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Exhibit 10.1
 
EXECUTIVE SUPPLEMENTAL RETIREMENT
 
INCOME AGREEMENT
 
FOR
 
ANGELO J. Di LORENZO
 
BROOKLYN FEDERAL SAVINGS BANK
 
Brooklyn, New York
 
Initially Effective as of May 1, 2005
 
Amended and Restated Effective as of December 1, 2007
 

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EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
 
This Executive Supplemental Retirement Income Agreement (“Agreement”), which was
initially effective as of the 1st day of May, 2005, by and between Brooklyn
Federal Savings Bank, Brooklyn, New York, a stock savings bank organized and
existing under the laws of the United States of America, hereinafter referred to
as “Bank,” and Angelo J. Di Lorenzo, a key employee and executive hereinafter
referred to as “Executive,” is hereby amended and restated effective as of
December 1, 2007, as provided herein.
 
WITNESSETH:
 
WHEREAS, Executive is employed by the Bank;
 
WHEREAS, the Bank recognizes the valuable services heretofore performed for it
by Executive and wishes to encourage continued employment;
 
WHEREAS, Executive wishes to be assured that he will be entitled to a certain
amount of additional compensation for some definite period of time from and
after his retirement from active service with the Bank or other termination of
his employment and wishes to provide his beneficiary with benefits from and
after his death;
 
WHEREAS, the Bank has adopted a program of deferred compensation for certain of
its senior executives which program is evidenced by individual agreements, such
as this one, between the Bank and each participating executive which agreements
provide the terms and conditions upon which the Bank shall pay such additional
compensation to each executive after his retirement or other termination of his
employment and/or death benefits to his beneficiary after his death;
 
WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) provides that certain nonqualified deferred compensation arrangements
must comply with its terms and the final Treasury Regulations (defined herein)
promulgated thereunder, or subject the recipients of such compensation to
additional taxes and penalties;
 
WHEREAS, the parties hereto intend that this Agreement be considered an unfunded
arrangement, maintained primarily to provide supplemental retirement income for
Executive, a member of a select group of management or highly compensated
employee of the Bank for purposes of the Employee Retirement Income Security Act
of 1974, as amended;
 
WHEREAS, the Bank has adopted this Executive Supplemental Retirement Income
Agreement which controls all issues relating to the Supplemental Retirement
Income Benefit as described herein;
 
WHEREAS, it is intended that the provisions of this Agreement shall supersede
any prior agreements relating to the subject matter hereto.
 
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
parties hereto agree as follows:
 

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SECTION I
 
DEFINITIONS
 
When used herein, the following words shall have the meanings below unless the
context clearly indicates otherwise:
 

 
1.1.
“Act” means the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.
         
1.2.
“Actuarial Assumptions” shall mean, with respect to any form of benefit, the
appropriate Actuarial Assumptions set forth on Schedule A, as changed from time
to time, based on the recommendations of the Bank’s Benefits Consultants and
approved by the Bank’s Board of Directors, and as attached hereto and made a
part hereof.
         
1.3.
“Agreement” means this Executive Supplemental Retirement Income Agreement.
         
1.4.
“Annual Compensation” shall mean the sum of the base salary and bonus paid or
attributable to Executive during the Plan Year, including amounts deferred at
Executive’s election to any tax-qualified or non-qualified employee benefit plan
of the Bank or Company.
         
1.5.
“Bank” means Brooklyn Federal Savings Bank and any successor thereto.
         
1.6.
“Beneficiary” means the person or persons designated by Executive, in writing on
the attached Exhibit A, from time to time, as the beneficiary to whom the
deceased Executive’s account is payable. If no beneficiary is so designated,
then Executive’s Spouse, if living, will be deemed the beneficiary. If
Executive’s Spouse is not living, then the Children of Executive will be deemed
the beneficiary. If there are no living Children, then the Estate of Executive
will be deemed the beneficiary.
         
1.7.
“Benefits Consultants” shall mean MKA Executive and Professional Benefits, or
such other professional consultants appointed to the position by the Board of
Directors, from time to time.
       
1.8.
“Cause” means personal dishonesty, willful misconduct, willful malfeasance,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule, or regulation (other
than traffic violations or similar offenses), final cease-and-desist order,
material breach of any provision of this Agreement, or gross negligence in
matters of material importance to the Bank.
       
1.9.
“Change in Control” of the Bank or the Company shall mean (i) a change in
ownership of the Bank or Company under paragraph (a) below, or (ii) a change in
effective control of the Bank or Company under paragraph (b) below, or (iii) a
change in the ownership of a substantial portion of the assets of the Bank or
Company under paragraph (c) below:

 

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(a)
Change in the ownership of the Bank or Company.  A change in the ownership of
the Bank or Company shall occur on the date that any one person, or more than
one person acting as a group (as defined in Treasury Regulation Section
1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the corporation that,
together with stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of
such corporation.  However, if any one person or more than one person acting as
a group, is considered to own more than 50 percent of the total fair market
value or total voting power of the stock of a corporation, the acquisition of
additional stock by the same person or persons is not considered to cause a
change in the ownership of the corporation (or to cause a change in the
effective control of the corporation (within the meaning of paragraph (b)
below).  An increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an acquisition of
stock for purposes of this section.  This paragraph (a) applies only when there
is a transfer of stock of a corporation (or issuance of stock of a corporation)
and stock in such corporation remains outstanding after the transaction.
           
