Hudson
City Bancorp, Inc.
Made and Entered into
as of December 31, 2008
Hudson
City Bancorp, Inc.
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 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 07562-1473 (the
“Company”) and Ronald E. Hermance Jr ., an
individual residing at 4634 Carlton Dunes 2, Fernandina Beach,
Florida 32034 (the “Executive”).
The
Executive currently serves the Company and Hudson City Savings Bank , a
savings bank organized and operating under the federal laws of the
United States with an office at West 80 Century Road, Paramus, New
Jersey 07652-1473, and a wholly owned subsidiary of the Company
(the “Bank”), 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
June 7, 2005 (the “Prior Agreement”). The Board of
Directors of the Company (“Board”) has determined that
it is in the best interests of the Company to amend and restate the
Prior Agreement pursuant to Section 29 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 Company and the Executive have
agreed to are as follows.
The
Company 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
Company 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) On
the day after the Employment Commencement Date and on each day
thereafter, the Employment Period shall be extended by one day,
such that on any date the Employment Period will expire on the day
before the third (3rd) anniversary of such date. These extensions
shall continue in perpetuity until discontinued by: (i) notice
to the Executive given by
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the Company
that it has elected to discontinue the extensions; (ii) notice
by the Executive to the Company that he has elected to discontinue
the extensions; or (iii) termination of the Executive’s
employment with the Company, whether by resignation, discharge or
otherwise. On the date on which such a notice is deemed given, or
on the effective date of a termination of the Executive’s
employment with the Company, the Employment Period shall be
converted to a fixed period of three (3) years ending on the
day before the third (3rd) anniversary of such date.
(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 earliest of the date in question, any earlier date on which
the Executive or the Company is deemed to have given a notice to
discontinue extensions of the Employment Period, and any earlier
date on which the Executive’s employment with the Company was
terminated.
(d) Nothing
in this Agreement shall be deemed to prohibit the Company 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 Company 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
Company and the Executive agree otherwise.
(a) The
Executive shall serve as Chairman, President and Chief Executive
Officer of the Company. The Executive shall have such power,
authority and responsibility and perform such duties as are
prescribed by or under the By-Laws of the Company, 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 Bank and the Executive, dated as of the
Initial Effective Date (“Bank Agreement”)) to the
business and affairs of the Company 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 Company 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 Company’s customary payroll practices for
senior officers. The Board shall review the
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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
Company 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 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.
Section 5. Employee Benefit Plans and Programs
.
During
the Employment Period, the Executive shall be treated as an
employee of the Company 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 Company, in accordance with the terms
and conditions of such employee benefit plans and programs and
compensation plans and programs and consistent with the
Company’s customary practices in each case as applied to
senior executive officers of the Company.
Section 6. Indemnification and Insurance
.
(a) During
the Employment Period and for a period of six years thereafter, the
Company 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 Company or service in other capacities at the
Company’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 Company.
(b) To
the maximum extent permitted under applicable law, during the
Employment Period and for a period of six years thereafter, the
Company 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 Company or service in other capacities at the Company’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 Company 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
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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 activities are not
prohibited under any code of conduct or investment or securities
trading policy established by the Company 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 Company and the Executive may
mutually agree upon. The Company 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 Company and necessary or appropriate in
connection with the performance of his assigned duties under this
Agreement. The Company shall provide to the Executive for his
exclusive use an automobile owned or leased by the Company and
appropriate to his position, to be used in the performance of his
duties hereunder, including commuting to and from his personal
residence. The Company shall (i) reimburse the Executive for
the cost of maintenance and servicing such automobile and, for
instance, gasoline and oil for such automobile; (ii) reimburse
the Executive 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)
that are excludible from the Executive’s gross income for
federal income tax purposes; (iii) reimburse the Executive for
fees for memberships in such clubs and organizations and such other
expenses as the Executive and the Company shall mutually agree are
necessary and appropriate for business purposes, in each case as
soon as practicable following presentation to the Company of an
itemized account of such expenses in such form as the Company 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 Company 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 Company
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 Company
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 Company, including the annual bonus plan (if any) to which
the Executive is entitled under any cash-based annual bonus or
performance
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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.”
Section 10. Termination Due to Disability
.
The
Company 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 Company
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 Company 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 Company 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 Company 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.
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Section 11. Discharge with Cause
.
(a) The
Company 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
(A) has willfully and intentionally failed to perform his assigned
duties under this Agreement in any material respect (including, for
these purposes, the Executive’s inability to perform such
duties as a result of drug or alcohol dependency); (B) has
willfully and intentionally engaged in dishonest or illegal conduct
in connection with his performance of services for the Company or
has been convicted of a felony; (C) has willfully violated, in
any material respect, any law, rule, regulation, written agreement
or final cease-and-desist order with respect to his performance of
services for the Company; or (D) has willfully and
intentionally breached the material terms of this Agreement in any
material respect; and
(ii) at least
forty-five (45) days prior to the votes contemplated by
section 11(a)(i), the Company 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 Company 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 Company. 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 Company 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 Company.
(b) If
the Executive is discharged during the Employment Period with
Cause, the Company shall pay and provide to him (or, in the event
of his death, to his estate, his
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surviving
beneficiaries and his dependents) the Standard Termination
Entitlements only. Following the giving of a Notice of Intent to
Discharge, the Company 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 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 Company
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
Company may discharge the Executive at any time during the
Employment Period and, unless such discharge constitutes a
discharge with Cause:
(a) The Company
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 Company 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 Company, 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 Company
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 Company during the
Remaining Unexpired
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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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