EMPLOYEE RETENTION AGREEMENT
by and among
THE DIME SAVINGS BANK OF WILLIAMSBURGH,
DIME COMMUNITY BANCSHARES, INC.
and
DANIEL
J.
HARRIS
made and entered into as of
February
4, 2008
EMPLOYEE
RETENTION AGREEMENT
This
EMPLOYEE
RETENTION AGREEMENT (“Agreement”) is made
and entered into as of February 4, 2008 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 209 Havemeyer
Street, Brooklyn, New York 11211 (“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 209 Havemeyer Street,
Brooklyn, New York 11211 (“Holding Company”); and
Daniel J. Harris, an individual residing at 92 East Brookside
Drive, Larchmont, New York,
10538(“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
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
fol1ows:
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 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 second 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 second 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 second anniversary of the date of the
Change of Control, as defined in section 10 of this Agreement, or
the second 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 periods, 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.
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, employee 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,
including, without limitation, the Officer's travel and
entertainment expenses, incurred in connection with the
performance 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
that 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.
(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
present 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 a
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