YARDVILLE NATIONAL BANCORP
EXHIBIT 10.3
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<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>


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                               EMPLOYMENT CONTRACT

This AGREEMENT is made effective as of this thirty-first day of January, 2001 by
and between THE YARDVILLE NATIONAL BANCORP (the "Holding Company"), a
corporation organized under the laws of the State of New Jersey, and Stephen F.
Carman (the "Officer").

                                    RECITALS

         WHEREAS, the Holding Company desires to employ and retain the services
of the Officer for the period provided in this Agreement; and

         WHEREAS, the Officer is willing to serve in the employ of the Bank on
a full-time basis for said period;

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereto agree as follows:

5.       POSITION AND RESPONSIBILITIES

         During the period of his employment hereunder, the Officer shall serve
as Executive Vice President and Chief Financial Officer of the Yardville
National Bank (the "Bank") reporting to the President & CEO of the Bank.

6.       TERMS AND DUTIES

         (C) The period of the Officer's employment agreement shall commence as
of January 31, 2001 and shall continue for a period of twenty-four (24) full
calendar months thereafter, unless terminated by the Bank on account of death,
disability or cause (as herein defined). This Agreement is subject to approval,
for continuation, by the Board of Directors of the Yardville National Bancorp,
at the conclusion of each contract period. Renewals shall be on the same terms
and conditions as set forth herein, except for such modification of compensation
and benefits as may hereafter be agreed upon between the parties hereto from
time to time.


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         (D) During the period of employment, the Officer shall devote full time
and attention to such employment and shall perform such duties as are
customarily and appropriately vested in the Executive Vice President and Chief
Financial Officer of a commercial bank.

7.       DEFINITIONS

         For purposes of the Agreement,

         (E) "Cause" means any of the following:

             (v) the willful commission of an act that causes or that probably
             will cause substantial economic damage to the Bank or substantial
             injury to the Bank's business reputation; or,

             (vi) the commission of an act of fraud in the performance of the
             Officer's duties; or

             (vii) a continuing willful failure to perform the duties of the
             Officer's position with the Bank; or

             (viii) the order of a bank regulatory agency or court requiring the
             termination of the Officer's employment.

         (F) "Change in Control": means any of the following:

             (iv) the acquisition by any person or group acting in concert of
             beneficial ownership of forty percent (40%) or more of any class of
             equity security of the Bank or the Bank's Holding Company, or

             (v) the approval by the Board, and appropriate regulatory
             authorities of the sale of all or substantially all of the assets
             of the Bank or Holding Company; or,

             (vi) the approval by the Board and appropriate regulatory
             authorities of 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) or (ii) above.


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         (G) "Disability" means a mental or physical illness or condition
rendering the Officer incapable of performing his normal duties for the Bank.

         (H) "Willfulness" means an act or failure to act done not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Bank.

8.       COMPENSATION AND REIMBURSEMENT

         (F) During the period of employment, the Bank shall pay to the Officer
an annual salary of not less than $150,000.00, in the first year of the contract
period and salary increase consideration of 4% to 5%, as determined by Bank
Management, in the second year of the contract period; which salary shall be
paid in bi-weekly installments.

Such salary shall be reviewed by the Board or a duly appointed committee thereof
at least annually and any adjustments in the amount of salary on said review
shall be fixed by the Board from time to time.

         (G) The Officer shall be entitled to participate in or receive benefits
under any retirement plan, pension plan, medical coverage or any other employee
benefit plan or prerequisite arrangement currently available or which may
hereafter be adopted by the Bank for its senior executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Nothing paid to the
Officer under any such plan or arrangement will be deemed to be in lieu of other
compensation to which the Officer is entitled under this Agreement.

         (H) The Officer shall be provided by the Bank with an automobile for
his individual use.

         (I) In addition to the salary provided for under Section 4:

             (iii)   The Bank shall pay for all reasonable travel and other
                     reasonable expenses incurred by the Officer in
                     performing his obligations under this Agreement.


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9.       TERMINATION FOR CAUSE

         (D) The Officer shall not have the right to receive compensation or
other benefits provided hereunder for any period after termination for Cause,
except to the extent that Officer may be legally entitled to participate by
virtue of COBRA or any other State or Federal Law concerning employee rights to
benefits upon termination.

10.      TERMINATION BY THE OFFICER

         (A) In the event of the Officer's voluntary termination, the Officer
shall not have the right to receive compensation or benefits as provided
hereunder after such date of termination, except to the extent that the Officer
may be legally entitled to participate by virtue of COBRA or any other State of
Federal law concerning employee rights to benefits upon termination.

11.      CHANGE IN CONTROL

         (B) In the event that within three (3) years after a Change in Control
(as herein defined), the Officer's employment is terminated by the Bank, other
than for death, disability or Cause, the Officer shall be entitled to receive
three (3) years' salary at the annual salary currently being paid, which payment
shall be made in a lump sum promptly after the occurrence of such termination.

         (B) The Officer will have the option within six (6) months after a
Change in Control (as herein defined), to elect to resign his position. If the
Officer's voluntary departure is for other than death, disability or cause the
Officer shall be entitled to receive two (2) years' salary at an annual salary
currently being paid, which payment shall be made in a lump sum promptly after
the occurrence of such voluntary resignation.

12.      TERMINATION UPON DISABILITY

         (A) In the event that the Officer experiences a Disability during the
period of his employment, his salary shall continue at the same rate as was in
effect on the day of the occurrence of such Disability, reduced by an concurrent
disability benefit payments provided under disability insurance maintained by
the Bank. If such Disability continues for a period of six (6) consecutive
months, the Bank at its option may thereafter, upon written notice to the
Officer or his personal representative, terminate the Officer's employment with
no further notice.


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13.      GOVERNING LAW

         This Agreement and the other obligations of the parties hereto shall be
interpreted, construed and enforced in accordance with the laws of the State of
New Jersey.

14.      ENTIRE AGREEMENT

         This instrument contains the entire agreement of the parties. It may
not be changed orally, but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.

         IN WITHNESS WHEREOF, the parties have hereunto executed this Agreement
on the 31st day of January, 2001.


ATTEST:                                           YARDVILLE NATIONAL BANCORP



------------------------------                 ---------------------------------
                                                         Patrick M. Ryan
                                                         President/CEO

WITNESS



------------------------------                ---------------------------------
                                                    Stephen F. Carman
                                                Executive Vice President
                                                 & Chief Financial Officer
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