Document:

EX-10.4

Exhibit 10.4

ROCKVILLE BANK

Employment Agreement for Christopher Buchholz

As Amended and Restated as of January 1, 2009

 

 

ROCKVILLE BANK

Employment Agreement for Christopher Buchholz

As Amended and Restated as of January 1, 2009

	 	 	 	 	 
	1. Employment
	 	 	1	 
	 
	2. Term
	 	 	2	 
	 
	3. Offices and Duties
	 	 	2	 
	 
	(a) Generally
	 	 	2	 
	 
	(b) Place of Employment
	 	 	3	 
	 
	4. Salary and Annual Incentive Compensation
	 	 	3	 
	 
	(a) Base Salary
	 	 	3	 
	 
	(b) Annual Incentive Compensation
	 	 	3	 
	 
	5. Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense Reimbursement
	 	 	3	 
	 
	(a) Executive Compensation Plans
	 	 	3	 
	 
	(b) Employee and Executive Benefit Plans
	 	 	4	 
	 
	(c) Acceleration of Awards Upon a Change in Control
	 	 	5	 
	 
	(d) Deferral of Compensation
	 	 	5	 
	 
	(e) Company Registration Obligations
	 	 	6	 
	 
	(f) Reimbursement of Expenses
	 	 	6	 
	 
	(g) Limitations Under Code Section 409A
	 	 	6	 
	 
	6. Termination Due to Retirement, Death, or Disability
	 	 	6	 
	 
	(a) Retirement
	 	 	6	 
	 
	(b) Death
	 	 	7	 
	 
	(c) Disability
	 	 	8	 
	 
	(d) Other Terms of Payment Following Retirement, Death, or Disability
	 	 	10	 
	 
	7. Termination of Employment For Reasons Other Than Retirement, Death or Disability
	 	 	11	 
	 
	(a) Termination by the Bank for Cause
	 	 	11	 
	 
	(b) Termination by Executive Other Than For Good Reason
	 	 	11	 
	 
	 
	 	 	 	 
	i

 

 

	 	 	 	 	 
	(c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change in Control
	 	 	12	 
	 
	(d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change in Control
	 	 	14	 
	 
	(e) Termination by the Bank Without Cause Within Two Years After a Change in Control
	 	 	16	 
	 
	(f) Termination by Executive for Good Reason Within Two Years After a Change in Control
	 	 	18	 
	 
	(g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409A Exemptions; Delayed 

      Payments Under Section 409A
	 	 	20	 
	 
	8. Definitions Relating to Termination Events
	 	 	23	 
	 
	(a) “Cause
	 	 	23	 
	 
	(b) “Change in Control
	 	 	23	 
	 
	(c) “Compensation Accrued at Termination
	 	 	25	 
	 
	(d) “Disability
	 	 	25	 
	 
	(e) “Good Reason
	 	 	25	 
	 
	(f) “Potential Change in Control
	 	 	27	 
	 
	(g) “Specified Employee
	 	 	27	 
	 
	9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions
	 	 	27	 
	 
	(a) Rabbi Trust Funded Upon Potential Change in Control
	 	 	27	 
	 
	(b) Gross-up If Excise Tax Would Apply
	 	 	27	 
	 
	10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain Forfeitures
	 	 	29	 
	 
	(a) Non-Competition
	 	 	30	 
	 
	(b) Non-Disclosure; Ownership of Work
	 	 	30	 
	 
	(c) Cooperation With Regard to Litigation
	 	 	30	 
	 
	(d) Non-Disparagement
	 	 	31	 
	 
	(e) Release of Employment Claims
	 	 	31	 
	 
	(f) Forfeiture of Outstanding Options
	 	 	31	 
	 
	(g) Forfeiture of Certain Bonuses and Profits
	 	 	32	 
	 
	(h) Forfeiture Due to Regulatory Restrictions
	 	 	32	 
	 
	(i) Survival
	 	 	32	 
	 
	11. Governing Law; Disputes
	 	 	32	 
	 
	(a) Governing Law
	 	 	32	 
	 
	 	 	 	 
	ii

 

 

	 	 	 	 	 
	(b) Reimbursement of Expenses in Enforcing Rights
	 	 	33	 
	 
	(c) Dispute Resolution
	 	 	33	 
	 
	(d) Interest on Unpaid Amounts
	 	 	34	 
	 
	12. Miscellaneous
	 	 	35	 
	 
	(a) Integration
	 	 	35	 
	 
	(b) Successors; Transferability
	 	 	35	 
	 
	(c) Beneficiaries
	 	 	35	 
	 
	(d) Notices
	 	 	35	 
	 
	(e) Reformation
	 	 	36	 
	 
	(f) Headings
	 	 	36	 
	 
	(g) No General Waivers
	 	 	36	 
	 
	(h) No Obligation To Mitigate
	 	 	36	 
	 
	(i) Offsets; Withholding
	 	 	36	 
	 
	(j) Successors and Assigns
	 	 	36	 
	 
	(k) Counterparts
	 	 	36	 
	 
	13. Indemnification
	 	 	37	 
	 
	 	 	 	 
	Attachment A
	 
	 	 	 	 
	iii

 

 

ROCKVILLE BANK

Employment
Agreement for Christopher Buchholz

As Amended and Restated as of January 1, 2009

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and among ROCKVILLE FINANCIAL, INC., a
Connecticut corporation (the “Company”), ROCKVILLE BANK, a Connecticut savings bank and a
wholly-owned subsidiary of the Company (the “Bank”), and Christopher Buchholz (“Executive”) which
was first effective as of June 5, 2006 (the “Effective Date”) is hereby amended and restated in its
entirety as of January 1, 2009.

W I T N E S S E T H

     WHEREAS, Executive is currently employed as Senior Vice President of the Bank; and

     WHEREAS, the Company and the Bank desire to ensure that the Company and the Bank are assured
of the continued availability of Executive’s services as provided in this Agreement; and

     WHEREAS, Executive is willing to continue to serve the Company and the Bank on the terms and
conditions hereinafter set forth; and

     WHEREAS, the Company, the Bank and Executive desire to amend and restate the Agreement in its
entirety to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the Treasury Regulations thereunder (the “Regulations”) and in certain
other respects effective as of January 1, 2009.

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and
other good and valuable consideration the receipt and adequacy of which the Company, the Bank and
Executive each hereby acknowledge, the Company, the Bank and Executive hereby agree as follows:

1. Employment.

     The Bank hereby agrees to employ Executive as its Senior Vice President (with the principal
executive duties set forth below in Section 3), and Executive hereby agrees to accept such
employment and serve in such capacities, during the Term as defined in Section 2 (subject to
Section 7(c) and 7(e)) and upon the terms and conditions set forth in this Agreement.

 

 

2. Term.

     The term of employment of Executive under this Agreement (the “Term”) shall be the period
commencing on the Effective Date and ending on December 31, 2008 and any period of extension
thereof in accordance with this Section 2, except that the Term will end at a date, prior to the
end of such period or extension thereof, specified in Section 6 or 7 in the event of termination of
Executive’s employment. The Term, if not previously ended, shall be extended automatically without
further action by either party by one additional year (added to the end of the Term) first on
December 31, 2006 (extending the Term to December 31, 2009) and on each succeeding December 31
thereafter (a “December 31 extension date”), unless either party shall have served written notice
in accordance with Section 12(d) upon the other party on or before the June 30 preceding a December
31 extension date electing not to extend the Term further as of that December 31 extension date, in
which case employment shall terminate on the third anniversary of that December 31 extension date
and the Term shall end at that date, subject to earlier termination of employment and earlier
termination of the Term in accordance with Section 6 or 7. The foregoing notwithstanding, in the
event there occurs a Potential Change in Control during the period of 180 days prior to the
December 31 on which the Term will terminate as a result of notice given by the Executive or the
Company hereunder, the Term shall be extended automatically at that December 31 by an additional
period such that the Term will extend until the 180th day following such Potential Change in
Control.

3. Offices and Duties.

     The provisions of this Section 3 will apply during the Term, except as otherwise provided in
Section 7(c) or 7(e):

     (a) Generally. Executive shall serve as the Senior Vice President of the Bank.
Executive shall have and perform such duties, responsibilities, and authorities as are prescribed
by or under the Bylaws of the Bank and as are customarily associated with such position or,
irrespective of the office, title or other designation, if any, a position with responsibilities
and powers substantially identical to such position with the Bank. In addition, Executive shall
have and perform such additional duties, responsibilities, and authorities as may be from time to
time assigned by the President and Chief Executive Officer based on his assessment of the business
needs of the Bank, and the Bank reserves the right to change or modify these assignments and any
positions and titles associated therewith. Executive shall devote his full business time and
attention, and his best efforts, abilities, experience, and talent, to the position of Senior Vice
President and other assignments hereunder, and for the business of the Bank, without commitment to
other business endeavors, except that Executive (i) may make personal investments which are not in
conflict with his duties to the Bank and manage personal and family financial and legal affairs,
(ii) may undertake public speaking engagements, and (iii) may serve as a director of (or similar
position with) any other business or an educational, charitable, community, civic, religious, or
similar type of organization with the approval of the President and Chief Executive Officer, so
long as such activities (i.e., those listed in clauses (i) through (iii)) do not preclude or render
unlawful Executive’s employment or service to the Bank or otherwise materially inhibit the
performance of Executive’s duties under this Agreement or materially impair the business of the
Bank or its affiliates.

2

 

     (b) Place of Employment. Executive’s principal place of employment shall be at the
administrative offices of the Bank.

4. Salary and Annual Incentive Compensation.

     As partial compensation for the services to be rendered hereunder by Executive, the Bank
agrees to pay to Executive during the Term the compensation set forth in this Section 4.

     (a) Base Salary. The Bank will pay to Executive during the Term a base salary, the
annual rate of which shall be $148,000, payable in cash in substantially equal semi-monthly
installments commencing at the beginning of the Term, and otherwise in accordance with the Bank’s
usual payroll practices with respect to senior executives (except to the extent deferred under
Section 5(d)). Executive’s annual base salary shall be reviewed by the Human Resources Committee
(the “Committee”) of the Board of Directors of the Bank (the “Board”) at least once in each
calendar year, and may be increased above, but may not be reduced below, the then-current rate of
such base salary. For purposes of this Agreement, “Base Salary” means Executive’s then-current
base salary.

     (b) Annual Incentive Compensation. The Bank will pay to Executive during the Term
annual incentive compensation which shall offer to Executive an opportunity to earn additional
compensation based upon performance in amounts determined by the Committee in accordance with the
applicable plan and consistent with past practices of the Bank, with the nature of the performance
and the levels of performance triggering payments of such annual target incentive compensation for
each year to be established and communicated to Executive during the first quarter of such year by
the Committee. In addition, the Committee (or the Board) may determine, in its discretion, to
increase Executive’s annual target incentive opportunity or provide an additional annual incentive
opportunity, in excess of the annual target incentive opportunity, payable for performance in
excess of or in addition to the performance required for payment of the annual target incentive
amount. Any annual incentive compensation payable to Executive shall be paid in accordance with
the applicable plan (except to the extent deferred under Section 5(d)).

5. Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense Reimbursement.

     (a) Executive Compensation Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in executive compensation plans and programs
intended for general participation by senior executives of the Bank, as presently in effect or as
they may be modified or added to by the Bank from time to time, subject to the eligibility and
other requirements of such plans and programs, including without limitation any stock option plans,
plans under which restricted stock/restricted stock units, performance-based restricted
stock/restricted stock units or performance-accelerated restricted stock/restricted stock units
(collectively, “stock plans”) may be awarded, other annual and long-term cash and/or equity
incentive plans, and deferred compensation plans. The Bank makes no commitment under this Section
5(a) to provide
participation opportunities to Executive in all plans and programs or at levels equal to (or
otherwise comparable to) the participation opportunity of any other executive.

3

 

     (b) Employee and Executive Benefit Plans. Executive shall be entitled during the Term
to participate, without discrimination or duplication, in employee and executive benefit plans and
programs of the Bank, as presently in effect or as they may be modified or added to by the Bank
from time to time, subject to the eligibility and other requirements of such plans and programs,
including without limitation plans providing pensions, supplemental pensions, supplemental and
other retirement benefits, medical insurance, life insurance, disability insurance, and accidental
death or dismemberment insurance, as well as savings, profit-sharing, and stock ownership plans.
The Bank makes no commitment under this Section 5(b) to provide participation opportunities to
Executive in all benefit plans and programs or at levels equal to (or otherwise comparable to) the
participation opportunity of any other executive.

     In furtherance of and not in limitation of the foregoing, during the Term:

	 	(i)	 	Executive will participate as Senior Vice President in all executive and
employee vacation and time-off programs;
	 
	 	(ii)	 	The Bank will provide Executive with coverage as Senior Vice President with
respect to long-term disability insurance;
	 
	 	(iii)	 	Executive will be covered by Bank-paid group term life insurance;
	 
	 	(iv)	 	Executive will be entitled to benefits under the Supplemental Savings and
Retirement Plan (the “SERP”) in accordance with the terms thereof, with the effective
date of Executive’s participation therein to be the Effective Date; and
	 
	 	(v)	 	Following Executive’s completion of five years of “Credited Service” with the Bank (within the meaning provided in the SERP) or
earlier termination of employment in accordance with Section 6(c) of this Agreement by reason of Executive’s Disability (as defined in Section 8(d)),
Executive will be entitled to payment of a retirement benefit (the “Retirement Benefit”) equal to $40,000 per year (subject to reduction as provided
hereinbelow) for a period of 20 years, commencing on the first day of the month coinciding with or immediately following the later of his attainment
of age 60 or termination of service with the Bank, subject to the provisions of Section 7(g) (relating to the six-month delay in payment of certain
benefits to Specified Employees as required by Section 409A of the Code). In the event that Executive’s service with the Bank shall be terminated
prior to his attainment of age 60 for any reason other than death as provided in Section 6(b), Disability as provided in Section 6(c), termination by the
Bank without Cause as provided in Sections 7(c) and (e), or termination by Executive for Good Reason as provided in Sections 7(d) and (f), such $40,000
annual Retirement Benefit shall be reduced at a rate of five percent per year for each 12-month period or portion thereof that Executive’s termination of
service with the Bank precedes his attainment of age 65, with any pro rata reduction for periods of fewer than 12 months to be determined by disregarding
any partial months. Such Retirement Benefit shall be payable to Executive in equal monthly installments on the first day of each month following the later of
his attainment of age 60 or termination of service with the Bank, subject to the provisions of Section 7(g), for a total of 240 monthly payments. In the event
of Executive’s 

4

 

	 	 	 	death prior to the commencement of payment of such Retirement Benefit, Executive’s beneficiary (the “Beneficiary”), designated on such form
as the Bank may provide, shall be entitled to receive the Retirement Benefit that would otherwise have been provided to Executive pursuant to this Section 5(b)(v).
In the event of the death of Executive after the commencement of payment of the Retirement Benefit, payment shall continue to be made to Executive’s
Beneficiary in an amount equal to the annual benefit that Executive was receiving at the time of death until such annual Retirement Benefit shall have been paid to
Executive and his Beneficiary for a total period of 20 years. Monthly installments shall cease to be paid after 240 months of installments have been paid to Executive,
his Beneficiary or both. Anything in this Agreement to the contrary notwithstanding, if Executive’s employment is terminated for Cause as provided in Section 7(a) of this Agreement,
the Retirement Benefit otherwise payable in accordance with this Section 5(b)(v) shall be forfeited. If Executive or his Beneficiary has received any monthly installments of the
Retirement Benefit and it is subsequently determined that Executive was terminated for Cause as provided in Section 7(a), then the monthly installments previously paid
shall be returned by Executive or his Beneficiary, as the case may be, to the Bank, and no further monthly installments shall be payable under this Agreement.
In the event that Executive’s employment is terminated by the Bank without Cause within two years after a Change in Control as provided in Section 7(e) of this
Agreement or is terminated by Executive for Good Reason within two years after a Change in Control as provided in Section 7(f) of this Agreement, payment of the
Retirement Benefit provided under this Section 5(b)(v) shall begin on the first day of the month coinciding with or immediately following Executive’s termination, subject to Section
7(g), regardless of the number of years of Credited Service completed by Executive and regardless of whether Executive shall have attained age 60 and such Retirement Benefit
shall not be reduced as otherwise provided hereinabove on account of payment prior to Executive’s attainment of age 60. The Retirement Benefit
payable pursuant to this Section 5(b)(v) shall not be funded and shall not be subject in any manner to alienation, transfer or assignment by Executive.
Executive shall have only the right of an unsecured general creditor of the Bank and the Company for the Retirement Benefit provided pursuant to this Section 5(b)(v).

     (c) Acceleration of Awards Upon a Change in Control. In the event of a Change in
Control (as defined in Section 8(b)), all outstanding stock options, restricted stock, and other
equity-based awards then held by Executive shall become vested and exercisable. The time and form
of payment of such equity-based awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such equity-based awards were granted.

     (d) Deferral of Compensation. If the Bank has in effect or adopts any deferral
program or arrangement permitting executives to elect to defer any compensation, Executive will be
eligible to participate in such program. Any plan or program of the Bank which provides benefits
based on the level of salary, annual incentive, or other compensation of Executive shall, in
determining Executive’s benefits, take into account the amount of salary, annual incentive, or
other compensation prior to any reduction for voluntary contributions made by Executive under

5

 

any
deferral or similar contributory plan or program of the Bank (excluding compensation that would not
be taken into account even if not deferred), but shall not treat any payout or settlement under
such a deferral or similar contributory plan or program to be additional salary, annual incentive,
or other compensation for purposes of determining such benefits, unless otherwise expressly
provided under such plan or program.

     (e) Company Registration Obligations. The Company will use its best efforts to file
with the Securities and Exchange Commission and thereafter maintain the effectiveness of one or
more registration statements registering under the Securities Act of 1933, as amended (the “1933
Act”), the offer and sale of shares by the Company to Executive pursuant to stock options or other
equity-based awards granted to Executive under Company plans or otherwise or, if shares are
acquired by Executive in a transaction not involving an offer or sale to Executive but resulting in
the acquired shares being “restricted securities” for purposes of the 1933 Act, registering the
reoffer and resale of such shares by Executive.

     (f) Reimbursement of Expenses. The Bank will promptly reimburse Executive for all
reasonable business expenses and disbursements incurred by Executive in the performance of
Executive’s duties during the Term in accordance with the Bank’s reimbursement policies as in
effect from time to time and the provisions of Section 7(g) of this Agreement.

