May 13, 2007
Xx. Xxxx X. Xxxxx
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxxx:
In connection with the anticipated merger (the "Merger") of Synergy
Financial Group, Inc. (the "Company") with and into New York Community Bancorp,
Inc. ("NYB") as contemplated by the Agreement and Plan of Merger, dated as of
May 13, 2007, by and between NYB and the Company (the "Merger Agreement"), which
is entered into as of today, the Company, NYB and you hereby enter into this
agreement (this "Agreement"). Capitalized terms used but not otherwise defined
in this Agreement shall have the meaning set forth in the Merger Agreement.
1. Effective Time Payment. Subject to Paragraph 4 below, at the
Effective Time, the Company or NYB shall pay you $1,090,000. For the avoidance
of doubt, and notwithstanding anything herein to the contrary, you agree that
this payment and the payment described in Paragraph 2 below, shall not be taken
into account in computing any benefits under any plan, program or arrangement of
the Company or its Affiliates in which you participate or to which you are a
party. Not later that 10 business days prior to the scheduled payment date, NYB
shall be provided with sufficient information by the Company to enable its Tax
Advisor (as defined below) to determine whether such payment is in compliance
with Paragraph 4 of this Agreement and to make any adjustments authorized by
Paragraph 4.
2. Settlement of SERP Obligation. Subject to Paragraph 4 below, at the
Effective Time, you agree to accept a payment of $883,000 in full satisfaction
of all obligations of the Company and NYB under your Supplement Retirement Plan
for Xxxx X. Xxxxx. The foregoing action shall not affect your rights under the
Executive Life Insurance Agreement under the Salary Continuation Agreement for
Xxxx X. Xxxxx (with a death benefit of $2 million) and a separate life insurance
benefit under the Executive Life Insurance Agreement (with a death benefit of
$1,170,000), each of which shall remain in effect in accordance with their
terms.
3. Termination of Prior Agreements; Agreement to Remain Employed
Through Effective Time. You hereby agree that, in consideration for entering
into this Agreement, effective as of the date hereof, the separate Employment
Agreements by and between the Company, Synergy Bank and you, dated as of January
1, 2005 and the Supplemental Retirement Plan for Xxxx X. Xxxxx, shall be null
and void and no person or entity shall be obligated to pay you or any person any
amounts or provide any benefits in respect to such Agreements. Further, in
consideration of the benefits conferred upon you pursuant to this Agreement, you
hereby agree not to terminate your employment with the Company or any of its
Affiliates prior to the Effective Time, and, prior to the Effective Time, the
Company agrees not to terminate your employment with the Company or its
Affiliates without the prior written consent of NYB.
4. Withholding and Reduction. The Company will withhold and deposit
all federal, state and local income and employment taxes that are owed with
respect to all amounts paid or benefits provided to or for you by the Company,
NYB or any Affiliate pursuant to this Agreement.
It is the intention of the parties that no payment be made or benefit
be provided to you under this Agreement or otherwise that would constitute an
"excess parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), and any regulations
thereunder, thereby resulting in a loss of an income tax deduction by the
Company or NYB or the imposition of an excise tax on you under Section 4999 of
the Code. If, at any time, the Tax Advisor (as defined below) determines that
some or all of the payments or benefits scheduled to be made or provided under
this Agreement, when combined with any other payments or benefits provided to
you by NYB, the Company and/or any Affiliate required to be aggregated with NYB
or the Company under Section 280G of the Code, would constitute nondeductible
excess parachute payments under Section 280G of the Code, then the payments or
benefits scheduled under this Agreement will be reduced to the maximum amount
which may be paid or provided without causing any such payments or benefits
scheduled under to be nondeductible. The determination made as to the reduction
of benefits or payments required hereunder by the Tax Advisor shall be binding
on the parties, unless within 15 days after such determination, a reputable tax
advisor retained by you disputes such determination in writing. If the two (2)
tax advisors cannot resolve the dispute within five (5) business days, they
shall jointly appoint a third tax advisor to make the final determination. If a
dispute arises, the joint determination of the two (2) tax advisors or the
determination of the third tax advisor, as applicable, shall be binding on the
parties. You shall have the right to designate within a reasonable period which
payments or benefits scheduled under this Agreement will be reduced; provided,
however, that if you do not provide such direction, the Company will implement
any necessary reductions in its discretion. For purposes of this paragraph, "Tax
Advisor" shall mean a law firm, benefits consulting firm or independent
accounting firm (which firm may be NYB's independent auditors) appointed by NYB
to make the determination required by this paragraph.
