EXHIBIT
10.2
June
6, 2007
Mr.
Patrick M. Ryan
Yardville
National Bancorp
2465
Kuser Road
Hamilton,
New Jersey 08690
Dear
Patrick:
In
connection with the anticipated merger (the
“Merger”) by and between The PNC Financial
Services Group, Inc. (the “Parent”) and Yardville
National Bancorp (the “Company”) as contemplated
by the Agreement and Plan of Merger, dated even with the date
hereof, by and among the Parent and the Company (the
“Merger Agreement”), the Company, PNC Bank,
National Association (“PNC Bank”), and you hereby
enter into this Consulting, Non-Competition and Retention
Agreement (this “Agreement”).
The
parties hereto agree and acknowledge that Section 9 of this
Agreement shall become immediately effective upon the
execution of this Agreement and all other provisions of this
Agreement shall become effective only as of the Effective Time
(as defined in the Merger Agreement). In the event
that the Effective Time does not occur for any reason, this
Agreement shall be deemed null and void ab initio and
of no force and effect, and the Employment Agreement between
you, the Company and Yardville National Bank, a subsidiary of
the Company, dated as of August 20, 2004 (the “Prior
Agreement”) shall be reinstated effective
immediately.
1.
Consulting Arrangement . PNC Bank shall engage your
services as a consultant on the terms and conditions set forth in
this Agreement. The term of this arrangement shall be
for a period of one year commencing on the date on which the
Effective Time occurs (the “Effective Date”) and ending
on the first anniversary of the Effective Date, or such earlier
date as provided in Section 5 below (the “Consulting
Period”).
2.
Services . You have agreed to provide consulting
services to PNC Bank and its affiliates (as used herein,
“affiliates” includes PNC Bank’s affiliates and
subsidiaries) during the Consulting Period as described herein (the
“Services”). Your Services will include the
following: transition with the Company’s Board of
Directors, and assistance in retaining relationships with those
Board members as designated by PNC Bank; assistance in maintaining
an ongoing satisfactory business and personal relationship with
customers and current and past executives of the Company;
assistance in meeting customers and/or centers of influence to
provide for continuity in the introduction of PNC Bank and its
affiliates to the Hamilton, New Jersey area; advice on the
appropriate civic involvement for PNC Bank and its affiliates and
executives; and other matters as they may
arise. It is acknowledged that the Services will not
require a full-time commitment from you and you shall perform the
Services on a part-time basis, as and when reasonably requested by
PNC Bank from time to time.
3.
Independent Contractor Status . You shall perform
the Services as an independent contractor, and not as an employee,
agent or representative of PNC Bank or any of its
affiliates. Unless authorized in writing by PNC Bank,
you shall not have the power or authority to act on behalf of, or
bind in any way, PNC Bank or any of its
affiliates. Because the Services will be performed by
you as an independent contractor and not as an employee of PNC
Bank, you understand and agree that you are not eligible by virtue
of this Agreement to participate in any of PNC Bank’s
employee benefit plans or programs. (This Agreement does
not, however, circumvent any other legal or contractual rights that
you may have to such participation as a former employee of the
Company.) In the unlikely event that this consulting
arrangement is reclassified as Bank employment by any governmental
agency or court, you further agree that you will not seek to
participate in or benefit from any of PNC Bank’s employee
benefit plans or programs as a result of such
reclassification.
4.
Fees.
(a)
Consulting Fees . During the Consulting Period, you
shall bill PNC Bank and PNC Bank will pay to you a monthly
consulting fee of $20,000 (which is a total of $240,000 for the
Consulting Period) (“Consulting Fees”). In
addition to the Consulting Fee, the Company will reimburse you for
reasonable travel and other out-of-pocket expenses incurred by you
in carrying out your duties under this Agreement in accordance with
the applicable expense reimbursement policies of PNC Bank and its
affiliates.
