Document:

EMPLOYMENT AGREEMENT
                                     BETWEEN
                             SOMERSET HILLS BANCORP
                                       AND
                               PAUL E. FITZGERALD

     THIS AGREEMENT, by and between Somerset Hills Bancorp, a New Jersey
corporation, having its principal office located at 155 Morristown Road,
Bernardsville, New Jersey 07924 (hereinafter referred to as the "Employer"), and
Paul E. Fitzgerald, residing at 58 Ridgeview Drive, Belle Mead, New Jersey 08502
(hereinafter referred to as the "Employee").

                                    RECITALS

     WHEREAS, the Employer and the Employee have agreed upon the terms and
conditions by which the Employee will be employed; and

     WHEREAS, the Employee represents to his knowledge, that he is not
restricted from accepting employment with the Employer by any agreement,
judgment or for any other reason; and

     WHEREAS, the Employer and the Employee have agreed to formalize the terms
and conditions of the Employee's employment with the Employer.

     NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the Employer and the Employee do hereby agree as follows:

     I. TERM OF EMPLOYMENT AND DUTIES

     1.1 The Employee shall serve as Director of the Employer, as well as
Director and President of its wholly-owned subsidiary, The Bank of the Somerset
Hills (the "Bank"), and Employee hereby accepts said employment and agrees to
render such services to the Employer beginning May 15, 2001, on the terms and
conditions set forth in this Agreement. Employee is currently a member of the
Board of Directors of both the Employer and the Bank. The initial term of
employment under this Agreement shall commence on March 19, 2001 (the
"Commencement Date"), and shall terminate two (2) years from the Commencement
Date (the "Initial Employment Period"). Unless either party gives six (6) months
prior written notice of nonrenewal (a "Notice of Nonrenewal"), this Agreement
shall automatically be

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extended for an additional one (1) year period, and, for one (1) year periods
thereafter (collectively the "Renewal Period(s)"). Notices shall be sent by
Certified Mail, Return Receipt Requested as follows:

                                 To the Employer

                             Somerset Hills Bancorp
                               155 Morristown Road
                             Bernardsville, NJ 07924
                            Attn: Board of Directors

                                 To the Employee

                               Paul E. Fitzgerald
                               58 Ridgeview Drive
                              Belle Mead, NJ 08502

     During the term of this Agreement the annual compensation of Employee shall
be no less than the base salary ("Base Salary") for the immediately preceding 12
months. (The Employees' Base Salary, together with any cash bonus which may be
awarded to Employee, hereafter called "Total Compensation"). References herein
to the term of this Agreement shall refer both to the Initial Employment Period
and any Renewal Periods.

     If proper Notice of Nonrenewal is sent effective at the end of the Initial
Term or any Renewal Period, this Agreement shall terminate at the end of the
then current term without any liability of the parties hereto to the other
except for performance of their respective obligations under this Agreement and
other obligations owed arising out of the employment relationship which may be
imposed and/or required by applicable law.

     1.2 During the term of this Agreement, the Employee shall perform such
executive services for the Employer that are consistent with his titles as may
from time to time be assigned to him by the Employer's Chief Executive Officer
and, in his absence, the Board of Directors.

     1.3 During the term of this Agreement, Employee shall not be engaged in
gainful employment for any other employer and shall devote his full time,
energy, skill and attention to the performance of his duties and
responsibilities and shall perform them diligently, loyally and competently.

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     II. COMPETITIVE ACTIVITIES

     2.1 Employee agrees that during the term of his employment hereunder,
except with the express written consent of the Board of Directors of the
Employer, he will not, directly or indirectly, engage in or make any financial
investment in any firm, corporation, business entity or business enterprise
competitive with or to any business of the Employer; provided, however, that
Employee shall not thereby be precluded or prohibited from owning passive
investments, including investments in the securities of other financial
institutions of not more than five percent (5% ) of its outstanding capital
stock, so long as such ownership does not require him to devote substantial time
to management or control of the business or activities in which he has invested.

     2.2 Restrictive Covenants.

          1. Non-Solicitation of Customers. During the term of this Agreement
and for a period of one (1) year from the date of termination, Employee shall
not actively solicit or induce any person, corporation, or other entity that is
a customer of Employer or Bank to become a customer of any other person, firm,
corporation, or other entity which directly or indirectly competes with Employer
or Bank, or approach any such person, entity, firm, corporation, or other entity
for such purpose or authorize or knowingly approve the taking of such actions by
other persons, without the prior written consent of Employer. This shall not be
deemed to prohibit (i) responding to requests for service initiated by customers
of Employer, (ii) solicitation of the public at large through television, radio,
newspapers, magazines, newsletters or Internet home pages, or (iii)
resolicitation by the competitor of persons, firms, corporations or other
entities who were customers of both Employer and the competitor on the date
hereof for those services provided to the customer by the competitor on the date
hereof.

          2. Non-Solicitation of Employees. During the term of this Agreement
and for a period of one (1)

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year from the date of termination, Employee shall not solicit or induce any
person who is an employee of Employer or Bank or was such at any time within
three months prior to the date hereof to become employed by any other person,
entity, firm or corporation or approach any such employee for such purpose or
authorize or knowingly approve the taking of such actions by other persons,
without the prior written consent of Employer.

          3. Non-Disclosure of Proprietary Information. Employee acknowledges
that during the course of Employee's employment with Employer, Employee
received, obtained or became aware of or had access to proprietary information,
lists and records of customers and trade secrets which are the property of
Employer and which are not known by competitors or generally by the public
("Proprietary Information") and recognizes such Proprietary Information to be
valuable and unique assets of Employer. For purposes of this subparagraph: (i)
Proprietary Information is deemed to include, without limitation, (A) marketing
materials, marketing manuals, policy manuals, procedure manuals, policy and
procedure manuals, operating manuals and procedures and product documentation,
(B) all information about pricing, products, procedures, practices, business
methods, systems, plans, strategies or personnel of Employer, (C) circumstances
surrounding the relationships with knowledge of, or information about the
customers, clients and accounts of Employer, including, but not limited to, the
identity of current active customers or prospects who have been contacted by
Employer, the expiration dates and other terms of loans or deposit or other
banking relationships, details or special product provisions or special
combinations of products, or special prices, and (D) all other information about
Employer which has not been disclosed in documents filed with the U.S.
Securities and Exchange Commission or otherwise publicly disseminated by
Employer, whether or not that information is recorded and notwithstanding the
method

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of recordation, if any; and (ii) Proprietary Information is deemed to exclude
all information legally in the public domain. Employee agrees to hold the
Proprietary Information in the strictest confidence and agrees not to use or
disclose any Proprietary Information, directly or indirectly, at any time for
any purpose, without the prior written consent of Employer or to use for
Employee's benefit or the benefit of any person, firm, corporation or other
entity (other than Employer) any Proprietary Information, and to use Employee's
best efforts to prevent such prohibited use or disclosure by any other persons.
Employee has returned all Proprietary Information in Employee's possession or
control of Employee.

