exv10w1






Exhibit 10.1




ROCKVILLE BANK



Employment Agreement for Marino J. Santarelli



Effective as of July 18, 2011





 









 








ROCKVILLE BANK



Employment Agreement for Marino J. Santarelli



Effective as of July 18, 2011



	 	 	 	 	 

	1. Employment
	 	 	1	 
	2. Term
	 	 	1	 
	3. Offices and Duties
	 	 	2	 
	(a) Generally
	 	 	2	 
	(b) Place of Employment
	 	 	2	 
	4. Salary and Annual Incentive Compensation
	 	 	2	 
	(a) Base Salary
	 	 	2	 
	(b) Annual Incentive Compensation
	 	 	3	 
	5. Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense Reimbursement
	 	 	3	 
	(a) Executive Compensation Plans
	 	 	3	 
	(b) Employee and Executive Benefit Plans
	 	 	3	 
	(c) Acceleration of Awards Upon Termination Within Two Years After a Change in Control
	 	 	4	 
	(d) Deferral of Compensation
	 	 	4	 
	(e) Company Registration Obligations
	 	 	4	 
	(f) Reimbursement of Expenses
	 	 	4	 
	(g) Limitations Under Code Section 409A
	 	 	5	 
	6. Termination Due to Retirement, Death, or Disability
	 	 	5	 
	(a) Retirement
	 	 	5	 
	(b) Death
	 	 	6	 
	(c) Disability
	 	 	7	 
	(d) Other Terms of Payment Following Retirement, Death, or Disability
	 	 	9	 
	7. Termination of Employment For Reasons Other Than Retirement, Death or Disability
	 	 	10	 
	(a) Termination by the Bank for Cause
	 	 	10	 






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	(b) Termination by Executive Other Than For Good Reason
	 	 	10	 
	(c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change in Control
	 	 	11	 
	(d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change in Control
	 	 	13	 
	(e) Termination by the Bank Without Cause Within Two Years After a Change in Control
	 	 	15	 
	(f) Termination by Executive for Good Reason Within Two Years After a Change in Control
	 	 	17	 
	(g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409A
Exemptions; Delayed Payments Under Section 409A
	 	 	20	 
	8. Definitions Relating to Termination Events
	 	 	22	 
	(a) Cause
	 	 	22	 
	(b) Change in Control
	 	 	23	 
	(c) Compensation Accrued at Termination
	 	 	24	 
	(d) Disability
	 	 	24	 
	(e) Good Reason
	 	 	25	 
	(f) Potential Change in Control
	 	 	26	 
	(g) Specified Employee
	 	 	26	 
	9. Limitation on Change in Control Payments
	 	 	27	 
	10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain Forfeitures
	 	 	27	 
	(a) Non-Competition
	 	 	27	 
	(b) Non-Disclosure; Ownership of Work
	 	 	28	 
	(c) Cooperation With Regard to Litigation
	 	 	28	 
	(d) Non-Disparagement
	 	 	28	 
	(e) Release of Employment Claims
	 	 	29	 
	(f) Forfeiture of Outstanding Options
	 	 	29	 
	(g) Forfeiture of Certain Bonuses and Profits
	 	 	29	 
	(h) Forfeiture Due to Regulatory Restrictions
	 	 	30	 
	(i) Survival
	 	 	30	 
	11. Governing Law; Disputes
	 	 	30	 
	(a) Governing Law
	 	 	30	 
	(b) Reimbursement of Expenses in Enforcing Rights
	 	 	31	 
	(c) Dispute Resolution
	 	 	31	 






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	(d) Interest on Unpaid Amounts
	 	 	32	 
	12. Miscellaneous
	 	 	32	 
	(a) Integration
	 	 	32	 
	(b) Successors; Transferability
	 	 	33	 
	(c) Beneficiaries
	 	 	33	 
	(d) Notices
	 	 	33	 
	(e) Reformation
	 	 	34	 
	(f) Headings
	 	 	34	 
	(g) No General Waivers
	 	 	34	 
	(h) No Obligation To Mitigate
	 	 	34	 
	(i) Offsets; Withholding
	 	 	34	 
	(j) Successors and Assigns
	 	 	34	 
	(k) Counterparts
	 	 	34	 
	13. Indemnification
	 	 	34	 






Attachment A






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ROCKVILLE BANK



Employment Agreement for Marino J. Santarelli



Effective as of July 18, 2011


          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 Marino J. Santarelli (“Executive”) is
effective as of July 18, 2011 (the “Effective Date”).



