exhibit10-9.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Severance
Pay Plan

    


    of

    


    The Dime Savings Bank of
Williamsburgh

    ________________________

     

    Adopted
on February 8, 1996

     

    Effective
on November 1, 1995, Amended and Restated Effective as of January 1,
2008

     


    
      
        
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    SEVERANCE
PAY PLAN OF THE

     

    DIME
SAVINGS BANK OF WILLIAMSBURGH

     

    Article
I

     

    


     

    Purpose

     

    Section
1                      Statement of
Purpose.

     

    The Dime
Savings Bank of Williamsburgh adopts this Severance Pay Plan for the benefit of
its eligible Employees. The Bank recognizes that, as a public company, it will
be subject to the possibility of a negotiated or unsolicited change of control
which may result in a loss of employment for some of its Employees and that it
may acquire other companies in transactions which may result in a loss of
employment for the employees of the Acquired Companies. The purpose of the Plan
is to encourage the Bank's Employees and those of Acquired Companies to continue
working for their employers with their full time and attention devoted to their
employer's affairs by providing prescribed income security and job placement
assistance in the event of an Involuntary Severance following a Change of
Control.  Effective as of_ January 1, 2008, the Plan is amended and
restated to comply with the applicable requirements of section 409A of the
Internal Revenue Code of 1986, as amended (“Code.”)

    


     

    Article
II

     

    


     

    Definitions

     

    For
purposes of the Plan, the following terms shall have the meanings assigned to
them below, unless a different meaning is plainly indicated by the
context:

     

    Section
2.1                                Acquired
Company means any of the following companies which is acquired by, or
merged or consolidated with, the Bank:

     

    1.           Pioneer
Savings Bank, F.S.B

     

    2.           Conestoga
Bancorp, Inc

     

    Section
2.2                                Acquired
Employee means a person who is employed by an Acquired Company at the
time when such company becomes an Acquired Company and who becomes an employee
of the Bank immediately thereafter. An Acquired Employee whose employment by the
Bank terminates for any reason and who is subsequently re-employed by the Bank
shall not be considered an Acquired Employee following such
re-employment.

     

    Section
2.3                                Bank
means The Dime Savings Bank of Williamsburgh (or its successors or assigns,
whether by merger, consolidation, sale of assets, statutory receivership,
operation of law or otherwise) and any affiliate of The Dime Savings Bank of
Williamsburgh which, with the approval of the Board of Directors of The Dime
Savings Bank of Williamsburgh, and subject to such conditions as may be imposed
by such Board, adopts this Plan.

     

    Section
2.4                                Board
means the Board of Directors of The Dime Savings Bank of
Williamsburgh.

     

    Section
2.5                                Cause
means, with respect to the conduct of an Employee in connection with his
employment with the Bank, personal dishonesty, incompetence, willful misconduct,
breach of fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease and desist order in
each case as measured against standards generally prevailing at the relevant
time in the savings and community banking industry; provided, however, that
following a Change of Control of the Bank or a company which owns 100% of the
outstanding common stock of the Bank, an Employee shall not be deemed to have
been discharged for Cause unless and until he shall have received a written
notice of termination from the Board, accompanied by a resolution duly adopted
by affirmative vote of a majority of the entire Board at a meeting called and
held for such purpose (after reasonable notice to the Employee and a reasonable
opportunity for the Employee to make oral and written presentations to the
members of the Board, on his own behalf, or through a representative, who may be
his legal counsel, to refute the grounds for the proposed determination)finding
that in the good faith opinion of the Board grounds exist for discharging the
Employee for "Cause".