     4. Remedies. Employee hereby acknowledges that Employee's duties and
responsibilities under this Paragraph 2.2 are unique and extraordinary and that
irreparable injury may result to Employee in the event of a breach of the terms
and conditions of this Paragraph 2.2, which may be difficult to ascertain, and
that the award of damages would not be adequate relief to Employer. Employee
therefore agrees that in the event of Employee's breach of any of the terms or
conditions of this Paragraph 2.2, Employer shall have the right to such
equitable relief as may be appropriate under the circumstances, in addition to
any other remedies to which the Employer may be entitled at law.

     III. COMPENSATION AND OTHER BENEFITS

     3.1 Compensation. For the first year of the Initial Employment Period,
("IEP"), Employer shall pay Employee a Base Salary of $130,000 per year and be
eligible for a cash bonus in an amount to be decided by the Employer, payable,
if at all, no later than the last day of the first year of the IEP. Both Base
Salary, as well as any cash bonus for each subsequent year of the IEP and the
Renewal Periods shall be as determined by the Board of Directors of the Employer
but Base Salary shall always be in an amount equal to or greater than the amount
paid as Base Salary during the previous year increased (but

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not decreased) by a percentage equal to the percentage increase in the Consumer
Price Index for all urban consumers for New York, New York, Northeastern New
Jersey (1982-84 = 100), as issued by the Bureau of Labor Statistics of the U.S.
Department of Labor ("CPI"), from the first day of the immediately preceding
twelve months of employment to the first day of the then current term. The Base
Salary shall be payable in equal weekly installments or in such other
installments as may be agreed upon by the Employer and Employee.

     3.2 Life Insurance. Employer shall maintain at its sole expense one or more
life insurance policies on Employee's life with a face value totaling two (2)
times Employee's Base Salary for the most recently completed year of employment,
with the beneficiary or beneficiaries to be selected by Employee.

     3.3 401(K) Plan. Employee is eligible for full participation in Employer's
401(K) Plan in accordance with the terms of such plan and, if permitted under
such plan, Employer will waive any waiting periods for participation.

     IV. PARTICIPATION IN RETIREMENT AND MEDICAL PLANS; FRINGE BENEFITS,
         VACATIONS

     4.1 The Employee shall be entitled to participate in all plans and benefit
programs of the Employer in effect for its executive personnel from time to
time, including, but not limited to pension, profit-sharing, or other retirement
benefits and life, medical, dental and disability insurance and hospitalization
or reimbursement plans, or other plans that the Employer may hereafter adopt for
the benefit of their employees. The foregoing notwithstanding, Employee's
severance benefits shall be limited solely to those severance benefits expressly
provided for in this Agreement.

     4.2 Employee shall be entitled to five (5) weeks' vacation each year, three
floating holidays plus reasonable sick days.

     4.3 (a) If the Employee shall become disabled or incapacitated to the
extent that he is unable to perform any of his material duties, he shall
nevertheless continue to receive the following

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percentages of his Base Salary, in addition to any benefits which may be in
effect for employees of the Employer under Section 4.1 of this Agreement, for
the following periods of his disability: 100% for the first 6 months, 60% for
the next 6 months, and 50% thereafter for the remaining portion of the current
employment term (Employee may also purchase increased benefits at his own
expense). Upon returning to active duty, the Employee's full Base Salary as set
forth in this Agreement shall be reinstated. In the event that said Employee
returns to active employment on other than a full-time basis, then his Base
Salary (as set forth in Section 3.1 of this Agreement) shall be reduced in
proportion to the time spent in said employment.

     4.3 (b) There shall be deducted from the amounts paid to Employee hereunder
during any period of disability, as described in Section 4.3(a) hereof, any
amounts actually paid to Employee pursuant to any disability insurance or other
similar such program which the Employer has instituted or may institute on
behalf of their employees for the purpose of compensating Employee in the event
of disability, including workmen's compensation benefits and social security
disability benefits and for which the Employer has paid. Employee shall have the
duty to apply for such benefits and shall provide to the Employer the right to
set off from any amounts so received the amount of payments made hereunder.

     4.3 (c) For purposes of this Agreement, Employee shall be deemed disabled
or incapacitated if the Employee, due to physical or mental illness, shall have
been absent from his duties with the Employer on a full-time basis for six
consecutive months during which time Employee will be paid in full; provided,
that if Employee shall not agree with a determination to terminate him because
of disability or incapacity, the question of the Employee's ability shall be
submitted to an impartial and reputable physician selected by the parties hereto
and such physician's determination on the question of disability or incapacity
shall be binding.

     4.4 If Employee's employment hereunder is terminated by reason of his
death, then:

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         (a) The Employer will pay Employee's beneficiary or beneficiaries, or
his estate, as the case may be, the Employee's Base Salary for a period equal to
the longer of (a) 60 days or (b) the end of the calendar quarter in which the
death occurs.

         (b) The Employer will cause to be continued, at the Employer's expense,
medical and dental insurance, hospitalization and reimbursement plans, and other
health plans adopted by the Employer for the benefit of its Employees from time
to time, substantially identical to the coverage maintained by the Employee, for
the members of Employee's immediate family. This coverage will cease twelve (12)
months from the date of death.

         (c) Employee's beneficiary or beneficiaries, or his estate, as the case
may be, will have a period of up to twelve (12) months (or such longer period as
may be specified in any program or applicable option agreement) from the date of
death within which to exercise any outstanding options Employee held at the time
of his death for the purchase of any securities of the Employer, all of which
options will become fully vested and exercisable by said beneficiary,
beneficiaries or estate on the date of his death. Such options will expire at
the end of the twelve (12) month period (or such longer period as may be
specified in any program or applicable option agreement).

     V. ADDITIONAL COMPENSATION AND BENEFITS

     5.1 During the term of the Agreement, Employee will be entitled to
participate in and receive the benefits of any stock option, profit sharing, or
other plans, benefits and privileges given to employees and executives of the
Employer or their subsidiaries and affiliates which may come into existence
hereafter, to the extent commensurate with his then duties and responsibilities,
as fixed by the Board of Directors of the Employer or any Committee of such
Board or of the Employer selected for such purpose; and, to the extent Employee
is otherwise eligible and-qualifies, to so participate in and receive such
benefits or privileges. The Employer shall not make any changes in such plans,
benefits or privileges which would adversely affect Employee's rights or
benefits thereunder, unless such change occurs

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pursuant to a program applicable to all executive officers (Senior Vice
President or above) of the Employer and does not result in a proportionately
greater adverse change in the rights of or benefits to Employee as compared with
any other executive officer of the Employer. Nothing paid to Employee under any
plan or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of Total Compensation payable to Employee pursuant to
Section 3.1 hereof.