(b)
Change in the effective control of the Bank or Company.  A change in the
effective control of the Bank or Company shall occur on the date that either (i)
any one person, or more than one person acting as a group (as defined in
Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the corporation possessing 30
percent or more of the total voting power of the stock of such corporation; or
(ii) a majority of members of the corporation’s board of directors is replaced
during any 12-month period by directors whose appointment or election is not
endorsed by a majority of the members of the corporation’s board of directors
prior to the date of the appointment or election, provided that for purposes of
this paragraph (b)(ii), the term corporation refers solely to a corporation for
which no other corporation is a majority shareholder.  In the absence of an
event described in paragraph (i) or (ii), a change in the effective control of a
corporation will not have occurred.  If any one person, or more than one person
acting as a group, is considered to effectively control a corporation (within
the meaning of this paragraph (b)), the acquisition of additional control of the
corporation by the same person or persons is not considered to cause a change in
the effective control of the corporation (or to cause a change in the ownership
of the corporation within the meaning of paragraph (a)).  Persons will not be
considered to be acting as a group solely because they purchase or own stock of
the same corporation at the same time, or as a result of the same public
offering.

 

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(c)
Change in the ownership of a substantial portion of the Bank or Company’s
assets.  A change in the ownership of a substantial portion of the Bank or
Company’s assets shall occur on the date that any one person, or more than one
person acting as a group (as defined in Treasury Regulation Section
1.409A-3(i)(5)(vii)(C)), acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total gross fair market value equal to
or more than 40% of the total gross fair market value of all of the assets of
the corporation immediately prior to such acquisition or acquisitions.  For this
purpose, gross fair market value means the value of the assets of the
corporation, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.  There is no Change in
Control under this paragraph (c) when there is a transfer to an entity that is
controlled by the shareholders of the transferring corporation immediately after
the transfer.
           
(d)
Each of the sub-paragraphs (a) through (c) of this Section 1.9 shall be
construed and interpreted consistent with the requirements of Code Section 409A
and any Treasury Regulations or other guidance issued thereunder.
         
1.10.
“Children” means Executive’s children, both natural and adopted, then living at
the time payments are due the Children under this Agreement.
       
1.11.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
         
1.12.
“Company” means Brooklyn Federal Bancorp, Inc., a Federally chartered
corporation which owns all of the issued and outstanding stock of the Bank.
         
1.13.
“Effective Date.”  The initial Effective Date of the Agreement was May 1,
2005.  The Agreement is hereby amended and restated effective as of December 1,
2007 in order to conform to the Treasury Regulations under Code Section 409A.
       
1.14.
“Estate” means the estate of Executive.
       
1.15.
“Interest Factor” means six percent (6%) or such other rate as is set forth on
Schedule A, from time to time.
       
1.16.
“Normal Retirement Date” means the first day of the month coincident with or
next following the later of (i) Executive’s sixty-fifth (65th) birthday, or (ii)
the date of Executive’s actual retirement.
       
1.17.
“Permanently and Totally Disabled” means Executive (i) is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or (ii) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health plan covering
employees of the participant’s employer, or (iii) has been determined to be
totally disabled by the Social Security Administration.

 

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1.18.
“Plan Year” means the calendar year.
       
1.19.
“Separation from Service” means the Executive’s death, retirement or other
termination of employment with the Bank within the meaning of Code Section
409A.  No Separation from Service shall be deemed to occur due to military
leave, sick leave or other bona fide leave of absence if the period of such
leave does not exceed six months or, if longer, so long as the Executive’s right
to reemployment is provided by law or contract.  If the leave exceeds six months
and the Executive’s right to reemployment is not provided by law or by contact,
then the Executive shall have a Separation from Service on the first date
immediately following such six-month period.
         
Whether a termination of employment has occurred is determined based on whether
the facts and circumstances indicate that the Bank and Executive reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services the Executive would perform after such date
(whether as an employee or as an independent contractor) would permanently
decrease to no more than 49% of the average level of bona fide services
performed over the immediately preceding 36 months (or such lesser period of
time in which the Executive has provided services for the Bank).  The
determination of whether the Executive has a Separation from Service shall be
made by applying the presumptions set forth in the Treasury Regulations under
Code Section 409A.
         
1.20.
“Specified Employee” means with respect to a publicly traded company, an
employee of the Bank or Company who is also a “key employee” as such term is
defined in Section 416(i) of the Code, without regard to paragraph 5 thereof.
       