     

    Section
2.6                                Change
of Control means

     

    (a)           with
respect to The Dime Savings Bank of Williamsburgh:

     

    (i)           the
occurrence of any event upon which any "person" (as such term is
used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended ("Exchange
Act")), other than (A) a trustee or other fiduciary holding securities
under an employee benefit plan maintained for the benefit of employees of The
Dime Savings Bank of Williamsburgh; (B) a corporation owned, directly or
indirectly, by the stockholders of The Dime Savings Bank of Williamsburgh in
substantially the same proportions as their ownership of stock of The Dime
Savings Bank of Williamsburgh; or (C) any group constituting a person in which
employees of The Dime Savings Bank of Williamsburgh are substantial members,
becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities issued by The Dime Savings Bank of
Williamsburgh representing 25% or more of the combined voting power of all of
The Dime Savings Bank of Williamsburgh's then outstanding securities;
or

     

    (ii)           the
occurrence of any event upon which the individuals who on the date the Plan is
adopted are members of the Board, together with individuals whose election by
the Board or nomination for election by The Dime Savings Bank of Williamsburgh's
stockholders was approved by the affirmative vote of at least two-thirds of the
members of the Board then in office who were either members of the Board on the
date this Plan is adopted or whose nomination or election was previously so
approved, cease for any reason to constitute a majority of the members of the
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of directors of The Dime Savings Bank of
Williamsburgh (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or

     

    (iii)           the
shareholders of The Dime Savings Bank of Williamsburgh (or, if The Dime Savings
Bank of Williamsburgh is not then a stock form institution, the Board of The
Dime Savings Bank of Williamsburgh) approve either:

     

    (A)           a
merger or consolidation of The Dime Savings Bank of Williamsburgh with any other
corporation, other than a merger or consolidation following which both of the
following conditions are satisfied:

     

    (I)           either
(1) the members of the Board of The Dime Savings Bank of Williamsburgh
immediately prior to such merger or consolidation constitute at least a majority
of the members of the governing body of the institution resulting from such
merger or consolidation; or (2) the shareholders of The Dime Savings Bank of
Williamsburgh own securities of the institution resulting from such merger or
consolidation representing 80% or more of the combined voting power of all such
securities then outstanding in substantially the same proportions as their
ownership of voting securities of The Dime Savings Bank of Williamsburgh before
such merger or consolidation; and

     

    (II)           the
entity which results from such merger or consolidation expressly agrees in
writing to assume and perform The Dime Savings Bank of Williamsburgh's
obligations under the Plan; or

     

    (B)           a
plan of complete liquidation of The Dime Savings Bank of Williamsburgh or an
agreement for the sale or disposition by The Dime Savings Bank of Williamsburgh
of all or substantially all of its assets; and

     

    (b)           with
respect to any company which owns 100% of the outstanding common stock The Dime
Savings Bank of Williamsburgh, any event that would be described in section
2.6(a) if the name of such company were substituted for "The Dime
Savings Bank of Williamsburgh" therein; and

     

    (c)           with
respect to an Acquired Company, the transaction by which such company becomes an
Acquired Company.

     

    In no
event, however, shall the transaction by which The Dime Savings Bank of
Williamsburgh converts from a mutual savings bank to a stock savings bank, or
any transaction by which a company wholly owned by The Dime Savings Bank of
Williamsburgh becomes the parent company of The Dime Savings Bank of
Williamsburgh be deemed a Change of Control.

     

    Section
2.7                                Employee
means any person, including an Officer, who is employed by the Bank, other than:
(a) a person who is compensated on an hourly rate basis; (b) a person who works
for the Bank on a part-time or temporary basis; (c) an Employee receiving
long-term disability benefits; or (d) a person who has an employment contract, change of
control agreement or other agreement with the Bank or who is covered by other
programs which provide severance benefits or by their terms exclude such person
from participation in this Plan.

     

    Section
2.8                                FDI
Act means the Federal Deposit Insurance Act, as the same may be amended
from time to time, and the corresponding provisions of any successor
statute.

