AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made
and entered into as of _____________, 2008, by and between Dime
Community Bancshares, Inc., a savings and loan holding company
organized and operating under the laws of the State of Delaware and
having an office at 209 Havemeyer Street, Brooklyn, New York 11211
(“Company”) and Kenneth J. Mahon ("Mr.
Mahon").
W I T N E S S E T H :
WHEREAS, Mr.
Mahon and the Company are parties to an Employment Agreement made
and entered into as of June 26, 1996 (the “Initial Effective
Date”) pursuant to which Mr. Mahon serves the Company in the
capacity of First Executive Vice President and Chief Financial
Officer of the Company and its wholly owned subsidiary, The Dime
Savings Bank of Williamsburgh ( “Bank “);
and
WHEREAS, such Agreement was amended as of
January 1, 2003 (the “Prior Agreement”); and
WHEREAS, the parties desire to amend and restate
the Prior Agreement for the purpose, among others, of compliance
with the applicable requirements of Section 409A of the
Internal Revenue Code of 1986 (“the Code”);
and
WHEREAS, the
Company desires to assure for itself the continued availability of
Mr. Mahon’s services and the ability of Mr. Mahon to perform
such services with a minimum of personal distraction in the event
of a pending or threatened Change in Control (as hereinafter
defined); and
WHEREAS, Mr.
Mahon is willing to continue to serve the Company on the terms and
conditions hereinafter set forth;
NOW, THEREFORE,
in consideration of the premises and the mutual covenants and
obligations hereinafter set forth, the Company and Mr. Mahon hereby
agree as follows:
1. Representations
and Warranties of the Parties.
(a) The
Company hereby represents and warrants to Mr. Mahon
that:
(i) it
has all requisite power and authority to execute, enter into and
deliver this Agreement and to perform each and every one of its
obligations hereunder; and
(ii) the
execution, delivery and performance of this Agreement have been
duly authorized by all requisite corporate action on the part of
the Company; and
(iii) neither
the execution or delivery of this Agreement, nor the performance of
or compliance with any of the terms and conditions hereof, is
prevented or in any way limited by (A) any agreement or instrument
to which the Company is a party or by which it is bound, or (B) any
provision of law, including, without limitation, any statute, rule
or regulation or any order of any court or administrative agency,
applicable to the Company or its business.
(b) Mr.
Mahon hereby represents and warrants to the Company
that:
(i) he
has all requisite power and authority to execute, enter into and
deliver this Agreement and to perform each and every one of his
obligations hereunder; and
(ii) neither
the execution or delivery of this Agreement, nor the performance of
or compliance with any of the terms and conditions hereof, is
prevented or in any way limited by (A) any agreement or instrument
to which he is a party or by which he is bound, or (B) any
provision of law, including, without limitation, any statute, rule
or regulation or any order of any court or administrative agency,
applicable to him.
The Company
hereby continues the employment of Mr. Mahon, and Mr. Mahon hereby
accepts such continued employment, during the period and upon the
terms and conditions set forth in this Agreement.
(a) The
terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this
section 3 (“Employment Period”). The
Employment Period shall be for an initial term of three years
beginning on the Initial Effective Date and ending on the third
anniversary date of the Initial Effective Date, plus such
extensions, if any, as are provided pursuant to section
3(b).
(b) Except
as provided in section 3(c), beginning on the Initial Effective
Date, the Employment Period shall automatically be extended for one
(1) additional day each day, unless either the Company or Mr. Mahon
elects not to extend the Agreement further by giving written notice
to the other party, in which case the Employment Period shall end
on the third anniversary of the date on which such written notice
is given. Upon termination of Mr. Mahon’s
employment with the Company for any reason whatsoever, any daily
extensions provided pursuant to this section 3(b), if not therefore
discontinued, shall automatically cease.
(c) If,
prior to the date on which the Employment Period would end pursuant
to section 3(a) or (b) of this Agreement, a Change in Control (as
defined in section 13 of this Agreement) occurs, then the
Employment Period shall be extended through and including the
second anniversary of the earliest date after the effective date of
such Change in Control on which either the Company or Mr. Mahon
elects, by written notice pursuant to section 3(d) of this
Agreement to the non-electing party, to discontinue the Employment
Period; provided, however, that this section shall not apply in the
event that, prior to the Change in Control (as defined in section
13 of this Agreement), Mr. Mahon has provided written notice to the
Company of his intent to discontinue the Employment
Period.
