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Exhibit
10B.5
AMENDED AND
RESTATED
CHANGE-IN-CONTROL
AGREEMENT
ROBERT E.
FARRELL
THIS AMENDED AND RESTATAED
CHANGE IN CONTROL AGREEMENT (this “ Agreement
”), is made as of this 11 th day of February, 2008, among VALLEY NATIONAL BANK (“
Bank ”), a national banking association with its
principal office at 1455 Valley Road, Wayne, New Jersey, VALLEY
NATIONAL BANCORP (“ Valley ”), a New Jersey
corporation which maintains its principal office at 1455 Valley
Road, Wayne, New Jersey (Valley and the Bank collectively are the
“ Company ”) and ROBERT E. FARRELL (the “
Executive ”).
BACKGROUND
WHEREAS, the Executive has
been continuously employed by the Bank for at least three full
years;
WHEREAS, the Executive has
worked diligently in the Executive’s position in the business
of the Bank and Valley;
WHEREAS, the Boards of
Directors of the Bank and Valley (either one, the “ Board
of Directors ” and, together, the “ Company
Boards ”) believe that the future services of the
Executive are of great value to the Bank and Valley and that it is
important for the growth and development of the Bank that the
Executive continue in the Executive’s position;
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WHEREAS, if the Company
receives any proposal from a third person concerning a possible
business combination with, or acquisition of equities securities
of, the Company, the Company Boards believe it is imperative that
the Company and the Company Boards be able to rely upon the
Executive to continue in the Executive’s position, and that
they be able to receive and rely upon the Executive’s advice,
if they request it, as to the best interests of the Company and its
shareholders, without concern that the Executive might be
distracted by the personal uncertainties and risks created by such
a proposal;
WHEREAS, to achieve that
goal, and to retain the Executive’s services prior to any
such activity, the Company Boards and the Executive have agreed to
enter into this Agreement to govern the Executive’s
termination benefits in the event of a Change in Control of the
Company, as hereinafter defined.
NOW, THEREFORE, to assure the
Company that it will have the continued dedication of the Executive
and the availability of the Executive’s advice and counsel
notwithstanding the possibility, threat or occurrence of a bid to
take over control of the Company, and to induce the Executive to
remain in the employ of the Company, and for other good and
valuable consideration, the Company and the Executive, each
intending to be legally bound hereby agree as follows:
1.
Definitions
a. Base Salary .
“ Base Salary ”, as used in Section 9
hereof, means the annual cash base salary (excluding any bonus and
the value of any fringe benefits) paid to the Executive at the time
of the termination of employment unless such amount has been
reduced after a Change in Control, in which case such amount shall
be the highest base salary in effect during the 18 months prior to
the Change in Control.
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b. Cause . For
purposes of this Agreement “ Cause ” with
respect to the termination by the Company of Executive’s
employment shall mean (i) willful and continued failure by the
Executive to perform the Executive’s duties for the Company
under this Agreement after at least one warning in writing from the
Board of Directors identifying specifically any such failure;
(ii) the willful engaging by the Executive in misconduct which
causes material injury to the Company as specified in a written
notice to the Executive from the Board of Directors; or
(iii) conviction of a crime, other than a traffic violation,
habitual drunkenness, drug abuse, or excessive absenteeism other
than for illness, after a warning (with respect to drunkenness or
absenteeism only) in writing from the Board of Directors to refrain
from such behavior. No act or failure to act on the part of the
Executive shall be considered willful unless done, or omitted to be
done, by the Executive not in good faith and without reasonable
belief that the action or omission was in the best interest of the
Company.
c. Change in Control .
“ Change in Control ” means any of the following
events: (i) when Valley or a Valley Subsidiary acquires actual
knowledge that any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than an affiliate of
Valley or a Valley Subsidiary or an employee benefit plan
established or maintained by Valley, a Valley Subsidiary or any of
their respective affiliates, is or becomes the beneficial owner (as
defined in Rule 13d-3 of the Exchange Act) directly or indirectly,
of securities of Valley representing more than twenty-five percent
(25%) of the combined voting power of Valley’s then
outstanding
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securities (a “
Control Person ”); (ii) upon the first purchase
of Valley’s common stock pursuant to a tender or exchange
offer (other than a tender or exchange offer made by Valley, a
Valley Subsidiary or an employee benefit plan established or
maintained by Valley, a Valley Subsidiary or any of their
respective affiliates); (iii) the consummation of (A) a
transaction, other than a Non-Control Transaction, pursuant to
which Valley is merged with or into, or is consolidated with, or
becomes the subsidiary of another corporation, (B) a sale or
disposition of all or substantially all of Valley’s assets or
(C) a plan of liquidation or dissolution of Valley;
(iv) if during any period of two (2) consecutive years,
individuals (the “ Continuing Directors ”) who
at the beginning of such period constitute the Board of Directors
of Valley (the “ Valley Board ”) cease for any
reason to constitute at least 60% thereof or, following a
Non-Control Transaction, 60% of the board of directors of the
Surviving Corporation; provided that any individual whose
election or nomination for election as a member of the Valley Board
(or, following a Non-Control Transaction, the board of directors of
the Surviving Corporation) was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director; or (v) upon a sale of
(A) common stock of the Bank if after such sale any person (as
such term is used in Section 13(d) and 14(d)(2) of the
Exchange Act) other than Valley, an employee benefit plan
established or maintained by Valley or a Valley Subsidiary, or an
affiliate of Valley or a Valley Subsidiary, owns a majority of the
Bank’s common stock or (B) all or substantially all of
the Bank’s assets (other than in the ordinary course of
business). For purposes of this paragraph: (I) Valley will be
deemed to have become a subsidiary of another corporation if any
other corporation (which term shall include, in addition to a
