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Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (“Agreement”) is made and entered into as of the 20th
day of June 2011 (“Effective Date”), by and among Provident New York Bancorp, a
Delaware corporation (the “Company), Provident Bank, a savings bank organized
and existing under the laws of the United States of America (the “Bank”; and
together with the Company, “Provident”), and Jack L. Kopnisky (“Executive”).
 
WITNESSETH:
 
WHEREAS, the Company and the Bank desire to employ Executive as President and
Chief Executive Officer of the Company and the Bank, respectively; and
 
WHEREAS,  Executive desires to serve in such positions;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
obligations hereinafter set forth, the Company, the Bank and Executive hereby
agree as follows:
 
1. Employment; Board Membership.
 
(a)           Employment.  Subject to the terms set forth herein, the Company
and the Bank, respectively, agree to employ Executive as President and Chief
Executive Officer of the Company and President and Chief Executive Officer of
the Bank, and Executive hereby accepts such employment.  As President and Chief
Executive Officer of the Company and the Bank, Executive shall have such
authority, perform such duties, and fulfill such responsibilities commonly
incident to such positions or which are delegated to Executive by the Board of
Directors of the Company (the “Board”) or the Board of Directors of the
Bank.  While employed, Executive shall devote his full business time and
attention to the business and affairs of the Company and the Bank and shall use
his best efforts to advance the interests of the Company and the Bank.
 
(b)           Board Membership.  Executive will be appointed, effective as of
the Start Date (as defined in Section 2(a)), as a member of the Board and as a
member of the Bank Board.  The Company and the Bank, as applicable, will
nominate Executive for election to the Board or the Bank Board upon any
expiration of Executive’s initial term of membership on the Board or Bank Board
during the Employment Period (as defined in Section 2(a)).  The Company’s and
the Bank’s obligations under this Section 1(b) will be subject to the
requirements of applicable law.
 
2. Employment Period
 
(a) Duration.  Executive’s period of employment with Provident shall begin on
July 6, 2011 (the “Start Date”) and shall continue until the second anniversary
of such date (or if a Change in Control occurs prior to such second anniversary,
the eighteen (18) month anniversary of the date of the Change in Control, if
later), unless terminated prior thereto by either Provident or Executive in
accordance with Section 6 hereof (such period of employment being the
“Employment Period”).
 
 
 
 

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(b) Employment Following Termination of Employment Period.  Nothing in this
Agreement shall mandate or prohibit a continuation of Executive’s employment
following the expiration of the Employment Period upon such terms and conditions
as the Company, the Bank, and Executive may agree.
 
3. Compensation
 
(a) Base Salary. In consideration for the services performed by Executive during
the Employment Period, Provident shall pay to Executive an annual salary (“Base
Salary”) of $550,000.  The Base Salary shall be paid in approximately equal
installments in accordance with the Bank’s customary payroll
practices.  Provident shall review Executive’s Base Salary at least annually
during the Employment Period for possible upward adjustment, and Executive’s
Base Salary shall not be reduced without Executive’s consent.
 
(b) Annual Bonus.  During the Employment Period, Executive shall be eligible to
participate in Provident’s Executive Officer Management Incentive Program (or
any successor thereto) (the “Annual Bonus Plan”).  Executive’s target annual
bonus under the Annual Bonus Plan shall be 50% of Executive’s Base Salary (the
“Target Bonus”).  The actual amount of Executive’s annual bonus shall depend
upon the achievement of performance goals established by the Executive
Compensation Committee of the Board and may range from 0% of the Target Bonus to
150% of the Target Bonus.  The Executive Compensation Committee of the Board
will periodically review the Annual Bonus Plan and Executive’s Target Bonus
percentage and may in its discretion increase Executive’s annual bonus
opportunity.  Annual bonuses paid to Executive under the Annual Bonus Plan are
referred to herein as “Annual Bonuses.”
 
(c) Long-Term Compensation.  During the Employment Period, Executive shall be
eligible to participate in any equity and/or other long-term compensation
programs established by Provident from time to time for senior executive
officers on a basis consistent with Executive’s status as President and Chief
Executive Officer of the Company and the Bank.  As of the Start Date, Executive
shall be granted equity-based awards (the “Initial Equity Awards”) covering the
Company’s common stock as follows: 
 
(i) Nonqualified stock options having an aggregate value of $250,000 on the
Start Date that shall vest at a rate of 25% per year, subject to Executive’s
continued employment with Provident.  The per share exercise price of the
options shall be equal the closing price of the Company’s common stock on the
Start Date, as reported on the Nasdaq Global Select Market.  The value of such
options shall be determined by the Company as of the Start Date in a manner
consistent with how options are valued for purposes of the Company’s proxy
statement disclosures.
 
