Document:

EX-10.26

 

EXHIBIT 10.26

 

 

Amended and Restated 

Employment Agreement

between

Hudson City Savings Bank

and

Denis J. Salamone

Made and Entered into

as of June 7, 2005

 

 

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Hudson City Savings Bank

Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered
into as of June 7, 2005 between Hudson City Savings Bank, a savings bank organized and
operating under the federal laws of the United States and having an office at West 80 Century Road,
Paramus, New Jersey 07652-1473 (the “Bank”) and Denis J. Salamone, an individual residing
at 440 Hillcrest Road, Ridgewood, New Jersey 07450 (the “Executive”).

Introductory Statement

          The Executive currently serves Hudson City Bancorp, Inc., a business corporation organized and
operating under the laws of the State of Delaware and having an office at West 80 Century Road,
Paramus, New Jersey 07652-1473 (the “Company”) and the Bank, a wholly owned subsidiary of the
Company, in an executive capacity pursuant to an Employment Agreement between the Executive, the
Company and the Bank made and entered into as of October 29, 2001 (the “Prior Agreement”). The
Board of Directors of the Bank (“Board”) has determined that it is in the best interests of the
Bank to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey
chartered savings bank to a federal savings association and to reflect other changes in the Bank’s
operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

          Section 1. Employment.

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

          Section 2.
Employment Period; Remaining Unexpired Employment Period.

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

          (b) The Board shall conduct an annual review of the Executive’s performance on or about each
anniversary of the Employment Commencement Date (each, an “Anniversary Date”) and may, on the basis
of such review and by written notice to the Executive, offer to extend the Employment Period
through the day before the third (3rd) anniversary of the relevant Anniversary Date. In
such event, the Employment Period shall be deemed extended in the absence of objection from the
Executive by written notice to Bank given within ten (10) business days after his receipt of the
Bank’s offer of extension.

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement
to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning
on such date and ending on the day before the third (3rd) anniversary of the Employment
Commencement Date or, if later, on the day before the third (3rd) anniversary of the
last Anniversary Date as of which the Employment Period was extended pursuant to section 2(b).

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EXHIBIT 10.26

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

          Section 3. Duties.

          (a) The Executive shall serve as Senior Executive Vice President and Chief Operating Officer
of the Company. The Executive shall have such power, authority and responsibility and perform such
duties as are prescribed by or under the By-Laws of the Bank, and as are customarily associated
with such positions. The Executive shall devote his full business time and attention (other than
during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of
absence, and other than his performance of services pursuant to the terms of the employment
agreement between the Company and the Executive, dated as of the date hereof (“Company Agreement”))
to the business and affairs of the Bank and shall use his best efforts to advance its best
interests.

          (b) If duly elected, the Executive shall serve as a member of the Board and as Chairman of the
Board (or in another position as a member of the Board), without additional remuneration therefor;
provided, however, that failure to elect the Executive to the position of Chairman of the Board (or
other position as a member of the Board) shall not by itself constitute a breach of the Agreement
or entitle the Executive to severance benefits hereunder.

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Bank shall
pay to him a salary at an initial annual rate of Five Hundred Seventy Five Thousand dollars
($575,000), payable in approximately equal installments in accordance with the Bank’s customary
payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary
at such times during the Employment Period as it deems appropriate, but not less frequently than
once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition
to salary, the Executive may receive other cash compensation from the Bank for services hereunder
at such times, in such amounts and on such terms and conditions as the Board may determine. If the
Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction
with respect to participation in the affairs of the Bank, he shall continue to perform services for
the Company in accordance with the terms of the Company Agreement, but shall not directly or
indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent
with the terms of such discharge or suspension or any applicable regulatory order.

          Section 5. Employee Benefit Plans and Programs.

          During the Employment Period, the Executive shall be treated as an employee of the Bank and
shall be entitled to participate in and receive benefits under any and all qualified or
non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group
life, health (including hospitalization, medical and major medical), dental, accident and long-term
disability insurance plans, and any other employee benefit and compensation plans (including, but
not limited to, any incentive compensation plans or programs, stock option and appreciation rights
plans and restricted stock plans) as may from time to time be maintained by, or cover employees of,
the Bank, in accordance with the terms and conditions of such employee benefit plans and programs
and compensation plans and programs and consistent with the Bank’s customary practices in each case
as applied to senior executive officers of the Bank.

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EXHIBIT 10.26

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

          The Executive may serve as a member of the boards of directors of such business, community and
charitable organizations as he may disclose to and as may be approved by the Board (which approval
shall not be unreasonably withheld); provided, however, that such service shall not materially
interfere with the performance of his duties under this Agreement. The Executive may also engage in
personal business and investment activities which do not materially interfere with the performance
of his duties hereunder; provided, however, that such activities are not prohibited under any code
of conduct or investment or securities trading policy established by the Bank and generally
applicable to all similarly situated executives.

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the
address first above written, or at such other location as the Bank and the Executive may mutually
agree upon. The Bank shall provide the Executive at his principal place of employment with a
private office, secretarial services and other support services and facilities suitable to his
positions with the Bank and necessary or appropriate in connection with the performance of his
assigned duties under this Agreement. The Bank shall reimburse the Executive for his ordinary and
necessary business expenses, including, without limitation, his travel and entertainment expenses
incurred in connection with the performance of his duties under this Agreement, in each case upon
presentation to the payer of an itemized account of such expenses in such form as the Bank may
reasonably require.

          Section 9.
Termination of Employment Due to Death.

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

          (a) The Bank shall pay to the Executive’s estate his earned but unpaid compensation
(including, without limitation, salary and all other items which constitute wages under applicable
law) as of the date of his termination of employment. This payment shall be made at the time and in
the manner prescribed by law applicable to the payment of wages but in no event later than 30 days
after the date of the Executive’s termination of employment.