corporation, a limited liability company, partnership, trust, or
other organization) owns,
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directly or indirectly, 50
percent or more of the total combined outstanding voting power of
all classes of stock of Valley or any successor to Valley; (II)
“ Non-Control Transaction ” means a transaction
in which Valley is merged with or into, or is consolidated with, or
becomes the subsidiary of another corporation pursuant to a
definitive agreement providing that at least 60% of the directors
of the Surviving Corporation immediately after the transaction are
persons who were directors of Valley on the day before the first
public announcement relating to the transaction; (III) the
“ Surviving Corporation ” in a transaction in
which Valley becomes the subsidiary of another corporation is the
ultimate parent entity of Valley or Valley’s successor;
(IV) the “ Surviving Corporation ” in any
other transaction pursuant to which Valley is merged with or into
another corporation is the surviving or resulting corporation in
the merger or consolidation; and (V) “ Valley
Subsidiary ” means any corporation in an unbroken chain
of corporations, beginning with Valley, if each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
d. Continuously
Employed . “ Continuously employed ”, as
used in Section 9, means continuously employed by the Bank but
excludes any period of employment by a bank or financial
institution acquired by or merged into the Bank and excludes any
period of employment by the Bank if such period is separated from
the current employment with the Bank by a break in service (other a
break in service resulting solely from illness, disability or
family leave).
e. Contract Period .
“ Contract Period ” shall mean the period
commencing the day immediately preceding a Change in Control and
ending on the earlier of (i) the second anniversary of the
Change in Control or (ii) the death of the Executive. For the
purpose of this Agreement, a Change in Control shall be deemed to
have occurred at the date specified in the definition of
Change-in-Control.
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f. Exchange Act .
“ Exchange Act ” means the Securities Exchange
Act of 1934, as amended.
g. Good Reason . When
used with reference to a voluntary termination by Executive of the
Executive’s employment with the Company, “ Good
Reason ” shall mean any of the following, if taken
without Executive’s express written consent:
(1) The assignment to
Executive of any duties inconsistent with, or the reduction of
powers or functions associated with, Executive’s position,
duties, responsibilities and status with the Company immediately
prior to a Change in Control. A change in title or positions
resulting merely from a merger of the Bank or Valley into or with
another bank or company which does not downgrade in any way the
Executive’s powers, duties and responsibilities shall not
meet the requirements of this paragraph;
(2) A reduction by the
Company in Executive’s annual base compensation as in effect
immediately prior to a Change in Control or the failure to award
Executive annual increases in accordance herewith;
(3) A failure by the Company
to continue any bonus plan in which Executive participated
immediately prior to the Change in control or a failure by the
Company to continue Executive as a participant in such plan on at
least the same basis as Executive participated in such plan prior
to the Change in Control;
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(4) The Company’s
transfer of Executive to another geographic location more than 35
miles from the Executive’s present office location, except
for required travel on the Company’s business to an extent
substantially consistent with Executive’s business travel
obligations immediately prior to such Change in Control;
(5) The failure by the
Company to continue in effect any employee benefit plan, program or
arrangement (including, without limitation the Company’s
retirement plan, benefit equalization plan, life insurance plan,
health and accident plan, disability plan, deferred compensation
plan or long term stock incentive plan) in which Executive is
participating immediately prior to a Change in Control (except that
the Company may institute or continue plans, programs or
arrangements providing Executive with substantially similar
benefits); the taking of any action by the Company which would
adversely affect Executive’s participation in or materially
reduce Executive’s benefits under, any of such plans,
programs or arrangements; the failure to continue, or the taking of
any action which would deprive Executive, of any material fringe
benefit enjoyed by Executive immediately prior to such Change in
Control; or the failure by the Company to provide Executive with
the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control;
(6) The failure by the
Company to obtain an assumption in writing of the obligations of
the Company to perform this Agreement by any successor to the
Company and to provide such assumption to the Executive prior to
any Change in Control; or
(7) Any purported termination
of Executive’s employment by the Company during the term of
this Agreement which is not effected pursuant to all of the
requirements of this Agreement; and, for purposes of this
Agreement, no such purported termination shall be
effective.
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h. Pro-rata Bonus
Amount . “ Pro-rata Bonus Amount ”, as used
in Section 9, means an amount equal to a “portion”
of the highest cash bonus paid to the Executive in the three
calendar years immediately prior to the Change in Control. The
“portion” of such cash bonus shall be a fraction, the
numerator of which is the number of calendar months or part thereof
which the Executive has worked in the calendar year in which the
termination occurs and the denominator of which is 12.
2. Employment . The
Company hereby agrees to employ the Executive, and the Executive
hereby accepts employment, during the Contract Period upon the
terms and conditions set forth herein.
3. Position . During
the Contract Period the Executive shall be employed by the bank as
a Senior Officer, or such other corporate or divisional profit
center as shall then be the principal successor to the business,
assets and properties of the Company, with substantially the same
title and the same duties and responsibilities as before the Change
in Control. The Executive shall devote full time and attention to
the business of the Company, and shall not during the Contract
Period be engaged in any other business activity. This paragraph
shall not be
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