(ii) A number of shares of restricted stock equal to $250,000 divided by the
closing price of the Company’s common stock on the Start Date, rounded down to
the nearest whole number of shares.  Such shares shall vest at a rate of 25% on
each of the first four anniversary dates of the Start Date, subject to
Executive’s continued employment with Provident.
 
(iii) A number of shares of restricted stock equal to $100,000 divided by the
closing price of the Company’s common stock on the Start Date, rounded down to
the nearest whole number of shares.  Such shares shall vest on a cliff basis on
December 31, 2014, but only if performance goals specified by the Company are
achieved and Executive remains employed by Provident until such date.
 
 
 
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The Initial Equity Awards shall be subject to the terms and conditions of the
Company’s standard forms of award agreements and such other customary terms and
conditions as the Company may establish.
 
The Company currently intends to seek stockholder approval of a new equity-based
compensation plan during early 2012 from which equity-based compensation awards
can be granted to Executive and the Company’s other senior executives.   The
Executive Compensation Committee of the Board currently anticipates that
equity-based compensation will be an important component of the Company’s
performance-based compensation program for the Company’s senior executives going
forward.  
 
(d) Employee Benefit Plans; Paid Time Off.
 
(i) Benefit Plans.  During the Employment Period, Executive shall be an employee
of the Company and the Bank and shall be entitled to participate in Provident’s
(i) tax-qualified retirement plans (currently, Provident’s 401(k) and Profit
Sharing Plan and Employee Stock Ownership Plan); (ii) nonqualified retirement
plans (currently, the 2005 Supplemental Executive Retirement Plan); (iii) group
life, health and disability insurance plans and supplemental long-term
disability and long-term care plans; and (iv) any other employee benefit plans
and programs in accordance with Provident’s customary practices, provided that
Executive’s participation shall be subject to the terms of such plans and
programs (including being a member of the class of employees authorized to
participate in the plan or program), and provided further that nothing herein
shall limit Provident’s right to amend or terminate any such plans or programs.
 
(ii) Paid Time Off.  Executive shall be entitled to four (4) weeks of paid
vacation time each year during the Employment Period (measured on a fiscal or
calendar year basis, in accordance with the Provident’s usual practices), as
well as sick leave, holidays and other paid absences in accordance with the
Provident’s policies and procedures for senior executives.  Any unused paid time
off during an annual period may be carried forward into the following year to
the extent permitted under Provident’s policies and procedures and Executive
shall not be compensated for any unused paid time off.
 
(e) Signing Bonus.  Provident shall pay Executive a signing bonus in the amount
of $75,000 not later than the end of the first payroll period that includes the
Start Date.
 
(f) Country Club Initiation Fee.  The Bank will promptly reimburse Executive for
the initiation fee paid by Executive for membership in a mutually agreed upon
country club in the Bank’s market area.  Such reimbursement obligation shall
apply only if Executive pays the  initiation fee during 2011.  The reimbursement
shall be subject to reduction for applicable withholding taxes and shall in all
events be paid not later than March 15, 2012.
 
 
 
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(g) Expenses.  Provident shall reimburse Executive for Executive’s ordinary and
necessary business expenses and travel and entertainment expenses incurred in
connection with the performance of his duties under this Agreement upon
presentation to Provident of an itemized account of such expenses in such form
as Provident may reasonably require.
 
4. Principal Place of Employment
 
Executive’s principal place of employment during the Employment Period shall be
at the Company’s principal executive offices or at such other location upon
which the Company and Executive may mutually agree.
 
5. Outside Activities and Board Memberships
 
During the Employment Period, Executive shall not provide services on behalf of
any financial institution or other entity or business that competes with the
Company, the Bank, or any of their affiliates (each, a “competitive business”)
or any subsidiary or affiliate of any such competitive business, as an employee,
consultant, independent contractor, agent, sole proprietor, partner, joint
venturer, corporate officer or director; nor shall Executive acquire by reason
of purchase during the Employment Period the ownership of more than 5% of the
outstanding equity interest in any such competitive business.  In addition,
during the Employment Period, Executive shall not, directly or indirectly,
acquire a beneficial interest, or engage in any joint venture in real estate
with Provident.  Subject to the foregoing, Executive may serve on boards of
directors of unaffiliated corporations, subject to Board approval, which shall
not be unreasonably withheld.  Except as specifically set forth herein,
Executive may engage in personal business and investment activities, including
real estate investments and personal investments in the stocks, securities and
obligations of other financial institutions (or their holding
companies).  Notwithstanding the foregoing, in no event shall Executive’s
outside activities, services, personal business and investments materially
interfere with the performance of his duties under this Agreement.  Nothing in
this Section 5 shall limit any of Executive’s obligations under Section 9
hereof.
 
6. Termination of Employment
 
(a) Termination by the Company Without Cause.
 
