EMPLOYEE RETENTION AGREEMENT by and among THE DIME SAVINGS BANK OF WILLIAMSBURGH, DIME COMMUNITY BANCSHARES, INC. and CHRISTOPHER D. MAHER made and entered into as of June 30, 2006 EMPLOYEE RETENTION AGREEMENT
Exhibit
10.26
by
and among
THE
DIME SAVINGS BANK OF WILLIAMSBURGH,
DIME
COMMUNITY BANCSHARES, INC.
and
XXXXXXXXXXX
X. XXXXX
made
and entered into as of
June
30, 2006
This
EMPLOYEE
RETENTION AGREEMENT (“Agreement”)
is made
and entered into as of June 30, 2006 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 Xxxxxxxxxxx X. Xxxxx, an individual residing
at 0 Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (“Officer”).
W I T N E S S E T H:
WHEREAS,
the
Bank desires to secure for itself the Officer’s services; and
WHEREAS,
the
Bank recognizes that a third party may at some time in the future pursue a
Change of Control of the Bank or the Holding Company and that this possibility
may result in the departure or distraction of the Bank’s officers;
and
WHEREAS,
the
Bank has determined that appropriate steps should be taken to encourage the
continued attention and dedication of the Bank’s officers, including the
Officer, to their duties for the Bank without the distraction that may arise
from the possibility of a Change of Control of the Bank or the Holding Company;
and
WHEREAS,
the
Bank believes that, by assuring certain officers, including the Officer, of
reasonable financial security in the event of a Change of Control of the Bank
or
the Holding Company, such officers will be in a position to perform their duties
free from financial self interest and in the best interests of the Bank and
its
shareholders; and
WHEREAS,
for
purposes of securing the Officer’s services for the Bank, the Board of Directors
of the Bank (“Board”) has authorized the proper officers of the Bank to enter
into an employee retention agreement with the Officer on the terms and
conditions set forth herein; and
WHEREAS,
the
Board of Directors of the Holding Company has authorized the Holding Company
to
guarantee the Bank’s obligations under such an employee retention agreement and
to provide for certain tax indemnification payments; and
WHEREAS,
the
Officer is willing to make the Officer’s services available to the Bank on the
terms and conditions set forth herein;
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-
Section
1. Effective
Date
(a) This
Agreement shall be effective as of the date first above written and shall remain
in effect during the term of this Agreement which shall be for a period of
three
(3) years commencing on the date of this Agreement, plus such extensions as
are
provided pursuant to section 1(b); provided,
however, that
if
the term of this Agreement has not
2
otherwise
terminated, the term of this Agreement will terminate on the date of the
Officer’s termination of employment with the Bank; and provided,
further, that
the
obligations under section 8 of this Agreement shall survive the term of this
Agreement if payments become due hereunder.
(b) Prior
to
each anniversary date of this Agreement, the Board shall consider the
advisability of an extension of the term in light of the circumstances then
prevailing and may, in its discretion, approve an extension to take effect
as of
the upcoming anniversary date. If an extension is approved, the term of this
Agreement shall be extended so that it will expire three (3) years after such
anniversary date.
(c) Notwithstanding
anything herein contained to the contrary: (i) the Officer’s employment with the
Bank may be terminated at any time, subject to the terms and conditions of
this
Agreement; and (ii) nothing in this Agreement shall mandate or prohibit a
continuation of the Officer’s employment following the expiration of the
Assurance Period upon such terms and conditions as the Bank and the Officer
may
mutually agree upon.
Section
2. Assurance
Period.
(a) The
assurance period (“Assurance Period”) shall be for a period commencing on the
date of a Change of Control, as defined in section 10 of this Agreement, and
ending on the third anniversary of the date on which the Assurance Period
commences, plus such extensions as are provided pursuant to the following
sentence. The Assurance Period shall be automatically extended for one (1)
additional day each day, unless either the Bank or the Officer elects not to
extend the Assurance Period further by giving written notice to the other party,
in which case the Assurance Period shall become fixed and shall end on the
third
anniversary of the date on which such written notice is given; provided,
however, that
if
following a Change of Control, the Office of Thrift Supervision (or its
successor) is the Bank’s primary federal regulator, the Agreement shall be
subject to extension not more frequently than annually and only upon review
and
approval of the Board.