     VI. EXPENSES

     6.1 Employer shall at its sole expense provide Employee with an appropriate
automobile allowance. Employer shall reimburse the Employee or otherwise provide
for or pay for all reasonable expenses incurred by Employee in furtherance or in
connection with the business of the Employer including, but not by way of
limitation, traveling expenses, and all reasonable entertainment expenses
(whether incurred at the Employee's residence, while traveling, or otherwise)
subject to such reasonable limitations as may be established by the Board of
Directors of the Employer. If such expenses are paid in the first instance by
Employee, Employer will reimburse the Employee therefor. The Employee shall be
entitled to receive reimbursement for such expenses incurred by him in
connection with the performance of his duties herein within fifteen (15) days
after delivery by him of an itemized statement.

     VII. TERMINATION

     7.1 The Employer shall have the right, at any time upon prior written
Notice of Termination satisfying the requirements of Section 7.6(c) hereunder,
to terminate Employee's employment hereunder, for just cause. For the purpose of
this Agreement, "termination for just cause" shall mean termination for willful
misconduct, breach of fiduciary duty to the Employer or the Bank involving
personal profit, conviction of a felony, or willful violation of any material
law, rule or regulation (other than traffic violations or similar offenses),
removal of the Employee from office and/or permanent prohibition of Employee
from participating in the conduct of the Employer's affairs by an order issued
by the FRB or by the Department, willful violation of a final cease-and-desist
order, willful or intentional breach by

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Employee of his duties hereunder, or persistent negligence or misconduct in the
performance of such duties, all of which conduct must be significantly and
demonstrably injurious to the Employer. For purposes of this paragraph, no act
or failure to act on Employee's part shall be considered "willful" unless done
or omitted to be done by him not in good faith and without reasonable belief
that his action or omission was in the best interest of the Employer; provided,
however, that any act or omission to act on the Employee's part in reliance upon
an opinion of counsel to the Employer or counsel to the Employee shall not be
deemed to be willful. Employee shall not be deemed to have been terminated for
just cause unless and until there shall have been delivered to him a copy of a
certification by a majority of the non-officer members of the Board of Directors
of Employer finding that, in the good faith opinion of such majority, Employee
was guilty of conduct which was deemed to be just cause and specifying the
particulars thereof in detail, after reasonable notice to Employee and an
opportunity for him, together with counsel to Employee, to be heard before such
majority and to cure any such breach or failure to the reasonable satisfaction
of the Employer.

     7.2 In the event employment is terminated for just cause pursuant to
Section 7.1 hereof, Employee shall have no right to compensation or other
benefits for any period after such date of termination. If Employee is
terminated by the Employer other than for just cause pursuant to Section 7.1
hereof and prior to a change in control of the Employer as defined in Section
7.6(b) hereof, Employee's right to compensation and other benefits under this
Agreement shall be as set forth in Sections 7.7(a) and (c) hereof. If Employee
is terminated by the Employer other than for just cause pursuant to Section 7.1
hereof or Employee's employment is terminated by death, and after a change in
control of the Employer as defined in Section 7.6(b) hereof, Employee's right to
compensation and other benefits under this Agreement shall be as set forth in
Sections 7.7(b) and (c) hereof.

     7.3 Employee shall have the right, upon prior written Notice of Termination
of not less than thirty (30) days satisfying the requirements of Section 7.6(c)
hereof, to terminate his employment

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hereunder, but in such event, Employee shall have no right after the date of
termination to compensation or other benefits as provided in this Agreement,
unless such termination is for Good Reason, as defined pursuant to Section
7.6(a) hereof. If Employee provides a Notice of Termination for Good Reason, as
defined, the date of termination shall be the date on which a Notice of
Termination is given.

     7.4 If Employee is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employer's affairs pursuant to notice served
by the Federal Reserve Board ("FRB") or by the Department of Banking and
Insurance of the State of New Jersey ("Department"), the Employer's obligations
under this Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. Total Compensation and benefits, however, shall
continue to be paid to Employee unless FRB or Department cites personal conduct
of Employee which would permit termination for just cause. If the charges in the
notice are dismissed, and/or the notice from FRB or Department is rescinded,
Employer shall: (i) pay Employee all of the benefits withheld while contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.

     7.5 In the event that Employee is terminated in a manner which violates the
provisions of Section 7.1, as determined by a court of competent jurisdiction,
Employee shall be entitled to reimbursement for all reasonable costs, including
attorneys' fees, incurred by Employee in challenging such termination. Such
reimbursement shall be in addition to all rights to which Employee is otherwise
entitled under this Agreement.

     7.6 (a) Employee may terminate his employment hereunder for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean (A) a proven failure by
Employer to comply with any material provision of this Agreement, which failure
has not been cured within ten (10) days after a notice of such noncompliance has
been given by Employee to the Employer, or without Employee's express written
consent, the assignment to Employee of any duties inconsistent with Employee's
positions, duties, responsibilities and status with the Employer; (B) subsequent
to a change in control of

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the Employer as defined in Section 7.6(b) hereof and without Employee's express
written consent, the assignment to Employee of any duties inconsistent with
Employee's positions, duties, responsibilities and status with the Employer
immediately prior to a change in control of the Employer, or a change in
Employee's reporting responsibilities, titles or offices as in effect
immediately prior to a change in control of the Employer, any removal of
Employee from, or any failure to re-elect Employee to, any of the positions held
by Employee, except in connection with a termination of employment for just
cause, disability, death or retirement or pursuant to Section 7.1 hereof, a
reduction by the Employer in Employee's Total Compensation as in effect
immediately prior to a change in control or as the same may be increased from
time to time, or the requirement that Employee be relocated to an office which
is more than 25 miles from the current principal executive office of the
Employer, or the failure of the Employer to continue in effect any bonus,
benefit or compensation plan, life insurance plan, health and accident plan or
disability plan in which Employee is participating at the time of a change in
control of the Employer, or the taking of any action by the Employer which would
adversely affect Employee's participation in or materially reduce Employee
benefits under any of such plans unless specifically agreed by Employee in
writing; (C) subsequent to a Change in Control, service on the Employee by the
Employer of a Notice of Nonrenewal pursuant to Section 1.1; or (D) any purported
termination of Employee's employment which is not effected pursuant to a Notice
of Termination satisfying the requirements of paragraph (c) hereof (and for
purposes of this Agreement, no such purported termination shall be effective).