     (g) Limitations Under Code Section 409A. Anything in this Section 5 to the contrary
notwithstanding, with respect to any payment otherwise required hereunder, in the event of any
delay in the payment date as a result of Section 7(g) of this Agreement (relating to the six-month
delay in payment of certain benefits to Specified Employees as required by Section 409A of the
Code), the Bank will adjust the payment to reflect the deferred payment date by multiplying the
payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment would have been made but for the delay multiplied
by a fraction, the numerator of which is the number of days by which such payment was delayed and
the denominator of which is 365. The Bank will pay the adjusted payment at the beginning of the
seventh month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by such payment date is not administratively practicable due to
events beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons that
are commercially reasonable, payment will be made as soon as administratively practicable in
compliance with Section 409A of the Code and the Regulations. In the event of Executive’s death
during such six-month period, payment will be made in the payroll period next following the payroll
period in which Executive’s death occurs.

6. Termination Due to Retirement, Death, or Disability.

     (a) Retirement. Executive may elect to terminate employment hereunder by retirement
at or after age 60 (“Retirement”). At the time Executive’s employment terminates due to
Retirement, the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease except for obligations which expressly continue
after termination of employment due to Retirement, and the Bank will pay Executive at the time
specified in Section 6(d), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));

6

 

	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the performance year and
paid at the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days in the year of
termination;
	 
	 	(iii)	 	The vesting and exercisability of stock options held by Executive at
termination and all other terms of such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which such options were
granted (subject to Section 10(f) hereof);
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, all rights under the SERP and any other benefit plan
shall be governed by such plans and all rights to the Retirement Benefit provided under
Section 5(b)(v) of this Agreement shall be governed by Section 5(b)(v); and
	 
	 	(v)	 	Upon Retirement, if Executive is not eligible for retiree coverage under the
Bank’s health plan (the “Health Plan”) or Medicare and provided that Executive shall be
in compliance with the conditions set forth in Section 10, the Bank shall pay to
Executive a lump sum amount equal on an after-tax basis to the present value of the
total cost of medical coverage under the Health Plan that would have been incurred by
both Executive and the Bank on behalf of Executive (and his spouse and eligible
dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s Retirement) from the date of Executive’s Retirement
until Executive’s attainment of Social Security retirement age had Executive remained
employed by the Bank during such period, calculated on the assumption that the cost of
such coverage would remain
unchanged from that in effect for the year of Executive’s Retirement. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at
the time specified in Section 6(d). Such amount shall not be subject to reduction
or forfeiture by reason of any coverage for which Executive may thereafter become
eligible by reason of subsequent employment or otherwise. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

     (b) Death. In the event of Executive’s death which results in the termination of
Executive’s employment, the Term will terminate, all obligations
of the Bank and Executive under
Sections 1 through 5 of this Agreement will immediately cease except for obligations

7

 

which
expressly continue after death, and the Bank will pay Executive’s beneficiary or estate at the time
specified in Section 6(d), and Executive’s beneficiary or estate will be entitled to receive, the
following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s death occurred, a lump sum amount equal to the portion of annual
incentive compensation that would have become payable in cash to Executive (i.e.,
excluding the portion payable in stock or in other non-cash awards) for that year if
his employment had not terminated, based on performance actually achieved in that year
(determined by the Committee following completion of the performance year and paid at
the time specified in the applicable plan), multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of his death and the
denominator of which is the total number of days in the year of death;
	 
	 	(iii)	 	The vesting and exercisability of stock options held by Executive at death and
all other terms of such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted;
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plans and all rights to the Retirement Benefit provided
under Section 5(b)(v) of this Agreement shall be governed by Section 5(b)(v);
	 
	 	(v)	 	If Executive’s surviving spouse (and eligible dependents, if any) elects
continued coverage under the Bank’s Health Plan in accordance with the applicable
provisions of COBRA, the Bank shall pay to Executive’s surviving spouse on a monthly
basis during such COBRA continuation period and in accordance with Section 7(g) of this
Agreement an amount equal on an after-tax basis to the total cost of such coverage. No
further benefits shall be paid under this Section after
the expiration of the maximum COBRA continuation period available to Executive’s
surviving spouse and eligible dependents, if any.

     (c) Disability. The Bank may terminate the employment of Executive hereunder due to
the Disability (as defined in Section 8(d)) of Executive. Upon termination of employment, the Term
will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly continue after termination
of employment due to Disability, and the Bank will pay Executive at the time specified in Section
6(d), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;

8

 

	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the performance year and
paid at the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days in the year of
termination;
	 
	 	(iii)	 	Stock options held by Executive at termination shall be governed by the plans
and programs and the agreements and other documents pursuant to which such options were
granted;
	 
	 	(iv)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(v)	 	Disability benefits shall be payable in accordance with the Bank’s plans,
programs and policies, including the SERP, all deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the deferral and
all rights to the Retirement Benefit provided under Section 5(b)(v) of this Agreement
shall be governed by Section 5(b)(v);
	 
	 	(vi)	 	Upon termination of Executive’s employment due to Disability, if Executive is
not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided
that Executive shall be in compliance with the conditions set forth in
Section 10, the Bank shall pay to Executive a lump sum amount equal on an after-tax
basis to the present value of the total cost of medical coverage under the Health
Plan that would have been incurred by both Executive and the Bank on behalf of
Executive (and his spouse and eligible dependents, if any, for whom coverage had
been provided under the Health Plan immediately prior to Executive’s termination of
employment) from the date of Executive’s termination of employment until Executive’s
attainment of Social Security retirement age had Executive remained employed by the
Bank during such period, calculated on the assumption that the cost of such coverage
would remain unchanged from that in effect for the year of Executive’s termination
of employment. Such lump sum amount shall be calculated by an actuary selected by
the Bank and paid in cash at the time specified in Section 6(d). Such amount shall
not be subject to reduction

9

 

	 	 	or forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 6(d) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until Executive’s attainment of Social Security retirement age, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until Executive’s attainment of Social Security retirement age, calculated
on the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set forth
in the Bank’s qualified retirement plan for the determination of lump sum payments.

     (d) Other Terms of Payment Following Retirement, Death, or Disability. Nothing in
this Section 6 shall limit the benefits payable or provided in the event Executive’s employment
terminates due to Retirement, death, or Disability under the terms of plans or programs of the Bank
more favorable to Executive (or his beneficiaries) than the benefits payable or provided under this
Section 6 (except in the case of annual incentives in lieu of which amounts are paid hereunder),
including plans and programs adopted after the date of this Agreement. Amounts payable under this
Section 6 following Executive’s termination of employment, other than those expressly payable
following determination of performance for the year of termination for purposes of annual incentive
compensation or otherwise expressly payable on a deferred basis, will be paid in the payroll period
next following the payroll period in which termination of employment occurs; subject, however, to the provisions of Section 7(g) of this Agreement
relating to the six-month delay in payment of certain benefits to Specified Employees as required
by Section 409A of the Code. Any payment or reimbursement due within such six-month period shall be
delayed to the end of such six-month period as required by Section 7(g). The Bank will adjust the
payment or reimbursement to reflect the deferred payment date by multiplying the payment by the
product of the six-month CMT Treasury Bill annualized yield rate as published by the U.S. Treasury
for the date on which such payment or reimbursement would have been made but for the delay
multiplied by a fraction, the numerator of which is the number of days by which such payment or
reimbursement was delayed and the denominator of which is 365. In the event of a reimbursement that
is required by other terms of this Agreement to be made on an after-tax basis which is subject to
the six-month delay in payment as described in Section 7(g) of this Agreement, the reimbursement as
adjusted in accordance with this Section 6(d) to reflect the deferred payment date shall be paid to
Executive on an after-tax and fully grossed-up basis so that Executive is held economically
harmless. The Bank will pay the adjusted payment or reimbursement at the beginning of the seventh
month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by such payment date is not administratively practicable due to
events beyond the control of Executive

10

 

(or Executive’s beneficiary or estate) and for reasons that
are commercially reasonable, payment will be made as soon as administratively practicable in
compliance with Section 409A of the Code and the Regulations. In the event of Executive’s death
during such six-month period, payment will be made in the payroll period next following the payroll
period in which Executive’s death occurs.

7. Termination of Employment For Reasons Other Than Retirement, Death or Disability.

     (a) Termination by the Bank for Cause. The Bank may terminate the employment of
Executive hereunder for Cause (as defined in Section 8(a)) at any time. At the time Executive’s
employment is terminated for Cause, the Term will terminate, all obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease except for
obligations which expressly continue after termination of employment by the Bank for Cause, and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were granted;
and
	 
	 	(iii)	 	All deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral, and all rights, if any, under the
SERP and any other benefit plan shall be governed by such plans.

     (b) Termination by Executive Other Than For Good Reason. Executive may terminate his
employment hereunder voluntarily for reasons other than Good Reason (as defined in Section 8(e)) at
any time upon 90 days’ written notice to the Bank. An election by Executive not to extend the Term
pursuant to Section 2 hereof shall be deemed to be a termination of employment by Executive for
reasons other than Good Reason at the date of expiration of the Term, unless a Change in Control
(as defined in Section 8(b)) occurs prior to, and there exists Good Reason at, such date of
expiration; provided, however, that, if Executive has attained age 60 at such date of termination,
such termination shall be deemed a Retirement of Executive, which shall instead be governed by
Section 6(a) above. At the time Executive’s employment is terminated by Executive other than for
Good Reason the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease, and the Bank will pay Executive at the time
specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were granted;

11

 

	 	(iii)	 	All deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral, all rights under the SERP and any
other benefit plan shall be governed by such plans and all rights to the Retirement
Benefit provided under Section 5(b)(v) of this Agreement shall be governed by Section
5(b)(v).

     (c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change
in Control. The Bank may terminate the employment of Executive hereunder without Cause, if at
the date of termination no Change in Control has occurred or such date of termination is at least
two years after the most recent Change in Control, upon at least 90 days’ written notice to
Executive. The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to
terminate Executive’s positions specified in Sections 1 and 3 and all other obligations of
Executive and the Bank under Section 3 at a date earlier than the expiration of such 90-day period,
if so specified by the Bank in the written notice, provided that Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. An election by the Bank not to extend the Term pursuant to Section 2 hereof shall
be deemed to be a termination of Executive’s employment by the Bank without Cause at the date of
expiration of the Term and shall be subject to this Section 7(c) if at the date of such termination
no Change in Control has occurred or such date of termination is at least two years after the most
recent Change in Control; provided, however, that, if Executive has attained Social Security
retirement age at such date of termination, such termination shall be deemed a Retirement of
Executive. At the time Executive’s employment is terminated by the Bank (i.e., at the expiration of
such notice period), the Term will terminate, all remaining obligations of the Bank and Executive
under Sections 1 through 5 of this Agreement will immediately cease (except for obligations which continue
after termination of employment as expressly provided herein), and the Bank will pay Executive at
the time specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(c)(ii) shall be payable a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of

12

 

	 	 	 	which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and, in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan and all rights to the
Retirement Benefit provided under Section 5(b)(v) of this Agreement shall be governed
by Section 5(b)(v);
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of

13

 

	 	 	 	(A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

     (d) Termination by Executive for Good Reason Prior to or More than Two Years After a
Change in Control. Executive may terminate his employment hereunder for Good Reason, prior to
a Change in Control or after the second anniversary of the most recent Change in Control, upon 90
days’ written notice to the Bank; provided, however, that, if the Bank has corrected the basis for
such Good Reason within 30 days after receipt of such notice, Executive may not terminate his
employment for Good Reason, and therefore Executive’s notice of termination will automatically
become null and void. At the time Executive’s employment is terminated by Executive for Good
Reason (i.e., at the expiration of
such notice period), the Term will terminate, all obligations of the Bank and Executive under
Sections 1 through 5 of this Agreement will immediately cease (except for obligations which
continue after termination of employment as expressly provided herein), and the Bank will pay
Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the
following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(d)(ii) shall be payable in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of

14

 

	 	 	 	which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and, in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan and all rights to the
Retirement Benefit provided under Section 5(b)(v) of this Agreement shall be governed
by Section 5(b)(v); and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of

15

 

	 		 	(A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which Executive’s termination occurred; and (B) the amount that
Executive and the Bank would have paid to continue Executive’s group life insurance
coverage, had he remained employed, from the date of Executive’s termination of
employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year in which Executive’s termination occurred. For purposes of
this Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

If any payment or benefit under this Section 7(d) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(d).

     (e) Termination by the Bank Without Cause Within Two Years After a Change in Control.
The Bank may terminate the employment of Executive hereunder without Cause, simultaneously with or
within two years after a Change in Control, upon at least 90 days’ written notice to Executive.
The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminate
Executive’s positions specified in Sections 1 and 3 and all other obligations of Executive and the
Bank under Section 3 at a date earlier than the expiration of such 90-day notice period, if so
specified by the Bank in the written notice, provided that Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. An election by the Bank not to extend the Term pursuant to Section 2 hereof shall
be deemed to be a termination of Executive’s employment by the Bank without Cause at the date of
expiration of the Term and shall be subject to this Section 7(e) if the date of such termination
coincides with or is within two years after a Change in Control; provided, however, that, if
Executive has attained Social Security retirement age at such date of termination, such termination
shall be deemed a Retirement of Executive. At the time Executive’s employment is terminated by the
Bank (i.e., at the expiration of such notice period), the Term will terminate, all remaining
obligations of the Bank and Executive under Sections 1 through 5 of this Agreement will immediately
cease (except for obligations which continue after termination of employment as expressly provided
herein), and the Bank will pay Executive at the time specified in Section 7(g), and Executive will
be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target

16

 

	 	 	 	incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(e)(ii) shall be paid by the Bank in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and any
such options granted on or after the Effective Date shall remain outstanding and
exercisable until the stated expiration date of the Option as though Executive’s
employment did not terminate, and, in other respects, such options shall be governed
by the plans and programs and the agreements and other documents pursuant to which
such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan and all rights to the
Retirement Benefit provided under Section 5(b)(v) of this Agreement shall be governed
by Section 5(b)(v); and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-

17

 

	 	 	 	tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the
cost of such coverage would remain unchanged from that in effect for the year in
which Executive’s termination occurred; and (B) the amount that Executive and the
Bank would have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until the
third anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

     (f) Termination by Executive for Good Reason Within Two Years After a Change in
Control. Executive may terminate his employment hereunder for Good Reason, simultaneously with
or within two years after a Change in Control, upon 90 days’ written notice to the Bank; provided,
however, that, if the Bank has corrected the basis for such Good Reason within 30 days after
receipt of such notice, Executive may not terminate his employment for Good Reason, and therefore
Executive’s notice of termination will automatically become null and void. At the time Executive’s
employment is terminated by Executive for Good Reason (i.e., at the expiration of such notice
period), the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease (except for obligations which continue after
termination of employment as expressly provided herein), and the Bank will pay Executive at the
time specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an

18

 

	 	 	 	amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(f)(ii) shall be paid by the Bank in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and any such options granted on or after the Effective Date shall remain outstanding
and exercisable until the stated expiration date of the Option as though Executive’s
employment did not terminate, and, in other respects, such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan and all rights to the
Retirement Benefit provided under Section 5(b)(v) of this Agreement shall be governed
by Section 5(b)(v); and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in

19

 

	 	 	 	Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from
the date of Executive’s termination of employment until the third anniversary of
Executive’s termination of employment, calculated on the assumption that the cost
of such coverage would remain unchanged from that in effect for the year in which
Executive’s termination occurred; and (B) the amount that Executive and the Bank
would have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until the
third anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

If any payment or benefit under this Section 7(f) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(f).

     (g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section
409A Exemptions; Delayed Payments Under Section 409A.

	 	(i)	 	Whether a termination is deemed to be at or
within two years after a Change in Control for purposes of Sections
7(c), (d), (e), or (f) is determined at the date of termination,
regardless of whether the Change in Control had occurred at the time a
notice of termination was given. In the event Executive’s employment
terminates for any reason set forth in Section 7(b) through (f),
Executive will be entitled to the benefit of any terms of plans or

20

 

	 	 	 	agreements applicable to Executive which are more favorable than those
specified in this Section 7 (except in the case of annual incentives
in lieu of which amounts are paid hereunder).
	 
	 	(ii)	 	Amounts payable under this Section 7
following Executive’s termination of employment, other than those
expressly payable on a deferred basis, will be paid in the payroll
period next following the payroll period in which termination of
employment occurs except as otherwise provided in this Section 7.
	 
	 	(iii)	 	Any reimbursements made or in-kind benefits
provided under this Agreement shall be subject to the following
conditions:

     (A) the amount of expenses eligible for reimbursement or
in-kind benefits provided in any one taxable year of Executive
shall not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided in any other taxable
year of Executive;

     (B) the reimbursement of any expense shall be made each
calendar quarter not later than the last day of Executive’s taxable
year following Executive’s taxable year in which the expense was
incurred (unless this Agreement specifically provides for
reimbursement by an earlier date);

     (C) the right to reimbursement of an expense or payment of an
in-kind benefit shall not be subject to liquidation or exchange for
another benefit.

In addition, with respect to any reimbursement made under Section
6(b)(v) for expenses for medical coverage purchased by Executive’s
spouse, any such reimbursement made during the period of time
Executive’s spouse or dependents would be entitled to continuation
coverage under the Bank’s Health Plan pursuant to COBRA if
Executive’s spouse or dependents had elected such coverage and
paid the applicable premiums shall be exempt from Section 409A of
the Code and the six-month delay in payment described hereinbelow
pursuant to Section 1.409A-1(b)(9)(v)(B) of the Regulations.

	 	(iv)	 	Executive’s right to reimbursements under
this Agreement shall be treated as a right to a series of separate
payments under Section 1.409A-2(b)(2)(iii) of the Regulations.
	 
	 	(v)	 	Any tax gross-up payments made under this
Agreement, within the meaning provided by Section 1.409A-3(i)(1)(v) of
the Regulations, shall be made by the end of Executive’s taxable year
next following Executive’s taxable year in which he remits

21

 

	 	 	 	the related
taxes (unless this Agreement specifically provides for payment by an
earlier date).
	 
