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                                                                    Exhibit 10.1

                              EMPLOYMENT AGREEMENT

      EMPLOYMENT AGREEMENT dated as of January 30, 1998 between THE DIME SAVINGS
BANK OF NEW YORK, FSB (the "Bank"), a federal stock savings bank having its
principal executive offices at 589 Fifth Avenue, New York, New York 10017, and
LAWRENCE J. TOAL (the "Officer").

                                   -----------

      A. The Bank is desirous of employing the Officer upon the terms and
conditions set forth in this Agreement.

      B. The Officer is desirous of being employed by the Bank upon the terms
and conditions set forth in this Agreement.

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

      Therefore, the Bank and the Officer, intending to be legally bound, agree
as follows:

            1. Employment. Subject to the terms and conditions of this
Agreement, the Bank hereby employs the Officer, and the Officer hereby accepts
such employment.

            2. Term of Employment. (a) The initial term of the Officer's
employment under this Agreement shall be deemed to have commenced on the date of
this Agreement and shall continue until March 1, 2001. This Agreement shall be
renewed automatically for one additional year on and on March 1, 1999 and shall
be further renewed on March 1, 2000 to continue until the date of the Officer's
65th birthday, unless (i) the Officer or the Bank gives contrary written notice
to the other, at least 20 days prior to any such renewal date, or (ii) this
Agreement has been otherwise terminated in accordance with its provisions. The
Board of Directors of the Bank shall,
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no later than the last day in each such year on which the Bank may give the
Officer notice of non-renewal pursuant to the immediately preceding sentence,
review and determine whether the Bank shall give the Officer notice of such
non-renewal with respect to the March 1 renewal date in such year; provided,
however, that nothing in this sentence shall be construed as limiting the Bank's
ability to give notice of non-renewal pursuant to the immediately preceding
sentence at any other time. A determination by the Board of Directors of the
Bank in any year that the Bank shall not give notice of non-renewal with respect
to the March 1 renewal date in such year shall be deemed to be the Board's
approval of the renewal of this Agreement on such renewal date. Except as
otherwise provided in Section 12(c)(ii) of this Agreement, neither the giving of
notice of non-renewal pursuant to clause (i) of the second sentence of this
Section 2(a), nor the subsequent expiration of the Term of this Agreement as a
result of the giving of such notice, shall be deemed to be a termination of the
Officer's employment under this Agreement. (As used in this Agreement, (i)
"Term" shall mean the initial term and any renewal term of this Agreement and
(ii) "remaining Term" shall mean the balance of the Term remaining at a
specified time without regard to potential future renewals under the renewal
provisions of this Section 2(a)).

            (b) The Officer's employment may be terminated during the Term of
this Agreement by the Bank or the Officer in the manner specified in this
Agreement. Any such termination of employment shall result in a termination of
this Agreement on the Effective Date of Termination (as defined in Section 14);
provided that, notwithstanding anything to the contrary in the foregoing, any
right of the Officer to any payments or benefits as a result of a termination of
the Officer's employment (as provided in this Agreement) shall survive the
termination of this Agreement.


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            3. Offices. During the Term, the Officer shall serve as President,
Chief Executive Officer and Chief Operating Officer of Dime Bancorp, Inc. (the
"Company"), and as Chairman of the Board, President, Chief Executive Officer and
Chief Operating Officer of the Bank, and as a director of each of the Company
and the Bank. In addition, during the Term the Officer shall serve, for the
period for which he may from time to time be elected, as an officer or director
of any subsidiary or affiliate of the Company.

            4. Duties. As Chairman of the Board of the Bank, and as President,
Chief Executive Officer and Chief Operating Officer of the Company and the Bank,
the Officer shall perform such duties as are reasonable and customary for a
chief executive officer and such other duties as are set forth in the Bylaws of
the Company and the Bank or as may be agreed to from time to time by the
Officer. During the Term (except for periods of illness and vacation),
substantially all of the Officer's business time, attention, skill and efforts
shall be devoted to the performance of the Officer's duties under this
Agreement. Notwithstanding the foregoing, the Officer may (a) continue to serve
on the boards of directors of, and hold any other offices or positions in,
companies or organizations previously approved by the Board of Directors of the
Company or the Bank and (b) with the approval of the Board of Directors of the
Company, from time to time to serve on the board of directors of, and hold any
other offices or positions in, companies or organizations engaged in activities
that present no conflict of interest with the Company or the Bank and that will
not materially and adversely affect the performance of his obligations under
this Agreement.


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            5. Compensation; Certain Benefits; Reimbursement. (a) The annual
salary of the Officer during the Term shall be $750,000 which shall, subject to
the provisions of Section 5(e), be payable in installments in accordance with
the prevailing general payroll practice of the Bank as it may exist from time to
time. The Board of Directors of the Bank (or a duly authorized committee of the
Board) may increase the Officer's annual salary from time to time. In no event
shall the Officer's annual salary be decreased below his annual salary specified
in the first sentence of this Section 5(a) plus all subsequent increases in his
annual salary. As used in this Agreement, "annual salary" shall mean, at any
time, the annual rate of salary then payable to the Officer pursuant to this
Section 5(a) (before deduction of any amounts deferred under any deferred
compensation plan of the Bank, any voluntary contributions to a 401(k) plan of
the Bank, or any other deductions from income) and shall be exclusive of
bonuses, incentive compensation or other compensation or benefits paid to or
accrued for the Officer other than pursuant to this Section 5(a).

            (b) During the Term, the Bank shall (i) at the Bank's expense,
provide the Officer with the exclusive use of a Bank-owned or Bank-leased
automobile (at any time not to be more than three years old), (ii) employ for
the exclusive use of the Officer a full-time driver for such automobile, (iii)
reimburse the Officer for the annual (or less frequent) membership fees for two
country, social, business, luncheon or fitness clubs and (iv) reimburse the
Officer for tax planning and financial consulting services with a provider
selected by the Officer in an amount not to exceed $15,000 per annum.