W I T N E S S E T H



          WHEREAS, the Company and the Bank desire to ensure that the Company and the Bank are assured
of the continued availability of Executive’s services as provided in this Agreement; and


          WHEREAS, Executive is willing to continue to serve the Company and the Bank on the terms and
conditions hereinafter set forth.


          NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, 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 Executive Vice President and Chief Operating
Officer (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, 2011 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 by one additional
year (added to the end of the Term) first on December 31, 2011 (extending the Term to December 31,
2012) and on each succeeding December 31st thereafter (a “December 31st
extension date”) but only in the event the Bank serves written notice in accordance with Section
12(d) upon Executive at least 60 days preceding December 31, 2011 extending the Term



 









 








to December 31, 2012 and thereafter at least 60 days preceding a December 31st extension
date, in which case the Term shall be extended to the next succeeding December 31st,
subject to earlier termination of Executive’s 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 Term, the Term shall be extended automatically until the day
after the earlier of: (a) the second anniversary of the date the Change in Control is consummated;
or (b) the date the Change in Control contemplated by the Potential Change in Control is fully and
finally abandoned.




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 Executive Vice President and Chief
Operating Officer 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 his full business time and attention, and his best efforts, abilities, experience,
and talent, to the position of Executive Vice President and Chief Operating Officer 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
his 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 $250,000 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



2









 






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 applicable plan (except to the extent deferred under Section
5(d)).



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.



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          In furtherance of and not in limitation of the foregoing, during the Term:




	 	(i)	 	Executive will participate as Executive Vice President in
all executive and employee vacation and time-off programs;
	 
	 	(ii)	 	The Bank will provide Executive with coverage as
Executive 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, subject to meeting eligibility
requirements, be entitled to participate in the Supplemental Savings and
Retirement Plan (the “SERP”).






     (c) Acceleration of Awards Upon Termination Within Two Years After a Change in
Control. In the event of termination of the employment of Executive, other than for Cause,
simultaneously with or within two years after 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. The time and form of payment of such equity-based
awards shall be governed by the plans and programs and the agreements and other documents
pursuant to which such equity-based awards were granted.




     (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.




     (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 and the provisions of Section 7(g) of this Agreement.



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     (g) Limitations Under Code Section 409A. Anything in this Section 5 to the
contrary notwithstanding, with respect to any payment otherwise required hereunder, in the event
of any delay in the payment date as a result of Section 7(g) of this Agreement (relating to the
six-month delay in payment of certain benefits to Specified Employees as required by Section 409A
of the Code), the Bank will adjust the payment to reflect the deferred payment date by
multiplying the payment by the product of the six-month CMT Treasury Bill annualized yield rate
as published by the U.S. Treasury for the date on which such payment would have been made but for
the delay multiplied by a fraction, the numerator of which is the number of days by which such
payment was delayed and the denominator of which is 365. The Bank will pay the adjusted payment
at the beginning of the seventh month following Executive’s termination of employment.
Notwithstanding the foregoing, if calculation of the amounts payable by such payment date is not
administratively practicable due to events beyond the control of Executive (or Executive’s
beneficiary or estate) and for reasons that are commercially reasonable, payment will be made as
soon as administratively practicable in compliance with Section 409A of the Code and the
Regulations. In the event of Executive’s death during such six-month period, payment will be made
in the payroll period next following the payroll period in which Executive’s death occurs.



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 at
the time specified in Section 6(d), 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, a lump
sum 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 his
employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the
performance year and paid at the time specified in the applicable plan),
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);




5









 












