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                                                                    Exhibit 10.5


                            EMPLOYMENT AGREEMENT

            This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of July 13, 1999 by and among HUDSON CITY SAVINGS BANK, a savings bank
organized and operating under the laws of the State of New Jersey and having an
office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the "Bank"),
HUDSON CITY BANCORP, INC., a business corporation organized and existing under
the laws of the State of Delaware and having an office at West 80 Century Road,
Paramus, New Jersey 07552-1473 (the "Company") and RONALD E. HERMANCE, JR., an
individual residing at 327 McKinley Place, Ridgewood, New Jersey 07450 (the
"Executive").

                           INTRODUCTORY STATEMENT

            The Bank is undertaking a reorganization through which it will
convert from a mutual savings to a stock savings bank and become a wholly owned
subsidiary of the Company, and the Company will become a majority-owned
subsidiary of Hudson City, MHC, a New Jersey mutual holding company (the
"Reorganization"). At the same time, the Company will sell less than fifty
percent (50%) of its outstanding common stock to the public in an initial public
offering. The Executive has served the Bank in an executive capacity for many
years and is familiar with the Bank's operations.

            The Board of Managers of the Bank and the Board of Directors of the
Company have concluded that it is in the best interests of the Bank, the Company
and their prospective shareholders to secure a continuity in management
following the Reorganization. They also consider it desirable to establish a
working environment for the Executive which minimizes the personal distractions
that might result from possible business combinations in which the Company or
the Bank might be involved. For these reasons, the Board of Managers of the Bank
and the Board of Directors of the Company have decided to offer to enter into a
contract with the Executive for his future services. The Executive has accepted
this offer.

            The terms and conditions which the Bank, the Company and the
Executive have agreed to are as follows.

                                 AGREEMENT

            SECTION 1. EMPLOYMENT.

            The Company and the Bank hereby continue to employ the Executive,
and the Executive hereby accepts such continued employment, during the period
and upon the terms and conditions set forth in this Agreement.

            SECTION 2. EMPLOYMENT PERIOD; REMAINING UNEXPIRED EMPLOYMENT PERIOD.

            (a) The Company and the Bank shall employ the Executive during an
initial period of three (3) years beginning on the effective date of the
Reorganization (the "Employment Commencement Date") and ending on the day before
the third (3rd) anniversary of the Employment Commencement Date, and during the
period of any additional extensions described in section 2(b) (the "Employment
Period").

            (b)   The Employment Period shall be subject to extension in
the following manner:

            (i) For purposes of determining the rights and obligations of the
      Executive and the Company with respect to each other, on the day after the
      Employment
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      Commencement Date and on each day thereafter, the Employment Period shall
      be extended by one day, such that on any date the Employment Period will
      expire on the day before the third (3rd) anniversary of such date. These
      extensions shall continue in perpetuity until discontinued by: (i) notice
      to the Executive given by the Company that they have elected to
      discontinue the extensions; (ii) notice by the Executive to the Company
      that he has elected to discontinue the extensions; or (iii) termination of
      the Executive's employment with the Company, whether by resignation,
      discharge or otherwise. On the date on which such a notice is deemed
      given, or on the effective date of a termination of the Executive's
      employment with the Company, the Employment Period shall be converted to a
      fixed period of three (3) years ending on the day before the third (3rd)
      anniversary of such date.

            (ii) For purposes of determining the rights and obligations of the
      Executive and the Bank with respect to each other, the Board of Directors
      of the Bank shall conduct an annual review of the Executive's performance
      on or about each anniversary of the Employment Commencement Date (each, an
      "Anniversary Date") and may, on the basis of such review and by written
      notice to the Executive, offer to extend the Employment Period through the
      day before the third (3rd) anniversary of the relevant Anniversary Date.
      In such event, the Employment Period shall be deemed extended in the
      absence of objection from the Executive by written notice to Bank given
      within ten (10) business days after his receipt of the Bank's offer of
      extension.

            (c) Except as otherwise expressly provided in this Agreement, any
reference in this Agreement to the term "Remaining Unexpired Employment Period"
as of any date shall mean (i) for purposes of determining the rights and
obligations of the Company and the Executive to each other, the period beginning
on such date and ending on the day before the third (3rd) anniversary of the
earliest of the date in question, any earlier date on which the Executive or the
Company is deemed to have given a notice to discontinue extensions of the
Employment Period, and any earlier date on which the Executive's employment with
the Bank and the Company was terminated; and (ii) for purposes of determining
the rights and obligations of the Bank and the Executive to each other, the
period beginning on such date and ending on the day before the third (3rd)
anniversary of the Employment Commencement Date or, if later, on the day before
the third (3rd) anniversary of the last Anniversary Date as of which the
Employment Period was extended pursuant to section 2(b)(ii).

            (d) Nothing in this Agreement shall be deemed to prohibit the
Company or the Bank from terminating the Executive's employment before the end
of the Employment Period with or without notice for any reason. This Agreement
shall determine the relative rights and obligations of the Bank, the Company and
the Executive in the event of any such termination. In addition, nothing in this
Agreement shall require the termination of the Executive's employment at the
expiration of the Employment Period. Any such continuation shall be on an
"at-will" basis unless the Bank, the Company and the Executive agree otherwise.

            SECTION 3.  DUTIES.

            The Executive shall serve as President and Chief Operating Officer
of the Company and as President and Chief Operating Officer of the Bank, having
such power, authority and responsibility and performing such duties as are
prescribed by or under their respective By-Laws and as are customarily
associated with such positions. The Executive shall devote his full business
time and attention (other than during weekends, holidays, approved vacation
periods, and periods of illness or approved leaves of absence) to the business
and affairs of the Bank and the Company and shall use his best efforts to
advance their respective best interests.


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            SECTION 4.  CASH COMPENSATION.

            In consideration for the services to be rendered by the Executive
hereunder, the Bank and the Company shall pay to him a salary at an initial
annual rate of Three hundred seventeen thousand dollars ($317,000), payable in
approximately equal installments in accordance with their respective customary
payroll practices for senior officers. The Bank's and the Company's respective
Boards of Directors shall review the Executive's annual rate of salary at such
times during the Employment Period as they deem appropriate, but not less
frequently than once every twelve (12) months, and may, in their discretion,
approve a salary increase. In addition to salary, the Executive may receive
other cash compensation from the Company or the Bank for services hereunder at
such times, in such amounts and on such terms and conditions as the Boards of
Directors of the Bank and the Company may determine. If the Executive is
discharged or suspended, or is subject to any regulatory prohibition or
restriction with respect to participation in the affairs of the Bank, he shall
continue to perform services for the Company in accordance with this Agreement
but shall not directly or indirectly provide services to or participate in the
affairs of the Bank in a manner inconsistent with the terms of such discharge or
suspension or any applicable regulatory order.