         (b) For purposes of this Agreement, a "Change in Control" of the
Employer shall be deemed to occur (i) upon a Change in Control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A or Item 1a of Form 8-K promulgated under the Securities Exchange
Act of 1934 ("Exchange Act"); or (ii) if any "person" (including as such term is
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act, but excluding the
Employer and its

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subsidiaries or an employee benefit plan of the Employer (or any fiduciary
thereof) or a corporation controlled by the Employer's shareholders in
substantially the same character and proportions as their ownership of stock of
the Employer, or an underwriter temporarily holding securities pursuant to an
offering of such securities) is or becomes the beneficial owner, directly or
indirectly, of securities of the Employer representing twenty-five percent (25%)
or more of the combined voting power of the Employer's outstanding securities
then entitled to vote for the election of directors; or (iii) if during any
period of two (2) consecutive years, individuals who at the beginning of such
period constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof (excluding, for purposes of this
calculation, any director who dies during such period); provided, however, if
the election or appointment of any new director was approved by the Incumbent
Board, such new director shall constitute a member of the Incumbent Board; or
(iv) if the Employer shall meet the delisting criteria of any exchange on which
its shares are or become listed, or any successor exchange in respect of the
number of publicly-held shares or the number of shareholders holding one hundred
(100) shares or more; (v) if the Board shall approve any merger, consolidation,
issuance of securities or purchase of assets, the result of which would be the
occurrence of any event described in clause (i), (ii), (iii) or (iv) above or
that the shareholders of the Employer receive or retain stock having less than
51% combined voting power of the company resulting from such transaction in
substantially the same proportions as their prior ownership of the Employer.

         (c) Any termination of Employee's employment by the Employer or by
Employee shall be communicated by written Notice of Termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a dated notice which shall (i) indicate the specific termination provision
in this Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated (if applicable); (iii) specify a
date of termination, which shall be not less than thirty (30) nor

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more than ninety (90) days after such Notice of Termination is given, except in
the case of the Employer's termination of Employee's employment for just cause
pursuant to Section 7.1 hereof, in which case the Notice of Termination may
specify a date of termination as of the date such Notice of Termination is
given, or, in the case of Employee's termination of his employment pursuant to
Section 7.3, in which case the date of termination shall be thirty (30) days
from the date of notice; and (iv) be given in the manner specified in Section
8.3 hereof.

         (d) Employee shall not be required to mitigate the amount of any
payment provided for in Section 7.7 by seeking other employment or otherwise.

     7.7 (a) In the event the Employee is terminated (including, without
limitation, service by the Employer of a Notice of Nonrenewal pursuant to
Section 1.1), and it is finally determined that it was without just cause, or
the Employee shall terminate his employment for Good Reason pursuant to Section
7.6, in each case prior to a Change in Control, Employee will immediately
receive a lump sum payment equal to the greater of the remaining amount due him
for the remaining term of the IEP, or two (2) times Base Salary plus two (2)
times the bonus he received in the preceding contract year;

         (b) If Employee is terminated (including, without limitation, service
by the Employer of a Notice of Nonrenewal pursuant to Section 1.1), other than
for just cause, or Employee terminates his employment for Good Reason, in each
case after a Change in Control occurs, Employee will immediately be entitled to
a lump sum payment of three (3) times Base Salary and three (3) times the bonus
he received in the preceding contract year provided however that if the Employee
is employed by the Acquirer in a position and on terms acceptable to him after
the change of control for at least 2 years, he shall only be immediately
entitled to two and one-half (2 1/2) times Base Salary and bonus;

         (c) In the event the Employee is terminated without just cause, or
there is a change of control and the Employee is not employed in a position and
on terms acceptable to him after the change of control for at least two years,
or Employee terminates his employment for Good Reason,

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Employee will be entitled to continue his medical and insurance coverage for the
earlier of (i) two (2) years from termination, or (ii) until he receives medical
or insurance coverage from a new employer.

     VIII. MISCELLANEOUS

     8.1 Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any rights or privileges to
Employee as provided in this Agreement shall not be in lieu or derogation of the
rights and privileges that Employee now has under any plan or benefit presently
outstanding.

     8.2 This Agreement may not be modified, changed, amended, or altered except
in a writing signed by the Employee or by his duly authorized representative and
by a duly authorized officer of the Employer.

     8.3 All notices given or required to be given herein shall be in writing or
sent by United States first-class certified or registered mail, postage prepaid,
to Employee (or to Employee's spouse or estate upon Employee's death) at
Employee's last known address, and to the Employer at their principal offices.
All such notices shall be effective when deposited in the mail in the manner
specified in this Section 8.3. Either party by a notice in writing may change or
designate the place for receipt of all such notices.

     8.4 No course of conduct between Employer and Employee and no delay or
omission of Employer or Employee to exercise any right or power given under this
Agreement shall: (i) impair the subsequent exercise of any right or power or
(ii) be construed to be a waiver of any default or any acquiescence in or
consent to the curing of any default while any other default shall continue to
exist, or be construed to be a waiver of such continuing default or of any other
right or power that shall theretofore have arisen; and every power and remedy
granted by law and by this Agreement to any party hereto may be exercised from
time to time and as often as may be deemed expedient. All such rights and powers
shall be cumulative to the fullest extent permitted by law.

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     IX. SUCCESSORS, NON-ASSIGNABILITY OF THE AGREEMENT

     9.1 This Agreement shall inure to the benefit of and be binding upon
Employee and to the extent applicable, his heirs, assigns, executors, and
personal representatives and Employer, and their respective successors and
assigns, including, without limitation, any person, partnership, or corporation
which may acquire all or substantially all of Employer's assets and business, or
with or into which Employer may be consolidated or merged, and this provision
shall apply in the event of any subsequent merger, consolidation, or transfer.

     9.2 This Agreement is personal to each of the parties and none of the
parties may assign or delegate any of its rights or obligations under this
Agreement without the prior written consent of the other parties.

     X. APPLICABLE LAW

     10.1 This Agreement shall be governed in all respects and be interpreted by
and under the laws of the State of New Jersey, except to the extent that such
law may be preempted by applicable Federal law, including regulations, opinions
or orders duly issued by the FRB ("Federal Law"), in which event this Agreement
shall be governed and be interpreted by and under Federal Law.

     10.2 In the event of any disputes concerning the interpretation,
application or the performance or nonperformance of any rights or duties under
this Agreement, the parties agree and hereby exclusively submit to the
jurisdiction of the Superior Court of New Jersey.

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     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the 19th day of March, 2001.