1.21.
“Spouse” means the individual to whom Executive is legally married at the time
of Executive’s death.
       
1.22.
“Supplemental Disability Benefit” shall mean the benefit payable to Executive
pursuant to Section 3.2 hereof in the event he becomes Permanently and Totally
Disabled prior to his Normal Retirement Date.
       
1.23.
“Supplemental Retirement Income Benefit” means an annual retirement benefit
equal to (a) sixty percent (60%) times the highest of Executive’s average Annual
Compensation over any consecutive thirty-six (36) month period during the last
ten (10) years prior to retirement, reduced by (b) the sum of (i) the annuitized
value (calculated using the Interest Factor and appropriate Actuarial
Assumptions) of Executive’s retirement benefits under the Bank’s Money Purchase
Pension Plan payable in the form of a single life annuity for Executive’s life
with two hundred forty (240) monthly payments guaranteed; (ii) the annuitized
value (calculated using the Interest Factor and the appropriate Actuarial
Assumptions) of the annual benefit to Executive commencing at the Normal
Retirement Date, and attributable to employer contributions to the Bank’s
tax-qualified 401(k) plan, payable in the form of a single life annuity for
Executive’s life, with two hundred forty (240) monthly payments guaranteed; and
(iii) the annuitized value (calculated using the Interest Factor and appropriate
Actuarial Assumptions) of Executive’s annual Social Security retirement benefits
commencing at the Normal Retirement Date.  Notwithstanding the foregoing,
Executive may elect an optional form of distribution of his Supplemental
Retirement Income Benefit, provided that such optional form of distribution is
the actuarial equivalent of the regular form of Supplemental Retirement Income
Benefit.

 

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1.24.
 “Survivor’s Benefit” means the benefit provided under Section 2.1 to
Executive’s Beneficiary if Executive dies while in active employment of the
Bank.  The Survivor’s Benefit shall be equal in amount to the Supplemental
Retirement Income Benefit payable to Executive if Executive had lived until his
Normal Retirement Date, terminated employment on such date and commenced
receiving the Supplemental Retirement Income Benefit at that time.  For purposes
of these calculations, Executive’s Annual Compensation shall be deemed to
increase at the rate of five percent (5%) per year to age 65 at the customary
time of such normal annual increase.  In addition, for purposes of calculating
the Survivor’s Benefit payable hereunder, the Bank’s contributions to (i) the
Money Purchase Pension Plan, (ii) the 401(k) Plan, and (iii) the employer’s
portion of Social Security shall be deemed to continue until Executive’s Normal
Retirement Date at the same rate as was contributed on behalf of Executive in
Executive’s last full year of employment prior to his death.
       
1.25.
“Treasury Regulations” means the Treasury regulations and other rules,
regulations or authority promulgated under Code Section 409A.

 
SECTION II
 
PRE RETIREMENT AND POST RETIREMENT DEATH BENEFITS
 
2.1           Death Prior to Termination of Employment.  If Executive dies prior
to termination of employment with the Bank or after termination of employment
with the Bank but prior to the payment of any portion of the Supplemental
Retirement Income Benefit, Executive’s Beneficiary shall be entitled to the
Survivor’s Benefit. Such benefit shall be paid monthly in two hundred forty
(240) equal installments.  The first installment shall begin within thirty (30)
days after the Bank is notified of the date of death of Executive.
 
2.2           Death Subsequent to Retirement.  In the event of the Executive’s
death while receiving monthly benefits under this Agreement, but prior to
receiving two hundred forty (240) monthly payments, the unpaid balance of such
monthly payments shall continue to be paid monthly to Executive’s Beneficiary.
 

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SECTION III
 
SUPPLEMENTAL RETIREMENT INCOME BENEFIT
AND OTHER BENEFITS
 
3.1           Normal Retirement Benefit.  Upon Executive’s termination of
employment due to retirement coincident with or following his Normal Retirement
Date, the Bank shall commence payments of the Supplemental Retirement Income
Benefit.  Such payments shall commence the first day of the month next following
Executive’s termination of employment and, except as otherwise provided in
Section 3.5 below, shall be payable monthly thereafter for two hundred forty
(240) months or Executive’s life, whichever is longer.  If the Executive is a
Specified Employee and the termination is deemed to be a Separation from
Service, then such payments shall commence the first day of the seventh month
next following Executive’s Separation from Service, with the first six payments
accumulated and paid in the seventh month, and the remaining payments payable
monthly thereafter for two hundred thirty-four (234) months or Executive’s life,
whichever is longer.

3.2           Disability.  If Executive becomes Permanently and Totally Disabled
while covered by the provisions of this Agreement, Executive shall be entitled
to a Supplemental Disability Benefit commencing within thirty (30) days after a
determination by the Board of Directors that the Executive is Permanently and
Totally Disabled.  The Supplemental Disability Benefit shall be equal to the
Supplemental Retirement Income Benefit and, except as otherwise provided in
Section 3.5 below, shall be payable monthly thereafter for two hundred forty
(240) months or Executive’s life, whichever is longer.

