EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of January 1,
2003, by and between Dime Community Bancshares, Inc., a savings and
loan holding company organized and operating under the laws of the
State of Delaware and having an office at 209 Havemeyer Street,
Brooklyn, New York 11211 (“Company”) and Michael P.
Devine ("Mr. Devine").
W I T N E S S E T H :
WHEREAS, Mr. Devine and the Company are
parties to an Employment Agreement made and entered into as of June
26, 1996 (the “Prior Agreement”) pursuant to which Mr.
Devine serves the Company in the capacity of President and Chief
Operating Officer of the Company and its wholly owned subsidiary,
The Dime Savings Bank of Williamsburgh ( “Bank “);
and
WHEREAS, the Prior Agreement required the
Company to maintain for Mr. Devine qualified and non-qualified
defined benefit plans; and
WHEREAS, the Prior Agreement required the
Company to refrain from making any material adverse changes in Mr.
Devine’s package of compensation and benefits; and
WHEREAS, the cessation of benefit
accruals under the qualified and non-qualified defined benefit
plans in which Mr. Devine participated may have resulted in a
breach of the Company’s obligations under the Prior
Agreement, allowing him to resign and claim severance benefits
under the Prior Agreement; and
WHEREAS, the Company desires to assure
for itself the continued availability of Mr. Devine’s
services and the ability of Mr. Devine to perform such services
with a minimum of personal distraction in the event of a pending or
threatened Change in Control (as hereinafter defined);
and
WHEREAS, Mr. Devine is willing to
continue to serve the Company on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the
premises and the mutual covenants and obligations hereinafter set
forth, the Company and Mr. Devine hereby agree as
follows:
1.
Representations and Warranties of the
Parties.
(a)
The Company hereby represents and
warrants to Mr. Devine that:
(i)
it has all requisite power and authority
to execute, enter into and deliver this Agreement and to perform
each and every one of its obligations hereunder; and
(ii)
the execution, delivery and performance
of this Agreement have been duly authorized by all requisite
corporate action on the part of the Company; and
(iii)
neither the execution or delivery of this
Agreement, nor the performance of or compliance with any of the
terms and conditions hereof, is prevented or in any way limited by
(A) any agreement or instrument to which the Company is a party or
by which it is bound, or (B) any provision of law, including,
without limitation, any statute, rule or regulation or any order
fof any court or administrative agency, applicable to the Company
or its business.
(b)
Mr. Devine hereby represents and warrants
to the Company that:
(i)
he has all requisite power and authority
to execute, enter into and deliver this Agreement and to perform
each and every one of his obligations hereunder; and
(ii)
neither the execution or delivery of this
Agreement, nor the performance of or compliance with any of the
terms and conditions hereof, is prevented or in any way limited by
(A) any agreement or instrument to which he is a party or by which
he is bound, or (B) any provision of law, including, without
limitation, any statute, rule or regulation or any order of any
court or administrative agency, applicable to him.
2.
Employment.
The Company hereby continues the
employment of Mr. Devine, and Mr. Devine hereby accepts such
continued employment, during the period and upon the terms and
conditions set forth in this Agreement.
3.
Employment Period.
(a)
The terms and conditions of this
Agreement shall be and remain in effect during the period of
employment established under this section 3 (“Employment
Period”). The Employment Period shall be for an initial
term of three years beginning on the date of this Agreement and
ending on the third anniversary date of this Agreement, plus such
extensions, if any, as are provided pursuant to section
3(b).
(b)
Except as provided in section 3(c),
beginning on the date of this Agreement, the Employment Period
shall automatically be extended for one (1) additional day each
day, unless either the Company or Mr. Devine elects not to extend
the Agreement further by giving written notice to the other party,
in which case the Employment Period shall end on the third
anniversary of the date on which such written notice is given.
Upon termination of Mr. Devine’s employment with the
Company for any reason whatsoever, any daily extensions provided
pursuant to this section 3(b), if not therefore discontinued, shall
automatically cease.
(c)
If, prior to the date on which the
Employment Period would end pursuant to section 3(a) or (b) of this
Agreement, a Change in Control (as defined in section 13 of this
Agreement) occurs, then the Employment Period shall be extended
through and including the second anniversary of the earliest date
after the effective date of such Change in Control on which either
the Company or Mr. Devine elects, by written notice pursuant to
section 3(d) of this Agreement to the non-electing party, to
discontinue the Employment Period; provided, however, that this
section shall not apply in the event that, prior to the Change in
Control (as defined in section 13 of this Agreement), Mr. Devine
has provided written notice to the Company of his intent to
discontinue the Employment Period.
