Modification of Employee Retention Agreement
This
Modification
of Employee Retention Agreement (“Modification”) is made and entered into
as of December 31, 2008 by and among The Dime
Savings Bank of Williamsburgh, a savings bank organized and operating
under the federal laws of the United States and having its executive offices at
000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (“Bank”); Dime
Community Bancshares, Inc., a business corporation organized and existing
under the laws of the State of Delaware and having its executive offices at 000
Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (“Holding Company”); and ___________________,
an individual residing at _______________ ___________________________
(“Officer”).
W
i t n e s s e t h
WHEREAS, the Bank, the Holding
Company and the Officer are parties to an Employee Retention Agreement
(“Agreement”) made and entered into as of February 22, 2007, pursuant to which
the Bank has agreed to provide certain payments to the Officer in the event that
his employment is terminated under certain circumstances as a result of a Change
of Control, and the Bank desires to assure for itself the continued availability
of the Officer’s services and the ability of the Officer to perform such
services with a minimum of personal distraction in the event of a pending or
threatened Change of Control, and the Officer is willing to continue to serve
the Bank on the terms and conditions set forth herein; and
WHEREAS, the parties desire to
modify the Agreement for the purpose, among others, of compliance with the
applicable requirements of section 409A of the Internal Revenue Code of 1986;
and
WHEREAS, section 21 of the
Agreement provides for modification of the Agreement in a writing signed by the
parties thereto;
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and obligations
hereinafter set forth, the Bank, the Holding Company and the Officer hereby
agree as follows:
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1.
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The
last sentence of section 7 of the Agreement is modified to add the
following clause at the end
thereof:
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each such
reimbursement payment to be made promptly following receipt of the itemized
account and in any event not later than the last year in which the expense was
incurred.
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2.
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Section
8(b) of the Agreement is modified to add the words “on his termination of
employment, subject to section 24” after the clause “(or, in the event of
the Officer’s death, to the Officer’s
estate)”.
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3.
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Section
8(b)(iv), (v) and (vi) of the Agreement are modified to strike the text
"within thirty (30) days following the Officer’s termination of employment
with the Bank," where it appears
therein.
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4.
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Section
8(b)(v) of the Agreement is modified to add the following text to the end
thereof:
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provided,
however, that if payments are made under this section 8(b)(v) as a result of
this section deeming otherwise unvested amounts under such defined benefit plans
to be vested, the payments, if any, attributable to such deemed vesting shall be
paid in the same form, and paid at the same time, and in the same manner, as
benefits under the corresponding non-qualified plan;
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5.
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Section
8(b)(vi) of the Agreement is modified to add the following text to the end
thereof:
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provided,
however, that if payments are made under this section 8(b)(vi) as a result of
this section deeming otherwise unvested amounts under such defined benefit plans
to be vested, the payments, if any, attributable to such deemed vesting shall be
paid in the same form, and paid at the same time, and in the same manner, as
benefits under the corresponding non-qualified plan;
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6.
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Subsection
8(b)(vii)(B) of the Agreement is modified to read as
follows:
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(B) the
salary that would have been paid to the Officer during each such calendar year
at the highest annual rate of salary achieved during the remaining unexpired
Assurance Period, such payments to be made without discounting for early
payment.
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7.
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The
text in section 10(a)(i) of the Agreement that precedes section
10(a)(i)(A) is modified to read as
follows:
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(i) the
reorganization, merger or consolidation of the Bank, respectively, with one or
more other persons, other than a transaction following which:
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8.
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Section
10(a)(ii) of the Agreement is modified to read as
follows:
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(ii) the
acquisition of substantially all of the assets of the Bank or beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of the outstanding securities of the Bank entitled to vote
generally in the election of directors by any person or by any persons acting in
concert, or approval by the stockholders of the Bank of any transaction which
would result in an acquisition;
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9.
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Section
11(b) of the Agreement is modified to add the following sentence to the
end thereof:
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Any
payment pursuant to this Section 11(b) shall in any case be made no later than
the last day of the calendar year following the calendar year in which any
additional taxes for which the payment is to be made are remitted to the
Internal Revenue Service.
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10.
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Section
15 of the Agreement is modified to add the following sentence to the end
thereof:
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Any
payment or reimbursement to effect such indemnification shall be made no later
than the last day of the calendar year following the calendar year in which the
Officer incurs the expense or, if later, within sixty (60) days after the
settlement or resolution that gives rise to the Officer’s right to
reimbursement; provided, however, that the Officer shall have submitted to the
Bank documentation supporting such expenses at such time and in such manner as
the Bank may reasonably require.