In the event Executive dies at any time after termination of employment due to
his becoming Permanently and Totally Disabled but prior to commencement or
completion of two hundred forty (240) monthly payments, the Bank shall pay to
Executive’s Beneficiary a continuation of the monthly installments for the
remainder of the two hundred forty (240) month period.

3.3           Change in Control Benefit.  If a Change in Control occurs,
Executive shall be entitled to a Change in Control benefit (the “Change in
Control Benefit”) commencing within thirty (30) days after the effective date of
such Change in Control and, except as otherwise provided in Section 3.5 below,
shall be payable monthly thereafter for two hundred forty (240) months or
Executive’s life, whichever is longer.  The Change in Control Benefit shall be
equal to the Supplemental Retirement Income Benefit.

In the event Executive dies at any time after the Change in Control, but prior
to commencement or completion of two hundred forty (240) monthly payments, the
Bank shall pay to Executive’s Beneficiary a continuation of the monthly
installments for the remainder of the two hundred forty (240) month period.

3.4           Change of Election to Delay Payment.  In the event Executive
desires to delay the payment commencement date of his Supplemental Retirement
Income Benefit, Executive may file an election with the Bank to delay the
payment commencement date, provided that (i) the election must be filed at least
12 months prior to its becoming effective, (ii) if Executive becomes entitled to
a payment during such 12 month period, the payment election form shall be
ignored and distribution of the Supplemental Retirement Income Benefit shall
commence under the Agreement in accordance with its original payment schedule,
and (iii) except with respect to distributions due to death or becoming Totally
and Permanently Disabled, the election must delay the first payment with respect
to such election for a period of not less than 5 years from the date the payment
would otherwise have been made.
 

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3.5           Optional Distribution Elections.  Notwithstanding the foregoing,
Executive may elect to receive his Supplemental Retirement Income Benefit in an
optional form of benefit that is the actuarial equivalent of the normal form of
benefit (e.g., monthly payments for the longer of two hundred forty (240) months
or Executive’s lifetime), by completing the Transition Year Election Form
attached hereto as Exhibit B. Such election, if made, must be completed prior to
December 31, 2008, provided, however, that  (i) Executive may not make an
election during 2007 to cause a payment to be made during 2007, or to otherwise
delay a payment that is scheduled to be made during 2007, and (ii) Executive may
not make an election during 2008 to cause a payment to be made during 2008, or
to otherwise delay a payment that is scheduled to be made during 2008.

SECTION IV
 
EXECUTIVE’S RIGHT TO ASSETS
 
The rights of Executive, any Beneficiary of Executive, or any other person
claiming through Executive under this Agreement, shall be solely those of an
unsecured general creditor of the Bank. Executive, the Beneficiary of Executive,
or any other person claiming through Executive, shall only have the right to
receive from the Bank those payments as specified under this Agreement.
Executive agrees that he, his Beneficiary, or any other person claiming through
him shall have no rights or interests whatsoever in any asset of the Bank,
including any insurance policies or contracts which the Bank may possess or
obtain to informally fund this Agreement. Any asset used or acquired by the Bank
in connection with the liabilities it has assumed under this Agreement, except
as expressly provided, shall not be deemed to be held under any trust for the
benefit of Executive or his Beneficiaries, nor shall it be considered security
for the performance of the obligations of the Bank. It shall be, and remain, a
general, unpledged, and unrestricted asset of the Bank.
 
SECTION V
 
RESTRICTIONS UPON FUNDING
 
The Bank shall have no obligation to set aside, earmark or entrust any fund or
money with which to pay its obligations under this Agreement. Executive, his
Beneficiaries or any successor in interest to him shall be and remain simply a
general creditor of the Bank in the same manner as any other creditor having a
general claim for matured and unpaid compensation. The Bank reserves the
absolute right, at its sole discretion, to either fund the obligations
undertaken by this Agreement or to refrain from funding the same and to
determine the extent, nature, and method of such informal funding. Should the
Bank elect to fund this Agreement, in whole or in part, through the purchase of
life insurance, disability policies or annuities, the Bank reserves the absolute
right, in its sole discretion, to terminate such funding at any time, in whole
or in part. At no time shall Executive be deemed to have any lien nor right,
title or interest in or to any specific funding investment or to any assets of
the Bank. If the Bank elects to invest in a life insurance, disability or
annuity policy upon the life of Executive, then Executive shall assist the Bank
by freely submitting to a physical examination and supplying such additional
information necessary to obtain such insurance or annuities.
 

