YARDVILLE NATIONAL BANCORP
EXHIBIT 10.20
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<TYPE>EX-10
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<FILENAME>ex10-20.txt
<DESCRIPTION>EXHIBIT 10.20
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                             YARDVILLE NATIONAL BANK
                      DIRECTORS DEFERRED COMPENSATION PLAN

          1. Effective Date. The Effective Date of the YARDVILLE NATIONAL BANK
DIRECTORS DEFERRED COMPENSATION PLAN (the "Plan") shall be January 1, 1995.

          2. Purpose and Definitions. (a) The purpose of this plan is to provide
eligible members of the Board of Directors ("Board Member") of the YARDVILLE
NATIONAL BANK ("Bank') with an opportunity to defer payment of certain portions
of their compensation, at. their election, in accordance with the provisions
hereof.

               (b) For purposes of this Plan, the following definitions shall
apply:

               (1) "Board Members" shall mean persons, other than employees of
YARDVILLE NATIONAL BANK ("Bank"), who constitute the Board of Directors of the
Bank and who, by electing to defer part or all of their Board Members' Eligible
Compensation, have elected to participate in this nonqualified deferred
compensation Plan.

               (2) "Committee" shall mean those members of the Board who shall
be responsible for the administration of the Plan.

               (3) "Eligible Compensation" shall include all fees payable to an
eligible Board Member but shall not include (i) any compensation payable to an
eligible Board Member in a form other than cash, or (ii) any retainer fee to any
eligible Board Member for services rendered during the last calendar quarter
preceding The effective date of this Plan. Eligible Compensation shall also mean
those fees payable to an eligible Board Member during a Plan Year for attendance
at a meeting of any Board or committees thereof, and all fees payable to such
eligible Board Member during such year by way of retainer for service as a
member or chairman of any Board or committees thereof, regardless of the number
of meetings attended.

               (4) Plan Year shall mean the calendar year.

          3. Deferral Elections. With respect to each Plan Year, an eligible
Board Member may elect to have payment of any part or all of his or her Eligible
Compensation for such year deferred, and to have payment of such portion made
under the terms of this Plan. Any such election shall be made in accordance with
the following rules:

               (a) A deferral election shall be made in writing, on a form
provided by the Bank for such purpose.


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               (b) In the election form, the eligible Board Member (i) shall
specify, by percentage (which must be an even multiple of the portion of his or
her Eligible Compensation that the eligible Board Member wishes to defer
hereunder (the amounts so deferred are hereinafter referred to as the eligible
Board Member's Deferred Amounts"), and (ii) shall specify, by percentage (which
must he art even multiple of 5%), the portions of the eligible Board Member's
deferred amounts that he or she wishes to have allocated, respectively, to an
account established for the eligible Board Member pursuant to Section 5.

               (c) An eligible Board Member's election to defer Eligible
Compensation for any Plan Year shall be filed with the Committee (i) by no later
than December 31st of the year preceding the calendar year for which the
eligible Board Member wishes to deter a portion or all of his or her Eligible
Compensation

               (d) Notwithstanding the provisions of paragraph (b) above, a
newly elected eligible Board Member may make an initial deferral election
hereunder with respect to Eligible Compensation for the Plan Year in which he or
she is first elected to serve as a member of the Board and, if so elected after
January 1st of such year, for the next following Plan Year, by filing his or her
election form with the Committee by no later than the last day of the year in
which he or she became an eligible Board Member. Any deferral election so made
shall be effective only with respect to Eligible Compensation earned for
services performed after the date on which the eligible Board Member's initial
deferral election has been filed with the Committee.

               (e) Any deferral election made by an eligible Board Member with
respect to his or her Eligible Compensation for a Plan Year, and any election
made hereunder as to the allocation of the deferred amounts for such year of his
or her Account, shall be irrevocable.

