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EXHIBIT 10.8
TWO YEAR CHANGE OF CONTROL AGREEMENT
by and among
HUDSON CITY SAVING BANK,
HUDSON CITY BANCORP, INC.,
and
Made and entered into
as of ___________________
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TWO-YEAR CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL AGREEMENT (the "Agreement") is made and
entered into as of ________________ by and
among HUDSON CITY SAVINGS BANK, a
savings bank organized and operating under
the federal laws of the United States
and having an office at West 80 Century
Road, Paramus, New Jersey 07652-1473
(the "Bank"), HUDSON CITY BANCORP, INC., a
business corporation organized and
existing under the laws of the State of
Delaware and having an office at West 80
Century Road, Paramus, New Jersey
07652-1473 (the "Company") and
________________________, an individual
residing at ______________________
_________________________________________
(the "Officer").
INTRODUCTORY STATEMENT
The Board of Directors of the Bank and the Board of Directors of
the
Company have concluded that it is in the
best interests of the Bank, the Company
and their shareholders to establish a
working environment for the Officer which
minimizes the personal distractions that
might result from possible business
combinations in which the Company or the
Bank might be involved. The Bank and
the Company have decided to provide the
Officer with assurance that his
compensation will be continued for a
minimum period of two (2) years following
termination of employment (the "Assurance
Period") if his employment terminates
under specified circumstances related to a
business combination. The Board of
Directors of the Bank and the Board of
Directors of the Company have decided to
formalize this assurance by entering into
this Change of Control Agreement with
the Officer.
The terms and conditions which the Bank, the Company and the
Officer
have agreed to are as follows.
AGREEMENT
SECTION 1. EFFECTIVE DATE; TERM; CHANGE OF CONTROL AND PENDING
CHANGE OF CONTROL DEFINED
(a) This Agreement shall take effect on the date it is signed by
the
Officer, Bank and Company (the "Effective
Date") and shall be in effect during
the period (the "Term") beginning on the
Effective Date and ending on the first
anniversary of the date on which the Bank
notifies the Executive of its intent
to discontinue the Agreement (the "Initial
Expiration Date") or, if later, the
second anniversary of the latest Change of
Control or Pending Change of Control,
as defined below, that occurs after the
Effective Date and before the Initial
Expiration Date.
(b) For all purposes of this Agreement, a "Change of Control"
shall
be deemed to have occurred upon the
happening of any of the following events:
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(i) the consummation of a reorganization, merger or consolidation
of
the
Company 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
Securities
Exchange Act of 1934, as amended ("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
outstanding equity ownership interests in the Company; 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
Company;
(ii) the acquisition of all or substantially all of the assets
of
the
Company or beneficial ownership (within the meaning of Rule
13d-3
promulgated under the Exchange Act) of 25% or more of the
outstanding
securities of the Company entitled
to vote generally in the election of
directors
by any person or by any persons acting in concert;
(iii) a complete liquidation or dissolution of the Company;
(iv) the occurrence of any event if, immediately following such
event, at
least 50% of the members of the Board of Directors of the
Company do
not belong to any of the following groups:
(A) individuals who were members of the Board of Directors of
the
Company on the date of this Agreement; or
(B) individuals who first became members of the Board of
Directors of the Company after the date of this Agreement
either:
(1) upon election to serve as a member of the Board of
Directors of the Company by affirmative vote of three-quarters
of the members of such board, or of a nominating committee
thereof, in office at the time of such first election; or
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(2) upon election by the shareholders of the Board of
Directors of the Company to serve as a member of such board,
but only if nominated for election by affirmative vote of
three-quarters of the members of the Board of Directors of the
Company, 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 Directors of the Company; or
(v) any event which would be described in section l (b)(i),
(ii),
(iii) or
(iv) if the term "Bank" were substituted for the term "Company"
therein.
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 Company, the Bank, or a
subsidiary of either of them, by the
Company, the Bank, or any subsidiary of
either of them, or by any employee benefit
plan maintained by any of them. For
purposes of this section 1(b), the term
"person" shall have the meaning assigned
to it under sections 13(d)(3) or 14(d)(2)
of the Exchange Act.
(c) For purposes of this Agreement, a "Pending Change of
Control"
shall mean: (i) the signing of a definitive
agreement for a transaction which,
if consummated, would result in a Change of
Control; (ii) the commencement of a
tender offer which, if successful, would
result in a Change of Control; or (iii)
the circulation of a proxy statement
seeking proxies in opposition to management
in an election contest which, if
successful, would result in a Change of
Control.
SECTION 2. DISCHARGE PRIOR TO A PENDING CHANGE OF CONTROL.
The Bank may discharge the Officer at any time prior to the
occurrence of a Pending Change of Control
for any reason or for no reason. In
such event:
(a) The Bank shall pay to the Officer (or, in the event of his
death
before
payment, his estate) his earned but unpaid compensation
(including,
without
limitation, salary and all other items which constitute wages
under
applicable law) as of the date of his termination of
employment.
