Made and Entered into
as of December 31, 2008
Amended
and Restated Employment Agreement
This
Amended And Restated
Employment Agreement (the “Agreement”) is
made and entered into as of December 31, 2008 between 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”) and Ronald E. Hermance Jr ., an
individual residing at 4634 Carlton Dunes 2, Fernandina Beach,
Florida 32034 (the “Executive”).
The
Executive currently serves Hudson City Bancorp, Inc ., a
business corporation organized and operating 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 the
Bank, a wholly owned subsidiary of the Company, in an executive
capacity pursuant to an Employment Agreement between the Executive,
the Company and the Bank made and entered into as of July 13,
1999 (the “Initial Effective Date”), and amended and
restated on July 7, 2005 (the “Prior Agreement”).
The Board of Directors of the Bank (“Board”) has
determined that it is in the best interests of the Bank to amend
and restate the Prior Agreement pursuant to Section 28 thereof
for the purpose, among others, of compliance with the applicable
requirements of section 409A of the Internal Revenue Code of 1986
(the “Code”). The Executive has agreed to this
amendment and restatement.
The
terms and conditions which the Bank and the Executive have agreed
to are as follows.
The
Bank hereby continues to employ the Executive, and the Executive
hereby accepts such continued employment, during the period and
upon the terms and conditions set forth in this
Agreement.
Section 2. Employment Period; Remaining Unexpired
Employment Period .
(a) The
Bank shall employ the Executive during an initial period of three
(3) years beginning on the Initial Effective Date (the
“Employment Commencement Date”) and ending on the day
before the third (3rd) anniversary of the Employment Commencement
Date, and during the period of any additional extensions described
in section 2(b) (the “Employment Period”).
(b) The
Board shall conduct an annual review of the Executive’s
performance on or about each anniversary of the Employment
Commencement Date (each, an “Anniversary Date”) and
may, on the basis of such review and by written notice to the
Executive, offer to extend the Employment Period through the day
before the third (3rd) anniversary of the relevant
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Anniversary
Date. In such event, the Employment Period shall be deemed extended
in the absence of objection from the Executive by written notice to
Bank given within ten (10) business days after his receipt of
the Bank’s offer of extension.
(c) Except
as otherwise expressly provided in this Agreement, any reference in
this Agreement to the term “Remaining Unexpired Employment
Period” as of any date shall mean the period beginning on
such date and ending on the day before the third (3rd) anniversary
of the Employment Commencement Date or, if later, on the day before
the third (3rd) anniversary of the last Anniversary Date as of
which the Employment Period was extended pursuant to section
2(b).
(d) Nothing
in this Agreement shall be deemed to prohibit the Bank from
terminating the Executive’s employment before the end of the
Employment Period with or without notice for any reason. This
Agreement shall determine the relative rights and obligations of
the Bank and the Executive in the event of any such termination. In
addition, nothing in this Agreement shall require the termination
of the Executive’s employment at the expiration of the
Employment Period. If the Executive’s employment continues
beyond the expiration of the Employment Period, any such
continuation shall be on an “at-will” basis unless the
Bank and the Executive agree otherwise.
(a) The
Executive shall serve as Chairman, President and Chief Executive
Officer of the Company of the Bank. The Executive shall have such
power, authority and responsibility and perform such duties as are
prescribed by or under the By-Laws of the Bank, and as are
customarily associated with such positions. The Executive shall
devote his full business time and attention (other than during
weekends, holidays, approved vacation periods, and periods of
illness or approved leaves of absence, and other than his
performance of services pursuant to the terms of the employment
agreement between the Company and the Executive, dated as of the
Initial Effective Date (“Company Agreement”)) to the
business and affairs of the Bank and shall use his best efforts to
advance its best interests.
(b) If
duly elected, the Executive shall serve as a member of the Board
and as Chairman of the Board (or in another position as a member of
the Board), without additional remuneration therefor; provided,
however, that failure to elect the Executive to the position of
Chairman of the Board (or other position as a member of the Board)
shall not by itself constitute a breach of the Agreement or entitle
the Executive to severance benefits hereunder.