	 	(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
	 
	 	(v)	 	Upon Retirement, if Executive is not eligible for retiree
coverage under the Bank’s health plan (the “Health Plan”) or Medicare and
provided that Executive shall be in compliance 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 total cost of medical coverage
under the Health Plan that would have been incurred by both Executive and
the Bank on behalf of Executive (and his spouse and eligible dependents, if
any, for whom coverage had been provided under the Health Plan immediately
prior to Executive’s Retirement) from the date of Executive’s Retirement
until Executive’s attainment of Social Security retirement age had Executive
remained employed by the Bank during such period, calculated on the
assumption that the cost of such coverage would remain unchanged from that
in effect for the year of Executive’s Retirement. Such lump sum amount
shall be calculated by an actuary selected by the Bank and paid in cash at
the time specified in Section 6(d). Such amount 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 at the time specified in Section 6(d), 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, a lump sum
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 his employment had not
terminated, based on performance actually achieved in that year (determined
by the Committee following completion of the performance year and paid at
the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days




6









 












	 	 	 	Executive was employed in the year of his death and the denominator of which is the total number of days in the
year of death;






	 	(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
and in accordance with Section 7(g) of this Agreement 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 at the time
specified in Section 6(d), 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, a lump
sum 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 his
employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the
performance year and paid at the time specified in the applicable plan),
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;






7











 






	 	(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;
	 
	 	(vi)	 	Upon termination of Executive’s employment due to
Disability, if Executive is not eligible for retiree coverage under the
Bank’s Health Plan or Medicare and provided that Executive shall be in
compliance 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 total cost of medical coverage under the Health Plan that
would have been incurred by both Executive and the Bank on behalf of
Executive (and his spouse and eligible dependents, if any, for whom coverage
had been provided under the Health Plan immediately prior to Executive’s
termination of employment) from the date of Executive’s termination of
employment until Executive’s attainment of Social Security retirement age
had Executive remained employed by the Bank during such period, calculated
on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such
lump sum amount shall be calculated by an actuary selected by the Bank and
paid in cash at the time specified in Section 6(d). Such amount 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, provided that Executive shall be in compliance
with the conditions set forth in Section 10, the Bank shall pay to Executive
at the time specified in Section 6(d) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) 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




8









 












	 	 	 	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
(B) 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 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 his 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
in the payroll period next following the payroll period in which termination of employment
occurs; subject, however, to the provisions of Section 7(g) of this Agreement relating to the
six-month delay in payment of certain benefits to Specified Employees as required by Section 409A
of the Code. Any payment or reimbursement due within such six-month period shall be delayed to
the end of such six-month period as required by Section 7(g). The Bank will adjust the payment or
reimbursement to reflect the deferred payment date by multiplying the payment by the product of
the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury for the
date on which such payment or reimbursement would have been made but for the delay multiplied by
a fraction, the numerator of which is the number of days by which such payment or reimbursement
was delayed and the denominator of which is 365. In the event of a reimbursement that is required
by other terms of this Agreement to be made on an after-tax basis which is subject to the
six-month delay in payment as described in Section 7(g) of this Agreement, the reimbursement as
adjusted in accordance with this Section 6(d) to reflect the deferred payment date shall be paid
to Executive on an after-tax and fully grossed-up basis so that Executive is held economically
harmless. The Bank will pay the adjusted payment or reimbursement at the beginning of the seventh
month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by such payment date is not administratively practicable due
to events beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons
that are commercially reasonable, payment will be made as soon as administratively practicable in
compliance with Section 409A of the Code and the Regulations. In the event of Executive’s death
during such six-month period, payment will be made in the payroll period next following the
payroll period in which Executive’s death occurs.



9









 





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 at the time specified in Section 7(g), 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
his 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 at the time specified in Section 7(g), 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




10









 












	 	 	 	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. 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 at the time specified in Section
7(g), and Executive will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to one and one-half
(1.5) 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
a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under
Section 4(b) for the year in which Executive’s employment terminated, a lump
sum 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




11









 












	 	 	 	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;
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not
eligible for retiree coverage under the Bank’s Health Plan or Medicare and
provided that Executive shall be in compliance 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 total cost of medical coverage
under the Health Plan that would have been incurred by both Executive and
the Bank on behalf of Executive (and his spouse and eligible dependents, if
any, for whom coverage had been provided under the Health Plan immediately
prior to Executive’s termination of employment) from the date of Executive’s
termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain
unchanged from that in effect for the year of Executive’s termination of
employment. Such lump sum amount shall be calculated by an actuary selected
by the Bank and paid in cash at the time specified in Section 7(g). Such
amount 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, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive at the time specified in Section 7(g) a lump sum
amount equal on an after-tax basis to the present value of the sum of (A)
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




