Employment Agreement

Exhibit 10.16

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT entered into as of February 22, 2005, by and between 1ST CONSTITUTION BANCORP , a New Jersey corporation having its principal place of business at 2650 Route 130 North, Cranbury, New Jersey 08512 (the " Employer" ), and ROBERT F. MANGANO , residing at 11 Sutton Way, Washington Township, New Jersey 07675 (the " Employee" ).

WHEREAS, the Employee has heretofore been employed as the President of the Employer and 1st Constitution Bank, a New Jersey commercial bank (the " Bank" ), a wholly-owned subsidiary of the Employer;

WHEREAS, the Employer and the Employee are parties to an Employment Agreement entered into as of April 22, 1999 (the " Former Employment Agreement" ), and

WHEREAS, the parties desire by this writing to set forth their intentions with respect to the employment relationship between the Employee and the Employer and replace the Former Employment Agreement.

NOW, THEREFORE, it is AGREED as follows:

1.

Employment; Duties.

a. Employment . The Employer hereby employs the Employee, and the Employee hereby accepts employment by the Employer, as the President and Chief Executive Officer of the Employer. The Employee also agrees to serve as President and Chief Executive Officer of the Bank and a Director of the Employer and the Bank if elected to such positions, and the Employer agrees to include the Employee on management' s slate of directors for the Bank and the Employer.

b. Duties . Subject to the direction of the Board of Directors of the Employer (the " Board" ), the Employee shall have responsibility for the general management and control of the business and affairs of the Employer and its subsidiaries and shall perform all duties and shall have all powers which are commonly incident to the offices of President and Chief Executive Officer or which, consistent therewith, are delegated to him by the Board. Such duties include, but are not limited to, (1) managing the day-to-day operations of the Employer and the Bank, (2) managing the efforts of the Employer and the Bank to comply with applicable laws and regulations, (3) promotion of the Bank and its services, (4) supervising employees of the Employer and the Bank, (5) providing prompt and accurate reports to the Board regarding the affairs and condition of the Employer and its subsidiaries, and (6) making recommendations to the Board concerning the strategies, capital structure, tactics, and general operations of the Employer and its subsidiaries.

2. Base Compensation . The Employer agrees to pay the Employee so long as he is employed pursuant to this Agreement a base salary at the total rate of Three Hundred Thirty Thousand Dollars ($330,000) per annum commencing with the Commencement Date (as defined below) or at such higher rate as the Board may thereafter establish (the " Base Salary" ). The Base Salary shall be payable on the same schedule as salaries of other executive officers of the Employer are paid. Once increased, the Employee' s Base Salary may not thereafter be decreased. The Employer will pay the Employee the Base Salary for so long as the Employer is an employer of the Employee hereunder. The Commencement Date shall be January 1, 2005.

3. Term . The Employee' s employment by the Employer pursuant to this Agreement is for the period commencing on the Commencement Date and ending thirty-six (36) months thereafter or on such earlier date as is determined in accordance with Sections 10 and 12 of this Agreement or such later date as provided herein. On the first anniversary of the Commencement Date and on each successive anniversary of such date thereafter the term of this Agreement shall be extended for one additional year, unless this Agreement is sooner terminated as provided in Sections 10 and 12 unless either the Board or the Employee advises the other, in writing no less than ninety (90) days prior to any anniversary of the Commencement Date that this Agreement will no longer be extended; provided, however, that the term of this Agreement shall end on the sixty-fifth (65) birthday of the Employee. Notwithstanding the foregoing, in the event of a Change of Control, the date the Change of Control occurs shall become the Commencement Date for all purposes thereafter, and each Change of Control thereafter shall result in a new Commencement Date on the date of the latest Change of Control.


4.

Equity Participation.

The Employee will participate in the Employer' s stock equity plans on at least an annual basis at levels appropriate for the President and Chief Executive Officer of the Employer.

5.

Cash Bonuses .

The Employer will pay the Employee a cash bonus within ninety (90) days after the end of each calendar year. The amount of the bonus will be determined by the compensation committee of the Board based upon the profit plan of the Employer developed by the Employee and approved by the Board prior to the calendar year with respect to which the bonus is payable. The bonus amount shall be a sliding scale for achieving the profit plan at various levels up to fifty percent (50%) of the Base Salary.

6.