Section 4. Cash Compensation .
In
consideration for the services to be rendered by the Executive
hereunder, the Bank shall pay to him a salary at an initial annual
rate of one million five hundred thousand dollars ($1,500,000),
payable in approximately equal installments in accordance with the
Bank’s customary payroll practices for senior officers. The
Board shall review the Executive’s annual rate of salary at
such times during the Employment Period as it deems appropriate,
but not less frequently than once every twelve (12) months,
and may, in its discretion, approve a salary increase. In addition
to salary, the Executive may receive other cash compensation from
the
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Bank for
services hereunder at such times, in such amounts and on such terms
and conditions as the Board may determine. If the Executive 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 continue to perform services for the
Company in accordance with the terms of the Company 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.
Section 5. Employee Benefit Plans and Programs
.
During
the Employment Period, the Executive shall be treated as an
employee of the Bank and shall be entitled to participate in and
receive benefits under any and all qualified or non-qualified
retirement, pension, savings, profit-sharing or stock bonus plans,
any and all group life, health (including hospitalization, medical
and major medical), dental, accident and long-term disability
insurance plans, and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and
restricted stock plans) 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 consistent with the
Bank’s customary practices in each case as applied to senior
executive officers of the Bank.
Section 6. Indemnification and Insurance
.
(a) During
the Employment Period and for a period of six years thereafter, the
Bank shall cause the Executive to be covered by and named as an
insured under any policy or contract of insurance obtained by it to
insure its directors and officers against personal liability for
acts or omissions in connection with service as an officer or
director of the Bank or service in other capacities at the
Bank’s request. The coverage provided to the Executive
pursuant to this section 6 shall be of the same scope and on the
same terms and conditions as the coverage (if any) provided to
other officers or directors of the Bank.
(b) To
the maximum extent permitted under applicable law, during the
Employment Period and for a period of six years thereafter, the
Bank shall indemnify the Executive against and hold him harmless
from any costs, liabilities, losses and exposures for acts or
omissions in connection with service as an officer or director of
the Bank or service in other capacities at the Bank’s request
to the fullest extent and on the most favorable terms and
conditions that similar indemnification is offered to any director
or officer of the Bank or any subsidiary or affiliate
thereof.
Section 7. Outside Activities
.
The
Executive 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); provided, however, that such service
shall not materially interfere with the performance of his duties
under this Agreement. The Executive may also engage in personal
business and investment activities which do not materially
interfere with the performance of his duties hereunder;
provided, however, that such
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activities are
not prohibited under any code of conduct or investment or
securities trading policy established by the Bank and generally
applicable to all similarly situated executives.
Section 8. Working Facilities and Expenses
.
The
Executive’s principal place of employment shall be at the
Bank’s executive offices at the address first above written,
or at such other location as the Bank and the Executive may
mutually agree upon. The Bank shall provide the Executive at his
principal place of employment with a private office, secretarial
services and other support services and facilities suitable to his
positions with the Bank and necessary or appropriate in connection
with the performance of his assigned duties under this Agreement.
The Bank shall reimburse the Executive for his ordinary and
necessary business expenses, including, without limitation, his
travel and entertainment expenses incurred in connection with the
performance of his duties under this Agreement, in each case upon
presentation to the payer of an itemized account of such expenses
in such form as the Bank may reasonably require, and in any event
not later than the last day of the calendar year following the
calendar year in which the expense was incurred.
Section 9. Termination of Employment Due to Death
.
The
Executive’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 Executive’s
death. In such event:
(a) The Bank shall
pay to the Executive’s 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 Executive’s termination of employment.