(d) The
Company or Mr. Mahon may, at any time by written notice given to
the other, elect to discontinue the daily extension of the
Employment Period. Any such notice given by the Company
shall be accompanied by a certified copy of a resolution, adopted
by the affirmative vote of a majority of the entire membership of
the Board at a meeting of the Board duly called and held,
authorizing the giving of such notice.
(e) Notwithstanding
anything herein contained to the contrary: (i) Mr.
Mahon’s employment with the Company may be terminated during
the Employment Period, in accordance with the terms and conditions
of this Agreement; and (ii) nothing in this Agreement shall mandate
or prohibit a continuation of Mr. Mahon’s employment
following the expiration of the Employment Period upon such terms
and conditions as the Company and Mr. Mahon may mutually agree
upon.
(f) For
all purposes of this Agreement, any reference to the
“Remaining Unexpired Employment Period” as of any
specified date shall mean (i) prior to the occurrence of a Change
in Control (as hereinafter defined) the period commencing on the
date specified and ending on the later of the third anniversary of
the Initial Effective Date, the third anniversary of any earlier
date on which either the Company or Mr. Mahon has elected to
discontinue the daily extensions of the Employment Period, or the
third anniversary of Mr. Mahon’s termination of employment
for any reason; and (ii) following a Change in Control (as
hereinafter defined) a period commencing on the date specified and
ending on the later of the second anniversary of the effective date
of the Change in Control, the second anniversary of any earlier
date following the occurrence of the Change in Control on which
either Mr. Mahon or the Company has elected to discontinue the
daily extensions of the Employment Period, or the second
anniversary of Mr. Mahon’s termination of employment for any
reason whatsoever.
During the
Employment Period, Mr. Mahon shall:
(a) except
to the extent allowed under section 7 of this Agreement, devote his
full business time and attention to the business and affairs of the
Company and use his best efforts to advance the Company’s
interests;
(b) serve
as First Executive Vice President and Chief Financial Officer if
duly appointed and/or elected to serve in such position;
and
(c) have
such functions, duties and responsibilities not inconsistent with
his title and office as may be assigned to him by or under the
authority of the Board of Directors of the Company
(“Board”), in accordance with organization Certificate,
By-laws, Applicable Laws, Statutes and Regulations, custom and
practice of the Company as in effect on the date first above
written. Mr. Mahon shall have such authority as is necessary or
appropriate to carry out his assigned duties. Mr. Mahon shall
report to and be subject to direction and supervision by the
Board.
(d) none
of the functions, duties and responsibilities to be performed by
Mr. Mahon pursuant to this Agreement shall be deemed to include
those functions, duties and responsibilities performed by Mr. Mahon
in his capacity as director of the Company.
5. Compensation
-- Salary and Bonus.
In
consideration for services rendered by Mr. Mahon under this
Agreement, the Company shall pay to Mr. Mahon a salary at an annual
rate equal to:
(a) during
the period beginning on January 1, 2009 and ending on December 31,
2009, no less than $________;
(b) during
each calendar year that begins after December 31, 2009, such amount
as the Board may, in its discretion, determine, but in no event
less than the rate in effect on December 31, 2009; or
(c) for
each calendar year that begins on or after a Change in Control, the
product of Mr. Mahon’s annual rate of salary in effect
immediately prior to such calendar year, multiplied by the greatest
of:
(ii) the
quotient of (A) the U.S. City Average All Items Consumer Price
Index for All Urban Consumers (or, if such index shall cease to be
published, such other measure of general consumer price levels as
the Board may, in good faith, prescribe) for October of the
immediately preceding calendar year, divided by (B) the U.S. City
Average All Items Consumer Price Index for All Urban Consumers (or,
if such index shall cease to be published, such other measure of
general consumer price levels as the Board may, in good faith,
prescribe) for October of the second preceding calendar year;
and
(iii) the
quotient of (A) the average annual rate of salary, determined as of
the first day of such calendar year, of the officers of the Company
(other than Mr. Mahon) who are assistant vice presidents or more
senior officers, divided by (B) the average annual rate of salary,
determined as of the first day of the immediately preceding
calendar year, of the officers of the Company (other than Mr.
