Dime Community Bancshares, Inc. 2004 Stock Incentive Plan
Non-Qualified Stock Option Agreement for Outside Directors
 

 

     
Name of Optionee
 
 
Social Security Number
 

 

 
Street Address 
 

 

         
City
 
 
State
 
 
ZIP Code
 

 
This Non-Qualified Stock Option Agreement is intended to set forth the terms and
conditions on which a Non-Qualified Stock Option has been granted under the Dime
Community Bancshares, Inc. 2004 Stock Incentive Plan. Set forth below are the
specific terms and conditions applicable to this Non-Qualified Stock Option.
Attached as Exhibit A are its general terms and conditions.
 
Option Grant
 
Grant Date:
 
Class of Optioned Shares*
Common
Number of Optioned Shares*
 
Exercise Price per Share*
 
VESTING:
 
Earliest Exercise Date*
 
Option Expiration Date*
 

 
* Subject to adjustment as provided in the Plan and the General Terms and
Conditions
 
By signing where indicated below, Dime Community Bancshares, Inc. (the
"Company") grants this Non-Qualified Stock Option upon the specified terms and
conditions, and the Optionee acknowledges receipt of this Non-Qualified Stock
Option Agreement, including Exhibit A, and agrees to observe and be bound by the
terms and conditions set forth herein.
 
Dime Community Bancshares, Inc.
 
Optionee
By
       
Name: Vincent F. Palagiano
 
Name:
 
Title: Chairman of the Board and
Chief Executive Officer
   

Instructions: This page should be completed by or on behalf of the Compensation
Committee. Any blank space intentionally left blank should be crossed out. An
option grant consists of a number of optioned shares with uniform terms and
conditions. Where options are granted on the same date with varying terms and
conditions (for example, varying exercise prices or earliest exercise dates),
the options should be recorded as a series of grants each with its own uniform
terms and conditions.
 

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EXHIBIT A
Dime Community Bancshares, Inc. 2004 Stock Incentive Plan
Non-Qualified Stock Option Agreement for Outside Directors
General Terms and Conditions
 
Section 1.  Non-Qualified Stock Option. The Company intends the Option evidenced
hereby not to be an "incentive stock option" within the meaning of section 422
of the Internal Revenue Code of 1986.
 
Section 2.  Option Period. (a) Subject to section 5.4(b), the Optionee shall
have the right to purchase all or any portion of the optioned Common Stock at
any time during the period ("Option Period") commencing on the Earliest Exercise
Date and expiring on the earliest of:
 

(i)  
removal for cause in accordance with the Company's bylaws;

 

(ii)  
the first anniversary of termination of service for the Company in all
capacities (other than a termination resulting from removal for cause); or

 

(iii)  
the last day of the ten-year period commencing on the date on which the Option
was granted.

 
(b)  Upon the termination of the Optionee's service with the Company, any Option
granted hereunder whose Earliest Exercise Date has not occurred is deemed
forfeited. For purposes of the Plan, an Optionee's service shall be deemed to
continue for so long as the Optionee is serving as an officer, employee, outside
director, advisory director, emeritus director or consultant to the Company or
is subject to and is observing the terms of a written agreement restricting his
ability to compete or imposing other restrictive covenants.
 
Section 3.  Exercise Price. During the Option Period, and after the applicable
Earliest Exercise Date, the Optionee shall have the right to purchase all or any
portion of the Optioned Common Stock at the Exercise Price per Share; provided,
however, that the Exercise Price shall not be less than the Fair Market Value of
a Share on the date on which the Option is granted.
 
Section 4.  Method of Exercise. The Optionee may, at any time during the Option
Period provided by section 2, exercise his right to purchase all or any part of
the optioned Common Stock then available for purchase; provided, however, that
the minimum number of shares of optioned Common Stock which may be purchased
shall be one hundred (100) or, if less, the total number of shares of optioned
Common Stock then available for purchase. The Optionee shall exercise such right
by:
 
(a)  giving written notice to the Committee, in the form attached hereto as
Appendix A; and
 
(b)  delivering to the Committee full payment of the Exercise Price for the
Optioned Shares to be purchased.
 