12









 












	 	 	 	that
the cost of such coverage would remain unchanged from that in effect for
the year in which Executive’s termination occurred; and (B) 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 his 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 his
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 at the time specified in Section 7(g), and Executive
will be entitled to receive, the following:




	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to one and one-half
(1.5) 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 a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under
Section 4(b) for the year in which Executive’s employment terminated, a lump
sum 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




13









 












	 	 	 	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
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not
eligible for retiree coverage under the Bank’s Health Plan or Medicare and
provided that Executive shall be in compliance 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 total cost of medical coverage
under the Health Plan that would have been incurred by both Executive and
the Bank on behalf of Executive (and his spouse and eligible dependents, if
any, for whom coverage had been provided under the Health Plan immediately
prior to Executive’s termination of employment) from the date of Executive’s
termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain
unchanged from that in effect for the year of Executive’s termination of
employment. Such lump sum amount shall be calculated by an actuary selected
by the Bank and paid in cash at the time specified in Section 7(g). Such
amount 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, provided that Executive
shall be in compliance with the conditions set
forth in Section 10, the Bank shall pay to Executive at the time 




14










 













	 	 	 	specified
in Section 7(g) a lump sum amount equal on an after-tax basis to the
present value of the sum of (A) 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 (B) 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. 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 at the time specified in Section
7(g), 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




15









 












	 		 	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 in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under
Section 4(b) for the year in which Executive’s employment terminated, a lump
sum 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
Effective Date 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)	 	Upon termination of Executive’s employment hereunder, if Executive is not
eligible for retiree coverage under the Bank’s Health Plan or Medicare and
provided that Executive shall be in compliance with the
conditions set forth in Section 10, the Bank shall pay to Executive a




16









 












	 	 	 	lump sum amount equal on an after-tax basis to the present value of the total
cost of medical coverage under the Health Plan that would have been
incurred by both Executive and the Bank on behalf of Executive (and his
spouse and eligible dependents, if any, for whom coverage had been
provided under the Health Plan immediately prior to Executive’s
termination of employment) from the date of Executive’s termination of
employment until the third anniversary of such date, calculated on the
assumption that the cost of such coverage would remain unchanged from that
in effect for the year of Executive’s termination of employment. Such
lump sum amount shall be calculated by an actuary selected by the Bank and
paid in cash at the time specified in Section 7(g). Such amount 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, provided that Executive shall be in
compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal
on an after-tax basis to the present value of the sum of (A) 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 (B) 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 his 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 his 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 at the time specified in Section 7(g), and Executive will be entitled to receive, the
following:




17











 






	 	(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 in a lump
sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under
Section 4(b) for the year in which Executive’s employment terminated, a lump
sum 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
Effective Date 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;





18









 











	 	(vii)	 	All rights under the SERP shall be governed by such
plan; and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is
not eligible for retiree coverage under the Bank’s Health Plan or Medicare
and provided that Executive shall be in compliance 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 total cost of medical
coverage under the Health Plan that would have been incurred by both
Executive and the Bank on behalf of Executive (and his spouse and eligible
dependents, if any, for whom coverage had been provided under the Health
Plan immediately prior to Executive’s termination of employment) from the
date of Executive’s termination of employment until the third anniversary of
such date, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year of Executive’s termination
of employment. Such lump sum amount shall be calculated by an actuary
selected by the Bank and paid in cash at the time specified in Section 7(g).
Such amount 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, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive at the time specified in Section 7(g) a lump sum
amount equal on an after-tax basis to the present value of the sum of (A)
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 (B)
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(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).




19









 









	 	(g)	 	Other Terms Relating to Certain Terminations of Employment; Reimbursements;
Section 409A Exemptions; Delayed Payments Under Section 409A.






	 	(i)	 	Whether the Executive has had a termination of
employment shall be determined on the basis of all relevant facts and
circumstances and with reference to Regulations Section 1.409A-1(h).
	 
	 	(ii)	 	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).
	 
	 	(iii)	 	Amounts payable under this Section 7 following
Executive’s termination of employment, other than those expressly payable on
a deferred basis, will be paid in the payroll period next following the
payroll period in which termination of employment occurs except as otherwise
provided in this Section 7.
	 