          4. Contributions by Yardville National Bank. (a) The Bank shell make a
contribution to a Board Member's Account equal to twenty-five percent (25%) of
such Board Member's deferral contribution, if he or she has elected to defer
part of his or her compensation pursuant to paragraph 3(a).

               (b)(1) An eligible Board Member who voluntarily resigns his or
her employment during the year shall receive his or her deferred Board Member's
fee with any earnings to the date of resignation.

               (2) A Board Member whose term in office is involuntarily
terminated other than for cause or who is granted a leave of absence during the
year shall receive his or her deferred Board Member's fee with any earnings to
the date of termination of employment.


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               (3) A Board Member whose term in office terminates due to
dismissal for cause, of which the Committee shall be the sole judge, shall lose
any right to receive a deferred fee or any earnings thereon under paragraph 3
which had not yet been paid to his or her account maintained under this Plan. An
eligible Board Member who acts or conducts himself in a manner inimical or in
any way contrary to the best interests of the Bank, of which the Committee shall
he the sole judge, shall lose his rights to earn out unearned deferred
compensation payments; except that no installment or amount paid or delivered to
the irrevocable trust established in conjunction with this Plan prior to the
date of the decision of the Bank shall be required to be returned to the Bank.

          5. Accounts. For each participating Board Member, there shall be
established on the books and records of the Bank, for bookkeeping purposes only,
an account to reflect the Board Member's interest under the Plan. The Account so
established for each Participant shall be maintained in accordance with the
following provisions:

               (a) The Account shall be credited, respectively, with amounts
equal to the portions of the Board Member's deferred amounts for each Plan Year
that the Board Member has elected under Section 3 to have allocated to his or
her Account. Such amounts shall be so credited as of the first day of the
calendar month following the month in which the amounts in question would have
been paid to the Board Member, had he or she not elected under Section 3 to
have payment of such amounts deferred under this Plan.

               (b) Each Board Member's Account shall be adjusted to reflect all
additional interest and earnings to be credited to such Account by determining
the percentage by which the value of the Board Member's Account for such month
exceeds, or is less than, the value of such Account, as of the valuation date
(which for this purpose shall be the last day of each month) for the immediately
preceding month and all payments made with respect to such account pursuant to
Section 6.

               (c) A Board Member's interest in his or her Account shall be
fully vested and nonforfeitable at all times.

               (d) Payment under this Plan and such other amounts arising out of
the administration of this Plan as the Bank may determine shall he charged to a
deferral reserve. Balances retained in the deferral reserve each year, except to
the extent otherwise directed by the Bank, shall be carried forward and be
available in a future year or years, if not otherwise paid to the irrevocable
trust pursuant to the terms of this Plan.


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          6. Payment of Account Balances. Payment with respect to a Board
Member's Account shall he made on Direction of the Committee from the
irrevocable trust established pursuant to Section 7 in accordance with the
following provisions:

               (a) The balance of a Board Member's Account shall become payable
upon the Board Member's ceasing to be a member of the Board, for any reason.

               (b) Except as otherwise provided in paragraph (c) below, payment
with respect to a Board Member's Account shall be made in the form of a lump
sum.

               (c) Each installment payment to he made with respect to a Board
Member's Account shall be made in cash, in an amount determined by dividing (i)
the balance of such Account determined to of the last day of the Plan Year
preceding the year in which such payment is to be made, by (ii) the number of
installment payments remaining to be made.

               (d) If a Board Member should die prior to retirement or before
receiving all payments required to be made hereunder with respect to his or her
Account, any payments remaining to he made at the date of the Board Member's
death shall be made to the Board Member's beneficiary as follows:

               (i) Payment with respect to the balance remaining in a Board
Member's Account shall be made in the form of a series of ten (10) annual
installments which shall be the actuarial equivalent of the projected benefit
for each eligible Board Member, The first such installment payment shall be made
on the last business day of the Plan Year in which the Board Member ceases to be
a member of any Board, and the remaining installments shall he made on the last
business day of each succeeding Plan Year.