The date of exercise shall be the earliest date practicable following the date
the requirements of this section 4 have been satisfied, but in no event more
than three (3) days after such date. Payment shall be made (i) in United States
dollars by certified check, money order or bank draft made payable to the order
of Dime Community Banc, Inc., (ii) in Shares duly endorsed for transfer and with
all necessary stock transfer tax stamps attached, already owned by the Optionee
for a period of more than six months and having a fair market value equal to the
Exercise Price, such fair market value to be determined in such manner as may be
provided by the Committee or as may be required in order to comply with or
conform to the requirements of any applicable laws or regulations, or (iii) in a
combination of (i) and (ii).
 
Section 5.  Delivery and Registration of Optioned Shares. As soon as is
practicable following the date on which the Optionee has satisfied the
requirements of section 4, the Committee shall take such action as is necessary
to cause the Company to issue a stock certificate evidencing the Optionee's
ownership of the optioned Common Stock that has been purchased. The Optionee
shall have no right to vote or to receive dividends, nor have any other rights
with respect to optioned Common Stock, prior to the date as of which such
optioned Common Stock is transferred to the Optionee on the stock transfer
records of the Company, and no adjustments shall be made for any dividends or
other rights for which the record date is prior to the date as of which such
transfer is effected. The obligation of the Company to deliver Common Stock
under this Agreement shall, if the Committee so requests, be conditioned upon
the receipt of a representation as to the investment intention of the person to
whom such Common Stock is to be delivered, in such form as the Committee shall
determine to be necessary or advisable to comply with the provisions of
applicable federal, state or local law. It may be provided that any such
representation shall become inoperative upon a registration of the Common Stock
or upon the occurrence of any other event eliminating the necessity of such
representation. The Company shall not be required to deliver any Common Stock
under this Agreement prior to (a) the admission of such Common Stock to listing
on any stock exchange on which Common Stock may then be listed, or (b) the
completion of such registration or other qualification under any state or
federal law, rule or regulations as the Committee shall determine to be
necessary or advisable.
 
Section 6.  Adjustments in the Event of Reorganization. In the event of any
merger, consolidation, or other business reorganization in which the Company is
the surviving entity, and in the event of any stock split, stock dividend or
other event generally affecting the number of shares of Common Stock held by
each person who is then a shareholder of record, the number of shares of Common
Stock subject to the option granted hereunder and the Exercise Price per share
of such option shall be adjusted in accordance with section 9.3 of the Plan to
account for such event. In the event of any merger, consolidation, or other
business reorganization in which the Company is not the surviving entity, the
option granted hereunder shall be canceled or adjusted in accordance with the
Plan.
 
Section 7.  No Right to Continued Service. Nothing in this Agreement nor any
action of the Board or Committee with respect to this Agreement shall be held or
construed to confer upon the Optionee any right to a continuation of service by
the Company. The Optionee may be dismissed or otherwise dealt with as though
this Agreement had not been entered into.
 
Section 8.  Taxes. The Company shall have the right to deduct from all amounts
paid by the Company in cash with respect to an Option under the Plan any taxes
required by law to be withheld. Where any person is entitled to receive shares
pursuant to the exercise of the Option granted hereunder, the Company shall have
the right to require such person to pay to the Company the amount of any tax
which the Company is required to withhold with respect to such shares, or, in
lieu thereof, to retain, or to sell without notice, a sufficient number of
shares to cover the amount required to be withheld.
 
Section 9.  Notices. Any communication required or permitted to be given under
the Plan, including any notice, direction, designation, comment, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below, or at such other
address as one such party may by written notice specify to the other party:
 
(a)  If to the Committee:
 
Dime Community Bancshares, Inc.
                c/o The Dime Savings Bank of Williamsburgh
                209 Havemeyer Street
                Brooklyn, New York 11211
                 Attention: Corporate Secretary
 
(b)  If to the Optionee, to the Optionee's address as shown in the Company's
personnel records.
 
