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Exhibit 10.26
EMPLOYEE RETENTION AGREEMENT
by and among
THE DIME SAVINGS BANK OF WILLIAMSBURGH,
DIME COMMUNITY BANCSHARES, INC.
and
CHRISTOPHER D. MAHER
made and entered into as of
June 30, 2006
EMPLOYEE
RETENTION AGREEMENT
This
EMPLOYEE RETENTION AGREEMENT
(“Agreement” )
is made and entered into as of June 30, 2006 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 Christopher D. Maher, an individual residing at 2 Helene Drive,
Randolph, New Jersey 07869 (“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 to provide for certain tax
indemnification payments; 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 follows-
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
third 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 third 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 third
anniversary of the date of the Change of Control, as defined
in section 10 of this Agreement, or the third 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 per-iods, 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, em-ployee 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 lim-itation, the Officer’s travel and
entertainment expenses, incurred in connection with the
perfor-mance 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 than
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 pre-sent 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 any and all qualified and
non-qualified defined benefit pension plans maintained by, or
covering employees of, the Bank if the Officer were 100%
vested thereunder and had continued working for the Bank
during the remaining unexpired Assurance 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
Assurance 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
8(b)(I), (iv) and (vii);
(B)
the
present value of the benefits to which the Officer is actually
entitled und
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