(b)
Settlement of Prior Agreement; SERP. On January 2,
2008, subject to your execution and non-revocation prior to
December 20, 2007 of a release substantially in the form attached
hereto as Exhibit A (the “Release”), PNC Bank will pay
you (i) $2,260,000 in full settlement of any and all obligations
and liabilities under the Prior Agreement and in consideration for
the restrictive covenants contained herein and (ii) $4,026,000 in
full settlement of any and all obligations and liabilities under
any non-qualified deferred compensation plans, programs, or
arrangements of PNC Bank, the Company or their respective
affiliates, including without limitation the Company’s Second
Amended and Restated Supplemental Executive Retirement Plan as in
effect as of the Effective Date. For the avoidance of
doubt, and notwithstanding anything herein to the contrary, the
payments set forth in this Section 4(b) shall not be taken into
account in computing any benefits under any plan, program or
arrangement of PNC Bank, the Company or their respective
affiliates.
5.
Termination of Consulting Arrangement . The parties
hereto expect that this consulting arrangement will continue for
the full term of the Consulting Period. Either you or
PNC Bank may, however, choose to end the arrangement prior to the
end of the Consulting Period.
(a)
Termination by PNC Bank . PNC Bank may
provide written notice and terminate the consulting
arrangement in the event that you take any action or omission
constituting “Cause”, which for purposes of this
Agreement shall mean in the good faith determination of PNC
Bank: (i) your gross negligence or willful misconduct
with respect to your performance of the Services;
(ii) your commission of fraud against PNC Bank or its
affiliates or its customers, clients or employees, (iii) your
commission of any theft or misappropriation of the assets or
business opportunities of PNC Bank or its affiliates, (iv) any
breach of your fiduciary
duty
owed to PNC Bank or its affiliates, (v) your commission of any
felony or act of moral turpitude, in either case, which could
reasonably be expected to have a material adverse effect on
PNC Bank or its affiliates (vi) a material violation by you
the Parent’s Code of Business Conduct and Ethics or its
Employee Conduct Policies, unless not reasonably applicable to
you as an independent contractor; (vii) a material breach of
your obligations contained in this Agreement, including your
intentional failure or refusal to perform the Services; or
(viii) the entry of any order against you by any
government body having regulatory authority with respect to
the business of PNC Bank or its affiliates for a violation by
you of any rule or regulation governing the business of PNC
Bank or its affiliates; provided, however , that
prior to being given written notice of the termination of your
engagement for Cause under (vi) or (vii) hereof, if curable,
you shall be given thirty days’ advance notice that PNC
Bank or its affiliates believe you are in violation of such
provision(s), during which time you may seek to cure your acts
and/or omissions and to the extent that such acts or omissions
are cured within such period, such acts or omissions shall not
constitute Cause. If the Consulting Period is
terminated by PNC Bank for Cause, PNC Bank’s obligation
to pay all consulting fees hereunder will cease immediately
after the cure period, if any, has ended without an effective
cure. In the event that the Consulting Period is
terminated by PNC Bank other than for Cause, PNC Bank will be
obligated to pay you the remainder of the unpaid Consulting
Fees for the full Consulting Period (assuming no such
termination had occurred) within thirty days after such
termination.
(b)
Termination by Consultant . You may
provide notice and terminate the Consulting Period for
“Good Reason” in the event that PNC Bank fails to
pay any of the amounts set forth in this Agreement when due;
provided, however , that PNC may cure within ten (10)
business days following the receipt of notice from you
outlining such breach. If you terminate the
Consulting Period for Good Reason, PNC Bank will be obligated
to pay you the remainder of the unpaid Consulting Fees for the
full Consulting Period (assuming no such termination had
occurred) within thirty days after such
termination. In the event that you terminate the
Consulting Period without Good Reason, PNC Bank’s
obligation to pay all consulting fees hereunder will
immediately cease.
