ROCKVILLE BANK
 
Employment Agreement for Darlene S. White
 
Effective as of April 17, 2006
 

 

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ROCKVILLE BANK
 
Employment Agreement for Darlene S. White
 
Effective as of April 17, 2006

 
 
 
 
 
1. Employment
 
2. Term
 
3. Offices and Duties
 
(a) Generally
 
(b) Place of Employment
 
4. Salary and Annual Incentive Compensation
 
(a) Base Salary
 
(b) Annual Incentive Compensation
 
5. Long-Term Compensation, Including Stock Options, Benefits, Deferred
Compensation, and Expense Reimbursement 
 
(a) Executive Compensation Plans
 
(b) Employee and Executive Benefit Plans
 
(c) Acceleration of Awards Upon a Change in Control
 
(d) Deferral of Compensation
 
(e) Company Registration Obligations
 
(f) Reimbursement of Expenses
 
(g) Limitations Under Code Section 409A4
 
6. Termination Due to Retirement, Death, or Disability
 
(a) Retirement
 
(b) Death
 
(c) Disability
 
(d) Other Terms of Payment Following Retirement, Death, or Disability
 
7. Termination of Employment For Reasons Other Than Retirement, Death or
Disability
 
(a) Termination by the Bank for Cause
 
(b) Termination by Executive Other Than For Good Reason
 
(c) Termination by the Bank Without Cause Prior to or More than Two Years After
a Change in Control
 
(d) Termination by Executive for Good Reason Prior to or More than Two Years
After a Change in Control  
 
(e) Termination by the Bank Without Cause Within Two Years After a Change in
Control  
 
(f) Termination by Executive for Good Reason Within Two Years After a Change in
Control
 
(g) Other Terms Relating to Certain Terminations of Employment
 
8. Definitions Relating to Termination Events
 
(a) “Cause
 
(b) “Change in Control
 
(c) “Compensation Accrued at Termination
 
(d) “Disability
 
(e) “Good Reason
 
(f) “Potential Change in Control
 
9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related
Provisions  
 
(a) Rabbi Trust Funded Upon Potential Change in Control
 
(b) Gross-up If Excise Tax Would Apply
 
10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement; Certain Forfeitures
 
(a) Non-Competition
 
(b) Non-Disclosure; Ownership of Work
 
(c) Cooperation With Regard to Litigation
 
(d) Non-Disparagement
 
(e) Release of Employment Claims
 
(f) Forfeiture of Outstanding Options
 
(g) Forfeiture of Certain Bonuses and Profits
 
(h) Forfeiture Due to Regulatory Restrictions
 
(i) Survival
 
11. Governing Law; Disputes
 
(a) Governing Law
 
(b) Reimbursement of Expenses in Enforcing Rights
 
(c) Dispute Resolution
 
(d) Interest on Unpaid Amounts
 
12. Miscellaneous
 
(a) Integration
 
(b) Successors; Transferability
 
(c) Beneficiaries
 
(d) Notices
 
(e) Reformation
 
(f) Headings
 
(g) No General Waivers
 
(h) No Obligation To Mitigate
 
(i) Offsets; Withholding
 
(j) Successors and Assigns
 
(k) Counterparts
 
13. Indemnification
 

Attachment A

 

 

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ROCKVILLE BANK
 

 
Employment Agreement for Darlene S. White
 
Effective as of April 17, 2006
 
 
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and among ROCKVILLE FINANCIAL,
INC., a Connecticut corporation (the “Company”), ROCKVILLE BANK, a Connecticut
savings bank and a wholly-owned subsidiary of the Company (the “Bank”), and
Darlene S. White (“Executive”) shall become effective as of April 17, 2006 (the
“Effective Date”).
 
W I T N E S S E T H
 
WHEREAS, the Bank wishes to assure itself of the services of the Executive for
the period of this Agreement; and
 
WHEREAS, the Executive is willing to provide services to the Bank in exchange
for employment under this Agreement on the terms and conditions set forth
herein; and
 
WHEREAS, the Human Resources Committee of the Board of Directors of the Company
has determined that the best interests of the Company and the Bank would be
served by providing for the terms and conditions of Executive's employment as
set forth herein.
 
NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
other good and valuable consideration the receipt and adequacy of which the
Company, the Bank and Executive each hereby acknowledge, the Company, the Bank
and Executive hereby agree as follows:
 
1. Employment.
 
The Bank hereby agrees to employ Executive as its Senior Vice President (with
the principal executive duties set forth below in Section 3), and Executive
hereby agrees to accept such employment and serve in such capacities, during the
Term as defined in Section 2 (subject to Section 7(c) and 7(e)) and upon the
terms and conditions set forth in this Agreement.
 
2. Term.
 
The term of employment of Executive under this Agreement (the "Term") shall be
the period commencing on the Effective Date and ending on December 31, 2008 and
any period of extension thereof in accordance with this Section 2, except that
the Term will end at a date, prior to the end of such period or extension
thereof, specified in Section 6 or 7 in the event of termination of Executive's
employment. The Term, if not previously ended, shall be extended automatically
without further action by either party by one additional year (added to the end
of the Term) first on December 31, 2006 (extending the Term to December 31,
2009) and on each succeeding December 31 thereafter (a “December 31 extension
date”), unless either party shall have served written notice in accordance with
Section 12(d) upon the other party on or before the June 30 preceding a December
31 extension date electing not to extend the Term further as of that December 31
extension date, in which case employment shall terminate on the third
anniversary of that December 31 extension date and the Term shall end at that
date, subject to earlier termination of employment and earlier termination of
the Term in accordance with Section 6 or 7. The foregoing notwithstanding, in
the event there occurs a Potential Change in Control during the period of 180
days prior to the December 31 on which the Term will terminate as a result of
notice given by the Executive or the Company hereunder, the Term shall be
extended automatically at that December 31 by an additional period such that the
Term will extend until the 180th day following such Potential Change in Control.
 

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3. Offices and Duties.
 
The provisions of this Section 3 will apply during the Term, except as otherwise
provided in Section 7(c) or 7(e):
 
(a) Generally. Executive shall serve as the Senior Vice President of the Bank.
Executive shall have and perform such duties, responsibilities, and authorities
as are prescribed by or under the Bylaws of the Bank and as are customarily
associated with such position or, irrespective of the office, title or other
designation, if any, a position with responsibilities and powers substantially
identical to such position with the Bank. In addition, Executive shall have and
perform such additional duties, responsibilities, and authorities as may be from
time to time assigned by the President and Chief Executive Officer based on his
assessment of the business needs of the Bank, and the Bank reserves the right to
change or modify these assignments and any positions and titles associated
therewith. Executive shall devote her full business time and attention, and her
best efforts, abilities, experience, and talent, to the position of Senior Vice
President and other assignments hereunder, and for the business of the Bank,
without commitment to other business endeavors, except that Executive (i) may
make personal investments which are not in conflict with her duties to the Bank
and manage personal and family financial and legal affairs, (ii) may undertake
public speaking engagements, and (iii) may serve as a director of (or similar
position with) any other business or an educational, charitable, community,
civic, religious, or similar type of organization with the approval of the
President and Chief Executive Officer, so long as such activities (i.e., those
listed in clauses (i) through (iii)) do not preclude or render unlawful
Executive’s employment or service to the Bank or otherwise materially inhibit
the performance of Executive’s duties under this Agreement or materially impair
the business of the Bank or its affiliates.
 
(b) Place of Employment. Executive’s principal place of employment shall be at
the administrative offices of the Bank.
 
4. Salary and Annual Incentive Compensation.
 
As partial compensation for the services to be rendered hereunder by Executive,
the Bank agrees to pay to Executive during the Term the compensation set forth
in this Section 4.
 
(a) Base Salary. The Bank will pay to Executive during the Term a base salary,
the annual rate of which shall be $105,000.00, payable in cash in substantially
equal semi-monthly installments commencing at the beginning of the Term, and
otherwise in accordance with the Bank’s usual payroll practices with respect to
senior executives (except to the extent deferred under Section 5(d)).
Executive’s annual base salary shall be reviewed by the Human Resources
Committee (the “Committee”) of the Board of Directors of the Bank (the “Board”)
at least once in each calendar year, and may be increased above, but may not be
reduced below, the then-current rate of such base salary. For purposes of this
Agreement, “Base Salary” means Executive’s then-current base salary.
 
(b) Annual Incentive Compensation. The Bank will pay to Executive during the
Term annual incentive compensation which shall offer to Executive an opportunity
to earn additional compensation based upon performance in amounts determined by
the Committee in accordance with the applicable plan and consistent with past
practices of the Bank, with the nature of the performance and the levels of
performance triggering payments of such annual target incentive compensation for
each year to be established and communicated to Executive during the first
quarter of such year by the Committee. In addition, the Committee (or the Board)
may determine, in its discretion, to increase Executive’s annual target
incentive opportunity or provide an additional annual incentive opportunity, in
excess of the annual target incentive opportunity, payable for performance in
excess of or in addition to the performance required for payment of the annual
target incentive amount. Any annual incentive compensation payable to Executive
shall be paid in accordance with the Bank’s usual practices with respect to
payment of incentive compensation to senior executives (except to the extent
deferred under Section 5(d)).
 
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5. Long-Term Compensation, Including Stock Options, Benefits, Deferred
Compensation, and Expense Reimbursement.
 
(a) Executive Compensation Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in executive compensation
plans and programs intended for general participation by senior executives of
the Bank, as presently in effect or as they may be modified or added to by the
Bank from time to time, subject to the eligibility and other requirements of
such plans and programs, including without limitation any stock option plans,
plans under which restricted stock/restricted stock units, performance-based
restricted stock/restricted stock units or performance-accelerated restricted
stock/restricted stock units (collectively, “stock plans”) may be awarded, other
annual and long-term cash and/or equity incentive plans, and deferred
compensation plans. The Bank makes no commitment under this Section 5(a) to
provide participation opportunities to Executive in all plans and programs or at
levels equal to (or otherwise comparable to) the participation opportunity of
any other executive.
 