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SECTION VI
 
ALIENABILITY AND ASSIGNMENT PROHIBITION
 
Neither Executive nor any Beneficiary under this Agreement shall have any power
or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify
or otherwise encumber in advance any of the benefits payable hereunder, nor
shall any of said benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by Executive or his Beneficiary,
nor be transferable by operation of law in the event of bankruptcy, insolvency
or otherwise. In the event Executive or any Beneficiary attempts assignment,
communication, hypothecation, transfer or disposal of the benefits hereunder,
the Bank’s liabilities shall forthwith cease and terminate.
 
SECTION VII
 
TERMINATION OF EMPLOYMENT FOR CAUSE
 
Should Executive be terminated for Cause, all benefits under this Agreement
shall be forfeited and this Agreement shall become null and void.
 
SECTION VIII
 
ACT PROVISIONS
 
8.1.           Named Fiduciary and Administrator. The Bank shall be the named
fiduciary and administrator of this Agreement.  As administrator, the Bank shall
be responsible for the management, control and administration of the Agreement
as established herein. The administrator may delegate to others certain aspects
of the management and operational responsibilities of the Agreement, including
the employment of advisors and the delegation of ministerial duties to qualified
individuals.
 
8.2.           Claims Procedure and Arbitration.  In the event that benefits
under this Agreement  are not paid to Executive (or to his Beneficiary in the
case of Executive’s death) and such claimants feel they are entitled to receive
such benefits, then a written claim must be made to the administrator named
above within thirty (30) days from the date payments are refused. The
administrator and its Board of Directors shall review the written claim and, if
the claim is denied, in whole or in part, they shall provide in writing within
thirty (30) days of receipt of such claim their specific reasons for such
denial, reference to the provisions of this Agreement upon which the denial is
based and any additional material or information necessary to perfect the claim.
Such written notice shall further indicate the additional steps to be taken by
claimants if a further review of the claim denial is desired.
 
8.3.           If claimants desire a second review, they shall notify the
administrator in writing within thirty (30) days of the first claim denial.
Claimants may review the Agreement or any documents relating thereto and submit
any issues, in writing, and comments they may feel appropriate. In its sole
discretion, the administrator shall then review the second claim and provide a
written decision within thirty (30) days of receipt of such claim. This decision
shall likewise state the specific reasons for the decision and shall include
reference to specific provisions of the Agreement upon which the decision is
based.
 

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8.4.           If claimants continue to dispute the benefit denial based upon
completed performance of the Agreement or the meaning and effect of the terms
and conditions thereof, then claimants may submit the dispute to mediation,
administered by the American Arbitration Association (“AAA”) (or a mediator
selected by the parties) in accordance with the AAA’s Commercial Mediation
Rules.  If mediation is not successful in resolving the dispute, it shall be
settled by arbitration administered by the AAA under its Commercial Arbitration
Rules, and judgment on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.  If it is finally determined that
Executive  (or his Beneficiary) is entitled to the benefits set forth under this
Agreement, then all amounts that Executive (or his Beneficiary) would have
received up to the time of such final determination shall be paid to Executive
(or his Beneficiary) with interest (calculated using the Interest Factor) within
thirty (30) days after such final determination.
 
8.5.           Where a dispute arises as to the Bank’s discharge of Executive
for Cause, such dispute shall likewise be submitted to arbitration as above
described and the parties hereto agree to be bound by the decision thereunder.
 
8.6.           All reasonable legal fees paid or incurred by Executive pursuant
to any dispute or questions of interpretation relating to this Agreement shall
be paid or reimbursed by the Bank, provided that the dispute or interpretation
has been settled by executive and the Bank or resolved in Executive’s favor.  To
the extent necessary to avoid additional taxes and penalties under Code Section
409A, such reimbursement shall be made not later than two and one-half months
following the resolution of such matters.
 
SECTION IX
 
MISCELLANEOUS
 
9.1           No Effect on Employment Rights.  Nothing contained herein shall
confer upon Executive the right to be retained in the service of the Bank nor
limit the right of the Bank to discharge or otherwise deal with Executive
without regard to the existence of this Agreement.
 
9.2           Disclosure.  Executive shall receive a copy of his Agreement and
the administrator will make available, upon request, a copy of any rules and
regulations that govern this Agreement.
 
9.3           Governing Law.  The Agreement is established under, and will be
construed according to, the laws of the State of New York, to the extent that
such laws are not preempted by the Act and valid regulations published
thereunder.
 
9.4           Severability.  In the event that any of the provisions of this
Agreement or portion thereof, are held to be inoperative or invalid by any court
of competent jurisdiction, then: (1) insofar as is reasonable, effect will be
given to the intent manifested in the provisions held invalid or inoperative,
and (2) the validity and enforceability of the remaining provisions will not be
affected thereby.
 