(b) Upon
termination of the Officer’s employment with the Bank, any daily extensions
provided pursuant to the preceding sentence, if not theretofore discontinued,
shall cease and the remaining unexpired Assurance Period under this Agreement
shall be a fixed period ending on the later of the third anniversary of the
date
of the Change of Control, as defined in section 10 of this Agreement, or the
third anniversary of the date on which the daily extensions were
discontinued.
Section
3. Duties.
During
the period of the Officer’s employment that falls within the Assurance Period,
the Officer shall: (a) except to the extent allowed under section 6 of this
Agreement, devote his full business time and attention (other than during
weekends, holidays, vacation per-iods, and periods of illness, disability or
approved leave of absence) to the business and affairs of the Bank and use
his
best efforts to advance the Bank’s interests; (b) serve in the position to which
the Officer is appointed by the Bank, which, during the Assurance Period, shall
be the position that the Officer held on the day before the Assurance Period
commenced or any higher office at the Bank to which he may subsequently be
appointed; and (c) subject to the direction of the Board and the By-laws of
the
Bank, have such functions, duties, responsibilities and authority commonly
associated with such position.
3
Section
4. Compensation.
In
consideration for the services rendered by the Officer during the Assurance
Period, the Bank shall pay to the Officer during the Assurance Period a salary
at an annual rate equal to the greater of:
(a) the
annual rate of salary in effect for the Officer on the day before
the
Assurance Period commenced; or
(b) such
higher annual rate as may be prescribed by or under the
authority
of the Board;
provided,
however,
that in
no event shall the Officer’s annual rate of salary under this Agreement in
effect at a particular time during the Assurance Period be reduced without
the
Officer’s prior written consent. The annual salary payable under this section 4
shall be subject to review at least once annually and shall be paid in
approximately equal installments in accordance with the Bank’s customary payroll
practices. Nothing in this section 4 shall be deemed to prevent the Officer
from
receiving additional compensation other than salary for his services to the
Bank, or additional compensation for his services to the Holding Company, upon
such terms and conditions as may be prescribed by or under the authority of
the
Board or the Board of Directors of the Holding Company.
Section
5. Employee
Benefit Plans and Programs
Except
as
otherwise provided in this Agreement, the Officer shall, during the Assurance
Period, be treated as an employee of the Bank and be eligible to participate
in
and receive benefits under any qualified or non-qualified defined benefit or
defined contribution retirement plan, group life, health (including
hospitalization, medical and major medical), dental, accident and long term
disability insurance plans, and such other employee benefit plans and programs,
including, but not limited to, any incentive compensation plans or programs
(whether or not employee benefit plans or programs), any stock option and
appreciation rights plan, em-ployee stock ownership plan and restricted stock
plan, as may from time to time be maintained by, or cover employees of, the
Bank, in accordance with the terms and conditions of such employee benefit
plans
and programs and compensation plans and programs and with the Bank’s customary
practices.
Section
6. Board
Memberships.
The
Officer may serve as a member of the boards of directors of such business,
community and charitable organizations as he may disclose to and as may be
approved by the Board (which approval shall not be unreasonably withheld),
and
he may engage in personal business and investment activities for his own
account; provided,
however, that
such
service and personal business and investment activities shall not materially
interfere with the performance of his duties under this Agreement.
Section
7. Working
Facilities and Expenses.
During
the Assurance Period, the Officer’s principal place of employment shall be at
the Bank’s executive offices at the address first above written, or at such
other location within the City of New York at which the Bank shall maintain
its
principal executive offices, or at such other location as the Bank and the
Officer may mutually agree upon. The Bank shall provide the Officer, at his
principal place of employment, with a private office and support services and
facilities suitable to his position with the Bank and necessary or appropriate
in connection with the performance of his assigned duties under this Agreement.
The Bank shall reimburse the Officer for his ordinary and necessary business
expenses,
4
including,
without lim-itation, the Officer’s travel and entertainment expenses, incurred
in connection with the perfor-xxxxx of the Officer’s duties under this
Agreement, upon presentation to the Bank of an itemized account of such expenses
in such form as the Bank may reasonably require.