(b) Employee and Executive Benefit Plans. Executive shall be entitled during the
Term to participate, without discrimination or duplication, in employee and
executive benefit plans and programs of the Bank, as presently in effect or as
they may be modified or added to by the Bank from time to time, subject to the
eligibility and other requirements of such plans and programs, including without
limitation plans providing pensions, supplemental pensions, supplemental and
other retirement benefits, medical insurance, life insurance, disability
insurance, and accidental death or dismemberment insurance, as well as savings,
profit-sharing, and stock ownership plans. The Bank makes no commitment under
this Section 5(b) to provide participation opportunities to Executive in all
benefit plans and programs or at levels equal to (or otherwise comparable to)
the participation opportunity of any other executive.
 
In furtherance of and not in limitation of the foregoing, during the Term:
 
(i)
 
Executive will participate as Senior Vice President in all executive and
employee vacation and time-off programs;
 
(ii)
 
The Bank will provide Executive with coverage as Senior Vice President with
respect to long-term disability insurance;
 
(iii)
 
Executive will be covered by Bank-paid group term life insurance; and
 
(iv)
 
Executive will be entitled to benefits under the Supplemental Savings and
Retirement Plan (the “SERP”) in accordance with the terms thereof, with the
effective date of Executive's participation therein to be the Effective Date.
 

(c) Acceleration of Awards Upon a Change in Control. In the event of a Change in
Control (as defined in Section 8(b)), all outstanding stock options, restricted
stock, and other equity-based awards then held by Executive shall become vested
and exercisable.
 
(d) Deferral of Compensation. If the Bank has in effect or adopts any deferral
program or arrangement permitting executives to elect to defer any compensation,
Executive will be eligible to participate in such program. Any plan or program
of the Bank which provides benefits based on the level of salary, annual
incentive, or other compensation of Executive shall, in determining Executive’s
benefits, take into account the amount of salary, annual incentive, or other
compensation prior to any reduction for voluntary contributions made by
Executive under any deferral or similar contributory plan or program of the Bank
(excluding compensation that would not be taken into account even if not
deferred), but shall not treat any payout or settlement under such a deferral or
similar contributory plan or program to be additional salary, annual incentive,
or other compensation for purposes of determining such benefits, unless
otherwise expressly provided under such plan or program.
 
(e) Company Registration Obligations. The Company will use its best efforts to
file with the Securities and Exchange Commission and thereafter maintain the
effectiveness of one or more registration statements registering under the
Securities Act of 1933, as amended (the “1933 Act”), the offer and sale of
shares by the Company to Executive pursuant to stock options or other
equity-based awards granted to Executive under Company plans or otherwise or, if
shares are acquired by Executive in a transaction not involving an offer or sale
to Executive but resulting in the acquired shares being “restricted securities”
for purposes of the 1933 Act, registering the reoffer and resale of such shares
by Executive.
 
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(f) Reimbursement of Expenses. The Bank will promptly reimburse Executive for
all reasonable business expenses and disbursements incurred by Executive in the
performance of Executive’s duties during the Term in accordance with the Bank’s
reimbursement policies as in effect from time to time
 
(g) Limitations Under Code Section 409A. In the event that, as a result of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (and
any related regulations or other pronouncements), any of the payments or
benefits that Executive is entitled to under the terms of this Agreement or any
other plan involving deferred compensation (as defined under Code Section 409A)
may not be made at the time contemplated by the terms thereof without causing
Executive to be subject to an income tax penalty and interest and the timing of
payment is the sole cause of such adverse tax consequences, the Bank will make
such payment on the first day permissible under Code Section 409A without
Executive incurring such adverse tax consequences and there shall be no payment
to Executive of interest or earnings on account of such delay in payment. In
addition, other provisions of this Agreement or any other such plan
notwithstanding, the Bank shall have no right to accelerate any such payment or
to make any such payment as the result of any specific event except to the
extent permitted under Section 409A. Executive, the Bank and the Company agree
to make such amendments to this Agreement as may be necessary or appropriate to
comply with Section 409A on the date determined by the Bank and the Company,
which shall not be later than the amendment deadline prescribed by applicable
Treasury Regulations, as the same may be extended. The Company shall not be
obligated to reimburse Executive for any tax penalty or interest or provide a
gross-up in connection with any tax liability of Executive under Section 409A,
except this provision will not limit any gross-up payable under Section 9(b).
 
6. Termination Due to Retirement, Death, or Disability.
 
(a) Retirement. Executive may elect to terminate employment hereunder by
retirement at or after age 60 (“Retirement”). At the time Executive’s employment
terminates due to Retirement, the Term will terminate, all obligations of the
Bank and Executive under Sections 1 through 5 of this Agreement will immediately
cease except for obligations which expressly continue after termination of
employment due to Retirement, and the Bank will pay Executive, and Executive
will be entitled to receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
 
(ii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, an amount equal to the portion of
annual incentive compensation that would have become payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for that year if her employment had not terminated, based on performance
actually achieved in that year (determined by the Committee following completion
of the performance year), multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the
denominator of which is the total number of days in the year of termination;
 
(iii)
 
The vesting and exercisability of stock options held by Executive at termination
and all other terms of such options shall be governed by the plans and programs
and the agreements and other documents pursuant to which such options were
granted (subject to Section 10(f) hereof);
 
(iv)
 
All restricted stock and deferred stock awards, including outstanding stock plan
awards, all other long-term incentive awards, and all deferral arrangements
under Section 5(d), shall be governed by the plans and programs under which the
awards were granted or governing the deferral, and all rights under the SERP and
any other benefit plan shall be governed by such plans; and
 

 
 
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(v)
 
If Executive shall not be eligible upon Retirement for retiree coverage under
the Bank’s health plan (the “Health Plan”) and Executive elects in accordance
with the applicable provisions of the Consolidated Omnibus Budget Reconciliation
Act of 1986, as amended (“COBRA”) continued coverage under the Health Plan in
accordance with the applicable provisions of COBRA, the Bank shall pay to
Executive on a monthly basis during such COBRA continuation period an amount
equal on an after-tax basis to the total cost of such coverage. Prior to the
expiration of the maximum COBRA continuation period available to Executive,
provided that Executive theretofore shall have complied with the conditions set
forth in Section 10, the Bank shall make a good faith effort to obtain insured
coverage for Executive (and her spouse and eligible dependents, if any, for whom
coverage had been provided during the COBRA continuation period) that is
substantially comparable to such COBRA continuation coverage, which insured
coverage shall begin on the date of expiration of Executive’s COBRA continuation
period and continue until the earliest of: (1) Executive’s eligibility for
medical coverage under the Bank’s Health Plan, as a retiree or active employee,
(2) Executive’s eligibility for medical coverage under a plan maintained by a
subsequent employer or other entity to which Executive provides services, (3)
Executive’s eligibility for Medicare, or (4) Executive’s attainment of Social
Security retirement age, within the meaning of Section 216(l) of the Social
Security Act, as the same may be amended (“Social Security Retirement Age”). In
the event that the Bank determines, in its sole discretion, that it is unable to
obtain such insured coverage for Executive (and her spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) or in the event that Executive determines, in her sole
discretion, that any such insured coverage offered by the Bank is not
substantially comparable to such COBRA continuation coverage, the Bank shall pay
to Executive, provided that Executive shall not have become eligible for medical
coverage under (1) the Bank’s Health Plan, as a retiree or active employee, (2)
a plan maintained by a subsequent employer or other entity to which Executive
provides services, or (3) Medicare and, provided further, that Executive
theretofore shall have complied with the conditions set forth in Section 10, a
lump sum amount equal on an after-tax basis to the present value of the total
cost of retiree medical coverage under the Health Plan that would have been
incurred by both Executive and the Bank on behalf of Executive (and her spouse
and eligible dependents, if any, for whom coverage had been provided during the
COBRA continuation period) if Executive (and such spouse and dependents, if any)
had been eligible for such retiree medical coverage from the end of Executive’s
COBRA continuation period until Executive’s attainment of Social Security
retirement age, calculated on the assumption that the cost of such coverage
would remain unchanged from that in effect for the year in which such lump sum
is paid. Such lump sum amount shall be calculated by an actuary selected by the
Bank and paid in cash as soon as administratively practicable following the
expiration of Executive’s COBRA continuation period and shall not be subject to
reduction or forfeiture by reason of any coverage for which Executive may
thereafter become eligible by reason of subsequent employment or otherwise. For
purposes of this Section, present value shall be calculated on the basis of the
discount rate set forth in the Bank’s qualified retirement plan for the
determination of lump sum payments.
 

 
(b) Death. In the event of Executive’s death which results in the termination of
Executive’s employment, the Term will terminate, all obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease
except for obligations which expressly continue after death, and the Bank will
pay Executive’s beneficiary or estate, and Executive’s beneficiary or estate
will be entitled to receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination;
 
(ii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s death occurred, an amount equal to the portion of annual
incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for
that year if her employment had not terminated, based on performance actually
achieved in that year (determined by the Committee following completion of the
performance year), multiplied by a fraction the numerator of which is the number
of days Executive was employed in the year of her death and the denominator of
which is the total number of days in the year of death;
 

 
 
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(iii)
 
The vesting and exercisability of stock options held by Executive at death and
all other terms of such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
 
(iv)
 
All restricted stock and deferred stock awards, including outstanding stock plan
awards, all other long-term incentive awards, and all deferral arrangements
under Section 5(d), shall be governed by the plans and programs under which the
awards were granted or governing the deferral, and all rights under the SERP and
any other benefit plan shall be governed by such plans;
 
(v)
 
If Executive’s surviving spouse (and eligible dependents, if any) elects
continued coverage under the Bank’s Health Plan in accordance with the
applicable provisions of COBRA, the Bank shall pay to Executive’s surviving
spouse on a monthly basis during such COBRA continuation period an amount equal
on an after-tax basis to the total cost of such coverage. No further benefits
shall be paid under this Section after the expiration of the maximum COBRA
continuation period available to Executive’s surviving spouse and eligible
dependents, if any.
 