(i) Provident shall have the right to terminate Executive’s employment at any
time during the Employment Period without Cause by giving notice to Executive as
described in Section 6(f).  For sake of clarity, neither termination of
Executive’s employment pursuant to Section 6(e) nor upon or after expiration of
the Employment Period shall constitute a termination without Cause for purposes
of this Section 6.
 
(ii) In the event that Provident terminates Executive’s employment during the
Employment Period without Cause:
 
(A) Provident shall pay or provide to Executive any Accrued Obligations;
 
 
 
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(B) Subject to Section 6(g), Provident shall pay to Executive within sixty (60)
days following the date of termination a lump sum cash payment (the “Severance
Payment”) equal to the product of (i) two (2) and (ii) the sum of Executive’s
Base Salary immediately prior to termination of employment and the amount of
Executive’s Target Bonus for the fiscal year including Executive’s termination
of employment.  Notwithstanding the foregoing, a multiplier of three (3)
(instead of two (2)) shall be used in the preceding clause (B)(i) if Executive’s
termination of employment occurs upon or within eighteen (18) months after a
Change in Control.
 
(C) Subject to Section 6(g), Provident shall pay to Executive on a monthly basis
commencing with the first month following Executive’s termination of employment
and continuing until the eighteenth month following Executive’s termination of
employment a cash payment (subject to reduction for applicable withholding
taxes) equal to the monthly COBRA premium in effect as of the date of
Executive’s termination of employment for the level of coverage in effect for
Executive under Provident’s group health plan (the “COBRA Premium Payments”);
 
(D) If such termination occurs upon or within eighteen (18) months after a
Change in Control, then, subject to Section 6(g) and except to the extent
otherwise provided in the applicable award agreements or terms of the applicable
plan(s), all of Executive’s then outstanding stock options and other
equity-based awards shall become fully vested (to the extent not previously
vested) on the sixtieth day after such termination of employment, except that
that in the case of any stock options or other equity based awards the scheduled
vesting of which is, in whole or in part, contingent upon the achievement of one
or more performance goals, such performance goals shall be deemed to be fully
achieved (at “target”, to the extent applicable) as of the date of Executive’s
termination of employment and such option or other equity-based award shall vest
on a pro-rata basis on the sixtieth day after termination of employment based on
the number of days during the scheduled vesting period during which Executive
was employed relative to the total number of days during the scheduled vesting
period.  It is understood and agreed that if Executive’s termination of
employment occurs prior to a Change in Control or more than eighteen (18) months
after a Change in Control, Executive’s then outstanding stock options and other
equity compensation awards covering the Company’s common stock shall vest if and
to the extent provided in the applicable award agreements and terms of the
applicable plan(s). Any accelerated vesting that occurs pursuant to the terms of
this clauses (D) is herein referred to as the “Accelerated Equity Vesting.”
 
(b) Termination by the Company for Cause.  Provident shall have the right to
terminate Executive’s employment at any time during the Employment Period for
Cause by giving notice to Executive as provided in Section 6(f) hereof.  In the
event Executive’s employment is terminated for Cause, Provident’s sole
obligation shall be to pay or provide to Executive any Accrued Obligations.
 
(c) Resignation by Executive Without Good Reason.  Executive may resign from
employment during the Employment Period without Good Reason at any time by
giving notice to the Company as described in Section 6(f).  In the event
Executive resigns from employment without Good Reason, Provident’s sole
obligation shall be to pay or provide to Executive any Accrued Obligations.
 
 
 
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(d) Resignation by Executive for Good Reason.  Executive may resign from
employment under this Agreement for Good Reason by giving notice to the Company
as described in Section 6(f).  In the event Executive resigns from employment
for Good Reason, (i) Provident shall pay or provide to Executive any Accrued
Obligations and (ii) Executive shall, subject to Section 6(g), be entitled to
the Severance Payment, the COBRA Premium Payment, and Accelerated Equity
Vesting, if applicable (together, the “Severance Benefits”) to the same extent
as if Executive’s employment was terminated by Provident without Cause pursuant
to Section 6(a) as of the date of Executive’s termination of employment for Good
Reason.
 
(e) Termination by Reason of Death or Disability of Executive.
 
(i) In the event of Executive’s death during the Employment Period, Provident’s
sole obligation shall be to pay to Executive’s legal representatives any Accrued
Obligations.
 
(ii) The Company shall be entitled to terminate Executive’s employment due to
Executive’s Disability. If Executive’s employment hereunder is terminated due to
Executive’s Disability, Provident’s sole obligation shall be to pay or provide
to Executive any Accrued Obligations.
 