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            (c) The Officer shall not have or acquire by virtue of this
Agreement any rights to participate in, or receive benefits with respect to, any
compensation or benefit plan or program of the Bank, except (i) that while
employed by the Bank, the Officer shall be eligible to participate in an annual
cash bonus program (with a target bonus (the "Target Bonus") of at least 50% of
the Officer's annual salary or such higher target bonus amount as the Board of
Directors of the Bank or the Company may establish from time to time) and a
long-term incentive program on such terms and conditions, and subject to such
performance goals, as may from time to time be adopted by the Company or the
Bank, (ii) that while employed by the Bank, the Officer may participate in such
plans or programs to the extent provided in such plans and programs and on the
same basis as if the Officer's employment were not subject to the terms and
conditions of this Agreement, or (iii) as otherwise specifically provided in
this Agreement.

            (d) The Officer is authorized to incur reasonable expenses for
promoting the business of the Company and the Bank and their subsidiaries and
affiliates, including expenses for travel, entertainment and similar items. The
Bank shall pay, or reimburse the Officer for, all such expenses upon
presentation by the Officer from time to time of an itemized account (in
reasonable detail) of such expenditures.

            (e) Notwithstanding anything to the contrary in the foregoing
provisions, the payment of any amounts that would otherwise be payable to the
Officer but which would be in excess of the amount which the Company or the Bank
could deduct for federal income tax purposes if then paid on account of the
operation of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), shall be deferred to the extent such deferral is required pursuant
to a policy adopted by the Compensation Committee of the Company or the Bank
and,


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to the extent so deferred, shall be payable pursuant to the relevant terms of
the Dime Bancorp, Inc. Voluntary Deferred Compensation Plan; provided, however,
that, if a Change in Control (as defined in Section 12(a)) has occurred,
deferral of amounts payable hereunder to the Officer on or after the date of
such Change in Control will only be required if and to the extent such policy in
effect immediately prior to the Change in Control (without taking into
consideration any changes therein made in contemplation of the occurrence of the
Change in Control) requires or would have required such deferral.

            6. Disability. (a) The Bank may terminate the Officer's employment
under this Agreement for "permanent disability" if (i) the Officer shall become
physically or mentally disabled or incapacitated to the extent that the Officer
has been absent from the Officer's duties with the Bank on account of such
disabilities or incapacitation, as determined in a manner consistent with the
policy which applies generally to employees of the Bank, on a full-time basis
for a period of six consecutive months, and (ii) within 30 days after written
notice of proposed termination for permanent disability is given by the Bank to
the Officer, the Officer shall not have returned to full-time performance of the
Officer's duties.

            (b) In the event of termination for "permanent disability," the Bank
shall provide the Officer with a benefit equal to (i) his annual salary (as in
effect immediately prior to the occurrence of such disability) for a period
commencing on the Effective Date of Termination and ending on the day
immediately prior to the first anniversary thereof and (ii) 75% of his annual
salary (as in effect immediately prior to the occurrence of such disability)
from the date of the first anniversary of the Effective Date of Termination and
continuing through the duration of his disability (but in no event beyond the
Officer's attainment of age 65). Notwithstanding the first


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sentence of this Section 6(b), any such payment shall terminate upon the
earliest to occur of (A) the date the Officer returns to full-time employment
with the Bank, (B) the date of the Officer's full-time employment by another
employer (including full-time service as a sole proprietor or owner of an
unincorporated business), or (C) the date of the Officer's death. In the event
of termination for "permanent disability," the Bank also shall continue to
provide until the Officer's death or, if earlier, the first to occur of (aa) the
date the Officer returns to full-time employment with the Bank, (bb) the date of
the Officer's full-time employment by another employer, or (cc) the date of the
Officer's attainment of age 65, all life, medical and dental insurance coverage
as is maintained by the Bank for full-time employees, provided that the Officer
shall continue to pay all amounts in respect of such coverage that other
employees receiving the same level of coverage are required to pay. In the event
of a termination of the Officer's employment for "permanent disability" at any
time during the remaining Term in effect at the time of a Change in Control (as
defined in Section 12(a)), the provisions of Section 12 shall apply in lieu of
the provisions of this Section 6(b).

            (c) There shall be no reduction in the compensation payable to the
Officer or the Officer's other rights under this Agreement during any period
when the Officer is incapable of performing some or all of the Officer's duties
by reason of temporary or partial disability.

            (d) The obligations of the Bank to provide the benefits described in
Section 6(b) may be satisfied, in whole or in part, by payments under disability
insurance policies covering the Officer and obtained and maintained in force
(with respect to the benefit described in the first sentence of Section 6(b)
solely at the Company's expense) by the Company. In connection therewith, the
Bank may require the Officer to elect the maximum disability insurance coverage


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available under the Bank's or the Company's group disability policy, provided
that the Bank shall pay on the Officer's behalf all amounts required to be paid
by the Officer as a result of such election. The Officer shall cooperate with
the Bank in all reasonable ways to obtain any such disability or key person
insurance coverage.

            7. Supplemental Executive Retirement Benefits. The Officer shall
participate in the Supplemental Executive Retirement Plan of the Company (the
"SERP") and shall have a "Pension Goal" under such plan of not less than 50%.
The Officer's benefits under the SERP shall vest no less quickly than in
accordance with the following formula:

<TABLE>
<CAPTION>
      Years of Service with
      the Company, the Bank
      or any subsidiary or
      affiliate of either such
      entity (or any predecessor
      of any such entities)                     Vesting Percentage
      --------------------------                ------------------
           <S>                                        <C>
            5                                         50%
            6                                         60%
            7                                         70%
            8                                         80%
            9                                         90%
            10                                       100%
</TABLE>

Any benefits provided under the SERP shall be in lieu of any supplemental
pension benefits provided pursuant to any previous employment agreement between
the Officer and the Bank. Notwithstanding the vesting schedule set forth above,
the Officer shall be fully vested in his benefit under the SERP in the event
that the Officer's employment is terminated at such time and upon such events as
would trigger a right to benefits pursuant to Sections 12(c)(i) or (c)(ii) in
connection with a Change in Control (as defined in Section 12(a)), unless such
termination is for "cause" (as defined in Section 9(b))). In the event of any
other involuntary termination of the