          (b) The Bank shall provide the benefits, if any, due to the Executive’s estate, surviving
dependents or designated beneficiaries under the employee benefit plans and programs and

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EXHIBIT 10.26

compensation plans and programs maintained for the benefit of the officers and employees of
the Bank. The time and manner of payment or other delivery of these benefits and the recipients of
such benefits shall be determined according to the terms and conditions of the applicable plans and
programs.

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

          Section 10. Termination Due to Disability.

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

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

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

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

          Section 11.
Discharge with Cause.

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

     (i) the Board, by a majority vote of its membership, determines that
the Executive should be terminated because of personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease and desist order,
or material breach of any provision of this Agreement, in each case as measured
against standards generally prevailing at the relevant time in the savings and
community banking industry; and

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EXHIBIT 10.26

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

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

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

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

          (b) If the Executive is discharged during the Employment Period with Cause, the Bank shall pay
and provide to him (or, in the event of his death, to his estate, his surviving beneficiaries and
his dependents) the Standard Termination Entitlements only. Following the giving of a Notice of
Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in
such event, may also suspend the payment of salary and other cash compensation, but not the
Executive’s participation in retirement, insurance and other employee benefit plans. If the
Executive is not discharged, or is discharged without Cause, within forty-five (45) days after the
giving of a Notice of Intent to Discharge, all payments withheld during the period of suspension
shall be promptly restored and, if no termination has occurred, payments of salary and cash
compensation shall resume. If the Executive is discharged with Cause not later than forty-five (45)
days after the giving of the Notice of Intent to Discharge, all payments withheld during the period
of suspension shall be deemed forfeited and shall not be included in the Standard Termination
Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than
ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the
Executive during the period beginning with the giving of the Notice of Intent to Discharge and
ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not
be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final
Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to
Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to
discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

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

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EXHIBIT 10.26

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

          (b) In addition to the Standard Termination Entitlements:

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

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

where: “SSP” is the amount of the Salary Severance Payment (before the deduction of
applicable federal, state and local withholding taxes); “BS” is the highest annual
rate of salary achieved by the Executive during the period of three (3) years ending
immediately prior to the date of termination; “PR” is the number of payroll periods
that occur during a year under the Bank’s normal payroll practices; “I” equals the
applicable federal short term rate established under section 1274 of the Internal
Revenue Code of 1986 (the “Code”) for the month in which the Executive’s termination
of employment occurs (the “Short Term AFR”) and “n” equals the product of the
Remaining Unexpired Employment Period at the Executive’s termination of employment
(expressed in years and fractions of years) multiplied by the number of payroll
periods that occur during a year under the Bank’s normal payroll practices. The
Salary Severance Payment shall be made within five (5) business days after the
Executive’s termination of employment and shall be in lieu of any claim to a
continuation of base salary which the Executive might otherwise have and in lieu of
cash severance benefits under any severance benefits program which may be in effect
for officers or employees of the Bank.

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

BSP = SSP x (ABP / ASP)

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EXHIBIT 10.26

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

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

PSP =
PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for
applicable federal, state and local withholding taxes); “APB” is the aggregate lump
sum present value of the actual vested pension benefits payable under the Pension
Plans in the form of a straight life annuity beginning at the earliest date
permitted under the Pension Plans, computed on the basis of the Executive’s life
expectancy at the earliest date on which payments under the Pension Plans could
begin, determined by reference to Table VI of section 1.72-9 of the Income Tax
Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate
assumption equal to the “applicable interest rate” determined in accordance with
section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum
present value of the pension benefits (whether or not vested) that would be payable
under the Pension Plans in the form of a straight life annuity beginning at the
earliest date permitted under the Pension Plans, computed on the basis that the
Executive’s actual age at termination of employment is his attained age as of his
last birthday that would occur during the Remaining Unexpired Employment Period,
that his service for benefit accrual purposes under the Pension Plans is equal to
the aggregate of his actual service plus the Remaining Unexpired Employment Period,
that his average compensation figure used in determining his accrued benefit is
equal to the highest annual rate of salary achieved by the Executive during the
period of three (3) years ending immediately prior to the date of termination, that
the Executive’s life expectancy at the earliest date on which payments under the
Pension Plans could begin is the Assumed Life Expectancy and that the interest rate
assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be
made within five (5) business days after the Executive’s termination of employment
and shall be in lieu of any claim to any actual increase in his accrued benefits
under the Pension Plans in respect of the Remaining Unexpired Employment Period.

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EXHIBIT 10.26

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

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

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

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

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

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EXHIBIT 10.26

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

For the purpose of computing this payment, the Executive shall be deemed fully
vested in all options and appreciation rights under any stock option or appreciation
rights plan or program maintained by, or covering employees of, the Bank, even if he
is not vested under such plan or program.

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

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

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

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

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

          Section 13. Resignation.

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

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

     (i) the failure of the Bank (whether by act or omission of the Board,
or otherwise) to appoint or re-appoint or elect or re-elect the Executive to the
position(s) with the Bank specified in section 3 of this Agreement (other than to
any such position as an officer of the Board) or to a more senior office;

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

     (iii) a material failure by the Bank, whether by amendment of its
certificate of incorporation or organization, by-laws, action of the Board or
otherwise, to vest in the Executive the functions, duties, or responsibilities
prescribed in section 3 of this Agreement (other than such functions, duties or
responsibilities associated with a position

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EXHIBIT 10.26

as an officer of the Board); provided that the Executive shall have given
notice of such failure to the Bank, and the Bank has not fully cured such failure
within thirty (30) days after such notice is deemed given;

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

     (v) any change in the terms and conditions of any compensation or
benefit program in which the Executive participates which, either individually or
together with other changes, has a material adverse effect on the aggregate value of
his total compensation package, disregarding for this purpose any change that
results from an across-the-board reduction that affects all similarly situated
employees in a similar manner; provided that the Executive shall have given notice
of such material adverse effect to the Bank, and the Bank has not fully cured such
failure within thirty (30) days after such notice is deemed given;

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

     (vii) a change in the Executive’s principal place of employment,
without his consent, to a place that is not the principal executive office of the
Bank, or a relocation of the Bank’s principal executive office to a location that is
both more than twenty-five (25) miles away from the Executive’s principal residence
and more than twenty-five (25) miles away from the location of the Bank’s principal
executive office on the date of this Agreement.