WITNESS: SOMERSET HILLS BANCORP

______________________________               By:__________________________
                                                  Stewart E. McClure, Jr.
                                                  Chief Executive Officer

WITNESS:

_______________________________              _____________________________
                                                  Paul E. Fitzgerald

                                      -17-EMPLOYMENT AGREEMENT
                                     BETWEEN
                         THE BANK OF THE SOMERSET HILLS
                                 (in formation)
                                       AND
                                  GERARD RIKER

     THIS AGREEMENT is effective as of May 15, 1998, by and between The Bank of
the Somerset Hills (in formation), a New Jersey-chartered commercial bank in
organization, having its principal office located at 155 Morristown Road,
Bernardsville, New Jersey 07924 (hereinafter referred to as the "Employer"), and
Gerard Riker, residing at 80 Ligham Street, Belleville, New Jersey 07109
(hereinafter referred to as "Employee").

     In consideration of the mutual covenants herein set forth, the Employer and
the Employee do hereby agree as follows:

I. TERM OF EMPLOYMENT AND DUTIES

     1.1 The Employer hereby employs the Employee as Executive Vice President
and Chief Financial Officer as hereinafter provided, and Employee hereby accepts
said employment and agrees to render such services to the Employer on the terms
and conditions set forth in this Agreement. The initial term of employment under
this Agreement shall commence on May 26, 1998 (the "Commencement Date"), and
shall terminate on the date that is three (3) years from the Commencement Date
(the "Initial Employment Period"). At the conclusion of the Initial Employment
Period, Employee shall have the option to renew his employment for each of two
consecutive one-year periods (the "Renewal Periods"). In consideration for
providing Employee with the option with respect to the Renewal Periods, Employee
agrees to provide Employer with 120 days prior written notice of Employee's
decision not to renew the term of employment as provided hereunder. Upon
conclusion of the Renewal Periods, any subsequent employment of Employee shall
be by mutual agreement of Employee and the Board of Directors of Employer,
provided, however, that the annual compensation of Employee for any such
subsequent year shall be no less than his total base salary compensation, for
the immediately preceding year. References herein to the term of this Agreement
shall refer both to the Initial Employment Period and any Renewal Periods.

     Employer agrees to appoint Employee to serve as a member of its Board of
Directors within one (1) year from the Commencement Date.

     Notwithstanding the foregoing, unless extended by the parties, this
Agreement shall terminate without any liability of the parties hereto to the
others except for the obligation of Employer to pay Employee the applicable
proportion of base salary which is due to him under Section 3.1 hereof if,
through no action or negligence on the part of Employer, (i) Employer's
Application with the Federal Deposit Insurance Corporation is not approved or
(ii) Employer does not raise the amount necessary to capitalize itself and
obtain a Certificate of Authority from the New Jersey Department of Banking and
Insurance.

     1.2 During the term of this Agreement, the Employee shall perform such
executive services for the Employer as may be consistent with his title and from
time to time be assigned to him by the Employer's Board of Directors.

                                      -1-

<PAGE>

     1.3 During the term of this Agreement, Employee shall devote his full time,
energies, skills and attention to the performance of his duties and
responsibilities and shall perform them faithfully, diligently and competently.

II. COMPETITIVE ACTIVITIES

     2.1 Employee agrees that during the term of his employment hereunder,
except with the express consent of the Board of Directors of the Employer, he
will not, directly or indirectly, engage in or make any financial investment in
any firm, corporation, business entity or business enterprise competitive with
or to any business of the Employer; provided, however, that Employee shall not
thereby be precluded or prohibited from owning passive investments, including
investments in the securities of other financial institutions of not more than
5% of its outstanding capital stock, so long as such ownership does not require
him to devote substantial time to management or control of the business or
activities in which he has invested.

     2.2 Employee agrees and acknowledges that by virtue of his employment
hereunder, he will maintain an intimate knowledge of the activities and affairs
of the Employer including trade secrets and other confidential matters. As a
result, and also because of the special, unique, and extraordinary services that
Employee is capable of performing for the Employer or one of its competitors,
Employee recognizes that the services to be rendered by him hereunder are of a
character giving them a peculiar value, the loss of which cannot be adequately
or reasonably compensated for by damages. Employee therefore agrees that if he
fails to render to the Employer the services required hereunder, the Employer
shall be entitled to immediate injunctive or other equitable relief to restrain
Employee from failing to render his services hereunder, in addition to any other
remedies to which the Employer may be entitled under law; provided, however,
that the right to such injunctive or other equitable relief shall not survive
the termination of Employee's employment.

III. COMPENSATION AND OTHER BENEFITS

     3.1 Base Salary. Employer shall pay Employee a base salary at the rate of
$150,000 per year for the first year of the Initial Employment Period. The base
salary for each subsequent year of the Initial Employment Period and the Renewal
Periods shall be determined by mutual agreement of Employee and the Board of
Directors of Employer but shall in no event be less than $150,000 without
Employee's prior written consent. The base salary shall be payable in equal
weekly installments or in such other installments as may be agreed upon by the
Employer and Employee.

     3.2 Options. In connection with its initial public offering of common
stock, the Board of Directors of Employer intends to adopt the a Stock Option
Program ("Program"). The Board of Directors intends to reserve for future
issuance pursuant to the Program an amount of authorized but unissued common
stock of Employer. In order to qualify such Program for favorable treatment
under federal tax and securities laws, Employer intends to submit such Program
for approval of its stockholders at the first annual meeting of stockholders to
be held following the initial public offering. Employer shall also file with
applicable state authorities a registration statement with respect to the
Employer's common stock available for future issuance pursuant to the Program.

     Pursuant to the terms of the Program, Employer hereby agrees to grant to
Employee, at no cost to him, incentive stock options, as defined in Section 422A
of the Internal Revenue Code of 1986 as amended ("Code") to purchase 25,000
shares of the Employer's common stock issued in the initial public offering.
Thereafter during the Initial Employment Period on each anniversary of the date
of this Agreement, Employer shall grant to Employee, at no cost to him,
incentive stock options to purchase not

                                      -2-

<PAGE>

less than 5,000 shares of Employer's common stock provided Employee has
continued to be an employee in good standing as of the date of issuance of said
options, as determined by the Board of Directors. The per share exercise price
shall be equal to the fair market value of the shares on the date of grant. The
Options to be granted to Employee shall vest one-third of the total amount on
each anniversary of this Agreement, and shall not otherwise be contingent on any
event, and shall be non-assignable and non-transferable other than by will or
the laws of descent and distribution. Notwithstanding the foregoing, the
aforesaid options shall immediately vest on an accelerated basis upon the
occurrence of any of the following events: (i) death or incapacity of Employee,
(ii) change of control of the Employer as defined in Section 7.7 (b) hereof,
(iii) termination of employment by the Employer other than for "just cause"
pursuant to Section 7.1 hereof or (iv) termination by Employee of his employment
for "good reason" pursuant to Section 7.7 (a) hereof.

     Employee shall exercise options by giving written notice of such exercise
to Employer. The date upon which such written notice is received by Employer
shall be the exercise date for the options.