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9.5           Incapacity of Recipient.  In the event Executive is declared
incompetent and a conservator or other person legally charged with the care of
his person or of his Estate is appointed, any benefits under the Agreement to
which such Executive is entitled shall be paid to such conservator or other
person legally charged with the care of his person or his Estate.  Except as
provided above in this paragraph, when the Bank’s Board of Directors in its sole
discretion, determines that an Executive is unable to manage his financial
affairs, the Board may direct the Bank to make distributions to any person for
the benefit of such Executive.
 
9.6           Unclaimed Benefit.  Executive shall keep the Bank informed of his
current address and the current address of his Beneficiaries.  The Bank shall
not be obligated to search for the whereabouts of any person.  If the location
of Executive is not made known to the Bank within three years after the date on
which any payment of Executive’s Supplemental Retirement Income Benefit may be
made, payment may be made as though Executive had died at the end of the
three-year period. If, within one additional year after such three-year period
has elapsed, or, within three years after the actual death of Executive, the
Bank is unable to locate any Beneficiary of Executive, then the Bank may fully
discharge its obligation by payment to the Estate.
 
9.7           Limitations on Liability.  Notwithstanding any of the preceding
provisions of the Agreement, neither the Bank, nor any individual acting as an
employee or agent of the Bank or as a member of the Board of Directors shall be
liable to Executive, former Executive, or any other person for any claim, loss,
liability or expense incurred in connection with the Agreement.
 
9.8           Gender.  Whenever, in this Agreement, words are used in the
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so apply.
 
9.9           Affect on Other Corporate Benefit Agreements.  Nothing contained
in this Agreement shall affect the right of Executive to participate in, or be
covered by, any qualified or non-qualified pension, profit sharing, group, bonus
or other supplemental compensation or fringe benefit agreement constituting a
part of the Bank’s existing or future compensation structure.
 
9.10           Headings.  Headings and sub-headings in this Agreement are
inserted for reference and convenience only and shall not be deemed a part of
this Agreement.
 
9.11           Establishment of Rabbi Trust.  The Bank may, but is not obligated
to, establish a rabbi trust into which the Bank may contribute assets which
shall be held therein, subject to the claims of the Bank’s creditors in the
event of the Bank’s “Insolvency” as defined in the agreement which establishes
such rabbi trust, until the contributed assets are paid to Executives and their
Beneficiaries in such manner and at such times as specified in this
Agreement.  In the event a rabbi trust is established, it is the intention of
the Bank to make contributions to the rabbi trust to provide the Bank with a
source of funds to assist it in meeting the liabilities of this Agreement.  The
rabbi trust and any assets held therein shall conform to the terms of the rabbi
trust agreement which has been established in conjunction with this
Agreement.  To the extent the language in this Agreement is modified by the
language in the rabbi trust agreement, the rabbi trust agreement shall supersede
this Agreement.  Any contributions to the rabbi trust shall be made during each
Plan Year in accordance with the rabbi trust agreement.  The amount of such
contribution(s) shall be equal to the full present value of all benefit accruals
under this Agreement, if any, less:  (i) previous contributions made on behalf
of Executive to the rabbi trust, and (ii) earnings to date on all such previous
contributions.
 

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9.12           Tax Withholding.  Any distribution under this Agreement shall be
reduced by the amount of any taxes required to be withheld from such
distribution.  This Agreement shall permit the acceleration of the time or
schedule of a payment to pay employment-related taxes as permitted under
Treasury Regulations Section 1.409A-3(j) or to pay any taxes that may become due
at any time that the arrangement fails to meet the requirements of Code Section
409A and the Treasury Regulations and other guidance promulgated thereunder.  In
the latter case, such payments shall not exceed the amount required to be
included in income as the result of the failure to comply with the requirements
of Code Section 409A.
 
9.13           Acceleration of Payments.  Except as specifically permitted
herein or in other sections of this Agreement, no acceleration of the time or
schedule of any payment may be made hereunder.  Notwithstanding the foregoing,
payments may be accelerated hereunder by the Bank, in accordance with the
provisions of Treasury Regulation Section 1.409A-3(j)(4) and any subsequent
guidance issued by the United States Treasury Department.  Accordingly, payments
may be accelerated, in accordance with requirements and conditions of the
Treasury Regulations (or subsequent guidance) in the following circumstances:
(i) as a result of certain domestic relations orders; (ii) in compliance with
ethics agreements with the Federal government; (iii) in compliance with ethics
laws or conflicts of interest laws; (iv) in limited cash-outs (but not in excess
of the limit under Code Section 402(g)(1)(B)); (v) in the case of certain
distributions to avoid a non-allocation year under Code Section 409(p); (vi) to
apply certain offsets in satisfaction of a debt of the Executive to the Bank;
(vii) in satisfaction of certain bona fide disputes between the Executive and
the Bank; or (viii) for any other purpose set forth in the Treasury Regulations
and subsequent guidance.