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Officer's employment by the Bank during the Term other than a termination for
"cause" (as defined in Section 9(b)), the Officer shall receive service credit
for purposes of vesting in the SERP benefit as if he had remained employed
through the end of the Term. On and after any Change in Control, to the extent
not otherwise limited pursuant to Section 9(c)(i), the Officer shall be eligible
to be paid, under the SERP, a SERP benefit, to the extent vested, that is in no
event less than a benefit calculated based upon the amount of the Officer's
"Pension Goal" and "Average Compensation" and the otherwise applicable terms of
the SERP and this Agreement, each as determined immediately prior to the Change
in Control. In addition, in the event of any termination of employment from the
Bank during the Term that would trigger a right to benefits pursuant to Section
12(c)(i) or (c)(ii), or in the event of any other involuntary termination of the
Officer's employment by the Bank during the Term other than a termination for
cause (as defined in Section 9(b)), if it results in a greater benefit the SERP
benefit payable to the Officer shall be based upon a definition of "Average
Compensation" whereby, in applying the otherwise applicable provisions of the
Average Compensation definition under the SERP, the compensation of the Officer
is determined as if the Officer had continued service throughout the Term, and,
at the end of the Term, the Average Compensation under the SERP is then
determined. For these purposes, where such a modified Average Compensation
definition is to be utilized, the Officer shall be deemed to have continued to
earn base pay at the rate that applied as of the Effective Date of Termination
through the end of the Term. In addition, where such a modified Average
Compensation definition is to be utilized, the average of the bonuses paid with
respect to the two-year period prior to the Effective Date of Termination shall
be deemed to be earned with respect to each annual period from the Effective
Date of Termination through the end of the Term;


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provided, however, that if the Effective Date of Termination occurs in 1998, the
actual bonus amount paid with respect to 1997 shall be deemed to be earned with
respect to each year through the end of the Term instead of such average bonus
amount. Any enhanced benefits payable pursuant to the provisions of this Section
7 shall be payable to the Officer (or, as appropriate, his beneficiaries) at the
same time, and in the same manner, as other benefits payable with respect to the
Officer pursuant to the terms of the SERP.

            8. Death. In the event of the Officer's death during the Term, this
Agreement and all of the Bank's obligations under this Agreement shall terminate
(except as otherwise provided in this Section 8, Section 12(f) or with respect
to the obligations of the Bank under Section 7). In the event of the Officer's
death during the Term, the Bank shall, during the remainder of the life of the
Officer's surviving spouse, continue to provide such spouse the same level of
medical and dental insurance as is maintained from time to time by the Company
or the Bank for spouses of full-time employees (or, as appropriate, retirees) of
the Bank (or, in lieu of providing any such coverage, the Bank may pay such
spouse the cash equivalent of the cost of such coverage), provided that such
surviving spouse shall continue to pay any amounts in respect of such coverage
that is otherwise required to be paid by employees (or, as appropriate,
retirees) for such coverage and provided, further, that any such medical
coverage may be modified so that Medicare (or other governmental) coverage is
primary, with coverage provided by the Bank supplementary, to the extent
permitted by law.

            9. Termination by the Bank. (a) The Bank may terminate the Officer's
employment under this Agreement at any time by giving the Officer written notice
of such termination, provided that, except where termination is for "cause" (as
defined in Section 9(b)),


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such notice shall be provided at least 30 days prior to the Effective Date of
Termination. In the event of a termination by the Bank of the Officer's
employment, other than a termination for "cause" (as defined in Section 9(b)),
the Bank shall (subject to the provisions of Section 9(c)) (1) pay to the
Officer, as a severance payment for services previously rendered to the Company
and the Bank, a lump sum equal to two times the Officer's annual salary (as
defined in Section 5(a)) and (2) maintain, until the later to occur of (A) the
18-month anniversary of the Effective Date of Termination and (B) the end of the
remaining Term at the Effective Date of Termination, all life, medical and
dental insurance coverage as is maintained by the Bank for full-time employees
(or, in lieu of providing any such coverage, the Bank may pay the Officer the
cash equivalent of the cost of such coverage), provided that the Officer shall
continue to pay all amounts in respect of such coverage that other employees
receiving the same level of coverage are required to pay. If the Effective Date
of Termination by the Bank of the Officer's employment occurs at any time during
the remaining Term in effect at the time of a Change in Control, the provisions
of Section 12 shall apply in lieu of the provisions of the immediately preceding
sentence of this Section 9(a).

            (b) The Officer shall have no right to receive compensation or other
benefits under this Agreement for any period after the Effective Date of
Termination if the Officer's employment is terminated for "cause." As used in
this Agreement, "cause" shall mean the Officer's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform assigned duties (which failure continues
after written demand is delivered by the Bank to the Officer that specifically
identifies the manner in which the Bank believes the Officer is intentionally
failing to perform his assigned duties), willful violation of any


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law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order or material breach of any provision of this
Agreement.

            (c)(i) Notwithstanding any other provision of this Section 9 or of
Section 12, if at the Effective Date of Termination any statute, regulation,
order, agreement, or regulatory interpretation thereof that is valid and binding
upon the Bank (a "Regulatory Restriction") shall restrict, prohibit or limit the
amount of any payment or the provision of any benefit that the Bank would
otherwise be liable for under this Section 9 or under Section 12, then the
amount that the Bank shall pay to the Officer hereunder shall not exceed the
maximum amount permissible under such Regulatory Restriction; provided that, if
such Regulatory Restriction shall subsequently be rescinded, superseded, amended
or otherwise determined not to restrict, limit or prohibit payment by the Bank
of amounts otherwise due the Officer hereunder, then the Bank shall promptly
thereafter pay to such Officer any amounts (or the value of any benefit)
previously withheld from such Officer as a result of such Regulatory
Restriction.

            (ii) Notwithstanding any other provision of this Section 9 or
Section 12, in the event that any amount that is otherwise payable hereunder
other than on account of events described in Sections 12(c)(i) or 12(c)(ii)
following a Change in Control (as hereinafter defined) would be deemed to
constitute a parachute payment (a "Parachute Payment") within the meaning of
Section 280G of the Code, and if such Parachute Payment, when added to the other
payments which are deemed to constitute Parachute Payments, would otherwise
result in the imposition of an excise tax under Section 4999 of the Code, the
amounts payable hereunder (other than amounts payable pursuant to Section 7 or
otherwise payable on account of events described in Sections 12(c)(i) or
12(c)(ii) following a Change in Control) shall be reduced by the smallest


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amount necessary to avoid the imposition of such excise tax. Any such limitation
shall be applied to such compensation and benefit amounts, and in such order, as
the Bank shall determine in its sole discretion. References to the Code in this
Agreement shall be to the Code as presently in effect or to the corresponding
provisions of any succeeding law.