     The exercise price for any shares shall be paid in full in cash at the time
an option is exercised promptly after the exercise of an option and the payment
of the full option price, Employee shall be entitled to the issuance of a stock
certificate evidencing his ownership of such shares. Employee shall have none of
the rights of a shareholder until shares are issued to him.

     The shares subject to the options and the price per share shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of stock subsequent to the date hereof resulting from (1) a subdivision
or consolidation of shares or any other capital adjustment, (2) the payment of a
stock dividend, or (3) any other increase or decrease in the number of such
issue of shares effected without receipt of consideration by Employer. If
Employer shall be the surviving corporation in any merger or consolidation, any
such option shall pertain, apply, and relate to the securities to which a holder
of the number of shares of stock subject to the option would have been entitled
after the merger or consolidation.

     3.3 Other Compensation. It is understood that upon execution of this
Agreement and assumption of the office of Executive Vice President and Chief
Financial Officer of Employer, Employee will forfeit his rights to incentive
stock options from Sovereign Bancorp, Inc. or its subsidiaries ("Sovereign").
Accordingly, no later than July 10, 1998, Employee shall be entitled to receive
from Employer cash in an amount equal in value to the lesser of (i) $10,000 or
(ii) the number of Sovereign stock options otherwise vesting on May 22, 1998,
multiplied by the "Mean Price of Sovereign" on May 22, 1998. The "Mean Price of
Sovereign" shall be the mean between the high and low price of Sovereign shares
on such. Employee shall provide Employer with documentation provided from
Sovereign which shall evidence his entitlement with respect to the aforesaid
Sovereign incentive stock options.

     3.4 Life Insurance. Employer shall maintain at its sole expense one or more
life insurance policies on Employee's life with a face value totaling two (2)
times Employee's base salary (as such base salary is in effect from time to
time), with the beneficiary or beneficiaries to be selected by Employee. Such
policy or policies shall be in addition to any life insurance provided as part
of the fringe benefits to which Employee is entitled pursuant to Section IV of
this Agreement.

IV. PARTICIPATION IN RETIREMENT AND MEDICAL PLANS; FRINGE BENEFITS, VACATIONS

     4.1 The Employee shall be entitled to participate in any plan of the
Employer in effect for its executive personnel from time to time, including, but
not limited to pension, profit-sharing, or other

                                       -3-

<PAGE>

retirement benefits and life, medical, dental and disability insurance and
hospitalization or reimbursement plans or other plans that the Employer may
hereafter adopt for the benefit of their employees.

     4.2 Employee shall take two (2) consecutive weeks' vacation each year.
Employee may in his discretion and consistent with his duties take three (3)
additional weeks' vacation each year, three floating holidays plus reasonable
sick days consistent with his duties. Employee shall, For only the calendar year
commencing January 1, 1999, Employee shall be permitted to carry-over any
vacation time that was not taken during the preceding calendar year. There shall
be no further carry-over permitted.

     4.3(a) If the Employee shall become disabled or incapacitated to the extent
that he is unable to materially perform the duties of Executive Vice President
and Chief Financial Officer, he shall nevertheless continue to receive the
following percentages of his Employer compensation, exclusive of any benefits
which may be in effect for employees of the Employer under Section 4.1 of this
Agreement, for the following periods of his disability: 100% for the first 3
months, 60% for the next 12 months, and 50% thereafter for the remaining portion
of the Initial Employment Period or if applicable, the Renewal Period which then
applies. Upon returning to active duties, the Employee's full compensation as
set forth in this Agreement shall be reinstated. In the event that said Employee
returns to active employment on other than a full-time basis, then his
compensation (as set forth in Section 3.1 of this Agreement) shall be reduced in
proportion to the time spent in said employment. Notwithstanding the foregoing,
the Employer shall have the right to terminate Employee's employment hereunder
after Employer shall have been absent from his duties with Employer on a full
time basis for three consecutive months upon providing a Notice of Termination
in accordance with Section 7.7(c) hereof. If Employee is terminated pursuant to
this Section 4. 3 (a), Employee shall be entitled to receive the percentage of
base salary compensation he was receiving pursuant to the first sentence of this
Section 4.3(a) for an additional 90 days.

     4.3(b) There shall be deducted from the amounts paid to Employee hereunder
during any period of disability, as described in Section 4.3(a) hereof, any
amounts actually paid to Employee pursuant to any disability insurance or other
similar such program which the Employer have instituted or may institute on
behalf of their employees for the purpose of compensating Employee in the event
of disability, including workmen's compensation benefits and social security
disability benefits. Employee shall have the duty to apply for such benefits and
shall provide to the Employer the right to set off from any amounts so received
the amount of payments made hereunder.

     4.3(c) For purposes of this Agreement, Employee shall be deemed disabled or
incapacitated if the Employee, due to physical or mental illness, shall have
been absent from his duties with the Employer on a full-time basis for three
consecutive months during which time Employee will be paid in full; provided,
that if Employee shall not agree with a determination to terminate him because
of disability or incapacity, the question of the Employee's ability shall be
submitted to an impartial and reputable physician selected by the parties hereto
and such physician's determination on the question of disability or incapacity
shall be binding.

     4.4 If Employee's employment hereunder is terminated by reason of his
death, then:

          (a) The Employer will pay Employee's beneficiary or beneficiaries, or
     his estate, as the case may be, the Employee's base salary up to the end of
     the month in which death occurs.

                                      -4-

<PAGE>

          (b) The Employer will cause to be continued, at the Employer's
     expense, health and disability coverage substantially identical to the
     coverage maintained by the Employee for the qualifying members of
     Employee's family prior to his death. This coverage will cease twelve (12)
     months from the date of death.

          (c) Employee's beneficiary or beneficiaries, or his estate, as the
     case may be, will have a period of up to eighteen (18) months from the date
     of death within which to exercise any outstanding options Employee held at
     the time of his death for the purchase of any securities of the Employer,
     all of which options will become fully exercisable by said beneficiary,
     beneficiaries or estate on the date of his death, provided, however, that
     the period of exercise provided hereunder shall in no event exceed the
     period for exercise provided in any such option agreement. Such options
     will expire at the end of the eighteen (18) month period or such shorter
     period as may remain under any such option agreement.

V. ADDITIONAL COMPENSATION AND BENEFITS

     5.1 During the term of the Agreement, Employee will be entitled to
participate in and receive the benefits of any stock option, profit sharing, or
other plans, benefits and privileges given to employees and executives of the
Employer or their subsidiaries and affiliates which may come into existence
hereafter, to the extent commensurate with his then duties and responsibilities,
as fixed by the Board of Directors of the Employer or any Committee of such
Board or of the Employer selected for such purpose; and, to the extent Employee
is otherwise eligible and qualifies, to so participate in and receive such
benefits or privileges. The Employer shall not make any changes in such plans,
benefits or privileges which would adversely affect Employee's rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all executive officers (Senior Vice President or above) of the Employer and
does not result in a proportionately greater adverse change in the rights of or
benefits to Employee as compared with any other executive officer of the
Employer. Nothing paid to Employee under any plan or arrangement presently in
effect or made available in the future shall be deemed to be in lieu of the
salary payable to Employee pursuant to Section 3.1 hereof.