Mahon) who are assistant vice presidents or more senior
officers;
The salary
payable under this section 5 shall be paid in approximately equal
installments in accordance with the Company’s customary
payroll practices. Nothing in this section 5 shall be
construed as prohibiting the payment to Mr. Mahon of a salary in
excess of that prescribed under this section 5 or of additional
cash or non-cash compensation in a form other than salary, to the
extent that such payment is duly authorized by or under the
authority of the Board. No portion of the compensation paid to Mr.
Mahon pursuant to this Agreement shall be deemed to be compensation
received by Mr. Mahon in his capacity as director of the
Company.
6. Employee
Benefit Plans and Programs; Other Compensation.
Except as
otherwise provided in this Agreement, Mr. Mahon shall be treated as
an employee of the Company and be entitled to participate in and
receive benefits under the Company’s Retirement Plan,
Incentive Savings Plan, group life and health (including medical
and major medical) and disability insurance plans, and such other
employee benefit plans and programs, including but not limited to
any long-term or short-term incentive compensation plans or
programs (whether or not employee benefit plans or programs), as
the Company may maintain from time to time, in accordance with the
terms and conditions of such employee benefit plans and programs
and compensation plans and programs and with the Company’s
customary practices. Following a Change in Control, all
such benefits to Mr. Mahon shall be continued on terms and
conditions substantially identical to, and in no event less
favorable than, those in effect prior to the Change in
Control.
7. Board
Memberships and Personal Activities.
(a) Mr.
Mahon may serve as a member of the board of directors of such
business, community and charitable organizations as he may disclose
to the Board from time to time, 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.
(b) Mr.
Mahon may also serve as an officer or director of the Bank on such
terms and conditions as the Company and the Bank may mutually agree
upon, and such service shall not be deemed to materially interfere
with Mr. Mahon’s performance of his duties hereunder or
otherwise result in a material breach of this
Agreement. If Mr. Mahon is discharged or suspended, or
is subject to any regulatory prohibition or restriction with
respect to participation in the affairs of the Bank, he shall
(subject to the Company’s powers of termination hereunder)
continue to perform services for the Company in accordance with
this Agreement but shall not directly or indirectly provide
services to or participate in the affairs of the Bank in a manner
inconsistent with the terms of such discharge or suspension or any
applicable regulatory order.
8. Working
Facilities and Expenses.
Mr.
Mahon’s principal place of employment shall be at the
Company’s executive offices at the address first above
written, or at such other location in the New York metropolitan
area as determined by the Board. The Company shall
provide Mr. Mahon, at his principal place of employment, with a
private office, stenographic services and other support services
and facilities suitable to his position with the Company and
necessary or appropriate in connection with the performance of his
assigned duties under this Agreement. The Company shall
provide Mr. Mahon with an automobile suitable to his
position with the Company in accordance with its prior practices,
and such automobile shall be used by Mr. Mahon in carrying out his
duties under this Agreement, including commuting between his
residence and his principal place of employment. The
Company shall (i) reimburse Mr. Mahon for the cost of maintenance
and servicing such automobile and, for instance, gasoline and oil
for such automobile; (ii) reimburse Mr. Mahon for his ordinary and
necessary business expenses, incurred in the performance of his
duties under this Agreement (including but not limited to travel
and entertainment expenses); and (iii) reimburse Mr. Mahon for fees
for memberships in such clubs and organizations as Mr. Mahon and
the Company and such other expenses as Mr. Mahon and the Company
shall mutually agree are necessary and appropriate for business
purposes, upon presentation to the Company of an itemized account
of such expenses in such form as the Company may reasonably
require, each such reimbursement payment to be made promptly
following receipt of the itemized account and in any event not
later than the last day of the year following the year in which the
expense was incurred. Mr. Mahon shall be entitled to no
less than four (4) weeks of paid vacation during each year in the
Employment Period. Mr. Mahon shall be responsible for
the payment of any taxes on account of his personal use of the
automobile provided by the Company and on account of any other
benefit provided herein.