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

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

          Section 14. Terms and Conditions of the Additional Termination Entitlements.

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

          Section 15. Termination Upon or Following a Change of Control.

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

Page 11 of 19

 

EXHIBIT 10.26

     (i) the consummation of a reorganization, merger or consolidation of
the Bank with one or more other persons, other than a transaction following which:

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

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

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

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

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

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

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

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

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

provided, however, that such individual’s election or nomination did not
result from an actual or threatened election contest (within the meaning of
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents (within the meaning
of Rule 14a-11

Page 12 of 19

 

EXHIBIT 10.26

of Regulation 14A promulgated under the Exchange Act) other than by or on
behalf of the Board of Directors of the Bank; or

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

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

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

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

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

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

          Section 16.
Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment
with the Bank prior to the expiration of the Employment Period, for a period of one year following
the date of his termination of employment with the Bank, he shall not, without the written consent
of the Company, become an officer, employee, consultant, director or trustee of any savings bank,
savings and loan association, savings and loan holding company, bank or bank holding company, or
any direct or indirect subsidiary or affiliate of any such entity, that entails working within any
city or county in the State of New Jersey or any other county in which the Company or the Bank
maintains an office (“Competitive Market”); provided, however, that this section 16 shall not apply
if the Executive is entitled to the Additional Termination Entitlements.

Page 13 of 19

 

EXHIBIT 10.26

          Section 17. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep
confidential and shall refrain from using for the benefit of himself, or any person or entity other
than the Company or any entity which is a subsidiary of the Company or of which the Company is a
subsidiary, any material document or information obtained from the Company, or from its parent or
subsidiaries, in the course of his employment with any of them concerning their properties,
operations or business (unless such document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made available to the public through
no fault of his own) until the same ceases to be material (or becomes so ascertainable or
available); provided, however, that nothing in this section 17 shall prevent the Executive, with or
without the Company’s consent, from participating in or disclosing documents or information in
connection with any judicial or administrative investigation, inquiry or proceeding to the extent
that such participation or disclosure is required under applicable law.

          Section 18. Solicitation.

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

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

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

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

          Section 19.
No Effect on Employee Benefit Plans or Programs.

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

Page 14 of 19

 

EXHIBIT 10.26

          Section 20. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the Executive, his legal
representatives and testate or intestate distributees, and the Bank and its successors and assigns,
including any successor by merger or consolidation or a statutory receiver or any other person or
firm or corporation to which all or substantially all of the assets and business of the Bank may be
sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written
assumption of the Bank’s obligations hereunder at least 60 days in advance of the scheduled
effective date of any such succession shall be deemed a material breach of this Agreement.

          Section 21. Notices.

          Any communication required or permitted to be given under this Agreement, including any
notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and
shall be deemed to have been given at such time as it is delivered personally, or five days after
mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested,
addressed to such party at the address listed below or at such other address as one such party may
by written notice specify to the other party:

          If to the Executive:

440 Hillcrest Road

Ridgewood, New Jersey 07450

          If to the Bank:

Hudson City Savings Bank

West 80 Century Road

Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp

Two World Financial Center

New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees.

          The Bank shall indemnify, hold harmless and defend the Executive against reasonable costs,
including legal fees and expenses, incurred by him in connection with or arising out of any action,
suit or proceeding (including any tax controversy) in which he may be involved, as a result of his
efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that
the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or
order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in
a settlement. For purposes of this Agreement, any settlement agreement which provides for payment
of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of
the Executive’s entitlement to

Page 15 of 19

 

EXHIBIT 10.26

indemnification hereunder, and any such indemnification payments shall be in addition to
amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly
provides otherwise.

          Section 23. Severability.

          A determination that any provision of this Agreement is invalid or unenforceable shall not
affect the validity or enforceability of any other provision hereof.

          Section 24. Waiver.

          Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof
shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of
this Agreement must be made in writing, designated as a waiver, and signed by the party against
whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any
one or more times shall not be deemed a waiver or relinquishment of such right or power at any
other time or times.

          Section 25. Counterparts.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, and all of which shall constitute one and the same Agreement.

          Section 26. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey applicable to
contracts entered into and to be performed entirely within the State of New Jersey. The federal and
state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction
over any claim, action, complaint or lawsuit brought under the terms of this Agreement or in any
way relating to the rights or obligations of any person under, or the acts or omissions of the
Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement.
By executing this Agreement, the Executive, for himself and any other person claiming any rights
under the Agreement through him, agrees to submit himself, and any such legal action described
herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and
resolution of such disputes.

          Section 27. Headings and Construction.

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

          Section 28. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating to the subject matter
hereof, and supersedes in its entirety any and all prior agreements (including, without limitation,
the Prior Agreement), understandings or representations relating to the subject matter hereof. No
modifications of this Agreement shall be valid unless made in writing and signed by the parties
hereto.

          Section 29. Non-Duplication.

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

Page 16 of 19

 

EXHIBIT 10.26

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

          Section 30. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the
Executive to severance compensation and other termination benefits under this Agreement shall be
determined on the basis of the aggregate compensation payable to the Executive by the Bank and the
Company, and liability therefor shall be apportioned between the Bank and the Company in the same
manner as compensation paid to the Executive for services to each of them.

          Section 31. Required Regulatory Provisions.

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

          (a) Notwithstanding anything herein contained to the contrary, in no event shall the aggregate
amount of compensation payable to the Executive under section 12 hereof (exclusive of amounts
described in section 9(a) and exclusive of amounts described in sections 12(b)(vi) and 12(b)(vii)
to the extent such amounts are attributable to stock options, stock appreciation rights and/or
shares that are vested on the date of the Executive’s termination of employment, without regard to
any actual or deemed acceleration triggered by such termination) exceed three times the Executive’s
average annual total compensation for the last five consecutive calendar years to end prior to his
termination of employment with the Bank (or for his entire period of employment with the Bank if
less than five calendar years).

