exhibit10-29.htm


    

      DIME
COMMUNITY BANCSHARES, INC.

      ANNUAL
INCENTIVE PLAN

      Amended
and Restated as of December 31, 2008

      


      SECTION
1.                                Purpose.

      


      The purpose of the Dime Community
Bancshares, Inc. ("Dime") Annual Incentive Plan (the "Plan") is to provide
incentives for senior executives and other key employees whose performance in
fulfilling the responsibilities of their positions can have a major impact on
the profitability and future growth of Dime (the "Company"). The Plan is part of
an overall compensation program which ties the achievement of annual strategic
and operating goals with compensation.  Effective as of December 31,
2008, this Plan is amended and restated in order to comply with the applicable
requirements of section 409A of the Internal Revenue Code of 1986, as amended
(“Code”).

      


      SECTION
2.                                Definitions.

      


      For the purposes of the Plan, the
following terms shall have the meanings indicated:

      


      "Award" shall mean the payment of an
award by the Committee to a Participant pursuant to Section 4.

      


      "Applicable Period" shall mean, with
respect to any Award Year, a period commencing on or before the first day of
such Award Year and ending no later than the earlier of (i) the 90th day of such
Award Year or (ii) the date on which 25% of such Award Year has been completed.
Any action required under the Plan to be taken within the period specified in
the previous sentence may be taken at a later date with respect to Participants
who are not Covered Officers and with respect to Covered Officers if Section
162(m) is amended to permit such later date.

      


      "Award Year" shall mean any fiscal
year, or other performance period designated by the Committee, with respect to
the Company's performance in which an Award is granted.

      


      "Board" shall mean the Board of
Directors of the Company.

      


      "Committee" shall mean the Committee
designated pursuant to Section 3. Unless otherwise determined by the Board, the
Compensation Committee designated by the Board shall be the Committee under the
Plan.

      


      "Covered Officer" shall mean at any
date (i) any individual who, with respect to the previous taxable year of the
Company, was a "covered employee" of the Company within the meaning of Section
162(m), as hereinafter defined; provided, however, that the term "Covered
Officer" shall not include any such individual who is designated by the
Committee, in its discretion, at the time of any Award or at any subsequent
time, as reasonably expected not to be such a "covered employee" with respect to
the current taxable year of the Company and (ii) any individual who is
designated by the Committee, in its discretion, at the time of any Award or at
any subsequent time, as reasonably expected to be such a "covered employee" with
respect to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be
paid.

      


      "Individual Award Opportunity" shall
mean the performance-based award opportunity for a Participant for a given Award
Year as specified by the Committee within the Applicable Period, which may be
expressed in dollars or on a formula basis that is consistent with the
provisions of this Plan.

      


      "Participant" shall mean a senior
executive or other key employee of the Company selected by the Committee in
accordance with Section 4(a) who receives an Individual Award
Opportunity.

      


      "Section 162(m)" shall mean Section
162(m) of the Internal Revenue Code of 1986 and the rules promulgated thereunder
or any successor provision thereto as in effect from time to time.

      


      SECTION
3.                                Administration.

       

      (a)           Committee.
Subject to the authority and powers of the Board in relation to the Plan as
hereinafter provided, the Plan shall be administered by a Committee designated
by the Board consisting of two or more members of the Board each of whom is an
"outside director" within the meaning of Section 162(m). The Committee shall
have full authority to interpret the Plan and from time to time to adopt such
rules and regulations for carrying out the Plan as it may deem best, including
without limitation:

      


      (i)           to
designate Participants and Individual Award Opportunities and/or bonus pool
award opportunities;

      


      (ii)           to
designate and thereafter administer the performance goals and other Award terms
and conditions;

      


      (iii)           to
determine and certify the bonus amounts earned for any Award Year;

      


      (iv)           to
determine the effect on an Award of a termination of employment;
and

      


      (v)           to
decide whether, under what circumstances, and subject to what terms, bonus
payouts are to be paid on a deferred basis, including automatic deferrals at the
Committee's election as well as elective deferrals at the election of
Participants.

      


      (b)           Committee
Determinations. All determinations by the Committee shall be made by the
affirmative vote of a majority of its members, but any determination reduced to
writing and signed by a majority of the members shall be fully as effective as
if it had been made by a majority vote at a meeting duly called and held. All
decisions by the Committee pursuant to the provisions of the Plan and all orders
or resolutions of the Board pursuant thereto shall be final, conclusive and
binding on all persons, including the Participants, the Company and its
subsidiaries, and stockholders.

      


      SECTION
4.                                Eligibility
for and Payment of Awards.