	 	(vi)	 	It is intended that payments made under this
Agreement due to Executive’s termination of employment which are paid
on or before the 15th day of the third month following the end of
Executive’s taxable year in which his termination of employment occurs
shall be exempt from compliance with Section 409A of the Code pursuant
to the exemption for short-term deferrals set forth in Section
1.409A-1(b)(4) of the Regulations (the “Exempt Short-Term Deferral
Payments”); and that payments under this Agreement, other than Exempt
Short-Term Deferral Payments, that are made on or before the last day
of the second taxable year following the taxable year in which
Executive terminates employment in an aggregate amount not exceeding
two times the
lesser of: (A) the sum of Executive’s annualized compensation based
on his annual rate of pay for the taxable year preceding the
taxable year in which he terminates employment (adjusted for any
increase during that year that was expected to continue
indefinitely if he had not terminated employment); or (B) the
maximum amount that may be taken into account under a qualified
plan pursuant to Section 401(a)(17) of the Code for the year in
which Executive terminates employment shall be exempt from
compliance with Section 409A of the Code pursuant to the exception
for payments under a separation pay plan as set forth in Section
1.409A-1(b)(9)(iii) of the Treasury Regulations.
	 
	 	(vii)	 	Anything in this Agreement to the contrary
notwithstanding, payments to be made under this Agreement upon
termination of Executive’s employment which are subject to Section
409A of the Code shall be delayed for six months following such
termination of employment if Executive is a Specified Employee as
defined in Section 8(g) on the date of his termination of employment.
Any payment or reimbursement due within such six-month period shall be
delayed to the end of such six-month period. The Bank will adjust the
payment or reimbursement to reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the
six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment or reimbursement
would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment or
reimbursement was delayed and the denominator of which is 365. In the
event of a reimbursement that is required by other terms of this
Agreement to be made on an after-tax basis and which is subject to the
six-month delay provided herein, the reimbursement as adjusted in
accordance with this Section 7(g)

22

 

	 	 	 	to reflect the deferred payment date
shall be paid to Executive on an after-tax and fully grossed-up basis
so that Executive is held economically harmless. The Bank will pay the
adjusted payment or reimbursement at the beginning of the seventh
month following Executive’s termination of employment. Notwithstanding
the foregoing, if calculation of the amounts payable by any payment
date specified in this Section 7(g) is not administratively
practicable due to events beyond the control of Executive (or
Executive’s beneficiary or estate) and for reasons that are
commercially reasonable, payment will be made as soon as
administratively practicable in compliance with Section 409A of the
Code and the Regulations thereunder. In the event of Executive’s
death during such six-month period, payment will be
made in the payroll period next following the payroll period in
which Executive’s death occurs.

8. Definitions Relating to Termination Events.

     (a) “Cause.” For purposes of this Agreement, “Cause” shall mean:

	 	(i)	 	Executive’s willful and continued failure to substantially perform his duties
hereunder (other than any such failure resulting from incapacity due to physical or
mental illness or Disability or any failure after the issuance of a notice of
termination by Executive for Good Reason) which failure is demonstrably and materially
damaging to the financial condition or reputation of the Company, the Bank and/or their
affiliates, and which failure continues more than 48 hours after a written demand for
substantial performance is delivered to Executive by the Board, which demand
specifically identifies the manner in which the Board believes that Executive has not
substantially performed his duties hereunder and the demonstrable and material damage
caused thereby; or
	 
	 	(ii)	 	the willful engaging by Executive in conduct which is demonstrably and
materially injurious to the Company, the Bank or their affiliates, monetarily or
otherwise.

No act, or failure to act, on the part of Executive shall be deemed “willful” unless done, or
omitted to be done, by Executive not in good faith and without reasonable belief that his action or
omission was in the best interest of the Bank and the Company. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until there shall have
been delivered to Executive a copy of the resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board
(after reasonable notice to Executive and an opportunity for Executive, together with Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board,
Executive was guilty of conduct set forth above in this definition and specifying the particulars
thereof in detail.

     (b) “Change in Control.” For purposes of this Agreement, a “Change in Control” shall
be deemed to have occurred if, during the term of this Agreement:

23

 

	 	(i)	 	the Company, or the mutual holding company parent of the
Company, whether it remains a mutual holding company or converts to the stock
form of organization (the “Mutual Holding Company”), merges into or
consolidates with another corporation, or merges another corporation into the
Company or the Mutual Holding Company, and as a result, with respect to the
Company, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by “Persons”
as such term is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) who were stockholders of the Company immediately before the merger or
consolidation or, with respect to the Mutual Holding Company, less than a
majority of the directors of the resulting corporation immediately after the
merger or consolidation were directors of the Mutual Holding Company
immediately before the merger or consolidation;
	 
	 	(ii)	 	following a conversion of the Mutual Holding Company to the
stock form of organization, any Person (other than any trustee or other
fiduciary holding securities under an employee benefit plan of the Bank or the
Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the resulting
corporation representing 25% or more of the combined voting power of the
resulting corporation’s then-outstanding securities;
	 
	 	(iii)	 	during any period of twenty-four months (not including any
period prior to the Effective Date of this Agreement), individuals who at the
beginning of such period constitute the board of directors of the Company, and
any new director (other than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect a transaction described
in Sections (8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by any
Person (including the Company) who publicly announces an intention to take or
to consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change in
Control or (C) a director nominated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of the Company representing 25% or more
of the combined voting power of the Company’s securities) whose election by the
board of directors of the Company or nomination for election by the Company’s
stockholders was approved in advance by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
	 
	 	(iv)	 	the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; or

24

 

	 	(v)	 	the board of directors of the Company adopts a resolution to
the effect that, for purposes of this Agreement, a Change in Control has
occurred.

     (c) “Compensation Accrued at Termination.” For purposes of this Agreement,
“Compensation Accrued at Termination” means the following:

	 	(i)	 	The unpaid portion of annual base salary at the rate payable, in accordance
with Section 4(a) hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in a lump sum at the time specified
in Section 6(d) or 7(g) as the case may be;
	 
	 	(ii)	 	All vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans, programs, and
arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b) hereof
(including any earned and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in accordance with the
terms and conditions of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were granted or
accrued; and
	 
	 	(iii)	 	Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as authorized
under Section 5(f), in accordance the Company’s reimbursement policies as in effect at
the date of such termination, and payable in a lump sum in accordance with Section
7(g).

     (d) “Disability.” For purposes of this Agreement, “Disability” shall have the meaning
ascribed to it by Section 409A of the Code and the Regulations.

     (e) “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean, without
Executive’s express written consent, the occurrence of any of the following circumstances provided
that Executive shall have given notice of such circumstance(s) to the Bank within a period not to
exceed 90 days of the initial existence of such circumstance(s) and the Bank shall not have
remedied such circumstance(s) within 30 days after receipt of such notice:

	 	(i)	 	the assignment to Executive of duties materially inconsistent with Executive’s
position and status as Senior Vice President, or an alteration, materially adverse to
Executive, in Executive’s position and status as Senior Vice President or in the nature
of Executive’s duties, responsibilities, and authorities or conditions of Executive’s
employment from those relating to Executive position and status as Senior Vice
President (excluding changes in assignments permitted under Section 3); except the
foregoing shall not constitute Good Reason if occurring in connection with the
termination of Executive’s employment for Cause, Disability, Retirement, as a result of
Executive’s death, or as a result of action by or with the consent of Executive;

25

 

	 	(ii)	 	(A) a material reduction by the Bank in Executive’s Base Salary, (B) the
setting of Executive’s annual target incentive opportunity or payment of earned annual
incentive not in material conformity with Section 4 hereof, (C) a change in
compensation or benefits not in material conformity with Section 5, or (D) a material
reduction, after a Change in Control, in perquisites from the level of such perquisites
as in effect immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control, except for
across-the-board perquisite reductions similarly affecting all senior executives of
the Bank and all senior executives of any Person in control of the Company;
	 
	 	(iii)	 	the relocation of the principal place of Executive’s employment to a site that
is outside of a fifty mile radius of his principal place of employment prior to such
relocation; for this purpose, required travel on the Bank’s business will not
constitute a relocation so long as the extent of such travel is substantially
consistent with Executive’s customary business travel obligations in periods prior to
the Effective Date;
	 
	 	(iv)	 	the failure by the Bank to pay to Executive any material portion of Executive’s
compensation or to pay to Executive any material portion of an installment of deferred
compensation under any deferred compensation program of the Bank within a reasonable
time after the date such compensation is due;
	 
	 	(v)	 	the failure by the Bank to continue in effect any material compensation or
benefit plan in which Executive participated immediately prior to a Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Bank to continue
Executive’s participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amounts of compensation or
benefits provided and the level of Executive’s participation relative to other
participants, as existed at the time of the Change in Control;
	 
	 	(vi)	 	the failure of the Bank to obtain a satisfactory agreement from any successor
to the Bank, the Company or the Mutual Holding Company to fully assume the Bank’s and
the Company’s obligations and to perform under this Agreement, as contemplated in
Section 12(b) hereof, in a form reasonably acceptable to Executive;
	 
	 	(vii)	 	any election by the Bank not to extend the Term of this Agreement at the next
possible extension date under Section 2 hereof, unless Executive will have attained
Social Security retirement age at or before such extension date; or
	 
	 	(viii)	 	any other failure by the Bank or the Company to perform any material obligation
under, or breach by the Bank or the Company of any material provision of, this
Agreement;

provided, however, that a forfeiture under Section 10(f), (g), or (h) shall not constitute “Good
Reason.”

26

 

     (f) “Potential Change in Control.” For purposes of this Agreement, a “Potential
Change in Control” shall be deemed to have occurred if, during the term of this Agreement:

	 	(i)	 	the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control;
	 
	 	(ii)	 	any Person (including the Company) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a Change in Control;
or
	 
	 	(iii)	 	the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

     (g) “Specified Employee”  For purposes of this Agreement, a “Specified Employee”
shall mean an employee of the Bank, at a time when any stock of the Bank is publicly traded on an
established securities market or otherwise, who satisfies the requirements for being designated a
“key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section
416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be
considered a Specified Employee for the twelve-month period beginning on the first day of the
fourth month immediately following the end of such calendar year. In the event of any corporate
spinoff or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any
calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions.

     (a) Rabbi Trust Funded Upon Potential Change in Control. In the event of a Potential
Change in Control or Change in Control, the Bank or the Company shall, not later than 15 days
thereafter, have established one or more rabbi trusts and shall deposit therein cash in an amount
determined by the actuary for the Bank’s qualified Retirement Plan on the basis of the interest
rate and mortality assumptions set forth in said qualified Retirement Plan, which is sufficient to
provide for full payment of all potential obligations of the Bank and the Company that would arise
assuming consummation of a Change in Control, or has arisen in the case of an actual Change in
Control, and a subsequent termination of Executive’s employment under Section 7(e) or (f). Such
rabbi trust(s) shall be irrevocable and shall provide that neither the Bank nor the Company may,
directly or indirectly, use or recover any assets of the trust(s) until such time as all
obligations which potentially could arise hereunder have been settled and paid in full, subject
only to the claims of creditors of the Bank and the Company in the event of insolvency or
bankruptcy of the Bank or the Company; provided, however, that if no Change in Control has occurred
within two years after such Potential Change in Control, such rabbi trust(s) shall at the end of
such two-year period become revocable and may thereafter be revoked by the Bank.

     (b) Gross-up If Excise Tax Would Apply. In the event Executive becomes entitled to
any amounts or benefits payable in connection with a Change in Control or other change in ownership
or control (whether or not such amounts are payable pursuant to this Agreement) (the “Change in
Control Payments”), if any of such Change in Control Payments

27

 

are subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code (or any similar federal, state or local tax that may
hereafter be imposed), the Bank shall pay to Executive at the time specified in Section 9(b)(iii)
hereof an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive,
after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any federal,
state and local income tax and Excise Tax upon the payments provided for by Section 9(b), shall be
equal to the Total Payments.

(i)  For purposes of determining whether any of the Change in Control Payments will
be subject to the Excise Tax and the amount of such Excise Tax:

(A) any payments or benefits received or to be received by Executive in
connection with a Change in Control or other change in ownership or control
or Executive’s termination of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Bank,
any Person whose actions result in a Change in Control or any Person
affiliated with the Bank or such Person) (which, together with the Change in
Control Payments, constitute the “Total Payments”) shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code,
and all “excess parachute payments” within the meaning of Section 280G(b)(1)
of the Code shall be treated as subject to the Excise Tax, unless in the
opinion of nationally-recognized tax counsel selected by Executive such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;

(B) the amount of the Total Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (x) the total amount of the
Total Payments and (y) the amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying Section 9(b)(i)(A)
hereof); and

(C)  the value of any non-cash benefits or any deferred payments or benefit
shall be determined by a nationally-recognized accounting firm selected
by Executive in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.

(ii)    For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the state
and locality of Executive’s residence in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes which
could actually be obtained from deduction of such state and local taxes by
Executive. In the event that the Excise Tax is

28

 

subsequently determined to be less
than the amount taken into account and paid to
Executive hereunder, Executive shall file for a refund of such excess Excise Tax.
Executive shall repay to the Bank the excess Excise Tax amount actually refunded to
Executive by the Internal Revenue Service within ten business days after the later
of (A) the date that the Internal Revenue Service makes a final determination
(within the meaning of Section 1313 of the Code) that an overpayment of such Excise
Tax was made (and including a final determination of the amount thereof) and (B) the
actual receipt of the refund check from the Internal Revenue Service for the amount
of such overpayment of Excise Tax by Executive; provided, however, if no refund
shall be due to Executive because such overpayment of the Excise Tax has been
applied to satisfy Executive’s other tax liabilities, Executive shall notify the
Bank of such application of the overpayment to Executive’s other tax liabilities and
shall pay to the Bank within ten business days after such application of the
overpayment to Executive’s other tax liabilities the amount of the Excise Tax that
would otherwise have been refunded. In the event that the Excise Tax is determined
to exceed the amount taken into account and paid hereunder, the Bank shall make an
additional Gross-Up Payment in respect of such excess within ten business days after
the time that the amount of such excess is determined but in no event later than 30
days after the Change in Control. In no event shall any Gross-Up Payment be made
under this Section 9(b) later than the last day of Executive’s taxable year next
following Executive’s taxable year in which Executive remits the Excise Tax.
Anything in this Section 9(b) to the contrary notwithstanding, any Gross-Up Payment
to be made hereunder shall be subject to such delay in payment as may apply under
Section 7(g) of this Agreement (including but not limited to Section 7(g)(vi)) in
the event that such payment is made in connection with Executive’s termination of
employment and is subject to Section 409A of the Code.

(iii) The Gross-Up Payment provided for in this Section 9(b) shall be made at
the same time as any payments giving rise to an Excise Tax are made; provided,
however, that if the amount of such Gross-Up Payment cannot be finally
determined at the same time as the payments giving rise to an Excise Tax are made,
the Bank shall pay to Executive at the time the payments giving rise to an Excise
Tax are made an estimate, as determined in good faith by the Bank pursuant to
Section 9(b)(iv) hereof, of the amount of such Gross-Up Payment and shall pay the
remainder of such Gross-Up Payment at the time provided in Section 9(b)(ii) above.
Executive’s right to payments under this Section 9(b) shall be treated as a right to
a series of separate payments under Section 1.409A-2(b)(2)(iii) of the Regulations.

(iv) All determinations under this Section 9(b) shall be made by the Bank at
its expense using a nationally recognized public accounting firm selected by
Executive, and such determination shall be binding upon Executive and the Bank.

10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain
Forfeitures.

29

 

     (a) Non-Competition. In consideration for the compensation and benefits provided
under this Agreement, including without limitation, the compensation and benefits provided under
Sections 7(e) and (f), without the consent in writing of the Board, Executive will not, at any time
during the Term and for a period of two years following termination of Executive’s employment for
any reason, acting alone or in conjunction with others, directly or indirectly (i) engage (either
as owner, investor, partner, stockholder, employer, employee, consultant, advisor, or director) in
any business of any savings bank, savings and loan association, savings and loan holding company,
bank, bank holding company, or other institution engaged in the business of accepting deposits or
making loans, or any direct or indirect subsidiary or affiliate of any such entity, that conducts
business in any county in which the Company or the Bank maintains an office as of Executive’s date
of termination or had plans to open an office within six months after Executive’s date of
termination; (ii) induce any customers of the Bank or any of its affiliates with whom Executive has
had contacts or relationships, directly or indirectly, during and within the scope of his
employment with the Bank, to curtail or cancel their business with the Bank or any such affiliate;
(iii) induce, or attempt to influence, any employee of the Bank or any of its affiliates to
terminate employment; or (iv) solicit, hire or retain as an employee or independent contractor, or
assist any third party in the solicitation, hire, or retention as an employee or independent
contractor, any person who during the previous twelve months was an employee of the Bank or any
affiliate; provided, however, that the limitation contained in clause (i) above shall not apply if
Executive’s employment is terminated as a result of a termination by the Company without Cause
within two years following a Change in Control or is terminated by Executive for Good Reason within
two years following a Change in Control or is terminated by Executive other than for Good Reason as
provided in Section 7(b) and, provided further, that activities engaged in by or on behalf of the
Bank are not restricted by this covenant. The provisions of subparagraphs (i), (ii), (iii), and
(iv) above are separate and distinct commitments independent of each of the other subparagraphs.
It is agreed that the ownership of not more than one percent of the equity securities of any
company having securities listed on an exchange or regularly traded in the over-the-counter market
shall not, of itself, be deemed inconsistent with clause (i) of this Section 10(a).

     (b) Non-Disclosure; Ownership of Work. Executive shall not, at any time during the
Term and thereafter (including following Executive’s termination of employment for any reason),
disclose, use, transfer, or sell, except in the course of employment with or other service to the
Bank or the Company, any proprietary information, secrets, organizational or employee information,
or other confidential information belonging or relating to the Bank or the Company and its
affiliates and customers so long as such information has not otherwise been disclosed or is not
otherwise in the public domain, except as required by law or pursuant to legal process. In
addition, upon termination of employment for any reason, Executive will return to the Company or
its affiliates all documents and other media containing information belonging or relating to the
Bank and the Company or its affiliates.

     (c) Cooperation With Regard to Litigation. Executive agrees to cooperate with the
Bank and the Company, during the Term and thereafter (including following Executive’s termination
of employment for any reason), by making himself available to testify on behalf of the Bank or the
Company or any subsidiary or affiliate of the Bank or the Company, in any action,

30

 

suit, or
proceeding, whether civil, criminal, administrative, or investigative, and to assist the Bank and the Company, or
any subsidiary or affiliate of the Company, in any such action, suit, or proceeding, by providing
information and meeting and consulting with the Board or its representatives or counsel, or
representatives or counsel to the Bank or the Company, or any subsidiary or affiliate of the
Company, as requested. The Bank agrees to reimburse Executive, on an after tax basis each calendar
quarter, for all expenses actually incurred in connection with his provision of testimony or
assistance in accordance with the provisions of Section 7(g) of this Agreement but not later than
the last day of the year in which the expense was incurred.