            (d) If the Officer's employment is proposed to be terminated by the
Bank (whether or not for "cause" (as defined in Section 9(b)), the Bank shall
deliver to the Officer a Notice of Termination (as defined in Section 14)
accompanied by a copy of a resolution duly adopted by the affirmative vote of
not less than a majority of the entire Board of Directors of the Bank at a
meeting called and held for that purpose (after reasonable notice to the Officer
and an opportunity for him, together with counsel, to be heard before the Board
of Directors), and if such termination is for cause it shall include a finding
that in the good faith opinion of the Board of Directors the Officer's conduct
constituted cause for termination and specifying the particulars thereof in
reasonable detail.

            (e) Upon the expiration of the Term on the Officer's 65th birthday
or the earlier expiration of the Term in accordance with the provisions of this
Agreement, the employment of the Officer hereunder shall terminate and the
Officer shall not be entitled to any additional compensation or benefits as a
result of such expiration pursuant to this Section 9 or Section 12 except as
otherwise expressly provided by Section 12(c)(ii).

            10. Voluntary Termination by the Officer. The Officer shall have the
right to terminate the Officer's employment under this Agreement at any time
upon at least 60 but not more than 90 days' prior written notice to the Bank (an
"Officer's Termination Notice"). If this Agreement is terminated pursuant to the
immediately preceding sentence, all of the Bank's


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obligations under this Agreement shall terminate and the Officer shall not be
entitled to any compensation or benefits after the Effective Date of
Termination, except to the extent provided in Section 7 and, as applicable,
Section 12.

            11. Additional Termination and Suspension Provisions. (a) If the
Officer is removed and/or permanently prohibited from participating in the
conduct of the Bank's affairs by an order issued under Section 8(e)(3) or (g)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) or (g)(1)), all
obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the parties shall not be affected.

            (b) If the Bank is in default (as defined in Section 3(x)(1) of the
Federal Deposit Insurance Act), all obligations under this Agreement shall
terminate as of the date of default, but this paragraph shall not affect any
vested rights of the parties.

            (c) All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the Bank, (i) by the Director of Thrift Supervision
or his or her designee (the "Director"), at the time the Federal Deposit
Insurance Corporation enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the Federal
Deposit Insurance Act; or (ii) by the Director, at the time the Director
approves a supervisory merger to resolve problems related to operation of the
Bank or when the Bank is determined by the Director to be in an unsafe or
unsound condition. Any rights of the parties that have already vested, however,
shall not be affected by such action.

            (d) If the Officer is suspended and/or temporarily prohibited from
participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal


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Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)), the Bank's obligations
under this Agreement shall be suspended as of the date of service unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (a) pay the Officer all or part of the compensation
withheld while its contract obligations were suspended and (b) reinstate (in
whole or in part) any of its obligations which were suspended.

            (e) The provisions of paragraphs (a) through (d) of this Section 11
are required to be set forth in this Agreement by regulations applicable to the
Bank on the date of this Agreement. If any such regulation shall hereafter be
amended or modified, or if any new regulation applicable to the Bank and
effective after the date of this Agreement shall require the inclusion in this
Agreement of a provision not presently included in this Agreement, then the
foregoing provisions of paragraphs (a) through (d) of this Section 11 shall be
deemed amended to the extent necessary to give effect in this Agreement to any
such amended, modified or new regulation.

            12. Change in Control. (a) As used in this Agreement, a "Change in
Control" shall be deemed to have occurred if the event set forth in any one of
the following paragraphs shall have occurred:

            (I) any Person is or becomes the Beneficial Owner, directly or
      indirectly, of securities of the Company (not including in the securities
      beneficially owned by such Person any securities acquired directly from
      the Company or its Affiliates) representing 35% or more of the combined
      voting power of the Company's then outstanding securities; or


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            (II) the following individuals cease for any reason to constitute a
      majority of the number of directors then serving as directors of the
      Company: individuals who, on July 24, 1997, constitute the Board of
      Directors of the Company and any new director (other than a director whose
      initial assumption of office is in connection with the settlement of an
      actual or threatened election contest, including but not limited to a
      consent solicitation, relating to the election of directors of the
      Company) whose appointment or election by the Board of Directors of the
      Company or nomination for election by the Company's stockholders was
      approved or recommended by a vote of at least two-thirds (2/3) of the
      directors then still in office who either were directors on July 24, 1997
      or whose appointment, election or nomination for election was previously
      so approved or recommended; or

            (III) there is consummated a merger or consolidation of the Company
      or any direct or indirect subsidiary of the Company with any other
      corporation or entity, other than (i) a merger or consolidation which
      would result in the voting securities of the Company outstanding
      immediately prior to such merger or consolidation continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving entity or any Parent thereof), in combination
      with the ownership of any trustee or other fiduciary holding securities
      under an employee benefit plan of the Company or any subsidiary of the
      Company, at least 65% of the combined voting power of the securities of
      the Company, such surviving entity or any Parent thereof outstanding
      immediately after such merger or consolidation or (ii) a merger or
      consolidation effected solely to implement a recapitalization of the
      Company or the Bank (or similar transaction)


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      in which no Person is or becomes the Beneficial Owner, directly or
      indirectly, of securities of the Company or the Bank (not including in the
      securities beneficially owned by such Person any securities acquired
      directly from the Company or its Affiliates) representing 35% or more of
      the combined voting power of the Company's or the Bank's then outstanding
      securities; or

            (IV) the stockholders of the Company or the Bank approve a plan of
      complete liquidation or dissolution of the Company or the Bank,
      respectively, or there is consummated a sale or disposition by the Company
      or any of its subsidiaries of any assets which individually or as part of
      a series of related transactions constitute all or substantially all of
      the Company's consolidated assets (provided that, for these purposes, a
      sale of all or substantially all of the voting securities of the Bank or a
      Parent of the Bank shall be deemed to constitute a sale of substantially
      all of the Company's consolidated assets), other than any such sale or
      disposition to an entity at least 65% of the combined voting power of the
      voting securities of which are owned by stockholders of the Company in
      substantially the same proportions as their ownership of the voting
      securities of the Company immediately prior to such sale or disposition;
      or