 
(c) Disability. The Bank may terminate the employment of Executive hereunder due
to the Disability (as defined in Section 8(d)) of Executive. Upon termination of
employment, the Term will terminate, all obligations of the Bank and Executive
under Sections 1 through 5 of this Agreement will immediately cease except for
obligations which expressly continue after termination of employment due to
Disability, and the Bank will pay Executive, and Executive will be entitled to
receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination;
 
(ii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, an amount equal to the portion of
annual incentive compensation that would have become payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for that year if her employment had not terminated, based on performance
actually achieved in that year (determined by the Committee following completion
of the performance year), multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the
denominator of which is the total number of days in the year of termination;
 
(iii)
 
Stock options held by Executive at termination shall be governed by the plans
and programs and the agreements and other documents pursuant to which such
options were granted;
 
(iv)
 
Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan
awards, and other long-term incentive awards is conditioned shall be deemed to
have been met at target level at the date of termination, and restricted stock
and deferred stock awards, including outstanding stock plan awards, and other
long-term incentive awards (to the extent then or previously earned, in the case
of performance-based awards) shall become fully vested and non-forfeitable at
the date of such termination, and, in other respects, such awards shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such awards were granted;
 
(v)
 
Disability benefits shall be payable in accordance with the Bank's plans,
programs and policies, including the SERP, and all deferral arrangements under
Section 5(d) will be settled in accordance with the plans and programs governing
the deferral;
 

 
 
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(vi)
 
If Executive elects after termination of employment continued coverage under the
Health Plan in accordance with the applicable provisions of COBRA, the Bank
shall pay to Executive on a monthly basis during such COBRA continuation period
an amount equal on an after-tax basis to the total cost of such coverage. Prior
to the expiration of the maximum COBRA continuation period available to
Executive, provided that Executive theretofore shall have complied with the
conditions set forth in Section 10, the Bank shall make a good faith effort to
obtain insured coverage for Executive (and her spouse and eligible dependents,
if any, for whom coverage had been provided during the COBRA continuation
period) that is substantially comparable to such COBRA continuation coverage,
which insured coverage shall begin on the date of expiration of Executive’s
COBRA continuation period and continue until the earliest of: (1) Executive’s
eligibility for medical coverage under the Bank’s Health Plan, as a retiree or
active employee, (2) Executive’s eligibility for medical coverage under a plan
maintained by a subsequent employer or other entity to which Executive provides
services, (3) Executive’s eligibility for Medicare, or (4) Executive’s
attainment of Social Security retirement age. In the event that the Bank
determines, in its sole discretion, that it is unable to obtain such insured
coverage for Executive (and her spouse and eligible dependents, if any, for whom
coverage had been provided during the COBRA continuation period) or in the event
that Executive determines, in her sole discretion, that any such insured
coverage offered by the Bank is not substantially comparable to such COBRA
continuation coverage, the Bank shall pay to Executive, provided that Executive
shall not have become eligible for medical coverage under (1) the Bank’s Health
Plan, as a retiree or active employee, (2) a plan maintained by a subsequent
employer or other entity to which Executive provides services, or (3) Medicare
and, provided further, that Executive theretofore shall have complied with the
conditions set forth in Section 10, a lump sum amount equal on an after-tax
basis to the present value of the total cost of retiree medical coverage under
the Health Plan that would have been incurred by both Executive and the Bank on
behalf of Executive (and her spouse and eligible dependents, if any, for whom
coverage had been provided during the COBRA continuation period) if Executive
(and such spouse and dependents, if any) had been eligible for such retiree
medical coverage from the end of Executive’s COBRA continuation period until
Executive’s attainment of Social Security retirement age, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid. Such lump sum amount shall
be calculated by an actuary selected by the Bank and paid in cash as soon as
administratively practicable following the expiration of Executive’s COBRA
continuation period and shall not be subject to reduction or forfeiture by
reason of any coverage for which Executive may thereafter become eligible by
reason of subsequent employment or otherwise. In addition, as soon as
administratively practicable following Executive’s termination of employment,
provided that Executive shall have complied with the conditions set forth in
Section 10, the Bank shall pay to Executive a lump sum amount equal on an
after-tax basis to the present value of the sum of (1) the amount that Executive
and the Bank would have been paid for coverage under the Bank’s group long-term
disability policy from Executive’s termination of employment until Executive’s
attainment of Social Security retirement age, calculated on the assumption that
the cost of such coverage would remain unchanged from that in effect for the
year in which Executive’s termination occurred; and (2) the amount that
Executive and the Bank would have paid to continue Executive’s group life
insurance coverage from Executive’s termination of employment until Executive’s
attainment of Social Security retirement age, calculated on the assumption that
the cost of such coverage would remain unchanged from that in effect for the
year in which Executive’s termination occurred. For purposes of this Section,
present value shall be calculated on the basis of the discount rate set forth in
the Bank’s qualified retirement plan for the determination of lump sum payments.
 

 
(d) Other Terms of Payment Following Retirement, Death, or Disability. Nothing
in this Section 6 shall limit the benefits payable or provided in the event
Executive’s employment terminates due to Retirement, death, or Disability under
the terms of plans or programs of the Bank more favorable to Executive (or her
beneficiaries) than the benefits payable or provided under this Section 6
(except in the case of annual incentives in lieu of which amounts are paid
hereunder), including plans and programs adopted after the date of this
Agreement. Amounts payable under this Section 6 following Executive’s
termination of employment, other than those expressly payable following
determination of performance for the year of termination for purposes of annual
incentive compensation or otherwise expressly payable on a deferred basis, will
be paid as promptly as practicable after such termination of employment.
 
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7. Termination of Employment For Reasons Other Than Retirement, Death or
Disability.
 
(a) Termination by the Bank for Cause. The Bank may terminate the employment of
Executive hereunder for Cause (as defined in Section 8(a)) at any time. At the
time Executive’s employment is terminated for Cause, the Term will terminate,
all obligations of the Bank and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly continue
after termination of employment by the Bank for Cause, and the Bank will pay
Executive, and Executive will be entitled to receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
 
(ii)
 
All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were
granted; and
 
(iii)
 
All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral, and all rights, if any, under the
SERP and any other benefit plan shall be governed by such plans.
 

(b) Termination by Executive Other Than For Good Reason. Executive may terminate
her employment hereunder voluntarily for reasons other than Good Reason (as
defined in Section 8(e)) at any time upon 90 days’ written notice to the Bank.
An election by Executive not to extend the Term pursuant to Section 2 hereof
shall be deemed to be a termination of employment by Executive for reasons other
than Good Reason at the date of expiration of the Term, unless a Change in
Control (as defined in Section 8(b)) occurs prior to, and there exists Good
Reason at, such date of expiration; provided, however, that, if Executive has
attained age 60 at such date of termination, such termination shall be deemed a
Retirement of Executive, which shall instead be governed by Section 6(a) above.
At the time Executive’s employment is terminated by Executive other than for
Good Reason the Term will terminate, all obligations of the Bank and Executive
under Sections 1 through 5 of this Agreement will immediately cease, and the
Bank will pay Executive, and Executive will be entitled to receive, the
following:
 
(i)
 
Executive’s Compensation Accrued at Termination;
 
(ii)
 
All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were
granted;
 
(iii)
 
All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral, and all rights under the SERP and
any other benefit plan shall be governed by such plans.
 

(c) Termination by the Bank Without Cause Prior to or More than Two Years After
a Change in Control. The Bank may terminate the employment of Executive
hereunder without Cause, if at the date of termination no Change in Control has
occurred or such date of termination is at least two years after the most recent
Change in Control, upon at least 90 days’ written notice to Executive. The
foregoing notwithstanding, the Bank may elect, by written notice to Executive,
to terminate Executive’s positions specified in Sections 1 and 3 and all other
obligations of Executive and the Bank under Section 3 at a date earlier than the
expiration of such 90-day period, if so specified by the Bank in the written
notice, provided that Executive shall be treated as an employee of the Bank
(without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the
expiration of such 90-day period. An election by the Bank not to extend the Term
pursuant to Section 2 hereof shall be deemed to be a termination of Executive’s
employment by the Bank without Cause at the date of expiration of the Term and
shall be subject to this Section 7(c) if at the date of such termination no
Change in Control has occurred or such date of termination is at least two years
after the most recent Change in Control; provided, however, that, if Executive
has attained Social Security retirement age at such date of termination, such
termination shall be deemed a Retirement of Executive. At the time Executive’s
employment is terminated by the Bank (i.e., at the expiration of such notice
period), the Term will terminate, all remaining obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease
(except for obligations which continue after termination of employment as
expressly provided herein), and the Bank will pay Executive, and Executive will
be entitled to receive, the following:
 
8

--------------------------------------------------------------------------------

 
(i)
 
Executive’s Compensation Accrued at Termination;
 
(ii)
 
Cash in an aggregate amount equal to three times the sum of (A) Executive’s Base
Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in stock or in other non-cash awards) for the year of
termination or (y) the portion of Executive’s annual incentive compensation that
became payable in cash to Executive (i.e., excluding the portion payable in
stock or in other non-cash awards) for the latest year preceding the year of
termination based on performance actually achieved in that latest year. The
amount determined to be payable under this Section 7(c)(ii) shall be payable in
monthly installments over the 36 months following termination, without interest,
except the Bank may elect to accelerate payment of the remaining balance of such
amount and to pay it as a lump sum, without discount;
 
(iii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, an amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for the year of termination, multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of termination
and the denominator of which is the total number of days in the year of
termination;
 
(iv)
 
Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such
termination, and, in other respects (including the period following termination
during which such options may be exercised), such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which
such options were granted;
 
(v)
 
Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan
awards, and other long-term incentive awards is conditioned shall be deemed to
have been met at target level at the date of termination, and restricted stock
and deferred stock awards, including outstanding stock plan awards, and other
long-term incentive awards (to the extent then or previously earned, in the case
of performance-based awards) shall become fully vested and non-forfeitable at
the date of such termination, and, in other respects, such awards shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such awards were granted;
 
(vi)
 
All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
 
(vii)
 
All rights under the SERP shall be governed by such plan;
 

 
 
9

--------------------------------------------------------------------------------

 
(viii)
 