     (d) Non-Disparagement. Executive shall not, at any time during the Term and
thereafter, make statements or representations, or otherwise communicate, directly or indirectly,
in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage
the Bank or the Company or any of its subsidiaries or affiliates or their respective officers,
directors, employees, advisors, businesses or reputations. Notwithstanding the foregoing, nothing
in this Agreement shall preclude Executive from making truthful statements that are required by
applicable law, regulation or legal process.

     (e) Release of Employment Claims. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in Sections 6 and 7 herein (other than Compensation
Accrued at Termination), that he will execute a general release agreement, in substantially the
form set forth in Attachment A to this Agreement, releasing any and all claims arising out of
Executive’s employment other than enforcement of this Agreement and rights to indemnification under
any agreement, law, Bank or Company organizational document or policy, or otherwise. The Bank will
provide Executive with a copy of such release simultaneously with or as soon as administratively
practicable following the delivery of the notice of termination provided in Sections 6 and 7 of
this Agreement, but not later than 21 days before (45 days before if Executive’s termination is
part of an exit incentive or other employment termination program offered to a group or class of
employees) Executive’s termination of employment. Executive shall deliver the executed release to
the Bank eight days before the date provided in Section 7(g) of this Agreement for the payment of
the termination payments and benefits payable under Sections 6 and 7 of this Agreement.

     (f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7
notwithstanding, if Executive willfully and materially fails to substantially comply with any
restrictive covenant under this Section 10 or willfully and materially fails to substantially
comply with any material obligation under this Agreement, all options to purchase common stock
granted by the Company and then held by Executive or a transferee of Executive shall be immediately
forfeited and thereupon such options shall be cancelled. Notwithstanding the foregoing, Executive
shall not forfeit any option unless and until there shall have been delivered to him, within six
months after the Board (i) had knowledge of conduct or an event allegedly constituting grounds for
such forfeiture and (ii) had reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote of the membership of
the Board (excluding Executive) at a meeting of the Board called and held for such purpose (after
giving Executive reasonable notice specifying the nature of the grounds for such forfeiture and not
less than 30 days to correct the acts or omissions complained of, if correctable, and affording
Executive the opportunity, together with his counsel, to be heard before the Board) finding that, in the
good faith opinion of the Board, Executive has engaged and continues to engage in conduct set forth
in this Section 10(f) which constitutes grounds for forfeiture of Executive’s options; provided,
however, that if any option is exercised

31

 

after delivery of such notice and the Board subsequently
makes the determination described in this sentence, Executive shall be required to pay to the
Company an amount equal to the difference between the aggregate value of the shares acquired upon
such exercise at the date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any term or provision
of any option agreement. In addition, options granted to Executive on or after the Effective Date,
and gains resulting from the exercise of such options, shall be subject to forfeiture in accordance
with the Company’s standard policies relating to such forfeitures and clawbacks, as such policies
are in effect at the time of grant of such options.

     (g) Forfeiture of Certain Bonuses and Profits. If the Company is required to prepare
an accounting restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws, and if Executive,
knowingly or through gross negligence, caused or failed to prevent such misconduct, Executive shall
reimburse the Bank for (i) any bonus or other incentive based or equity-based compensation received
by Executive during the 12-month period following the first public issuance or filing with the
Securities and Exchange Commission (whichever first occurs) of the financial document embodying
such financial reporting requirement; and (ii) any profits realized from the sale of securities of
the Company during that 12-month period.

     (h) Forfeiture Due to Regulatory Restrictions. Anything in this Agreement or the SERP
to the contrary notwithstanding, (i) any payments made pursuant to this Agreement or the SERP shall
be subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and any regulations
promulgated thereunder; and (ii) payments contemplated to be made by the Bank pursuant to this
Agreement or the SERP shall not be immediately payable to the extent such payments are barred or
prohibited by an action or order issued by the Connecticut Banking Commissioner or the Federal
Deposit Insurance Corporation.

     (i) Survival. The provisions of this Section 10 shall survive the termination of the
Term and any termination or expiration of this Agreement.

11. Governing Law; Disputes.

     (a) Governing Law. This Agreement and the rights and obligations of the Company, the
Bank and Executive are governed by and are to be construed, administered, and enforced in
accordance with the laws of the State of Connecticut, without regard to conflicts of law
principles. If under the governing law, any portion of this Agreement is at any time deemed to be
in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary to conform thereto
or, if that is not possible, to be omitted therefrom. The invalidity of any such portion shall not
affect the force, effect, and validity of the remaining portion thereof. If any court determines
that any provision of Section 10 of this Agreement is
unenforceable because of the duration or geographic scope of such provision, it is the
parties’ intent that such court shall have the power to modify the duration or geographic scope of
such provision, as the case may be, to the extent necessary to render the provision enforceable
and, in its modified form, such provision shall be enforced. Anything in this Agreement to the
contrary notwithstanding, the terms of this Agreement shall be interpreted and applied in a manner
consistent with the requirements of Section 409A of the Code and the Regulations so as not to
subject Executive to the payment of

32

 

any tax penalty or interest which may be imposed by Section
409A of the Code and the Bank shall have no right to accelerate or make any payment under this
Agreement except to the extent such action would not subject Executive to the payment of any tax
penalty or interest under Section 409A of the Code. If all or a portion of the benefits and
payments provided under this Agreement constitute taxable income to Executive for any taxable year
that is prior to the taxable year in which such payments and/or benefits are to be paid to
Executive as a result of the Agreement’s failure to comply with the requirements of Section 409A of
the Code and the Regulations, the applicable payment or benefit shall be paid immediately to
Executive to the extent such payment or benefit is required to be included in income. If Executive
becomes subject to any tax penalty or interest under Section 409A of the Code by reason of this
Agreement, the Bank shall reimburse Executive on a fully grossed-up and after-tax basis for any
such tax penalty or interest (so that Executive is held economically harmless) ten business days
prior to the date such tax penalty or interest is due and payable by Executive to the government.

     (b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices, the
Bank shall promptly pay or reimburse all reasonable costs and expenses (including fees and
disbursements of counsel and pension experts) incurred by Executive or Executive’s surviving spouse
in seeking to interpret this Agreement or enforce rights pursuant to this Agreement or in any
proceeding in connection therewith brought by Executive or Executive’s surviving spouse, whether or
not Executive or Executive’s surviving spouse is ultimately successful in enforcing such rights or
in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses
relating to any unsuccessful assertion of rights or proceeding if and to the extent that such
assertion or proceeding was initiated or maintained in bad faith or was frivolous, as determined
in accordance with Section 11(c) or a court having jurisdiction over the matter. Any such payment
or reimbursement shall be made on an after-tax basis each calendar quarter for all costs and
expenses actually incurred as provided in this Section 11(b) and in accordance with the provisions
of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense
was incurred.

     (c) Dispute Resolution.

(i) Negotiation. The Bank and the Company (collectively, the
“Employer”) and Executive shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by
negotiation between the Chief Executive Officer of the Bank and Executive.
Any party may give the other party written notice of any dispute in
accordance with the notice procedures set forth in Section 12(d). Within
15 days after delivery of the notice, the receiving party shall submit to
the other, in accordance with the notice procedures set
forth in Section 12(d), a written response. The notice and response shall
include a statement of that party’s position and summary of arguments
supporting that position. Within 30 days after delivery of the initial
notice, the parties shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to
resolve the dispute. All negotiations pursuant to this clause (i) are
confidential and shall be treated as compromise and settlement negotiations
for purposes of applicable rules of evidence.

33

 

(ii)  Mediation. If the dispute has not been resolved by
negotiation as provided herein within 45 days after delivery of the initial
notice of negotiation, or if the parties failed to meet within 30 days
after delivery, the parties shall endeavor to settle the dispute by
mediation under the CPR Mediation Procedure then currently in effect;
provided, however, that if one party fails to participate in the
negotiation as provided herein, the other party can initiate mediation
prior to the expiration of the 45 days. Unless otherwise agreed, the
parties will select a mediator from the CPR Panels of Distinguished
Neutrals.

(iii) Arbitration. Any dispute arising under or in connection with
this Agreement which has not been resolved by mediation as provided herein
within 45 days after initiation of the mediation procedure, shall be
finally resolved by arbitration in accordance with the CPR Rules for
Non-Administered Arbitration then currently in effect, by three independent
and impartial arbitrators, of whom each party shall designate one;
provided, however, that if one party fails to participate in either the
negotiation or mediation as agreed herein, the other party can commence
arbitration prior to the expiration of the time periods set forth above.
The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
§§1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof. The place of arbitration
shall be Hartford, Connecticut. For purposes of entering any judgment upon
an award rendered by the arbitrators, the Company, the Bank and Executive
hereby consent to the jurisdiction of any or all of the following courts:
(i) the United States District Court for the District of Connecticut, (ii)
any of the courts of the State of Connecticut, or (iii) any other court
having jurisdiction. The Company, the Bank and Executive hereby agree that
a judgment upon an award rendered by the arbitrators may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Subject to Section 11(b) of this Agreement, the Bank shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 11(c) in accordance with the provisions of Section
7(g) of this Agreement, but not later than the last day of the year in
which the expense was incurred. Notwithstanding any provision in this
Section 11(c), Executive shall be entitled to seek specific performance of
Executive’s right to be paid
during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

     (d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to the
terms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to
this Section 11 but which has not been timely paid shall bear interest at the prime rate in effect
at the time such amount first becomes payable, as quoted by the Bank, except as otherwise provided
in Sections 5(g), 6(d) and 7(g) of this Agreement (concerning interest payable with respect to
certain delayed payments that are subject to Section 409A of the Code).

34

 

12. Miscellaneous.

     (a) Integration. This Agreement cancels and supersedes any and all prior employment
agreements and understandings between the parties hereto with respect to the employment of
Executive by the Bank, any parent or predecessor company, and the Company’s subsidiaries during the
Term, except for contracts relating to compensation under executive compensation and employee
benefit plans of the Bank. This Agreement constitutes the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any provision hereof shall
be effective unless in writing and signed by the parties hereto. Executive shall not be entitled
to any payment or benefit under this Agreement which duplicates a payment or benefit received or
receivable by Executive under any prior agreements and understandings or under any benefit or
compensation plan of the Bank which are in effect.

     (b) Successors; Transferability. The Bank and the Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank or the Company to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Bank and the
Company would be required to perform it if no such succession had taken place.

     As used in this Agreement, “Bank “and “Company” shall mean the Bank and the Company
respectively as hereinbefore defined and any successor to its or their business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise and,
in the case of an acquisition of the Bank or the Company in which the corporate existence of the
Bank or the Company, as the case may be, continues, the ultimate parent company following such
acquisition. Subject to the foregoing, the Bank and the Company may transfer and assign this
Agreement and the Bank’s and the Company’s rights and obligations hereunder. Neither this
Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and distribution or as
specified in Section 12(c).

     (c) Beneficiaries. Executive shall be entitled to designate (and change, to the
extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation
or benefits provided hereunder following Executive’s death.

     (d) Notices. Whenever under this Agreement it becomes necessary to give notice, such
notice shall be in writing, signed by the party or parties giving or making the same, and shall be
served on the person or persons for whom it is intended or who should be advised or notified, by
Federal Express or other similar overnight service or by certified or registered mail, return
receipt requested, postage prepaid and addressed to such party at the address set forth below or at
such other address as may be designated by such party by like notice:

If to the Bank or the Company:

ROCKVILLE BANK

1645 Ellington Road

South Windsor, CT 06074

Att: Chief Executive Officer

35

 

If to Executive:

Christopher Buchholz

49 Coach Road

Glastonbury, CT 06033

     If the parties by mutual agreement supply each other with telecopier numbers for the purposes
of providing notice by facsimile, such notice shall also be proper notice under this Agreement. In
the case of Federal Express or other similar overnight service, such notice or advice shall be
effective when sent, and, in the cases of certified or registered mail, shall be effective two days
after deposit into the mails by delivery to the U.S. Post Office.

     (e) Reformation. The invalidity of any portion of this Agreement shall not be deemed
to render the remainder of this Agreement invalid.

     (f) Headings. The headings of this Agreement are for convenience of reference only
and do not constitute a part hereof.

     (g) No General Waivers. The failure of any party at any time to require performance
by any other party of any provision hereof or to resort to any remedy provided herein or at law or
in equity shall in no way affect the right of such party to require such performance or to resort
to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such provisions. No such
waiver shall be effective unless in writing and signed by the party against whom such waiver is
sought to be enforced.

     (h) No Obligation To Mitigate. Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of employment, and any
compensation or benefits received from any other employment of Executive shall not mitigate or
reduce the obligations of the Bank and the Company or the rights of Executive hereunder.

     (i) Offsets; Withholding. The amounts required to be paid by the Bank to Executive
pursuant to this Agreement shall not be subject to offset other than with respect to any amounts
that are owed to the Bank by Executive due to his receipt of funds as a result of his fraudulent
activity. The foregoing and other provisions of this Agreement notwithstanding, all payments to be
made to Executive under this Agreement, including under Sections 6 and 7, or otherwise by the Bank,
will be subject to withholding to satisfy required withholding taxes and other required deductions.

     (j) Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of Executive, his heirs, executors, administrators and beneficiaries, and shall be
binding upon and inure to the benefit of the Bank and the Company and their successors and assigns.

     (k) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and the same instrument.

36

 

13. Indemnification.

     All rights to indemnification by the Bank or the Company now existing in favor of Executive as
provided in the Bank’s and the Company’s Certificate of Incorporation or By-laws or pursuant to
other agreements in effect on or immediately prior to the Effective Date shall continue in full
force and effect from the Effective Date (including all periods after the expiration of the Term),
and the Bank and the Company shall also advance expenses for which indemnification may be
ultimately claimed as such expenses are incurred to the fullest extent permitted under applicable
law and in accordance with Section 7(g); provided, however, that any determination required to be
made with respect to whether Executive’s conduct complies with the standards required to be met as
a condition of indemnification or advancement of expenses under applicable law and the Bank’s or
the Company’s Certificate of Incorporation, By-laws, or other agreement shall be made by
independent counsel mutually acceptable to Executive and the Company (except to the extent
otherwise required by law). After the date hereof, the Bank and the Company shall not amend its
Certificate of Incorporation or By-laws or any agreement in any manner which adversely affects the
rights of Executive to indemnification thereunder. Any provision contained herein notwithstanding,
this Agreement shall not limit or reduce any rights of Executive to indemnification pursuant to
applicable law. In addition, the Company will maintain directors’ and officers’ liability
insurance in effect and covering acts and omissions of Executive during the Term and for a period
of six years thereafter on terms substantially no less favorable than those in effect on the date
of execution of this Agreement.

     IN WITNESS WHEREOF, Executive has hereunto set his hand and the Bank and the Company have each
caused this instrument to be duly executed this___day of                     , 2008.

	 	 	 	 	 
	 	ROCKVILLE BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ROCKVILLE FINANCIAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	                                                            

Christopher Buchholz

 	 
	 	 	 
	 	 	 
	 	 	 

37

 

	 	 	 	 	 

ATTACHMENT A

RELEASE

     We advise you to consult an attorney before you sign this Release. You have until the date
which is seven (7) days after the Release is signed and returned to Rockville Bank to change your
mind and revoke your Release. Your Release shall not become effective or enforceable until after
that date.

In consideration for the benefits provided under your Employment Agreement with Rockville Bank as
amended and restated as of January 1, 2009 (the “Employment Agreement”), and more specifically
enumerated in Exhibit 1 hereto, by your signature below, you, for yourself and on behalf of your
heirs, executors, agents, representatives, successors and assigns, hereby release and forever
discharge the Rockville Financial, Inc., its past and present parent corporations, subsidiaries,
divisions, subdivisions, affiliates and related companies (collectively, the “Company”) and the
Company’s past, present and future agents, directors, officers, employees, representatives,
successors and assigns (hereinafter “those associated with the Company”) with respect to any and
all claims, demands, actions and liabilities, whether in law or equity, which you may have against
the Company or those associated with the Company of whatever kind, including but not limited to
those arising out of your employment with the Company or the termination of that employment. You
agree that this release covers, but is not limited to, claims arising under the Age Discrimination
in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. §
12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair
Employment Practices Act, C.G.S. § 46a-51 et seq., and any other local, state or federal
law, regulation or order dealing with discrimination in employment on the basis of sex, race,
color, national origin, veteran status, marital status, religion, disability, handicap, or age.
You also agree that this release includes claims based on wrongful termination of employment,
breach of contract (express or implied), tort, or claims otherwise related to your employment or
termination of employment with the Company and any claim for attorneys’ fees, expenses or costs of
litigation.

This Release covers all claims based on any facts or events, whether known or unknown by you, that
occurred on or before the date of this Release. Except to enforce this Release, you agree that you
will never commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of
any kind against the Company or those associated with the Company in any forum and agree to
withdraw with prejudice all complaints or charges, if any, that you have filed against the Company
or those associated with the Company.

Anything in this Release to the contrary notwithstanding, this Release does not include a release
of: (i) your rights under the Employment Agreement or your right to enforce the Employment
Agreement; (ii) any rights you may have to indemnification under any agreement, law, Company
organizational document or policy, or otherwise; (iii) any rights you may have to benefits under
the Company’s benefit plans; or (iii) your right to enforce this Release.

38

 

By signing this Release, you further agree as follows:

     i. You have read this Release carefully and fully understand its terms;

     ii. You have had at least twenty-one (21) days to consider the terms of the Release;

     iii. You have seven (7) days from the date you sign this Release to revoke it by written
notification to the Company. After this seven (7) day period, this Release is final and binding
and may not be revoked;

     iv. You have been advised to seek legal counsel and have had an opportunity to do so;

     v. You would not otherwise be entitled to the benefits provided under your Employment
Agreement had you not agreed to execute this Release; and

     vi. Your agreement to the terms set forth above is voluntary.

