Exhibit 10.5



 Exhibit 10.5 
 RETENTION AGREEMENT 
 This Retention Agreement (the “Agreement”) is made and entered into
on November 2, 2006 (but effective at the time specified in Section 1 below) by and between New York Community Bank (the “Bank”) and Patrick D. McTernan, an individual (the “Employee”). 
 INTRODUCTORY STATEMENT 
 New York
Community Bancorp, Inc. (“NYB”), the parent holding company of the Bank and PennFed Financial Services, Inc. (“PFSI”), the parent holding company of Penn Federal Savings Bank (“Penn Federal”) have entered into an
Agreement and Plan of Merger dated as of November 2, 2006 (the “Merger Agreement”). Employee is a senior officer of Penn Federal. NYB considers the Employee’s continued services important to the successful integration of the
operation of Penn Federal’s business with the Bank’s business and wishes to secure the Employee’s continued services during a transition period following the Effective Time by providing the Employee with a financial incentive to
remain in the Bank’s employ. The Employee, understanding the circumstances, has agreed to execute this Agreement and observe its terms. 
 1. Term of Agreement. 
 This Agreement shall become effective and begin immediately following the Effective Time (as
such term is defined in the Merger Agreement) and shall continue for nine (9) months thereafter (the “Term”). 
 2.
Place of Employment and Extent of Services. 
 (a) The Employee’s principal place of employment shall be at the same location
as immediately before the Effective Time. 
 (b) During the Term, the Employee shall serve as an employee of the Bank, performing such duties
and having such position, title and authority as may be assigned to him by the Bank. The Employee shall devote his full business time and attention (other than during weekends, holidays, approved vacation periods (which shall be not less than six
weeks, which may be taken consecutively) and periods of illness or approved leave of absence) to the business and affairs of the Bank and shall use his best efforts to advance its best interests. 
 3. Compensation and Benefits. 
 In consideration for the services to be rendered by the Employee during the Term pursuant to this Agreement, the Bank shall pay the Employee total retention compensation of $310,000 (“Retention Compensation”), payable in
substantially equal installments over the Term in accordance with the Bank’s customary payroll practices. The Employee shall be an employee of the Bank and shall be eligible to participate in and receive benefits under any and all qualified or
non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance plans, and any other employee
benefit plan as may from time to time be maintained by, or cover employees of, the Bank, in accordance with the terms and conditions of such employee benefit plans and programs and consistent with the Bank’s customary practices. 







 4. Termination of Employment During the Term. 
 The Employee’s employment with the Bank may be terminated during the Term at any time and for any reason and, in such event: 
 (a) If such termination results from the Employee’s resignation or discharge for cause (as hereinafter defined), the Bank shall pay to the Employee
(or, in the event of his death, to his estate) his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment
shall be made at the time and in the manner prescribed by law applicable to the payment of wages but in no event later than thirty (30) days after the date of the Employee’s termination of employment. 
 (b) If such termination results from the Employee’s discharge by the Bank other than for “cause” (as hereinafter defined), death,
disability as a result of which the Employee qualifies for disability insurance benefits under the Bank’s group long-term disability insurance plan or under the federal Social Security Act, the Bank shall pay the Employee the amount, if any, of
the remaining amount of Retention Compensation the Employee would have received over the Term but for the early termination of the Agreement. The Bank shall pay such amount, if any, in a single lump sum as soon as practicable following termination
of employment. 
 The Bank shall have the right to discharge the Employee for “cause” if it determines that the Employee has committed gross
negligence in the performance of, or continually neglects, after due notice, to perform his assigned duties; has been convicted or entered a plea of guilty or nolo contendere to, the commission of a felony or any other crime involving
dishonesty, personal profit or other circumstance likely, in the reasonable judgment of the Bank, to have a material adverse effect on the Bank or its business, operations or reputation; or has violated, in any material respect, any law, rule,
regulation, written agreement or final cease-and-desist order applicable to the Bank in his performance of services for the Bank. 
 5.
Termination After the Term. 
 Unless otherwise agreed by the parties, the expiration of the Term shall result in a termination of
the Employee’s employment with the Bank. 
 6. Successors and Assigns. 
 This Agreement will inure to the benefit of and be binding upon the Employee, his legal representatives and testate or intestate distributes, and the Bank
and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise
transferred. 
 7. Notices. 
 Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been
given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address
as one such party may by written notice specify to the other party: 
  

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 if to the Employee, at the address on file in the Bank’s personnel records for the Employer:

 if to the Bank: 
 New York Community Bank 
 615 Merrick Avenue 
 Westbury, New York 11590 
 Attention: Joseph R. Ficalora, President and Chief Executive Officer 
 8. Severability.

 A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof. 
 9. Waiver. 
 Failure to insist upon strict compliance with any of the terms or conditions hereof shall not be deemed a waiver of such term or condition. A waiver of any provision of this Agreement must be made in writing,
designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at
any other time or times. 
 10. Counterparts. 
 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement. 
 11. Governing Law. 
 This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York, except to the extent that such laws are
pre-empted by the federal laws of the United States. 
 12. Entire Agreement; Modifications. 
 This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter hereof. No modifications of this agreement shall be valid unless made in writing and signed by the parties hereto. 
 13. Dispute Resolution. 
 Any
dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New York, New York in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. 
  

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 14. Effect of Failure to Complete the Merger. 
 The parties’ obligations to each other under this Agreement are conditioned on the consummation of the transactions contemplated by the Merger
Agreement. If NYB or PFSI terminate the Merger Agreement, the parties shall have no obligation to each other under this Agreement. 
 The
Bank has caused this Retention Agreement to be executed and the Employee has hereunto set his hand, all as of the day and year first above written. 
  

			
	NEW YORK COMMUNITY BANK
		
	By:	 	 /s/ Joseph R. Ficalora

	Name:	 	 Joseph R. Ficalora

	Title:	 	 President and Chief Executive Officer

	
	 /s/ Patrick D. McTernan

	PATRICK D. MCTERNAN


  

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