This
payment shall be made at the time and in the manner prescribed by
law
applicable
to the payment of wages but in no event later than 30 days
after the
date of the Officer's termination of employment.
(b) The Bank shall provide the benefits, if any, due to the
Officer,
his
estate, surviving dependents or designated beneficiaries under
the
employee
benefit
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plans and
programs and compensation plans and programs maintained for the
benefit of
the officers and employees of the Bank. The time and manner of
payment or
other delivery of these benefits and the recipients of such
benefits
shall be determined according to the terms and conditions of
the
applicable
plans and programs.
The payments and benefits described in
sections 2(a) and (b) shall be referred
to in this Agreement as the "Standard
Termination Entitlements."
SECTION 3. TERMINATION OF EMPLOYMENT DUE TO DEATH.
The Officer's employment with the Bank shall terminate,
automatically and without any further
action on the part of any party to this
Agreement, on the date of the Officer's
death. In such event, the Bank shall pay
and deliver to the Officer's estate and
surviving dependents and beneficiaries,
as applicable, the Standard Termination
Entitlements.
SECTION 4. TERMINATION DUE TO DISABILITY AFTER CHANGE OF CONTROL
OR
PENDING CHANGE OF CONTROL.
The Bank may terminate the Officer's employment during the Term
and
after the occurrence of a Change of Control
or a Pending Change of Control upon
a determination, by a majority vote of the
members of the Board of Directors of
the Bank, acting in reliance on the written
advice of a medical professional
acceptable to it, that the Officer is
suffering from a physical or mental
impairment which, at the date of the
determination, has prevented the Officer
from performing his assigned duties on a
substantially full-time basis for a
period of at least one hundred and eighty
(180) days during the period of one
(1) year ending with the date of the
determination or is likely to result in
death or prevent the Officer from
performing his assigned duties on a
substantially full-time basis for a period
of at least one hundred and eighty
(180) days during the period of one (1)
year beginning with the date of the
determination. In such event:
(a) The Bank shall pay and deliver to the Officer (or in the
event
of his
death before payment, to his estate and surviving dependents
and
beneficiaries, as applicable) the Standard Termination
Entitlements.
(b) In addition to the Standard Termination Entitlements, the
Bank
shall
continue to pay the Officer his base salary, at the annual rate
in
effect for
him immediately prior to the termination of his employment,
during a
period ending on the earliest of: (i) the expiration of one
hundred
and eighty (180) days after the date of termination of his
employment; (ii) the date on which long-term disability insurance
benefits
are first
payable to him under any long-term disability insurance plan
covering
employees of the Bank (the "LTD Eligibility Date"); (iii) the
date of
his death; and (iv) the expiration of the Assurance Period (the
"Initial
Continuation Period"). If the end of the Initial Continuation
Period is
neither the LTD Eligibility Date nor the date of his death, the
Bank shall
continue to pay the Officer his base
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salary, at
an annual rate equal to sixty percent (60%) of the annual rate
in effect
for him immediately prior to the termination of his employment,
during an
additional period ending on the earliest of the LTD Eligibility
Date, the
date of his death and the expiration of the Assurance Period.
A termination of employment due to
disability under this section 4 shall be
effected by a notice of termination given
to the Officer by the Bank and shall
take effect on the later of the effective
date of termination specified in such
notice or the date on which the notice of
termination is deemed given to the
Officer.
SECTION 5. DISCHARGE WITH CAUSE AFTER CHANGE OF CONTROL OR
PENDING
CHANGE OF CONTROL.
(a) The Bank may terminate the Officer's employment with
"Cause"
during the Term and after the occurrence of
a Change of Control or Pending
Change of Control, but a termination shall
be deemed to have occurred with
"Cause" only if
(i) the Board of Directors of the Bank, by majority vote of its
entire
membership, determines that the Officer should be terminated
because of
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;
and
(ii) at least forty-five (45) days prior to the vote contemplated
by
section
1(b)(i), the Bank has provided the Officer with notice of its
intent to
discharge the Officer for Cause, detailing with particularity
the facts
and circumstances which are alleged to constitute Cause (the
"Notice of
Intent to Discharge"); and
(iii) after the giving of the Notice of Intent to Discharge and
before the
taking of the vote contemplated by section 5(a)(i), the Officer
(together
with his legal counsel, if he so desires) is afforded a
reasonable
opportunity to make both written and oral presentations before
the Board
of Directors of the Bank for the purpose of refuting the
alleged
grounds
for Cause for his discharge; and
(iv) after the vote contemplated by section 5(a)(i), the Bank
has
furnished
to the Officer a notice of termination which shall specify the
effective
date of his termination of employment (which shall in no event
be earlier
than the date on which such notice is deemed given) and include
a copy of
a resolution or resolutions adopted by the Board of Directors
of
the Bank,
certified by its corporate secretary and signed by each member
of the
Board of Directors voting in favor of adoption of the
resolution(s), authorizing the termination of the Officer's
employment
with
Cause
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and
stating with particularity the facts and circumstances found to
constitute
Cause for his discharge (the "Final Discharge Notice").