     

    Section
2.9                                Involuntary
Severance means (a) the discharge or dismissal of an Employee by the Bank
other than for Cause, or the resignation by the Employee from his position with
the Bank, which resignation the Employee is asked or compelled by the Bank to
tender other than for Cause; or (b) termination of employment at an Employee's
election within sixty (60) days after any action following a Change of Control
which, either alone or together with other actions, results in: (i) the
reduction in the Employee's Salary by more than 20%; (ii) the assignment of the
Employee to a job requiring relocation of his residence in order to be able to
commute without unreasonable difficulty, expense or inconvenience; (iii) the
assignment of the Employee to duties or to an office or working space which
involves unreasonable personal embarrassment; or (iv) a material adverse change
in the Employee's title, position or responsibilities at the Bank.

     

    Section
2.10                                Officer
means, in the case of an Employee, an officer of the Bank and in the case of an
Acquired Employee, a person who is an officer of the Acquired Company
immediately prior to the closing of the transaction pursuant to which such
company becomes an Acquired Company.

     

    Section
2.11                                OTS
means the Office of Thrift Supervision of the United States Department of the
Treasury, and its successors.

     

    Section
2.12                                Plan
means this Severance Pay Plan of The Dime Savings Bank of Williamsburgh, as the
same may be amended from time to time.

     

    Section
2.13                                Plan
Administrator means the Compensation Committee of the Board of Directors
of The Dime Savings Bank of Williamsburgh.

     

    Section
2.14                                Plan
Year means the calendar year.

     

    Section
2.15                                Salary
means (a) in the case of an Employee, the highest basic annual rate of salary of
the Employee for his services to the Bank (excluding overtime, bonuses and other
forms of additional compensation) attained by the Employee during his employment
with the Bank, and (b) in the case of an Acquired Employee, the highest basic
annual rate of salary of an the Acquired Employee for his services to the
Acquired Company (excluding overtime, bonuses and other forms of additional
compensation) attained by the Employee during his employment with the Acquired
Company.

     

    Section
2.16                                Service
means service rendered by an Employee that is, or would be, recognized under the
Retirement Plan of The Dime Savings Bank of Williamsburgh in RSI Retirement
Trust for vesting purposes as of the date of the Employee's Involuntary
Severance.

     

    Article
III

     

    


     

    Benefits

     

    Section
3.1                                Severance Benefits for
Employees.

     

    (a)           An
Employee with at least one (1) year of Service whose employment with the Bank is
terminated under circumstances constituting an Involuntary Severance, other than
for Cause, as a result of, within twelve months following or within three (3)
months prior to, a Change of Control with respect to the Bank or any company
which owns 100% of the outstanding common stock of the Bank shall be entitled to
the following benefits:

     

    (i)           if
the Employee is or has, at any time after November 1, 1995,
been an Officer of the Bank, he shall be entitled, as severance pay, to a weekly
payment in an amount equal to one week's Salary, commencing with the first week
following the date of the Employee's Involuntary Severance and continuing for
twice the number of weeks as the Employee has whole years of Service, or, if
less, for thirty-nine (39) weeks; or

     

    (ii)           if
the Employee is not an Employee described in section 3.1(a)(i), he shall be
entitled, as severance pay, to a weekly payment in an amount equal to one week's
Salary, commencing with the first week following the date of the Employee's
Involuntary Severance and continuing for the same number of weeks as the
Employee has whole years of Service, or, if less, for twenty-six (26) weeks;
provided, however, that in no event shall any Employee described in section
3.1(a)(i) or (ii) receive, as severance pay under this Plan, less than four
weeks' Salary.

     

    (b)           Each
Employee who is entitled to payments under section 3.1(a)(i) or (ii) shall, for
the duration of such payments, continue to be eligible for all of the benefits
provided under the Bank's employee benefit plans and programs (excluding
tax-qualified plans and other plans which by law must restrict participation to
active employees) as if he were still an Employee and working at the Bank,
except that he shall cease to accrue vacation and shall be paid a lump sum
payment at the date of his Involuntary Severance in lieu of any unused accrued
vacation.