SECTION X
 
NON-COMPETITION AFTER NORMAL RETIREMENT
 
10.1           Non-Compete Clause.  Except as stated in the second paragraph of
this subsection, Executive expressly agrees that, as consideration for the
agreements of the Bank contained herein and as a condition to the performance by
the Bank of its obligations hereunder, for eighteen (18) months following
termination of Executive’s employment, other than a termination of employment
following a Change in Control, Executive will not, without the prior written
consent of the Bank, engage in or become interested, directly or indirectly, as
a sole proprietor, as a partner in a partnership, or as a substantial
shareholder in a corporation, nor become associated with, in the capacity of an
employee, director, officer, principal, agent, trustee or in any other capacity
whatsoever, any enterprise conducted in any city, town or county in which the
Bank maintains an office at the time of Executive’s termination of employment,
which enterprise is, or may deemed to be, competitive with any business carried
on by the Bank as of the date of the termination of Executive’s employment or
his retirement.
 

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10.2           Benefits Following a Change in Control.  In the event of a Change
in Control, Executive shall be entitled to the benefit hereunder whether or not
he enters into an arrangement that is deemed to be competitive with the Bank.
 
10.3           Breach.  In the event of any breach by Executive of the
agreements and covenants contained herein, the Board of Directors of the Bank
shall direct that any unpaid balance of any payments to Executive under this
Agreement be suspended, and shall thereupon notify Executive of such
suspensions, in writing. Thereupon, if the Board of Directors of the Bank shall
determine that said breach by Executive has continued for a period of six (6)
months following notification of such suspension, all rights of Executive and
his Beneficiaries under this Agreement, including rights to further payments
hereunder, shall thereupon terminate.  If, however, Executive cures such breach
in all material respects within ninety (90) days of the termination of
Executive’s (and his Beneficiaries’) rights under the Agreement, or if it is
later determined by the Bank’s Board of Directors that no breach had, in fact,
occurred, then all of Executive’s (and his Beneficiaries’) rights under the
Agreement will be immediately restored, and benefit payments, if they had begun
prior to the breach (or the action erroneously determined to be a breach), shall
recommence at the next ordinarily scheduled payment date.  The first benefit
payment after recommencement shall be in an amount sufficient to place the
Executive in the position, with respect to the payment of his benefits under the
Agreement, in which he would have been but for the suspension of his rights due
to the Board’s determination that Executive had breached the Agreement.

SECTION XI
 
AMENDMENT, REVOCATION OR TERMINATION
 
This Agreement shall not be amended, modified, or revoked at any time, in whole
or part, without the mutual written consent of Executive and the Bank, and such
mutual consent shall be required even if Executive is no longer employed by the
Bank.  In the event that any of the provisions of this Agreement or portion
hereof, are held to be inoperative or invalid by any court of competent
jurisdiction, or in the event that any legislation, regulation, or rule adopted
by any governmental body having jurisdiction over the Bank, including, but not
limited to the Office of Thrift Supervision and the Internal Revenue Service,
would be retroactively applied to invalidate this Agreement or any provision
hereof or cause the benefits hereunder to be taxable, then: (1) insofar as is
reasonable, effect will be given to the intent manifested in the provisions held
invalid or inoperative, and (2) the validity and enforceability of the remaining
provisions will not be affected thereby.  In the event that the intent of any
provision shall need to be construed in a manner to avoid taxability, such
construction shall be made by the Bank, as administrator of the Agreement, in a
manner that would manifest to the maximum extent possible the original meaning
of such provisions.  Notwithstanding anything to the contrary herein, in the
event of a Change in Control, the Bank may terminate the Agreement by
irrevocable action of the Bank’s Board of Directors taken within thirty (30)
days preceding, but not following, the Change in Control, provided that (i) all
agreements, methods, programs and other arrangements sponsored by the Bank
immediately after the Change in Control with respect to which deferrals of
compensation are treated as having been deferred under a single plan pursuant to
Treasury Regulations Section 1.409A-1(c)(2), are terminated and liquidated with
respect to each Executive that experienced such Change in Control, and (ii) all
accrued benefits payable hereunder are paid to each affected Executive within
twelve months of the Agreement’s termination.
 

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SECTION XII
 
COMPLIANCE WITH CODE SECTION 409A
 
This Agreement has been amended following the enactment of Code Section 409A and
is intended to be construed consistent with the requirements of that Section,
the Treasury Regulations and other guidance issued thereunder.  If any provision
of the Agreement shall be determined to be inconsistent therewith for any
reason, then the Agreement shall be construed, to the maximum extent possible,
to give effect to such provision in a manner consistent with Code Section 409A,
and if such construction is not possible, as if such provision had never been
included.  In the event that any of the provisions of the Agreement or portion
thereof are held to be inoperative or invalid by any court of competent
jurisdiction, then (i) insofar as is reasonable, effect will be given to the
intent manifested in the provisions held to be inoperative, and (ii) the
invalidity and enforceability of the remaining provisions will not be affected
thereby.
 
