any such capacity (whether or not serving in such capacity at the time any Loss is incurred for which indemnification can be provided under this Agreement).
(g)“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation and banking  law and neither presently performs, nor in the past five years has performed, services for either: (i) the Company or Indemnitee (other than in connection with matters concerning Indemnitee under this Agreement or of other indemnitees under similar agreements) or (ii) any other party to the Claim giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement.
(h)“Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), ERISA excise taxes, amounts paid or payable in settlement, including any interest, assessments, and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Claim.
(i)“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity and includes the meaning set forth in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(j)“Standard of Conduct Determination” shall have the meaning ascribed to it in Section 9(b) below.
(k)“Voting Securities” means any securities of the Company that vote generally in the election of directors.
2.    Employment.  This Agreement shall not be deemed an employment agreement between the Company (or any of its subsidiaries or Enterprise) and Indemnitee. Indemnitee specifically acknowledges that his or her employment with or service to the Company or any of its subsidiaries or Enterprise is at will and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment agreement between Indemnitee and the Company (or any of its subsidiaries or Enterprise), other applicable formal severance policies duly adopted by the Board or, with respect to service as a director or officer of the Company, by the Company's Constituent Documents or New Jersey  law. This Agreement shall continue in force after Indemnitee has ceased to serve as a director or officer of the Company or, at the request of the Company, of any of its subsidiaries or Enterprise, as provided in Section 12 hereof.
3.     Indemnification.  Subject to Section 9 and Section 10 of this Agreement, the Company shall indemnify Indemnitee, to the fullest extent permitted by the laws of the State of New Jersey and applicable federal law  in effect on the date hereof, or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all Losses if Indemnitee was or is or becomes a party to or participant in, or is threatened to be made a party to or participant in, any Claim by reason of or arising in part out of an Indemnifiable Event, including, without limitation, Claims brought by or in the right of the Company, Claims brought by third parties, and Claims in which the Indemnitee is solely a witness.

	
			
	84894962.2
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4.    Advancement of Expenses.  Indemnitee shall have the right to advancement by the Company, prior to the final disposition of any Claim by final adjudication to which there are no further rights of appeal, of any and all Expenses actually and reasonably paid or incurred by Indemnitee in connection with any Claim arising out of an Indemnifiable Event.  Indemnitee’s right to such advancement is not subject to the satisfaction of any standard of conduct.  Without limiting the generality or effect of the foregoing, within 120 days  after any written request by Indemnitee to the Board, the Company shall, in accordance with such request, (a) pay such Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such Expenses.  In connection with any request for Expense Advances, Indemnitee shall not be required to provide any documentation or information to the extent that the provision thereof would undermine or otherwise jeopardize attorney‐client privilege.  In connection with any request for Expense Advances, Indemnitee shall execute and deliver to the Company an undertaking in form reasonably satisfactory to the Board  to repay any amounts paid, advanced, or reimbursed by the Company for such Expenses to the extent that it is ultimately determined, following the final disposition of such Claim, that Indemnitee is not entitled to indemnification hereunder.  Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon.
5.    Indemnification for Expenses in Enforcing Rights.  To the fullest extent allowable under applicable law, the Company shall also indemnify against, and, if requested by Indemnitee, shall advance to Indemnitee subject to and in accordance with Section 4, any Expenses actually and reasonably paid or incurred by Indemnitee in connection with any action or proceeding by Indemnitee for (a) indemnification or reimbursement or advance payment of Expenses by the Company under any provision of this Agreement, or under any other agreement or provision of the Constituent Documents now or hereafter in effect relating to Claims relating to Indemnifiable Events, and/or (b) recovery under any directors' and officers' liability insurance policies maintained by the Company. However, in the event that Indemnitee is ultimately determined not to be entitled to such indemnification or insurance recovery, as the case may be, then all amounts advanced under this Section 5 shall be repaid.  Indemnitee shall be required to reimburse the Company in the event that a final judicial determination is made that such action brought by Indemnitee was frivolous or not made in good faith.
6.    Partial Indemnity.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Losses in respect of a Claim related to an Indemnifiable Event but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
7.    Notification and Defense of Claims.
(a)    Notification of Claims.  Indemnitee shall notify the Company in writing as soon as practicable of any Claim which could relate to an Indemnifiable Event or for which Indemnitee could seek Expense Advances, including a brief description (based upon information then available to Indemnitee) of the nature of, and the facts underlying, such Claim. The failure by Indemnitee to timely notify the Company hereunder shall not relieve the Company from any liability hereunder unless the Company's ability to participate in the defense of such claim was materially and adversely affected by such failure, except that the Company shall not be liable to indemnify Indemnitee under this Agreement with respect to any judicial award in a Claim related to an Indemnifiable Event if the Company was not given a reasonable and timely opportunity to participate at its expense in the defense of such action. If at the time of the receipt of such notice, the Company has directors' and officers' liability insurance in effect under which coverage for Claims related to Indemnifiable Events is potentially available, the Company shall give prompt written notice to the applicable insurers in accordance with the procedures set forth in the applicable policies.  The Company shall provide to Indemnitee a copy of such notice delivered to the applicable insurers, and copies of all subsequent correspondence between the Company and such insurers regarding the Claim, in each case substantially concurrently with the delivery or receipt thereof by the Company.
(b)    Defense of Claims.  The Company shall be entitled to participate in the defense of any Claim relating to an Indemnifiable Event at its own expense and, except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee of its election to assume the defense of any such Claim, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently 