Section
8. Termination
of Employment with Severance Benefits.
(a) In
the
event that the Officer’s employment with the Bank shall terminate during the
Assurance Period, or prior to the commencement of the Assurance Period but
within three (3) months of and in connection with a Change of Control as defined
in section 10 of this Agreement on account of:
(i) The
Officer’s voluntary resignation from employment with the Bank within ninety (90)
days following:
(A) the
failure of the Bank’s Board to appoint or re-appoint or elect or re-elect the
Officer to serve in the same position in which the Officer was serving, on
the
day before the Assurance Period commenced or a more senior office;
(B) the
failure of the stockholders of the Holding Company to elect or re-elect the
Officer as a member of the Board, if he was a member of the Board on the day
before the Assurance Period commenced;
(C) the
expiration of a thirty (30) day period following the date on which the Officer
gives written notice to the Bank of its material failure, whether by amendment
of the Bank’s Organization Certificate or By-laws, action of the Board or the
Holding Company’s stockholders or otherwise, to vest in the Officer the
functions, duties, or responsibilities vested in the Officer on the day before
the Assurance Period commenced (or the functions, duties and responsibilities
of
a more senior office to which the Officer may be appointed), unless during
such
thirty (30) day period, the Bank fully cures such failure;
(D) the
failure of the Bank to cure a material breach of this Agreement by the Bank,
within thirty (30) days following written notice from the Officer of such
material breach;
(E) a
reduction in the compensation provided to the Officer, or a material reduction
in the benefits provided to the Officer under the Bank’s program of employee
benefits, compared with the compensation and benefits that were provided to
the
Officer on the day before the Assurance Period commenced;
(F) a
change
in the Officer’s principal place of employment that would result in a one-way
commuting time in excess of the greater of (I) 30 minutes or (II) the Officer’s
commuting time immediately prior to such change; or
(ii) the
discharge of the Officer by the Bank for any reason other than for “cause” as
provided in section 9(a);
then,
subject to section 21, the Bank shall provide the benefits and pay to the
Officer the amounts provided for under section 8(b) of this Agreement;
provided,
however, that
if
benefits or payments become due hereunder as a result of the Officer’s
termination of employment prior to the commencement of the Assurance Period,
the
benefits and payments provided for under section 8(b) of this Agreement shall
be
determined as though the Officer had remained in the service of the Bank (upon
the terms and conditions in effect at the time of his actual termination of
service) and had not terminated employment with the Bank until the date on
which
the Officer’s Assurance Period would have commenced.
5
(b) Upon
the
termination of the Officer’s employment with the Bank under circumstances
described in section 8(a) of this Agreement, the Bank shall pay and provide
to
the Officer (or, in the event of the Officer’s death, to the Officer’s
estate):
(i) the
Officer’s earned but unpaid compensation (including, without limitation, all
items which constitute wages under section 190.1 of the New York Labor Law
and
the payment of which is not otherwise provided for under this section 8(b))
as
of the date of the termination of the Officer’s employment with the Bank, such
payment to be made at the time and in the manner prescribed by law applicable
to
the payment of wages but in no event later than thirty (30) days after
termination of employment;
(ii) the
benefits, if any, to which the Officer is entitled as a former employee under
the employee benefit plans and programs and compensation plans and programs
maintained for the benefit of the Bank’s officers and employees;
(iii) continued
group life, health (including hospitalization, medical and major medical),
accident and long term disability insurance benefits, in addition to that
provided pursuant to section 8(b)(ii) and after taking into account the coverage
provided by any subsequent employer, if and to the extent necessary to provide
for the Officer, for the remaining unexpired Assurance Period, coverage
equivalent to the coverage to which the Officer would have been entitled under
such plans (as in effect on the date of his termination of employment, or,
if
his termination of employment occurs after a Change of Control, on the date
of
such Change of Control, whichever benefits are greater) if the Officer had
continued working for the Bank during the remaining unexpired Assurance Period
at the highest annual rate of compensation achieved during the Officer’s period
of actual employment with the Bank;
(iv) within
thirty (30) days following the Officer’s termination of employment with the
Bank, a lump sum payment, in an amount equal to the pre-sent value of the salary
that the Officer would have earned if the Officer had continued working for
the