     

    (c)           Each
Employee who is entitled to benefits under section 3.1(a)(i) or (ii) shall also
be entitled to outplacement services as follows:

     

    (i)           an
Employee described in section 3.1(a)(i) shall be entitled to utilize the
services of an outplacement counseling firm at the Bank's expense for assistance
in preparing a resume, developing interviewing skills, identifying career
opportunities and evaluating job offers and for access to office and secretarial
facilities, provided that the fee for such services shall not exceed 12% of the
Employee's Salary; and

     

    (ii)           if
the Employee is not an Employee described in section 3.1(a)(i), he shall be
entitled to utilize the services of an outplacement counseling firm at the
Bank's expense, for assistance in preparing a resume, developing interviewing
skills, identifying career opportunities and evaluating job offers, provided
that the fee for such services shall not exceed 6% of the Employee's Salary or
$1,000, whichever is higher.

     

    The
outplacement firm utilized by any Employee or group of Employees shall be
selected by the Plan Administrator or, if permitted by the Plan Administrator
selected by the Employee or Employees subject to the Plan Administrator's
approval.

     

    Section
3.2                                Severance Benefits for
Acquired Employees.

     

    (a)           An
Acquired Employee with at least one (1) year of Service whose employment with
the Bank is terminated under circumstances constituting an Involuntary
Severance, other than for Cause within twelve months following a Change of
Control with respect to the relevant Acquired Company shall be entitled to the
following benefits:

     

    (i)           if
the Employee was an Officer of the Acquired Company, he shall be entitled, as
severance pay, to a weekly payment in an amount equal to one week's Salary,
commencing with the first week following the date of the Employee's Involuntary
Severance and continuing for twice the number of weeks as the Employee has whole
years of Service, or, if less, for thirty-nine (39) weeks; or

     

    (ii)           if
the Employee is not an Employee described in section 3.1(a)(i), he shall be
entitled, as severance pay, to a weekly payment in an amount equal to one week's
Salary, commencing with the first week following the date of the Employee's
Involuntary Severance and continuing for the same number of weeks as the
Employee has whole years of Service, or, if less, for twenty-six (26) weeks;
provided, however, that in no event shall any Employee described in section
3.1(a)(i) or (ii) receive, as severance pay under this Plan, less than four
weeks' Salary.

     

    (b)           Each
Employee who is entitled to payments under section 3.1(a)(i) or (ii) shall, for
the duration of such payments, continue to be eligible for all of the benefits
provided under the Bank's employee benefit plans and programs (excluding
tax-qualified plans and other plans which by law must restrict participation to
active employees) as if he were still an Employee and working at the Bank,
except that he shall cease to accrue vacation and shall be paid a lump sum
payment at the date of his Involuntary Severance in lieu of any unused accrued
vacation.

     

    (c)           Each
Employee who is entitled to benefits under section 3.1(a)(i) or (ii) shall also
be entitled to outplacement services as follows:

     

    (i)           an
Employee described in section 3.1(a)(i) shall be entitled to utilize the
services of an outplacement counseling firm at the Bank's expense for assistance
in preparing a resume, developing interviewing skills, identifying career
opportunities and evaluating job offers and for access to office and secretarial
facilities, provided that the fee for such services shall not exceed 12% of the
Employee's Salary; and

     

    (ii)           if
the Employee is not an Employee described in section 3.1(a)(i), he shall be
entitled to utilize the services of an outplacement counseling firm at the
Bank's expense, for assistance in preparing a resume, developing interviewing
skills, identifying career opportunities and evaluating job offers, provided
that the fee for such services shall not exceed 6% of the Employee's Salary or
$1,000, whichever is higher.

     

    The
outplacement firm utilized by any Employee or group of Employees shall be
selected by the Plan Administrator or, if permitted by the Plan Administrator
selected by the Employee or Employees subject to the Plan Administrator's
approval.  Any payment which is reimbursed to the Employee under this
section 3.2(c) shall be made on or before the last day of the Employee’s taxable
year following the taxable year in which the expense was incurred.

     

    Section
3.3                                Vesting.