(f) Notice; Effective Date of Termination.  Notice of termination of employment
under this Agreement shall be communicated by or to Executive (on one hand) or
the Company (on the other hand) in writing in accordance with Section
14.  Termination of Executive’s employment pursuant to this Agreement shall be
effective on the earliest of:
 
(i) immediately after Provident gives notice to Executive of Executive’s
termination without Cause, unless the parties agree to a later date, in which
case, termination shall be effective as of such later date;
 
(ii) immediately upon approval by the Board of termination of Executive’s
employment for Cause;
 
(iii) immediately upon Executive’s death;
 
(iv) in the case of termination by reason of Executive’s Disability, the date on
which Executive is determined to be permanently disabled for purposes of
Provident’s long-term disability plan or policy that covers Executive; or
 
(v) thirty (30) days after Executive gives written notice to Provident of
Executive’s resignation from employment under this Agreement (including for Good
Reason), provided that the Company  or the Bank may set an earlier termination
date at any time prior to the date of termination of employment, in which case
Executive’s resignation shall be effective as of such other date.
 
(g) General Release of Claims.  Executive shall not be entitled to any of the
Severance Benefits pursuant to Sections 6(a) or 6(d) unless (i) Executive has
executed and delivered to the Company a general release of claims (in such form
as the Company shall specify) (the “Release”) and such Release has become
irrevocable under the Age Discrimination in Employment Act (ADEA) not later than
fifty-six (56) days after the date of Executive’s termination of employment
hereunder.  Executive’s entitlement to the Severance Benefits is further
conditioned upon Executive returning to Provident all property of Provident on
or prior to the date of Executive’s termination of employment with Provident and
complying with the terms of Sections 5, 8, and 9 hereof and the
Release.  Provident shall deliver to Executive a copy of the Release not later
than three (3) days after Executive’s termination of employment hereunder
pursuant to Section 3(a) or 3(d) hereof.
 
 
 
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(h) No Other Severance Benefits.  Executive acknowledges and agrees the
Severance Benefits are in lieu of, and not in addition to, any payments and/or
benefits to which Executive may otherwise be entitled under any severance plan,
policy or program of Provident.
 
(i) Payment of Obligations.  Notwithstanding anything to the contrary herein,
any payment obligation of the Company or the Bank under this Agreement may be
satisfied in whole or in part by payment by the Company, the Bank, or any
affiliate and any such payment shall, for purposes of this Agreement, be treated
as if made by the Company or the Bank (as applicable).
 
(j) Resignation from Positions.  Upon termination of Executive’s employment for
any reason, Executive shall promptly (i) resign from all positions (including,
without limitation, any management, officer, or director position) with
Provident and (ii) relinquish any power of attorney, signing authority, trust
authorization, or bank account signatory authorization that Executive may hold
on behalf of Provident.  Executive’s execution of this Agreement shall be deemed
the grant by Executive to the officers of the Company and the Bank of a limited
power of attorney to sign in Executive’s name and on Executive’s behalf such
documentation as may be necessary or appropriate for the limited purposes of
effectuating such resignations and relinquishments.
 
(k) Golden Parachute Limit.  (i)  Notwithstanding any other provision of this
Agreement, in the event that any portion of the Severance Benefits or any other
payment or benefit received or to be received by Executive (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement)
(collectively, the "Total Benefits") would be subject to the excise tax imposed
under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”
(the “Excise Tax”), the Total Benefits shall be reduced to the extent necessary
so that no portion of the Total Benefits is subject to the Excise Tax; provided,
however, that no such reduction in the Total Benefits shall be made if by not
making such reduction, Executive’s Retained Amount (as hereinafter defined)
would be greater than Executive’s Retained Amount if the Total Benefits are so
reduced.  All determinations required to be made under this Section 6(k) shall
be made by tax counsel selected by Provident and reasonably acceptable to
Executive (“Tax Counsel”), which determinations shall be conclusive and binding
on Executive and Provident absent manifest error.  All fees and expenses of Tax
Counsel shall be borne solely by Provident.  Prior to any reduction in
Executive’s Total Benefits pursuant to this Section 6(k), Tax Counsel shall
provide Executive and the Company with a report setting forth its calculations
and containing related supporting information.  In the event any such reduction
is required, the Total Benefits shall be reduced in the following order: (i) the
COBRA Premium Payments, (ii) the Severance Payment, (iii) any other portion of
the Total Benefits that are not subject to Section 409A of the Code (other than
Total Benefits resulting from any accelerated vesting of equity awards), (iv)
Total Benefits that are subject to Section 409A of the Code in reverse order of
payment, and (v) Total Benefits that are not subject to Section 409A and arise
from any accelerated vesting of equity awards.  The parties hereto hereby elect
to use the applicable Federal rate that is in effect on the date this Agreement
is entered into for purposes of determining the present value of any payments
provided for hereunder for purposes of Section 280G of the Code.  “Retained
Amount” shall mean the present value (as determined in accordance with sections
280G(b)(2)(A)(ii) and 290G(d)(4) of the Code) of the Total Benefits net of all
federal, state and local taxes imposed on Executive with respect thereto.
 