Bank during the remaining unexpired Assurance Period at the highest annual
rate
of salary achieved during the Officer’s period of actual employment with the
Bank, where such present value is to be determined using a discount rate equal
to the applicable short-term federal rate prescribed under section 1274(d)
of
the Internal Revenue Code of 1986 (“Code”) (“Applicable Short-Term Rate”),
compounded using the compounding periods corresponding to the Bank’s regular
payroll periods for its officers, such lump sum to be paid in lieu of all other
payments of salary provided for under this Agreement in respect of the period
following any such termination;
(v) within
thirty (30) days following the Officer’s termination of employment with the
Bank, a lump sum payment in an amount equal to the excess, if any,
of:
(A) the
present value of the aggregate benefits to which the Officer would be entitled
under any and all qualified and non-qualified defined benefit pension plans
maintained by, or covering employees of, the Bank if the Officer were 100%
vested thereunder and had continued working for the Bank during the remaining
unexpired Assurance Period, such benefits to be determined as of the date of
termination of employment by adding to the service actually recognized under
such plans an additional period equal to the remaining unexpired Assurance
Period and by adding to the
6
compensation
recognized under such plans for the year in which termination of employment
occurs all amounts payable under sections 8(b)(I), (iv) and (vii);
(B) the
present value of the benefits to which the Officer is actually entitled under
such defined benefit pension plans as of the date of his
termination;
where
such present values are to be determined using the mortality tables prescribed
under section 415(b)(2)(E)(v) of the Code and a discount rate, compounded
monthly, equal to the applicable long-term federal rate prescribed under section
1274(d) of the Code for the month in which his employment terminates;
.
(vi) within
thirty (30) days following the Officer’s termination of employment with the
Bank, a lump sum payment in an amount equal to the present value of the
additional employer contributions (or if greater in the case of a leveraged
employee stock ownership plan or similar arrangement, the additional assets
allocable to him through debt service, based on the fair market value of such
assets at termination of employment) to which he would have been entitled under
any and all qualified and non-qualified defined contribution plans maintained
by, or covering employees of, the Bank, if he were 100% vested thereunder and
had continued working for the Bank during the remaining unexpired Assurance
Period at the highest annual rate of compensation achieved during the Officer’s
period of actual employment with the Bank, and making the maximum amount of
employee contributions, if any, required under such plan or plans, such present
value to be determined on the basis of the discount rate, compounded using
the
compounding period that corresponds to the frequency with which employer
contributions are made to the relevant plan, equal to the Applicable Short-Term
Rate;
(vii) the
payments that would have been made to the Officer under any cash bonus or
long-term or short-term cash incentive compensation plan maintained by, or
covering employees of, the Bank, if he had continued working for the Bank during
the remaining unexpired Assurance Period and had earned the maximum bonus or
incentive award in each calendar year that ends during the remaining unexpired
Assurance Period, such payments to be equal to the product of:
(A) the
maximum percentage rate at which an award was ever available to the Officer
under such incentive compensation plan; multiplied by
(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) within thirty (30) days following the Officer’s termination of
employment.
The
Bank
and the Officer hereby stipulate that the damages which may be incurred by
the
Officer following any such termination of employment are not capable of accurate
measurement as of the date first above written and that the payments and
benefits contemplated by this section 8(b) constitute a reasonable estimate
under the circumstances of all damages sustained as a consequence of any such
termination of employment, other than damages arising under or out of any stock
option, restricted stock or other non-qualified stock acquisition or investment
plan or program, it being understood and agreed that this Agreement shall not
determine the measurement of damages under any such plan or program in respect
of any termination of employment. Such damages shall be payable without any
requirement of proof of actual damage and without regard to the Officer’s
efforts, if any, to
7
mitigate
damages. The Bank and the Officer further agree that the Bank may condition
the
payments and benefits (if any) due under sections 8(b)(iii), (iv), (v), (vi)
and
(vii) on the receipt of the Officer’s resignation from any and all positions
which he holds as an officer, director or committee member with respect to
the
Bank, the Company or any subsidiary or affiliate of either of them.