Section 10.  Restrictions on Transfer. The option granted hereunder shall not be
subject in any manner to anticipation, alienation or assignment, nor shall such
option be liable for or subject to debts, contracts, liabilities, engagements or
torts, nor shall it be transferable by the Optionee other than by will or by the
laws of descent and distribution or as otherwise permitted by the Plan.
 
Section 11.  Successors and Assigns. This Agreement shall inure to the benefit
of and shall be binding upon the Company and the Optionee and their respective
heirs, successors and assigns.
 
Section 12.  Construction of Language. Whenever appropriate in the Agreement,
words used in the singular may be read in the plural, words used in the plural
may be read in the singular, and words importing the masculine gender may be
read as referring equally to the feminine or the neuter. Any reference to a
section shall be a reference to a section of this Agreement, unless the context
clearly indicates otherwise. Capitalized terms not specifically defined herein
shall have the meanings assigned to them under the Plan.
 
Section 13.  Governing Law. This Agreement shall be construed, administered and
enforced according to the laws of the State of New York without giving effect to
the conflict of laws principles thereof, except to the extent that such laws are
preempted by the federal law.
 
Section 14.  Amendment. This Agreement may be amended, in whole or in part and
in any manner not inconsistent with the provisions of the Plan, at any time and
from time to time, by written agreement between the Company and the Optionee.
 
Section 15.  Plan Provisions Control. This Agreement and the rights and
obligations created hereunder shall be subject to all of the terms and
conditions of the Plan. In the event of any conflict between the provisions of
the Plan and the provisions of this Agreement, the terms of the Plan, which are
incorporated herein by reference, shall control. By signing this Agreement, the
Optionee acknowledges receipt of a copy of the Plan.
 

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Appendix A to Stock Option Agreement
 Dime Community Bancshares, Inc. 2004 Stock Incentive Plan
 
Notice of Exercise of Stock Option
 
Use this Notice to inform Dime Community Bancshares, Inc. that you are
exercising your right to purchase shares of common stock ("Shares") of Dime
Community Bancshares, Inc. pursuant to an option ("Option") granted under the
Dime Community Bancshares, Inc. 2004 Stock Incentive Plan (the “Plan”). If you
are not the person to whom the Option was granted (“Option Recipient"), you must
attach to this Notice proof of your right to exercise the Option granted under
the Stock Option Agreement entered into between the Company and the Option
Recipient (“Agreement”) . This Notice should be personally delivered or mailed
by certified mail, return receipt requested to: Dime Community Bancshares, Inc.,
c/o The Dime Savings Bank of Williamsburgh, 209 Havemeyer Street, Brooklyn, New
York 11211, Attention: Corporate Secretary. The effective date of the exercise
of the Option shall be the earliest date practicable following the date this
Notice is received by Dime Community Bancshares, Inc. but in no event more than
three days after such date ("Effective Date"). Except as specifically provided
to the contrary herein, capitalized terms shall have the meanings assigned to
them under the Plan . This Notice is subject to all of the terms and conditions
of the Plan and the Agreement.
 
OPTION INFORMATION  Identify below the Option that you are exercising by
providing the following information from the Stock Option Agreement.
 
Name of Option Recipient:  
 
Option Grant Date: ________________, __________ Exercise Price per
share:  $________________.____
(Month and Day)  (Year)
 
EXERCISE PRICE Compute the Exercise Price below and select a method of payment.
 
Total Exercise Price ________________ x $__________.______
=     $_______________
(No. of Shares)  (Exercise Price)  Total Exercise Price
Method of Payment
   
¨
I enclose a certified check, money order, or bank draft payable to the order of
Dime Community Bancshares, Inc. in the amount of
$ 
   
¨
I enclose Shares duly endorsed for transfer to Dime Community Bancshares, Inc.
with all stamps attached and having a fair market value of
$ 
     
Total Exercise Price
 
$ 
ISSUANCE OF CERTIFICATES
 
I hereby direct that the stock certificates representing the Shares purchased
pursuant to section 2 above be issued to the following person(s) in the amount
specified below:
 
Name and Address
Social Security No.
 No. of Shares
 
 
-   -  
   
 
-   -  
 
 
WITHHOLDING ELECTIONS For Employee Option Recipients with Non-Qualified Stock
Options only. Outside Directors and Beneficiaries should not complete.
I understand that I am responsible for the amount of federal, state and local
taxes required to be withheld with respect to the Shares to be issued to me
pursuant to this Notice, but that I may request Dime Community Bancshares, Inc.,
to retain or sell a sufficient number of such Shares to cover the amount to be
withheld. I hereby request that any taxes required to be withheld be paid in the
following manner [check one]:
 
   
¨
With a certified or bank check that I will deliver to the Administrator on the
day after the Effective Date of my Option exercise.
   