               (ii) Subject to subparagraph (iii) below, in the event that a
Board Member shall die while serving as such for the Bank, or after his or her
retirement and prior to the time when all of the deferred compensation allocated
to his or her account shall have been paid, the Bank shall direct payment as
provided for in the preceding paragraph from the irrevocable trust to the Board
Member's designated beneficiary or beneficiaries, or if there be none then
living, then to the estate of the Board Member, of all of the deferred
compensation allocated to such deceased Board Member's Account and held in the
irrevocable trust pursuant to this Plan, unless the Committee and Board Member
otherwise agree in writing that such other payment schedule shall he made in
such amounts at such times and manner as the Bank and Board Member shall
determine after considering such facts and circumstances relating to the Board
Member and his beneficiaries as they deem appropriate. Each Board Member shall
notify the Bank in writing of the name and address of his primary and
alternative beneficiaries, which may be changed from time to time by the Board
Member by notice in writing to the Committee.


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               (iii) If a life insurance policy has been purchased on the life
of an Board Member and if such policy is held as an asset of the Plan
[irrevocable trust], the Bank shall receive, as a beneficiary, that portion of
the death benefit, if any, needed to pay the alternative minimum tax that is
imposed upon the receipt of such death benefit. The balance, if any, of the
death benefit shall be paid from the proceeds of the insurance to the Board
Member's beneficiary as specified in subparagraph (ii) above.

               (iv) Any payment made hereunder to the Board Member's beneficiary
shall he made as soon as practicable after the date of the Board Member's death.

               (e) if the Board Member's employment is terminated because of
disability while he is in the employ of the Bank, then the Board Member shall be
considered to have retired on the date of his having become disabled and
payments shall be made pursuant to subparagraph (b) above. A Board Member shall
be deemed to have become disabled for purposes of this subparagraph (d) if the
Bank shall find on the basis of satisfactory medical evidence (as determined by
the Bank) that the Board Member is totally disabled, mentally or physically, so
as to be prevented from engaging in further employment by the Bank in a position
essentially similar to that held by him prior to his disability and that such
disability will be permanent and continuous during the remainder of his life.

               (f) Notwithstanding any other provision of this Section 6 to the
contrary, payment with respect to any part or all of the Board Member's Account
balance may be made to the Board member on any date earlier than the date on
which such payment is to be made pursuant to such other provisions of this
Section 6 if (i) the Board Member requests such early payment and (ii) the
Committee, in its sole discretion, determines that such early payment is
necessary to help the Board Member meet an "unforeseeable emergency" within the
meaning of section 1.457- 2(h)(4) of the federal Income Tax Regulations. The
amount that may he so paid may not exceed the amount necessary to meet such
emergency.

               (g) There shall be deducted from the amount of any payment
otherwise required to he made under the Plan, all Federal, state and local taxes
required by law to be withheld with respect to such payment.



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          7. Establishment of Irrevocable Trust. Upon the receipt of a deferred
compensation contribution made pursuant to the terms of Section 3 above and
contributions made by the Bank pursuant to Section 4 above, such payments shall
be paid to the irrevocable trust established in conjunction with this Plan and
shall thereafter be governed pursuant to the terms of the Plan and the
irrevocable trust. Eligible Board Members' deferrals and Bank contributions for
any year shall be paid in cash to the irrevocable trust established by the Bank
and shall be credited with interest equal to the prime rate as established and
adjusted from time to time by the Bank from the date paid to the irrevocable
trust until the date paid to the Board Member.

          8. Amendment or Termination of Plan. While it is contemplated that
deferred compensation awards will be paid annually pursuant to Paragraph 3
hereof, the Bank shall have the right from time to time to modify or suspend
this plan.

          9. Alienation and Assignment of Benefits Under the Plan. The right of
the Board Member or any other person to the payment of deferred compensation or
other benefits under this Plan shall not he assigned, transferred, pledged or
encumbered except by will or by the laws of descent and distribution.