            SECTION 5.  EMPLOYEE BENEFIT PLANS AND PROGRAMS.

            During the Employment Period, the Executive shall be treated as an
employee of the Company and the Bank and shall be entitled 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 and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Company and the Bank, in accordance with the terms and conditions of such
employee benefit plans and programs and compensation plans and programs and
consistent with the Company's and the Bank's customary practices.

            SECTION 6.  INDEMNIFICATION AND INSURANCE.

            (a) During the Employment Period and for a period of six years
thereafter, the Company and the Bank shall cause the Executive to be covered by
and named as an insured under any policy or contract of insurance obtained by
them to insure their directors and officers against personal liability for acts
or omissions in connection with service as an officer or director of the Company
or the Bank or service in other capacities at their request. The coverage
provided to the Executive pursuant to this section 6 shall be of the same scope
and on the same terms and conditions as the coverage (if any) provided to other
officers or directors of the Company and the Bank.

            (b) To the maximum extent permitted under applicable law, during the
Employment Period and for a period of six years thereafter, the Company and the
Bank shall indemnify the Executive against and hold him harmless from any costs,
liabilities, losses and exposures to the fullest extent and on the most
favorable terms and conditions that similar indemnification is offered to any
director or officer of the Company and the Bank or any subsidiary or affiliate
thereof.

            SECTION 7.  OUTSIDE ACTIVITIES.

            The Executive may serve as a member of the boards of directors of
such business, community and charitable organizations as he may disclose to and
as may be approved by the Boards of Directors of the Company and the Bank (which
approval shall not be unreasonably withheld); provided,


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however, that such service shall not materially interfere with the performance
of his duties under this Agreement. The Executive may also engage in personal
business and investment activities which do not materially interfere with the
performance of his duties hereunder; provided, however, that such activities are
not prohibited under any code of conduct or investment or securities trading
policy established by the Company or the Bank and generally applicable to all
similarly situated executives.

            SECTION 8.  WORKING FACILITIES AND EXPENSES.

            The Executive's principal place of employment shall be at the Bank's
executive offices at the address first above written, or at such other location
as the Bank, the Company and the Executive may mutually agree upon. The Bank and
the Company shall provide the Executive at his principal place of employment
with a private office, secretarial services and other support services and
facilities suitable to his positions with the Company and the Bank and necessary
or appropriate in connection with the performance of his assigned duties under
this Agreement. The Company shall provide to the Executive for his exclusive use
an automobile owned or leased by the Company and appropriate to his position, to
be used in the performance of his duties hereunder, including commuting to and
from his personal residence. The Bank or the Company shall reimburse the
Executive for his ordinary and necessary business expenses, including, without
limitation, all expenses associated with his business use of the aforementioned
automobile, fees for memberships in such clubs and organizations as the
Executive and the Company shall mutually agree are necessary and appropriate for
business purposes, and his travel and entertainment expenses incurred in
connection with the performance of his duties under this Agreement, in each case
upon presentation to the payer of an itemized account of such expenses in such
form as the payer may reasonably require.

            SECTION 9.  TERMINATION OF EMPLOYMENT DUE TO DEATH.

            The Executive's employment with the Bank and the Company shall
terminate, automatically and without any further action on the part of any party
to this Agreement, on the date of the Executive's death. In such event:

            (a) The Bank and the Company shall pay to the Executive's 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 30 days after the date of the Executive's
      termination of employment.

            (b) The Company and the Bank shall provide the benefits, if any, due
      to the Executive's estate, surviving dependents or his designated
      beneficiaries under the employee benefit plans and programs and
      compensation plans and programs maintained for the benefit of the officers
      and employees of the Company and the Bank. The time and manner of payment
      or other delivery of these benefits and the recipients of such benefits
      shall be determined according to the terms and conditions of the
      applicable plans and programs.

The payments and benefits described in sections 9(a) and (b) shall be referred
to in this Agreement as the "Standard Termination Entitlements."


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            SECTION 10. TERMINATION DUE TO DISABILITY.

            The Bank and the Company may terminate the Executive's employment
upon a determination, by separate votes of a majority of the members of the
Boards of Directors of the Company and the Bank, acting in reliance on the
written advice of a medical professional acceptable to them, that the Executive
is suffering from a physical or mental impairment which, at the date of the
determination, has prevented the Executive from performing his assigned duties
on a substantially full-time basis for a period of at least one hundred and
eighty (180) days during the period of one (1) year ending with the date of the
determination or is likely to result in death or prevent the Executive from
performing his assigned duties on a substantially full-time basis for a period
of at least one hundred and eighty (180) days during the period of one (1) year
beginning with the date of the determination. In such event:

            (a) The Bank and the Company shall pay and deliver to the Executive
      (or in the event of his death before payment, to his estate and surviving
      dependents and beneficiaries, as applicable) the Standard Termination
      Entitlements.

            (b) In addition to the Standard Termination Entitlements, the Bank
      and the Company shall continue to pay the Executive his base salary, at
      the annual rate in effect for him immediately prior to the termination of
      his employment, during a period ending on the earliest of: (i) the
      expiration of one hundred and eighty (180) days after the date of
      termination of his employment; (ii) the date on which long-term disability
      insurance benefits are first payable to him under any long-term disability
      insurance plan covering employees of the Bank or the Company (the "LTD
      Eligibility Date"); (iii) the date of his death; and (iv) the expiration
      of the Remaining Unexpired Employment Period (the "Initial Continuation
      Period"). If the end of the Initial Continuation Period is neither the LTD
      Eligibility Date nor the date of his death, the Company and the Bank shall
      continue to pay the Executive his base salary, at an annual rate equal to
      sixty percent (60%) of the annual rate in effect for him immediately prior
      to the termination of his employment, during an additional period ending
      on the earliest of the LTD Eligibility Date, the date of his death and the
      expiration of the Remaining Unexpired Employment Period.

A termination of employment due to disability under this section 10 shall be
effected by joint notice of termination given to the Executive by the Company
and the Bank and shall take effect on the later of the effective date of
termination specified in such notice or the date on which the notice of
termination is deemed given to the Executive.

            SECTION 11. DISCHARGE WITH CAUSE.

