Hudson
City Bancorp, Inc.
Made and Entered into
as of June 7, 2005
Hudson
City Bancorp, Inc.
Amended and Restated
Employment Agreement
This Amended And Restated Employment
Agreement (the “Agreement”) is made and
entered into as of June 7, 2005 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
“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
to reflect the Bank’s conversion from a New Jersey chartered
savings bank to a federal savings association and to reflect other
changes in the Bank’s operating environment. 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 date hereof (the
“Employment Commencement Date”) and ending on the day
before the third (3 rd )
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 (3 rd )
anniversary of such date. These extensions shall continue in
perpetuity until discontinued by: (i) notice to the Executive
given by 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
(3 rd
) anniversary of such
date.
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(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 (3
rd ) 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 date
hereof (“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 Nine
Hundred Fifty Thousand dollars ($950,000), payable in approximately
equal installments in accordance with the Company’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 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.
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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 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 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 reimburse the Executive for his
ordinary and necessary business expenses, including, without
limitation, all expenses
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associated with
his business use of the aforementioned automobile, fees for
memberships in such clubs and organizations as the Executive and
the Company shall mutually agree are necessary and appropriate for
business purposes, and 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 Company may
reasonably require.
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. 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
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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.
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”).
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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
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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 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 Employment Period at the highest annual rate of
salary achieved during the period of three (3) years
ending
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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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