     

    The
benefits to be provided under this Article III of the Plan to an Employee shall
be completely vested and nonforfeitable upon the occurrence of a Change of
Control with respect to the Bank or any company which owns 100% of the
outstanding common stock of the Bank.

     

    Section
3.4                                Indemnification.

     

    The Bank
shall indemnify, hold harmless and defend each Employee against costs or
expenses, including reasonable attorneys' fees, incurred by him or arising out
of any action, suit or proceeding in which he may be involved, as a result of
his efforts, in good faith, to defend or enforce his rights under this Plan;
provided, however, that the Employee shall have substantially prevailed on the
merits pursuant to a judgment, decree or order of a court of competent
jurisdiction or of an arbitrator in an arbitration proceeding, or in a
settlement. For purposes of this Agreement, any settlement agreement which
provides for payment of any amounts in settlement of the Bank's obligations
hereunder shall be conclusive evidence of the Employee'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. Any payment which is
reimbursed to the Employee under this section 3.4 shall be made on or before the
last day of the Employee’s taxable year following the taxable year in which the
expense was incurred.

     

    Article
IV

     

    


     

    Administration

     

    Section
4.1                                Named
Fiduciaries.

     

    The term
"Named Fiduciary" shall
mean (but only to the extent of the responsibilities of each of them) the Plan
Administrator and the Board. This Article V is intended to allocate to each
Named Fiduciary the responsibility for the prudent execution of the functions
assigned to him or it, and none of such responsibilities or any other
responsibility shall be shared by two or more of such Named Fiduciaries.
Whenever one Named Fiduciary is required by the Plan to follow the directions of
another Named Fiduciary, the two Named Fiduciaries shall not be deemed to have
been assigned a shared responsibility, but the responsibility of the Named
Fiduciary giving the directions shall be deemed his sole responsibility, and the
responsibility of the Named Fiduciary receiving those directions shall be to
follow them insofar as such instructions are on their face proper under
applicable law.

     

    Section
4.2                                Plan
Administrator.

     

    The Plan
Administrator shall subject to the responsibilities of the Board, have the
responsibility for the day-to-day control, management, operation and
administration of the Plan. The Plan Administrator shall have the following
responsibilities:

     

    (a)           To
maintain records necessary or appropriate for the administration of the
Plan;

     

    (b)           To
give and receive such instructions, notices, information, materials, reports and
certifications as may be necessary or appropriate in the administration of the
Plan;

     

    (c)           To
prescribe forms and make rules and regulations consistent with the terms of the
Plan and with the interpretations and other actions of the
Committee;

     

    (d)           To
require such proof or evidence of any matter from any person as may be necessary
or appropriate in the administration of the Plan;

     

    (e)           To
prepare and file, distribute or furnish all reports, plan descriptions, and
other information concerning the Plan, including, without limitation, filings
with the Secretary of Labor and employee communications as shall be required of
the Plan Administrator under ERISA;

     

    (f)           To
determine any question arising in connection with the Plan, including any
question of Plan interpretation, and the Plan Administrator's decision or action
in respect thereof shall be final and conclusive and binding upon all persons
having an interest under the Plan;

     

    (g)           To
review and dispose of claims under the Plan filed pursuant to section 4.3 and
appeals of claims decisions pursuant to section 4.4;

     

    (h)           If
the Plan Administrator shall determine that by reason of illness, senility,
insanity, or for any other reason, it is undesirable to make any payment to the
person entitled thereto, to direct the application of any amount so payable to
the use or benefit of such person in any manner that the Plan Administrator may
deem advisable or to direct in the Plan Administrator's discretion the
withholding of any payment under the Plan due to any person under legal
disability until a representative competent to receive such payment in his
behalf shall be appointed pursuant to law;

     

    (i)           To
discharge such other responsibilities or follow such directions as may be
assigned or given by the Board; and

     

    (j)           To
perform any duty or take any action which is allocated to the Plan Administrator
under the Plan.