            (a) The Bank and the Company may terminate the Executive's
employment during the Employment Period, and such termination shall be deemed to
have occurred with "Cause" only if:

            (i) the Board of Directors of the Bank and the Board of Directors of
      the Company, by separate majority votes of their entire membership,
      determine that the Executive (A) has willfully and intentionally failed to
      perform his assigned duties under this Agreement in any material respect
      (including, for these purposes, the Executive's inability to perform such
      duties as a result of drug or alcohol dependency); (B) has willfully and
      intentionally engaged in dishonest or illegal conduct in connection with
      his performance of services for the Company or the Bank or has been
      convicted of a felony; (C) has willfully violated, in any material
      respect, any law, rule, regulation, written agreement or final
      cease-and-desist order with respect to his performance of services for


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      the Company or the Bank; or (D) has willfully and intentionally breached
      the material terms of this Agreement in any material respect; and

            (ii) at least forty-five (45) days prior to the votes contemplated
      by section 11(a)(i), the Bank and the Company have provided the Executive
      with notice of their intent to discharge the Executive for Cause,
      detailing with particularity the facts and circumstances which are alleged
      to constitute Cause (the "Notice of Intent to Discharge"); and

            (iii) after the giving of the Notice of Intent to Discharge and
      before the taking of the votes contemplated by section 11(a)(i), the
      Executive (together with his legal counsel, if he so desires) is afforded
      a reasonable opportunity to make both written and oral presentations
      before the Boards of Directors of the Company and the Bank for the purpose
      of refuting the alleged grounds for Cause for his discharge; and

            (iv) after the votes contemplated by section 11(a)(i), the Company
      and the Bank have furnished to the Executive a notice of termination which
      shall specify the effective date of his termination of employment (which
      shall in no event be earlier than the date on which such notice is deemed
      given) and include a copy of a resolution or resolutions adopted by the
      Board of Directors of the Bank and the Board of Directors of the Company,
      certified by their corporate secretaries and signed by each member of
      their respective Board of Directors voting in favor of adoption of the
      resolution(s), authorizing the termination of the Executive's employment
      with Cause and stating with particularity the facts and circumstances
      found to constitute Cause for his discharge (the "Final Discharge
      Notice").

For purposes of this section 11, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company and the
Bank. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board and the Bank Board or based upon the
written advice of counsel for the Company or the Bank shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company and the Bank.

            (b) If the Executive is discharged during the Employment Period with
Cause, the Company and the Bank shall pay and provide to him (or, in the event
of his death, to his estate, his surviving beneficiaries and his dependents) the
Standard Termination Entitlements only. Following the giving of a Notice of
Intent to Discharge, the Bank and the Company may temporarily suspend the
Executive's duties and authority and, in such event, may also suspend the
payment of salary and other cash compensation, but not the Executive's
participation in retirement, insurance and other employee benefit plans. If the
Executive is not discharged, or is discharged without Cause, within forty-five
(45) days after the giving of a Notice of Intent to Discharge, payments of
salary and cash compensation shall resume, and all payments withheld during the
period of suspension shall be promptly restored. If the Executive is discharged
with Cause not later than forty-five (45) days after the giving of the Notice of
Intent to Discharge, all payments withheld during the period of suspension shall
be deemed forfeited and shall not be included in the Standard Termination
Entitlements. If a Final Discharge Notice is given later than forty-five (45)
days, but sooner than ninety (90) days, after the giving of the Notice of Intent
to Discharge, all payments made to the Executive during the period beginning
with the giving of the Notice of Intent to Discharge and ending with the
Executive's discharge with Cause shall be retained by the Executive and shall
not be applied to offset the Standard Termination Entitlements. If the Bank and
the Company do not give a Final Discharge Notice to the Executive within ninety
(90) days after giving a


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Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed
withdrawn and any future action to discharge the Executive with Cause shall
require the giving of a new Notice of Intent to Discharge.

            SECTION 12. DISCHARGE WITHOUT CAUSE.

            The Bank and the Company may discharge the Executive at any time
during the Employment Period and, unless such discharge constitutes a discharge
with Cause:

            (a) The Bank and the Company shall pay and deliver to the Executive
(or in the event of his death before payment, to his estate and surviving
dependents and beneficiaries, as applicable) the Standard Termination
Entitlements.

            (b) In addition to the Standard Termination Entitlements:

            (i) During the Remaining Unexpired Employment Period, the Bank and
      the Company shall provide for the Executive and his dependents continued
      group life, health (including hospitalization, medical and major medical),
      dental, accident and long-term disability insurance benefits on
      substantially the same terms and conditions (including any required
      premium-sharing arrangements, co-payments and deductibles) in effect for
      them immediately prior to the Executive's termination. The coverage
      provided under this section 12(b)(i) may, at the election of the Bank and
      the Company, be secondary to the coverage provided as part of the Standard
      Termination Entitlements and to any employer-paid coverage provided by a
      subsequent employer or through Medicare, with the result that benefits
      under the other coverages will offset the coverage required by this
      section 12(b)(i).

            (ii) The Bank and the Company shall make a lump sum payment to the
      Executive (or, in the event of his death before payment, to his estate),
      in an amount equal to the estimated present value of the salary that the
      Executive would have earned if he had continued working for the Company
      and the Bank during the Remaining Unexpired Employment Period at the
      highest annual rate of salary achieved during the period of three (3)
      years ending immediately prior to the date of termination (the "Salary
      Severance Payment"). The Salary Severance Payment shall be computed using
      the following formula:

                      SSP=(Epsilon) n [       (BS/PR)      ]
                                       --------------------
                                    1 [    [ 1 + (I / PR)]n]

      where "SSP" is the amount of the Salary Severance Payment (before the
      deduction of applicable federal, state and local withholding taxes); "BS"
      is the highest annual rate of salary achieved by the Executive during the
      period of three (3) years ending immediately prior to the date of
      termination; "PR" is the number of payroll periods that occur during a
      year under the Company's and the Bank's normal payroll practices; "I"
      equals the applicable federal short term rate established under section
      1274 of the Internal Revenue Code of 1986 (the "Code") for the month in
      which the Executive's termination of employment occurs (the "Short Term
      AFR") and "n" equals the product of the Remaining Unexpired Employment
      Period at the Executive's termination of employment (expressed in years
      and fractions of years) multiplied by the number of payroll periods that
      occur during a year under the Company's and the Bank's normal payroll
      practices. The Salary Severance Payment shall be made within five (5)
      business days after the


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      Executive's termination of employment and shall be in lieu of any claim to
      a continuation of base salary which the Executive might otherwise have and
      in lieu of cash severance benefits under any severance benefits program
      which may be in effect for officers or employees of the Bank or the
      Company.