(b) The Bank shall
provide the benefits, if any, due to the Executive’s estate,
surviving dependents or designated beneficiaries under the employee
benefit plans and programs and compensation plans and programs
maintained for the benefit of the officers and employees of the
Bank, including the annual bonus plan (if any) to which the
Executive is entitled under any cash-based annual bonus or
performance compensation plan in effect for the year in which his
or her termination occurs, to be paid at the same time and on the
terms and conditions (including but not limited to achievement of
performance goals) applicable under the relevant plan. 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 9(a) and (b) shall be
referred to in this Agreement as the “Standard Termination
Entitlements.”
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Section 10. Termination Due to Disability
.
The
Bank may terminate the Executive’s employment upon a
determination, by vote of a majority of the members of the Board,
acting in reliance on the written advice of a medical professional
acceptable to them, that the Executive is suffering from a physical
or mental impairment which, at the date of the determination, has
prevented the Executive 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 Executive 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 Executive (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 Executive 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 or the
Company (the “LTD Eligibility Date”); (iii) the
date of his death; and (iv) the expiration of the Remaining
Unexpired Employment 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 Executive his base 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 Remaining Unexpired Employment Period.
A
termination of employment due to disability under this section 10
shall be effected by notice of termination given to the Executive
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
Executive.
Section 11. Discharge with Cause
.
(a) The
Bank may terminate the Executive’s employment during the
Employment Period, and such termination shall be deemed to have
occurred with “Cause” only if:
(i) the Board, by
a majority vote of its membership, determines that the Executive
should be terminated because of personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving
personal
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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 material
breach of any provision of this Agreement, in each case as measured
against standards generally prevailing at the relevant time in the
savings and community banking industry; and
(ii) at least
forty-five (45) days prior to the votes contemplated by
section 11(a)(i), the Bank has provided the Executive with notice
of intent to discharge the Executive 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 votes contemplated by section 11(a)(i), the Executive
(together with his legal counsel, if he so desires) is afforded a
reasonable opportunity to make both written and oral presentations
before the Board for the purpose of refuting the alleged grounds
for Cause for his discharge; and
(iv) after the
votes contemplated by section 11(a)(i), the Bank has furnished to
the Executive 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 adopted by the Board,
certified by the corporate secretary and signed by each member of
the Board voting in favor of adoption of the resolution,
authorizing the termination of the Executive’s employment
with Cause and stating with particularity the facts and
circumstances found to constitute Cause for his discharge (the
“Final Discharge Notice”).
For purposes of
this section 11, no act or failure to act on the part of the
Executive shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’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 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 Executive in good faith and in the best
interests of the Bank.
(b) If
the Executive is discharged during the Employment Period with
Cause, 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 Executive’s duties and authority and,
in such event, may also suspend the payment of salary and other
cash compensation, but not the Executive’s participation in
retirement, insurance and other employee benefit plans. If the
Executive is not discharged, or is discharged without Cause, within
forty-five (45) days after the giving of a Notice of Intent to
Discharge, all payments withheld during the period of suspension
shall be promptly restored and, if no termination has occurred,
payments of salary and cash compensation shall resume. If the
Executive is discharged with Cause not later than forty-five (45)
days after the giving of the Notice of Intent to Discharge,
all
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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 Executive during the period beginning with the giving of the
Notice of Intent to Discharge and ending with the Executive’s
discharge with Cause shall be retained by the Executive and shall
not be applied to offset the Standard Termination Entitlements. If
the Bank does not give a Final Discharge Notice to the Executive
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 Executive with
Cause shall require the giving of a new Notice of Intent to
Discharge.
Section 12. Discharge without Cause
.
The
Bank may discharge the Executive at any time during the Employment
Period and, unless such discharge constitutes a discharge with
Cause:
(a) The Bank shall
pay and deliver to the Executive (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:
(i) During the
Remaining Unexpired Employment Period, the Bank shall provide for
the Executive 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 Executive’s
termination. The coverage provided under this section 12(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
12(b)(i).
(ii) The Bank
shall make a lump sum payment to the Executive (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 Executive would have
earned if he had continued working for the Bank during the
Remaining Unexpired Employment 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:
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