          (b) Notwithstanding anything herein contained to the contrary, any payments to the Executive
by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon
their compliance with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and
any regulations promulgated thereunder and Federal Deposit Insurance Corporation regulation 12 CFR
Part 359, Golden Parachute and Indemnification Payments.

          (c) Notwithstanding anything herein contained to the contrary, if the Executive is suspended
and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant
to a notice served under section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
§1818(e)(3) or 1818(g)(1)), the Bank’s obligations under this Agreement shall be suspended as of
the date of service of such notice, unless stayed by appropriate proceedings. If the charges in
such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of
the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate,
in whole or in part, any of the obligations which were suspended.

          (d) Notwithstanding anything herein contained to the contrary, if the Executive is removed
and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order
issued under section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(4)
or (g)(1)), all obligations of the Bank under this Agreement shall terminate as of the effective
date of the order, but vested rights of the Bank and the Executive shall not be affected.

          (e) Notwithstanding anything herein contained to the contrary, if the Bank is in default (as
defined in section 3(x)(1) of the Federal Deposit Insurance Act), all obligations of the Bank under
this Agreement shall terminate as of the date of default, but vested rights of the Bank and the
Executive shall not be affected.

Page 17 of 19

 

EXHIBIT 10.26

          (f) Notwithstanding anything herein contained to the contrary, all prospective obligations of
the Bank hereunder shall be terminated, except to the extent that a continuation of this Agreement
is necessary for the continued operation of the Bank: (i) by the Director of the Office of Thrift
Supervision (“OTS”) or his or her designee, at the time the Federal Deposit Insurance Corporation
enters into an agreement to provide assistance to or on behalf of the Bank under the authority
contained in section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director of the OTS
or his or her designee at the time such Director or designee approves a supervisory merger to
resolve problems related to the operation of the Bank or when the Bank is determined by such
Director to be in an unsafe or unsound condition.

The vested rights of the parties shall not be affected. If and to the extent that any of the
foregoing provisions is not, or shall cease to be, required by applicable law, rule or regulation,
the same shall became inoperative in the case of the Bank as though eliminated by formal amendment
of this Agreement.

Page 18 of 19

 

EXHIBIT 10.26

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

	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Denis J. Salamone
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Hudson City Savings Bank
	 
	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	By	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Veronica Olszewski
	 	 	 	 	 	Ronald E. Hermance Jr.
	 

	 	Senior Vice President and Corporate
	 	 	 	 	 	Chairman of the Board of Directors,
	 

	 	Secretary
	 	 	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 	 	 	 	 
	[Seal]	 	 	 	 	 	 

Page 19 of 19EX-10.27

 

EXHIBIT 10.27

Executive Officer Annual Incentive Plan

of

Hudson City Bancorp, Inc.

 

Adopted on January 18, 2005

Effective as of January 1, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	 	Page
	 

	 	Article I 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Plan Objectives	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1

	 	Purpose
	 	 	1	 
	 
	 	 	 	 	 	 
	 

	 	Article II 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Plan Duration	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1

	 	Term 	 	 	1	 
	 
	 	 	 	 	 	 
	 

	 	Article III 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Definitions	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1

	 	Bank
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 3.2

	 	Base Salary
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 3.3

	 	Board
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 3.4

	 	Change of Control
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 3.5

	 	Code
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.6

	 	Company
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.7

	 	Company and the Bank
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.8

	 	Corporate Performance Objectives
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.9

	 	Committee
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.10

	 	Disabled
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.11

	 	Discharge for Cause
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 3.12

	 	Effective Date
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.13

	 	Employee
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.14

	 	ERISA
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.14

	 	Exchange Act
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.15

	 	GAAP
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.16

	 	Participant
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.17

	 	Plan
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.18

	 	Plan Year
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.19

	 	Retires
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 3.20

	 	Section 162(m) Employee
	 	 	4	 

i

 

Table of Contents

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 3.21

	 	Taxable Year
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Article IV 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Eligibility and Participation	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.1

	 	Eligibility
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.2

	 	Participation
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.3

	 	Termination of Employment
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.4

	 	Change of Control
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.5

	 	Other Terminations
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 4.6

	 	Prorated Awards
	 	 	5	 
	 
	 	 	 	 	 	 
	 

	 	Article V 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Award Opportunity	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.1

	 	Awards
	 	 	6	 
	 
	 	 	 	 	 	 
	Section 5.2

	 	Award Matrix
	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	Article VI 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Establishment of Corporate Performance Objectives	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.1

	 	Performance Objectives
	 	 	6	 
	 
	 	 	 	 	 	 
	Section 6.2

	 	Award Matrix
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 6.3

	 	Adjustments
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 6.4

	 	Negative Discretion
	 	 	8	 
	 
	 	 	 	 	 	 
	 

	 	Article VII 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Determination and Payment of Awards	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.1

	 	Certification of Corporate Performance Objectives
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 7.2

	 	Deferral of Awards
	 	 	9	 
	 
	 	 	 	 	 	 
	 

	 	Article VIII 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Maximum Award	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.1

	 	Maximum Award
	 	 	9	 

ii

 

Table of Contents

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	Article IX 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Administration	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.1

	 	Committee
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 9.2

	 	Committee Action
	 	 	9	 
	 
	 	 	 	 	 	 
	Section 9.3

	 	Committee Responsibilities
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	Article X 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Amendment and Termination	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.1

	 	Amendment
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 10.2

	 	Termination
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	Article XI 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Miscellaneous	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.1

	 	No Right to Continued Employment
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 11.2

	 	Non-Alienation of Benefits
	 	 	10	 
	 
	 	 	 	 	 	 
	Section 11.3

	 	No Effect Prior to Shareholder Approval
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 11.4

	 	Status of Plan Under ERISA
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 11.5

	 	Construction and Language
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 11.6

	 	Governing Law
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 11.7

	 	Headings
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 11.8

	 	Withholding
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 11.9

	 	Notices
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.10

	 	Indemnification
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.11

	 	Severability
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.12

	 	Waiver
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.13

	 	No Deposit Account
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.14

	 	Successors and Assigns
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 11.15

	 	Required Provisions
	 	 	13	 

iii

 

Executive Officer Annual Incentive Plan

of

Hudson City Bancorp, Inc.