            (iii) The Bank and the Company shall make a lump sum payment to the
      Executive (or, in the event of his death before payment, to his estate),
      in an amount equal to the estimated present value of the annual bonuses
      that the Executive would have earned if he had continued working for the
      Company and the Bank during the Remaining Unexpired Employment Period at
      the highest annual rate of salary achieved during the period of three (3)
      years ending immediately prior to the date of termination (the "Bonus
      Severance Payment"). The Bonus Severance Payment shall be computed using
      the following formula:

                             BSP = SSP x (ABP / ASP)

      where "BSP" is the amount of the Bonus Severance Payment (before the
      deduction of applicable federal, state and local withholding taxes); "SSP"
      is the amount of the Salary Severance Payment (before the deduction of
      applicable federal, state and local withholding taxes); "ABP" is the
      aggregate of the annual bonuses paid or declared (whether or not paid) for
      the most recent period of three (3) calendar years to end on or before the
      Executive's termination of employment; and "ASP" is the aggregate base
      salary actually paid to the Executive during such period of three (3)
      calendar years (excluding any year for which no bonus was declared or
      paid). The Bonus Severance Payment shall be made within five (5) business
      days after the Executive's termination of employment and shall be in lieu
      of any claim to a continuation of participation in annual bonus plans of
      the Bank or the Company which the Executive might otherwise have.

            (iv) The Bank and the Company shall make a lump sum payment to the
      Executive (or, in the event of his death before payment, to his estate),
      in an amount equal to the estimated present value of the long-term
      incentive bonuses that the Executive would have earned if he had continued
      working for the Company and the Bank during the Remaining Unexpired
      Employment Period (the "Incentive Severance Payment"). The Incentive
      Severance Payment shall be computed using the following formula:

                     ISP = (SSP / RUP) x (ALTIP / ALTSP) x Y

      where "ISP" is the amount of the Incentive Severance Payment (before the
      deduction of applicable federal, state and local withholding taxes); "SSP"
      is the amount of the Salary Severance Payment (before the deduction of
      applicable federal, state and local withholding taxes); "ALTIP" is the
      aggregate of the most recently paid or declared (whether or not paid)
      long-term incentive compensation payments (but not more than three (3)
      such payments) for performance periods that end on or before the
      Executive's termination of employment; and "ALTSP" is the aggregate base
      salary actually paid to the Executive during the performance periods
      covered by the payments included in "ALTIP" and excluding base salary paid
      for any period for which no long-term incentive compensation payment was
      declared or paid; "RUP" is the Remaining Unexpired Employment Period,
      expressed in years and fractions of years; and "Y" is the aggregate
      (expressed in years and fractions of years) of the Remaining Unexpired
      Employment Period plus the number of years and fraction of years that have
      elapsed since the end of the last performance period for which a long-term
      incentive payment has been declared


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      and paid. The Incentive Severance Payment shall be made within five (5)
      business days after the Executive's termination of employment and shall be
      in lieu of any claim to a continuation of participation in long-term
      incentive compensation plans of the Bank or the Company which the
      Executive might otherwise have. Notwithstanding the foregoing, the
      Incentive Severance Payment shall be zero if the Executive's termination
      of employment occurs at a time when he is not covered by any long-term
      incentive compensation plan.

            (v) The Company and the Bank shall pay to the Executive (or in the
      event of his death, to his estate), a lump sum payment in an amount equal
      to the excess (if any) of: (A) the present value of the aggregate benefits
      to which he would be entitled under any and all tax-qualified and
      non-tax-qualified defined benefit plans maintained by, or covering
      employees of, the Company or the Bank (the "Pension Plans") if he had
      continued working for the Company and the Bank during the Remaining
      Unexpired Employment Period; over (B) the present value of the benefits to
      which the Executive and his spouse and/or designated beneficiaries are
      actually entitled under such plans (the "Pension Severance Payment"). The
      Pension Severance Payment shall be computed according to the following
      formula:

                                 PSP = PPB - APB

      where "PSP" is the amount of the Pension Severance Payment (before
      deductions for applicable federal, state and local withholding taxes);
      "APB" is the aggregate lump sum present value of the actual vested pension
      benefits payable under the Pension Plans in the form of a straight life
      annuity beginning at the earliest date permitted under the Pension Plans,
      computed on the basis of the Executive's life expectancy at the earliest
      date on which payments under the Pension Plans could begin, determined by
      reference to Table VI of section 1.72-9 of the Income Tax Regulations (the
      "Assumed Life Expectancy"), and on the basis of an interest rate
      assumption equal to the average bond-equivalent yield on United States
      Treasury Securities with a Constant Maturity of 30 Years for the month
      prior to the month in which the Executive's termination of employment
      occurs (the "30-Year Treasury Rate"); and "PPB" is the lump sum present
      value of the pension benefits (whether or not vested) that would be
      payable under the Pension Plans in the form of a straight life annuity
      beginning at the earliest date permitted under the Pension Plans, computed
      on the basis that the Executive's actual age at termination of employment
      is his attained age as of his last birthday that would occur during the
      Remaining Unexpired Employment Period, that his service for benefit
      accrual purposes under the Pension Plans is equal to the aggregate of his
      actual service plus the Remaining Unexpired Employment Period, that his
      average compensation figure used in determining his accrued benefit is
      equal to the highest annual rate of salary achieved by the Executive
      during the period of three (3) years ending immediately prior to the date
      of termination, that the Executive's life expectancy at the earliest date
      on which payments under the Pension Plans could begin is the Assumed Life
      Expectancy and that the interest rate assumption used is equal to the
      30-Year Treasury Rate. The Pension Severance Payment shall be made within
      five (5) business days after the Executive's termination of employment and
      shall be in lieu of any claim to any actual increase in his accrued in the
      Pension Plans in respect of the Remaining Unexpired Employment Period.