Section
9. Termination
without Severance Benefits.
In
the
event that the Officer’s employment with the Bank shall terminate during the
Assurance Period on account of:
(a) the
discharge of the Officer for “cause,” which, for purposes of this Agreement
shall mean personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease and desist order, or any material
breach of this Agreement, in each case as measured against standards generally
prevailing at the relevant time in the savings and community banking industry;
provided,
however, that
the
Officer shall not be deemed to have been discharged for cause unless and until
he shall have received a written notice of termination from the Board,
accompanied by a resolution duly adopted by affirmative vote of a majority
of
the entire Board at a meeting called and held for such purpose (after reasonable
notice to the Officer and a reasonable opportunity for the Officer to make
oral
and written presentations to the members of the Board, on his own behalf, or
through a representative, who may be his legal counsel, to refute the grounds
for the proposed determination) finding that in the good faith opinion of the
Board grounds exist for discharging the Officer for cause; or
(b) the
Officer’s voluntary resignation from employment with the Bank for reasons other
than those specified in section 8(a)(I); or
(c) the
Officer’s death; or
(d) a
determination that the Officer is eligible for long-term disability
benefits
under the Bank’s long-term disability insurance program or, if there is no such
program, under the federal Social Security Act; then the Bank shall have no
further obligations under this Agreement, other than the payment to the Officer
(or, in the event of his death, to his estate) of his earned but unpaid salary
as of the date of the termination of his employment, and the provision of such
other benefits, if any, to which the Officer is entitled as a former employee
under the employee benefit plans and pro-grams and compensation plans and
programs maintained by, or covering employees of, the Bank.
Section
10. Change
of Control.
(a) A
Change
of Control of the Bank (“Change of Control”) shall be deemed to have occurred
upon the happening of any of the following events:
(i) approval
by the stockholders of the Bank of a transaction that would result in the
reorganization, merger or consolidation of the Bank, respectively, with one
or
more other persons, other than a transaction following which:
(A) at
least
51% of the equity ownership interests of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) in substantially the same relative proportions by
persons who, immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated
8
under
the
Exchange Act) at least 51% of the outstanding equity ownership interests in
the
Bank; and
(B) at
least
51% of the securities entitled to vote generally in the election of directors
of
the entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially
the
same relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote generally in
the
election of directors of the Bank;
(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;
(iii) a
complete liquidation or dissolution of the Bank, or approval by the stockholders
of the Bank of a plan for such liquidation or dissolution;
(iv) the
occurrence of any event if, immediately following such event, at least fifty
percent (50%) of the members of the Board do not belong to any of the following
groups:
(A) individuals
who were members of the Board on the date of this Agreement; or
(B) individuals
who first became members of the Board after the date of this Agreement
either:
(1) upon
election to serve as a member of the Board by affirmative vote of three-quarters
(3/4) of the members of such Board, or a nominating committee thereof, in office
at the time of such first election; or
(2) upon
election by the stockholders of the Board to serve as a member of the Board,
but
only if nominated for election by affirmative vote of three quarters(3/4) of
the
members of the Board, or of a nominating committee thereof, in office at the
time of such first nomination;
provided,
however, that
such
individual’s election or nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf of the Board
of
the Bank; or
(v) any
event
which would be described in section 10(a)(i), (ii), (iii) or (iv) if the term
“Holding Company” were substituted for the term “Bank” therein.
(b) In
no
event, however, shall a Change of Control be deemed to have occurred as a result
of any acquisition of securities or assets of the Holding Company, the Bank
or
any subsidiary of either of them, by the Holding Company, the Bank or any
subsidiary of either of them, or by any employee benefit plan maintained by
any
of them.
Section
11. Excise
Tax Indemnification.