 
 
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7. Certain Definitions.
 
(a) “Accrued Obligations” means (i) any accrued and unpaid Base Salary of
Executive through the date of termination of employment, payable pursuant to the
Bank’s standard payroll policies, (ii) any compensation and benefits to the
extent payable to Executive based on Executive’s participation in any
compensation or benefit plan, program or arrangement of Provident through the
date of termination of employment, payable in accordance with the terms of such
plan, program or arrangement, and (iii) any expense reimbursement to which
Executive is entitled under Provident’s standard expense reimbursement policy
(as applicable) and Sections 3(g) and 10 hereof.
 
(b) “Cause” means Executive’s failure or refusal to substantially perform his
duties hereunder, personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, breach of the Bank’s Code of
Ethics, material violation of the Sarbanes-Oxley requirements for officers of
public companies that in the reasonable opinion of the Board will likely cause
substantial financial harm or substantial injury to the reputation of the
Company or the Bank, willfully engaging in actions that in the reasonable
opinion of the Board will likely cause substantial financial harm or substantial
injury to the business reputation of the Company or Bank, willful violation of
any law, rule or regulation (other than routine traffic violations or similar
offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement. The Bank shall furnish Executive with a statement of the
grounds for termination for Cause and shall afford Executive a reasonable
opportunity to refute the grounds for the proposed termination.  For purposes of
this Section, no act or failure to act, on the part of Executive, shall be
considered “willful” unless it is done, or omitted to be done, by Executive in
bad faith or without reasonable belief that Executive’s action or omission was
in the best interests of the Company and the Bank.  Any act, or failure to act,
based upon the direction of the Board or the Bank Board based upon the advice of
counsel for the Company or Bank shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of the
Company or the Bank.
 
(c) “Change in Control” means the occurrence of any of the following:
 
(i) any “person” (as the term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
any employee benefit plan of Provident or any affiliate, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of Company’s outstanding securities; or
 
 
 
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(ii) individuals who constitute the Board on the date hereof (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Company’s
stockholders was approved by the Nominating Committee serving under an Incumbent
Board, shall be, for purposes of this clause (ii), considered as though such
person were a member of the Incumbent Board; or
 
(iii) the Company consummates a merger, consolidation, share exchange, division
or other reorganization or transaction of the Company (a “Fundamental 
Transaction”) with any other corporation, other than a Fundamental Transaction
that  results in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined Voting Power immediately after such Fundamental
Transaction of (i) the Company’s outstanding  securities, (ii) the surviving
entity’s outstanding securities, or (iii) in the case of a division, the
outstanding securities of each entity resulting from the division; or
 
(iv) the shareholders of the Company approve a plan of complete liquidation or
winding up of the Company; or
 
(v) the consummation of an agreement for the sale or disposition (in one
transaction or a series of transactions) of all or substantially all of the
Company’s or the Bank’s assets.
 
(d) “Disability” means that Executive is deemed disabled for purposes of
Provident’s long-term disability plan or  policy that covers Executive.
 
(e) “Good Reason” means the occurrence of any of the following events (without
Executive’s consent):
 
(i) a material adverse change in Executive’s functions, duties, or
responsibilities with the Company and the Bank, which change would cause
Executive’s position to become one of materially lesser responsibility,
importance, or scope; or
 
(ii) a material breach of this Agreement by the Company or the Bank.
 
Notwithstanding the foregoing, no such event shall constitute “Good Reason”
unless (a) Executive shall have given written notice of such event to the
Company within ninety (90) days after the initial occurrence thereof, (b) the
Company and the Bank shall have failed to cure the situation within thirty (30)
days following the delivery of such notice (or such longer cure period as may be
agreed upon by the parties), and (c) Executive terminates employment within
thirty (30) days after expiration of such cure period.
 
8. Confidentiality.  Unless Executive obtains prior written consent from the
Company or the Bank, Executive shall keep confidential and shall refrain from
using for the benefit of himself, or any person or entity other than the
Company, the Bank or any entity which is a subsidiary or affiliate of the
Company or the Bank or of which the Company or the Bank is a subsidiary or
affiliate, any document or information obtained from the Company, the Bank or
from any of their respective parents, subsidiaries or affiliates, in the course
of his employment with any of them concerning their properties, operations or
business (unless such document or information is readily ascertainable from
public or published information or trade sources or has otherwise been made
available to the public through no fault of Executive) until the same becomes so
ascertainable or available; provided, however, that nothing in this Section
shall prevent Executive, with or without the Bank’s or the Company’s consent,
from participating in or disclosing documents or information in connection with
any judicial or administrative investigation, inquiry or proceeding to the
extent that such participation or disclosure is required under applicable law.
 