SECTION XIII
 
EXECUTION
 
13.1           This Agreement sets forth the entire understanding of the parties
hereto with respect to the transactions contemplated hereby, and any previous
agreements or understandings between the parties hereto regarding the subject
matter hereof are merged into and superseded by this Agreement.
 
13.2           This Agreement shall be executed in triplicate, each copy of
which, when so executed and delivered, shall be an original, but all three
copies shall together constitute one and the same instrument.
 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the 4th day of December, 2007.
 
 

    EXECUTIVE                                 December 4, 2007   /s/ Angelo J.
Di Lorenzo   Dated:   Angelo J. Di Lorenzo                                    
BROOKLYN FEDERAL SAVINGS BANK                           By: /s/ John A.
Loconsolo         John A. Loconsolo         Title: Chairman  

 

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SCHEDULE A
 
ACTUARIAL ASSUMPTIONS
 

 
Interest Factor:
6%
   
Actuarial Table:
1983 Individual Annuity Mortality

 
 
 

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EXHIBIT A
 
EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
 
BENEFICIARY DESIGNATION
 
Executive, ANGELO J. Di LORENZO, under the terms of a certain Executive
Supplemental Retirement Income Agreement by and between him and BROOKLYN FEDERAL
SAVINGS BANK, Brooklyn, New York, amended and restated effective December 1,
2007, hereby designates the following Beneficiary to receive any guaranteed
payments or death benefits under such Agreement, following his death:
 

  PRIMARY BENEFICIARY:  __________________________________________           
__________________________________________          SECONDARY BENEFICIARY: 
__________________________________________           
__________________________________________ 

 
This Beneficiary Designation hereby revokes any prior Beneficiary Designation
which may have been in effect.
 
This Beneficiary Designation is revocable by Executive at any time for any
reason.    To the extent Executive desires to change the individual(s)
designated as beneficiary (ies) herein, Executive shall have the right to
execute a new Beneficiary Designation that will effectively revoke this
Beneficiary Designation.
 
DATE: __________________, 20___

     
(WITNESS)
 
(EXECUTIVE – Print Name)
                 
(WITNESS)
 
(EXECUTIVE – Signature)

 

 

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EXHIBIT B

EXECUTIVE SUPPLEMENTAL RETIREMENT INCOME AGREEMENT
FOR
ANGELO J. DI LORENZO

TRANSITION YEAR ELECTION FORM

Instructions:  Use this Transition Year Election Form to elect an optional form
of distribution of the Supplemental Retirement Income Benefit (“SRIB”) under the
Executive Supplemental Retirement Income Agreement (the “Agreement”) for Angelo
J. Di Lorenzo (“Executive”).  The Agreement provides that the SRIB will be
distributed in monthly installments for the longer of two hundred forty (240)
months or the Executive’s lifetime, commencing upon Executive’s Separation from
Service, Disability, or in the event of a Change in Control. Any optional form
of distribution of the SRIB elected hereunder shall be the actuarial equivalent
of the installment form of distribution described above.

Due to IRS rules, Executive must complete this form no later than December 31,
2008, provided, however, that Executive may not make an election during 2007 to
cause a payment to be made during 2007, or to otherwise delay a payment that is
scheduled to be made during 2007, and Executive may not make an election during
2008 to cause a payment to be made during 2008, or to otherwise delay a payment
that is scheduled to be made during 2008.

If you do not wish to change your form of payment from the installments form of
distribution described above, please mark the box below with an “X” to indicate
that you do not wish to make any changes to the form of distributions under the
Agreement.

o
I do not wish to elect an optional form of distribution of my SRIB under the
Agreement.

* * * * *

Normal Retirement Benefit (Section 3.1 of the Agreement)

In accordance with the terms of the Agreement, upon my termination of employment
due to my retirement following my Normal Retirement Date, I hereby elect to
receive my SRIB in the following optional form (check one):
 
 

  __________ Annual installments for a period of __________ years (not to exceed
10 years)             __________
Lump Sum Distribution  

   

 

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Total and Permanent Disability Benefit (Section 3.2 of the Agreement)

In accordance with the terms of the Agreement, in the event of my Total and
Permanent Disability, I hereby elect to receive my SRIB in the following
optional form (check one):
 

  __________ Annual installments for a period of __________ years (not to exceed
10 years)             __________
Lump Sum Distribution  

   

Change in Control Benefit (Section 3.3 of the Agreement)

In accordance with the terms of the Agreement, in the event of a Change in
Control prior to my Normal Retirement Date, I hereby elect to receive my SRIB in
the following optional form (check one):

 

  __________ Annual installments for a period of __________ years (not to exceed
10 years)             __________
Lump Sum Distribution  

   

 
I understand that none of the benefits distributed from the Agreement are
eligible for tax-free rollover and I will be required to pay income tax on the
amounts when they are paid to me.

Date: ______________________   Executive’s Signature: ________________          
    Date: ______________________   Bank: _____________________________     
(duly authorized Officer)