¨
With the proceeds from a sale of Shares that would otherwise be distributed to
me.
   
¨
Retain shares that would otherwise be distributed to me.
I understand that the withholding elections I have made on this form are not
binding on the Committee, and that the Committee will decide the amount to be
withheld and the method of withholding and advise me of its decision prior to
the Effective Date. I further understand that the Committee may request
additional information or assurances regarding the manner and time at which I
will report the income attributable to the distribution to be made to me. I
further understand that if I have elected to have Shares sold to satisfy tax
withholding, I may be asked to pay a minimal amount of such taxes in cash in
order to avoid the sale of more Shares than are necessary.
 
COMPLIANCE WITH TAX AND SECURITIES LAWS
S
I
G
N
H
E
R
E
I understand that I must rely on, and consult with, my own tax and legal counsel
(and not Dime Community Bancshares, Inc.) regarding the application of all laws
-- particularly tax and securities laws -- to the transactions to be effected
pursuant to my Option and this Notice. I understand that I will be responsible
for paying any federal, state and local taxes that may become due upon the sale
(including a sale pursuant to a "cashless exercise") or other disposition of
Shares issued pursuant to this Notice and that I must consult with my own tax
advisor regarding how and when such income will be reportable.
 

Signature Date

Address

 Internal Use Only  
 
Received [check one]: ¨ By Hand ¨ By Mail Post Marked  
Date of Post Mark
By   
Authorized Signature Date of Receipt

 

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Appendix B to Stock Option Agreement
Dime Community Bancshares, Inc. 2004 Stock Incentive Plan
 
Beneficiary Designation Form
 
GENERAL
 
INFORMATION
 
Use this form to designate the Beneficiary(ies) who will receive vested stock
options outstanding to you at the time of your death.
 
Name of Person
Making Designation______________________________________________________________
 
 
 
Social Security Number ______—_____—______
 
BENEFICIARY
 
DESIGNATION
 
Complete sections A and B. If no percentage shares are specified, each
Beneficiary in the same class (primary or contingent) shall have an equal share.
If any designated Beneficiary predeceases you, the shares of each remaining
Beneficiary in the same class (primary or contingent) shall be increased
proportionately.
 
A. PRIMARY BENEFICIARY(IES). I hereby designate the following person as my
primary Beneficiary, reserving the right to change or revoke this designation at
any time prior to my death:
 
Name
 
Address
 
Relationship
 
Birth Date
 
Share
 
       
 
%
       
 
%
       
 
%
Total = 100%
 
B. CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s) as my
contingent Beneficiary(ies) to receive benefits only if all of my primary
Beneficiaries should predecease me, reserving the right to change or revoke this
designation at any time prior to my death with respect to all outstanding Stock
Option:
 
Name
 
Address
 
Relationship
 
Birth Date
 
Share
 
       
 
%
       
 
%
       
 
%
Total = 100%
 
S
 
I
 
G
 
N
 
H
 
E
 
R
 
E
 
I understand that this Beneficiary Designation shall be effective only if
properly completed and received by the Corporate Secretary of Dime Community
Bancshares, Inc. prior to my death. I also understand that an effective
Beneficiary designation revokes my prior designation(s) with respect to all
outstanding Stock Options.
 
______________________________________                  ____________________
Your Signature                                         Date
 

 Internal Use Only 
This Beneficiary Designation was received by the Corporate Secretary of Dime
Community Bancshares, Inc. on the date indicated.
 
By     
        __________________________            _________
        Authorized Signature                     Date
        
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