            (V) the execution of a binding agreement that if consummated would
      result in a Change in Control of a type specified in clause (I) or (III)
      of this Section 12(a) (an "Acquisition Agreement") or of a binding
      agreement for the sale or disposition of assets that, if consummated,
      would result in a Change in Control of a type specified in clause (IV) of
      this Section 12(a) (an "Asset Sale Agreement") or the adoption by the
      Board of Directors of the Company or the Bank of a plan of complete
      liquidation or dissolution of


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      the Company or the Bank that, if consummated, would result in a Change in
      Control of a type specified in clause (IV) of this Section 12(a) (a "Plan
      of Liquidation"), provided however, that a Change in Control of the type
      specified in this clause (V) shall not be deemed to exist or have occurred
      as a result of the execution of such Acquisition Agreement or Asset Sale
      Agreement, or the adoption of such a Plan of Liquidation, from and after
      the Abandonment Date if the Effective Date of Termination of the Officer's
      employment has not occurred on or prior to the Abandonment Date. As used
      in this Section, the term "Abandonment Date" shall mean the date on which
      (A) an Acquisition Agreement, Asset Sale Agreement or Plan of Liquidation
      is terminated (pursuant to its terms or otherwise) without having been
      consummated, (B) the parties to an Acquisition Agreement or Asset Sale
      Agreement abandon the transactions contemplated thereby, (C) the Bank or
      the Company abandons a Plan of Liquidation or (D) a court or regulatory
      body having competent jurisdiction enjoins or issues a cease and desist or
      stop order with respect to or otherwise prevents the consummation of, or a
      regulatory body notifies the Bank or the Company that it will not approve,
      an Acquisition Agreement, Asset Sale Agreement or Plan of Liquidation or
      the transactions contemplated thereby and such injunction, order or notice
      has become final and not subject to appeal.

            As used in connection with the foregoing definition of Change in
Control, "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
under Section 12 of the Exchange Act; "Beneficial Owner" shall have the meaning
set forth in Rule 13d-3 under the Exchange Act; "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended from time to time; "Parent" shall
mean any entity that becomes the Beneficial Owner of at least


                                       18
<PAGE>   19

80% of the voting power of the outstanding voting securities of the Company or
of an entity that survives any merger or consolidation of the Company or any
direct or indirect subsidiary of the Company; and "Person" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include (i)
the Company or any of its subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
Affiliates, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation or entity owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

            (b) If the Bank or the Company shall relocate its principal
executive offices after a Change in Control, and if the Officer is required to,
as a result, change the Officer's principal residence, the Bank shall (i)
promptly pay (or reimburse the Officer for) all reasonable moving expenses
incurred by the Officer as a result of such change in the Officer's principal
residence, and (ii) indemnify the Officer against, and reimburse the Officer
for, any loss incurred as the result of the sale of the Officer's principal
residence (which loss shall be computed for the purpose of this Agreement as the
difference between the actual sales price (net of closing costs and brokerage
fees) of such residence and the fair market value of such residence (computed as
of the time the Bank or the Company relocates its principal executive offices)
as determined by an independent real estate appraiser designated and paid by the
Bank or the Company and acceptable to the Officer), provided that such sale of
the Officer's principal residence occurs within six months after the Bank or the
Company relocates its principal executive offices.


                                       19
<PAGE>   20

            (c)(i) If a Change in Control shall occur, the Officer shall be
entitled to the compensation and benefits provided in paragraphs (d), (e), (f)
and (g) of this Section 12 upon the subsequent termination by the Bank of the
Officer's employment at any time during the remaining Term in effect at the time
of the Change in Control (including, without limitation, a termination for
permanent disability), other than a termination for cause (as defined in Section
9(b)), provided that the rights to any such compensation and benefits shall be
subject to the limitations and provisions set forth in Section 9(c).

            (ii) If a Change in Control shall occur, and thereafter the Board of
Directors of the Company or the Bank or, if the Company or the Bank is not the
surviving entity in the transaction giving rise to such Change in Control, the
Board of Directors of the ultimate parent entity surviving such Change in
Control, either (A) fails to elect or re-elect or appoint or reappoint the
Officer to the offices or positions specified in Section 3 with the Company and
the Bank or, if the Company or the Bank is not the surviving ultimate parent
entity in the transaction giving rise to such Change in Control, as Chief
Executive Officer of the ultimate parent entity surviving such Change in
Control, (B) gives the Officer notice of non-renewal of this Agreement as
provided in Section 2(a) other than for "cause" (as defined in Section 9(b)), or
(C) makes a material change in the Officer's functions, duties or
responsibilities, which change would cause the Officer's position with the
Company or the Bank or, if the Company or the Bank is not the surviving entity
in the transaction giving rise to such Change in Control, with the entity
surviving such Change in Control to become one of lesser responsibility,
importance or scope from that in effect immediately prior to the time of the
Change in Control (an event specified in clause (A), (B) or (C) is hereafter
referred to as a "Material Change"), the Officer shall be entitled to the


                                       20
<PAGE>   21

compensation and benefits provided in paragraphs (d), (e), (f) and (g) of this
Section 12 (subject to the limitations and provisions set forth in Section 9(c))
upon the subsequent termination of the Officer's employment, at any time during
the remaining Term in effect at the time of the Change in Control, by the
Officer.

            (iii) If the Officer's employment is terminated by the Bank or by
reason of the Officer's permanent disability during the Term but after the
expiration of the remaining Term in effect at the time of the Change in Control,
then the provisions of Section 6 or 9 (as the case may be) shall apply in lieu
of the provisions of paragraphs (d), (e) and (f) of this Section 12. If the
Officer's employment is terminated by the Officer during the Term but after the
expiration of the remaining Term in effect at the time of the Change in Control
(or if the Officer's employment is terminated by the Officer during the
remaining Term in effect at the time of the Change in Control and no Material
Change shall have occurred), then the provisions of Section 10 shall apply in
lieu of the provisions of paragraphs (d), (e) and (f) of this Section 12.