VI. EXPENSES

     6.1 Employer shall at its sole expense provide Employee with an automobile,
or an appropriate allowance. Maintenance, taxes, insurance and all other
operating costs shall be paid by Employer. The Employer shall reimburse Employee
or otherwise provide for or pay for all reasonable expenses incurred by Employee
in furtherance or in connection with the business of the Employer including, but
not by way of limitation, traveling expenses, and all reasonable entertainment
expenses (whether incurred at the Employee's residence, while traveling, or
otherwise) subject to such reasonable limitations as may be established by the
Board of Directors of the Employer. If such expenses are paid in the first
instance by Employee, the Employer will reimburse Employee therefor. Employee
shall be entitled to receive reimbursement for such expenses incurred by him in
connection with the performance of his duties herein within 15 days after
delivery by him of an itemized statement.

VII. TERMINATION

     7.1 The Employer shall have the right, at any time upon prior written
Notice of Termination satisfying the requirements of Section 7.7(c) hereunder,
to terminate Employee's employment hereunder, including termination for just
cause. For the purpose of this Agreement, "termination for just cause" shall
mean termination for personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, conviction of a felony,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses), willful violation of a final cease-and-desist order,

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<PAGE>

willful or intentional breach or neglect by Employee of his duties hereunder,
persistent negligence or misconduct in the performance of such duties, conduct
which is significantly and demonstrably injurious to the Employer, material
breach of any provision of this Agreement, or termination pursuant to Section
7.5 hereof. For purposes of this paragraph, no act or failure to act on the
Employee's part shall be considered "willful" unless done or omitted to be done
by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Employer; provided, however, that any
act or omission to act on the Employee's part in reliance upon an opinion of
counsel to the Employer or counsel to the Employee shall not be deemed to be
willful. Employee shall not be deemed to have been terminated for just cause
unless and until there shall have been delivered to him a copy of a
certification by a majority of the non-officer members of the Board of Directors
of Employer finding that, in the good faith opinion of such majority, Employee
was guilty of conduct which was deemed to be just cause and specifying the
particulars thereof in detail, after reasonable notice to Employee and an
opportunity for him, together with counsel to Employee, to be heard before such
majority.

     7.2 In the event employment is terminated for just cause pursuant to
Section 7.1 hereof, Employee shall have no right to compensation or other
benefits for any period after such date of termination. If Employee is
terminated by the Employer other than for just cause pursuant to Section 7. 1
hereof and prior to a change in control of the Employer as defined in Section
7.7(b) hereof, Employee's right to compensation and other benefits under this
Agreement shall be as set forth in Section 7.7(e) hereof. If Employee is
terminated by the Employer other than for just cause pursuant to Section 7.1
hereof and after a change in control of the Employer as defined in Section
7.7(b) hereof, Employee's right to compensation and other benefits under this
Agreement shall be as set forth in Section 7.7(d) hereof.

     7.3 Employee shall have the right, upon prior written Notice of Termination
of not less than thirty (30) days satisfying the requirements of Section 7.7(c)
hereof, to terminate his employment hereunder, but in such event, Employee shall
have no right after the date of termination to compensation or other benefits as
provided in this Agreement, unless such termination is for good reason, as
defined pursuant to Section 7.7(a) hereof. If Employee provides a Notice of
Termination for good reason, as defined, the date of termination shall be the
date on which a Notice of Termination is given.

     7.4 If Employee is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employer's affairs pursuant to notice served
by the Federal Reserve Board ("FRB) or by the Department of Banking and
Insurance of the State of New Jersey ("Department"), the Employer's obligations
under this Agreement shall be suspended as of the date of service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the
Employer shall: (i) pay Employee all of the compensation withheld while contract
obligations were suspended and (ii) reinstate any of its obligations which were
suspended.

     7.5 If Employee is removed from office and/or permanently prohibited from
participating in the conduct of the Employer's affairs by an order issued by the
FRB or by the Department, all obligations of the Employer under this Agreement
shall terminate as of the effective date of the order, but rights of the
Employee to compensation earned as of the date of termination shall not be
affected.

     7.6 In the event that Employee is terminated in a manner which violates the
provision of section 7.1, as determined by a court of competent jurisdiction,
Employee shall be entitled to reimbursement for all reasonable costs, including
attorney's fees, in challenging such termination. Such reimbursement shall be in
addition to all rights to which Employee is otherwise entitled under this
Agreement.

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<PAGE>

     7.7(a) Employee may terminate his employment hereunder for good reason. For
purposes of this Agreement, "good reason" shall mean (A) a failure by the
Employer to comply with any material provision of this Agreement, which failure
has not been cured within ten (10) days after a notice of such noncompliance has
been given by Employee to the Employer, or without Employee's express written
consent, the assignment to Employee of any duties inconsistent with Employee's
positions, duties, responsibilities and status with the Employer; (B) subsequent
to a change in control of the Employer as defined in Section 7.7(b) hereof and
without Employee's express written consent, the assignment to Employee of any
duties inconsistent with Employee's positions, duties, responsibilities and
status with the Employer immediately prior to a change in control of the
Employer, or a change in Employee's reporting responsibilities, titles or
offices as in effect immediately prior to a change in control of the Employer,
any removal of Employee from, or any failure to re-elect Employee to, any of the
positions held by Employee, except in connection with a termination of
employment for just cause, disability, death or retirement or pursuant to
Sections 7.1 or 7.5 hereof, a reduction by the Employer in Employee's annual
salary as in effect immediately prior to a change in control or as the same may
be increased from time to time, or the requirement that Employee be relocated to
an office which is more than 25 miles from the current principal executive
office of the Employer, or the failure of the Employer to continue in effect any
bonus, benefit or compensation plan, life insurance plan, health and accident
plan or disability plan in which Employee is participating at the time of a
change in control of the Employer, or the taking of any action by the Employer
which would adversely affect Employee's participation in or materially reduce
Employee benefits under any of such plans unless specifically agreed by Employee
in writing; or (C) any purported termination of Employee's employment which is
not effected pursuant to a Notice of Termination satisfying the requirements of
paragraph (c) hereof (and for purposes of this Agreement, no such purported
termination shall be effective).