(d)
The Company or Mr. Devine may, at any
time by written notice given to the other, elect to discontinue the
daily extension of the Employment Period. Any such notice
given by the Company shall be accompanied by a certified copy of a
resolution, adopted by the affirmative vote of a majority of the
entire membership of the Board at a meeting of the Board duly
called and held, authorizing the giving of such notice.
(e)
Notwithstanding anything herein contained
to the contrary: (i) Mr. Devine’s employment with the
Company may be terminated during the Employment Period, in
accordance with the terms and conditions of this Agreement; and
(ii) nothing in this Agreement shall mandate or prohibit a
continuation of Mr. Devine’s employment following the
expiration of the Employment Period upon such terms and conditions
as the Company and Mr. Devine may mutually agree upon.
(f)
For all purposes of this Agreement, any
reference to the “Remaining Unexpired Employment
Period” as of any specified date shall mean (i) prior to the
occurrence of a Change in Control (as hereinafter defined) the
period commencing on the date specified and ending on the later of
the third anniversary of the date of this Agreement, the third
anniversary of any earlier date on which either the Company or Mr.
Devine has elected to discontinue the daily extensions of the
Employment Period, or the third anniversary of Mr. Devine’s
termination of employment for any reason; and (ii) following a
Change in Control (as hereinafter defined) a period commencing on
the date specified and ending on the later of the second
anniversary of the effective date of the Change in Control, the
second anniversary of any earlier date following the occurrence of
the Change in Control on which either Mr. Devine or the Company has
elected to discontinue the daily extensions of the Employment
Period, or the second anniversary of Mr. Devine’s termination
of employment for any reason whatsoever.
4.
Duties.
During the Employment Period, Mr. Devine
shall:
(a)
except to the extent allowed under
section 7 of this Agreement, devote his full business time and
attention to the business and affairs of the Company and use his
best efforts to advance the Company’s interests;
(b)
serve as President and Chief Operating
Officer if duly appointed and/or elected to serve in such position;
and
(c)
have such functions, duties and
responsibilities not inconsistent with his title and office as may
be assigned to him by or under the authority of the Board of
Directors of the Company (“Board”), in accordance with
organization Certificate, By-laws, Applicable Laws, Statutes and
Regulations, custom and practice of the Company as in effect on the
date first above written.Mr. Devine shall have such authority as is
necessary or appropriate to carry out his assigned duties. Mr.
Devine shall report to and be subject to direction and supervision
by the Board.
(d)
none of the functions, duties and
responsibilities to be performed by Mr. Devine pursuant to this
Agreement shall be deemed to include those functions, duties and
responsibilities performed by Mr. Devine in his capacity as
director of the Company.
5.
Compensation -- Salary and
Bonus.
In consideration for services rendered by
Mr. Devine under this Agreement, the Company shall pay to Mr.
Devine a salary at an annual rate equal to:
(a)
during the period beginning on January 1,
2003 and ending on December 31, 2003, no less than
$________;
(b)
during each calendar year that begins
after December 31, 2003, such amount as the Board may, in its
discretion, determine, but in no event less than the rate in effect
on December 31, 2003; or
(c)
for each calendar year that begins on or
after a Change in Control, the product of Mr. Devine’s annual
rate of salary in effect immediately prior to such calendar year,
multiplied by the greatest of:
(i)
1.06;
(ii)
the quotient of (A) the U.S. City Average
All Items Consumer Price Index for All Urban Consumers (or, if such
index shall cease to be published, such other measure of general
consumer price levels as the Board may, in good faith, prescribe)
for October of the immediately preceding calendar year, divided by
(B) the U.S. City Average All Items Consumer Price Index for All
Urban Consumers (or, if such index shall cease to be published,
such other measure of general consumer price levels as the Board
may, in good faith, prescribe) for October of the second preceding
calendar year; and
(iii)
the quotient of (A) the average annual
rate of salary, determined as of the first day of such calendar
year, of the officers of the Company (other than Mr. Devine) who
are assistant vice presidents or more senior officers, divided by
(B) the average annual rate of salary, determined as of the first
day of the immediately preceding calendar year, of the officers of
the Company (other than Mr. Devine) who are assistant vice
presidents or more senior officers;
The salary payable under this section 5
shall be paid in approximately equal installments in accordance
with the Company’s customary payroll practices. Nothing
in this section 5 shall be construed as prohibiting the payment to
Mr. Devine of a salary in excess of that prescribed under this
section 5 or of additional cash or non-cash compensation in a form
other than salary, to the extent that such payment is duly
authorized by or under the authority of the Board.No portion of the
compensation paid to Mr. Devine pursuant to this Agreement shall be
deemed to be compensation received by Mr. Devine in his capacity as
director of the Company.