            (vi) The Company and the Bank shall pay to the Executive (or in the
      event of his death, to his estate) a lump sum payment in an amount equal
      to the present value of the additional employer contributions that would
      have been credited directly to his


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      account(s) under any and all tax-qualified and non-tax qualified defined
      contribution plans maintained by, or covering employees of, the Bank and
      the Company (the "Non-ESOP DC Plans"), plus the fair market value of the
      additional shares of employer securities or other property that would have
      been allocated to his account as a result of employer contributions or
      dividends under any tax-qualified leveraged employee stock ownership plan
      and any related non-tax-qualified supplemental plan maintained by, or
      covering employees of, the Bank and the Company (the "ESOP Plans") if he
      had continued in employment during the Remaining Unexpired Employment
      Period (the "Defined Contribution Severance Payment"). The Defined
      Contribution Severance Payment shall be computed according to the
      following formula:

                  DCSP = [SSP x (EC / BS)] + [(STK + PROP) x Y]

      where: "DCSP" is the amount of the Defined Contribution Severance Payment
      (before deductions for applicable federal, state and local withholding
      taxes); "SSP" is the amount of the Salary Severance Payment (before
      deductions for applicable federal, state and local withholding taxes);
      "EC" is the amount of employer contributions actually credited to the
      Executive's accounts under the Non-ESOP Plans for the last plan year to
      end before his termination of employment; "BS" is the Executive's
      compensation taken into account in computing EC; "Y" is the aggregate
      (expressed in years and fractions of years) of the Remaining Unexpired
      Employment Period and the number of years and fractions of years that have
      elapsed between the end of plan year for which EC was computed and the
      date of the Executive's termination of employment; "STK" is the fair
      market value (determined by the final reported sales price for stock of
      the same class on the last trading day before the Executive's termination
      of employment) of the employer securities actually allocated to the
      Executive's accounts under the ESOP Plans in respect of employer
      contributions and dividends applied to loan amortization payments for the
      last plan year to end before his termination of employment; and "PROP" is
      the fair market value (determined as of the day before the Executive's
      termination of employment using the same valuation methodology used to
      value the assets of the ESOP Plans) of the property other than employer
      securities actually allocated to the Executive's accounts under the ESOP
      Plans in respect of employer contributions and dividends applied to loan
      amortization payments for the last plan year to end before his termination
      of employment.

            (vii) At the election of the Company made within 30 days following
      the Executive's termination of employment, upon the surrender of options
      or appreciation rights issued to the Executive under any stock option and
      appreciation rights plan or program maintained by, or covering employees
      of, the Company or the Bank, a lump sum payment in an amount equal to the
      product of:

                  (A) the excess of (I) the fair market value of a share of
            stock of the same class as the stock subject to the option or
            appreciation right, determined as of the date of termination of
            employment, over (II) the exercise price per share for such option
            or appreciation right, as specified in or under the relevant plan or
            program; multiplied by

                  (B) the number of shares with respect to which options or
            appreciation rights are being surrendered.

      For the purpose of computing this payment, the Executive shall be deemed
      fully vested in all options and appreciation rights under any stock option
      or appreciation rights plan or


                                       10
<PAGE>
      program maintained by, or covering employees of, the Company or the Bank,
      even if he is not vested under such plan or program.

            (viii) At the election of the Company made within 30 days following
      the Executive's termination of employment, upon the surrender of any
      shares awarded to the Executive under any restricted stock plan maintained
      by, or covering employees of, the Company or the Bank, the Company and the
      Bank shall make a lump sum payment in an amount equal to the product of:

                  (A) the fair market value of a share of stock of the same
            class of stock granted under such plan, determined as of the date of
            the Executive's termination of employment; multiplied by

                  (B) the number of shares which are being surrendered.

      For purposes of computing this payment, the Executive shall be deemed
      fully vested in all shares awarded under any restricted stock plan
      maintained by, or covering employees of, the Company or the Bank, even if
      he is not vested under such plan.

The payments and benefits described in section 12(b) are referred to in this
Agreement as the "Additional Termination Entitlements".

            SECTION 13. RESIGNATION.

            (a) The Executive may resign from his employment with the Bank and
the Company at any time. A resignation under this section 13 shall be effected
by notice of resignation given by the Executive to the Company and the Bank and
shall take effect on the later of the effective date of termination specified in
such notice or the date on which the notice of termination is deemed given by
the Executive. The Executive's resignation of any of the positions within the
Bank or the Company to which he has been assigned shall be deemed a resignation
from all such positions.

            (b) The Executive's resignation shall be deemed to be for "Good
Reason" if the effective date of resignation occurs within ninety (90) days
after any of the following:

            (i) the failure of the Company or the Bank (whether by act or
      omission of their respective Boards of Directors, or otherwise) to appoint
      or re-appoint or elect or re-elect the Executive to the position(s) with
      the Company and the Bank, specified in section 3 of this Agreement or to a
      more senior office;

            (ii) if the Executive is or becomes a member of the Board of
      Directors of the Company or the Bank, the failure of their respective
      shareholders (whether in an election in which the Executive stands as a
      nominee or in an election where the Executive is not a nominee) to elect
      or re-elect the Executive to membership at the expiration of his term of
      membership, unless such failure is a result of the Executive's refusal to
      stand for election;

            (iii) a material failure by the Company or the Bank, whether by
      amendment of their respective certificates of incorporation or
      organization, by-laws, action of their respective Boards of Directors or
      otherwise, to vest in the Executive the functions, duties, or
      responsibilities prescribed in section 3 of this Agreement; provided that
      the Executive shall have given notice of such failure to the Company and
      the Bank, and the Company


                                       11
<PAGE>
      or the Bank have not fully cured such failure within thirty (30) days
      after such notice is deemed given;

            (iv) any reduction of the Executive's rate of base salary in effect
      from time to time, whether or not material, or any failure (other than due
      to reasonable administrative error that is cured promptly upon notice) to
      pay any portion of the Executive's compensation as and when due;

            (v) any change in the terms and conditions of any compensation or
      benefit program in which the Executive participates which, either
      individually or together with other changes, has a material adverse effect
      on the aggregate value of his total compensation package; provided that
      the Executive shall have given notice of such material adverse effect to
      the Company and the Bank, and the Company or the Bank have not fully cured
      such failure within thirty (30) days after such notice is deemed given;

            (vi) any material breach by the Company or the Bank of any material
      term, condition or covenant contained in this Agreement; provided that the
      Executive shall have given notice of such material adverse effect to the
      Company and the Bank, and the Company or the Bank have not fully cured
      such failure within thirty (30) days after such notice is deemed given; or

            (vii) a change in the Executive's principal place of employment to a
      place that is not the principal executive office of the Bank, or a
      relocation of the Bank's principal executive office to a location that is
      both more than twenty-five (25) miles away from the Executive's principal
      residence and more than twenty-five (25) miles away from the location of
      the Bank's principal executive office on the date of this Agreement.

In all other cases, a resignation by the Executive shall be deemed to be without
Good Reason.

            (c) In the event of the Executive's resignation before the
expiration of the Employment Period, the Company and the Bank shall pay and
deliver the Standard Termination Entitlements. In addition, if the Executive's
resignation is deemed to be a resignation with Good Reason, the Company and the
Bank shall also pay and deliver the Additional Termination Entitlements.