5. Successors. This Agreement is personal to you and without the prior
written consent of the Company shall not be assignable by you otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by your legal representatives. This Agreement
shall inure to the benefit of and be binding upon the Company, NYB, and their
successors and assigns.
6. Waiver. Failure of the Company or NYB to demand strict compliance
with any of the terms, covenants or conditions of this Agreement shall not be
deemed a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any such term, covenant or condition on any occasion or
multiple occasions be deemed a waiver or relinquishment of such term, covenant
or condition.
7. Governing Law and Jurisdiction. The Agreement is governed by and
construed under the laws of the State of New York, without regard to conflict of
laws rules. You, the Company and NYB (i) hereby consent to submit to the
exclusive personal jurisdiction of any Federal court located in the State of New
York or any court of the State of New York in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement, and
(ii) hereby waive any right to challenge jurisdiction or venue in such courts
with regard to any suit, action, or proceeding under or in connection with the
Agreement. Each party to this Agreement also hereby waives any right to trial by
jury in connection with any suit, action, or proceeding under or in connection
with this Agreement.
8. Entire and Final Agreement. Except for the Noncompetition Agreement
and the Retention Agreement entered into between you and NYB and New York
Community Bank, respectively dated as of the date hereof, this Agreement shall
supersede any and all prior oral or written representations, understandings and
agreements of the parties with respect to the matters addressed herein and it
contains the entire agreement of the parties with respect to those matters. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. Once signed by the parties hereto, no
provision of this Agreement may be modified or amended unless agreed to in a
writing, signed by you and a duly authorized officer of the Company and NYB.
Notwithstanding anything in this
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Agreement to the contrary, this Agreement shall terminate ab initio without
further action by the parties if the Merger Agreement is terminated.
9. Assignment. Neither this Agreement nor any of the rights,
obligations or interests arising hereunder may be assigned by you. Neither this
Agreement nor any of the rights, obligations or interests arising hereunder may
be assigned by the Company without your prior written consent, to a person or
entity other than an affiliate or parent entity of the Company or its successors
or assigns; provided, however, that, in the event of the merger, consolidation,
transfer, or sale of all or substantially all of the assets of the Company with
or to any other individual or entity, this Agreement shall, subject to the
provisions hereof, be binding upon and inure to the benefit of such successor
and such successor shall discharge and perform all the promises, covenants,
duties, and obligations of the Company hereunder.
10. Section Headings. The section headings contained in this Agreement
are inserted for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement.
11. Notices. All notices required by this Agreement shall be sent in
writing and delivered by one party to the other by overnight express mail to the
following persons and addresses:
If to the Company:
Synergy Financial Group, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
If to NYB:
New York Community Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, President and Chief Executive Officer
If to you:
At the most recent address on file at the Company.
12. Execution in Counterparts. This Agreement may be executed by the
parties hereto in counterparts, and each of which shall be considered an
original for all purposes.
* * *
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If the foregoing is satisfactory, please so indicate by signing and
returning to the Company the enclosed copy of this letter whereupon this will
constitute our agreement on the subject.
SYNERGY FINANCIAL GROUP, INC.
By: /s/Xxxx X. Xxxxx
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Name: XXXX X. XXXXX
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Date: May 13, 2007
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NEW YORK COMMUNITY BANCORP, INC.
By:/s/Xxxxxx X. Xxxxxxx
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Name:XXXXXX X. XXXXXXX
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Date:May 13, 2007
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ACCEPTED AND AGREED TO:
/s/Xxxx X. Xxxxx
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XXXX X. XXXXX
Date: May 13, 2007
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