	
			
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directly incurred by Indemnitee in connection with Indemnitee’s defense of such Claim other than reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ its own legal counsel in such Claim, but all Expenses related to such counsel incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s own expense; provided, however, that if (i) Indemnitee’s employment of its own legal counsel has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of such Claim, or (iii) the Company shall not in fact have employed counsel to assume the defense of such Claim, then Indemnitee shall be entitled to retain its own separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any such Claim) and all Expenses related to such separate counsel shall be borne by the Company.
8.    Procedure upon Application for Indemnification.  In order to obtain indemnification pursuant to this Agreement, Indemnitee shall submit to the Company a written request therefor, including in such request such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of the Claim. Indemnification shall be made insofar as the Company determines Indemnitee is entitled to indemnification in accordance with Section 9 below.
9.    Determination of Right to Indemnification.
(a)    Mandatory Indemnification; Indemnification as a Witness.
		
	(i)
	To the extent that Indemnitee shall have been successful on the merits or otherwise in defense of any Claim relating to an Indemnifiable Event, including, without limitation, dismissal without prejudice, Indemnitee shall be indemnified against all Losses relating to such Claim in accordance with Section 3 to the fullest extent allowable by law.

		
	(ii)
	To the extent that Indemnitee’s involvement in a Claim relating to an Indemnifiable Event is to prepare to serve and serve as a witness, and not as a party, the Indemnitee shall be indemnified against all Losses incurred in connection therewith to the fullest extent allowable by law.

(b)    Standard of Conduct.  To the extent that the provisions of Section 9(a) are inapplicable to a Claim related to an Indemnifiable Event that shall have been finally disposed of, any determination of whether Indemnitee has satisfied any applicable standard of conduct under New Jersey or applicable federal  law that is a legally required condition to indemnification of Indemnitee hereunder against Losses relating to such Claim and any determination that Expense Advances must be repaid to the Company (a “Standard of Conduct Determination”) shall be made (i) by a majority vote of the Disinterested Directors, even if less than a quorum of the Board, (ii) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum, or (iii) if there are no such Disinterested Directors, by Independent Counsel in a written opinion addressed to the Board, a copy of which shall be delivered to Indemnitee; and
The Company shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee, shall reimburse Indemnitee for, or advance to Indemnitee, within 120 days after  such request, any and all Expenses incurred by Indemnitee in cooperating with the person or persons making such Standard of Conduct Determination.
(c)    Making the Standard of Conduct Determination.  The Company shall use its reasonable best efforts to cause any Standard of Conduct Determination required under Section 9(b) to be made as promptly as practicable.  If the person or persons designated to make the Standard of Conduct Determination under Section 9(b) shall not have made a determination within 120 days after the later of (A) receipt by the Company of a written request from Indemnitee for indemnification pursuant to Section 8 (the date of such receipt being the “Notification Date”) and (B) the selection of an Independent Counsel, if such determination is to be made by Independent Counsel, then Indemnitee shall be deemed to have satisfied the applicable standard of conduct; provided that such 120‐day period may be extended for a reasonable time, not to exceed an additional 90 days, if the person or persons making such determination in good faith requires such additional time to obtain 