9
(a) This
section 11 shall apply if the Officer’s employment is terminated in
circumstances giving rise to liability for excise taxes under section 4999
of
the Code. If this Section 11 applies, then, if for any taxable year, the Officer
shall be liable for the payment of an excise tax under section 4999 of the
Code
with respect to any payment in the nature of compensation made by the Company
or
any direct or indirect subsidiary or affiliate of the Holding Company to (or
for
the benefit of) the Officer, the Holding Company shall pay to the Officer an
amount equal to X deter-mined under the following formula:
|
X
|
=
|
E
x
X
|
|
0
-
[(XX x (0 - XXX)) + SLI + E + M]
|
where
|
E
=
|
the
rate at which the excise tax is assessed under section 4999 of the
Code;
|
|
P
=
|
the
amount with respect to which such excise tax is assessed, determined
without regard to this section 11;
|
|
FI
=
|
the
highest marginal rate of income tax applicable to the Officer under
the
Code for the taxable year in
question;
|
|
SLI
=
|
the
sum of the highest marginal rates of income tax applicable to the
Officer
under all appli-cable state and local laws for the taxable year in
ques-tion; and
|
|
M
=
|
the
highest marginal rate of Medicare tax applicable to the Officer under
the
Code for the taxable year in
question.
|
With
respect to any payment in the nature of compensation that is made to (or for
the
benefit of) the Officer under the terms of this Agree-ment, or otherwise, and
on
which an excise tax under sec-tion 4999 of the Code will be assessed, the
payment determined under this section 11(a) shall be made to the Officer on
the earlier of (i) the date the Holding Company or any direct or indirect
subsidiary or affiliate of the Holding Company is required to withhold such
tax,
or (ii) the date the tax is required to be paid by the Officer.
(b) Notwithstanding
anything in this section 11 to the contrary, in the event that the Officer’s
liability for the excise tax under section 4999 of the Code for a taxable year
is subse-quently determined to be different than the amount deter-mined by
the
formula (X + P) x E, where X, P and E have the meanings
provided in section 11(a), the Officer or the Holding Company, as the case
may
be, shall pay to the other party at the time that the amount of such ex-cise
tax
is final-ly determined, an appropriate amount, plus interest, such that the
payment made under section 11(a), when increased by the amount of the payment
made to the Officer under this section 11(b) by the Holding Company, or when
reduced by the amount of the payment made to the Company under this section
11(b) by the Officer, equals the amount that should have properly been paid
to
the Officer under section 11(a). The interest paid under this section 11(b)
shall be determined at the rate provided under section 1274(b)(2)(B) of the
Code. To confirm that the proper amount, if any, was paid to the Officer under
this section 11, the Officer shall furnish to the Holding Company a copy of
each
tax return which reflects a liability for an excise tax payment made by the
Holding Company, at least 20 days before the date on which such return is
required to be filed with the Internal Revenue Service.
10
(c) The provisions of this section 11 are designed to reflect the provisions of applicable federal, state and local tax laws in effect on the date of this Agreement. If, after the date hereof, there shall be any change in any such laws, this section 11 shall be modified in such manner as the Officer and the Holding Company may mutually agree upon if and to the extent necessary to assure that the Officer is fully indemnified against the economic effects of the tax imposed under section 4999 of the Code or any similar federal, state or local tax.
Section
12
. No
Effect on Employee Benefit Plans or Programs.
The
termination of the Officer’s employment during the Assurance Period or
thereafter, whether by the Bank or by the Officer, shall have no effect on
the
rights and obligations of the parties hereto under the Bank’s qualified and
non-qualified defined benefit or defined contribution retirement plans, group
life, health (including hospitalization, medical and major medical), dental,
accident and long term disability insurance plans or such other employee benefit
plans or programs, or compensation plans or programs (whether or not employee
benefit plans or programs) and any defined contribution plan, employee stock
ownership plan, stock option and appreciation rights plan, and restricted stock
plan, as may be maintained by, or cover employees of, the Bank from time to
time; provided,
however, that
nothing in this Agreement shall be deemed to duplicate any compensation or
benefits provided under any agreement, plan or program covering the Officer
to
which the Bank or the Holding Company is a party and any duplicative amount
payable under any such agreement, plan or program shall be applied as an offset
to reduce the amounts otherwise payable hereunder.
Section
13. Successors
and Assigns.
This
Agreement will inure to the benefit of and be binding upon the Officer, his
legal representatives and testate or intestate distributes, and the Bank and
the
Holding Company, their respective successors and assigns, including any
successor by merger or consolidation or a statutory receiver or any other person
or firm or corporation to which all or substantially all of the respective
assets and business of the Bank or the Holding Company may be sold or otherwise
transferred.