	 	(iv)	 	Any reimbursements made or in-kind benefits provided
under this Agreement shall be subject to the following conditions:






	 	(A)	 	the amount of expenses eligible for
reimbursement or in-kind benefits provided in any one taxable year of
Executive shall not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided in any other taxable year
of Executive;
	 
	 	(B)	 	the reimbursement of any expense shall
be made each calendar quarter not later than the last day of
Executive’s taxable year following Executive’s taxable year in which
the expense was incurred (unless this Agreement specifically provides
for reimbursement by an earlier date);
	 
	 	(C)	 	the right to reimbursement of an expense or
payment of an in-kind benefit shall not be subject to liquidation or
exchange for another benefit.






	 	 	 	In addition, with respect to any
reimbursement made under Section 6(b)(v) for expenses for medical
coverage purchased by Executive’s spouse, any such reimbursement
made during the period of time Executive’s spouse or dependents
would be entitled to continuation coverage under the Bank’s Health
Plan pursuant to COBRA if Executive’s spouse or dependents had
elected such coverage and paid




20









 












	 	 	 	the applicable premiums shall be
exempt from Section 409A of the
Code and the six-month delay in payment described hereinbelow pursuant to
Section 1.409A-1(b)(9)(v)(B) of the Regulations.
	 
	 	(v)	 	Executive’s right to reimbursements under this
Agreement shall be treated as a right to a series of separate payments under
Section 1.409A-2(b)(2)(iii) of the Regulations.
	 
	 	(vi)	 	Any tax gross-up payments made under this Agreement,
within the meaning provided by Section 1.409A-3(i)(1)(v) of the Regulations,
shall be made by the end of Executive’s taxable year next following
Executive’s taxable year in which he remits the related taxes (unless this
Agreement specifically provides for payment by an earlier date).
	 
	 	(vii)	 	It is intended that payments made under this
Agreement due to Executive’s termination of employment which are paid on or
before the 15th day of the third month following the end of Executive’s
taxable year in which his termination of employment occurs shall be exempt
from compliance with Section 409A of the Code pursuant to the exemption for
short-term deferrals set forth in Section 1.409A-1(b)(4) of the Regulations
(the “Exempt Short-Term Deferral Payments”); and that payments under this
Agreement, other than Exempt Short-Term Deferral Payments, that are made on
or before the last day of the second taxable year following the taxable year
in which Executive terminates employment in an aggregate amount not
exceeding two times the lesser of: (A) the sum of Executive’s annualized
compensation based on his annual rate of pay for the taxable year preceding
the taxable year in which he terminates employment (adjusted for any
increase during that year that was expected to continue indefinitely if he
had not terminated employment); or (B) the maximum amount that may be taken
into account under a qualified plan pursuant to Section 401(a)(17) of the
Code for the year in which Executive terminates employment shall be exempt
from compliance with Section 409A of the Code pursuant to the exception for
payments under a separation pay plan as set forth in Section
1.409A-1(b)(9)(iii) of the Treasury Regulations. If, under the terms of
this Agreement, it is possible for a payment that is subject to Section 409A
to be made in two separate taxable years, payment shall be made in the later
taxable year.
	 
	 	(viii)	 	Anything in this Agreement to the contrary notwithstanding, payments
to be made under this Agreement upon termination of Executive’s employment
which are subject to Section 409A of the Code shall be delayed for six
months following such termination of employment if Executive is a Specified
Employee as defined in Section 8(g) on the date of his termination of
employment. Any payment or reimbursement due within such six-month period
shall be delayed to the end of such




21









 












	 	 	 	six-month period. The Bank will adjust
the payment or reimbursement to reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the six-month CMT
Treasury Bill
annualized yield rate as published by the U.S. Treasury for the date on
which such payment or reimbursement would have been made but for the delay
multiplied by a fraction, the numerator of which is the number of days by
which such payment or reimbursement was delayed and the denominator of
which is 365. In the event of a reimbursement that is required by other
terms of this Agreement to be made on an after-tax basis and which is
subject to the six-month delay provided herein, the reimbursement as
adjusted in accordance with this Section 7(g) to reflect the deferred
payment date shall be paid to Executive on an after-tax and fully
grossed-up basis so that Executive is held economically harmless. The Bank
will pay the adjusted payment or reimbursement at the beginning of the
seventh month following Executive’s termination of employment.
Notwithstanding the foregoing, if calculation of the amounts payable by
any payment date specified in this Section 7(g) is not administratively
practicable due to events beyond the control of Executive (or Executive’s
beneficiary or estate) and for reasons that are commercially reasonable,
payment will be made as soon as administratively practicable in compliance
with Section 409A of the Code and the Regulations thereunder. In the
event of Executive’s death during such six-month period, payment will be
made in the payroll period next following the payroll period in which
Executive’s death occurs.