	
			
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or evaluate information relating thereto. Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of any Claim.
(d)    Payment of Indemnification.  If, in regard to any Losses:
		
	(i)
	Indemnitee shall be entitled to indemnification pursuant to Section 9(a);

		
	(ii)
	no Standard Conduct Determination is legally required as a condition to indemnification of Indemnitee hereunder; or

		
	(iii)
	Indemnitee has been determined or deemed pursuant to Section 9(b) or Section 9(c) to have satisfied the Standard of Conduct Determination,

then the Company shall pay to Indemnitee, within 30 days after the later of (A) the Notification Date or (B) the earliest date on which the applicable criterion specified in clause (i), (ii) or (iii) is satisfied, an amount equal to such Losses.
(e)    Selection of Independent Counsel for Standard of Conduct Determination.  If a Standard of Conduct Determination is to be made by Independent Counsel pursuant to Section 9(b)(iii), the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected.  Indemnitee may, within five (5) days after receiving written notice of selection from the Company, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not satisfy the criteria set forth in the definition of “Independent Counsel” in Section 1(i), and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person or firm so selected shall act as Independent Counsel.  If such written objection is properly and timely made and substantiated, (i) the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit; and (ii) the Company may, at its option, select an alternative Independent Counsel and give written notice to Indemnitee advising Indemnitee of the identity of the alternative Independent Counsel so selected, in which case the provisions of the two immediately preceding sentences, the introductory clause of this sentence and numbered clause (i) of this sentence shall apply to such subsequent selection and notice. If applicable, the provisions of clause (ii) of the immediately preceding sentence shall apply to successive alternative selections.  If no Independent Counsel that is permitted under the foregoing provisions of this Section 9(e) to make the Standard of Conduct Determination shall have been selected within 20 days after the Company gives its initial notice pursuant to the first sentence of this Section 9(e), either the Company or Indemnitee may petition the Superior Court of the State of New Jersey (“New Jersey Court”) to resolve any objection which shall have been made by  Indemnitee to the Company’s selection of Independent Counsel and/or to appoint as Independent Counsel a person to be selected by the Court or such other person as the Court shall designate, and the person or firm with respect to whom all objections are so resolved or the person or firm so appointed will act as Independent Counsel. In all events, the Company shall pay all of the reasonable fees and expenses of the Independent Counsel incurred in connection with the Independent Counsel’s determination pursuant to Section 9(b).
(f)    Indemnitee’s Entitlement to Indemnification.  In making any Standard of Conduct Determination, the person or persons making such determination shall presume that Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification, and the Company shall have the burden of proof to overcome that presumption and establish that Indemnitee is not so entitled.  Any Standard of Conduct Determination that is adverse to Indemnitee may be challenged by  Indemnitee in the New Jersey Court.  No determination by the Company (including by its directors or any Independent Counsel) that Indemnitee has not satisfied any applicable standard of conduct may be used as a defense to any legal proceedings brought by Indemnitee to secure indemnification or reimbursement or advance payment of Expenses by the Company hereunder or create a presumption that Indemnitee has not met any applicable standard of conduct.

	
			
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10.    Exclusions from Indemnification.  Notwithstanding anything in this Agreement to the contrary, the Company shall not be obligated to:
(a)    indemnify or advance funds to Indemnitee for Expenses or Losses with respect to proceedings initiated by Indemnitee, including any proceedings against the Company or its directors, officers, employees or other indemnitees and not by way of defense, except:
		
	(i)
	proceedings referenced in Section 5 above (unless a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous); or

		
	(ii)
	where the Company has joined in or the Board has consented to the initiation of such proceedings.