Article I

Plan Objectives

          Section 1.1 Purpose. The purpose of the Plan is to achieve the following objectives: (i) to
promote the achievement of Hudson City Bancorp, Inc.’s and Hudson City Savings Bank’s performance
objectives; (ii) to link executive compensation to specific corporate performance objectives; (iii)
to provide a competitive reward structure for executive management; and (iv) to encourage
involvement in and communication regarding Hudson City Bancorp, Inc.’s and Hudson City Savings
Bank’s strategic plans and objectives.

Article II

Plan Duration

          Section 2.1 Term. The Plan shall be effective for five consecutive Plan Years
beginning on the Effective Date and ending on December 31, 2009.

Article III

Definitions

     The following definitions shall apply for purposes of this Plan unless a different meaning is
clearly indicated by the context:

          Section 3.1 “Bank” means Hudson City Savings Bank, a federally chartered savings
association, and any successor thereto.

          Section 3.2 “Base Salary” means, for any Participant for a Plan Year, such Participant’s
annual rate of base salary as of January 1 of the Plan Year.

          Section 3.3 “Board” means the Board of Directors of the Company.

          Section 3.4 “Change of Control” means any of the following events:

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

     (i) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) in substantially the same relative proportions by

 

 

persons who, immediately prior to such transaction, beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) at
least 51% of the outstanding equity ownership interests in the
Company; and

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

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

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

     (d) the occurrence of any event if, immediately following such event, at least
50% of the members of the Board of Directors of Hudson City Bancorp, Inc. do not
belong to any of the following groups:

     (i) individuals who were members of the Board of Directors of
Hudson City Bancorp, Inc. on January 1, 2005; or

     (ii) individuals who first became members of the Board of
Directors of Hudson City Bancorp, Inc. after January 1, 2005 either:

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

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

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

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14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or
consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) other than by or on behalf of the Board of Directors of Hudson City Bancorp, Inc.; or

     (e) any event which would be described in section 3.4(a), (b), (c) or (d) if
the term “Bank” were substituted for the terms “Company” or “Hudson City Bancorp,
Inc.” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any
acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by
the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan
maintained by any of them. For purposes of this section 3.4, the term “person” shall have the
meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          Section 3.5 “Code” means the Internal Revenue Code of 1986, including the corresponding
provisions of any succeeding law.

          Section 3.6 “Company” means Hudson City Bancorp, Inc., a Delaware corporation, and any
successor thereto.

          Section 3.7 “Company and the Bank” means the Company, together with any other organization
that is required to be considered, along with the Company, a single entity for purposes of
consolidated financial reporting under GAAP.

          Section 3.8 “Corporate Performance Objectives” means for any Plan Year those objective
performance objectives selected and established by the Committee in accordance with the
requirements of Article VI of the Plan.

          Section 3.9 “Committee” means a committee consisting of those members of the Compensation
Committee of the Company whom are outside directors as defined in section 162(m) of the Code or
such other committee consisting of outside directors as defined in section 162(m) of the Code as
the Board may appoint to serve as the Committee. The Committee shall at all times consist of at
least two members who are outside directors as defined in section 162(m) of the Code.

          Section 3.10 “Disabled” means, with respect to any Participant, suffering from a mental or
physical condition of total incapacity which the Committee shall have determined, on the basis of
competent medical evidence, is likely to be permanent and precludes further performance of duty
with the Company and the Bank.

          Section 3.11 “Discharge for Cause” means the termination upon the finding of the Committee
of an intentional failure to perform stated duties, breach of a fiduciary duty involving personal
dishonesty which results in material loss to the Company, the Bank or one of their affiliates, or
willful violation of any law, rule or regulation, (other than traffic violations or similar
offenses), or final cease-and-desist order which results in material loss to the Company, the Bank
or one of their affiliates.

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          Section 3.12 “Effective Date” means January 1, 2005, subject to approval by the Company’s
shareholders at the meeting of shareholders on May 27, 2005, or any adjournment or postponement
thereof.

          Section 3.13 “Employee” means any individual employed by the Company or the Bank as an
employee, but does not mean an individual who renders service solely as a director or independent
contractor.

          Section 3.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

          Section 3.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, including the corresponding provisions of any succeeding law.

          Section 3.16 “GAAP” means generally accepted accounting principles, as amended from time
to time and applied in preparing the financial statements of the Company and the Bank.

          Section 3.17 “Participant” means an Employee who is selected by the Committee as eligible
to participate in the Plan for a Plan Year.

          Section 3.18 “Plan” means the Executive Officer Annual Incentive Plan of Hudson City
Bancorp, Inc.

          Section 3.19 “Plan Year” means the calendar year.

          Section 3.20 “Retires” means, with respect to any Employee, terminates employment at a
time when the Employee is eligible to receive a benefit based upon his retirement or early
retirement as set forth in any tax-qualified retirement or pension plan of the Company or the Bank.

          Section 3.21 “Section 162(m) Employee” means at any date (i) any individual who, with
respect to the previous taxable year of the Company, was a “covered employee” of the Company within
the meaning of section 162(m) of the Code, as hereinafter defined; provided, however, that the term
“Section 162(m) Employee” shall not include any such individual who is designated by the Committee,
in its discretion, at the time of any Award or at any subsequent time, as reasonably expected not
to be such a “covered employee” with respect to the current taxable year of the Company and (ii)
any individual who is designated by the Committee, in its discretion, at the time of any Award or
at any subsequent time, as reasonably expected to be such a “covered employee” with respect to the
current taxable year of the Company or with respect to the taxable year of the Company in which any
applicable Award will be paid.

          Section 3.22 “Taxable Year” means the taxable year of the Company for federal income tax
purposes.