     

    The Plan
Administrator shall have the power and authority necessary or appropriate to
carry out his responsibilities.

     

    Section
4.3                                Claims
Procedure.

     

    Any claim
relating to benefits under the Plan shall be filed with the Plan Administrator
on a form prescribed by it. If a claim is denied in whole or in part, the Plan
Administrator shall give the claimant written notice of such denial, which
notice shall specifically set forth:

     

    (a)           The
reasons for the denial;

     

    (b)           The
pertinent Plan provisions on which the denial was based;

     

    (c)           Any
additional material or information necessary  for the claimant to
perfect his claim and an explanation of why such material or information is
needed; and

     

    (d)           An
explanation of the Plan's procedure for review of the denial of the
claim.

     

    In the
event that the claim is not granted and notice of denial of a claim is not
furnished by the 30th day after such claim was filed, the claim shall be deemed
to have been denied on that day for the purpose of permitting the claimant to
request review of the claim.

     

    Section
4.4                                Claims Review
Procedure.

     

    Any
person whose claim filed pursuant to section 4.3 has been denied in whole or in
part by the Plan Administrator may request review of the claim by the Plan
Administrator, upon a form prescribed by the Plan Administrator. The claimant
shall file such form (including a statement of his position) with the Plan
Administrator no later than 60 days after the mailing or delivery of the written
notice of denial provided for in section 4.3, or, if such notice is not
provided, within 60 days after such claim is deemed denied pursuant to section
4.3. The claimant shall be permitted to review pertinent documents. A decision
shall be rendered by the Plan Administrator and communicated to the claimant not
later than 30 days after receipt of the claimant's written request for review.
However, if the Plan Administrator finds it necessary, due to special
circumstances (for example, the need to hold a hearing), to extend this period
and so notifies the claimant in writing, the decision shall be rendered as soon
as practicable, but in no event later than 120 days after the claimant's request
for review. The Plan Administrator's decision shall be in writing and shall
specifically set forth:

     

    (a)           The
reasons for the decision; and

     

    (b)           The
pertinent Plan provisions on which the decision is based.

     

    Any such
decision of the Plan Administrator shall be binding upon the claimant and the
Bank, and the Plan Administrator shall take appropriate action to carry out such
decision.

     

    Section
4.5                                Allocation of Fiduciary
Responsibilities and Employment of Advisors.

     

    Any Named
Fiduciary may:

     

    (a)           Allocate
any of his or its responsibilities (other than trustee responsibilities) under
the Plan to such other person or persons as he or it may designate, provided
that such allocation and designation shall be in writing and filed with the Plan
Administrator;

     

    (b)           Employ
one or more persons to render advice to him or it with regard to any of his or
its responsibilities under the Plan; and

     

    (c)           Consult
with counsel, who may be counsel to the Bank.

     

    Section
4.6                                Other Administrative
Provisions.

     

    (a)           Any
person whose claim has been denied in whole or in part must exhaust the
administrative review procedures provided in section 4.4 prior to initiating any
claim for judicial review.

     

    (b)           No
bond or other security shall be required of the Plan Administrator, or any
officer or Employee of the Bank to whom fiduciary responsibilities are allocated
by a Named Fiduciary, except as may be required by ERISA.

     

    (c)           Subject
to any limitation on the application of this section 4.6(c) pursuant to ERISA,
neither the Plan Administrator, nor any officer or Employee of the Bank to whom
fiduciary responsibilities are allocated by a Named Fiduciary, shall be liable
for any act of omission or commission by himself or by another person, except
for his own individual willful and intentional malfeasance.

     

    (d)           The
Plan Administrator may, except with respect to actions under section 4.4,
shorten, extend or waive the time (but not beyond 60 days) required by the Plan
for filing any notice or other form with the Plan Administrator, or taking any
other action under the Plan.

     

    (e)           Any
person, group of persons, committee, corporation or organization may serve in
more than one fiduciary capacity with respect to the Plan.