(b)    indemnify or advance funds to Indemnitee if a final decision by a court of competent jurisdiction determines that such indemnification is prohibited by applicable law.
(c)    indemnify Indemnitee for the disgorgement of profits arising from the purchase or sale by Indemnitee of securities of the Company in violation of Section 16(b) of the Exchange Act, or any similar successor statute.
(d)    indemnify or advance funds to Indemnitee for Indemnitee's reimbursement to the Company of any bonus or other incentive-based or equity-based compensation previously received by Indemnitee or payment of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements under Section 304 of the Sarbanes‐Oxley Act of 2002 in connection with an accounting restatement of the Company or the payment to the Company of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act).
(e)    indemnify or advance funds to Indemnitee for Expenses or Losses (i) if the Company has been advised by a bank regulatory authority that doing so may result in the imposition of fines or other penalties on the Company or its directors or officers or a finding that the Company is engaging in an unsafe and unsound banking practice, or (ii) if such indemnification or advancement would violate the terms of any agreement, memorandum of understanding or similar arrangement between the Company and a bank regulatory authority or resolutions of the Board adopted at the direction of a bank regulatory authority or (iii) result in the Company failing to meet, or while it does not meet,  minimum capital requirements under applicable law, or (iv) if it would violate any  federal or state laws or regulations applicable to the Company or any entity which controls the Company including but not limited to Section 18 (k) of the Federal Deposit Insurance Act or any regulation of the Federal Deposit Insurance Corporation adopted thereunder..   
11.    Settlement of Claims.  The Company shall not be liable to Indemnitee under this Agreement for any amounts paid in settlement of any threatened or pending Claim related to an Indemnifiable Event effected without the Company's prior written consent, which shall not be unreasonably withheld. The Company shall not settle any Claim related to an Indemnifiable Event in any manner that would impose any Losses on the Indemnitee without the Indemnitee's prior written consent.
12.    Duration.  All agreements and obligations of the Company contained herein shall continue during the period that Indemnitee is a director or officer of the Company (or is serving at the request of the Company as a director, officer, employee, member, trustee or agent of another Enterprise) and shall continue thereafter (i) so long as Indemnitee may be subject to any possible Claim relating to an Indemnifiable Event (including any rights of appeal thereto) and (ii) throughout the pendency of any proceeding (including any rights of appeal thereto) commenced by Indemnitee to enforce or interpret his or her rights under this Agreement, even if, in either case, he or she may have ceased to serve in such capacity at the time of any such Claim or proceeding.

	
			
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13.    Non‐Exclusivity.  The rights of Indemnitee hereunder will be in addition to any other rights Indemnitee may have under the Constituent Documents, the Banking Act of 1948, as amended of  the State of New Jersey, any other contract or otherwise (collectively, “Other Indemnity Provisions”); provided, however, that (a) to the extent that Indemnitee otherwise would have any greater right to indemnification under any Other Indemnity Provision, Indemnitee will be deemed to have such greater right hereunder and (b) to the extent that any change is made to any Other Indemnity Provision which permits any greater right to indemnification than that provided under this Agreement as of the date hereof, Indemnitee will be deemed to have such greater right hereunder; provided however, that the Original Agreement shall be deemed to be of no force and effect for that or any other purpose.
14.    No Duplication of Payments.  The Company shall not be liable under this Agreement to make any payment to Indemnitee in respect of any Losses to the extent Indemnitee has otherwise received payment under any insurance policy, the Constituent Documents, Other Indemnity Provisions or otherwise of the amounts otherwise indemnifiable by the Company hereunder.
15.    Subrogation.  In the event of payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee. Indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
16.    Amendments. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.  Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
17.    Binding Effect.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs and personal and legal representatives.
18.    Severability.  The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any portion thereof) are held by a court of competent jurisdiction to be invalid, illegal, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.
19.    Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, by postage prepaid, certified or registered mail:
		
	(a)
	if to Indemnitee, to the address set forth on the signature page hereto.

		
	(b)
	if to the Company, to: Rumson-Fair Haven Bank and Trust Company;                                               

 
20 Bingham Avenue; Rumson, New Jersey 07760. Attn: Joseph Castelluci
Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third business day after mailing.
20.    Governing Law and Forum.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts made and to be performed in such state without giving effect to its principles of conflicts of laws and applicable federal law. The Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall 

	
			
	84894962.2
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be brought only in the New Jersey Court and not in any other state or federal court in the United States, (b) consent to submit to the exclusive jurisdiction of the New Jersey Court for purposes of any action or proceeding arising out of or in connection with this Agreement, and (c) waive, and agree not to plead or make, any claim that the New Jersey Court lacks venue or that any such action or proceeding brought in the New Jersey Court has been brought in an improper or inconvenient forum.
22.    Headings.  The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof.
23.    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement.
 