If Executive elects after termination of employment continued coverage under the
Health Plan in accordance with the applicable provisions of COBRA, the Bank
shall pay to Executive on a monthly basis during such COBRA continuation period
an amount equal on an after-tax basis to the total cost of such coverage. If the
maximum COBRA continuation period available to Executive shall be less than
three years, prior to the expiration of the maximum COBRA continuation period
available to Executive, provided that Executive theretofore shall have complied
with the conditions set forth in Section 10, the Bank shall make a good faith
effort to obtain insured coverage for Executive (and her spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) that is substantially comparable to such COBRA continuation
coverage, which insured coverage shall begin on the date of expiration of
Executive’s COBRA continuation period and continue until the third anniversary
of Executive’s termination of employment. In the event that the Bank determines,
in its sole discretion, that it is unable to obtain such insured coverage for
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) or in the event that
Executive determines, in her sole discretion, that any such insured coverage
offered by the Bank is not substantially comparable to such COBRA continuation
coverage, the Bank shall pay to Executive, provided that Executive shall not
have become eligible for medical coverage under (1) the Bank’s Health Plan, as a
retiree or active employee, (2) a plan maintained by a subsequent employer or
other entity to which Executive provides services, or (3) Medicare and, provided
further, that Executive theretofore shall have complied with the conditions set
forth in Section 10, a lump sum amount equal on an after-tax basis to the
present value of the total cost of retiree medical coverage under the Health
Plan that would have been incurred by both Executive and the Bank on behalf of
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) if Executive (and such
spouse and dependents, if any) had been eligible for such retiree medical
coverage from the end of Executive’s COBRA continuation period until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid. Such lump sum amount shall
be calculated by an actuary selected by the Bank and paid in cash as soon as
administratively practicable following the expiration of Executive’s COBRA
continuation period and shall not be subject to reduction or forfeiture by
reason of any coverage for which Executive may thereafter become eligible by
reason of subsequent employment or otherwise. In addition, as soon as
administratively practicable following Executive’s termination of employment,
provided that Executive shall have complied with the conditions set forth in
Section 10, the Bank shall pay to Executive a lump sum amount equal on an
after-tax basis to the present value of the sum of (1) the amount that Executive
and the Bank would have paid, had he remained employed, for coverage under the
Bank’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination
of employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which Executive’s
termination occurred; and (2) the amount that Executive and the Bank would have
paid to continue Executive’s group life insurance coverage, had he remained
employed, from the date of Executive’s termination of employment until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount
rate set forth in the Bank’s qualified retirement plan for the determination of
lump sum payments.
 

 
(d) Termination by Executive for Good Reason Prior to or More than Two Years
After a Change in Control. Executive may terminate her employment hereunder for
Good Reason, prior to a Change in Control or after the second anniversary of the
most recent Change in Control, upon 90 days’ written notice to the Bank;
provided, however, that, if the Bank has corrected the basis for such Good
Reason within 30 days after receipt of such notice, Executive may not terminate
her employment for Good Reason, and therefore Executive’s notice of termination
will automatically become null and void. At the time Executive’s employment is
terminated by Executive for Good Reason (i.e., at the expiration of such notice
period), the Term will terminate, all obligations of the Bank and Executive
under Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination of employment as expressly provided
herein), and the Bank will pay Executive, and Executive will be entitled to
receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination;
 
(ii)
 
Cash in an aggregate amount equal to three times the sum of (A) Executive’s Base
Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in stock or in other non-cash awards) for the year of
termination or (y) the portion of Executive’s annual incentive compensation that
became payable in cash to Executive (i.e., excluding the portion payable in
stock or in other non-cash awards) for the latest year preceding the year of
termination based on performance actually achieved in that latest year. The
amount determined to be payable under this Section 7(d)(ii) shall be payable in
monthly installments over the 36 months following termination, without interest,
except the Bank may elect to accelerate payment of the remaining balance of such
amount and to pay it as a lump sum, without discount;
 

 
10

--------------------------------------------------------------------------------

 
(iii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, an amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for the year of termination, multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of termination
and the denominator of which is the total number of days in the year of
termination;
 
(iv)
 
Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such
termination, and, in other respects (including the period following termination
during which such options may be exercised), such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which
such options were granted;
 
(v)
 
Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan
awards, and other long-term incentive awards is conditioned shall be deemed to
have been met at target level at the date of termination, and restricted stock
and deferred stock awards, including outstanding stock plan awards, and other
long-term incentive awards (to the extent then or previously earned, in the case
of performance-based awards) shall become fully vested and non-forfeitable at
the date of such termination, and, in other respects, such awards shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such awards were granted;
 
(vi)
 
All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
 
(vii)
 
All rights under the SERP shall be governed by such plan; and
 

 
 
11

--------------------------------------------------------------------------------

 
(viii)
 
If Executive elects after termination of employment continued coverage under the
Health Plan in accordance with the applicable provisions of COBRA, the Bank
shall pay to Executive on a monthly basis during such COBRA continuation period
an amount equal on an after-tax basis to the total cost of such coverage. If the
maximum COBRA continuation period available to Executive shall be less than
three years, prior to the expiration of the maximum COBRA continuation period
available to Executive, provided that Executive theretofore shall have complied
with the conditions set forth in Section 10, the Bank shall make a good faith
effort to obtain insured coverage for Executive (and her spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) that is substantially comparable to such COBRA continuation
coverage, which insured coverage shall begin on the date of expiration of
Executive’s COBRA continuation period and continue until the third anniversary
of Executive’s termination of employment. In the event that the Bank determines,
in its sole discretion, that it is unable to obtain such insured coverage for
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) or in the event that
Executive determines, in her sole discretion, that any such insured coverage
offered by the Bank is not substantially comparable to such COBRA continuation
coverage, the Bank shall pay to Executive, provided that Executive shall not
have become eligible for medical coverage under (1) the Bank’s Health Plan, as a
retiree or active employee, (2) a plan maintained by a subsequent employer or
other entity to which Executive provides services, or (3) Medicare and, provided
further, that Executive theretofore shall have complied with the conditions set
forth in Section 10, a lump sum amount equal on an after-tax basis to the
present value of the total cost of retiree medical coverage under the Health
Plan that would have been incurred by both Executive and the Bank on behalf of
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) if Executive (and such
spouse and dependents, if any) had been eligible for such retiree medical
coverage from the end of Executive’s COBRA continuation period until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid. Such lump sum amount shall
be calculated by an actuary selected by the Bank and paid in cash as soon as
administratively practicable following the expiration of Executive’s COBRA
continuation period and shall not be subject to reduction or forfeiture by
reason of any coverage for which Executive may thereafter become eligible by
reason of subsequent employment or otherwise. In addition, as soon as
administratively practicable following Executive’s termination of employment,
provided that Executive shall have complied with the conditions set forth in
Section 10, the Bank shall pay to Executive a lump sum amount equal on an
after-tax basis to the present value of the sum of (1) the amount that Executive
and the Bank would have paid, had he remained employed, for coverage under the
Bank’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination
of employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which Executive’s
termination occurred; and (2) the amount that Executive and the Bank would have
paid to continue Executive’s group life insurance coverage, had he remained
employed, from the date of Executive’s termination of employment until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount
rate set forth in the Bank’s qualified retirement plan for the determination of
lump sum payments.
 

 
If any payment or benefit under this Section 7(d) is based on Base Salary or
other level of compensation or benefits at the time of Executive’s termination
and if a reduction in such Base Salary or other level of compensation or benefit
was the basis for Executive’s termination for Good Reason, then the Base Salary
or other level of compensation in effect before such reduction shall be used to
calculate payments or benefits under this Section 7(d).
 
(e) Termination by the Bank Without Cause Within Two Years After a Change in
Control. The Bank may terminate the employment of Executive hereunder without
Cause, simultaneously with or within two years after a Change in Control, upon
at least 90 days’ written notice to Executive. The foregoing notwithstanding,
the Bank may elect, by written notice to Executive, to terminate Executive’s
positions specified in Sections 1 and 3 and all other obligations of Executive
and the Bank under Section 3 at a date earlier than the expiration of such
90-day notice period, if so specified by the Bank in the written notice,
provided that Executive shall be treated as an employee of the Bank (without any
assigned duties) for all other purposes of this Agreement, including for
purposes of Sections 4 and 5, from such specified date until the expiration of
such 90-day period. An election by the Bank not to extend the Term pursuant to
Section 2 hereof shall be deemed to be a termination of Executive’s employment
by the Bank without Cause at the date of expiration of the Term and shall be
subject to this Section 7(e) if the date of such termination coincides with or
is within two years after a Change in Control; provided, however, that, if
Executive has attained Social Security retirement age at such date of
termination, such termination shall be deemed a Retirement of Executive. At the
time Executive’s employment is terminated by the Bank (i.e., at the expiration
of such notice period), the Term will terminate, all remaining obligations of
the Bank and Executive under Sections 1 through 5 of this Agreement will
immediately cease (except for obligations which continue after termination of
employment as expressly provided herein), and the Bank will pay Executive, and
Executive will be entitled to receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination;
 

 
 
12

--------------------------------------------------------------------------------

 
(ii)
 
Cash in an aggregate amount equal to three times the sum of (A) Executive’s Base
Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in stock or in other non-cash awards) for the year of
termination or (y) the portion of Executive’s annual incentive compensation that
became payable in cash to Executive (i.e., excluding the portion payable in
stock or in other non-cash awards) for the latest year preceding the year of
termination based on performance actually achieved in that latest year. The
amount determined to be payable under this Section 7(e)(ii) shall be paid by the
Bank not later than 15 days after Executive’s termination;
 
(iii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, an amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for the year of termination, multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of termination
and the denominator of which is the total number of days in the year of
termination;
 
(iv)
 
Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such
termination, and any such options granted on or after the date hereof shall
remain outstanding and exercisable until the stated expiration date of the
Option as though Executive’s employment did not terminate, and, in other
respects, such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted;
 
(v)
 
Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan
awards, and other long-term incentive awards is conditioned shall be deemed to
have been met at target level at the date of termination, and restricted stock
and deferred stock awards, including outstanding stock plan awards, and other
long-term incentive awards (to the extent then or previously earned, in the case
of performance-based awards) shall become fully vested and non-forfeitable at
the date of such termination, and, in other respects, such awards shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such awards were granted;
 
(vi)
 
All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
 
(vii)
 
All rights under the SERP shall be governed by such plan; and
 

 
 
13

--------------------------------------------------------------------------------

 
(viii)
 