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Article IV

Eligibility And Participation

          Section 4.1 Eligibility. The Committee shall annually select the individual
Employees, if any, eligible for participation in the Plan. Eligibility shall be limited to top
executive-level Employees whose functional responsibility includes the establishment of strategic
direction and long-range plans for the Company and the Bank, including, but not limited to, the
Chief Executive Officer, Chief Operating Officer, Senior Executive Vice Presidents, Executive Vice Presidents and Senior Vice
Presidents.

          Section 4.2 Participation. An Employee who holds or assumes an eligible position
shall not be a Participant for any Plan Year unless selected by the Committee to participate in the
Plan for the Plan Year. An Employee who is hired, transferred or promoted into an eligible position
during a Plan Year and selected to participate in the Plan for that Plan Year shall receive a
prorated award for that Plan Year. In no event shall a person who is a Section 162(m) Employee be
added to the Plan for any Plan Year after the close of the eighth month of the Plan Year.

          Section 4.3 Termination of Employment. In general, a Participant must be employed by
the Company and/or the Bank on the last day of the Plan Year to receive an award. A Participant who
Retires, dies or becomes Disabled during a Plan Year shall receive a prorated award for that Plan
Year. In these circumstances, the amount of any prorated award shall be calculated and paid after
the end of the Plan Year on the basis of the level of attainment of the established performance
goals for the entire Plan Year.

          Section 4.4 Change of Control. A Participant who terminates employment with the
Company and the Bank on or after the effective date of a Change of Control shall be eligible for a
prorated award, provided that his termination was not a Discharge for Cause. In these
circumstances, the amount of any prorated award shall be calculated and paid at or as soon as
practicable following termination of employment on the basis of the level of attainment of the
established performance goals for the portion of the Plan Year preceding the Change of Control,
annualized to project full-year performance.

          Section 4.5 Other Terminations. The Committee shall have the authority to determine
whether a Participant who otherwise ceases employment prior to the end of a Plan Year is eligible
to receive a prorated award for that Plan Year; provided, however, that following the occurrence of
a Change of Control, the Committee may not exercise its authority to deny a prorated award to any
Participant whose termination of employment is not a Discharge for Cause.

          Section 4.6 Prorated Awards. Prorated awards shall be calculated by dividing the
applicable annual award by twelve and multiplying the result by the number of months of the
Participant’s service during the Plan Year, rounded to the next highest whole month.

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Article V

Award Opportunity

          Section 5.1 Awards. The Committee shall provide an award opportunity to Participants
who assist the Company and the Bank in achieving certain Corporate Performance Objectives for a
Plan Year. The award opportunity for each Plan Year shall be a percentage of each Participant’s Base Salary for the
Plan Year. The amount of a Participant’s award, if any, shall be based on the degree to which the
Company and the Bank achieve their Corporate Performance Objectives.

          Section 5.2 Award Opportunity Level. The Committee recognizes that the level of
control and influence a Participant has over the achievement of Corporate Performance Objectives is
influenced by the Participant’s level of responsibility. As such, the Committee shall establish
annually, as provided below, a matrix which shall establish for each Participant the award
opportunity for such Participant if the Company and the Bank achieve their target Corporate
Performance Objectives. The matrix may also include enhanced or reduced award opportunity levels
for such Participant if the Company and the Bank achieve at a level above or below the target
Corporate Performance Objectives.

Article VI

Establishment Of Corporate Performance Objectives

          Section 6.1 Performance Objectives.

     (a) As soon as practicable, but in any event within the first ninety (90) days of each Plan
Year, the Committee shall establish specific Corporate Performance Objectives for the Company and
the Bank, including target levels and, if deemed appropriate by the Committee, one or more enhanced
or reduced award opportunity levels associated with each Corporate Performance Objective. If the
Committee adds a Participant to the Plan for a Plan Year after initially establishing the award
opportunities and Corporate Performance Objectives for the Plan Year, it shall establish the award
opportunities and Corporate Performance Objectives applicable to the new Participant within 30 days
after adding the Participant to the Plan. The Corporate Performance Objectives for a Plan Year
shall be based on one or more of the following criteria:

     (i) Basic earnings per common share,

     (ii) Basic cash earnings per common share,

     (iii) Diluted earnings per common share,

     (iv) Diluted cash earnings per common share,

     (v) Net income,

     (vi) Cash earnings,

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     (vii) Net interest income,

     (viii) Non-interest income,

     (ix) General and administrative expense to average assets ratio,

     (x) Cash general and administrative expense to average assets ratio,

     (xi) Efficiency ratio,

     (xii) Cash efficiency ratio,

     (xiii) Return on average assets,

     (xiv) Cash return on average assets,

     (xv) Return on average stockholders’ equity,

     (xvi) Cash return on average stockholders’ equity,

     (xvii) Return on average tangible stockholders’ equity,

     (xviii) Cash return on average tangible stockholders’ equity,

     (xix) Core earnings,

     (xx) Operating income,

     (xxi) Operating efficiency ratio,

     (xxii) Net interest rate spread,

     (xxiii) Loan production volume,

     (xxiv) Non-performing loans,

     (xxv) Cash flow,

     (xxvi) Strategic business objectives, consisting of one or more objectives
based upon meeting specified cost targets, business expansion goals, and goals
relating to acquisitions or divestitures, or goals relating to capital raising and
capital management,

     (xxvii) Any combination of the foregoing.

The Corporate Performance Objectives may be expressed on an absolute and/or relative basis, or a
before- or after-tax basis, may be based on or otherwise employ comparisons based on internal
targets, the past performance of the Company and/or the past or current performance of other
companies and may include or exclude any or all extraordinary or non-recurring items.