          10. Designation of Beneficiary. (a) Each participating Board Member
shall file with the Committee a written designation of one or more persons as
the beneficiary who shall be entitled to receive any amount, payable under the
Plan by reason of his or her death. A Board Member may, from time to time,
revoke or change his or her beneficiary designation without the consent of any
previously designated beneficiary by filing a new designation with the
Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall he effective unless received by the Committee prior to the
participating Board Member's death, and in no event shall it be effective as of
a date prior to such receipt. If, at the date of participating Board Member's
death, there is no designation of a beneficiary in effect for the Board Member
pursuant to the provisions of this Section 10, or if no beneficiary designated
by the Board Member in accordance with the provisions hereof survives to receive
any amount payable under the Plan by reason of the participating Board Member's
death, the Board Member's estate shall be treated as the beneficiary for
purposes of the Plan.



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               (b) If the Bank shall find chat any person to whom any payment is
payable under this Plan is unable to care for his affairs because of illness or
accident, or is a minor, any payment due (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee or other legal
representative) may he paid to the spouse, a child, a parent, or to any poison
deemed by the Committee to have incurred expense for such person otherwise
entitled to payment, in such manner and proportions as the Committee may
determine. Any such payment shall be a complete discharge of the liabilities of
the Bank under this Plan.

          11. Rights Conferred Under this Plan. Nothing contained herein shall
be construed as conferring upon the Board Member the right to continue in the
employ of the Bank as a Director or in any other capacity.

          12. Interpretation of Plan. The Committee shall have full power and
authority to interpret, construe and administer this Plan and the Committee's
interpretations and construction thereof, and actions hereunder, including any
valuation of an Board Member's deferred compensation account as held in the
irrevocable trust, or the amount or recipient of the payment to be made
therefrom, shall he binding and conclusive on all persons for all purposes. No
officer or Board Member of the Bank shall he liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan unless attributable to his own willful misconduct or gross negligence.

          13. Right to Bring Action. Any and all right of action by any Board
Member (past, present or future) against the Bank with respect to a payment of
under this Plan or with respect to an alleged violation of this Plan,
irrespective of the place where action may be brought, shall cease and be barred
by the expiration of three years (a) from the date of the act or omission in
respect of which such right of action arises or (b) from the date of final
determination of the respective bonus award or awards by the Bank, whichever
date is later.

          14. Administration of Plan. (a) The expenses of administering this
Plan shall be borne by the Bank and not charged against the Account of an
eligible Board Member.

               (b)(1) The Plan shall be administered by a Committee composed of
at least three Board members who shall be appointed by the Board of Directors
from among Board members who are not eligible Board Members. If at any time
there are less than three such Board members, additional members of the
Committee shall be appointed form among those Board members who have never
participated in the Plan, or, in the absence of any such Board Members, from
among any senior officers of the Bank or any of its affiliated companies. All
decisions, actions or interpretations of, the Committee under the Plan shall be
final, conclusive and binding upon all parties.


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               (2) No member of the Committee shall be personally liable by
reason of any contract or other instrument executed by such member or on his or
her capacity as a member of the Committee nor for any mistake of judgment made
in good faith, and the bank shall indemnify and hold harmless each member of the
Committee, and each employee, officer, director or trustee of the Bank or any of
its affiliated companies to whom any duty or power relating to the
administration or interpretation of the Plan may be delegated, against any cost
or expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Board of Directors) arising out
of any act or omission to act in connection with the Plan unless arising out of
such person's own fraud or bad faith.

          15. Change in Fiscal Year of Bank. In the event of a change in the
Bank's fiscal year, this plan shall apply, with pro rata adjustment in the
deduction for net capital, to any intermediate period not consisting of 12
months and shall then apply to each fiscal year following.

          16. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New Jersey.


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