[SIGNATURE PAGE FOLLOWS]
 

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

	
		
	 
	Rumson-Fair Haven Bank and Trust Company 

	 
	By:   /s/ Joseph Castelluci         

Name:   Joseph Castelluci         
Title:   President / CEO         

	 
	 

	
		
	 
	INDEMNITEE

	 
	   James G. Aaron         

Name:   James G. Aaron         
Address:  [Intentionally Omitted]      
______________________________
______________________________
Effective Date: April 24, 2013      

	 
	 

	
			
	84894962.2
	8Exhibit

Exhibit 10.3

Name:    _________________                No. of Restricted Shares: ______

1ST CONSTITUTION BANCORP
RESTRICTED STOCK AGREEMENT 
FOR NON-EMPLOYEE DIRECTORS

This RESTRICTED STOCK AGREEMENT (this “Agreement”) is made this _____ day of ___________, 20___ (the “Award Date”) between 1ST CONSTITUTION BANCORP, a New Jersey corporation (the “Company”), and ________________ (the “Participant”). Capitalized terms used in this Agreement but not defined upon their first usage shall have the meanings ascribed to them in the Company’s 2015 Directors Stock Plan, as it may be amended from time to time (the “Plan”).

1.    Grant of Restricted Stock. The Company hereby grants to the Participant _____ restricted shares of the Company’s common stock, no par value (the “Restricted Stock”), pursuant to the Plan, subject to the terms and conditions of the Plan and this Agreement. 

2.    Incorporation by Reference of the Plan. The Plan is hereby incorporated by reference into this Agreement. The Participant hereby acknowledges receipt of a copy of the Plan and represents and warrants to the Company that the Participant has read and understands the terms and conditions of the Plan. The execution of this Agreement by the Participant constitutes the Participant’s acceptance of and agreement to the terms and conditions of the Plan and this Agreement.

3.    Vesting of Restricted Stock. Unless the Board provides for earlier vesting, and subject to the terms of this Agreement, the Restricted Stock shall vest in accordance with the following schedule:

Percentage of Shares            Scheduled Vesting Date

50%                First Anniversary of Award Date
50%                Second Anniversary of Award Date
    
4.    Termination of Service. 

(a)    Termination of Service Upon Death or Disability. Upon cessation of the Participant’s service on the Board and/or the board of directors of 1st Constitution Bank (“Bank Board”), as applicable, by reason of death or Disability, all unvested shares of Restricted Stock shall become fully vested.  For this purpose, “Disability” means the Participant is determined to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as determined in the sole discretion of the Board, and the Participant resigns or is removed as a director as a result of the Disability. 

(b)   Termination of Service for Other Reasons.  All unvested shares of Restricted Stock shall become fully vested if the Participant’s service as a director on the Board and/or Bank Board, as applicable, is terminated by reason of: (i) non-election by the stockholder or stockholders of the Company and/or Bank, as applicable; (ii) failure of the Board and/or Bank Board, as applicable, to nominate the Participant for re-election at an annual meeting of 

94849053.8

Exhibit 10.3

stockholders of the Company or Bank, as applicable; (iii) the Participant’s resignation or agreement not to stand for re-election at the request of the Board and/or Bank Board, as applicable, where the Participant is otherwise willing to continue serving in such capacity, including, but not limited to (A) inability of the Participant to fulfill the duties of a director due to inability to attend meetings for health reasons, (B) as a result of a request of a regulatory agency that the Participant cease serving on the Board and/or Bank Board, as applicable, subject to applicable law, and (C) a determination of the Board and/or Bank Board, as applicable, that continued service would create a conflict of interest for the Participant.  

(c)    Forfeiture. Upon termination of the Participant’s service on the Board or Bank Board, as applicable, for any reason, other than death, Disability, the events set forth above in Section 4(b), or as provided in Section 9, all unvested shares of Restricted Stock will be forfeited to and reacquired by the Company at no cost to the Company, automatically and immediately. 
(d)  Service on Both Boards.  For purposes of clarity, if the Participant serves on both the Board and the Bank Board, as applicable, the Participant’s unvested Restricted Stock shall not vest under Sections 4 (a) or (b) nor shall they be forfeited under Section 4 (c) unless and until the Participant is no longer serving as a director on the Board and the Bank Board.    