            (iv) Only for purposes of determining whether there has been a
termination of the Officer's employment during the remaining Term in effect at
the time of a Change in Control (as specified in paragraphs (c)(i) or (c)(ii) of
this Section 12) so as to entitle the Officer to the compensation and benefits
provided in paragraphs (d), (e), (f) and (g) of this Section 12, a termination
of the Officer's employment following a Change in Control shall be deemed to
have occurred on such date during the remaining Term that (A) Notice of
Termination (as defined in Section 14(b)) is given by the Bank to the Officer
(regardless of the Effective Date of Termination specified therein), (B) an
Officer's Termination Notice (as defined in Section 10) is given by the Officer
to the Bank (regardless of the Effective Date of Termination specified therein)
or (C)


                                       21
<PAGE>   22

notice of non-renewal pursuant to Section 2(a) is given by the Bank to the
Officer (regardless of the date on which the Term expires, but provided that,
but for such notice of non-renewal, a renewal would otherwise occur).
Notwithstanding the immediately preceding sentence, the Officer shall continue
to be employed by the Bank pursuant to this Agreement until (1) the Effective
Date of Termination specified in the Notice of Termination or Officer's
Termination Notice, as the case may be, or (2) the end of the remaining Term in
effect when notice of non-renewal is given pursuant to Section 2(a).

            (d)(i) Upon the occurrence of a Change in Control followed by any
termination of the Officer's employment pursuant to Section 12(c)(i) or (c)(ii),
the Bank shall pay to the Officer, as a severance payment for services
previously rendered to the Bank, a lump sum equal to three times the Officer's
Deemed Annual Compensation, as in effect immediately prior to the Effective Date
of Termination (without regard to any decrease in the Officer's Deemed Annual
Compensation made after the Change in Control). As used in this Section
12(d)(i), the term "Deemed Annual Compensation" shall mean, at any time, an
amount equal to the sum of (A) the Officer's annual salary (as defined in
Section 5(a)) at such time, plus (B) the higher of (y) the amount of the target
bonus which the Officer is eligible to earn for the year which includes the day
immediately prior to the Change in Control, or (z) the amount of the average
bonus or other cash incentive earned by the Officer with respect to the two most
recently completed fiscal years, provided, however, that for purposes of this
clause (z), if the Effective Date of Termination occurs during 1998, 100% of the
bonus or other cash incentive actually earned by the Officer with respect to
1997 pursuant to each plan or program (whether or not such plan or program has
been


                                       22
<PAGE>   23

formalized or is in written form) of the Bank in effect for such year that
provides for bonuses or other cash incentives shall be utilized in lieu of such
two-year average.

            (ii) Upon the occurrence of a Change in Control followed by any
termination of the Officer's employment pursuant to Section 12(c)(i) or (c)(ii),
to the extent not otherwise limited pursuant to Section 9(c), each Vested Stock
Option held by the Officer shall (to the extent permitted by the plan under
which such Vested Stock Option was granted), notwithstanding anything to the
contrary in the grant letter related to such Vested Stock Option and regardless
of the actual Effective Date of Termination, remain exercisable for the term
specified in such grant letter as if there had been no termination of the
Officer's employment and the Officer remained in the employment of the Bank for
the entire term of such Vested Stock Option. As used in this Section 12(d)(ii),
the term "Vested Stock Option" shall mean any stock option (including any tandem
stock appreciation right) previously or hereafter granted to the Officer under a
stock incentive or stock option plan of the Company that vests and becomes
exercisable prior to the Effective Date of Termination or that vests upon the
retirement of the Officer.

            (e) Any payment pursuant to Section 12(d)(i) shall be made to the
Officer within 30 days after the Effective Date of Termination.

            (f) Upon the occurrence of a Change in Control followed by any
termination of the Officer's employment pursuant to Section 12(c)(i) or (c)(ii),
to the extent not otherwise limited pursuant to Section 9(c), the Bank shall,
for the remainder of the Officer's life, and for the remainder of the life of
the Officer's spouse (to whom the Officer was married as of the Effective Date
of Termination), continue to provide to the Officer and such spouse the same
level of disability, medical and dental insurance coverage as is maintained from
time to time by the


                                       23
<PAGE>   24

Company or the Bank for full-time employees and their spouses, provided that (x)
the Officer (and, after the Officer's death, the Officer's surviving spouse)
shall continue to pay all amounts in respect of such coverage that the other
employees, retirees, or surviving spouses, as applicable, receiving the same
levels of coverage are required to pay, (y) any medical coverage may be modified
so that Medicare (or other governmental coverage) is primary, with coverage
provided by the Bank supplementary, to the extent permitted by law, and (z) in
lieu of providing any benefit hereunder, the Bank may pay the Officer (and after
the Officer's death, the Officer's surviving spouse) the cash equivalent of the
cost of such coverage.

            (g)(i) If, on account of events described in Sections 12(c)(i) or
12(c)(ii) following a Change in Control, any payment or other benefit paid or to
be paid or any property transferred or to be transferred (collectively, a
"Severance Payment") with respect to one or more calendar years by or on behalf
of the Company (or any affiliate of the Company) to the Officer pursuant to this
Agreement shall constitute an "excess parachute payment" within the meaning of
Section 280G(b) of the Code subject to the tax imposed by Section 4999 of the
Code (the "Excise Tax"), then the Bank shall pay to the Officer an additional
amount (the "Gross Up Payment") such that the amount paid or transferred to the
Officer, after deduction of any Excise Tax on the Severance Payment, and any
federal, state and local income tax, employment tax and Excise Tax upon the
Gross Up Payment, shall be equal to the Severance Payment. In addition, if,
absent a Change in Control or in other circumstances following a Change in
Control, notwithstanding the reductions mandated by Section 9(c), the SERP
benefits described in Section 7 shall constitute an "excess parachute payment"
within the meaning of Section 280G(b) of the Code subject to the Excise Tax,
then the Bank shall pay to the Officer one or more Gross Up Payments such that
the amount


                                       24
<PAGE>   25

of such Gross Up Payments, when combined with such SERP benefits, after
deduction of any Excise Tax on the SERP benefits, and any federal, state and
local income tax, employment tax and Excise Tax upon the Gross Up Payments,
shall be equal to such SERP benefits.