       

      (a)           Eligible
Employees. Subject to the provisions of the Plan, within the Applicable Period,
the Committee may select officers or employees of the Company or any of its
subsidiaries who will be eligible to earn Awards under the Plan with respect to
such year and determine the amount of the Individual Award Opportunities and the
conditions under which they may be earned.

      


      (b)           Payment
of Awards. Awards under the Plan shall be paid in cash or shares of Company
stock, subject to applicable withholding taxes, on May 15th of the calendar year
following the end of the Plan Year.

       

      The
Committee may require that a Participant must still be employed as of the end of
the Award Year and/or the date on which the bonus is calculated, in order to be
eligible for an award for such Award Year and the Committee may adopt such
forfeiture, proration or other rules as it deems appropriate, in its sole
discretion, regarding the impact on an Award of a Participant's termination of
employment. In such event, the shares of Company stock delivered in payment of
an award that has been earned shall have an aggregate fair market value
(determined as of the date the award is earned) equal to the dollar amount of
the earned award, and fair market value for this purpose shall be determined on
the basis of the closing sales price for a share of Company common stock on the
relevant date (or if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) as reported in the principal
consolidated reporting system with respect to securities listed or admitted to
trading on the principal United States securities exchange on which the Shares
are listed or admitted to trading (including the Nasdaq Stock Market as a
national securities exchange for this purpose), as of the close of the market in
New York City and without regard to after-hours trading activity.

      


      (c)           During
the Applicable Period, the Committee shall establish the Individual Award
Opportunities for such Award Year, which shall be based on achievement of stated
target performance goals, and may be stated in dollars or on a formula
basis.

      


      (d)           Awards
to Covered Officers.

      


      (i)           Notwithstanding
the provisions of Sections 4(a), 4(b), and 4(c) hereof, any Award to any Covered
Officer shall be granted in accordance with the provisions of this Section 4(d).
Subject to the discretion of the Committee as set forth in Section 6(b) hereof,
the maximum amount of the Award that may be granted with respect to any Award
Year to any Covered Officer at the time of such grant shall be
$1,500,000.

      


      (ii)           Any
provision of the Plan to the contrary notwithstanding, no Covered Officer shall
be entitled to any payment of an Award with respect to an Award Year unless the
members of the Committee shall have certified in accordance with Section 162(m)
the extent to which the applicable performance goals have been
satisfied.

      


      


      SECTION
5.                                Performance
Goals

       

      For any given Award Year, the Committee
shall, within the Applicable Period, set one or more objective performance goals
for each Participant and/or each group of Participants and/or each bonus pool
(if applicable). The performance goals shall be limited to one or more of the
following Company, subsidiary, operating unit or division financial performance
measures:

      


      (i)           earnings
per share *

      


      (ii)           net
income *

      


      (iii)           return
on average equity *

      


      (iv)           return
on average assets *

      


      (v)           core
earnings *

      


      (vi)           stock
price

      


      (vii)           operating
income

      


      (viii)                      operating
efficiency ratio;

      


      (ix)           net
interest rate spread;

      


      (x)           loan
production volumes;

      


      (xi)           non-performing
loans;

      


      (xii)           cash
flow;

      


      (xiii)                      strategic
business objectives, consisting of one or more objectives based on meeting
specified cost targets, business expansion goals, and goals relating to
acquisitions or divestitures

      


      (xiv)                      except
in the case of a Covered Officer, any other performance criteria established by
the Committee

      


      (xv)           any
combination of (i) through (xiv) above.

      


        *
Performance goals indicated may be established on the basis of reported earnings
or cash earnings.

      


      Each goal
may be expressed on an absolute and/or relative basis, may be based on or
otherwise employ comparisons based on internal targets, the past performance of
the Company and/or the past or current performance of other
companies.

      


      SECTION
6.                                General
Provisions.

       

      (a)           Adjustments.
If the performance criteria for any Award Year shall have been affected by
special factors (including material changes in accounting policies or practices,
material acquisitions or dispositions of property, or other unusual items) that
in the Committee's judgment should or should not be taken into account, in whole
or in part, in the equitable administration of the Plan, the Committee may, for
any purpose of the Plan, adjust such criteria and make payments accordingly
under the Plan.

      


      (b)           No
Adjustments for Covered Officers.  Notwithstanding the provisions of
subparagraph (a) above, any adjustments made in accordance with or for the
purposes of subparagraph (a) shall be disregarded for purposes of calculating
the performance criteria if and to the extent that such adjustments would have
the effect of increasing the amount of an Award to a Covered Officer. In
addition, the Committee may, in the exercise of its discretion, reduce or
eliminate the amount of an Award to a Covered Officer otherwise calculated in
accordance with the provisions of Section 4(d) prior to payment
thereof.

      


      (c)           No
Assignment.  No portion of any Award under the Plan may be assigned or
transferred otherwise than by will or by the laws of descent and distribution
prior to the payment thereof.