6.
Employee Benefit Plans and Programs;
Other Compensation.
Except as otherwise provided in this
Agreement, Mr. Devine shall be treated as an employee of the
Company and be entitled to participate in and receive benefits
under the Company’s Retirement Plan, Incentive Savings Plan,
group life and health (including medical and major medical) and
disability insurance plans, and such other employee benefit plans
and programs, including but not limited to any long-term or
short-term incentive compensation plans or programs (whether or not
employee benefit plans or programs), as the Company may maintain
from time to time, in accordance with the terms and conditions of
such employee benefit plans and programs and compensation plans and
programs and with the Company’s customary practices.
Following a Change in Control, all such benefits to Mr.
Devine shall be continued on terms and conditions substantially
identical to, and in no event less favorable than, those in effect
prior to the Change in Control.
7.
Board Memberships and Personal
Activities.
(a)
Mr. Devine may serve as a member of the
board of directors of such business, community and charitable
organizations as he may disclose to the Board from time to time,
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.
(b)
Mr. Devine may also serve as an officer
or director of the Bank on such terms and conditions as the Company
and the Bank may mutually agree upon, and such service shall not be
deemed to materially interfere with Mr. Devine’s performance
of his duties hereunder or otherwise result in a material breach of
this Agreement. If Mr. Devine 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
(subject to the Company’s powers of termination hereunder)
continue to perform services for the Company in accordance with
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.
8.
Working Facilities and Expenses.
Mr. Devine’s principal place of
employment shall be at the Company’s executive offices at the
address first above written, or at such other location in the New
York metropolitan area as determined by the Board. The
Company shall provide Mr. Devine, at his principal place of
employment, with a private office, stenographic services and other
support services and facilities suitable to his position with the
Company and necessary or appropriate in connection with the
performance of his assigned duties under this Agreement. The
Company shall provide Mr. Devine with an automobile suitable
to his position with the Company in accordance with its prior
practices, and such automobile shall be used by Mr. Devine in
carrying out his duties under this Agreement, including commuting
between his residence and his principal place of employment.
The Company shall reimburse Mr. Devine for his ordinary and
necessary business expenses, including, without limitation, all
expenses associated with his business use of the aforementioned
automobile, fees for memberships in such clubs and organizations as
Mr. Devine and the Company shall mutually agree are necessary and
appropriate for business purposes and travel and entertainment
expenses incurred in connection with the performance of his duties
under this Agreement, upon presentation to the Company of an
itemized account of such expenses in such form as the Company may
reasonably require. Mr. Devine shall be entitled to no less
than four (4) weeks of paid vacation during each year in the
Employment Period.
9.
Termination Giving Rise to Severance
Benefits.
(a)
In the event that Mr. Devine’s
employment with the Company shall terminate during the Employment
Period other than on account of:
(i)
a Termination for Cause (within the
meaning of section 12(a) of this Agreement);
(ii)
a voluntary resignation by Mr. Devine
other than a Resignation for Good Reason (within the meaning of
section 12(b) of this Agreement);
(iii)
a termination on account of Mr.
Devine’s death; or
(iv)
a termination after both of the following
conditions exist: (A) Mr. Devine has been absent from the full-time
service of the Company on account of his Disability (as defined in
section 11(b) of this Agreement) for at least six (6) consecutive
months; and (B) Mr. Devine shall have failed to return to work in
the full-time service of the Company within thirty (30) days after
written notice requesting such return is given to Mr. Devine by the
Company;
then the Company shall provide to Mr.