            (ii) For purposes of determining under Section 12(g)(i) whether any
portion of a Severance Payment or SERP benefit will be subject to the Excise Tax
and the amount of such Excise Tax, (A) the Severance Payment or SERP benefit and
payments provided for in Section 12(g)(i) shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of Section 280(G)(b)(1) of the Code shall
be treated as subject to the Excise Tax, unless and to the extent that tax
counsel selected by the Bank's independent auditors and acceptable to the
Officer is of the opinion that the Severance Payment or SERP benefit (in whole
or in part) does not constitute a "parachute payment" or such "excess parachute
payment" (in whole or in part) represents reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the Code in excess
of the allocable base amount within the meaning of Section 280G(b)(3) of the
Code, or the Severance Payment or SERP benefit is otherwise not subject to the
Excise Tax, (B) the amount of the Severance Payment or SERP benefit that is
treated as subject to the Excise Tax shall be equal to the lesser of (X) the
total amount of the Severance Payment or SERP benefit, as applicable, and (Y)
the amount of "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code (after applying clause (A) above), (C) any Gross Up
Payment pursuant to Section 12(g)(i) shall be treated as subject to the Excise
Tax in its entirety and (D) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's


                                       25
<PAGE>   26

independent auditors in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.

            (iii) If in circumstances described in Section 12(g)(i), by reason
of the filing by the Officer of an amended tax return, an audit by the Internal
Revenue Service or other taxing authority, or a final determination by a court
of competent jurisdiction, it is determined that "excess parachute payments"
exceeding those previously reported in his tax returns were received by the
Officer and as a result an additional Excise Tax (the "Additional Excise Tax")
shall become due, the Bank shall pay the Officer an additional amount (the
"Subsequent Gross Up Payment") such that the amount paid or transferred to the
Officer, after deduction of (A) any Additional Excise Tax and (B) on an after
tax basis, any interest, additions and penalties with respect to the Additional
Excise Tax and (C) any federal, state and local income tax, employment tax and
Excise Tax upon the Subsequent Gross up Payment and (D) the payments provided
for in Section 12(g)(i), shall be equal to the Severance Payment or SERP
benefits, as appropriate.

            (iv) Any Gross Up Payment required hereunder shall be made at least
ten days prior to the due date (without regard to extensions) of the Officers's
federal income tax return for the year with respect to which the "excess
parachute payment" is deemed made under the Code. Any Subsequent Gross Up
Payment required hereunder shall be made to the Officer within 30 days after the
amount thereof is determined. Notwithstanding the two immediately preceding
sentences, the Bank shall pay any federal, state and local tax or taxes and
employment taxes required to be withheld from the Officer's wages (within the
meaning of Section 3121 and 3402 of the Code) with respect to the "excess
parachute payment" and any such tax or taxes paid by


                                       26
<PAGE>   27

the Company or the Bank to the Internal Revenue Service or state or local taxing
authority shall constitute payment to the Officer.

            (v) If the Excise Tax is finally determined (whether by the filing
of an amended tax return by the Officer, by audit of the Internal Revenue
Service or other taxing authority, or by a final determination of a court of
competent jurisdiction) to be less than the amount paid to or on behalf of the
Officer under the provisions of Sections 12(g)(i)-(iv) and the overpayment is
refunded to the Officer, the Officer shall repay to the Bank, promptly following
the receipt of the refund, the portion of the Gross Up Payment (and/or
Subsequent Gross Up Payment) attributable to such reduction of the Excise Tax
(plus the portion attributable to federal, state and local income tax and
employment taxes imposed on the portion being repaid by the Officer but only to
the extent that the repayment may result in a tax benefit to the Officer under
Section 1341 of the Code and similar provisions of applicable state and local
law).

            (vi) The provisions of this Section 12(g) shall inure to the benefit
of the Officer during the Term of this Agreement regardless of whether or not
his employment is terminated, and if the Officer's employment is terminated, the
rights and obligations of the Officer and the Bank under this Section 12(g)
shall survive the termination of this Agreement.

            13. Post-Termination Obligations of the Officer. (a) In addition to
any related requirements that may apply pursuant to the terms of the Consulting
Agreement, upon any termination of the Officer's employment during the Term of
this Agreement or upon termination of the Officer's employment after the
expiration of the Term of this Agreement or upon retirement, the Officer agrees
(i) not to make any disclosure in violation of Section 13(b), (ii) to return to
the Bank all material documents relating to the business of the Bank that are in
the


                                       27
<PAGE>   28

Officer's possession or under the Officer's control, and (iii) except if the
termination or retirement occurs after a Change in Control, not to solicit
(directly or indirectly), for one year following the Effective Date of
Termination (or date of termination after the expiration of the Term) or
retirement, the employment of any person who is an employee of the Bank on the
Effective Date of Termination (or date of termination after the expiration of
the Term) or retirement or who, within six months prior to the Effective Date of
Termination (or date of termination after the expiration of the Term) or
retirement, was an employee of the Bank, unless the Officer receives written
permission from the Bank to engage in the activities proscribed by this Section
13(a) or by Section 13(b) or to be relieved of any obligation under Section
13(a)(ii).

            (b) The Officer recognizes and acknowledges that the confidential
business activities and plans for business activities of the Bank and its
subsidiaries and affiliates, as they may exist from time to time, are valuable,
special and unique assets of the Bank. The Officer shall not, during or at any
time after the Officer's employment, disclose any knowledge of the past, present
or planned business activities of the Bank or its subsidiaries or affiliates
that are of a confidential nature (collectively, the "Bank's Confidential
Activities") to any person, firm, corporation, bank, thrift institution or other
entity for any reason or purposes whatsoever. Notwithstanding anything in this
Section 13(b) to the contrary, the Officer (i) may disclose any knowledge of
banking, financial and/or economic principles, concepts or ideas that are not
derived from the Bank's Confidential Activities, and (ii) shall not be precluded
from disclosures respecting the Bank's Confidential Activities that are (A) made
pursuant to compulsory legal process or when required by an appropriate
governmental agency; (B) public knowledge or become public


                                       28
<PAGE>   29

without the Officer's breach of this Section 13(b); (C) already known to the
party to whom the Officer makes such disclosures; or (D) approved by the Bank
for disclosure.