9. Termination
Giving Rise to Severance Benefits.
(a) In
the event that Mr. Mahon’s employment with the Company shall
terminate during the Employment Period other than on account
of:
(i) a
Termination for Cause (within the meaning of section 12(a) of this
Agreement);
(ii) a
voluntary resignation by Mr. Mahon other than a Resignation for
Good Reason (within the meaning of section 12(b) of this
Agreement);
(iii) a
termination on account of Mr. Mahon’s death; or
(iv) a
termination after both of the following conditions exist: (A) Mr.
Mahon has been absent from the full-time service of the Company on
account of his Disability (as defined in section 11(b) of this
Agreement) for at least six (6) consecutive months; and (B) Mr.
Mahon shall have failed to return to work in the full-time service
of the Company within thirty (30) days after written notice
requesting such return is given to Mr. Mahon by the
Company;
then the
Company shall provide to Mr. Mahon the benefits and pay to Mr.
Mahon the amounts provided under section 9(b) of this
Agreement.
(b) In
the event that Mr. Mahon’s employment with the Company shall
terminate under circumstances described in section 9(a) of this
Agreement, the following benefits and amounts shall be paid or
provided to Mr. Mahon (or, in the event of his death, to his
estate), in accordance with section 30, on his termination of
employment:
(i) his
earned but unpaid salary as of the date of the termination of his
employment with the Company, payable when due but in no event later
than thirty (30) days following his termination of employment with
the Company;
(ii) (A)
the benefits, if any, to which Mr. Mahon and his family and
dependents are entitled as a former employee, or family or
dependents of a former employee, under the employee benefit plans
and programs and compensation plans and programs maintained for the
benefit of the Company’s officers and employees, in
accordance with the terms of such plans and programs in effect on
the date of his termination of employment, or if his termination of
employment occurs after a Change in Control, on the date of his
termination of employment or on the date of such Change in Control,
whichever results in more favorable benefits as determined by Mr.
Mahon, where credit is given for three additional years of service
and age in determining eligibility and benefits for any plan and
program where age and service are relevant factors, and (B) payment
for all unused vacation days and floating holidays in the year in
which his employment is terminated, at his highest annual rate of
salary for such year;
(iii) continued
group life, health (including hospitalization, medical and major
medical, dental, accident and long-term disability insurance
benefits), in addition to that provided pursuant to section
9(b)(ii) of this Agreement and after taking into account the
coverage provided by any subsequent employer, if and to the extent
necessary to provide Mr. Mahon and his family and dependents for a
period of three years following termination of employment, coverage
identical to and in any event no less favorable than the coverage
to which they 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 in Control, on the
date of his termination of employment or during the one-year period
ending on the date of such Change in Control, whichever results in
more favorable benefits as determined by Mr. Mahon) if he had
continued working for the Company during the Remaining Unexpired
Employment Period at the highest annual rate of compensation
(assuming, if a Change in Control has occurred, that the annual
increases under section 5(c) would apply) under the
Agreement;
(iv) a
lump sum payment in an amount equal to the present value of the
salary and the bonus that Mr. Mahon would have earned if he had
worked for the Company during the Remaining Unexpired Employment
Period at the highest annual rate of salary (assuming, if a Change
in Control has occurred, that the annual increases under section
5(c) would apply) and the highest bonus as a percentage of the rate
of salary provided for under this Agreement, where such present
value is to be determined using a discount rate of six percent (6%)
per annum, compounded, in the case of salary, with the frequency
corresponding to the Company’s regular payroll periods with
respect to its officers, and, in the case of bonus,
annually;
(v) a
lump sum payment in an amount equal to the excess, if any, of: (A)
the present value of the benefits to which he would be entitled
under any defined benefit plans maintained by, or covering
employees of, the Company (including any “excess benefit
plan” within the meaning of section 3(36) of the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), or other special or supplemental plan) as in
effect on the date of his termination, if he had worked for the
Company during the Remaining Unexpired Employment Period at the
highest annual rate of compensation (assuming, if a Change in
Control has occurred, that the annual increases under section 5(c)
would apply) under the Agreement and been fully vested in such plan
or plans and had continued working for the Company during the