	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 
	 	 	 

	 	 
	Received By:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 
	 	 	 

	 	 

39EX-10.5

Exhibit 10.5

ROCKVILLE BANK

Employment Agreement for Richard J. Trachimowicz

As Amended and Restated as of January 1, 2009

 

 

ROCKVILLE BANK

Employment Agreement for Richard Trachimowicz

As Amended and Restated as of January 1, 2009

	 	 	 	 	 
	1. Employment
	 	 	1	 
	 
	 	 	 	 
	2. Term
	 	 	2	 
	 
	 	 	 	 
	3. Offices and Duties
	 	 	2	 
	 
	 	 	 	 
	(a) Generally
	 	 	2	 
	 
	 	 	 	 
	(b) Place of Employment
	 	 	3	 
	 
	 	 	 	 
	4. Salary and Annual Incentive Compensation
	 	 	3	 
	 
	 	 	 	 
	(a) Base Salary
	 	 	3	 
	 
	 	 	 	 
	(b) Annual Incentive Compensation
	 	 	3	 
	 
	 	 	 	 
	5. Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense
Reimbursement
	 	 	3	 
	 
	 	 	 	 
	(a) Executive Compensation Plans
	 	 	3	 
	 
	 	 	 	 
	(b) Employee and Executive Benefit Plans
	 	 	4	 
	 
	 	 	 	 
	(c) Acceleration of Awards Upon a Change in Control
	 	 	4	 
	 
	 	 	 	 
	(d) Deferral of Compensation
	 	 	4	 
	 
	 	 	 	 
	(e) Company Registration Obligations
	 	 	4	 
	 
	 	 	 	 
	(f) Reimbursement of Expenses
	 	 	5	 
	 
	 	 	 	 
	(g) Limitations Under Code Section 409A
	 	 	5	 
	 
	 	 	 	 
	6. Termination Due to Retirement, Death, or Disability
	 	 	5	 
	 
	 	 	 	 
	(a) Retirement
	 	 	5	 
	 
	 	 	 	 
	(b) Death
	 	 	6	 
	 
	 	 	 	 
	(c) Disability
	 	 	7	 
	 
	 	 	 	 
	(d) Other Terms of Payment Following Retirement, Death, or Disability
	 	 	9	 
	 
	 	 	 	 
	7. Termination of Employment For Reasons Other Than Retirement, Death or Disability
	 	 	9	 
	 
	 	 	 	 
	(a) Termination by the Bank for Cause
	 	 	9	 
	 
	 	 	 	 
	(b) Termination by Executive Other Than For Good Reason
	 	 	10	 

i

 

	 	 	 	 	 
	(c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change in
Control
	 	 	10	 
	 
	 	 	 	 
	(d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change in
Control
	 	 	12	 
	 
	 	 	 	 
	(e) Termination by the Bank Without Cause Within Two Years After a Change in Control
	 	 	14	 
	 
	 	 	 	 
	(f) Termination by Executive for Good Reason Within Two Years After a Change in Control
	 	 	16	 
	 
	 	 	 	 
	(g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section 409A
Exemptions; Delayed 

      Payments Under Section 409A
	 	 	19	 
	 
	 	 	 	 
	8. Definitions Relating to Termination Events
	 	 	21	 
	 
	 	 	 	 
	(a) “Cause
	 	 	21	 
	 
	 	 	 	 
	(b) “Change in Control
	 	 	22	 
	 
	 	 	 	 
	(c) “Compensation Accrued at Termination
	 	 	23	 
	 
	 	 	 	 
	(d) “Disability
	 	 	23	 
	 
	 	 	 	 
	(e) “Good Reason
	 	 	23	 
	 
	 	 	 	 
	(f) “Potential Change in Control
	 	 	25	 
	 
	 	 	 	 
	(g) “Specified Employee
	 	 	25	 
	 
	 	 	 	 
	9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions
	 	 	25	 
	 
	 	 	 	 
	(a) Rabbi Trust Funded Upon Potential Change in Control
	 	 	25	 
	 
	 	 	 	 
	(b) Gross-up If Excise Tax Would Apply
	 	 	26	 
	 
	 	 	 	 
	10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain
Forfeitures
	 	 	28	 
	 
	 	 	 	 
	(a) Non-Competition
	 	 	28	 
	 
	 	 	 	 
	(b) Non-Disclosure; Ownership of Work
	 	 	28	 
	 
	 	 	 	 
	(c) Cooperation With Regard to Litigation
	 	 	29	 
	 
	 	 	 	 
	(d) Non-Disparagement
	 	 	29	 
	 
	 	 	 	 
	(e) Release of Employment Claims
	 	 	29	 
	 
	 	 	 	 
	(f) Forfeiture of Outstanding Options
	 	 	29	 
	 
	 	 	 	 
	(g) Forfeiture of Certain Bonuses and Profits
	 	 	30	 
	 
	 	 	 	 
	(h) Forfeiture Due to Regulatory Restrictions
	 	 	30	 
	 
	 	 	 	 
	(i) Survival
	 	 	30	 
	 
	 	 	 	 
	11. Governing Law; Disputes
	 	 	30	 
	 
	 	 	 	 
	(a) Governing Law
	 	 	30	 

ii

 

	 	 	 	 	 
	(b) Reimbursement of Expenses in Enforcing Rights
	 	 	31	 
	 
	 	 	 	 
	(c) Dispute Resolution
	 	 	31	 
	 
	 	 	 	 
	(d) Interest on Unpaid Amounts
	 	 	33	 
	 
	12. Miscellaneous
	 	 	33	 
	 
	 	 	 	 
	(a) Integration
	 	 	33	 
	 
	 	 	 	 
	(b) Successors; Transferability
	 	 	33	 
	 
	 	 	 	 
	(c) Beneficiaries
	 	 	33	 
	 
	 	 	 	 
	(d) Notices
	 	 	33	 
	 
	 	 	 	 
	(e) Reformation
	 	 	34	 
	 
	 	 	 	 
	(f) Headings
	 	 	34	 
	 
	 	 	 	 
	(g) No General Waivers
	 	 	34	 
	 
	 	 	 	 
	(h) No Obligation To Mitigate
	 	 	34	 
	 
	 	 	 	 
	(i) Offsets; Withholding
	 	 	34	 
	 
	 	 	 	 
	(j) Successors and Assigns
	 	 	35	 
	 
	 	 	 	 
	(k) Counterparts
	 	 	35	 
	 
	 	 	 	 
	13. Indemnification
	 	 	35	 
	 
	 	 	 	 
	Attachment A
	 	 	 	 

iii

 

ROCKVILLE BANK

Employment Agreement for Richard J. Trachimowicz

As Amended and Restated as of January 1, 2009

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) by and among ROCKVILLE FINANCIAL, INC., a
Connecticut corporation (the “Company”), ROCKVILLE BANK, a Connecticut savings bank and a
wholly-owned subsidiary of the Company (the “Bank”), and Richard J. Trachimowicz (“Executive”)
which was first effective as of May 23, 2005 (the “Effective Date”) and thereafter amended by a
First Amendment effective as of December 22, 2006 and thereafter extended to December 31, 2009, is
hereby amended and restated in its entirety as of January 1, 2009.

W I T N E S S E T H

     WHEREAS, Executive is currently employed as Senior Vice President of the Bank; and

     WHEREAS, the Company and the Bank desire to ensure that the Company and the Bank are assured
of the continued availability of Executive’s services as provided in this Agreement; and

     WHEREAS, Executive is willing to continue to serve the Company and the Bank on the terms and
conditions hereinafter set forth; and

     WHEREAS, the Company, the Bank and Executive desire to amend and restate the Agreement in its
entirety to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and the Treasury Regulations thereunder (the “Regulations”) and in certain
other respects effective as of January 1, 2009.

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and
other good and valuable consideration the receipt and adequacy of which the Company, the Bank and
Executive each hereby acknowledge, the Company, the Bank and Executive hereby agree as follows:

1. Employment.

     The Bank hereby agrees to employ Executive as its Senior Vice President (with the principal
executive duties set forth below in Section 3), and Executive hereby agrees to accept such
employment and serve in such capacities, during the Term as defined in Section 2 (subject to
Section 7(c) and 7(e)) and upon the terms and conditions set forth in this Agreement.

 

 

2. Term.

     The term of employment of Executive under this Agreement (the “Term”) shall be the period
commencing on the Effective Date and ending on December 31, 2007 and any period of extension
thereof in accordance with this Section 2, except that the Term will end at a date, prior to the
end of such period or extension thereof, specified in Section 6 or 7 in the event of termination of
Executive’s employment. The Term, if not previously ended, shall be extended by one additional year
(added to the end of the Term) first on December 31, 2007 (extending the Term to December 31, 2008)
and on each succeeding December 31st thereafter (a “December 31st extension
date”) but only in the event the Bank serves written notice in accordance with Section 12(d) upon
Executive at least 60 days preceding December 31, 2007 extending the Term to December 31, 2008 and
thereafter at least 60 days preceding a December 31st extension date, in which case the
Term shall be extended to the next succeeding December 31st, subject to earlier
termination of Executive’s employment and earlier termination of the Term in accordance with
Section 6 or 7. The foregoing notwithstanding, in the event there occurs a Potential Change in
Control during the Term, the Term shall be extended automatically until the day after the earlier
of: (a) the second anniversary of the date the Change in Control is consummated; or (b) the date
the Change in Control contemplated by the Potential Change in Control is fully and finally
abandoned.

3. Offices and Duties.

     The provisions of this Section 3 will apply during the Term, except as otherwise provided in
Section 7(c) or 7(e):

     (a) Generally. Executive shall serve as the Senior Vice President of the Bank.
Executive shall have and perform such duties, responsibilities, and authorities as are prescribed
by or under the Bylaws of the Bank and as are customarily associated with such position or,
irrespective of the office, title or other designation, if any, a position with responsibilities
and powers substantially identical to such position with the Bank. In addition, Executive shall
have and perform such additional duties, responsibilities, and authorities as may be from time to
time assigned by the President and Chief Executive Officer based on his assessment of the business
needs of the Bank, and the Bank reserves the right to change or modify these assignments and any
positions and titles associated therewith. Executive shall devote his full business time and
attention, and his best efforts, abilities, experience, and talent, to the position of Senior Vice
President and other assignments hereunder, and for the business of the Bank, without commitment to
other business endeavors, except that Executive (i) may make personal investments which are not in
conflict with his duties to the Bank and manage personal and family financial and legal affairs,
(ii) may undertake public speaking engagements, and (iii) may serve as a director of (or similar
position with) any other business or an educational, charitable, community, civic, religious, or
similar type of organization with the approval of the President and Chief Executive Officer, so
long as such activities (i.e., those listed in clauses (i) through (iii)) do not preclude or render
unlawful Executive’s employment or service to the Bank or otherwise materially inhibit the
performance of Executive’s duties under this Agreement or materially impair the business of the
Bank or its affiliates.

2

 

     (b) Place of Employment. Executive’s principal place of employment shall be at the
administrative offices of the Bank.

4. Salary and Annual Incentive Compensation.

     As partial compensation for the services to be rendered hereunder by Executive, the Bank
agrees to pay to Executive during the Term the compensation set forth in this Section 4.

     (a) Base Salary. The Bank will pay to Executive during the Term a base salary, the
annual rate of which shall be $130,000, payable in cash in substantially equal semi-monthly
installments commencing at the beginning of the Term, and otherwise in accordance with the Bank’s
usual payroll practices with respect to senior executives (except to the extent deferred under
Section 5(d)). Executive’s annual base salary shall be reviewed by the Human Resources Committee
(the “Committee”) of the Board of Directors of the Bank (the “Board”) at least once in each
calendar year, and may be increased above, but may not be reduced below, the then-current rate of
such base salary. For purposes of this Agreement, “Base Salary” means Executive’s then-current
base salary.

     (b) Annual Incentive Compensation. The Bank will pay to Executive during the Term
annual incentive compensation which shall offer to Executive an opportunity to earn additional
compensation based upon performance in amounts determined by the Committee in accordance with the
applicable plan and consistent with past practices of the Bank, with the nature of the performance
and the levels of performance triggering payments of such annual target incentive compensation for
each year to be established and communicated to Executive during the first quarter of such year by
the Committee. In addition, the Committee (or the Board) may determine, in its discretion, to
increase Executive’s annual target incentive opportunity or provide an additional annual incentive
opportunity, in excess of the annual target incentive opportunity, payable for performance in
excess of or in addition to the performance required for payment of the annual target incentive
amount. Any annual incentive compensation payable to Executive shall be paid in accordance with
the applicable plan (except to the extent deferred under Section 5(d)).

5. Long-Term Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense
Reimbursement.

     (a) Executive Compensation Plans. Executive shall be entitled during the Term to
participate, without discrimination or duplication, in executive compensation plans and programs
intended for general participation by senior executives of the Bank, as presently in effect or as
they may be modified or added to by the Bank from time to time, subject to the eligibility and
other requirements of such plans and programs, including without limitation any stock option plans,
plans under which restricted stock/restricted stock units, performance-based restricted
stock/restricted stock units or performance-accelerated restricted stock/restricted stock units
(collectively, “stock plans”) may be awarded, other annual and long-term cash and/or equity
incentive plans, and deferred compensation plans. The Bank makes no commitment under this Section
5(a) to provide
participation opportunities to Executive in all plans and programs or at levels equal to (or
otherwise comparable to) the participation opportunity of any other executive.

3

 

     (b) Employee and Executive Benefit Plans. Executive shall be entitled during the Term
to participate, without discrimination or duplication, in employee and executive benefit plans and
programs of the Bank, as presently in effect or as they may be modified or added to by the Bank
from time to time, subject to the eligibility and other requirements of such plans and programs,
including without limitation plans providing pensions, supplemental pensions, supplemental and
other retirement benefits, medical insurance, life insurance, disability insurance, and accidental
death or dismemberment insurance, as well as savings, profit-sharing, and stock ownership plans.
The Bank makes no commitment under this Section 5(b) to provide participation opportunities to
Executive in all benefit plans and programs or at levels equal to (or otherwise comparable to) the
participation opportunity of any other executive.

     In furtherance of and not in limitation of the foregoing, during the Term:

	 	(i)	 	Executive will participate as Senior Vice President in all executive and
employee vacation and time-off programs;
	 
	 	(ii)	 	The Bank will provide Executive with coverage as Senior Vice President with
respect to long-term disability insurance;
	 
	 	(iii)	 	Executive will be covered by Bank-paid group term life insurance; and
	 
	 	(iv)	 	Executive will be entitled to benefits under the Supplemental Savings and
Retirement Plan (the “SERP”) in accordance with the terms thereof, with the effective
date of Executive’s participation therein to be the Effective Date.

     (c) Acceleration of Awards Upon a Change in Control. In the event of a Change in
Control (as defined in Section 8(b)), all outstanding stock options, restricted stock, and other
equity-based awards then held by Executive shall become vested and exercisable. The time and form
of payment of such equity-based awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such equity-based awards were granted.

     (d) Deferral of Compensation. If the Bank has in effect or adopts any deferral
program or arrangement permitting executives to elect to defer any compensation, Executive will be
eligible to participate in such program. Any plan or program of the Bank which provides benefits
based on the level of salary, annual incentive, or other compensation of Executive shall, in
determining Executive’s benefits, take into account the amount of salary, annual incentive, or
other compensation prior to any reduction for voluntary contributions made by Executive under any
deferral or similar contributory plan or program of the Bank (excluding compensation that would not
be taken into account even if not deferred), but shall not treat any payout or settlement under
such a deferral or similar contributory plan or program to be additional salary, annual incentive,
or other compensation for purposes of determining such benefits, unless otherwise expressly
provided under such plan or program.

     (e) Company Registration Obligations. The Company will use its best efforts to file
with the Securities and Exchange Commission and thereafter maintain the effectiveness of one or
more registration statements registering under the Securities Act of 1933, as amended (the “1933
Act”), the offer and sale of shares by the Company to Executive pursuant to stock options or other
equity-based awards granted to Executive under Company plans or otherwise or, if shares

4

 

are
acquired by Executive in a transaction not involving an offer or sale to Executive but resulting in
the acquired shares being “restricted securities” for purposes of the 1933 Act, registering the
reoffer and resale of such shares by Executive.

     (f) Reimbursement of Expenses. The Bank will promptly reimburse Executive for all
reasonable business expenses and disbursements incurred by Executive in the performance of
Executive’s duties during the Term in accordance with the Bank’s reimbursement policies as in
effect from time to time and the provisions of Section 7(g) of this Agreement.

     (g) Limitations Under Code Section 409A. Anything in this Section 5 to the contrary
notwithstanding, with respect to any payment otherwise required hereunder, in the event of any
delay in the payment date as a result of Section 7(g) of this Agreement (relating to the six-month
delay in payment of certain benefits to Specified Employees as required by Section 409A of the
Code), the Bank will adjust the payment to reflect the deferred payment date by multiplying the
payment by the product of the six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment would have been made but for the delay multiplied
by a fraction, the numerator of which is the number of days by which such payment was delayed and
the denominator of which is 365. The Bank will pay the adjusted payment at the beginning of the
seventh month following Executive’s termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by such payment date is not administratively practicable due to
events beyond the control of Executive (or Executive’s beneficiary or estate) and for reasons that
are commercially reasonable, payment will be made as soon as administratively practicable in
compliance with Section 409A of the Code and the Regulations. In the event of Executive’s death
during such six-month period, payment will be made in the payroll period next following the payroll
period in which Executive’s death occurs.

6. Termination Due to Retirement, Death, or Disability.

     (a) Retirement. Executive may elect to terminate employment hereunder by retirement
at or after age 60 (“Retirement”). At the time Executive’s employment terminates due to
Retirement, the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease except for obligations which expressly continue
after termination of employment due to Retirement, and the Bank will pay Executive at the time
specified in Section 6(d), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the performance year and
paid at the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days in the year of
termination;

5

 

	 	(iii)	 	The vesting and exercisability of stock options held by Executive at
termination and all other terms of such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which such options were
granted (subject to Section 10(f) hereof);
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plans; and
	 
	 	(v)	 	Upon Retirement, if Executive is not eligible for retiree coverage under the
Bank’s health plan (the “Health Plan”) or Medicare and provided that Executive shall be
in compliance with the conditions set forth in Section 10, the Bank shall pay to
Executive a lump sum amount equal on an after-tax basis to the present value of the
total cost of medical coverage under the Health Plan that would have been incurred by
both Executive and the Bank on behalf of Executive (and his spouse and eligible
dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s Retirement) from the date of Executive’s Retirement
until Executive’s attainment of Social Security retirement age had Executive remained
employed by the Bank during such period, calculated on the assumption that the cost of
such coverage would remain unchanged from that in effect for the year of Executive’s
Retirement. Such lump sum amount shall be calculated by an actuary selected by the
Bank and paid in cash at the time specified in Section 6(d). Such amount shall not be
subject to reduction or forfeiture by reason of any coverage for which Executive may
thereafter become eligible by reason of subsequent employment or otherwise. For
purposes of this Section, present value shall be calculated on the basis of the
discount rate set forth in the Bank’s qualified retirement plan for the determination
of lump sum payments.