If Executive elects after termination of employment continued coverage under the
Health Plan in accordance with the applicable provisions of COBRA, the Bank
shall pay to Executive on a monthly basis during such COBRA continuation period
an amount equal on an after-tax basis to the total cost of such coverage. If the
maximum COBRA continuation period available to Executive shall be less than
three years, prior to the expiration of the maximum COBRA continuation period
available to Executive, provided that Executive theretofore shall have complied
with the conditions set forth in Section 10, the Bank shall make a good faith
effort to obtain insured coverage for Executive (and her spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) that is substantially comparable to such COBRA continuation
coverage, which insured coverage shall begin on the date of expiration of
Executive’s COBRA continuation period and continue until the third anniversary
of Executive’s termination of employment. In the event that the Bank determines,
in its sole discretion, that it is unable to obtain such insured coverage for
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) or in the event that
Executive determines, in her sole discretion, that any such insured coverage
offered by the Bank is not substantially comparable to such COBRA continuation
coverage, the Bank shall pay to Executive, provided that Executive shall not
have become eligible for medical coverage under (1) the Bank’s Health Plan, as a
retiree or active employee, (2) a plan maintained by a subsequent employer or
other entity to which Executive provides services, or (3) Medicare and, provided
further, that Executive theretofore shall have complied with the conditions set
forth in Section 10, a lump sum amount equal on an after-tax basis to the
present value of the total cost of retiree medical coverage under the Health
Plan that would have been incurred by both Executive and the Bank on behalf of
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) if Executive (and such
spouse and dependents, if any) had been eligible for such retiree medical
coverage from the end of Executive’s COBRA continuation period until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid. Such lump sum amount shall
be calculated by an actuary selected by the Bank and paid in cash as soon as
administratively practicable following the expiration of Executive’s COBRA
continuation period and shall not be subject to reduction or forfeiture by
reason of any coverage for which Executive may thereafter become eligible by
reason of subsequent employment or otherwise. In addition, as soon as
administratively practicable following Executive’s termination of employment,
provided that Executive shall have complied with the conditions set forth in
Section 10, the Bank shall pay to Executive a lump sum amount equal on an
after-tax basis to the present value of the sum of (1) the amount that Executive
and the Bank would have paid, had he remained employed, for coverage under the
Bank’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination
of employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which Executive’s
termination occurred; and (2) the amount that Executive and the Bank would have
paid to continue Executive’s group life insurance coverage, had he remained
employed, from the date of Executive’s termination of employment until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount
rate set forth in the Bank’s qualified retirement plan for the determination of
lump sum payments.
 

 
(f) Termination by Executive for Good Reason Within Two Years After a Change in
Control. Executive may terminate her employment hereunder for Good Reason,
simultaneously with or within two years after a Change in Control, upon 90 days’
written notice to the Bank; provided, however, that, if the Bank has corrected
the basis for such Good Reason within 30 days after receipt of such notice,
Executive may not terminate her employment for Good Reason, and therefore
Executive’s notice of termination will automatically become null and void. At
the time Executive’s employment is terminated by Executive for Good Reason
(i.e., at the expiration of such notice period), the Term will terminate, all
obligations of the Bank and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except for obligations which continue after
termination of employment as expressly provided herein), and the Bank will pay
Executive, and Executive will be entitled to receive, the following:
 
(i)
 
Executive’s Compensation Accrued at Termination;
 
(ii)
 
Cash in an aggregate amount equal to three times the sum of (A) Executive’s Base
Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in stock or in other non-cash awards) for the year of
termination or (y) the portion of Executive’s annual incentive compensation that
became payable in cash to Executive (i.e., excluding the portion payable in
stock or in other non-cash awards) for the latest year preceding the year of
termination based on performance actually achieved in that latest year. The
amount determined to be payable under this Section 7(f)(ii) shall be paid by the
Bank not later than 15 days after Executive’s termination;
 

 
 
14

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(iii)
 
In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, an amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for the year of termination, multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of termination
and the denominator of which is the total number of days in the year of
termination;
 
(iv)
 
Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such
termination, and any such options granted on or after the date hereof shall
remain outstanding and exercisable until the stated expiration date of the
Option as though Executive’s employment did not terminate, and, in other
respects, such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted;
 
(v)
 
Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan
awards, and other long-term incentive awards is conditioned shall be deemed to
have been met at target level at the date of termination, and restricted stock
and deferred stock awards, including outstanding stock plan awards, and other
long-term incentive awards (to the extent then or previously earned, in the case
of performance-based awards) shall become fully vested and non-forfeitable at
the date of such termination, and, in other respects, such awards shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such awards were granted;
 
(vi)
 
All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
 
(vii)
 
All rights under the SERP shall be governed by such plan; and
 
(viii)
 
If Executive elects after termination of employment continued coverage under the
Health Plan in accordance with the applicable provisions of COBRA, the Bank
shall pay to Executive on a monthly basis during such COBRA continuation period
an amount equal on an after-tax basis to the total cost of such coverage. If the
maximum COBRA continuation period available to Executive shall be less than
three years, prior to the expiration of the maximum COBRA continuation period
available to Executive, provided that Executive theretofore shall have complied
with the conditions set forth in Section 10, the Bank shall make a good faith
effort to obtain insured coverage for Executive (and her spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) that is substantially comparable to such COBRA continuation
coverage, which insured coverage shall begin on the date of expiration of
Executive’s COBRA continuation period and continue until the third anniversary
of Executive’s termination of employment. In the event that the Bank determines,
in its sole discretion, that it is unable to obtain such insured coverage for
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) or in the event that
Executive determines, in her sole discretion, that any such insured coverage
offered by the Bank is not substantially comparable to such COBRA continuation
coverage, the Bank shall pay to Executive, provided that Executive shall not
have become eligible for medical coverage under (1) the Bank’s Health Plan, as a
retiree or active employee, (2) a plan maintained by a subsequent employer or
other entity to which Executive provides services, or (3) Medicare and, provided
further, that Executive theretofore shall have complied with the conditions set
forth in Section 10, a lump sum amount equal on an after-tax basis to the
present value of the total cost of retiree medical coverage under the Health
Plan that would have been incurred by both Executive and the Bank on behalf of
Executive (and her spouse and eligible dependents, if any, for whom coverage had
been provided during the COBRA continuation period) if Executive (and such
spouse and dependents, if any) had been eligible for such retiree medical
coverage from the end of Executive’s COBRA continuation period until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid. Such lump sum amount shall
be calculated by an actuary selected by the Bank and paid in cash as soon as
administratively practicable following the expiration of Executive’s COBRA
continuation period and shall not be subject to reduction or forfeiture by
reason of any coverage for which Executive may thereafter become eligible by
reason of subsequent employment or otherwise. In addition, as soon as
administratively practicable following Executive’s termination of employment,
provided that Executive shall have complied with the conditions set forth in
Section 10, the Bank shall pay to Executive a lump sum amount equal on an
after-tax basis to the present value of the sum of (1) the amount that Executive
and the Bank would have paid, had he remained employed, for coverage under the
Bank’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination
of employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which Executive’s
termination occurred; and (2) the amount that Executive and the Bank would have
paid to continue Executive’s group life insurance coverage, had he remained
employed, from the date of Executive’s termination of employment until the third
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount
rate set forth in the Bank’s qualified retirement plan for the determination of
lump sum payments.
 

 
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If any payment or benefit under this Section 7(f) is based on Base Salary or
other level of compensation or benefits at the time of Executive’s termination
and if a reduction in such Base Salary or other level of compensation or benefit
was the basis for Executive’s termination for Good Reason, then the Base Salary
or other level of compensation in effect before such reduction shall be used to
calculate payments or benefits under this Section 7(f).
 
(g) Other Terms Relating to Certain Terminations of Employment. Whether a
termination is deemed to be at or within two years after a Change in Control for
purposes of Sections 7(c), (d), (e), or (f) is determined at the date of
termination, regardless of whether the Change in Control had occurred at the
time a notice of termination was given. In the event Executive’s employment
terminates for any reason set forth in Section 7(b) through (f), Executive will
be entitled to the benefit of any terms of plans or agreements applicable to
Executive which are more favorable than those specified in this Section 7
(except in the case of annual incentives in lieu of which amounts are paid
hereunder). Amounts payable under this Section 7 following Executive’s
termination of employment, other than those expressly payable on a deferred
basis, will be paid as promptly as practicable after such a termination of
employment, and such amounts payable under Section 7(e) or 7(f) will be paid in
no event later than 15 days after Executive’s termination of employment unless
not determinable within such period.
 
8. Definitions Relating to Termination Events.
 
(a)
 
“Cause.” For purposes of this Agreement, “Cause” shall mean:
 
(i)
 
Executive’s willful and continued failure to substantially perform her duties
hereunder (other than any such failure resulting from incapacity due to physical
or mental illness or Disability or any failure after the issuance of a notice of
termination by Executive for Good Reason) which failure is demonstrably and
materially damaging to the financial condition or reputation of the Company, the
Bank and/or their affiliates, and which failure continues more than 48 hours
after a written demand for substantial performance is delivered to Executive by
the Board, which demand specifically identifies the manner in which the Board
believes that Executive has not substantially performed her duties hereunder and
the demonstrable and material damage caused thereby; or
 
(ii)
 
the willful engaging by Executive in conduct which is demonstrably and
materially injurious to the Company, the Bank or their affiliates, monetarily or
otherwise.
 

No act, or failure to act, on the part of Executive shall be deemed “willful”
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that her action or omission was in the best interest of the
Bank and the Company. Notwithstanding the foregoing, Executive shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to Executive a copy of the resolution duly adopted by the affirmative
vote of not less than three-quarters (3/4) of the entire membership of the Board
at a meeting of the Board (after reasonable notice to Executive and an
opportunity for Executive, together with Executive’s counsel, to be heard before
the Board) finding that, in the good faith opinion of the Board, Executive was
guilty of conduct set forth above in this definition and specifying the
particulars thereof in detail.
 
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(b) “Change in Control.” For purposes of this Agreement, a “Change in Control”
shall be deemed to have occurred if, during the term of this Agreement:
 
(i)
 
the Company, or the mutual holding company parent of the Company, whether it
remains a mutual holding company or converts to the stock form of organization
(the "Mutual Holding Company"), merges into or consolidates with another
corporation, or merges another corporation into the Company or the Mutual
Holding Company, and as a result, with respect to the Company, less than a
majority of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by "Persons" as such term is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") who were stockholders of the Company immediately
before the merger or consolidation or, with respect to the Mutual Holding
Company, less than a majority of the directors of the resulting corporation
immediately after the merger or consolidation were directors of the Mutual
Holding Company immediately before the merger or consolidation;
 
(ii)
 
following a conversion of the Mutual Holding Company to the stock form of
organization, any Person (other than any trustee or other fiduciary holding
securities under an employee benefit plan of the Bank or the Company), becomes
the "Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the resulting corporation representing
25% or more of the combined voting power of the resulting corporation's
then-outstanding securities;
 
(iii)
 
during any period of twenty-four months (not including any period prior to the
Effective Date of this Agreement), individuals who at the beginning of such
period constitute the board of directors of the Company, and any new director
(other than (A) a director nominated by a Person who has entered into an
agreement with the Company to effect a transaction described in Sections
(8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in Control or (C)
a director nominated by any Person who is the Beneficial Owner, directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's securities) whose election by the board
of directors of the Company or nomination for election by the Company's
stockholders was approved in advance by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
 
(iv)
 
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets; or
 
(v)
 
the board of directors of the Company adopts a resolution to the effect that,
for purposes of this Agreement, a Change in Control has occurred.
 

