Exhibit 10.5
RETENTION
AGREEMENT
This Retention Agreement (the
“Agreement”) is made and entered into on
November 2, 2006 (but effective at the time specified in
Section 1 below) by and between New York Community Bank (the
“Bank”) and Patrick D. McTernan, an individual (the
“Employee”).
INTRODUCTORY
STATEMENT
New York Community Bancorp, Inc.
(“NYB”), the parent holding company of the Bank and
PennFed Financial Services, Inc. (“PFSI”), the parent
holding company of Penn Federal Savings Bank (“Penn
Federal”) have entered into an Agreement and Plan of Merger
dated as of November 2, 2006 (the “Merger
Agreement”). Employee is a senior officer of Penn Federal.
NYB considers the Employee’s continued services important to
the successful integration of the operation of Penn Federal’s
business with the Bank’s business and wishes to secure the
Employee’s continued services during a transition period
following the Effective Time by providing the Employee with a
financial incentive to remain in the Bank’s employ. The
Employee, understanding the circumstances, has agreed to execute
this Agreement and observe its terms.
1. Term of Agreement
.
This Agreement shall become
effective and begin immediately following the Effective Time (as
such term is defined in the Merger Agreement) and shall continue
for nine (9) months thereafter (the
“Term”).
2. Place of Employment and
Extent of Services .
(a) The Employee’s principal
place of employment shall be at the same location as immediately
before the Effective Time.
(b) During the Term, the Employee
shall serve as an employee of the Bank, performing such duties and
having such position, title and authority as may be assigned to him
by the Bank. The Employee shall devote his full business time and
attention (other than during weekends, holidays, approved vacation
periods (which shall be not less than six weeks, which may be taken
consecutively) and periods of illness or approved leave of absence)
to the business and affairs of the Bank and shall use his best
efforts to advance its best interests.
3. Compensation and
Benefits .
In consideration for the services to
be rendered by the Employee during the Term pursuant to this
Agreement, the Bank shall pay the Employee total retention
compensation of $310,000 (“Retention Compensation”),
payable in substantially equal installments over the Term in
accordance with the Bank’s customary payroll practices. The
Employee shall be an employee of the Bank and shall be eligible 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 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 consistent with the
Bank’s customary practices.
4. Termination of Employment
During the Term .
The Employee’s employment with
the Bank may be terminated during the Term at any time and for any
reason and, in such event:
(a) If such termination results from
the Employee’s resignation or discharge for cause (as
hereinafter defined), the Bank shall pay to the Employee (or, in
the event of his death, to 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