     (b) Death. In the event of Executive’s death which results in the termination of
Executive’s employment, the Term will terminate, all obligations of the Bank and Executive under
Sections 1 through 5 of this Agreement will immediately cease except for obligations which
expressly continue after death, and the Bank will pay Executive’s
beneficiary or estate at the time specified in Section 6(d), and Executive’s beneficiary or
estate will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s death occurred, a lump sum amount equal to the portion of annual
incentive compensation that would have become payable in cash to Executive (i.e.,
excluding the portion payable in stock or in other non-cash awards) for that year if
his employment had not terminated, based on performance actually achieved in that year
(determined by the Committee following completion of the performance year and paid at
the time specified in the applicable plan), multiplied by a fraction the numerator of
which is the number of 

6

 

	 	 	 	days Executive was employed in the year of his death and the
denominator of which is the total number of days in the year of death;

	 	(iii)	 	The vesting and exercisability of stock options held by Executive at death and
all other terms of such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted;
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plans;
	 
	 	(v)	 	If Executive’s surviving spouse (and eligible dependents, if any) elects
continued coverage under the Bank’s Health Plan in accordance with the applicable
provisions of COBRA, the Bank shall pay to Executive’s surviving spouse on a monthly
basis during such COBRA continuation period and in accordance with Section 7(g) of this
Agreement an amount equal on an after-tax basis to the total cost of such coverage. No
further benefits shall be paid under this Section after the expiration of the maximum
COBRA continuation period available to Executive’s surviving spouse and eligible
dependents, if any.

     (c) Disability. The Bank may terminate the employment of Executive hereunder due to
the Disability (as defined in Section 8(d)) of Executive. Upon termination of employment, the Term
will terminate, all obligations of the Bank and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly continue after termination
of employment due to Disability, and the Bank will pay Executive at the time specified in Section
6(d), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash
to Executive (i.e., excluding the portion payable in stock or in other non-cash
awards) for that year if his employment had not terminated, based on performance
actually achieved in that year (determined by the Committee following completion of
the performance year and paid at the time specified in the applicable plan),
multiplied by a fraction the numerator of which is the number of days Executive was
employed in the year of termination and the denominator of which is the total number
of days in the year of termination;
	 
	 	(iii)	 	Stock options held by Executive at termination shall be governed by the plans
and programs and the agreements and other documents pursuant to which such options were
granted;
	 
	 	(iv)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan 

7

 

	 	 	 	awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;

	 	(v)	 	Disability benefits shall be payable in accordance with the Bank’s plans,
programs and policies, including the SERP, and all deferral arrangements under Section
5(d) will be settled in accordance with the plans and programs governing the deferral;
	 
	 	(vi)	 	Upon termination of Executive’s employment due to Disability, if Executive is
not eligible for retiree coverage under the Bank’s Health Plan or Medicare and provided
that Executive shall be in compliance with the conditions set forth in Section 10, the
Bank shall pay to Executive a lump sum amount equal on an after-tax basis to the
present value of the total cost of medical coverage under the Health Plan that would
have been incurred by both Executive and the Bank on behalf of Executive (and his
spouse and eligible dependents, if any, for whom coverage had been provided under the
Health Plan immediately prior to Executive’s termination of employment) from the date
of Executive’s termination of employment until Executive’s attainment of Social
Security retirement age had Executive remained employed by the Bank during such period,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 6(d). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 6(d) a
lump sum amount equal on an after-tax basis to the present value of the sum of (A)
the amount that Executive and the Bank would have paid, had he remained employed,
for coverage under the Bank’s group long-term disability policy from the date of
Executive’s termination of employment until Executive’s attainment of Social
Security retirement age, calculated on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year in which
Executive’s termination occurred; and (B) the amount that Executive and the Bank
would have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until
Executive’s attainment of Social Security retirement age, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set

8

 

	 	 	 	forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

     (d) Other Terms of Payment Following Retirement, Death, or Disability. Nothing in
this Section 6 shall limit the benefits payable or provided in the event Executive’s employment
terminates due to Retirement, death, or Disability under the terms of plans or programs of the Bank
more favorable to Executive (or his beneficiaries) than the benefits payable or provided under this
Section 6 (except in the case of annual incentives in lieu of which amounts are paid hereunder),
including plans and programs adopted after the date of this Agreement. Amounts payable under this
Section 6 following Executive’s termination of employment, other than those expressly payable
following determination of performance for the year of termination for purposes of annual incentive
compensation or otherwise expressly payable on a deferred basis, will be paid in the payroll period
next following the payroll period in which termination of employment occurs; subject, however, to
the provisions of Section 7(g) of this Agreement relating to the six-month delay in payment of
certain benefits to Specified Employees as required by Section 409A of the Code. Any payment or
reimbursement due within such six-month period shall be delayed to the end of such six-month period
as required by Section 7(g). The Bank will adjust the payment or reimbursement to reflect the
deferred payment date by multiplying the payment by the product of the six-month CMT Treasury Bill
annualized yield rate as published by the U.S. Treasury for the date on which such payment or
reimbursement would have been made but for the delay multiplied by a fraction, the numerator of
which is the number of days by which such payment or reimbursement was delayed and the denominator
of which is 365. In the event of a reimbursement that is required by other terms of this Agreement
to be made on an after-tax basis which is subject to the six-month delay in payment as described in
Section 7(g) of this Agreement, the reimbursement as adjusted in accordance with this Section 6(d)
to reflect the deferred payment date shall be paid to Executive on an after-tax and fully
grossed-up basis so that Executive is held economically harmless. The Bank will pay the adjusted
payment or reimbursement at the beginning of the seventh month following Executive’s termination of
employment. Notwithstanding the foregoing, if calculation of the amounts payable by such payment
date is not administratively practicable due to events beyond the control of Executive (or
Executive’s beneficiary or estate) and for reasons that are commercially reasonable, payment will
be made as soon as administratively practicable in compliance with Section 409A of the
Code and the Regulations. In the event of Executive’s death during such six-month period,
payment will be made in the payroll period next following the payroll period in which Executive’s
death occurs.

7. Termination of Employment For Reasons Other Than Retirement, Death or Disability.

     (a) Termination by the Bank for Cause. The Bank may terminate the employment of
Executive hereunder for Cause (as defined in Section 8(a)) at any time. At the time Executive’s
employment is terminated for Cause, the Term will terminate, all obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease except for
obligations which expressly continue after termination of employment by the Bank for Cause, and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

9

 

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were granted;
and
	 
	 	(iii)	 	All deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral, and all rights, if any, under the
SERP and any other benefit plan shall be governed by such plans.

     (b) Termination by Executive Other Than For Good Reason. Executive may terminate his
employment hereunder voluntarily for reasons other than Good Reason (as defined in Section 8(e)) at
any time upon 90 days’ written notice to the Bank. An election by Executive not to extend the Term
pursuant to Section 2 hereof shall be deemed to be a termination of employment by Executive for
reasons other than Good Reason at the date of expiration of the Term, unless a Change in Control
(as defined in Section 8(b)) occurs prior to, and there exists Good Reason at, such date of
expiration; provided, however, that, if Executive has attained age 60 at such date of termination,
such termination shall be deemed a Retirement of Executive, which shall instead be governed by
Section 6(a) above. At the time Executive’s employment is terminated by Executive other than for
Good Reason the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease, and the Bank will pay Executive at the time
specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	All stock options, restricted stock and deferred stock awards, including
outstanding stock plan awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were granted;
	 
	 	(iii)	 	All deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral, and all rights under the SERP and
any other benefit plan shall be governed by such plans.

     (c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change
in Control. The Bank may terminate the employment of Executive hereunder without Cause, if at
the date of termination no Change in Control has occurred or such date of termination is at least
two years after the most recent Change in Control, upon at least 90 days’ written notice to
Executive. The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to
terminate Executive’s positions specified in Sections 1 and 3 and all other obligations of
Executive and the Bank under Section 3 at a date earlier than the expiration of such 90-day period,
if so specified by the Bank in the written notice, provided that Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the
expiration of such notice period), the Term will terminate, all remaining

10

 

obligations of the Bank
and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination of employment as expressly provided herein), and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(c)(ii) shall be payable a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and, in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;

11

 

	 	(vii)	 	All rights under the SERP shall be governed by such plan;
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in
which Executive’s termination occurred; and (B) the amount that Executive and the
Bank would have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until the
third anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

     (d) Termination by Executive for Good Reason Prior to or More than Two Years After a
Change in Control. Executive may terminate his employment hereunder for Good Reason, prior to
a Change in Control or after the second anniversary of the most recent Change in Control, upon 90
days’ written notice to the Bank; provided, however, that, if the Bank has corrected the basis for
such Good Reason within 30 days after receipt of such notice, Executive may not terminate his
employment for Good Reason, and therefore Executive’s notice of termination will automatically
become null and void. At the time Executive’s employment is terminated by Executive for Good
Reason (i.e., at the expiration of such notice period), the Term will terminate, all obligations of
the Bank and Executive under Sections 1 through 5 of this Agreement will immediately cease (except
for obligations which continue after termination of

12

 

employment as expressly provided herein), and
the Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled
to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(d)(ii) shall be payable in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and, in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and programs and
the agreements and other documents pursuant to which such options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;
	 
	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan; and

13

 

	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become eligible
by reason of subsequent employment or otherwise. In addition, provided that Executive
shall be in compliance with the conditions set forth in Section 10, the Bank shall pay
to Executive at the time specified in Section 7(g) a lump sum amount equal on an
after-tax basis to the present value of the sum of (A) the amount that Executive and
the Bank would have paid, had he remained employed, for coverage under the Bank’s group
long-term disability policy from the date of Executive’s termination of employment
until the third anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year in
which Executive’s termination occurred; and (B) the amount that Executive and the
Bank would have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until the
third anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in effect
for the year in which Executive’s termination occurred. For purposes of this
Section, present value shall be calculated on the basis of the discount rate set
forth in the Bank’s qualified retirement plan for the determination of lump sum
payments.

If any payment or benefit under this Section 7(d) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(d).

     (e) Termination by the Bank Without Cause Within Two Years After a Change in Control.
The Bank may terminate the employment of Executive hereunder without Cause, simultaneously with or
within two years after a Change in Control, upon at least 90 days’ written notice to Executive.
The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminate
Executive’s positions specified in Sections 1 and 3 and all other obligations of Executive and the
Bank under Section 3 at a date earlier than the expiration of such 90-day notice period, if so
specified by the Bank in the written notice, provided that

14

 

Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the
expiration of such notice period), the Term will terminate, all remaining obligations of the Bank
and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination of employment as expressly provided herein), and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(e)(ii) shall be paid by the Bank in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and any such options granted on or after the Effective Date shall remain outstanding
and exercisable until the stated expiration date of the Option as though Executive’s
employment did not terminate, and, in other respects, such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by 

15

 

	 	 	 	the plans and programs and the
agreements and other documents pursuant to which such awards were granted;

	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan; and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction
or forfeiture by reason of any coverage for which Executive may thereafter become
eligible by reason of subsequent employment or otherwise. In addition, provided
that Executive shall be in compliance with the conditions set forth in Section 10,
the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum
amount equal on an after-tax basis to the present value of the sum of (A) the amount
that Executive and the Bank would have paid, had he remained employed, for coverage
under the Bank’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination of
employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which Executive’s termination
occurred; and (B) the amount that Executive and the Bank would have paid to continue
Executive’s group life insurance coverage, had he remained employed, from the date
of Executive’s termination of employment until the third anniversary of Executive’s
termination of employment, calculated on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year in which
Executive’s termination occurred. For purposes of this Section, present value shall
be calculated on the basis of the discount rate set forth in the Bank’s qualified
retirement plan for the determination of lump sum payments.

     (f) Termination by Executive for Good Reason Within Two Years After a Change in
Control. Executive may terminate his employment hereunder for Good Reason, simultaneously with
or within two years after a Change in Control, upon 90 days’ written notice to the Bank; provided,
however, that, if the Bank has corrected the basis for such Good Reason within 30 days after
receipt of such notice, Executive may not terminate his employment for Good Reason,

16

 

and therefore
Executive’s notice of termination will automatically become null and void. At the time Executive’s
employment is terminated by Executive for Good Reason (i.e., at the expiration of such notice
period), the Term will terminate, all obligations of the Bank and Executive under Sections 1
through 5 of this Agreement will immediately cease (except for obligations which continue after
termination of employment as expressly provided herein), and the Bank will pay Executive at the
time specified in Section 7(g), and Executive will be entitled to receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination;
	 
	 	(ii)	 	Cash in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an amount
equal to the greater of (x) the portion of Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the portion
payable in stock or in other non-cash awards) for the year of termination or (y) the
portion of Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the latest year preceding the year of termination based on performance actually
achieved in that latest year. The amount determined to be payable under this Section
7(f)(ii) shall be paid by the Bank in a lump sum;
	 
	 	(iii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year
in which Executive’s employment terminated, a lump sum amount equal to the portion of
Executive’s annual target incentive compensation potentially payable in cash to
Executive (i.e., excluding the portion payable in stock or in other non-cash awards)
for the year of termination, multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;
	 
	 	(iv)	 	Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of such termination,
and any such options granted on or after the Effective Date shall remain outstanding
and exercisable until the stated expiration date of the Option as though Executive’s
employment did not terminate, and, in other respects, such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;
	 
	 	(v)	 	Any performance objectives upon which the earning of performance-based
restricted stock and deferred stock awards, including outstanding stock plan awards,
and other long-term incentive awards is conditioned shall be deemed to have been met at
target level at the date of termination, and restricted stock and deferred stock
awards, including outstanding stock plan awards, and other long-term incentive awards
(to the extent then or previously earned, in the case of performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by 

17

 

	 	 	 	the plans and programs and the
agreements and other documents pursuant to which such awards were granted;

	 	(vi)	 	All deferral arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral;
	 
	 	(vii)	 	All rights under the SERP shall be governed by such plan; and
	 
	 	(viii)	 	Upon termination of Executive’s employment hereunder, if Executive is not eligible
for retiree coverage under the Bank’s Health Plan or Medicare and provided that
Executive shall be in compliance with the conditions set forth in Section 10, the Bank
shall pay to Executive a lump sum amount equal on an after-tax basis to the present
value of the total cost of medical coverage under the Health Plan that would have
been incurred by both Executive and the Bank on behalf of Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided under the Health Plan
immediately prior to Executive’s termination of employment) from the date of
Executive’s termination of employment until the third anniversary of such date,
calculated on the assumption that the cost of such coverage would remain unchanged from
that in effect for the year of Executive’s termination of employment. Such lump sum
amount shall be calculated by an actuary selected by the Bank and paid in cash at the
time specified in Section 7(g). Such amount shall not be subject to reduction
or forfeiture by reason of any coverage for which Executive may thereafter become
eligible by reason of subsequent employment or otherwise. In addition, provided
that Executive shall be in compliance with the conditions set forth in Section 10,
the Bank shall pay to Executive at the time specified in Section 7(g) a lump sum
amount equal on an after-tax basis to the present value of the sum of (A) the amount
that Executive and the Bank would have paid, had he remained employed, for coverage
under the Bank’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s termination of
employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which Executive’s termination
occurred; and (B) the amount that Executive and the Bank would have paid to continue
Executive’s group life insurance coverage, had he remained employed, from the date
of Executive’s termination of employment until the third anniversary of Executive’s
termination of employment, calculated on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year in which
Executive’s termination occurred. For purposes of this Section, present value shall
be calculated on the basis of the discount rate set forth in the Bank’s qualified
retirement plan for the determination of lump sum payments.

If any payment or benefit under this Section 7(f) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(f).

18

 

     (g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section
409A Exemptions; Delayed Payments Under Section 409A.

	 	(i)	 	Whether a termination is deemed to be at or
within two years after a Change in Control for purposes of Sections
7(c), (d), (e), or (f) is determined at the date of termination,
regardless of whether the Change in Control had occurred at the time a
notice of termination was given. In the event Executive’s employment
terminates for any reason set forth in Section 7(b) through (f),
Executive will be entitled to the benefit of any terms of plans or
agreements applicable to Executive which are more favorable than those
specified in this Section 7 (except in the case of annual incentives
in lieu of which amounts are paid hereunder).
	 
	 	(ii)	 	Amounts payable under this Section 7
following Executive’s termination of employment, other than those
expressly payable on a deferred basis, will be paid in the payroll
period next following the payroll period in which termination of
employment occurs except as otherwise provided in this Section 7.
	 
	 	(iii)	 	Any reimbursements made or in-kind benefits
provided under this Agreement shall be subject to the following
conditions:

     (A) the amount of expenses eligible for reimbursement or
in-kind benefits provided in any one taxable year of Executive
shall not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided in any other taxable year of
Executive;

     (B) the reimbursement of any expense shall be made each
calendar quarter not later than the last day of Executive’s taxable
year following Executive’s taxable year in which the expense was
incurred (unless this Agreement specifically provides for
reimbursement by an earlier date);

     (C) the right to reimbursement of an expense or payment of an
in-kind benefit shall not be subject to liquidation or exchange for
another benefit.

In addition, with respect to any reimbursement made under Section
6(b)(v) for expenses for medical coverage purchased by Executive’s
spouse, any such reimbursement made during the period of time
Executive’s spouse or dependents would be entitled to continuation
coverage under the Bank’s Health Plan pursuant to COBRA if
Executive’s spouse or dependents had elected such coverage and
paid the applicable premiums shall be exempt from Section 409A of
the Code and the six-month delay

19

 

in payment described hereinbelow
pursuant to Section 1.409A-1(b)(9)(v)(B) of the Regulations.

	 	(iv)	 	Executive’s right to reimbursements under
this Agreement shall be treated as a right to a series of separate
payments under Section 1.409A-2(b)(2)(iii) of the Regulations.
	 
	 	(v)	 	Any tax gross-up payments made under this
Agreement, within the meaning provided by Section 1.409A-3(i)(1)(v) of
the Regulations, shall be made by the end of Executive’s taxable year
next following Executive’s taxable year in which he remits the related
taxes (unless this Agreement specifically provides for payment by an
earlier date).
	 
	 	(vi)	 	It is intended that payments made under this
Agreement due to Executive’s termination of employment which are paid
on or before the 15th day of the third month following the end of
Executive’s taxable year in which his termination of employment occurs
shall be exempt from compliance with Section 409A of the Code pursuant
to the exemption for short-term deferrals set
forth in Section 1.409A-1(b)(4) of the Regulations (the “Exempt
Short-Term Deferral Payments”); and that payments under this
Agreement, other than Exempt Short-Term Deferral Payments, that are
made on or before the last day of the second taxable year following
the taxable year in which Executive terminates employment in an
aggregate amount not exceeding two times the lesser of: (A) the sum
of Executive’s annualized compensation based on his annual rate of
pay for the taxable year preceding the taxable year in which he
terminates employment (adjusted for any increase during that year
that was expected to continue indefinitely if he had not terminated
employment); or (B) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of
the Code for the year in which Executive terminates employment
shall be exempt from compliance with Section 409A of the Code
pursuant to the exception for payments under a separation pay plan
as set forth in Section 1.409A-1(b)(9)(iii) of the Treasury
Regulations.
	 