     

    (f)           Any
action taken or omitted by any fiduciary with respect to the Plan, including any
decision, interpretation, claim denial or review on appeal, shall be conclusive
and binding on the Bank and all interested parties and shall be subject to
judicial modification or reversal only to the extent it is determined by a court
of competent jurisdiction that such action or omission was arbitrary and
capricious and contrary to the terms of the Plan.

     

    Article
V

     

    


     

    Miscellaneous

     

    Section
5.1                                Rights of
Employees.

     

    No
Employee shall have any right or claim to any benefit under the Plan except in
accordance with the provisions of the Plan. The establishment of the Plan shall
not be construed as conferring upon any Employee or other person any legal right
to a continuation of employment or to any terms or conditions of employment, nor
as limiting or qualifying the right of the Bank to discharge any
Employee.

     

    Section
5.2                                Non-alienation of
Benefits.

     

    The right
to receive a benefit under the Plan shall not be subject in any manner to
anticipation, alienation, or assignment, nor shall such right be liable for or
subject to debts, contracts,
liabilities, or torts.

     

    Section
5.3                                Non-Duplication of
Benefits.

     

    No
provisions in this Plan shall be deemed to duplicate any compensation or
benefits provided under any agreement, plan or program covering the Employee to
which the Bank 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
5.4                                Construction.

     

    Whenever
appropriate in the Plan, words used in the singular may be read in the plural;
words used in the plural may be read in the singular; and the masculine gender
shall be deemed equally to refer to the feminine gender or the neuter. Any
reference to a section number shall refer to a section of this Plan, unless
otherwise stated.

     

    Section
5.5                                Headings.

     

    The
headings of sections are included solely for convenience of reference, and if
there is any conflict between such headings and the text of the Plan, the text
shall control.

     

    Section
5.6                                Governing
Law.

     

    Except to
the extent preempted by federal law, the Plan shall be construed, administered
and enforced according to the laws of the State of New York applicable to contracts between
citizens and residents of the State of New York entered into and to be performed
entirely within such jurisdiction.

     

    Section
5.7                                Severability.

     

    The
invalidity or unenforceability, in whole or in part, of any provision of this
Plan shall in no way affect the validity or enforceability of the remainder of
such provision or of any other provision of this Plan, and any provision, or
part thereof, deemed to be invalid or unenforceable shall be reformed as
necessary to render it valid and enforceable to the maximum possible
extent.

     

    Section
5.8                                Termination or
Amendment.

     

    The Bank
intends to keep this Plan in effect, but, subject to the provisions of section 4
hereunder, the Bank expressly reserves the right to terminate or amend the Plan,
in whole or in part, at any time by action of the Board; provided, however, that
no such amendment or termination which adversely affects the current or
prospective rights of any Employee shall be effective earlier than six (6)
months after written notice thereof is given to such Employee.

     

    Section
5.9                                Required Regulatory
Provisions.

     

    The
following provisions are included for the purposes of complying with various
laws, rules and regulations applicable to the Bank:

     

    (a)           Notwithstanding
anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to any person under Article III of this Plan
exceed the three times such person's average annual total compensation for the
last five consecutive calendar years to end prior to his termination of
employment with the Bank (or for his entire period of employment with the Bank
and its predecessors, if less than five calendar years).

     

    (b)           Notwithstanding
anything herein contained to the contrary, any payments to the Employee by the
Bank, whether pursuant to this Plan or otherwise, are subject to and conditioned
upon their compliance with section 18(k) of the FDI Act and any regulations
promulgated thereunder.

     

    (c)           Notwithstanding
anything herein contained to the contrary, if the Employee is suspended from
office and/or temporarily prohibited from participating in the conduct of the
affairs of the Bank pursuant to a notice served under section 8(e)(3) or 8(g)(1)
of the FDI Act, the Bank's obligations under this Plan shall be suspended as of
the date of service of such notice, unless stayed by appropriate proceedings. If
the charges in such notice are dismissed, the Bank, in its discretion, may (i)
pay to the Employee all or part of the compensation withheld while the Bank's
obligations hereunder were suspended and (ii) reinstate, in whole or in part,
any of the obligations which were suspended.