Section
14. Notices.
Any
communication required or permitted to be given under this Agreement, including
any notice, direction, designation, consent, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as
it is
delivered personally, or five (5) days after mailing if mailed, postage prepaid,
by registered or certified mail, return receipt requested, addressed to such
party at the address listed below or at such other address as one such party
may
by written notice specify to the other party:
If
to the
Officer:
Xx.
Xxxxxxxxxxx X. Xxxxx
0
Xxxxxx
Xxxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
If
to the
Bank:
The
Dime
Savings Bank of Williamsburgh
000
Xxxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxx 00000
11
Attention:
Corporate
Secretary
If
to the
Holding Company:
Dime
Community Bancshares, Inc.
000
Xxxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxx 00000
Attention:
Corporate
Secretary
Section
15. Indemnification
and Attorneys’ Fees.
The
Bank
shall indemnify, hold harmless and defend the Officer against rea-sonable costs,
including legal fees, incurred by the Officer in connection with or arising
out
of any action, suit or proceeding in which the Officer may be involved, as
a
result of the Officer’s efforts, in good faith, to defend or enforce the terms
of this Agreement; provided, however, that the Officer shall have substantially
prevailed on the merits pursuant to a judgment, decree or order of a court
of
competent jurisdiction or of an arbitrator in an arbitration proceeding, or
in a
settlement; provided,
further, that
this
section 15 shall not obligate the Bank to pay costs and legal fees on behalf
of
the Officer under this Agreement in excess of $20,000. For purposes of this
Agreement, any settlement agreement which provides for payment of any amounts
in
settlement of the Bank’s obligations hereunder shall be conclusive evidence of
the Officer’s entitlement to indemnification hereunder, and any such
indemnification payments shall be in addition to amounts payable pursuant to
such settlement agreement, unless such settlement agreement expressly provides
otherwise.
Section
16. Severability.
A
determination that any provision of this Agreement is invalid or unenforceable
shall not affect the validity or enforceability of any other provision
hereof.
Section
17. Waiver.
Failure
to insist upon strict compliance with any of the terms, covenants or conditions
hereof shall not be deemed a waiver of such term, covenant, or condition. A
waiver of any provision of this Agreement must be made in writing, designated
as
a waiver, and signed by the party against whom its enforcement is sought. Any
waiver or relinquishment of any right or power hereunder at any one or more
times shall not be deemed a waiver or relinquishment of such right or power
at
any other time or times.
12
Section
18. Counterparts.
This
Agreement may be executed in two (2) or more counterparts, each of which shall
be deemed an original, and all of which shall constitute one and the same
Agreement.
Section
19. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
federal laws of the United States, and in the absence of controlling federal
law, the laws of the State of New York, without reference to conflicts of law
principles.
Section
20. Headings
and Construction.
The
headings of sections in this Agreement are for convenience of reference only
and
are not intended to qualify the meaning of any section. Any reference to a
section number shall refer to a section of this Agreement, unless otherwise
stated.
Section
21. Entire
Agreement; Modifications.
This
instrument contains the entire agreement of the parties relating to the subject
matter hereof, and supersedes in its entirety any and all prior agreements,
understandings or rep-resentations relating to the subject matter hereof. No
modifications of this Agreement shall be valid unless made in writing and signed
by the parties hereto.
Section
22. Required
Regulatory Provisions.
The
following provisions are included for the purposes of complying with various
laws, rules and regulations applicable to the Bank:
(a) Notwithstanding
anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to the Officer by the Bank under section 8(b)
hereof (exclusive of amounts described in section 8(b) (i)) exceed the three
times the Officer’s average annual total compensation for the last five
consecutive calendar years to end prior to his termination of employment with
the Bank (or for his entire period of employment with the Bank if less than
five
calendar years). This section 22(a) shall not affect or limit payments made
by
the Holding Company hereunder pursuant to sections 8(b), 11 or otherwise. The
Holding Company agrees that, if this section 22(a) would limit payments by
the
Bank to the Officer pursuant to section 8(b) or otherwise, the Holding Company
shall make such payments to the Officer.