	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 his 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 his 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.




22









 










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 his 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.





	 	(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 50% 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)




23









 












	 	 	 	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 50% 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:




	 	(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 a lump sum at the time specified in Section 6(d) or 7(g) as the
case may be;
	 
	 	(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, and payable in a lump sum in accordance with Section 7(g).





     (d) “Disability.” For purposes of this Agreement, “Disability” shall have the
meaning ascribed to it by Section 409A of the Code and the Regulations.



24









 





     (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
provided that Executive shall have given notice of such circumstance(s) to the Bank within a
period not to exceed 90 days of the initial
existence of such circumstance(s) and the Bank shall not have remedied such circumstance(s)
within 30 days after receipt of such notice:




	 	(i)	 	the assignment to Executive of duties materially
inconsistent with Executive’s position and status as Executive Vice
President and Chief Operating Officer, or an alteration, materially adverse
to Executive, in Executive’s position and status as Executive Vice President
and Chief Operating Officer 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 Executive Vice
President and Chief Operating Officer (excluding changes in assignments
permitted under Section 3); 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;
	 
	 	(ii)	 	(A) a material 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 material conformity
with Section 4 hereof, (C) a change in compensation or benefits not in
material conformity with Section 5, or (D) a material 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 his 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;
	 
	 	(iv)	 	the failure by the Bank to pay to Executive any
material portion of Executive’s compensation or to pay to Executive any
material portion of an installment of deferred compensation under any
deferred compensation program of the Bank within a reasonable time after the
date such compensation is due;




25









 












	 	(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; or
	 
	 	(vii)	 	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.





     (g) “Specified Employee.” For purposes of this Agreement, a “Specified
Employee” shall mean an employee of the Bank, at a time when any stock of the Company is
publicly traded on an established securities market or otherwise, who satisfies the requirements
for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code
without regard to Section 416(i)(5) of the Code at any time during a calendar year, in which case
such employee shall be considered a Specified Employee for the twelve-month period beginning on
the first day of the fourth month immediately following the end of such calendar year. In the
event of any corporate spinoff or merger, the determination of which employees meet the
requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section
416(i)(5) of the Code for any calendar year shall be determined in accordance with Regulations
Section 1.409A-1(i)(6).



26









 




9. Limitation on Change in Control Payments.




     In the event that:




     (a) the aggregate payments or benefits to be made to you pursuant to this Agreement,
together with other payments and benefits which you have a right to receive from the Bank, which
are deemed to be parachute payments as defined in Section 280G of the Code (the “Termination
Benefits”), would be deemed to include an “excess parachute payment” under Section 280G of the
Code; and




     (b) if such Termination Benefits were reduced to an amount (the “Non-Triggering
Amount”), the value of which is one dollar ($1.00) less than an amount equal to three times your
“base amount,” as determined in accordance with said Section 280G, and the Non-Triggering Amount
less the product of the marginal rate of any applicable state and federal income tax and the
Non-Triggering Amount would be greater than the aggregate value of the Termination Benefits
(without such reduction) minus (A) the amount of tax required to be paid by you by Section 4999
of the Code and further minus (B) the product of the Termination Benefits and the marginal rate
of any applicable state and federal income tax,


then the Termination Benefits shall be reduced to the Non-Triggering Amount. The reduction
required hereby among the Termination Benefits shall be allocated to the payments and benefits set
forth in Sections 7(c), 7(d), 7(e), and 7(f), as applicable, in the following order until the
reduction is fully accomplished: Subsection (ii), (iii) and (viii) of Sections 7(c), 7(d), 7(e),
and 7(f), as applicable. If, however, the reduction cannot be fully accomplished after using the
order in the prior sentence, the reduction shall be allocated to any other remaining payments or
benefits at the Bank’s discretion.



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 his 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



27









 






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.