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11.
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The
last sentence of section 21 of the Agreement is modified to read as
follows:
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No
modifications of this Agreement shall be valid unless made in writing and signed
by the parties hereto; provided, however, that this Agreement shall be subject
to amendment in the future in such manner as the Bank and the Holding Company
shall reasonably deem necessary or appropriate to effect compliance with section
409A of the Code and the regulations thereunder, and to avoid the imposition of
penalties and additional taxes under section 409A of the Code, it being the
express intent of the parties that any such amendment shall not diminish the
economic benefit of the Agreement to the Officer on a present value
basis.
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12.
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The
Agreement is modified to include a new section 24, entitled “Compliance
with Section 409A of the Code,” to read in its entirety as
follows:
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Section
24. Compliance with Section 409A
of the Code.
The
Officer, the Bank and the Holding Company acknowledge that each of the payments
and benefits promised to the Officer under this Agreement must either comply
with the requirements of section 409A of the Code ("Section 409A") and the
regulations thereunder or qualify for an exception from compliance. To that end,
the Officer, the Bank and the Holding Company agree that:
(a) the
expense reimbursements described in section 7 and legal fee reimbursements
described in section 15 are intended to satisfy the requirements for a
"reimbursement plan" described in Treasury Regulation section
1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such
requirements;
(b) the
payment described in section 8(b)(i) is intended to be excepted from compliance
with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as
payment made pursuant to the Bank’s customary payment timing
arrangement;
(c) the
benefits and payments described in section 8(b)(ii) are expected to comply with
or be excepted from compliance with Section 409A on their own
terms;
(d) the
welfare benefits provided in kind under section 8(b)(iii) are intended to be
excepted from compliance with Section 409A as welfare benefits pursuant to
Treasury Regulation section 1.409A-1(a)(5) and/or as benefits not includible in
gross income; and
(e) the
tax indemnity payment provided under section 11 is intended to satisfy the
requirements for a “tax gross-up payment” described in Treasury Regulation
section 1.409A-3(i)(1)(v).
In the
case of a payment that is not excepted from compliance with Section 409A, and
that is not otherwise designated to be paid immediately upon a permissible
payment event within the meaning of Treasury Regulation section 1.409A-3(a), the
payment shall not be made prior to, and shall, if necessary, be deferred (with
interest at the annual rate of 6%, compounded monthly from the date of the
Officer’s termination of employment to the date of actual payment) to and paid
on the later of the date sixty (60) days after the Officer’s earliest separation
from service (within the meaning of Treasury Regulation section 1.409A-1(h))
and, if the Officer is a specified employee (within the meaning of Treasury
Regulation section 1.409A-1(i)) on the date of his separation from service, the
first day of the seventh month following the Officer’s separation from service.
Furthermore, this Agreement shall be construed and administered in such manner
as shall be necessary to effect compliance with Section 409A.
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13.
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The
Agreement is modified to include a new section 25, entitled “Compliance
with the Emergency Economic Stabilization Act of 2008,” to read in its
entirety as follows:
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Section
25.
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Compliance with the Emergency
Economic Stabilization Act of
2008.
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In the
event the Holding Company issues any debt or equity to the United States
Treasury ("UST") pursuant to the Capital Purchase Program (the "CPP")
implemented under the Emergency Economic Stabilization Act of 2008 ("EESA"), and
the Officer becomes a senior executive officer (within the meaning of 31 C.F.R.
Part 30) ("Senior Executive Officer"), the Officer acknowledges that any
compensation payable to the Officer under this Agreement or under any
compensation, bonus, incentive or other benefit plan, arrangement or agreement
of or with the Holding Company or the Bank, shall be subject to the limits of
section 111(b) of EESA as implemented by guidance or regulation thereunder that
has been issued and is in effect as of the date of such issue of debt or equity
to the UST pursuant to the CPP.
IN
WITNESS WHEREOF, the Bank and the Holding Company have caused this Modification
to be executed and the Officer has hereunto set his or her hand.
Name:
THE DIME
SAVINGS BANK OF WILLIAMSBURGH
By:
Name: Xxxxxxx
X. Xxxxxxxxx
Title: Chairman
& Chief Executive Officer
DIME
COMMUNITY BANCSHARES, INC.
By:
Name: Xxxxxxx
X. Xxxxxxxxx
Title: Chairman
& Chief Executive Officer
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