 
(c) “Compensation Accrued at Termination.” For purposes of this Agreement,
“Compensation Accrued at Termination” means the following:
 
 
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(i)
 
The unpaid portion of annual base salary at the rate payable, in accordance with
Section 4(a) hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in accordance with the Company’s
regular pay schedule;
 
(ii)
 
All vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans, programs,
and arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b)
hereof (including any earned and vested annual incentive compensation and
long-term incentive award) in which Executive theretofore participated, payable
in accordance with the terms and conditions of the plans, programs, and
arrangements (and agreements and documents thereunder) pursuant to which such
compensation and benefits were granted or accrued; and
 
(iii)
 
Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as
authorized under Section 5(f), in accordance the Company’s reimbursement
policies as in effect at the date of such termination.
 

(d) “Disability.” For purposes of this Agreement, “Disability” shall have the
meaning ascribed to it by Section 409A of the Code and the regulations
thereunder.
 
(e) “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean,
without Executive’s express written consent, the occurrence of any of the
following circumstances unless, in the case of subsections (i), (iv), (vi) or
(viii) hereof, such circumstances are fully corrected prior to the date of
termination specified in the notice of termination given in respect thereof:
 
(i)
 
the assignment to Executive of duties inconsistent with Executive’s position and
status as Senior Vice President, or an alteration, adverse to Executive, in
Executive’s position and status as Senior Vice President or in the nature of
Executive’s duties, responsibilities, and authorities or conditions of
Executive’s employment from those relating to Executive position and status as
Senior Vice President (excluding changes in assignments permitted under Section
3 and excluding inadvertent actions which are promptly remedied); except the
foregoing shall not constitute Good Reason if occurring in connection with the
termination of Executive’s employment for Cause, Disability, Retirement, as a
result of Executive’s death, or as a result of action by or with the consent of
Executive; for purposes of this Section 8(e), references to the Bank or the
Company (and to the Board of the Bank or the Company and to the stockholders of
the Company) refer to the ultimate parent company (and its board and
stockholders) succeeding the Company (or the Mutual Holding Company) following
an acquisition in which the corporate existence of the Company (or the Mutual
Holding Company) continues, in accordance with Section 12(b);
 
(ii)
 
(A) a reduction by the Bank in Executive’s Base Salary, (B) the setting of
Executive’s annual target incentive opportunity or payment of earned annual
incentive not in conformity with Section 4 hereof, (C) a change in compensation
or benefits not in conformity with Section 5, or (D) a reduction, after a Change
in Control, in perquisites from the level of such perquisites as in effect
immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control, except for
across-the-board perquisite reductions similarly affecting all senior executives
of the Bank and all senior executives of any Person in control of the Company;
 
(iii)
 
the relocation of the principal place of Executive’s employment to a site that
is outside of a fifty mile radius of her principal place of employment prior to
such relocation; for this purpose, required travel on the Bank’s business will
not constitute a relocation so long as the extent of such travel is
substantially consistent with Executive’s customary business travel obligations
in periods prior to the Effective Date;
 

 
 
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(iv)
 
the failure by the Bank to pay to Executive any portion of Executive’s
compensation or to pay to Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Bank within seven
days of the date such compensation is due;
 
(v)
 
the failure by the Bank to continue in effect any material compensation or
benefit plan in which Executive participated immediately prior to a Change in
Control, unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by the
Bank to continue Executive’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in terms of the
amounts of compensation or benefits provided and the level of Executive’s
participation relative to other participants, as existed at the time of the
Change in Control;
 
(vi)
 
the failure of the Bank to obtain a satisfactory agreement from any successor to
the Bank, the Company or the Mutual Holding Company to fully assume the Bank’s
and the Company’s obligations and to perform under this Agreement, as
contemplated in Section 12(b) hereof, in a form reasonably acceptable to
Executive;
 
(vii)
 
any election by the Bank not to extend the Term of this Agreement at the next
possible extension date under Section 2 hereof, unless Executive will have
attained Social Security retirement age at or before such extension date; or
 
(viii)
 
any other failure by the Bank or the Company to perform any material obligation
under, or breach by the Bank or the Company of any material provision of, this
Agreement;
 

provided, however, that a forfeiture under Section 10(f), (g), or (h) shall not
constitute “Good Reason.”
 
(f) “Potential Change in Control.” For purposes of this Agreement, a “Potential
Change in Control” shall be deemed to have occurred if, during the term of this
Agreement:
 
(i)
 
the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control;
 
(ii)
 
any Person (including the Company) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change in
Control; or
 
(iii)
 
the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
 

9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related
Provisions.
 
(a) Rabbi Trust Funded Upon Potential Change in Control. In the event of a
Potential Change in Control or Change in Control, the Bank or the Company shall,
not later than 15 days thereafter, have established one or more rabbi trusts and
shall deposit therein cash in an amount determined by the actuary for the Bank’s
qualified Retirement Plan on the basis of the interest rate and mortality
assumptions set forth in said qualified Retirement Plan, which is sufficient to
provide for full payment of all potential obligations of the Bank and the
Company that would arise assuming consummation of a Change in Control, or has
arisen in the case of an actual Change in Control, and a subsequent termination
of Executive's employment under Section 7(e) or (f). Such rabbi trust(s) shall
be irrevocable and shall provide that neither the Bank nor the Company may,
directly or indirectly, use or recover any assets of the trust(s) until such
time as all obligations which potentially could arise hereunder have been
settled and paid in full, subject only to the claims of creditors of the Bank
and the Company in the event of insolvency or bankruptcy of the Bank or the
Company; provided, however, that if no Change in Control has occurred within two
years after such Potential Change in Control, such rabbi trust(s) shall at the
end of such two-year period become revocable and may thereafter be revoked by
the Bank.
 
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(b) Gross-up If Excise Tax Would Apply. In the event Executive becomes entitled
to any amounts or benefits payable in connection with a Change in Control or
other change in control (whether or not such amounts are payable pursuant to
this Agreement) (the “Severance Payments”), if any of such Severance Payments
are subject to the tax (the “Excise Tax”) imposed by Section 4999 of the
Internal Revenue Code (or any similar federal, state or local tax that may
hereafter be imposed) (the “Code”), the Bank shall pay to Executive at the time
specified in Section 9(b)(iii) hereof an additional amount (the “Gross-Up
Payment”) such that the net amount retained by Executive, after deduction of any
Excise Tax on the Total Payments (as hereinafter defined) and any federal, state
and local income tax and Excise Tax upon the payment provided for by Section
9(b)(i), shall be equal to the Total Payments.
 
(i)
 
For purposes of determining whether any of the Severance Payments will be
subject to the Excise Tax and the amount of such Excise Tax:
 
 
(A) any other payments or benefits received or to be received by Executive in
connection with a Change in Control or Executive’s termination of employment
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Bank, any Person whose actions result in a Change in
Control or any Person affiliated with the Bank or such Person) (which, together
with the Severance Payments, constitute the “Total Payments”) shall be treated
as “parachute payments” within the meaning of Section 280G(b)(2) of the Code,
and all “excess parachute payments” within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, unless in the opinion of
nationally-recognized tax counsel selected by Executive such other payments or
benefits (in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax;
 
 
(B) the amount of the Total Payments which shall be treated as subject to the
Excise Tax shall be equal to the lesser of (x) the total amount of the Total
Payments and (y) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying Section 9(b)(i)(A) hereof); and
 
 
(C) the value of any non-cash benefits or any deferred payments or benefit shall
be determined by a nationally-recognized accounting firm selected by Executive
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
 

 
(ii)
 
For purposes of determining the amount of the Gross-Up Payment, Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of Executive’s residence on the Date of Termination, net of
the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of Executive’s employment, Executive shall repay to
the Bank within ten days after the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by Executive if such repayment
results in a reduction in Excise Tax and/or federal and state and local income
tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at the time of
the termination of Executive’s employment (including by reason of any payment
the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), the Bank shall make an additional gross-up payment in respect
of such excess within ten days after the time that the amount of such excess is
finally determined.
 

 
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(iii)
 
The payments provided for in this Section 9(b) shall be made not later than the
fifteenth day following the date of Executive’s termination of employment;
provided, however, that if the amount of such payments cannot be finally
determined on or before such day, the Bank shall pay to Executive on such day an
estimate, as determined in good faith by the Bank, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined but in no event later than the thirtieth day after the
date of Executive’s termination of employment. In the event that the amount of
the estimated payments exceeds the amount subsequently determined to have been
due, such excess shall be payable by Executive on the fifteenth day after the
demand by the Bank.
 
(iv)
 
All determinations under this Section 9(b) shall be made at the expense of the
Bank by a nationally recognized public accounting firm selected by Executive,
and such determination shall be binding upon Executive and the Bank.
 
(v)
 
Executive hereby agrees with the Bank and the Company and any successor thereto
to in good faith consider and take steps commonly used to minimize or eliminate
any tax liability or costs that would otherwise be created by the tax
indemnification provisions set forth in this Section 9(b) if requested to do so
by the Company or the Bank or any successor thereto; provided, however, that the
foregoing language shall neither require Executive to take or not take any
specific action in furtherance thereof nor contravene, limit or remove any right
or privilege provided thereto under this Agreement.
 

10. Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement; Certain Forfeitures.
 