     (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 Executive, on
an after tax basis each calendar quarter, for all expenses actually incurred in connection with
his provision of testimony or assistance in accordance with the provisions of Section 7(g) of
this Agreement but not later than the last day of the year in which the expense was incurred.




     (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.



28









 






     (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. The Bank will
provide Executive with a copy of such release simultaneously with or as soon as administratively
practicable following the delivery of the notice of termination provided in Sections 6 and 7 of
this Agreement, but not later than 21 days before (45 days before if Executive’s termination is
part of an exit incentive or other employment termination program offered to a group or class of
employees) Executive’s termination of employment. Executive shall deliver the executed release
to the Bank eight days before the date provided in Section 7(g) of this Agreement for the payment
of the termination payments and benefits payable under Sections 6 and 7 of this Agreement.




     (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
his 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.




     (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, Executive
shall reimburse the Bank for (i) any bonus or other incentive based or equity-based



29









 






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. Anything in this Agreement to the contrary notwithstanding, the
terms of this Agreement shall be interpreted and applied in a manner consistent with the
requirements of Section 409A of the Code and the Regulations so as not to subject Executive to
the payment of any tax penalty or interest which may be imposed by Section 409A of the Code and
the Bank shall have no right to accelerate or make any payment under this Agreement except to the
extent such action would not subject Executive to the payment of any tax penalty or interest
under Section 409A of the Code. If all or a portion of the benefits and payments provided under
this Agreement constitute taxable income to Executive for any taxable year that is prior to the
taxable year in which such payments and/or benefits are to be paid to Executive as a result of
the Agreement’s failure to comply with the requirements of Section 409A of the Code and the
Regulations, the applicable payment or benefit shall be paid immediately to Executive to the
extent such payment or benefit is required to be included in income. If Executive becomes
subject to any tax penalty or interest under Section 409A of the Code by reason of this
Agreement, the Bank shall reimburse Executive on a fully grossed-up and after-tax basis for any
such tax penalty or interest (so that Executive is held economically harmless) ten business days
prior to the date such tax penalty or interest is due and payable by Executive to the government.



30









 






     (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. Any such payment or reimbursement shall be made on an after-tax basis each calendar
quarter for all costs and expenses actually incurred as provided in this Section 11(b) and in
accordance with the provisions of Section 7(g) of this Agreement, but not later than the last day
of the year in which the expense was incurred.



     (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.
	 
	 	(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




31









 












	 	 	 	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) in accordance with
the provisions of Section 7(g) of this Agreement, but not later than the
last day of the year in which the expense was incurred. 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, except as otherwise
provided in Sections 5(g), 6(d) and 7(g) of this Agreement (concerning interest payable with
respect to certain delayed payments that are subject to Section 409A of the Code).


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




32












 




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.



     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

Attn: Chief Executive Officer



If to Executive:



Marino J. Santarelli

210B 54th Street

Virginia Beach, VA 23451





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     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.



     (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.



     (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 his receipt of funds as a result of his 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, his 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



34









 




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 and in accordance with Section 7(g); 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 date
of execution of this Agreement.







35









 








     IN WITNESS WHEREOF, Executive has hereunto set his hand and the Bank and the Company have each
caused this instrument to be duly executed this18th day of July, 2011.



	 	 	 	 	 
	 	ROCKVILLE BANK

 	 
	 	By:  	/s/ Richard J. Trachimowicz
 	 
	 	 	Name:  	Richard J. Trachimowicz 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	ROCKVILLE FINANCIAL, INC.

 	 
	 	By:  	/s/ Richard J. Trachimowicz
 	 
	 	 	Name:  	Richard J. Trachimowicz 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	 	 
	 	                       /s/ Marino J. Santarelli
 	 
	 	Marino J. Santarelli 	 
	 	 	 
	 






36









 








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 as
amended and restated as of January 1, 2011 (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 (iv) 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



     vi. Your agreement to the terms set forth above is voluntary.



	 	 	 	 	 
	Name:

	 	Marino J. Santarelli	 	 
	Signature:

	 	/s/Marino J. Santarelli
 

	 	Date: July 18, 2011 
	 
	 	 	 	 
	Received By:

	 	/s/Richard J. Trachimowicz
 

	 	Date: July 18, 2011 







2