Remaining Unexpired Employment 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 Employment Period and by
adding to the compensation recognized under such plans for the year
in which termination of employment occurs all amounts payable under
sections 9(b)(i), (iv) and (vii), over (B) the present value of the
benefits to which he is actually entitled under any such plans
maintained by, or covering employees of, the Company as of the date
of his termination where such present values are to be
determined using a discount rate of six percent (6%) per annum,
compounded monthly, and the mortality tables prescribed under
section 72 of the Internal Revenue Code of 1986
(“Code”); provided, however, that if payments are made
under this section 9(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;
(vi) a
lump sum payment in an amount equal to the excess, if any, of (A)
the present value of the benefits attributable to the
Company’s contribution to which he would be entitled under
any defined contribution plans maintained by, or covering employees
of, the Company (including any “excess benefit plan”
within the meaning of section 3(36) of ERISA, or other special or
supplemental plan) as in effect on the date of his termination, if
he had worked for the Company during the Remaining Unexpired
Employment Period at the highest annual rate of compensation
(assuming, if a Change in Control has occurred, that the annual
increases under section 5(c) would apply) under the Agreement, and
made the maximum amount of employee contributions, if any, required
or permitted under such plan or plans, and been eligible for the
highest rate in matching contributions under such plan or plans
during the Remaining Unexpired Employment Period which is prior to
Mr. Mahon’s termination of employment with the Company, and
been fully vested in such plan or plans, over (B) the present value
of the benefits attributable to the Company’s contributions
to which he is actually entitled under such plans as of the date of
his termination of employment with the Company, where such present
values are to be determined using a discount rate of six percent
(6%) per annum, compounded with the frequency corresponding to the
Company’s regular payroll periods with respect to its
officers; provided, however, that if payments are made under this
section 9(b)(vi) as a result of this section deeming otherwise
unvested amounts under such defined contribution 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;
(vii) the
payments that would have been made to Mr. Mahon under any incentive
compensation plan maintained by, or covering employees of, the
Company (other than bonus payments to which section 9(b)(iv) of
this Agreement is applicable) if he had continued working for the
Company during the Remaining Unexpired Employment Period and had
earned an incentive award in each calendar year that ends during
the Remaining Unexpired Employment Period in an amount equal to the
product of (A) the maximum percentage rate of compensation at which
an award was ever available to Mr. Mahon under such incentive
compensation plan, multiplied by (B) the compensation that would
have been paid to Mr. Mahon during each calendar year at the
highest annual rate of compensation (assuming, if a Change in
Control has occurred, that the annual increases under section 5(c)
would apply) under the Agreement, such payments to be made at the
same time and in the same manner as payments are made to other
officers of the Company pursuant to the terms of such incentive
compensation plan; provided, however, that payments under this
section 9(b)(vii) shall not be made to Mr. Mahon for any year on
account of which no payments are made to any of the Company’s
officers under any such incentive compensation plan; and
(viii) the
benefits to which Mr. Mahon is entitled under the Company’s
Supplemental Executive Retirement Plan (or other excess benefits
plan with the meaning of section 3(36) of ERISA or other special or
supplemental plan) shall be paid to him in a lump sum, where such
lump sum is computed using the mortality tables under the
Company’s tax-qualified pension plan and a discount rate of
6% per annum. If the amount may be increased by a subsequent Change
in Control, any additional payment shall be made at the time and in
the form provided under the relevant plan, or, if no such time or
form is provided, upon the first of the following events to occur
on or after the date of such Change in Control: a change
in control event (within the meaning of Treasury Regulation section
1.409A-3(i)(5)) with respect to Mr. Mahon, Mr. Mahon’s
separation from service (within the meaning of section
1.409A-1(h)), Mr. Mahon’s death or Mr. Mahon’s
disability (within the meaning of Treasury Regulation section
1.409A-3(i)(4)). From the date of such Change of Control
until the date of payment, any additional payment so deferred shall
be held in trust for Mr. Mahon, the terms of which trust shall be
those set forth in section 30.
(c) Mr.
Mahon shall not be required to mitigate the amount of any payment
provided for in this section 9 by seeking o