            SECTION 14. TERMS AND CONDITIONS OF THE ADDITIONAL TERMINATION
ENTITLEMENTS.

            The Company, the Bank and the Executive hereby stipulate that the
damages which may be incurred by the Executive following any termination of
employment are not capable of accurate measurement as of the date first above
written and that the Additional Termination Entitlements constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any, to
mitigate damages. The Company, the Bank and the Executive further agree that the
Company and the Bank may condition the payment and delivery of the Additional
Termination Entitlements on the receipt of the Executive's resignation from any
and all positions which he holds as an officer, director or committee member
with respect to the Company, the Bank or any subsidiary or affiliate of either
of them.

            SECTION 15. TERMINATION UPON OR FOLLOWING A CHANGE OF CONTROL.

            (a) A "Change of Control" shall be deemed to have occurred upon the
happening of any of the following events:


                                       12
<PAGE>
            (i) the consummation of a reorganization, merger or consolidation of
      the Company with one or more other persons, other than a transaction
      following which:

                  (A) at least 51% of the equity ownership interests of the
            entity resulting from such transaction are beneficially owned
            (within the meaning of Rule 13d-3 promulgated under the Securities
            Exchange Act of 1934, as amended ("Exchange Act")) in substantially
            the same relative proportions by persons who, immediately prior to
            such transaction, beneficially owned (within the meaning of Rule
            13d-3 promulgated under the Exchange Act) at least 51% of the
            outstanding equity ownership interests in the Company; and

                  (B) at least 51% of the securities entitled to vote generally
            in the election of directors of the entity resulting from such
            transaction are beneficially owned (within the meaning of Rule 13d-3
            promulgated under the Exchange Act) in substantially the same
            relative proportions by persons who, immediately prior to such
            transaction, beneficially owned (within the meaning of Rule 13d-3
            promulgated under the Exchange Act) at least 51% of the securities
            entitled to vote generally in the election of directors of the
            Company;

            (ii) the acquisition of all or substantially all of the assets of
      the Company or beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 25% or more of the outstanding
      securities of the Company entitled to vote generally in the election of
      directors by any person or by any persons acting in concert;

            (iii) a complete liquidation or dissolution of the
      Company;

            (iv) the occurrence of any event if, immediately following such
      event, at least 50% of the members of the Board of Directors of the
      Company do not belong to any of the following groups:

                  (A)   individuals who were members of the Board of
            Directors of the Company on the date of this Agreement; or

                  (B) individuals who first became members of the Board of
            Directors of the Company after the date of this Agreement either:

                        (1) upon election to serve as a member of the Board of
                  Directors of the Company by affirmative vote of three-quarters
                  of the members of such board, or of a nominating committee
                  thereof, in office at the time of such first election; or

                        (2) upon election by the shareholders of the Board of
                  Directors of the Company to serve as a member of such board,
                  but only if nominated for election by affirmative vote of
                  three-quarters of the members of the Board of Directors of the
                  Company, or of a nominating committee thereof, in office at
                  the time of such first nomination;

            provided, however, that such individual's election or nomination did
            not result from an actual or threatened election contest (within the
            meaning of Rule 14a-11 of Regulation 14A promulgated


                                       13
<PAGE>
            under the Exchange Act) or other actual or threatened solicitation
            of proxies or consents (within the meaning of Rule 14a-11 of
            Regulation 14A promulgated under the Exchange Act) other than by or
            on behalf of the Board of Directors of the Company; or

            (v) any event which would be described in section 15(a)(i), (ii),
      (iii) or (iv) if the term "Bank" were substituted for the term "Company"
      therein.

In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them. For
purposes of this section 15(a), the term "person" shall have the meaning
assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

            (b) For purposes of this Agreement, a "Pending Change of Control"
shall mean: (i) the signing of a definitive agreement for a transaction which,
if consummated, would result in a Change of Control; (ii) the commencement of a
tender offer which, if successful, would result in a Change of Control; or (iii)
the circulation of a proxy statement seeking proxies in opposition to management
in an election contest which, if successful, would result in a Change of
Control.

            (c) Notwithstanding anything in this Agreement to the contrary, if
the Executive's employment with the Bank and the Company terminates due to death
or disability within one (1) year after the occurrence of a Pending Change of
Control and if a Change of Control occurs within two (2) years after such
termination of employment, he (or in the event of his death, his estate) shall
be entitled to receive the Standard Termination Entitlements and the Additional
Termination Entitlements that would have been payable if a Change of Control had
occurred on the date of his termination of employment and he had resigned with
Good Reason immediately thereafter; provided, that payment shall be deferred
without interest until, and shall be payable immediately upon, the actual
occurrence of a Change of Control.

            (d) Notwithstanding anything in this Agreement to the contrary: (i)
in the event of the Executive's resignation within sixty (60) days after the
occurrence of a Change of Control, he shall be entitled to receive the Standard
Termination Entitlements and Additional Termination Entitlements that would be
payable if his resignation were a resignation for Good Reason, without regard to
the actual circumstances of his resignation; and (ii) for a period of one (1)
year after the occurrence of a Change of Control, no discharge of the Executive
shall be deemed a discharge with Cause unless the votes contemplated by section
11(a) of this Agreement are supported by at least two-thirds of the members of
the Board of Directors of the Company and the Bank at the time the vote is taken
who were also members of the Board of Directors of the Company and the Bank
immediately prior to the Change of Control.

            (e) Notwithstanding anything in this Agreement to the contrary, for
purposes of computing the Additional Termination Entitlements due upon a
termination of employment that occurs, or is deemed to have occurred, after a
Change of Control, the Remaining Unexpired Employment Period shall be deemed to
be three (3) full years.

            SECTION 16. TAX INDEMNIFICATION.

            (a) If the Executive's employment terminates under circumstances
entitling him (or in the event of his death, his estate) to the Additional
Termination Entitlements, the Company shall pay to the Executive (or in the
event of his death, his estate) an additional amount intended to indemnify him
against the financial effects of the excise tax imposed on excess parachute
payments under section 280G of the Code (the "Tax Indemnity Payment"). The Tax
Indemnity Payment shall be determined under the following formula:


                                       14
<PAGE>
             X =               E x P
                         ------------------------------------
                         1 - [(FI x (1 - SLI)) + SLI + E + M]

            where

            E   =        the percentage rate at which an excise tax is assessed
                         under section 4999 of the Code;

            P   =        the amount with respect to which such excise tax is
                         assessed, determined without regard to this section 16;

            FI  =        the highest marginal rate of income tax applicable to
                         the Executive under the Code for the taxable year in
                         question;

            SLI =        the sum of the highest marginal rates of income tax
                         applicable to the Executive under all applicable state
                         and local laws for the taxable year in question; and

            M   =        the highest marginal rate of Medicare tax applicable to
                         the Executive under the Code for the taxable year in
                         question.