(b) Notwithstanding
anything herein contained to the contrary, any payments to the Officer by the
Bank, whether pursuant to this agreement or otherwise, are subject to and
conditioned upon their compliance with section 18(k) of the Federal Deposit
Insurance Act (“FDI Act”),
12
U.S.C. Sec. 1828(k), and any regulations promulgated thereunder.
(c) Notwithstanding
anything herein contained to the contrary, if the Officer is suspended from
office and/or temporarily prohibited from participating in the conduct of the
affairs of the Bank pursuant to a notice served under section 8
(e) (3)
or 8 (g) (1) of the FDI Act, 12 U.S.C. Sec. 1818 (e) (3) or 1818 (g) (1), the
Bank’s obligations under this Agreement shall be suspended as of the date of
Service of such notice, unless stayed by appropriate proceedings. If the charges
in such notice are dismissed, the Bank, in its discretion, may (i)
13
pay
to
the Officer all or part of the compensation withheld while the Bank’s
obligations hereunder were suspended and (ii) reinstate, in whole or in part,
any of the obligations which were suspended.
(d) Notwithstanding
anything herein contained to the contrary, if the Officer is removed and/or
permanently prohibited from participating in the conduct of the Bank’s affairs
by an order issued under section 8 (e) (4) or 8 (g) (1) of the FDI Act, 12
U.S.C. sec. 1818 (e) (4) or (g) (1), all prospective obligations of the order,
but vested rights and obligations of the Bank and the Officer shall not be
effected.
(e) Notwithstanding
anything herein contained to the contrary, if the Bank is in default (within
the
meaning of section 3(x)(1) of the FDI Act, 12 U.S.C. Sec. 1813 (x) (1), all
prospective obligations of the Bank under this Agreement shall terminate as
of
the date of default, but vested rights and obligations of the Bank and the
Officer shall not be effected.
(f) Notwithstanding
anything herein contained to the contrary, all prospective obligations of the
Bank hereunder shall be terminated, except to the extent that a continuation
of
this Agreement is necessary for the continued operation of the Bank: (i) by
the
Director of the Office of Thrift Supervision (“OTS”) or his designee or the
Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in section 13(c) of the FDI Act, 12 U.S.C. sec. 1823(c);
(ii) by the Director of the OTS or his designee at the time such Director or
designee approves a supervisory merger to resolve problems related to the
operation of the Bank or when the Bank is determined by such Director to be
in
an unsafe or unsound condition. The vested rights and obligations of the parties
shall not be affected.
If
and to
the extent any of the foregoing provisions shall cease to be required by
applicable law, rule or regulation, the same shall become inoperative as though
eliminated by formal amendment of this Agreement.
Section
23. Guaranty.
The
Holding Company hereby irrevocably and unconditionally guarantees to the Officer
the payment of all amounts, and the performance of all other obligations, due
from the Bank in accordance with the terms of this Agreement as and when due
without any requirement of presentment, demand of payment, protest or notice
of
dishonor or nonpayment. For purposes of this section 23,
the
application of sections 21(a), (c), (d), (e) or (f) to the Bank shall have
no
effect on the Holding Company’s obligations hereunder.
14
IN
WITNESS WHEREOF,
the
Bank and the Holding Company have caused this Agreement to be executed and
the
Officer has hereunto set his hand, all as of the day and year first above
written.
/s/
XXXXXXXXXXX X.
XXXXX
Xxxxxxxxxxx
X.
Xxxxx
ATTEST: THE
DIME
SAVINGS of WILLIAMSBURGH
By:
/s/ XXXXX XXXXXXX
Secretary
[Seal] By:
/s/ XXXXXXX X. XXXXXXXXX
Name
: Xxxxxxx X.
Xxxxxxxxx
Title
: Chairman of the Board & CEO
ATTEST: DIME
COMMUNITY BANCSHARES, INC.
By: /s/
XXXXX XXXXXXX
Secretary By:
/s/ XXXXXXX X. XXXXXXXXX
[Seal] Name
: Xxxxxxx X. Xxxxxxxxx
Title
: Chairman of the Board & CEO
15