 
 
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9. Non-Solicitation; Non-Competition; Post-Termination Cooperation
 
(a) Executive hereby covenants and agrees that, for a period of one year
following his termination of employment with Provident (whether or not during
the Employment Period), Executive shall not, without the prior written consent
of the Company, either directly or indirectly:
 
(i) solicit, offer employment to, or take any other action intended (or that a
reasonable person acting in like circumstances would expect) to have the effect
of causing any officer or employee of the Company, the Bank or any of their
respective subsidiaries or affiliates to terminate his or her employment and
accept employment or become affiliated with, or provide services for
compensation in any capacity whatsoever to, any business whatsoever that
competes with the business of the Company or the Bank or any of their direct or
indirect subsidiaries or affiliates or has headquarters or offices within the
counties in which the Company or the Bank has business operations or has filed
an application for regulatory approval to establish such an office;
 
(ii) become an officer, employee, consultant, director, independent contractor,
agent, sole proprietor, joint venturer, greater than 5% equity-owner or
stockholder, partner or trustee of any savings bank, savings and loan
association, savings and loan holding company, credit union, bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity competing with the Company or the Bank or any of their affiliates
in Rockland, Orange, Sullivan, Ulster, Westchester or Putnam Counties in New
York or Bergen County in New Jersey or any other geographic locations where the
Company or the Bank or any of their affiliates has material business interests;
provided, however, that the restriction set forth in this clause (ii) shall not
apply if Executive’s employment is terminated following a Change in Control; or
 
(iii) solicit, provide any information, advice or recommendation or take any
other action intended (or that a reasonable person acting in like circumstances
would expect) to have the effect of causing any customer of the Company or the
Bank or any of their affiliates to terminate an existing business or commercial
relationship with the Company or the Bank or any of their affiliates.
 
(b) Executive shall, upon reasonable notice, furnish such information and
assistance to the Company and/or the Bank, as may reasonably be required by the
Company and/or the Bank, in connection with any litigation in which it or any of
its subsidiaries or affiliates is, or may become, a party; provided, however,
that Executive shall not be required to provide information or assistance with
respect to any litigation between Executive and the Company, the Bank or any of
their subsidiaries or affiliates.
 
 
 
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(c) All payments and benefits to Executive under this Agreement shall be subject
to Executive’s compliance with this Section.  The parties hereto, recognizing
that irreparable injury will result to the Company, the Bank and/or their
affiliates, and their business and property in the event of Executive’s breach
of this Section, agree that, in the event of any such breach by Executive, the
Company and the Bank will be entitled, in addition to any other remedies and
damages available, to an injunction to restrain the violation hereof by
Executive and all persons acting for or with Executive.  Executive represents
and admits that Executive’s experience and capabilities are such that Executive
can obtain employment in a business engaged in other lines and/or of a different
nature than the Company, the Bank, and their affiliates, and that the
enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood.  Nothing herein will be construed as prohibiting the
Company and the Bank from pursuing any other remedies available to them for such
breach or threatened breach, including the recovery of damages from Executive.
 
10. Section 409A of the Code.
 
(a) This Agreement is intended to comply with the requirements of Section 409A
of the Code (including the exceptions thereto), to the extent applicable, and
the Company shall administer and interpret this Agreement in accordance with
such requirements.  If any provision contained in the Agreement conflicts with
the requirements of Section 409A of the Code (or the exemptions intended to
apply under the Agreement), the Agreement shall be deemed to be reformed to
comply with the requirements of Section 409A of the Code (or the applicable
exemptions thereto).  Notwithstanding anything to the contrary herein, for
purposes of determining Executive’s entitlement to the Severance Benefits, (i)
Executive’s employment shall not be deemed to have terminated unless and until
Executive incurs a “separation from service” as defined in Section 409A of the
Code.   Reimbursement of any expenses provided for in this Agreement shall be
made promptly upon presentation of documentation in accordance with Provident’s
policies with respect thereto as in effect from time to time (but in no event
later than the end of calendar year following the year such expenses were
incurred); provided, however, that in no event shall the amount of expenses
eligible for reimbursement hereunder during a calendar year affect the expenses
eligible for reimbursement in any other taxable year.  Notwithstanding anything
to the contrary herein, if a payment or benefit under this Agreement is due to a
“separation from service” for purposes of the rules under Treas. Reg. §
1.409A-3(i)(2) (payments to specified employees upon a separation from service)
and Executive is determined to be a “specified employee” (as determined under
Treas. Reg. § 1.409A-1(i) and related Company procedures), such payment shall,
to the extent necessary to comply with the requirements of Section 409A of the
Code, be made on the later of (x) the date specified by the foregoing provisions
of this Agreement or (y) the date that is six (6) months after the date of
Executive’s separation from service (or, if earlier, the date of Executive’s
death).  Any installment payments that are delayed pursuant to this Section 10
shall be accumulated and paid in a lump sum on the first day of the seventh
month following the Date of Termination (or, if earlier, upon Executive’s death)
and the remaining installment payments shall begin on such date in accordance
with the schedule provided in this Agreement.  The Severance Benefits are
intended not to constitute deferred compensation subject to Section 409A of the
Code to the extent such Severance Benefits are covered by (i) the “short-term
deferral exception” set forth in Treas. Reg. § 1.409A-1(b)(4), (ii) the “two
times severance exception” set forth in Treas. Reg. § 1.409A-1(b)(9)(iii), or
(iii) the “limited payments exception” set forth in Treas. Reg. §
1.409A-1(b)(9)(v)(D).  The short-term deferral exception, the two times
severance exception and the limited payments exception shall be applied to the
Severance Benefits in order of payment in such manner as results in the maximum
exclusion of such Severance Payments from treatment as deferred compensation
under Section 409A of the Code.  Each installment of the Severance Payments
shall be deemed to be a separate payment for purposes of Section 409A of the
Code.
 