(a) Non-Competition. In consideration for the compensation and benefits provided
under this Agreement, including without limitation, the compensation and
benefits provided under Sections 7(e) and (f), without the consent in writing of
the Board, Executive will not, at any time during the Term and for a period of
two years following termination of Executive’s employment for any reason, acting
alone or in conjunction with others, directly or indirectly (i) engage (either
as owner, investor, partner, stockholder, employer, employee, consultant,
advisor, or director) in any business of any savings bank, savings and loan
association, savings and loan holding company, bank, bank holding company, or
other institution engaged in the business of accepting deposits or making loans,
or any direct or indirect subsidiary or affiliate of any such entity, that
conducts business in any county in which the Company or the Bank maintains an
office as of Executive’s date of termination or had plans to open an office
within six months after Executive’s date of termination ; (ii) induce any
customers of the Bank or any of its affiliates with whom Executive has had
contacts or relationships, directly or indirectly, during and within the scope
of her employment with the Bank, to curtail or cancel their business with the
Bank or any such affiliate; (iii) induce, or attempt to influence, any employee
of the Bank or any of its affiliates to terminate employment; or (iv) solicit,
hire or retain as an employee or independent contractor, or assist any third
party in the solicitation, hire, or retention as an employee or independent
contractor, any person who during the previous twelve months was an employee of
the Bank or any affiliate; provided, however, that the limitation contained in
clause (i) above shall not apply if Executive’s employment is terminated as a
result of a termination by the Company without Cause within two years following
a Change in Control or is terminated by Executive for Good Reason within two
years following a Change in Control or is terminated by Executive other than for
Good Reason as provided in Section 7(b) and, provided further, that activities
engaged in by or on behalf of the Bank are not restricted by this covenant. The
provisions of subparagraphs (i), (ii), (iii), and (iv) above are separate and
distinct commitments independent of each of the other subparagraphs. It is
agreed that the ownership of not more than one percent of the equity securities
of any company having securities listed on an exchange or regularly traded in
the over-the-counter market shall not, of itself, be deemed inconsistent with
clause (i) of this Section 10(a).
 
(b) Non-Disclosure; Ownership of Work. Executive shall not, at any time during
the Term and thereafter (including following Executive’s termination of
employment for any reason), disclose, use, transfer, or sell, except in the
course of employment with or other service to the Bank or the Company, any
proprietary information, secrets, organizational or employee information, or
other confidential information belonging or relating to the Bank or the Company
and its affiliates and customers so long as such information has not otherwise
been disclosed or is not otherwise in the public domain, except as required by
law or pursuant to legal process. In addition, upon termination of employment
for any reason, Executive will return to the Company or its affiliates all
documents and other media containing information belonging or relating to the
Bank and the Company or its affiliates.
 
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(c) Cooperation With Regard to Litigation. Executive agrees to cooperate with
the Bank and the Company, during the Term and thereafter (including following
Executive’s termination of employment for any reason), by making himself
available to testify on behalf of the Bank or the Company or any subsidiary or
affiliate of the Bank or the Company, in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and to assist the
Bank and the Company, or any subsidiary or affiliate of the Company, in any such
action, suit, or proceeding, by providing information and meeting and consulting
with the Board or its representatives or counsel, or representatives or counsel
to the Bank or the Company, or any subsidiary or affiliate of the Company, as
requested. The Bank agrees to reimburse the Executive, on an after tax basis,
for all expenses actually incurred in connection with her provision of testimony
or assistance.
 
(d) Non-Disparagement. Executive shall not, at any time during the Term and
thereafter, make statements or representations, or otherwise communicate,
directly or indirectly, in writing, orally, or otherwise, or take any action
which may, directly or indirectly, disparage the Bank or the Company or any of
its subsidiaries or affiliates or their respective officers, directors,
employees, advisors, businesses or reputations. Notwithstanding the foregoing,
nothing in this Agreement shall preclude Executive from making truthful
statements that are required by applicable law, regulation or legal process.
 
(e) Release of Employment Claims. Executive agrees, as a condition to receipt of
any termination payments and benefits provided for in Sections 6 and 7 herein
(other than Compensation Accrued at Termination), that he will execute a general
release agreement, in substantially the form set forth in Attachment A to this
Agreement, releasing any and all claims arising out of Executive’s employment
other than enforcement of this Agreement and rights to indemnification under any
agreement, law, Bank or Company organizational document or policy, or otherwise.
 
(f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7
notwithstanding, if Executive willfully and materially fails to substantially
comply with any restrictive covenant under this Section 10 or willfully and
materially fails to substantially comply with any material obligation under this
Agreement, all options to purchase common stock granted by the Company and then
held by Executive or a transferee of Executive shall be immediately forfeited
and thereupon such options shall be cancelled. Notwithstanding the foregoing,
Executive shall not forfeit any option unless and until there shall have been
delivered to him, within six months after the Board (i) had knowledge of conduct
or an event allegedly constituting grounds for such forfeiture and (ii) had
reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote
of the membership of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after giving Executive reasonable notice
specifying the nature of the grounds for such forfeiture and not less than 30
days to correct the acts or omissions complained of, if correctable, and
affording Executive the opportunity, together with her counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board,
Executive has engaged and continues to engage in conduct set forth in this
Section 10(f) which constitutes grounds for forfeiture of Executive’s options;
provided, however, that if any option is exercised after delivery of such notice
and the Board subsequently makes the determination described in this sentence,
Executive shall be required to pay to the Company an amount equal to the
difference between the aggregate value of the shares acquired upon such exercise
at the date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any
term or provision of any option agreement. In addition, options granted to
Executive on or after the Effective Date, and gains resulting from the exercise
of such options, shall be subject to forfeiture in accordance with the Company’s
standard policies relating to such forfeitures and clawbacks, as such policies
are in effect at the time of grant of such options.
 
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(g) Forfeiture of Certain Bonuses and Profits. If the Company is required to
prepare an accounting restatement due to the material noncompliance of the
Company, as a result of misconduct, with any financial reporting requirement
under the securities laws, and if Executive, knowingly or through gross
negligence, caused or failed to prevent such misconduct, Executive shall
reimburse the Bank for (i) any bonus or other incentive based or equity-based
compensation received by Executive during the 12-month period following the
first public issuance or filing with the Securities and Exchange Commission
(whichever first occurs) of the financial document embodying such financial
reporting requirement; and (ii) any profits realized from the sale of securities
of the Company during that 12-month period.
 
(h) Forfeiture Due to Regulatory Restrictions. Anything in this Agreement or the
SERP to the contrary notwithstanding, (i) any payments made pursuant to this
Agreement or the SERP shall be subject to and conditioned upon compliance with
12 U.S.C. §1828(k) and any regulations promulgated thereunder; and (ii) payments
contemplated to be made by the Bank pursuant to this Agreement or the SERP shall
not be immediately payable to the extent such payments are barred or prohibited
by an action or order issued by the Connecticut Banking Commissioner or the
Federal Deposit Insurance Corporation.
 
(i) Survival. The provisions of this Section 10 shall survive the termination of
the Term and any termination or expiration of this Agreement.
 
11. Governing Law; Disputes.
 
(a) Governing Law. This Agreement and the rights and obligations of the Company,
the Bank and Executive are governed by and are to be construed, administered,
and enforced in accordance with the laws of the State of Connecticut, without
regard to conflicts of law principles. If under the governing law, any portion
of this Agreement is at any time deemed to be in conflict with any applicable
statute, rule, regulation, ordinance, or other principle of law, such portion
shall be deemed to be modified or altered to the extent necessary to conform
thereto or, if that is not possible, to be omitted therefrom. The invalidity of
any such portion shall not affect the force, effect, and validity of the
remaining portion thereof. If any court determines that any provision of Section
10 of this Agreement is unenforceable because of the duration or geographic
scope of such provision, it is the parties’ intent that such court shall have
the power to modify the duration or geographic scope of such provision, as the
case may be, to the extent necessary to render the provision enforceable and, in
its modified form, such provision shall be enforced.
 
(b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices,
the Bank shall promptly pay or reimburse all reasonable costs and expenses
(including fees and disbursements of counsel and pension experts) incurred by
Executive or Executive’s surviving spouse in seeking to interpret this Agreement
or enforce rights pursuant to this Agreement or in any proceeding in connection
therewith brought by Executive or Executive’s surviving spouse, whether or not
Executive or Executive’s surviving spouse is ultimately successful in enforcing
such rights or in such proceeding; provided, however, that no reimbursement
shall be owed with respect to expenses relating to any unsuccessful assertion of
rights or proceeding if and to the extent that such assertion or proceeding was
initiated or maintained in bad faith or was frivolous, as determined in
accordance with Section 11(c) or a court having jurisdiction over the matter, in
which case any amounts previously paid by the Bank shall be promptly repaid.
 
(c) Dispute Resolution.
 
(i)
 
Negotiation. The Bank and the Company (collectively, the “Employer”) and
Executive shall attempt in good faith to resolve any dispute arising out of or
relating to this Agreement promptly by negotiation between the Chief Executive
Officer of the Bank and Executive. Any party may give the other party written
notice of any dispute in accordance with the notice procedures set forth in
Section 12(d). Within 15 days after delivery of the notice, the receiving party
shall submit to the other, in accordance with the notice procedures set forth in
Section 12(d), a written response. The notice and response shall include a
statement of that party’s position and summary of arguments supporting that
position. Within 30 days after delivery of the initial notice, the parties shall
meet at a mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, to attempt to resolve the dispute. All negotiations
pursuant to this clause (i) are confidential and shall be treated as compromise
and settlement negotiations for purposes of applicable rules of evidence.
 

 
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(ii)
 
Mediation. If the dispute has not been resolved by negotiation as provided
herein within 45 days after delivery of the initial notice of negotiation, or if
the parties failed to meet within 30 days after delivery, the parties shall
endeavor to settle the dispute by mediation under the CPR Mediation Procedure
then currently in effect; provided, however, that if one party fails to
participate in the negotiation as provided herein, the other party can initiate
mediation prior to the expiration of the 45 days. Unless otherwise agreed, the
parties will select a mediator from the CPR Panels of Distinguished Neutrals.
 