Other Benefits .

a. Participation in 401(k), Medical Plans, Insurance Plans and Other Benefits . The Employee shall be entitled to participate in the employee benefit plans that the Employer or the Bank maintains from time to time for the benefit of its employees and which include its executive employees relating to (i) 401(k) benefits, (ii) medical insurance and/or the reimbursement of uninsured medical expenses commencing after the date of employment of the Employee by the Bank , (iii) group term life insurance benefits (for which the current death benefit applicable to the Employee will be twice the Base Salary), (iv) group disability benefits and (v) the 1st Constitution Bancorp Supplemental Executive Retirement Plan. This provision shall not preclude the Employer or the Bank from any amendment to, or termination of, any such plan so long as the total scope and value of the benefits is not materially reduced after the date of this Agreement. The Employer will consider, but does not commit itself to adopt, a three percent (3%) or higher match up to six percent (6%) of Base Salary under its 401(k) plan.

b. Expenses . The Employee shall be entitled to be reimbursed for all reasonable out-of-pocket business expenses which he shall incur in connection with his rendition of services under this Agreement upon substantiation of such expenses in accordance with applicable policies of the Employer. The Employer shall provide the Employee with (i) the use for business purposes at no cost to him of a late-model mid-sized automobile and (ii) membership in the Forsgate Country Club or its equivalent.

c. Moving Expenses . The Employer will reimburse the Employee for reasonable moving costs in connection with the Employee' s relocation from his current residence to the market area of the Bank.

7.

Loyalty.

a. Devotion to Performance . During the period of his employment hereunder and except for illnesses, reasonable vacation periods, and reasonable leaves of absence, the Employee shall devote all his full business time, attention, skill, and efforts to the faithful performance of his duties hereunder. The phrase " full business time" as used herein means that the Employee cannot be gainfully employed in any other position or job and that the time devoted to the Employer shall be at least that amount of time usually devoted to like companies by similarly situated executive officers. During the term of his employment under this Agreement, the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Employer or its subsidiaries.

b. Investments . Nothing contained in this Section 7 shall be deemed to prevent or limit the Employee' s right to invest in the capital stock or other securities of any business dissimilar from that of the Employer or, solely as a passive or minority investor, in any business.

8.

Standards.

a. General . The Employee shall perform his duties under this Agreement in accordance with such reasonable standards as the Board may establish from time to time. The Employer will provide the Employee with working facilities and staff customary for similarly situated executive officers and necessary for him to perform his duties.

b. Written Employment Objectives . During the term of this Agreement, the Employee will submit annually lists of his employment objectives to the Board. Such objectives will promptly thereafter be discussed, reasonably modified and agreed upon in writing by the Employee and the Board. The Employee shall thereafter use reasonable efforts to achieve such agreed upon written employment objectives (the " Written Employment Objectives" ), unless modified with the consent of the Board.


9. Vacation . At such reasonable times as the Employee' s work load and the Employer' s business and staffing needs shall permit, consistent with the Employer' s safe and sound operations, , the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment with respect to the Employer under this Agreement, all such voluntary absences to count as vacation time, provided that:

a. Annual Vacation . The Employee shall be entitled to an annual vacation of twenty (20) days to be taken in accordance with such policies as the Board may periodically establish for senior management employees of the Employer.

b. No Additional Compensation . The Employee shall not receive any additional compensation from the Employer on account of his failure to take a vacation, and the Employee shall not accumulate unused vacation from one fiscal year to the next, except in either case to the extent authorized by the Board.

10. Termination and Termination Pay . The Employer may terminate the Employee' s employment hereunder at any time and for any reason and nothing herein shall be interpreted to circumscribe that right; however, the parties agree that differing financial obligations and entitlements shall pertain to various types of termination as described in this Agreement.

a. Death . Employment under this Agreement shall terminate upon the Employee' s death during the term of this Agreement, in which event the Employee' s estate shall be entitled to receive the Base Salary due the Employee through the last day of the calendar month in which his death occurred plus any appropriate cash bonus prorated to the date of termination.

b. Disability . Employment may be terminated hereunder upon the Board' s determination that the Employee is suffering a Disability. For purposes of this Agreement, " Disability" means a physical or mental infirmity which impairs the Employee' s ability to substantially perform his duties under this Agreement for a period of one hundred eighty (180) days during a three hundred sixty-five (365) consecutive day period and which results in the Employee' s becoming eligible for long-term disability benefits under the Employer' s long-term disability plan (or, if the Employer does not have such a plan in effect, which impairs the Employee' s ability to substantially perform his duties under this Agreement for any period of one hundred eighty (180) days, whether consecutive or not, within any twelve (12) month period of his ...