5.    Rights as a Shareholder. 

(a)The Participant shall have all of the rights of a shareholder of the Company, including the right to vote the Restricted Stock and the right to receive cash dividends thereon; provided, however, that dividends payable as distributions in full or partial liquidation of the Company or as the result of a merger or any other corporate reorganization shall not be distributed until such time as the Restricted Stock as to which such distribution applies vests.
  
(b)Stock dividends paid on the Restricted Stock shall be deferred until the restrictions with respect to the shares upon which such dividends were paid expire or are canceled, at which time the Company shall evidence the delivery to the Participant of all such dividends without interest.  If the Participant forfeits any Shares awarded hereunder, such Shares and any stock dividends with respect thereto shall automatically be forfeited and revert to the Company (without any payment by the Company to the Participant).

6.    Issuance of Stock. A record of the Restricted Stock awarded hereunder shall be evidenced by the Company in restricted book entry accounts maintained for the Participant with the Company’s transfer agent, or such other administrator designated by the Board, and registered in the Participant’s name.  The Restricted Stock shall be subject to such stop-transfer orders and other terms deemed appropriate by the Board to reflect the restrictions applicable to the Restricted Stock, until all the restrictions specifically set forth in this Agreement and the Plan with respect to the Restricted Stock shall expire or be canceled. Upon the lapse of restrictions relating to any Restricted Stock, the Company shall remove the notations on any such shares of Restricted Stock issued in book-entry form. 

7.    Limits on Transferability. During the period of time that any shares of Restricted Stock are unvested, such unvested shares shall not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, other than by will or the laws of descent and distribution, or to a beneficiary upon the death of the Participant, or as otherwise permitted by the Board.

8.    Tax Provisions. 

94849053.8

Exhibit 10.3

(a)    If applicable, in order to satisfy any withholding or similar tax requirements relating to the Restricted Stock, the Company has the right to deduct or withhold from any payroll or other payment to the Participant, or require the Participant to remit to the Company, an appropriate payment or other provision, which may include the withholding of Restricted Stock.  

(b)    In the event the Participant makes an election under Section 83(b) of the Code in connection with this Award, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code or other applicable provision.

9.    Change in Control. 

(a)Upon a Change in Control, all non-forfeited unvested shares of Restricted Stock shall become fully vested.  

(b)“Change in Control” shall mean any of the following events:

(i)the acquisition by any person, directly or indirectly, of beneficial ownership or power to vote more than thirty-five percent (35%) of the Company’s voting securities;

(ii)during any period of two consecutive years, individuals who at the beginning of such two-year period constitute the Board (the “Continuing Directors”) cease for any reason to constitute at least two-thirds (2/3) thereof; provided that, any individual whose election or nomination for election as a member of the Board was approved by a vote of a majority of the Continuing Directors then in office shall be considered a Continuing Director;

(iii)the consummation of a merger or consolidation (or similar transaction) of the Company with or into another company (other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of the surviving entity, more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation);

(iv)the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets; or

(v)upon approval by the shareholders of the Company of a plan of complete liquidation or dissolution of the Company.

The term “person” as used above means an individual, corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein, or a person or persons acting as a group within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended from time to time, and applicable rulings and regulations thereunder (other than the Company or any trustee or other fiduciary holding securities under any employee benefit plan of the Company). Any other provision hereof to the contrary notwithstanding, no Change of Control shall be deemed to have occurred for purposes of the Plan as a result of any offering registered with the Securities and Exchange Commission of stock to the Company’s shareholders and/or other investors or other offering conducted by the Company to meet regulatory capital requirements at the demand of a bank regulatory authority.

10.    Trading Black Out Policies. The Participant agrees to abide by all trading “black out” policies established from time to time by the Company. 

94849053.8

Exhibit 10.3

11.    No Rights to Continued Service. Nothing in this Agreement will confer upon the Participant any right to continued service on the Board or Bank Board, as applicable. 

12.    Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without giving effect to principles of conflicts of laws, and applicable provisions of federal law.

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date and year first above written.

1ST CONSTITUTION BANCORP

By:    ________________________________
Robert F. Mangano 
President

PARTICIPANT:

______________________________________
                        

94849053.8

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