7

 

     (b) Those Corporate Performance Objectives which have meanings ascribed to them by GAAP shall
have the meanings assigned to them under GAAP as in effect and applied to the Company and the Bank
on the date on which the Corporate Performance Objectives are
established, without giving effect to any subsequent changes in GAAP, unless the Committee
specifically provides otherwise when it establishes the Corporate Performance Objectives. Corporate
Performance Objectives based upon cash earnings or cash returns shall refer to or be calculated
based upon net income adjusted to exclude non-cash charges for goodwill amortization and non-cash
amortization expenses relating to employee stock ownership plans and restricted stock plans and (if
applicable) related tax benefits. Corporate Performance Objectives based upon cash general and
administrative expenses shall refer to general and administrative expenses, calculated in
accordance with GAAP, adjusted to eliminate non-cash charges for goodwill amortization and non-cash
amortization expenses relating to employee stock ownership plans and restricted stock plans and (if
applicable) related tax benefits.

          Section 6.2 Award Matrix. The Committee shall assign a percentage weight to each
Corporate Performance Objective for each Plan Year. The weight assigned to any one or more
Corporate Performance Objectives may be zero, but the aggregate weight assigned to all Corporate
Performance Objectives shall equal 100%. The Committee may assign different weightings to Corporate
Performance Objectives for each Participant or classes of Participants. The Committee shall
establish a matrix which shall set forth the Corporate Performance Objectives, the target and other
applicable performance levels with respect thereto, the weighting of such Corporate Performance
Objectives, if any, and the corresponding award opportunity for each Participant.

          Section 6.3 Adjustments. Under normal business conditions, once established for a
Plan Year as provided herein, Corporate Performance Objectives shall not be subject to revision or
alteration. However, unusual conditions may warrant a reexamination of such criteria. Such
conditions may include, but not be limited to, a Change of Control, declaration and distribution of
stock dividends or stock splits, mergers, consolidation or reorganizations, acquisitions or
dispositions of material business units, or infrequently occurring or extraordinary gains or
losses. In the event the Committee determines that, upon reexamination, alteration of the Corporate
Performance Objectives is appropriate, the Committee shall reestablish the Corporate Performance
Objectives to maintain as closely as possible the previously established expected level of overall
performance of the Participants, taken as a whole, as is practicable. Notwithstanding the
foregoing, any adjustments to the award opportunities or Corporate Performance Objectives
applicable to a Section 162(m) Employee for a Plan Year shall conform to the requirements of
section 162(m) of the Code and the regulations promulgated pursuant thereto.

          Section 6.4 Negative Discretion. The Committee may, in its sole discretion, determine
to adjust the amount of an award computed by applying the award matrix contemplated by section 6.2
for any or all Participants if it determines that prevailing circumstances (including but not
limited to, the subjective appraisal of the Participant’s performance for the Plan Year) warrant;
provided, however, that in the case of Section 162(m) Employees, any such adjustment shall result
in a reduced payment.

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Article VII

Determination And Payment Of Awards

          Section 7.1 Certification of Corporate Performance Objectives. As promptly as
practicable, but in any event within 75 days after the end of each Plan Year, the Committee shall
certify the performance of the Company and the Bank relative to the Corporate Performance
Objectives established for Participants. Each Participant’s award shall be determined by
multiplying the Participant’s Base Salary earned during the applicable Plan Year by the percentage
set forth in the matrix established pursuant to sections 6.2 and 6.3 of the Plan, as possibly
adjusted down, but not up, for such subjective factors as the Committee deems appropriate,
including, but not limited to, whether the Participant’s overall individual performance met
expectations. Awards under the Plan shall be paid in cash, subject to applicable withholding taxes,
as soon as practicable following the end of the Plan Year but in no event later than March 15 of
the year immediately following the Plan Year.

          Section 7.2 Deferral of Awards. In lieu of receiving a cash payment in respect of
Awards payable under the Plan, Participants may elect to defer Awards pursuant to the terms of the
Officers’ Deferred Compensation Plan of Hudson City Bancorp, Inc. if such plan is adopted and in
effect.

Article VIII

Maximum Award

          Section 8.1 Maximum Award. The maximum award that may be paid to any Participant for
any Plan Year shall be Three Million Dollars ($3,000,000).

Article IX

Administration

          Section 9.1 Committee. The Plan shall be administered by the Committee.

          Section 9.2 Committee Action. The Committee shall hold such meetings, and may make
such administrative rules and regulations, as it may deem proper. A majority of the members of the
Committee shall constitute a quorum, and the action of a majority of the members of the Committee
present at a meeting at which a quorum is present, as well as actions taken pursuant to the
unanimous written consent of all of the members of the Committee without holding a meeting, shall
be deemed to be actions of the Committee. All actions of the Committee shall be final and
conclusive and shall be binding upon the Company and all other interested parties. Any person
dealing with the Committee shall be fully protected in relying upon any written notice,
instruction, direction or other communication signed by the Secretary of the Committee and one
member of the Committee, by two members of the Committee or by a representative of the Committee authorized
to sign the same in its behalf.

9

 

          Section 9.3 Committee Responsibilities. Subject to the terms and conditions of the
Plan and such limitations as may be imposed by the Board, the Committee shall be responsible for
the overall management and administration of the Plan and shall have such authority as shall be
necessary or appropriate in order to carry out its responsibilities, including, without limitation,
the authority:

     (a) to interpret and construe the Plan, and to determine all questions
that may arise under the Plan as to eligibility for participation in the
Plan;

     (b) to adopt rules and regulations for the operation and administration
of the Plan; and

     (c) to take any other action not inconsistent with the provisions of
the Plan that it may deem necessary or appropriate.

Article X

Amendment And Termination

          Section 10.1 Amendment. The Board may amend or revise the Plan in whole or in part at
any time; provided, however, that to the extent required to comply with section 162(m) of the Code,
no such amendment or revision shall be effective if it amends a material term of the Plan unless
approved by a majority of the votes cast on a proposal to approve such amendment or revision.

          Section 10.2 Termination. The Board may suspend or terminate the Plan in whole or in
part at any time by giving written notice of such suspension or termination to the Committee.

Article XI

Miscellaneous

          Section 11.1 No Right to Continued Employment. Neither the establishment of the Plan
nor any provisions of the Plan nor any action of the Board or the Committee with respect to the
Plan shall be held or construed to confer upon any Participant any right to continuation of his or
her position as an Employee. The Company and the Bank reserve the right to dismiss any Participant
or otherwise deal with any Participant to the same extent as though the Plan had not been adopted.