     (b) For purposes of this Agreement, a "change in control of the Employer"
shall mean a change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided that,
without limitation, such a change in control shall be deemed to have occurred if
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act in effect on the date first written above), other than the Employer
or any "person" who on the date hereof is a director or officer of the Employer,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Employer
representing 25% or more of the voting power of the Employer's then outstanding
securities (excluding Employer' ownership in the Bank), or (B) during any period
of two consecutive years during the term of this Agreement, individuals who at
the beginning of such period constitute the Board of Directors of the Employer
cease for any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of such period
has been approved in advance by directors representing at least two-thirds of
the directors then in office who were directors at the beginning of the period.

     (c) Any termination of Employee's employment by the Employer or by Employee
shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
dated notice which shall (i) indicate the specific termination provision in this
Agreement relied upon; (ii) set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated; (iii) specify a date of
termination, which shall be not less than thirty (30) nor more than ninety (90)
days after such Notice of Termination is given, except in the case of the
Employer's termination of Employee's employment for just cause pursuant to
Section 7.1 hereof, in which case the Notice of Termination may specify a date
of termination as of the date such Notice of Termination is given; and (iv) be
given in the manner specified in Section 8.3 hereof.

                                      -7-

<PAGE>

     (d) If Employee shall terminate his Employment for good reason pursuant to
subpart (B) of Section 7.7(a) hereof, or if Employee is terminated by the
Employer other than for just cause pursuant to Section 7.1 hereof and after a
change in control of the Employer as defined in Section 7.7(b) hereof, then in
lieu of any further salary payments to Employee for periods subsequent to the
date of termination, the Employer shall pay as severance to Employee a sum equal
to the greater of (i) two (2) times the average annual salary paid to Employee
for the five (5) years immediately preceding Employee's termination or such
fewer number of years as Employee shall have been employed by the Employer or
(ii) the payments owed to Employee for the remaining term of the Initial
Employment Period and the Renewal Periods. At the discretion of Employee, such
payment may be made in a lump sum within five (5) days of the date of
termination of Employee's employment or paid, on a pro rata basis, bi-weekly
during the greater of (A) thirty-six (36) months following Employee's
termination or (B) the remaining term of this Agreement. In addition to the
severance payment provided for in this paragraph, Employer shall, for one year
or until Employee obtains employment which provides substantially similar
benefits, provide Employee and anyone entitled to claim under or through
Employee with the benefits provided pursuant to Sections 3.6 and Section 4
hereunder and all benefits under any group hospitalization, health care plan,
dental care plan, life or other insurance or death benefit plan, or other
present or future similar group employee benefit plan or program of Employer for
which executive officers are eligible, to the same extent as if Employee had
continued to be an employee of Employer during such period and such benefits
shall, to the extent not paid under any such plan or program, be paid by
Employer. The foregoing payments and benefits shall be paid to Employee's
beneficiaries by testate or intestate succession in the event of Employee's
death during the period during which such payments and benefits are being
provided.

     (e) If Employee shall terminate his employment for good reason as defined
in Subpart (A) or (C) of Section 7.7(a) hereof or if this Agreement or the
employment of the Employee is terminated by the Employer for other than just
cause pursuant to Section 7.1 hereof prior to a change in control of the
Employer as defined in Section 7.7(b) hereof, then in lieu of any further salary
payments to Employee for periods subsequent to the date of termination, the
Employer shall pay as severance to Employee an amount equal to the product of
(A) Employee's current annual base salary in effect as of the date of
termination, multiplied by (B) the number of years (including partial years)
remaining in the Initial Employment Period and the Renewal Periods, such payment
to be made in substantially equal semimonthly installments on the fifteenth and
last days of each month, or if these days are non-business days, the immediately
preceding business day, commencing with the month in which the date of
termination occurs and continuing over a period of two years.

     (f) Employee shall not be required to mitigate the amount of any payment
provided for in paragraph (d) or (e) of this Section 7.7 by seeking other
employment or otherwise.

VIII. MISCELLANEOUS

     8.1 Anything to the contrary herein contained notwithstanding, the payment
or obligation to pay any monies, or granting of any rights or privileges to
Employee as provided in this Agreement shall not be in lieu or derogation of the
rights and privileges that Employee now has under any plan or benefit presently
outstanding.

     8.2 This Agreement may not be modified, changed, amended, or altered except
in a writing signed by the Employee or by his duly authorized representative and
by a duly authorized officer of the Employer.

     8.3 All notices given or required to be given herein shall be in writing or
sent by United States first-class certified or registered mail, postage prepaid,
to Employee (or to Employee's spouse or

                                      -8-

<PAGE>

estate upon Employee's death) at Employee's last-known address, and to the
Employer at their principal offices. All such notices shall be effective when
deposited in the mail in the manner specified in this Section 8.3. Either party
by a notice in writing may change or designate the place for receipt of all such
notices.

     8.4 No course of conduct between the Employer and Employee and no delay or
omission of the Employer or Employee to exercise any right or power given under
this Agreement shall: (i) impair the subsequent exercise of any right or power
or (ii) be construed to be a waiver of any default or any acquiescence in or
consent to the curing of any default while any other default shall continue to
exist, or be construed to be a waiver of such continuing default or of any other
right or power that shall theretofore have arisen; and every power and remedy
granted by law and by this Agreement to any party hereto may be exercised from
time to time and as often as may be deemed expedient. All such rights and powers
shall be cumulative to the fullest extent permitted by law.

IX. SUCCESSORS, NON-ASSIGNABILITY OF THE AGREEMENT

     9.1 This Agreement shall inure to the benefit of and be binding upon
Employee and, to the extent applicable, his heirs, assigns, executors, and
personal representatives and the Employer, their successors and assigns,
including, without limitation, any person, partnership, or corporation which may
acquire all or substantially all of the Employer's assets and business, or with
or into which the Employer may be consolidated or merged, and this provision
shall apply in the event of any subsequent merger, consolidation, or transfer.

     9.2 This Agreement is personal to each of the parties and none of the
parties may assign or delegate any of its rights or obligations under this
Agreement without the prior written consent of the other parties.

X. APPLICABLE LAW

     10.1 This Agreement shall be governed in all respects and be interpreted by
and under the laws of the State of New Jersey, except to the extent that such
law may be preempted by applicable Federal law, including regulations, opinions
or orders duly issued by the FRB ("Federal Law"), in which event this Agreement
shall be governed and be interpreted by and under Federal Law.

                     (The next page is the signature page.)

                                      -9-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the 15th day of May, 1998.

WITNESS:                                        THE BANK OF THE SOMERSET HILLS
                                                      (in formation)

------------------------------                  By:
                                                   ----------------------------
                                                     Dennis C. Longwell
                                                     President

WITNESS:

-------------------------------                    ----------------------------
                                                     Gerard Riker

                                      -10-

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