      


      (d)           Tax
Requirements.  All payments made pursuant to the Plan shall be subject
to withholding in respect of income and other taxes required by law to be
withheld, in accordance with procedures to be established by the
Committee.

      


      (e)           No
Additional Participant Rights.  The selection of an individual for
participation in the Plan shall not give such Participant any right to be
retained in the employ of the Company or any of its subsidiaries, and the right
of the Company or any such subsidiary to dismiss or discharge any such
Participant, or to terminate any arrangement pursuant to which any such
Participant provides services to the Company is specifically reserved. The
benefits provided for Participants under the Plan shall be in addition to, and
shall in no way preclude, other forms of compensation to or in respect of such
Participants.

      


      (f)           Liability.  The
Board and the Committee shall be entitled to rely on the advice of counsel and
other experts, including the independent accountants for the Company. No member
of the Board or of the Committee or any officers of the Company or its
subsidiaries shall be liable for any act or failure to act under the Plan,
except in circumstances involving bad faith on the part of such member or
officer.

      


      (g)           Other
Compensation Arrangements.  Nothing contained in the Plan shall
prevent the Company or any subsidiary or affiliate of the Company from adopting
or continuing in effect other compensation arrangements, which arrangements may
be either generally applicable or applicable only in specific
cases.

      


      (h)           Governing
Law.  The validity, construction, and effect of the Plan and any rules
and regulations relating to the Plan and any Award Agreement shall be determined
in accordance with the laws of the State of Delaware.

      


      SECTION
7.                                Amendment
and Termination of the Plan.

       

      The Board may at any time terminate, in
whole or in part, or from time to time amend the Plan, provided that, except as
otherwise provided in the Plan, no such amendment or termination shall adversely
affect the rights of any Participant under any Awards deferred by such
Participant pursuant to Section 4(b). In the event of such termination, in whole
or in part, of the Plan, the Committee may in its sole discretion direct the
payment to Participants of any Awards not theretofore paid out prior to the
respective dates upon which payments would otherwise be made hereunder to such
Participants, in a lump sum or installments as the Committee shall prescribe
with respect to each such Participant. The Board may at any time and from time
to time delegate to the Committee any or all of its authority under this Section
6. Any amendment to the Plan that would affect any Covered Officer shall be
approved by the Company's stockholders if required by and in accordance with
Section 162(m).

      


      SECTION
8.                                Re-approval by
Shareholders.

       

      Any material terms of the performance
goals described in Section 5 shall be disclosed to and re-approved by
shareholders no later than the first shareholder meeting that occurs in the
fifth year following the year in which shareholders previously approved the
performance goals.

      


      SECTION
9.                                Section
409A Compliance.

       

      Dime acknowledges that the payments
promised to the Participants under this Plan must either comply with the
requirements of section 409A of the Code (“Section 409A”) and the regulations
thereunder or qualify for an exception from compliance.  To that end,
Dime asserts that the payment described in section 4(b) of this Plan is intended
to be a payment upon a specified time or fixed schedule pursuant to Section
409A(a)(2)(A)(iv).    In the case of a payment promised
under this Plan that is not exempt from Section 409A, and that is to be paid
upon a separation from service (within the meaning of Treasury Regulation
1.409A-1(h)) to a Participant who is a specified employee within the meaning of
section 409A of the Code at the time of such separation from service, such
payment shall not be made prior to, and shall, if necessary, be deferred (with
interest at the annual rate of 6%, compounded monthly from the date of
separation from service to the date of actual payment) to and paid on the first
day of the seventh month to begin after the separation from service and, if the
Participant is a specified employee (within the meaning of Treasury Regulation
Section 1.409A-1(i)) on the date of his separation from service, the first day
of the seventh month following the Participant’s separation from
service.  Each amount payable under this plan that is required to be
deferred beyond the Participant’s separation from service, shall be deposited on
the date on which, but for such deferral, Dime would have paid such amount to
the Participant, in a grantor trust which meets the requirements of Revenue
Procedure 92-65 (as amended or superseded from time to time), the trustee of
which shall be a financial institution selected by Dime with the approval of the
Participant (which approval shall not be unreasonably withheld or delayed),
pursuant to a trust agreement the terms of which are approved by the Participant
(which approval shall not be unreasonably withheld or delayed) (the “Rabbi
Trust”), and payments made shall include earnings on the investments made with
the assets of the Rabbi Trust, which investments shall consist of short-term
investment grade fixed income securities or units of interest in mutual funds or
other pooled investment vehicles designed to invest primarily in such
securities.  Furthermore, this Plan shall be construed and
administered in such manner as shall be necessary to effect compliance with
Section 409A.