          Section 11.2 Non-Alienation of Benefits. Except as may otherwise be required by law,
no distribution or payment under the Plan to any Participant, former Participant or beneficiary
shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, whether voluntary or involuntary, and any attempt to so anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; nor shall any
such distribution or payment be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such distribution or payment. If any

10

 

Participant, former Participant or beneficiary is adjudicated bankrupt or purports to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any such distribution or payment,
voluntarily or involuntarily, the Committee, in its sole discretion, may cancel such distribution
or payment or may hold or cause to be held or applied to such distribution or payment, or any part
thereof, to or for the benefit of such Participant, former Participant or beneficiary, in such
manner as the Committee shall direct; provided, however, that no such action by the Committee shall
cause the acceleration or deferral of any benefit payments from the date on which such payments are
scheduled to be made.

          Section 11.3 No Effect Prior to Shareholder Approval. The Plan shall not be effective
or implemented prior to approval by the holders of a majority of the total votes eligible to be
cast at any duly called annual or special meeting of the Company.

          Section 11.4 Status of Plan Under ERISA. The Plan is intended to be a non-qualified
incentive compensation program that is exempt from the regulatory requirements of the ERISA. The
Plan is not intended to comply with the requirements of section 401(a) of the Code or to be subject
to Parts 2, 3 and 4 of Title I of ERISA. The Plan shall be administered and construed so as to
effectuate this intent.

          Section 11.5 Construction and Language. Wherever appropriate in the Plan, words used
in the singular may be read in the plural, words used in the plural may be read in the singular,
and the masculine gender may be read as referring equally to the feminine gender or the neuter.

          Section 11.6 Governing Law. The Plan shall be construed, administered and enforced
according to the laws of the State of New Jersey, without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal law. The federal
and state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction
over any claim, action, complaint or lawsuit brought under the terms of the Plan or in any way
relating to the rights or obligations of any person under, or the acts or omissions of the Company,
the Bank, the Board, the Committee or any duly authorized person acting in their behalf in relation
to the Plan. By participating in this Plan, the Participant, for himself and any other person
claiming any rights under the Plan through him, agrees to submit himself, and any such legal action
described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication
and resolution of such disputes.

          Section 11.7 Headings. The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the text of the Plan,
the text shall control.

          Section 11.8 Withholding. Payments from this Plan shall be subject to all applicable
federal, state and local income withholding taxes. The Company, the Bank or the Committee shall
have the right to require any person entitled to receive a payment under this Plan to pay the
amount of any tax which is required to be withheld with respect to such payment, or, in lieu
thereof, to deduct from the amount payable the amount required to be withheld.

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          Section 11.9 Notices. Any communication required or permitted to be given under the
Plan, including any notice, direction, designation, comment, instruction, objection or waiver,
shall be in writing and shall be deemed to have been given at such time as it is delivered
personally or five (5) days after mailing if mailed, postage prepaid, by registered or certified
mail, return receipt requested, addressed to such party at the address listed below, or at such
other address as one such party may by written notice specify to the other party:

          (a) If to the Committee:

Hudson City Bancorp, Inc.

West 80 Century Road

Paramus, New Jersey 07652

Attention: Corporate Secretary

     (b) If to a Participant, to the Participant’s address as shown in the
Company and the Bank’s personnel records.

          Section 11.10 Indemnification. The Company shall indemnify, hold harmless and defend
each Participant, former Participant and beneficiary, against their reasonable costs, including
legal fees, incurred by them or arising out of any action, suit or proceeding in which they may be
involved, as a result of their efforts, in good faith, to defend or enforce the obligations of the
Company and the Bank under the terms of the Plan.

          Section 11.11 Severability. A determination that any provision of the Plan is invalid
or unenforceable shall not affect the validity or enforceability of any other provision hereof.

          Section 11.12 Waiver. Failure to insist upon strict compliance with any of the terms,
covenants or conditions of the Plan shall not be deemed a waiver of such term, covenant or
condition. A waiver of any provision of the Plan must be made in writing, designated as a waiver,
and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of
any right or power hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

          Section 11.13 No Deposit Account. Nothing in this Plan shall be held or construed to
establish any deposit account for any Participant or any deposit liability on the part of the
Company or the Bank.Participants’ rights hereunder shall be equivalent to those of a general unsecured creditor of
the Company and the Bank.

          Section 11.14 Successors and Assigns. The provisions of the Plan will inure to the
benefit of and be binding upon the Participants and their respective legal representatives and
testate or intestate distributes, and the Company and the Bank and their respective successors and
assigns, including any successor by merger or consolidation or a statutory receiver or any other
person or firm or corporation to which all or substantially all of the assets and business of the
Company or the Bank may be sold or otherwise transferred.

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          Section 11.15 Required Provisions. The following provisions are included for the
purposes of complying with various laws, rules and regulations applicable to the Company and the
Bank:

     (a) Notwithstanding anything herein contained to the contrary, in no
event will the aggregate amount of compensation payable by the Bank to any
person on account of his termination of employment exceed three times such
person’s average annual total compensation for the last five consecutive
calendar years to end prior to his termination of employment with the
Company and the Bank or for his entire period of employment with the Company
and the Bank and their respective predecessors, if less than five calendar
years.

     (b) Notwithstanding anything herein contained to the contrary, any
payments pursuant to this Plan, are subject to and conditioned upon their
compliance with section 1828(k) of the Federal Deposit Insurance Act and any
regulations promulgated thereunder and Federal Deposit Insurance Corporation
regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.

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

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

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

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

If and to the extent that any of the foregoing provisions is not or shall cease to be required by
applicable law, rule or regulation, the same shall become inoperative automatically as though
eliminated by formal amendment of the Plan. Any of the foregoing provisions which, by their terms,
apply only to the Bank shall not affect the rights and obligations of the Company.

14

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