Devine the benefits and pay to Mr. Devine the amounts provided
under section 9(b) of this Agreement.
(b)
In the event that Mr. Devine’s
employment with the Company shall terminate under circumstances
described in section 9(a) of this Agreement, the following benefits
and amounts shall be paid or provided to Mr. Devine (or, in the
event of his death, to his estate):
(i)
his earned but unpaid salary as of the
date of the termination of his employment with the Company, payable
when due but in no event later than thirty (30) days following his
termination of employment with the Company;
(ii)
(A) the benefits, if any, to which Mr.
Devine and his family and dependents are entitled as a former
employee, or family or dependents of a former employee, under the
employee benefit plans and programs and compensation plans and
programs maintained for the benefit of the Company’s officers
and employees, in accordance with the terms of such plans and
programs in effect on the date of his termination of employment, or
if his termination of employment occurs after a Change in Control,
on the date of his termination of employment or on the date of such
Change in Control, whichever results in more favorable benefits as
determined by Mr. Devine, where credit is given for three
additional years of service and age in determining eligibility and
benefits for any plan and program where age and service are
relevant factors, and (B) payment for all unused vacation days and
floating holidays in the year in which his employment is
terminated, at his highest annual rate of salary for such
year;
(iii)
continued group life, health (including
hospitalization, medical and major medical, dental, accident and
long-term disability insurance benefits), in addition to that
provided pursuant to section 9(b)(ii) of this Agreement and after
taking into account the coverage provided by any subsequent
employer, if and to the extent necessary to provide Mr. Devine and
his family and dependents for a period of three years following
termination of employment, coverage identical to and in any event
no less favorable than the coverage to which they 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 in Control, on the date of his termination of
employment or during the one-year period ending on the date of such
Change in Control, whichever results in more favorable benefits as
determined by Mr. Devine) if he had continued working for the
Company during the Remaining Unexpired Employment Period at the
highest annual rate of compensation (assuming, if a Change in
Control has occurred, that the annual increases under section 5(c)
would apply) under the Agreement;
(iv)
within thirty (30) days following his
termination of employment with the Company, a lump sum payment in
an amount equal to the present value of the salary and the bonus
that Mr. Devine would have earned if he had worked for the Company
during the Remaining Unexpired Employment Period at the highest
annual rate of salary (assuming, if a Change in Control has
occurred, that the annual increases under section 5(c) would apply)
and the highest bonus as a percentage of the rate of salary
provided for under this Agreement, where such present value is to
be determined using a discount rate of six percent (6%) per annum,
compounded, in the case of salary, with the frequency corresponding
to the Company’s regular payroll periods with respect to its
officers, and, in the case of bonus, annually;
(v)
within thirty (30) days following his
termination of employment with the Company, a lump sum payment in
an amount equal to the excess, if any, of: (A) the present value of
the benefits to which he would be entitled under any defined
benefit plans maintained by, or covering employees of, the Company
(including any “excess benefit plan” within the meaning
of section 3(36) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), or other special or
supplemental plan) as in effect on the date of his termination, if
he had worked for the Company during the Remaining Unexpired
Employment Period at the highest annual rate of compensation
(assuming, if a Change in Control has occurred, that the annual
increases under section 5(c) would apply) under the Agreement and
been fully vested in such plan or plans and had continued working
for the Company during the Remaining Unexpired Employment Period,
such benefits to be determined as of the date of termination of
employment by adding to the service actually recognized under such
plans an additional period equal to the Remaining Unexpired
Employment Period and by adding to the compensation recognized
under such plans for the year in which termination of employment
occurs all amounts payable under sections 9(b)(i), (iv) and (vii),
over (B) the present value of the benefits to which he is actually
entitled under any such plans maintained by, or covering employees
of, the Company as of the date of his termination where such
present values are to be determined using a discount rate of six
percent (6%) per annum, compounded monthly, and the mortality
tables prescribed under section 72 of the Internal Revenue Code of
1986 (“Code”);
(vi)
within thirty (30) days following his
termination of employment with the Company, a lump sum payment in
an amount equal to the excess, if any, of (A) the present value of
the benefits attributable to the Company’s contribution to
which he would be entitled under any defined contribution plans
maintained by, or covering employees of, the Company (including any
“excess benefit plan” within the meaning of section
3(36) of ERISA, or other sp