For purposes of this section 5, no act or
failure to act, on the part of the
Officer, shall be considered "willful"
unless it is done, or omitted to be done,
by the Officer in bad faith or without
reasonable belief that the Officer's
action or omission was in the best
interests of the Bank. Any act, or failure to
act, based upon authority given pursuant to
a resolution duly adopted by the
Board of Directors of the Bank or based
upon the written advice of counsel for
the Bank shall be conclusively presumed to
be done, or omitted to be done, by
the Officer in good faith and in the best
interests of the Bank.
(b) If the Officer is discharged with Cause during the Term and
after a Change of Control or Pending Change
of Control, the Bank shall pay and
provide to him (or, in the event of his
death, to his estate, his surviving
beneficiaries and his dependents) the
Standard Termination Entitlements only.
Following the giving of a Notice of Intent
to Discharge, the Bank may
temporarily suspend the Officer's duties
and authority and, in such event, may
also suspend the payment of salary and
other cash compensation, but not the
Officer's participation in retirement,
insurance and other employee benefit
plans. If the Officer is not discharged, or
is discharged without Cause, within
forty-five (45) days after the giving of a
Notice of Intent to Discharge,
payments of salary and cash compensation
shall resume, and all payments withheld
during the period of suspension shall be
promptly restored. If the Officer is
discharged with Cause not later than
forty-five (45) days after the giving of
the Notice of Intent to Discharge, all
payments withheld during the period of
suspension shall be deemed forfeited and
shall not be included in the Standard
Termination Entitlements. If a Final
Discharge Notice is given later than
forty-five (45) days, but sooner than
ninety (90) days, after the giving of the
Notice of Intent to Discharge, all payments
made to the Officer during the
period beginning with the giving of the
Notice of Intent to Discharge and ending
with the Officer's discharge with Cause
shall be retained by the Officer and
shall not be applied to offset the Standard
Termination Entitlements. If the
Bank does not give a Final Discharge Notice
to the Officer within ninety (90)
days after giving a Notice of Intent to
Discharge, the Notice of Intent to
Discharge shall be deemed withdrawn and any
future action to discharge the
Officer with Cause shall require the giving
of a new Notice of Intent to
Discharge.
SECTION 6. DISCHARGE WITHOUT CAUSE.
The Bank may discharge the Officer without Cause at any time
after
the occurrence of a Change of Control or
Pending Change of Control, and in such
event:
(a) The Bank shall pay and deliver to the Officer (or in the
event
of his
death before payment, to his estate and surviving dependents
and
beneficiaries, as applicable) the Standard Termination
Entitlements.
(b) In addition to the Standard Termination Entitlements:
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(i) During the Assurance Period, the Bank shall provide for
the Officer and his dependents continued group life, health
(including hospitalization, medical and major medical), dental,
accident and long-term disability insurance benefits on
substantially the same terms and conditions (including any
required
premium-sharing arrangements, co-payments and deductibles) in
effect
for them immediately prior to the Officer's resignation. The
coverage provided under this section 6(b)(i) may, at the election
of
the Bank, be secondary to the coverage provided as part of the
Standard Termination Entitlements and to any employer-paid
coverage
provided by a subsequent employer or through Medicare, with the
result that benefits under the other coverages will offset the
coverage required by
this section 6(b)(i).
(ii) The Bank shall make a lump sum payment to the Officer
(or, in the event of his death before payment, to his estate), in
an
amount equal to the estimated present value of the salary that
the
Officer would have earned if he had continued working for the
Bank
during the Assurance Period at the highest annual rate of
salary
achieved during the period of three (3) years ending
immediately
prior to the date of termination (the "Salary Severance
Payment").
The Salary Severance Payment shall be computed using the
following
formula:
(BS/PR)
SSP=(Sigma)(n)(1) [ _________________ ]
[1 +(I/ PR)](n)
where "SSP" is the amount of the Salary Severance Payment
(before
the deduction of applicable federal, state and local
withholding
taxes); "BS" is the highest annual rate of salary achieved by
the
Officer during the period of three (3) years ending immediately
prior to the date of termination; "PR" is the number of payroll
periods that occur during a year under the Bank's normal
payroll
practices; "I" equals the applicable federal short term rate
established under section 1274 of the Internal Revenue Code of
1986
(the "Code") for the month in which the Officer's termination
of
employment occurs (the "Short Term AFR") and "n" equals the
product
of the Assurance Period at the Officer's termination of
employment
(expressed in years and fractions of years) multiplied by the
number
of payroll periods that occur during a year under the Bank's
normal
payroll practices. The Salary Severance Payment shall be made
within
five (5) business days after the Officer's termination of
employment
and
shall be in lieu of any claim to a continuation of base salary
which the Officer might otherwise have and in lieu of cash
severance
benefits under any severance benefits program which may be in
effect
for officers or employees of the Bank.
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(iii) The Bank shall make a lump sum payment to the Officer
(or, in the event of his death before payment, to his estate), in
an
amount