 
 
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11. Additional Termination and Suspension Provisions
 
(a) If Executive is suspended and/or temporarily prohibited from participating
in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or
(g)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1818(e)(3)
and (g)(1)), all obligations of the Company and the Bank under this Agreement
shall be suspended as of the date of service unless stayed by appropriate
proceedings.  If the charges in the notice are dismissed, the Company and the
Bank may in their discretion (but subject in all events to the requirements of
Code Section 409A), (i) pay Executive all of the compensation withheld while the
Company’s and the Bank’s obligations under this Agreement were suspended and
(ii) reinstate (in whole) any of the Company’s and the Bank’s obligations which
were suspended, and in exercising such discretion, the Company and the Bank
shall consider the facts and make a decision promptly following such dismissal
of charges and act in good faith in deciding whether to pay any withheld
compensation to Executive and to reinstate any suspended obligations of the
Company and the Bank.
 
(b) If Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
(g)(1) of the Federal Deposit Insurance Act, as amended (12 U.S.C. 1818 (e)(4)
or (g)(1)), all obligations of the Company and the Bank under this Agreement
shall terminate as of the effective date of the order, but vested rights of the
parties shall not be affected.
 
(c) If the Bank is in default, as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, as amended (12 U.S.C. 1813 (x)(1)), all obligations of
the Company and the Bank under this Agreement shall terminate as of the date of
default, but this provision shall not affect any vested rights of the parties.
 
(d) All obligations under this Agreement shall be terminated, except to the
extent determined that continuation of this Agreement is necessary for the
continued operation of the Bank, (i) by the OTS  or other applicable banking
regulator (the “Regulator”), at the time the FDIC enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the Federal Deposit Insurance Act, as amended; or (ii) by the
Regulator, at the time the Regulator approves a supervisory merger to resolve
problems related to operation of the Bank or when the Bank is determined by the
Regulator to be in an unsafe or unsound condition.  Any rights of the parties
that have already vested, however, shall not be affected by such action.
 
 
 
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(e) If any regulation applicable to the Company or the Bank shall hereafter be
adopted, amended or modified or if any new regulation applicable to the Company
or the Bank and effective after the date of this Agreement:
 

(i) shall require the inclusion in this Agreement of a provision not presently
included in this Agreement, then the foregoing provisions of this Section shall
be deemed amended to the extent necessary to give effect in this Agreement to
any such amended, modified or new regulation; and
 
(ii) shall permit the exclusion of a limitation in this Agreement on the payment
to Executive of an amount or benefit provided for presently in this Agreement,
then the foregoing provisions of this Section shall be deemed amended to the
extent permissible to exclude from this Agreement any such limitation previously
required to be included in this Agreement by a regulation prior to its
amendment, modification or repeal.
 
12. Arbitration.  Any dispute or controversy arising out of, under, in
connection with, or relating to this Agreement or any amendment hereof shall be
submitted to binding arbitration before one arbitrator in Rockland County, New
York in accordance with the Commercial Arbitration Rules of the American
Arbitration Association for expedited arbitration, and any judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
 
13. Indemnification and Insurance
 
(a) To the extent that Provident provides its senior executive officers with
coverage under a directors’ and officers’ liability insurance policy, Provident
shall provide such coverage to Executive on substantially the same
basis.   Provident shall indemnify Executive (and Executive’s heirs, executors
and administrators) to the fullest extent permitted under applicable law against
all expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit or proceeding in which he may be involved by
reason of his having been an officer of the Company or the Bank (whether or not
Executive continues to be an officer at the time of incurring such expenses or
liabilities and for a period of six years following his termination of
employment with Provident), such expenses and liabilities to include, but not be
limited to, judgments, court costs and attorneys’ fees and the cost of
reasonable settlements (such settlements must be approved by the Board).  Any
such indemnification shall be made consistent with Regulations and Section 18(k)
of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and the regulations
issued thereunder in 12 C.F.R. Part 359.
 