     

    (d)           Notwithstanding
anything herein contained to the contrary, if the Employee is removed and/or
permanently prohibited from participating in the conduct of the Bank's affairs
by an order issued under section 8(e)(4) or 8(g)(1) of the FDI Act, all
prospective obligations of the Bank under this Plan shall terminate as of the
effective date of the order, but vested rights and obligations of the Bank and
the Employee shall not be affected.

     

    (e)           Notwithstanding
anything herein contained to the contrary, if the Bank is in default (within the
meaning of section 3(x)(1) of the FDI Act, all
prospective obligations of the Bank under this Plan shall terminate as of the
date of default, but vested rights and obligations of the Bank and the Employee
shall not be affected.

     

    (f)           Notwithstanding
anything herein contained to the contrary, all prospective obligations of the
Bank hereunder shall be terminated, except to the extent that a continuation of
this Plan is necessary for the continued operation of the Bank: (i) by the
Director of the OTS or his designee or the FDIC, at the time the FDIC enters
into an agreement to provide assistance to or on behalf of the Bank under the
authority contained in section 13(c) of the FDI Act; (ii) by the Director of the
OTS or his designee at the time such Director or designee approves a supervisory
merger to resolve problems related to the operation of the Bank or when the Bank
is determined by such Director to be in an unsafe or unsound condition. The
vested rights and obligations of the parties shall not be affected.

     

    If and to
the extent that any of the foregoing provisions shall cease to be required by
applicable law, rule or regulation, the same shall become inoperative
automatically as though eliminated by formal amendment of the Plan.

     

    Section
5.10                                Withholding.

     

    Payments
from this Plan shall be subject to all applicable federal, state and local
income withholding taxes.

     

    Section
5.11                                Status as Welfare Benefit
Plan Under ERISA.

     

    This Plan
is an "employee welfare
benefit plan" within the meaning of section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and shall be
construed, administered and enforced according to the provisions of
ERISA.

     

     Section
5.12                                Compliance
with Section 409A of the Code.

     

    The
Company intends that each of the payments and benefits 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, the Company intends that:

     

    (a)           the
benefits and payments described in Section 3.2(a) for severance benefits are
expected to comply with or be excepted from compliance with Section 409A
pursuant to Treasury Regulation section 1.409A-1(b)(9) or section
1.409A-3(b);

     

    (b)           the
welfare benefits provided in kind under section 3.2(b) are intended to be
excepted from compliance with Section 409A as welfare benefits pursuant to
Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in
gross income; and

     

    (c)           the
outplacement services provided in section 3.2(c) are intended to satisfy the
requirements for a "reimbursement plan" described in Treasury Regulation section
1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;
and

     

    (d)           the
legal fee reimbursements described in Section 3.4 are intended to satisfy the
requirements for a "reimbursement plan" described in Treasury Regulation section
1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such
requirements.

     

    In the
case of a payment that is not excepted from compliance with Section 409A, and
that is not otherwise designated to be paid immediately upon a permissible
payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the
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 the
Employee’s termination of employment to the date of actual payment) to and paid
on the later of the date sixty (60) days after the Employee’s earliest
separation from service within the meaning of Treasury Regulation Section
1.409A-1(h)) and, if the Employee 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 Employee’s separation
from service.  Each amount payable under this plan that is required to
be deferred beyond the Employee’s separation from service, shall be deposited on
the date on which, but for such deferral, the Company would have paid such
amount to the Employee, 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 the Company with
the approval of the Employee (which approval shall not be unreasonably withheld
or delayed), pursuant to a trust agreement the terms of which are approved by
the Employee (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 Agreement shall be construed and
administered in such manner as shall be necessary to effect compliance with
Section 409A.