Such computation shall be made at the expense of the Company by an attorney or a
firm of independent certified public accountants selected by the Executive and
reasonably satisfactory to the Company (the "Tax Advisor") and shall be based on
the following assumptions: (i) that a change in ownership, a change in effective
ownership or control, or a change in the ownership of a substantial portion of
the assets, of the Bank or the Company has occurred within the meaning of
section 280G of the Code (a "280G Change of Control"); (ii) that all direct or
indirect payments made to or benefits conferred upon the Executive on account of
his termination of employment are "parachute payments" within the meaning of
section 280G of the Code; and (iii) that no portion of such payments is
reasonable compensation for services rendered prior to the Executive's
termination of employment.

            (b) With respect to any payment that is presumed to be a parachute
payment for purposes of section 280G of the Code, the Tax Indemnity Payment
shall be made to the Executive on the earlier of the date the Company, the Bank
or any direct or indirect subsidiary or affiliate of the Company or the Bank is
required to withhold such tax or the date the tax is required to be paid by the
Executive, unless, prior to such date, the Company delivers to the Executive the
written opinion, in form and substance reasonably satisfactory to the Executive,
of the Tax Advisor or of an attorney or firm of independent certified public
accountants selected by the Company and reasonably satisfactory to the
Executive, to the effect that the Executive has a reasonable basis on which to
conclude that (i) no 280G Change in Control has occurred, or (ii) all or part of
the payment or benefit in question is not a parachute payment for purposes of
section 280G of the Code, or (iii) all or a part of such payment or benefit
constitutes reasonable compensation for services rendered prior to the 280G
Change of Control, or (iv) for some other reason which shall be set forth in
detail in such letter, no excise tax is due under section 4999 of the Code with
respect to such payment or benefit (the "Opinion Letter"). If the Company
delivers an Opinion Letter, the Tax Advisor shall recompute, and the Company
shall make, the Tax Indemnity Payment in reliance on the information contained
in the Opinion Letter.


                                       15
<PAGE>
            (c) In the event that the Executive's liability for the excise tax
under section 4999 of the Code for a taxable year is subsequently determined to
be different than the amount with respect to which the Tax Indemnity Payment is
made, the Executive or the Company, as the case may be, shall pay to the other
party at the time that the amount of such excise tax is finally determined, an
appropriate amount, plus interest, such that the payment made under section
16(b), when increased by the amount of the payment made to the Executive under
this section 16(c), or when reduced by the amount of the payment made to the
Company under this section 16(c), equals the amount that should have properly
been paid to the Executive under section 16(a). The interest paid to the Company
under this section 16(c) shall be determined at the rate provided under section
1274(b)(2)(B) of the Code. The payment made to the Executive shall include such
amount of interest as is necessary to satisfy any interest assessment made by
the Internal Revenue Service and an additional amount equal to any monetary
penalties assessed by the Internal Revenue Service on account of an underpayment
of the excise tax. To confirm that the proper amount, if any, was paid to the
Executive under this section 16, the Executive shall furnish to the Company a
copy of each tax return which reflects a liability for an excise tax, at least
20 days before the date on which such return is required to be filed with the
Internal Revenue Service. Nothing in this Agreement shall give the Company any
right to control or otherwise participate in any action, suit or proceeding to
which the Executive is a party as a result of positions taken on his federal
income tax return with respect to his liability for excise taxes under section
4999 of the Code.

            SECTION 17. COVENANT NOT TO COMPETE.

            The Executive hereby covenants and agrees that, in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one year following the date of his
termination of employment with the Company or the Bank, he shall not, without
the written consent of the Company, become an officer, employee, consultant,
director or trustee of any savings bank, savings and loan association, savings
and loan holding company, bank or bank holding company, or any direct or
indirect subsidiary or affiliate of any such entity, that entails working within
any city or county in the State of New Jersey or any other county in which the
Company or the Bank maintains an office; provided, however, that this section 17
shall not apply if the Executive is entitled to the Additional Termination
Entitlements.

            SECTION 18. CONFIDENTIALITY.

            Unless he obtains the prior written consent of the Company, the
Executive shall keep confidential and shall refrain from using for the benefit
of himself, or any person or entity other than the Company or any entity which
is a subsidiary of the Company or of which the Company is a subsidiary, any
material document or information obtained from the Company, or from its parent
or subsidiaries, in the course of his employment with any of them concerning
their properties, operations or business (unless such document or information is
readily ascertainable from public or published information or trade sources or
has otherwise been made available to the public through no fault of his own)
until the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this section 18 shall prevent the Executive,
with or without the Company's consent, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding to the extent that such participation or
disclosure is required under applicable law.

            SECTION 19. SOLICITATION.

            The Executive hereby covenants and agrees that, for a period of one
year following his termination of employment with the Company or the Bank, he
shall not, without the written consent of the Company and the Bank, either
directly or indirectly:


                                       16
<PAGE>
            (a) solicit, offer employment to, or take any other action intended,
      or that a reasonable person acting in like circumstances would expect, to
      have the effect of causing any officer or employee of the Company, the
      Bank or any of their respective subsidiaries or affiliates to terminate
      his or her employment and accept employment or become affiliated with, or
      provide services for compensation in any capacity whatsoever to, any
      savings bank, savings and loan association, bank, bank holding company,
      savings and loan holding company, or other institution engaged in the
      business of accepting deposits, making loans or doing business within the
      counties specified in section 17;

            (b) provide any information, advice or recommendation with respect
      to any such officer or employee of any savings bank, savings and loan
      association, bank, bank holding company, savings and loan holding company,
      or other institution engaged in the business of accepting deposits, making
      loans or doing business within the counties specified in section 17; that
      is intended, or that a reasonable person acting in like circumstances
      would expect, to have the effect of causing any officer or employee of the
      Company, the Bank, or any of their respective subsidiaries or affiliates
      to terminate his employment and accept employment or become affiliated
      with, or provide services for compensation in any capacity whatsoever to,
      any savings bank, savings and loan association, bank, bank holding
      company, savings and loan holding company, or other institution engaged in
      the business of accepting deposits, making loans or doing business within
      the counties specified in section 17;

            (c) solicit, provide any information, advice or recommendation or
      take any other action intended, or that a reasonable person acting in like
      circumstances would expect, to have the effect of causing any customer of
      the Company to terminate an existing business or commercial relationship
      with the Company.