(b) Notwithstanding the foregoing, no indemnification shall be made by the Bank
unless the Bank gives the Regulator, to the extent required, at least 60 days’
notice of its intention to make such indemnification.  Such notice shall state
the facts on which the action arose, the terms of any settlement, and any
disposition of the action by a court.  Such notice, a copy thereof, and a
certified copy of the resolution containing the required determination by the
Board shall be sent to the Regulator, to the extent required.  The notice period
for any such notice shall run from the date of such receipt.  No such
indemnification shall be made if the Regulator advises the Bank in writing
within such notice period, of its objection thereto.
 
 
 
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14. Notices. The persons or addresses to which mailings or deliveries shall be
made may change from time to time by notice given pursuant to the provisions of
this Section.  Any notice or other communication given pursuant to the
provisions of this Section shall be deemed to have been given (a) if sent by
messenger, upon personal delivery to the party to whom the notice is directed;
(b) if sent by reputable overnight courier, one business day after delivery to
such courier; (c) if sent by facsimile, upon electronic or telephonic
confirmation of receipt from the receiving facsimile machine and (d) if sent by
mail, three business days following deposit in the United States mail, properly
addressed, postage prepaid, certified or registered mail with return receipt
requested.  All notices required or permitted to be given hereunder shall be
addressed as follows:
 
If to Executive:
Jack L. Kopnisky
 
__________________________
 
__________________________
   
If to the Company or  the Bank:
Provident New York Bancorp or Provident Bank as applicable
400 Rella Boulevard
 
Montebello, New York 10901
 
Attention: Board of Directors
 
   

15. Amendment.  No modifications of this Agreement shall be valid unless made in
writing and signed by the parties hereto.
 
16. Miscellaneous
 
(a) Successors and Assigns.  This Agreement will inure to the benefit of and be
binding upon Executive, his legal representatives and estate and intestate
distributees, and the Company and the Bank, their successors and assigns,
including any successor by merger or consolidation or a statutory receiver or
any other person or firm or corporation to which all or substantially all of the
assets and business of the Company or the Bank, as applicable, may be sold or
otherwise transferred.  Any such successor of the Company or the Bank shall be
deemed to have assumed this Agreement and to have become obligated hereunder to
the same extent as the Company or the Bank, as applicable, and Executive’s
obligations hereunder shall continue in favor of such successor.
 
(b) Severability.  A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.
 
(c) Waiver.  Failure to insist upon strict compliance with any terms, covenants
or conditions hereof shall not be deemed a waiver of such term, covenant or
condition.  A waiver of any provision of this Agreement must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is
sought.  Any waiver or relinquishment or any right or power hereunder at any one
or more times shall not be deemed a waiver or relinquishment of such right or
power at any other time or times.
 
 
 
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(d) Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same Agreement.
 
(e) Governing Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without reference
to conflicts of law principles, except to the extent governed by federal law in
which case federal law shall govern.  Any payments made to Executive pursuant to
this Agreement or otherwise are subject to all applicable banking laws and
regulations, including, without limitation, 12 USC 1828 (k) and any regulations
promulgated thereunder.
 
(f) Withholding.  The Company and the Bank may withhold from any amounts payable
to Executive hereunder all federal, state, city or other taxes that the Company
or the Bank may reasonably determine are required to be withheld pursuant to any
applicable law or regulation (it being understood, that Executive shall be
responsible for payment of all taxes in respect of the payments and benefits
provided herein).
 
(g) Headings and Construction.  The headings of sections in this Agreement are
for convenience of reference only and are not intended to qualify the meaning of
any Section.  Any reference to a Section number shall refer to a Section of this
Agreement, unless otherwise specified.

 
(h) Entire Agreement.  This instrument contains the entire agreement of the
parties relating to the subject matter hereof, and supersedes in its entirety
any and all prior agreements, understandings or representations relating to the
subject matter hereof.
 
[Signatures on next page]
 
 
 
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IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be
executed and Executive has hereunto set his hand, all as of the Effective Date
specified above.
 

   
EXECUTIVE
                 
June 20, 2011
 
             /s/ Jack L. Kopnisky
Date
 
Jack L. Kopnisky
                     
PROVIDENT NEW YORK BANCORP
     
June 20, 2011
 
              /s/ William F. Helmer
Date
 
By: William F. Helmer, Chairman
             
 
     
PROVIDENT BANK
     
June 20, 2011
 
            /s/ William F. Helmer
Date
 
By: William F. Helmer, Chairman
   

 
 
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