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                                                                    EXHIBIT 10.5

                       AMENDMENT OF EMPLOYMENT AGREEMENT


     The Amended and Restated Employment Agreement, dated as of April 27, 1994,
between The Dime Savings Bank of New York, FSB, a federal stock savings bank
having its principal executive offices at 589 Fifth Avenue, New York, New York
10017, and D. James Daras (the "Agreement") is hereby amended as follows,
effective as of February 7, 1997.

     1.   The following subsection (f) is added after Section 8(e) in the
Agreement:

               "(f)(i)  Notwithstanding any other provision of this Section 8 or
          of Section 11, 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 8 or under Section 11, 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          if such Regulatory Restriction shall subsequently be rescinded,
          superseded, amended or otherwise determined not to restrict, limit or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 8 or
          Section 11, in the event that any amount that is otherwise payable
          hereunder other than on account of events following a Hostile 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 Internal Revenue Code of 1986, as amended (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 11(d)(ii), 11(f) and 11(g) or otherwise payable on
          account of events following a Hostile Change in Control) shall be
          reduced by the smallest amount necessary to avoid the imposition of
          such excise tax; provided, however, that if the amount of the
          reduction that would otherwise apply to the payment described in
          Section 11(d)(i) would result in a payment under that Section of less
          than two times the Officer's Annual Compensation (as defined in such
          Section), as in effect

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     immediately prior to the Effective Date of Termination (without regard to
     any decrease in the Officer's Annual Compensation made after the change in
     Control) (a 'Two-Times Payment'), such payment shall nonetheless be made in
     an amount equal to such a Two-Times Payment. 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."

     2.   The following provision is added at the end of Section 11(a):

          "As used in this Agreement, a 'Hostile Change in Control' shall mean
          (i) any of the events specified in Section 11(a)(i) if such
          transaction has not been affirmatively recommended to the Company's
          stockholders by action of the Board of Directors of the Company or
          (ii) any of the events specified in Section 11(a)(i) through (a)(iv)
          inclusive if the Board of Directors of the Company or the Bank, as the
          case may be, finds that, for purposes of this Agreement, the happening
          of an event specified in such Sections constitutes or will constitute
          a Hostile Change in Control; provided, however, that if it is an
          express condition precedent to the consummation of any such Change in
          Control event or occurrence that the Board of Directors of the Company
          or the Bank, as the case may be, refrain from making such a
          designation, the event or occurrence shall constitute a 'Hostile
          Change in Control' without regard to any designation by the Board of
          Directors of the Company or the Bank, as the case may be."

     3.   The first sentence of Section 11(d)(i) is amended to provide as
follows:

          "Except as otherwise limited pursuant to Section 8(f) of this
          Agreement, upon the occurrence of a Change in Control followed by any
          termination of the Officer's employment pursuant to Section 11(c)(i),
          (c)(ii) or (c)(iii), the Bank shall pay the Officer, as a severance
          payment for services previously rendered to the Bank, a lump sum equal
          to three times the Officer's Annual compensation, as in effect
          immediately prior to the Effective Date of Termination (without regard
          to any decrease in the Officer's Annual Compensation made after the
          Change in Control)."

     4.   Section 11(h)(i) of the Agreement is amended to provide as follows:

               (h)(i) If, (x) following a Hostile Change in Control, or
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                         (y) otherwise following a Change in Control if the
                    payment to the Officer under Section 11(d)(i) would have
                    been less than a Two-Times Payment (as described in Section
                    8(f)) were it not for the proviso at the end of the first
                    sentence of Section 8(f)(ii),

          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 Bank
          (or any affiliate of the Bank) to the Officer under the Agreement or
          under any other prior, contemporaneous or future agreement, plan,
          understanding or arrangement (including, without limitation, one or
          more grants of stock options, stock appreciation rights, restricted
          stock or rights to purchase restricted stock) 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."

     5.   The clause ", employment tax" is added after the clause "state and
local income tax" in Section 11(h)(iii) where it appears.

     6.   The clause "and employment taxes" is added after the clause "state and
local tax or taxes" in the second sentence of Section 11(h)(iv) where it
appears.

     7.   The clause "and employment taxes" is added after the clause "state and
local income tax" in Section 11(h)(v) where it appears.

                         AGREED AND ACCEPTED
                         THE DIME SAVINGS BANK OF NEW YORK, FSB

                         /s/ Lawrence J. Toal
                         --------------------------------------
                         By: Lawrence J. Toal


                         /s/ D. James Daras
                         --------------------------------------
                         D. JAMES DARAS