            SECTION 20. NO EFFECT ON EMPLOYEE BENEFIT PLANS OR PROGRAMS.

            The termination of the Executive's employment during the term of
this Agreement or thereafter, whether by the Company, by the Bank or by the
Executive, shall have no effect on the rights and obligations of the parties
hereto under the Company's or the Bank's qualified or non-qualified retirement,
pension, savings, thrift, profit-sharing or stock bonus plans, group life,
health (including hospitalization, medical and major medical), dental, accident
and long term disability insurance plans or such other employee benefit plans or
programs, or compensation plans or programs, as may be maintained by, or cover
employees of, the Company or the Bank from time to time; provided, however, that
nothing in this Agreement shall be deemed to duplicate any compensation or
benefits provided under any agreement, plan or program covering the Executive to
which the Company is a party and any duplicative amount payable under any such
agreement, plan or program shall be applied as an offset to reduce the amounts
otherwise payable hereunder.

            SECTION 21. SUCCESSORS AND ASSIGNS.

            This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Company and the Bank and their respective 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 Company may be sold or otherwise transferred. Failure of the
Company to obtain from any successor its express written assumption of the
Company's obligations hereunder at least 60 days in advance of the scheduled
effective date of any such succession shall be deemed a material breach of this
Agreement.


                                       17
<PAGE>
            SECTION 22. 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 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:

            If to the Executive:

                  Ronald E. Hermance, Jr.
                  327 McKinley Place
                  Ridgewood, New Jersey 07450

            If to the Company or the Bank:

                  Hudson City Bancorp, Inc.
                  West 80 Century Road
                  Paramus, New Jersey 07652-1473

                  Attention:  Chairman, Human Resources Committee

                  with a copy to:

                  Thacher Proffitt & Wood
                  Two World Trade Center
                  New York, New York 10048

                  Attention:  W. Edward Bright, Esq.

            SECTION 23. INDEMNIFICATION FOR ATTORNEYS' FEES.

            (a) The Company shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees and expenses, incurred
by him in connection with or arising out of any action, suit or proceeding
(including any tax controversy) in which he may be involved, as a result of his
efforts, in good faith, to defend or enforce the terms of this Agreement. For
purposes of this Agreement, any settlement agreement which provides for payment
of any amounts in settlement of the Company's or the Bank's obligations
hereunder shall be conclusive evidence of the Executive's entitlement to
indemnification hereunder, and any such indemnification payments shall be in
addition to amounts payable pursuant to such settlement agreement, unless such
settlement agreement expressly provides otherwise.

            (b) The Company's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment. Unless it is determined
that the Executive has acted frivolously or in bad faith, the Company shall pay
as incurred, to the full extent permitted by law, all legal fees and expenses
which the Executive


                                       18
<PAGE>
may reasonably incur as a result of or in connection with his consultation with
legal counsel or arising out of any action, suit, proceeding, tax controversy or
contest (regardless of the outcome thereof) by the Company, the Executive or
others regarding the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in section 7872(f)(2)(A) of the
Code. This section 23(b) shall apply whether such consultation, action, suit,
proceeding or contest arises before, on, after or as a result of a Change of
Control.

            SECTION 24. 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.

            SECTION 25. WAIVER.

            Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, 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.

            SECTION 26. 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.

            SECTION 27. GOVERNING LAW.

            Except to the extent preempted by federal law, this Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of New Jersey applicable to contracts entered into and to be performed
entirely within the State of New Jersey.

            SECTION 28. HEADINGS AND CONSTRUCTION.

            The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.

            SECTION 29. 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.

            SECTION 30. NON-DUPLICATION.

            In the event that the Executive shall perform services for the Bank
or any other direct or indirect subsidiary or affiliate of the Company or the
Bank, any compensation or benefits provided to the Executive by such other
employer shall be applied to offset the obligations of the Company hereunder, it


                                       19
<PAGE>
being intended that this Agreement set forth the aggregate compensation and
benefits payable to the Executive for all services to the Company, the Bank and
all of their respective direct or indirect subsidiaries and affiliates.

            SECTION 31. RELATIVE OBLIGATIONS OF THE BANK AND THE COMPANY.

            The Company shall, with respect to the Executive's services
hereunder and the compensation therefor and with respect to any termination of
the Executive's employment, have all of the obligations imposed on the Bank
under this Agreement to the same extent as though the name of the Company were
substituted for the name of the Bank herein and the Executive shall, with
respect to the services hereunder and the compensation therefor and with respect
to any termination of the Executive's employment, have all of the rights,
privileges and duties relative to the Company as though the name of the Company
were substituted for the name of the Bank herein. If the Executive performs
services for both the Bank and the Company, any entitlement of the Executive to
severance compensation and other termination benefits under this Agreement shall
be determined on the basis of the aggregate compensation payable to the
Executive by the Bank and the Company, and liability therefor shall be
apportioned between the Bank and the Company in the same manner as compensation
paid to the Executive for services to each of them; provided, however, that the
Company shall be jointly and severally liable with the Bank for all obligations
of the Bank under this Agreement; and provided, further, that in no event shall
the Bank bear any liability for actions of, or obligations undertaken by, the
Company under this Agreement and provided, further, that any payment otherwise
payable hereunder for which the Bank is not liable pursuant to Section 2(b)
shall be payable solely by the Company. It is the intent and purpose of this
section 31 that the Executive have the same legal and economic rights that he
would have if all of his services were rendered to and all of his compensation
were paid by the Company. This section 31 shall be construed and enforced to
give effect to such intent and purpose.

            SECTION 32. REQUIRED REGULATORY PROVISIONS.

            Notwithstanding anything herein contained to the contrary, any
payments to the Executive by the Company or the Bank, whether pursuant to this
Agreement or otherwise, are subject to and conditioned upon their compliance
with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1828(k), and any regulations promulgated thereunder.


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<PAGE>
            IN WITNESS WHEREOF, the Bank and the Company have caused this
Agreement to be executed and the Executive has hereunto set his hand, all as of
the day and year first above written.




                                         __________________________________
                                         RONALD E. HERMANCE, JR.



                                         HUDSON CITY SAVINGS BANK

Attest:

By    _______________________________    By    _________________________________
      Name:                                    Name:
      Title:                                   Title:

[Seal]



                                         HUDSON CITY BANCORP, INC.

Attest:
                                         Attest:
By    _______________________________
      Name:                              By    _________________________________
      Title:                                   Name:
                                               Title:
[Seal]


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