	 	(vii)	 	Anything in this Agreement to the contrary
notwithstanding, payments to be made under this Agreement upon
termination of Executive’s employment which are subject to Section
409A of the Code shall be delayed for six months following such
termination of employment if Executive is a Specified Employee as
defined in Section 8(g) on the date of his termination of employment.
Any payment or reimbursement due within such six-month period shall be
delayed to the end of such six-month period. The Bank will adjust the
payment or reimbursement to 

20

 

	 	 	 	reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the
six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment or reimbursement
would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment or
reimbursement was delayed and the denominator of which is 365. In the
event of a reimbursement that is required by other terms of this
Agreement to be made on an after-tax basis and which is subject to the
six-month delay provided herein, the reimbursement as adjusted in
accordance with this Section 7(g) to reflect the deferred payment date
shall be paid to Executive on an after-tax and fully grossed-up basis
so that Executive is held economically harmless. The Bank will pay the
adjusted payment or reimbursement at the beginning of the seventh
month following Executive’s termination of employment. Notwithstanding
the foregoing, if calculation of the amounts payable by any payment
date specified in this Section 7(g) is not administratively
practicable due to events beyond the control of
Executive (or Executive’s beneficiary or estate) and for reasons
that are commercially reasonable, payment will be made as soon as
administratively practicable in compliance with Section 409A of the
Code and the Regulations thereunder. In the event of Executive’s
death during such six-month period, payment will be made in the
payroll period next following the payroll period in which
Executive’s death occurs.

8. Definitions Relating to Termination Events.

	 	(a)	 	“Cause.” For purposes of this Agreement, “Cause” shall mean:
	 
	 	(i)	 	Executive’s willful and continued failure to substantially perform his duties
hereunder (other than any such failure resulting from incapacity due to physical or
mental illness or Disability or any failure after the issuance of a notice of
termination by Executive for Good Reason) which failure is demonstrably and materially
damaging to the financial condition or reputation of the Company, the Bank and/or their
affiliates, and which failure continues more than 48 hours after a written demand for
substantial performance is delivered to Executive by the Board, which demand
specifically identifies the manner in which the Board believes that Executive has not
substantially performed his duties hereunder and the demonstrable and material damage
caused thereby; or
	 
	 	(ii)	 	the willful engaging by Executive in conduct which is demonstrably and
materially injurious to the Company, the Bank or their affiliates, monetarily or
otherwise.

	No act, or failure to act, on the part of Executive shall be deemed “willful” unless done, or
omitted to be done, by Executive not in good faith and without reasonable belief that his action 

21

 

	or
omission was in the best interest of the Bank and the Company. Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause unless and until there shall have
been delivered to Executive a copy of the resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board
(after reasonable notice to Executive and an opportunity for Executive, together with Executive’s
counsel, to be heard before the Board) finding that, in the good faith opinion of the Board,
Executive was guilty of conduct set forth above in this definition and specifying the particulars
thereof in detail.

     (b) “Change in Control.” For purposes of this Agreement, a “Change in Control” shall
be deemed to have occurred if, during the term of this Agreement:

	 	(i)	 	the Company, or the mutual holding company parent of the
Company, whether it remains a mutual holding company or converts to the stock
form of organization (the “Mutual Holding Company”), merges into or
consolidates with another corporation, or merges another corporation into
the Company or the Mutual Holding Company, and as a result, with respect to
the Company, less than a majority of the combined voting power of the
resulting corporation immediately after the merger or consolidation is held
by “Persons” as such term is used for purposes of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) who
were stockholders of the Company immediately before the merger or
consolidation or, with respect to the Mutual Holding Company, less than a
majority of the directors of the resulting corporation immediately after the
merger or consolidation were directors of the Mutual Holding Company
immediately before the merger or consolidation;
	 
	 	(ii)	 	following a conversion of the Mutual Holding Company to the
stock form of organization, any Person (other than any trustee or other
fiduciary holding securities under an employee benefit plan of the Bank or the
Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the resulting
corporation representing 25% or more of the combined voting power of the
resulting corporation’s then-outstanding securities;
	 
	 	(iii)	 	during any period of twenty-four months (not including any
period prior to the Effective Date of this Agreement), individuals who at the
beginning of such period constitute the board of directors of the Company, and
any new director (other than (A) a director nominated by a Person who has
entered into an agreement with the Company to effect a transaction described
in Sections (8)(b)(i), (ii) or (iv) hereof, (B) a director nominated by any
Person (including the Company) who publicly announces an intention to take or
to consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change in
Control or (C) a director nominated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of the Company

22

 

	 	 	 	representing 25% or more
of the combined voting power of the Company’s securities) whose election by the
board of directors of the Company or nomination for election by the Company’s
stockholders was approved in advance by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;

	 	(iv)	 	the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; or
	 
	 	(v)	 	the board of directors of the Company adopts a resolution to
the effect that, for purposes of this Agreement, a Change in Control has
occurred.

     (c) “Compensation Accrued at Termination.” For purposes of this Agreement,
“Compensation Accrued at Termination” means the following:

	 	(i)	 	The unpaid portion of annual base salary at the rate payable, in accordance
with Section 4(a) hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in a lump sum at the time specified in
Section 6(d) or 7(g) as the case may be;
	 
	 	(ii)	 	All vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans, programs, and
arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b) hereof
(including any earned and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in accordance with the
terms and conditions of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were granted or
accrued; and
	 
	 	(iii)	 	Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as authorized
under Section 5(f), in accordance the Company’s reimbursement policies as in effect at
the date of such termination, and payable in a lump sum in accordance with Section
7(g).

     (d) “Disability.” For purposes of this Agreement, “Disability” shall have the meaning
ascribed to it by Section 409A of the Code and the Regulations.

     (e) “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean, without
Executive’s express written consent, the occurrence of any of the following circumstances provided
that Executive shall have given notice of such circumstance(s) to the Bank within a period not to
exceed 90 days of the initial existence of such circumstance(s) and the Bank shall not have
remedied such circumstance(s) within 30 days after receipt of such notice:

23

 

	 	(i)	 	the assignment to Executive of duties materially inconsistent with Executive’s
position and status as Senior Vice President, or an alteration, materially adverse to
Executive, in Executive’s position and status as Senior Vice President or in the nature
of Executive’s duties, responsibilities, and authorities or conditions of Executive’s
employment from those relating to Executive position and status as Senior Vice
President (excluding changes in assignments permitted under Section 3); except the
foregoing shall not constitute Good Reason if occurring in connection with the
termination of Executive’s employment for Cause, Disability, Retirement, as a result of
Executive’s death, or as a result of action by or with the consent of Executive;
	 
	 	(ii)	 	(A) a material reduction by the Bank in Executive’s Base Salary, (B) the
setting of Executive’s annual target incentive opportunity or payment of earned annual
incentive not in material conformity with Section 4 hereof, (C) a change in
compensation or benefits not in material conformity with Section 5, or (D) a material
reduction, after a Change in Control, in perquisites from the level of such perquisites
as in effect immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control, except for across-the-board
perquisite reductions similarly affecting all senior executives of the Bank and all
senior executives of any Person in control of the Company;
	 
	 	(iii)	 	the relocation of the principal place of Executive’s employment to a site that
is outside of a fifty mile radius of his principal place of employment prior to such
relocation; for this purpose, required travel on the Bank’s business will not
constitute a relocation so long as the extent of such travel is substantially
consistent with Executive’s customary business travel obligations in periods prior to
the Effective Date;
	 
	 	(iv)	 	the failure by the Bank to pay to Executive any material portion of Executive’s
compensation or to pay to Executive any material portion of an installment of deferred
compensation under any deferred compensation program of the Bank within a reasonable
time after the date such compensation is due;
	 
	 	(v)	 	the failure by the Bank to continue in effect any material compensation or
benefit plan in which Executive participated immediately prior to a Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Bank to continue
Executive’s participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amounts of compensation or
benefits provided and the level of Executive’s participation relative to other
participants, as existed at the time of the Change in Control;
	 
	 	(vi)	 	the failure of the Bank to obtain a satisfactory agreement from any successor
to the Bank, the Company or the Mutual Holding Company to fully assume the Bank’s and
the Company’s obligations and to perform under this Agreement, as contemplated in
Section 12(b) hereof, in a form reasonably acceptable to Executive; or

24

 

	 	(vii)	 	any other failure by the Bank or the Company to perform any material
obligation under, or breach by the Bank or the Company of any material provision of,
this Agreement;

provided, however, that a forfeiture under Section 10(f), (g), or (h) shall not constitute “Good
Reason.”

     (f) “Potential Change in Control.” For purposes of this Agreement, a “Potential
Change in Control” shall be deemed to have occurred if, during the term of this Agreement:

	 	(i)	 	the Company enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control;
	 
	 	(ii)	 	any Person (including the Company) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a Change in Control;
or
	 
	 	(iii)	 	the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

     (g) “Specified Employee”  For purposes of this Agreement, a “Specified Employee”
shall mean an employee of the Bank, at a time when any stock of the Company is publicly traded on
an established securities market or otherwise, who satisfies the requirements for being designated
a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section
416(i)(5) of the Code at any time during a calendar year, in which case such employee shall be
considered a Specified Employee for the twelve-month period beginning on the first day of the
fourth month immediately following the end of such calendar year. In the event of any corporate
spinoff or merger, the determination of which employees meet the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any
calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions.

     (a) Rabbi Trust Funded Upon Potential Change in Control. In the event of a Potential
Change in Control or Change in Control, the Bank or the Company shall, not later than 15 days
thereafter, have established one or more rabbi trusts and shall deposit therein cash in an amount
determined by the actuary for the Bank’s qualified Retirement Plan on the basis of the interest
rate and mortality assumptions set forth in said qualified Retirement Plan, which is sufficient to
provide for full payment of all potential obligations of the Bank and the Company that would arise
assuming consummation of a Change in Control, or has arisen in the case of an actual Change in
Control, and a subsequent termination of Executive’s employment under Section 7(e) or (f). Such
rabbi trust(s) shall be irrevocable and shall provide that neither the Bank nor the Company may,
directly or indirectly, use or recover any assets of the trust(s) until such time as all
obligations which potentially could arise hereunder have been settled and paid in full, subject
only to the claims of creditors of the Bank and the Company in the event of insolvency or
bankruptcy of the Bank or the Company; provided, however, that if no Change in Control has

25

 

occurred
within two years after such Potential Change in Control, such rabbi trust(s) shall at the end of
such two-year period become revocable and may thereafter be revoked by the Bank.

     (b) Gross-up If Excise Tax Would Apply. In the event Executive becomes entitled to
any amounts or benefits payable in connection with a Change in Control or other change in ownership
or control (whether or not such amounts are payable pursuant to this Agreement) (the “Change in
Control
Payments”), if any of such Change in Control Payments are subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Code (or any similar federal, state or local tax that may
hereafter be imposed), the Bank shall pay to Executive at the time specified in Section 9(b)(iii)
hereof an additional amount (the “Gross-Up Payment”) such that the net amount retained by
Executive, after deduction of any Excise Tax on the Total Payments (as hereinafter defined) and any
federal, state and local income tax and Excise Tax upon the payments provided for by Section 9(b),
shall be equal to the Total Payments.

(i) For purposes of determining whether any of the Change in Control Payments will
be subject to the Excise Tax and the amount of such Excise Tax:

(A) any payments or benefits received or to be received by Executive in
connection with a Change in Control or other change in ownership or control
or Executive’s termination of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Bank,
any Person whose actions result in a Change in Control or any Person
affiliated with the Bank or such Person) (which, together with the Change in
Control Payments, constitute the “Total Payments”) shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code,
and all “excess parachute payments” within the meaning of Section 280G(b)(1)
of the Code shall be treated as subject to the Excise Tax, unless in the
opinion of nationally-recognized tax counsel selected by Executive such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;

(B) the amount of the Total Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (x) the total amount of the
Total Payments and (y) the amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying Section 9(b)(i)(A)
hereof); and

(C) the value of any non-cash benefits or any deferred payments or benefit
shall be determined by a nationally-recognized accounting firm selected
by Executive in accordance with the principles of Sections 280G(d)(3)
and (4) of the Code.

26

 

(ii) For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the state
and locality of Executive’s residence in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in
federal income taxes which could actually be obtained from deduction of such state
and local taxes by Executive. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account and paid to Executive
hereunder, Executive shall file for a refund of such excess Excise Tax. Executive
shall repay to the Bank the excess Excise Tax amount actually refunded to Executive
by the Internal Revenue Service within ten business days after the later of (A) the
date that the Internal Revenue Service makes a final determination (within the
meaning of Section 1313 of the Code) that an overpayment of such Excise Tax was made
(and including a final determination of the amount thereof) and (B) the actual
receipt of the refund check from the Internal Revenue Service for the amount of such
overpayment of Excise Tax by Executive; provided, however, if no refund shall be due
to Executive because such overpayment of the Excise Tax has been applied to satisfy
Executive’s other tax liabilities, Executive shall notify the Bank of such
application of the overpayment to Executive’s other tax liabilities and shall pay to
the Bank within ten business days after such application of the overpayment to
Executive’s other tax liabilities the amount of the Excise Tax that would otherwise
have been refunded. In the event that the Excise Tax is determined to exceed the
amount taken into account and paid hereunder, the Bank shall make an additional
Gross-Up Payment in respect of such excess within ten business days after the time
that the amount of such excess is determined but in no event later than 30 days
after the Change in Control. In no event shall any Gross-Up Payment be made under
this Section 9(b) later than the last day of Executive’s taxable year next following
Executive’s taxable year in which Executive remits the Excise Tax. Anything in this
Section 9(b) to the contrary notwithstanding, any Gross-Up Payment to be made
hereunder shall be subject to such delay in payment as may apply under Section 7(g)
of this Agreement (including but not limited to Section 7(g)(vi)) in the event that
such payment is made in connection with Executive’s termination of employment and is
subject to Section 409A of the Code.

(iii) The Gross-Up Payment provided for in this Section 9(b) shall be made at
the same time as any payments giving rise to an Excise Tax are made; provided,
however, that if the amount of such Gross-Up Payment cannot be finally
determined at the same time as the payments giving rise to an Excise Tax are made,
the Bank shall pay to Executive at the time the payments giving rise to an Excise
Tax are made an estimate, as determined in good faith by the Bank pursuant to
Section 9(b)(iv) hereof, of the amount of such Gross-Up Payment and shall pay the
remainder of such Gross-Up Payment at the time provided in Section 9(b)(ii) above.
Executive’s right to payments under this Section 9(b) shall be treated as a right to
a series of separate payments under Section 1.409A-2(b)(2)(iii) of the Regulations.

27

 

(iv) All determinations under this Section 9(b) shall be made by the Bank at
its expense using a nationally recognized public accounting firm selected by
Executive, and such determination shall be binding upon Executive and the Bank.

10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain
Forfeitures.

     (a) Non-Competition. In consideration for the compensation and benefits provided
under this Agreement, including without limitation, the compensation and benefits provided under
Sections 7(e) and (f), without the consent in writing of the Board, Executive will not, at any time
during the Term and for a period of two years following termination of Executive’s employment for
any reason, acting alone or in conjunction with others, directly or indirectly (i) engage (either
as owner, investor, partner, stockholder, employer, employee, consultant, advisor, or director) in
any business of any savings bank, savings and loan association, savings and loan holding company,
bank, bank holding company, or other institution engaged in the business of accepting deposits or
making loans, or any direct or indirect subsidiary or affiliate of any such entity, that conducts
business in any county in which the Company or the Bank maintains an office as of Executive’s date
of termination or had plans to open an office within six months after Executive’s date of
termination; (ii) induce any customers of the Bank or any of its affiliates with whom Executive has
had contacts or relationships, directly or indirectly, during and within the scope of his
employment with the Bank, to curtail or cancel their business with the Bank or any such affiliate;
(iii) induce, or attempt to influence, any employee of the Bank or any of its affiliates to
terminate employment; or (iv) solicit, hire or retain as an employee or independent contractor, or
assist any third party in the solicitation, hire, or retention as an employee or independent
contractor, any person who during the previous twelve months was an employee of the Bank or any
affiliate; provided, however, that the limitation contained in clause (i) above shall not apply if
Executive’s employment is terminated as a result of a termination by the Company without Cause
within two years following a Change in Control or is terminated by Executive for Good Reason within
two years following a Change in Control or is terminated by Executive other than for Good Reason as
provided in Section 7(b) and, provided further, that activities engaged in by or on behalf of the
Bank are not restricted by this covenant. The provisions of subparagraphs (i), (ii), (iii), and
(iv) above are separate and distinct commitments independent of each of the other subparagraphs.
It is agreed that the ownership of not more than one percent of the equity securities of any
company having securities listed on an exchange or regularly traded in the over-the-counter market
shall not, of itself, be deemed inconsistent with clause (i) of this Section 10(a).

     (b) Non-Disclosure; Ownership of Work. Executive shall not, at any time during the
Term and thereafter (including following Executive’s termination of employment for any reason),
disclose, use, transfer, or sell, except in the course of employment with or other service to the
Bank or the Company, any proprietary information, secrets, organizational or employee information,
or other confidential information belonging or relating to the Bank or the Company and its
affiliates and customers so long as such information has not otherwise been disclosed or is not
otherwise in the public domain, except as required by law or pursuant to legal process. In
addition, upon termination of employment for any reason, Executive will return to the Company

28

 

or
its affiliates all documents and other media containing information belonging or relating to the
Bank and the Company or its affiliates.

     (c) Cooperation With Regard to Litigation. Executive agrees to cooperate with the
Bank and the Company, during the Term and thereafter (including following Executive’s termination
of employment for any reason), by making himself available to testify on behalf of the Bank or the
Company or any subsidiary or affiliate of the Bank or the Company, in any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, and to assist the Bank and
the Company, or any subsidiary or affiliate of the Company, in any such action, suit, or
proceeding, by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Bank or the Company, or any
subsidiary or affiliate of the Company, as requested. The Bank agrees to reimburse Executive, on
an after tax basis each calendar quarter, for all expenses actually incurred in connection with his
provision of testimony or assistance in accordance with the provisions of Section 7(g) of this
Agreement but not later than the last day of the year in which the expense was incurred.