(c)
Automatic Termination of the Agreement
. The engagement shall terminate automatically upon
your death or Disability. “Disability”
occurs if you are incapable of performing the Services for a
period of six months or more during the Consulting
Period. Termination of the engagement by reason of
Disability shall be communicated to you by written notice, and
shall be effective on the 30th day after receipt of such
notice by you (the “Disability Effective Date”),
unless you return to full-time performance of your duties
before the Disability Effective Date. If
termination of the consulting arrangement occurs for either of
these reasons, PNC Bank’s obligation to pay any
Consulting Fees will cease with the beginning of the first
full calendar month after your death or as of the Disability
Effective Date, whichever is applicable.
(d)
Mutual Agreement . You and PNC Bank may
mutually agree in writing at any time to terminate the
engagement, and the terms of that disengagement.
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6.
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Restrictive Covenants and Confidentiality .
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(a)
Conflicts of Interest . You and PNC Bank
have entered into this Agreement in significant part because
of your knowledge, experience and expertise pertaining
to
the
Company and its affiliates. During your employment
by the Company you have had direct and indirect access to a
significant amount of confidential and proprietary information
of the Company and its customers that is being acquired by the
Parent and its affiliates. In addition, during the
Consulting Period, in the performance of the Services you will
have access to and will accumulate significant knowledge of
the confidential and proprietary information of PNC Bank and
its affiliates and their customers. You agree that
it is reasonable and necessary to protect the interest of PNC
Bank and its affiliates in such confidential and proprietary
information, and that to do so you promise that you will not,
during the Consulting Period and for one year thereafter (the
“Restricted Period”), engage in any employment,
enterprise or activity that would present a real or perceived
conflict of interest with your obligations to advise PNC Bank
and its affiliates, assist them in growing their presence and
business in the Hamilton, New Jersey metropolitan area and/or
protecting, preserving and avoiding even the inadvertent use
or disclosure, or the perception of your use or disclosure, of
PNC Bank’s, the Company’s or their respective
affiliates’ confidential and/or proprietary
information.
(b)
Nonsolicitation of Employees/Clients . You
agree that during the Restricted Period you shall not,
directly or indirectly, either for your own benefit or purpose
or for the benefit or purpose of any person or entity other
than PNC Bank or its affiliates, solicit, call on, do business
with, or actively interfere with any of their relationships
with, or attempt to divert or entice away, any person or
entity that you should reasonably know (i) is or was a
customer for which PNC Bank or its affiliates provided
services during or as of the end of the Consulting Period, or
(ii) is or was, as of the end of the Consulting Period,
considering retention of PNC Bank and/or any of its affiliates
to provide services.
(c)
No-hire . You agree that during the
Restricted Period you shall not, directly or indirectly,
either for your own benefit or purpose or for the benefit or
purpose of any person or entity other than PNC Bank or its
affiliates, employ or offer to employ, call on, or actively
interfere with PNC Bank’s or its affiliates’
relationship with, or attempt to divert or entice away, any of
their employees, nor shall you assist any other person or
entity in such activities; provided, however, that the
covenant contained herein shall not prohibit you from having
an ownership interest in a person or entity at which your son,
Patrick L. Ryan is a director, officer or
employee.
(d)
Non-competition . You agree that during
the Consulting Period and the one-year period thereafter, you
shall not serve as an officer, director or employee of any
bank holding company, bank, savings association, savings and
loan holding company, or mortgage company which offers
products or services competing with those offered by the
Parent or PNC Bank from any office within fifty (50) miles
from the main office or any branch of PNC Bank.
(e)
Confidentiality . You shall hold for the
benefit of PNC Bank and its affiliates and shall not disclose
to others, copy, use, transmit, reproduce, summarize, quote or
make commercial, directly or indirectly, any secret or
confidential information, knowledge or data relating to PNC
Bank and its affiliates and their businesses (including
without limitation information about their respective clients
and customers and their proprietary knowledge and trade
secrets, software, technology, research, secret data, customer
lists, investor lists, business methods, business plans,
training materials, operating procedures or programs, pricing
strategies, employee lists and other business information)
that you have obtained during your engagement
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