            (c) The parties, recognizing that irreparable injury will result to
the Bank, its business and property in the event of the Officer's breach or
threatened breach of Section 13(a) or (b), agree that in the event of such
breach or threatened breach by the Officer, the Bank will be entitled, in
addition to any other remedies and damages that may be available, to seek and
obtain an injunction to restrain the violation of Section 13(a) or (b) by the
Officer.

            14. Notices. (a) All notices under this Agreement shall be in
writing and shall be delivered personally, sent by registered or certified mail,
return receipt requested or sent by recognized next-day courier service, (a) to
the Bank, at its address set forth above (to the attention of its General
Counsel), and (b) to the Officer, at the Officer's residence address as
appearing in the records of the Bank, or to such other address as either party
may hereafter designate in writing in the manner provided in this Section 14.
All notices under this Agreement shall be deemed given (i) upon receipt if
delivered personally, (ii) on the third business day after deposit in a facility
of the U.S. Postal Service with postage prepaid, if delivered by registered or
certified mail, or (iii) on the first business day following the date of
dispatch if delivered by a recognized next-day courier service.

            (b) Any purported termination of the Officer's employment with the
Bank pursuant to Sections 6 or 9 shall be communicated to the Officer by means
of a written notice (a "Notice of Termination"). The Notice of Termination shall
(i) indicate a specific termination provision relied upon, (ii) set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Officer's employment under the provision so indicated, and


                                       29
<PAGE>   30

(iii) specify the Effective Date of Termination; provided, however, that no such
Notice of Termination shall specify an Effective Date of Termination that is
prior to the date on which any such Notice of Termination is given.

            (c) As used in this Agreement, the term "Effective Date of
Termination" shall mean (i) the date on which the Officer's employment with the
Bank is to terminate, as specified in a Notice of Termination given by the Bank,
(ii) the date on which the Officer's employment with the Bank is to terminate,
as specified in an Officer's Termination Notice given by the Officer, or (iii)
for purposes of Section 12 only, the date on which the Term is to expire as a
result of a notice of non-renewal given by the Bank to the Officer pursuant to
Section 2(a).

            15. No Duty to Mitigate. Except as otherwise expressly provided
herein, if the Officer shall continue to receive compensation or benefits or
severance pay pursuant to this Agreement after its termination, (a) the Officer
shall have no duty to mitigate such payments by seeking or obtaining other
employment or otherwise, and (b) in the event the Officer does obtain other
employment, such payments from the Bank shall not be reduced by compensation
received from such other employment.

            16. Complete Understanding. This Agreement constitutes the complete
understanding between the parties with respect to its subject matter and merges
and supersedes all prior oral and written agreements and understandings and all
contemporaneous oral agreements and understandings, including, without
limitation, any other employment agreement heretofore executed by the Officer
and the Bank or any of its subsidiaries or affiliates. This Agreement may not be
amended, terminated or rescinded except in a writing signed by the party to be
charged.


                                       30
<PAGE>   31

            17. No Waiver. The failure of either party at any time to require
performance by the other party of a provision of this Agreement or to resort to
a remedy at law or in equity or otherwise shall in no way affect the right of
such party to require full performance or to resort to such remedy at any time
thereafter nor shall a waiver by either party of the breach of any provision of
this Agreement be taken or held to be a waiver of any subsequent breach of such
provision unless expressly so stated in writing. No waiver of any of the
provisions of this Agreement shall be effective unless in writing and signed by
the party to be charged.

            18. Governing Law. This Agreement shall be governed by the laws of
the State of New York, without regard to conflict of laws principles applied in
the State of New York.

            19. Headings. The headings to the Sections of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or interpretation of this Agreement.

            20. Severability. If any provision of this Agreement is held by a
court or other authority having competent jurisdiction to be invalid, void or
otherwise unenforceable, in whole or in part, by reason of any applicable law,
statute or regulation or any interpretation thereof, then (a) the remainder of
the provisions of this Agreement shall remain in full force and effect and in no
way affected, impaired or invalidated and (b) the provision so held to be
invalid, void or otherwise unenforceable shall be deemed modified in amount,
duration, scope or otherwise to the minimum extent necessary so that such
provision shall not be invalid, void or otherwise unenforceable by reason of
such law, statute, regulation or interpretation and such provision, as so
modified, shall remain in full force and effect.


                                       31
<PAGE>   32

            21. Payment of Legal Fees. If any legal action or proceeding is
commenced to enforce or interpret the provisions of this Agreement, or to
recover damages for its breach, including without limitation any proceeding
commenced under Section 22 hereof, all reasonable legal fees, disbursements and
court or arbitration costs paid or incurred by the Officer arising out of or
resulting from such action or proceeding shall be paid or reimbursed to the
Officer by the Bank, provided that the action or proceeding is not dismissed or
summarily decided against the Officer.

            22. Dispute Resolution. Any dispute or controversy arising under, in
connection with or relating to this Agreement or the transactions contemplated
hereby shall be subject to compulsory mediation in New York City in accordance
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association then in effect. In the event that such
compulsory mediation does not result in a resolution of such dispute or
controversy which is acceptable to both the Bank and the Officer, such dispute
or controversy shall be resolved exclusively by arbitration in New York City in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association then in effect. The parties hereto agree
that the decision of such arbitration shall be final and binding upon the
parties and upon confirmation of the decision resulting from such arbitration,
judgment may be entered on the arbitrators' award in any court having
jurisdiction.

            23. Assumption by Company. This Agreement shall be assumable by the
Company at its election. Following any such election, the obligations of the
Bank under this Agreement shall become the obligations of the Company.


                                       32
<PAGE>   33

            24. Taxes. Any payments due to the Officer pursuant to this
Agreement shall be reduced by all applicable federal, state, city or other taxes
required by law to be withheld with respect to such payments.

            25. Limitation on Payments. Any payments made to the Officer
pursuant to this Agreement, or otherwise, are subject to and conditioned upon
their compliance with 12 USC ss. 1828(k) and any regulations promulgated
thereunder.

                                          THE DIME SAVINGS BANK
                                          OF NEW YORK, FSB

                                          By:/s/IRA T. WENDER
                                             ---------------------------------
                                             Name:
                                             Title:

Dated: February 23, 1998                  /s/LAWRENCE J. TOAL
       -------------------                ------------------------------------
                                                 LAWRENCE J. TOAL


                                       33