     (d) Non-Disparagement. Executive shall not, at any time during the Term and
thereafter, make statements or representations, or otherwise communicate, directly or indirectly,
in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage
the Bank or the Company or any of its subsidiaries or affiliates or their respective officers,
directors, employees, advisors, businesses or reputations. Notwithstanding the foregoing, nothing
in this Agreement shall preclude Executive from making truthful statements that are required by
applicable law, regulation or legal process.

     (e) Release of Employment Claims. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in Sections 6 and 7 herein (other than Compensation
Accrued at Termination), that he will execute a general release agreement, in substantially the
form set forth in Attachment A to this Agreement, releasing any and all claims arising out of
Executive’s employment other than enforcement of this Agreement and rights to indemnification under
any agreement, law, Bank or Company organizational document or policy, or otherwise. The Bank will
provide Executive with a copy of such release simultaneously with or as soon as administratively
practicable following the delivery of the notice of termination provided in Sections 6 and 7 of
this Agreement, but not later than 21 days before (45 days before if Executive’s termination is
part of an exit incentive or other employment termination program offered to a group or class of
employees) Executive’s termination of employment. Executive shall deliver the executed release to
the Bank eight days before the date provided in Section 7(g) of this Agreement for the payment of
the termination payments and benefits payable under Sections 6 and 7 of this Agreement.

     (f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7
notwithstanding, if Executive willfully and materially fails to substantially comply with any
restrictive covenant under this Section 10 or willfully and materially fails to substantially
comply with any material obligation under this Agreement, all options to purchase common stock
granted by the Company and then held by Executive or a transferee of Executive shall be immediately
forfeited and thereupon such options shall be cancelled. Notwithstanding the foregoing, Executive
shall not forfeit any option unless and until there shall have been delivered to him, within six
months after the Board (i) had knowledge of conduct or an event allegedly

29

 

constituting grounds for
such forfeiture and (ii) had reason to
believe that such conduct or event could be grounds for such forfeiture, a copy of a
resolution duly adopted by a majority affirmative vote of the membership of the Board (excluding
Executive) at a meeting of the Board called and held for such purpose (after giving Executive
reasonable notice specifying the nature of the grounds for such forfeiture and not less than 30
days to correct the acts or omissions complained of, if correctable, and affording Executive the
opportunity, together with his counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, Executive has engaged and continues to engage in conduct set forth in
this Section 10(f) which constitutes grounds for forfeiture of Executive’s options; provided,
however, that if any option is exercised after delivery of such notice and the Board subsequently
makes the determination described in this sentence, Executive shall be required to pay to the
Company an amount equal to the difference between the aggregate value of the shares acquired upon
such exercise at the date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any term or provision
of any option agreement. In addition, options granted to Executive on or after the Effective Date,
and gains resulting from the exercise of such options, shall be subject to forfeiture in accordance
with the Company’s standard policies relating to such forfeitures and clawbacks, as such policies
are in effect at the time of grant of such options.

     (g) Forfeiture of Certain Bonuses and Profits. If the Company is required to prepare
an accounting restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws, and if Executive,
knowingly or through gross negligence, caused or failed to prevent such misconduct, Executive shall
reimburse the Bank for (i) any bonus or other incentive based or equity-based compensation received
by Executive during the 12-month period following the first public issuance or filing with the
Securities and Exchange Commission (whichever first occurs) of the financial document embodying
such financial reporting requirement; and (ii) any profits realized from the sale of securities of
the Company during that 12-month period.

     (h) Forfeiture Due to Regulatory Restrictions. Anything in this Agreement or the SERP
to the contrary notwithstanding, (i) any payments made pursuant to this Agreement or the SERP shall
be subject to and conditioned upon compliance with 12 U.S.C. §1828(k) and any regulations
promulgated thereunder; and (ii) payments contemplated to be made by the Bank pursuant to this
Agreement or the SERP shall not be immediately payable to the extent such payments are barred or
prohibited by an action or order issued by the Connecticut Banking Commissioner or the Federal
Deposit Insurance Corporation.

     (i) Survival. The provisions of this Section 10 shall survive the termination of the
Term and any termination or expiration of this Agreement.

11. Governing Law; Disputes.

     (a) Governing Law. This Agreement and the rights and obligations of the Company, the
Bank and Executive are governed by and are to be construed, administered, and enforced in
accordance with the laws of the State of Connecticut, without regard to conflicts of law
principles. If under the governing law, any portion of this
Agreement is at any time deemed to be in conflict with any applicable statute, rule,
regulation, ordinance, or other principle of law, such portion shall be deemed to be modified or
altered to the extent necessary to conform thereto

30

 

or, if that is not possible, to be omitted
therefrom. The invalidity of any such portion shall not affect the force, effect, and validity of
the remaining portion thereof. If any court determines that any provision of Section 10 of this
Agreement is unenforceable because of the duration or geographic scope of such provision, it is the
parties’ intent that such court shall have the power to modify the duration or geographic scope of
such provision, as the case may be, to the extent necessary to render the provision enforceable
and, in its modified form, such provision shall be enforced. Anything in this Agreement to the
contrary notwithstanding, the terms of this Agreement shall be interpreted and applied in a manner
consistent with the requirements of Section 409A of the Code and the Regulations so as not to
subject Executive to the payment of any tax penalty or interest which may be imposed by Section
409A of the Code and the Bank shall have no right to accelerate or make any payment under this
Agreement except to the extent such action would not subject Executive to the payment of any tax
penalty or interest under Section 409A of the Code. If all or a portion of the benefits and
payments provided under this Agreement constitute taxable income to Executive for any taxable year
that is prior to the taxable year in which such payments and/or benefits are to be paid to
Executive as a result of the Agreement’s failure to comply with the requirements of Section 409A of
the Code and the Regulations, the applicable payment or benefit shall be paid immediately to
Executive to the extent such payment or benefit is required to be included in income. If Executive
becomes subject to any tax penalty or interest under Section 409A of the Code by reason of this
Agreement, the Bank shall reimburse Executive on a fully grossed-up and after-tax basis for any
such tax penalty or interest (so that Executive is held economically harmless) ten business days
prior to the date such tax penalty or interest is due and payable by Executive to the government.

     (b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices, the
Bank shall promptly pay or reimburse all reasonable costs and expenses (including fees and
disbursements of counsel and pension experts) incurred by Executive or Executive’s surviving spouse
in seeking to interpret this Agreement or enforce rights pursuant to this Agreement or in any
proceeding in connection therewith brought by Executive or Executive’s surviving spouse, whether or
not Executive or Executive’s surviving spouse is ultimately successful in enforcing such rights or
in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses
relating to any unsuccessful assertion of rights or proceeding if and to the extent that such
assertion or proceeding was initiated or maintained in bad faith or was frivolous, as determined
in accordance with Section 11(c) or a court having jurisdiction over the matter. Any such payment
or reimbursement shall be made on an after-tax basis each calendar quarter for all costs and
expenses actually incurred as provided in this Section 11(b) and in accordance with the provisions
of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense
was incurred.

     (c) Dispute Resolution.

(i) Negotiation. The Bank and the Company (collectively, the
“Employer”) and Executive shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by
negotiation between the Chief Executive Officer of the Bank and Executive.
Any party may give the other party written notice of any dispute in
accordance with the notice procedures set forth in Section 12(d). Within
15 days after delivery of the notice, the receiving party

31

 

shall submit to
the other, in accordance with the notice procedures set forth in Section
12(d), a written response. The notice and response shall include a
statement of that party’s position and summary of arguments supporting that
position. Within 30 days after delivery of the initial notice, the parties
shall meet at a mutually acceptable time and place, and thereafter as often
as they reasonably deem necessary, to attempt to resolve the dispute. All
negotiations pursuant to this clause (i) are confidential and shall be
treated as compromise and settlement negotiations for purposes of
applicable rules of evidence.

(ii)  Mediation. If the dispute has not been resolved by
negotiation as provided herein within 45 days after delivery of the initial
notice of negotiation, or if the parties failed to meet within 30 days
after delivery, the parties shall endeavor to settle the dispute by
mediation under the CPR Mediation Procedure then currently in effect;
provided, however, that if one party fails to participate in the
negotiation as provided herein, the other party can initiate mediation
prior to the expiration of the 45 days. Unless otherwise agreed, the
parties will select a mediator from the CPR Panels of Distinguished
Neutrals.

(iii) Arbitration. Any dispute arising under or in connection with
this Agreement which has not been resolved by mediation as provided herein
within 45 days after initiation of the mediation procedure, shall be
finally resolved by arbitration in accordance with the CPR Rules for
Non-Administered Arbitration then currently in effect, by three independent
and impartial arbitrators, of whom each party shall designate one;
provided, however, that if one party fails to participate in either the
negotiation or mediation as agreed herein, the other party can commence
arbitration prior to the expiration of the time periods set forth above.
The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
§§1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof. The place of arbitration
shall be Hartford, Connecticut. For purposes of entering any judgment upon
an award rendered by the arbitrators, the Company, the Bank and Executive
hereby consent to the jurisdiction of any or all of the following courts:
(i) the United States District Court for the District of Connecticut, (ii)
any of the courts of the State of Connecticut, or (iii) any other court
having jurisdiction. The Company, the Bank and Executive hereby agree that
a judgment upon an award rendered by the arbitrators may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Subject to Section 11(b) of this Agreement, the Bank shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 11(c)
in accordance with the provisions of Section 7(g) of this Agreement, but
not later than the last day of the year in which the expense was incurred.
Notwithstanding any provision in this Section 11(c), Executive shall be
entitled to seek specific performance of

32

 

Executive’s right to be paid
during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

     (d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to the
terms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to
this Section 11 but which has not been timely paid shall bear interest at the prime rate in effect
at the time such amount first becomes payable, as quoted by the Bank, except as otherwise provided
in Sections 5(g), 6(d) and 7(g) of this Agreement (concerning interest payable with respect to
certain delayed payments that are subject to Section 409A of the Code).

12. Miscellaneous.

     (a) Integration. This Agreement cancels and supersedes any and all prior employment
agreements and understandings between the parties hereto with respect to the employment of
Executive by the Bank, any parent or predecessor company, and the Company’s subsidiaries during the
Term, except for contracts relating to compensation under executive compensation and employee
benefit plans of the Bank. This Agreement constitutes the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any provision hereof shall
be effective unless in writing and signed by the parties hereto. Executive shall not be entitled
to any payment or benefit under this Agreement which duplicates a payment or benefit received or
receivable by Executive under any prior agreements and understandings or under any benefit or
compensation plan of the Bank which are in effect.

     (b) Successors; Transferability. The Bank and the Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank or the Company to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that the Bank and the
Company would be required to perform it if no such succession had taken place.

     As used in this Agreement, “Bank “and “Company” shall mean the Bank and the Company
respectively as hereinbefore defined and any successor to its or their business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise and,
in the case of an acquisition of the Bank or the Company in which the corporate existence of the
Bank or the Company, as the case may be, continues, the ultimate parent company following such
acquisition. Subject to the foregoing, the Bank and the Company may transfer and assign this
Agreement and the Bank’s and the Company’s rights and obligations hereunder. Neither this
Agreement nor the rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and distribution or as
specified in Section 12(c).

     (c) Beneficiaries. Executive shall be entitled to designate (and change, to the
extent permitted under applicable law) a beneficiary or beneficiaries to receive any compensation
or benefits provided hereunder following Executive’s death.

     (d) Notices. Whenever under this Agreement it becomes necessary to give notice, such
notice shall be in writing, signed by the party or parties giving or making the same, and shall be
served on the person or persons for whom it is intended or who should be advised or notified, by
Federal Express or other similar overnight service or by certified or registered mail,

33

 

return
receipt requested, postage prepaid and addressed to such party at the address set forth below or at
such other address as may be designated by such party by like notice:

If to the Bank or the Company:

ROCKVILLE BANK

1645 Ellington Road

South Windsor, CT 06074

Att: Chief Executive Officer

If to Executive:

Richard J. Trachimowicz

31 Oak Circle

Princeton, MA 01541

     If the parties by mutual agreement supply each other with telecopier numbers for the purposes
of providing notice by facsimile, such notice shall also be proper notice under this Agreement. In
the case of Federal Express or other similar overnight service, such notice or advice shall be
effective when sent, and, in the cases of certified or registered mail, shall be effective two days
after deposit into the mails by delivery to the U.S. Post Office.

     (e) Reformation. The invalidity of any portion of this Agreement shall not be deemed
to render the remainder of this Agreement invalid.

     (f) Headings. The headings of this Agreement are for convenience of reference only
and do not constitute a part hereof.

     (g) No General Waivers. The failure of any party at any time to require performance
by any other party of any provision hereof or to resort to any remedy provided herein or at law or
in equity shall in no way affect the right of such party to require such performance or to resort
to such remedy at any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such provisions. No such
waiver shall be effective unless in writing and signed by the party against whom such waiver is
sought to be enforced.

     (h) No Obligation To Mitigate. Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of employment, and any
compensation or benefits received from any other employment of Executive shall not mitigate or
reduce the obligations of the Bank and the Company or the rights of Executive hereunder.

     (i) Offsets; Withholding. The amounts required to be paid by the Bank to Executive
pursuant to this Agreement shall not be subject to offset other than with respect to any amounts
that are owed to the Bank by Executive due to his receipt of funds as a result of his fraudulent
activity. The foregoing and other provisions of this Agreement notwithstanding, all payments to be
made to Executive under this Agreement, including under Sections 6 and 7, or otherwise by

34

 

the Bank,
will be subject to withholding to satisfy required withholding taxes and other required deductions.

     (j) Successors and Assigns. This Agreement shall be binding upon and shall inure to
the benefit of Executive, his heirs, executors, administrators and beneficiaries, and shall be
binding upon and inure to the benefit of the Bank and the Company and their successors and assigns.

     (k) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and the same instrument.

13. Indemnification.

     All rights to indemnification by the Bank or the Company now existing in favor of Executive as
provided in the Bank’s and the Company’s Certificate of Incorporation or By-laws or pursuant to
other agreements in effect on or immediately prior to the Effective Date shall continue in full
force and effect from the Effective Date (including all periods after the expiration of the Term),
and the Bank and the Company shall also advance expenses for which indemnification may be
ultimately claimed as such expenses are incurred to the fullest extent permitted under applicable
law and in accordance with Section 7(g); provided, however, that any determination required to be
made with respect to whether Executive’s conduct complies with the standards required to be met as
a condition of indemnification or advancement of expenses under applicable law and the Bank’s or
the Company’s Certificate of Incorporation, By-laws, or other agreement shall be made by
independent counsel mutually acceptable to Executive and the Company (except to the extent
otherwise required by law). After the date hereof, the Bank and the Company shall not amend its
Certificate of Incorporation or By-laws or any agreement in any manner which adversely affects the
rights of Executive to indemnification thereunder. Any provision contained herein notwithstanding,
this Agreement shall not limit or reduce any rights of Executive to indemnification pursuant to
applicable law. In addition, the Company will maintain directors’ and officers’ liability
insurance in effect and covering acts and omissions of Executive during the Term and for a period
of six years thereafter on terms substantially no less favorable than those in effect on the date
of execution of this Agreement.

35

 

     IN WITNESS WHEREOF, Executive has hereunto set his hand and the Bank and the Company have each
caused this instrument to be duly executed this___day of ___, 2008.

	 	 	 	 	 
	 	 	ROCKVILLE BANK
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	ROCKVILLE FINANCIAL, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	 
	 	 	Richard J. Trachimowicz

36

 

ATTACHMENT A

RELEASE

     We advise you to consult an attorney before you sign this Release. You have until the date
which is seven (7) days after the Release is signed and returned to Rockville Bank to change your
mind and revoke your Release. Your Release shall not become effective or enforceable until after
that date.

In consideration for the benefits provided under your Employment Agreement with Rockville Bank as
amended and restated as of January 1, 2009 (the “Employment Agreement”), and more specifically
enumerated in Exhibit 1 hereto, by your signature below, you, for yourself and on behalf of your
heirs, executors, agents, representatives, successors and assigns, hereby release and forever
discharge the Rockville Financial, Inc., its past and present parent corporations, subsidiaries,
divisions, subdivisions, affiliates and related companies (collectively, the “Company”) and the
Company’s past, present and future agents, directors, officers, employees, representatives,
successors and assigns (hereinafter “those associated with the Company”) with respect to any and
all claims, demands, actions and liabilities, whether in law or equity, which you may have against
the Company or those associated with the Company of whatever kind, including but not limited to
those arising out of your employment with the Company or the termination of that employment. You
agree that this release covers, but is not limited to, claims arising under the Age Discrimination
in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. §
12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair
Employment Practices Act, C.G.S. § 46a-51 et seq., and any other local, state or federal
law, regulation or order dealing with discrimination in employment on the basis of sex, race,
color, national origin, veteran status, marital status, religion, disability, handicap, or age.
You also agree that this release includes claims based on wrongful termination of employment,
breach of contract (express or implied), tort, or claims otherwise related to your employment or
termination of employment with the Company and any claim for attorneys’ fees, expenses or costs of
litigation.

This Release covers all claims based on any facts or events, whether known or unknown by you, that
occurred on or before the date of this Release. Except to enforce this Release, you agree that you
will never commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of
any kind against the Company or those associated with the Company in any forum and agree to
withdraw with prejudice all complaints or charges, if any, that you have filed against the Company
or those associated with the Company.

Anything in this Release to the contrary notwithstanding, this Release does not include a release
of: (i) your rights under the Employment Agreement or your right to enforce the Employment
Agreement; (ii) any rights you may have to indemnification under any agreement, law, Company
organizational document or policy, or otherwise; (iii) any rights you may have to benefits under
the Company’s benefit plans; or (iii) your right to enforce this Release.

 

 

By signing this Release, you further agree as follows:

     i. You have read this Release carefully and fully understand its terms;

     ii. You have had at least twenty-one (21) days to consider the terms of the Release;

     iii. You have seven (7) days from the date you sign this Release to revoke it by written
notification to the Company. After this seven (7) day period, this Release is final and binding
and may not be revoked;

     iv. You have been advised to seek legal counsel and have had an opportunity to do so;

     v. You would not otherwise be entitled to the benefits provided under your Employment
Agreement had you not agreed to execute this Release; and

     vi. Your agreement to the terms set forth above is voluntary.

	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	Date:
	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Received By:

	 	 	 	Date:
	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 

2

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