Supplemental Executive Retirement Plan

Exhibit 10.1


1ST CONSTITUTION BANCORP

2005 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


ARTICLE I

Establishment of Plan

Effective as of January 1, 2005, Bancorp hereby establishes a plan designed to provide a nonqualified pension benefit to certain selected key executives of Bancorp and Bank. This Plan is intended to be fully compliant with the requirements of Section 409A of the Code, and is to be interpreted and administered accordingly. In addition to the benefits that accrue under this Plan on and after January 1, 2005, this Plan also assumes all liabilities under the Grandfathered Plan that were not vested as of December 31, 2004.

ARTICLE II

Definitions

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2.1

Actuarial Equivalent

" Actuarial Equivalent" means an amount or benefit of equal value based on an interest rate and mortality table established by the Committee from time to time, based upon market conditions, as determined in the sole discretion of the Committee.

2.2

Bancorp

" Bancorp" means 1st Constitution Bancorp, and any successors thereto.

2.3

Bank

" Bank" means 1st Constitution Bank, and any successors thereto.

2.4

Beneficiary

" Beneficiary" means one or more persons designated in writing by a Member in the manner specified by the Committee to receive the Member' s benefits under the Plan in the event of his or her death, or in the event of no such designation, the term will mean the estate of the Member.

2.5

Board of Directors

" Board of Directors" means the Board of Directors of Bancorp.


2.6

Cause

" Cause" shall mean conviction or a plea of nolo contendre with respect to a felony or a similar class crime committed while employed by the Company, or if any regulatory agency requires the Company to sever its relationship with the Member, or if the Member is required to not be associated with any public company arising out of actions of the Member as an employee of the Company. If the Member contests the determination of Cause, and if he or she is successful in causing such determination to be reversed, then he or she will be entitled to all benefits hereunder, plus interest and reasonable legal fees in connection with such contest. If he or she contests the determination of Cause and loses, he or she will be responsible for the Company' s legal fees if it is determined by a court of competent jurisdiction that his or her contesting the determination of Cause was done in bad faith. The Board of Directors shall have the complete discretionary responsibility to determine whether Cause exists, without participation of the Member involved.

2.7

Change of Control


A " Change of Control" will be deemed to have occurred if -

(X) any " person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the " Exchange Act" )), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a person engaging in a transaction of the type described in clause (Z) below of this definition but which does not constitute a change in control under such clause (Z), hereafter becomes the " beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bancorp representing more than 50% of the combined voting power of Bancorp' s then outstanding securities; or

(Y) during any period of twenty-four (24) consecutive months during the term of this Agreement, individuals who at the beginning of such period constitute the Board of Directors, and any new director (other than a director designated by a person who has entered into an agreement with Bancorp to effect a transaction described in clauses (X) or (Z) of this definition) whose election by such Board of Directors, or nomination for election by Bancorp' s shareholders, was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the


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beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

(Z) Bancorp completes a merger, consolidation or similar transaction of Bancorp with or into any other corporation or entity, or a binding share exchange involving Bancorp' s securities, other than any such transaction which would result in the voting securities of Bancorp outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of Bancorp or such surviving entity outstanding immediately after such transaction, or Bancorp completely liquidates, sells or otherwise disposes of all or substantially all of its assets.

2.8

Code

" Code" refers to the Internal Revenue Code of 1986, as amended, as well as all agency guidance issued thereunder.

2.9

Committee

" Committee" means a committee of the Board of Directors to which is delegated responsibility to administer this Plan.

2.10

Company

" Company" means Bancorp and/or Bank.

2.11

Disability

" Disability" means (i) the Member is determined to be disabled within the meaning of the Company' s long term disability plan, (ii) the Member is unable to perform his or her job functions in full for a period of 180 days as a result of a physical or mental condition, or (iii) the Committee determines that the Member is disabled after appropriate medical consultants, all to be determined in the sole discretion of the Committee.

2.12

Eligible Employee

" Eligible Employee" means any executive employed by the Company who is designated by the Committee as a Member under the Plan.


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2.13

Grandfathered Plan

" Grandfathered Plan" means the 1st Constitution Supplemental Executive Retirement Plan, adopted effective as of October 1, 2002, and as amended thereafter.

2.14

Final Base Compensation

" Compensation" means a Member' s highest annual rate of base compensation in effect during the twelve (12) month period prior to termination of employment, excluding bonuses, overtime pay, commissions, other extraordinary payments, reimbursements or other expense allowances, equity compensation, fringe benefits (cash and non-cash), moving expenses, deferred compensation, and welfare benefits, paid by the Company to such Employee for services rendered by him or her to the Company. Notwithstanding the foregoing, Compensation shall include any amount which is contributed by the Company pursuant to a salary reduction agreement and which is not includible in the gross income of the Member under Section 125, 402(e)(3), or 402(h)(1)(B) of the Internal Revenue Code of 1986, as amended. Notwithstanding the above, in the event of the death of a Member (while still employed by the Company) prior to his or her attaining age 65 and also prior to a Change of Control, then Final Base Compensation used to calculate the SERP Benefit shall be determined for such Member in accordance with Appendix C.

2.15

Member

" Member" means an Eligible Employee who becomes a Member pursuant to Article III.

2.16

Normal Retirement Date

" Normal Retirement Date" means a Member' s 65th birthday.

2.17

Plan

" Plan" means this 1st Constitution Bancorp 2005 Supplemental Executive Retirement Plan, as set forth herein, and as amended from time to time.

2.18

SERP Benefit

" SERP Benefit" shall mean the annual retirement benefit payable to a Member pursuant to the terms of this Plan. In all instances, a Member' s SERP Benefit shall be reduced by the SERP Benefit, if any, payable to or on behalf of the Member under the Grandfathered Plan.


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2.19

Years of Service

" Years of Service" means each full year in which a Member serves as an employee of the Company (including years prior to implementation of this Plan).

2.20

For purposes of this Plan, unless the context requires otherwise, the masculine includes the feminine, the singular the plural, and vice versa . Any reference to a " Section" or " Article" shall mean the indicated section or article of this Plan unless otherwise specified.

ARTICLE III

Participation

An Eligible Employee listed in Appendix A shall become a Member of the Plan effective as of January 1, 2005. Each other Eligible Employee shall become a Member upon appointment by the Committee (provided that the Committee also determines a percentage multiplier for such new Member).

ARTICLE IV

SERP Benefit

3.

4.1

Amount of SERP Benefit

Each Member who retires on or after his or her Normal Retirement Date shall be entitled to a SERP Benefit. The amount of a Member' s SERP Benefit at his or her Normal Retirement ...