(iii)
 
Arbitration. Any dispute arising under or in connection with this Agreement
which has not been resolved by mediation as provided herein within 45 days after
initiation of the mediation procedure, shall be finally resolved by arbitration
in accordance with the CPR Rules for Non-Administered Arbitration then currently
in effect, by three independent and impartial arbitrators, of whom each party
shall designate one; provided, however, that if one party fails to participate
in either the negotiation or mediation as agreed herein, the other party can
commence arbitration prior to the expiration of the time periods set forth
above. The arbitration shall be governed by the Federal Arbitration Act, 9
U.S.C. §§1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof. The place of arbitration shall
be Hartford, Connecticut. For purposes of entering any judgment upon an award
rendered by the arbitrators, the Company, the Bank and Executive hereby consent
to the jurisdiction of any or all of the following courts: (i) the United States
District Court for the District of Connecticut, (ii) any of the courts of the
State of Connecticut, or (iii) any other court having jurisdiction. The Company,
the Bank and Executive hereby agree that a judgment upon an award rendered by
the arbitrators may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Subject to Section 11(b) of this
Agreement, the Bank shall bear all costs and expenses arising in connection with
any arbitration proceeding pursuant to this Section 11(c). Notwithstanding any
provision in this Section 11(c), Executive shall be entitled to seek specific
performance of Executive's right to be paid during the pendency of any dispute
or controversy arising under or in connection with this Agreement.
 

(d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to
the terms of this Agreement or any decision by arbitrators or judgment by a
court of law pursuant to this Section 11 but which has not been timely paid
shall bear interest at the prime rate in effect at the time such amount first
becomes payable, as quoted by the Bank.
 
12. Miscellaneous.
 
(a) Integration. This Agreement cancels and supersedes any and all prior
employment agreements and understandings between the parties hereto with respect
to the employment of Executive by the Bank, any parent or predecessor company,
and the Company’s subsidiaries during the Term, except for contracts relating to
compensation under executive compensation and employee benefit plans of the
Bank. This Agreement constitutes the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any
provision hereof shall be effective unless in writing and signed by the parties
hereto. Executive shall not be entitled to any payment or benefit under this
Agreement which duplicates a payment or benefit received or receivable by
Executive under any prior agreements and understandings or under any benefit or
compensation plan of the Bank which are in effect.
 
(b) Successors; Transferability. The Bank and the Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the Bank
or the Company to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Bank and the Company would be
required to perform it if no such succession had taken place.
 
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As used in this Agreement, “Bank “and “Company” shall mean the Bank and the
Company respectively as hereinbefore defined and any successor to its or their
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise and, in the case of an acquisition
of the Bank or the Company in which the corporate existence of the Bank or the
Company, as the case may be, continues, the ultimate parent company following
such acquisition. Subject to the foregoing, the Bank and the Company may
transfer and assign this Agreement and the Bank’s and the Company’s rights and
obligations hereunder. Neither this Agreement nor the rights or obligations
hereunder of the parties hereto shall be transferable or assignable by
Executive, except in accordance with the laws of descent and distribution or as
specified in Section 12(c).
 
(c) Beneficiaries. Executive shall be entitled to designate (and change, to the
extent permitted under applicable law) a beneficiary or beneficiaries to receive
any compensation or benefits provided hereunder following Executive’s death.
 
(d) Notices. Whenever under this Agreement it becomes necessary to give notice,
such notice shall be in writing, signed by the party or parties giving or making
the same, and shall be served on the person or persons for whom it is intended
or who should be advised or notified, by Federal Express or other similar
overnight service or by certified or registered mail, return receipt requested,
postage prepaid and addressed to such party at the address set forth below or at
such other address as may be designated by such party by like notice:
 
If to the Bank or the Company:
 
ROCKVILLE BANK
 
1645 Ellington Road
South Windsor, CT 06074
Att: Chief Executive Officer
 
 
If to Executive:
 
Ms. Darlene S. White
12 Crest Drive
Cromwell, CT 06416
 

If the parties by mutual agreement supply each other with telecopier numbers for
the purposes of providing notice by facsimile, such notice shall also be proper
notice under this Agreement. In the case of Federal Express or other similar
overnight service, such notice or advice shall be effective when sent, and, in
the cases of certified or registered mail, shall be effective two days after
deposit into the mails by delivery to the U.S. Post Office.
 
(e) Reformation. The invalidity of any portion of this Agreement shall not be
deemed to render the remainder of this Agreement invalid.
 
(f) Headings. The headings of this Agreement are for convenience of reference
only and do not constitute a part hereof.
 
(g) No General Waivers. The failure of any party at any time to require
performance by any other party of any provision hereof or to resort to any
remedy provided herein or at law or in equity shall in no way affect the right
of such party to require such performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
 
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(h) No Obligation To Mitigate. Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of
employment, and any compensation or benefits received from any other employment
of Executive shall not mitigate or reduce the obligations of the Bank and the
Company or the rights of Executive hereunder, except that, to the extent
Executive receives from a subsequent employer health or other insurance benefits
that are similar to the benefits referred to in Section 5(b) hereof, any such
benefits to be provided by the Bank to Executive following the Term shall be
correspondingly reduced.
 
(i) Offsets; Withholding. The amounts required to be paid by the Bank to
Executive pursuant to this Agreement shall not be subject to offset other than
with respect to any amounts that are owed to the Bank by Executive due to her
receipt of funds as a result of her fraudulent activity. The foregoing and other
provisions of this Agreement notwithstanding, all payments to be made to
Executive under this Agreement, including under Sections 6 and 7, or otherwise
by the Bank, will be subject to withholding to satisfy required withholding
taxes and other required deductions.
 
(j) Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of Executive, her heirs, executors, administrators and
beneficiaries, and shall be binding upon and inure to the benefit of the Bank
and the Company and their successors and assigns.
 
(k) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.
 
13. Indemnification.
 
All rights to indemnification by the Bank or the Company now existing in favor
of Executive as provided in the Bank’s and the Company’s Certificate of
Incorporation or By-laws or pursuant to other agreements in effect on or
immediately prior to the Effective Date shall continue in full force and effect
from the Effective Date (including all periods after the expiration of the
Term), and the Bank and the Company shall also advance expenses for which
indemnification may be ultimately claimed as such expenses are incurred to the
fullest extent permitted under applicable law, subject to any requirement that
Executive provide an undertaking to repay such advances if it is ultimately
determined that Executive is not entitled to indemnification; provided, however,
that any determination required to be made with respect to whether Executive’s
conduct complies with the standards required to be met as a condition of
indemnification or advancement of expenses under applicable law and the Bank’s
or the Company’s Certificate of Incorporation, By-laws, or other agreement shall
be made by independent counsel mutually acceptable to Executive and the Company
(except to the extent otherwise required by law). After the date hereof, the
Bank and the Company shall not amend its Certificate of Incorporation or By-laws
or any agreement in any manner which adversely affects the rights of Executive
to indemnification thereunder. Any provision contained herein notwithstanding,
this Agreement shall not limit or reduce any rights of Executive to
indemnification pursuant to applicable law. In addition, the Company will
maintain directors’ and officers’ liability insurance in effect and covering
acts and omissions of Executive during the Term and for a period of six years
thereafter on terms substantially no less favorable than those in effect on the
Effective Date.
 

 

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IN WITNESS WHEREOF, Executive has hereunto set her hand and the Bank and the
Company have each caused this instrument to be duly executed as of the Effective
Date.
 

 
ROCKVILLE BANK

By: _/ s / William J. McGurk__________________________

Name:  William J. McGurk
Title:     CEO and President

 

ROCKVILLE FINANCIAL, INC.

By: _/ s / William J. McGurk__________________________

Name:  William J. McGurk
Title:     CEO and President

 

_/ s / Darlene S. White_______________________________
Darlene S. White

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ATTACHMENT A
 
RELEASE
 
We advise you to consult an attorney before you sign this Release. You have
until the date which is seven (7) days after the Release is signed and returned
to Rockville Bank to change your mind and revoke your Release. Your Release
shall not become effective or enforceable until after that date.
 
In consideration for the benefits provided under your Employment Agreement with
Rockville Bank (the “Employment Agreement”), and more specifically enumerated in
Exhibit 1 hereto, by your signature below, you, for yourself and on behalf of
your heirs, executors, agents, representatives, successors and assigns, hereby
release and forever discharge the Rockville Financial, Inc., its past and
present parent corporations, subsidiaries, divisions, subdivisions, affiliates
and related companies (collectively, the “Company”) and the Company’s past,
present and future agents, directors, officers, employees, representatives,
successors and assigns (hereinafter “those associated with the Company”) with
respect to any and all claims, demands, actions and liabilities, whether in law
or equity, which you may have against the Company or those associated with the
Company of whatever kind, including but not limited to those arising out of your
employment with the Company or the termination of that employment. You agree
that this release covers, but is not limited to, claims arising under the Age
Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII of
the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans with
Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Fair Labor Standards
Act, 29 U.S.C. § 201 et seq., the Employee Retirement Income Security Act of
1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair Employment Practices Act,
C.G.S. § 46a-51 et seq., and any other local, state or federal law, regulation
or order dealing with discrimination in employment on the basis of sex, race,
color, national origin, veteran status, marital status, religion, disability,
handicap, or age. You also agree that this release includes claims based on
wrongful termination of employment, breach of contract (express or implied),
tort, or claims otherwise related to your employment or termination of
employment with the Company and any claim for attorneys’ fees, expenses or costs
of litigation.
 
This Release covers all claims based on any facts or events, whether known or
unknown by you, that occurred on or before the date of this Release. Except to
enforce this Release, you agree that you will never commence, prosecute, or
cause to be commenced or prosecuted any lawsuit or proceeding of any kind
against the Company or those associated with the Company in any forum and agree
to withdraw with prejudice all complaints or charges, if any, that you have
filed against the Company or those associated with the Company.
 
Anything in this Release to the contrary notwithstanding, this Release does not
include a release of: (i) your rights under the Employment Agreement or your
right to enforce the Employment Agreement; (ii) any rights you may have to
indemnification under any agreement, law, Company organizational document or
policy, or otherwise; (iii) any rights you may have to benefits under the
Company’s benefit plans; or (iii) your right to enforce this Release.
 
By signing this Release, you further agree as follows:
 
i. You have read this Release carefully and fully understand its terms;
 
ii. You have had at least twenty-one (21) days to consider the terms of the
Release;
 
iii. You have seven (7) days from the date you sign this Release to revoke it by
written notification to the Company. After this seven (7) day period, this
Release is final and binding and may not be revoked;
 
iv. You have been advised to seek legal counsel and have had an opportunity to
do so;
 

 
v. You would not otherwise be entitled to the benefits provided under your
Employment Agreement had you not agreed to execute this Release; and
 
 

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vi. Your agreement to the terms set forth above is voluntary.
 
Name:
 
Signature:
Date:
 
Received By:
Date:
 

 
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