Document:

EX-10.2

Exhibit 10.2

ROCKVILLE BANK

Employment Agreement for Joseph F. Jeamel, Jr.

As Amended and Restated as of January 1, 2009

 

 

ROCKVILLE BANK

Employment Agreement for Joseph F. Jeamel, Jr.

As Amended and Restated as of January 1, 2009

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

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	(c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change in Control
	 	 	10	 
	 
	 	 	 	 
	(d) Termination by Executive for Good Reason Prior to or More than Two Years After a Change in Control
	 	 	13	 
	 
	 	 	 	 
	(e) Termination by the Bank Without Cause Within Two Years After a Change in Control
	 	 	15	 
	 
	 	 	 	 
	(f) Termination by Executive for Good Reason Within Two Years After a Change in Control
	 	 	17	 
	 
	 	 	 	 
	(g) Other Terms Relating to Certain Terminations of Employment; Reimbursements; Section
409A Exemptions; Delayed 

      Payments Under Section 409A
	 	 	19	 
	 
	 	 	 	 
	8. Definitions Relating to Termination Events
	 	 	22	 
	 
	 	 	 	 
	(a) “Cause
	 	 	22	 
	 
	 	 	 	 
	(b) “Change in Control
	 	 	22	 
	 
	 	 	 	 
	(c) “Compensation Accrued at Termination
	 	 	23	 
	 
	 	 	 	 
	(d) “Disability
	 	 	24	 
	 
	 	 	 	 
	(e) “Good Reaso
	 	 	24	 
	 
	 	 	 	 
	(f) “Potential Change in Control
	 	 	25	 
	 
	 	 	 	 
	(g) “Specified Employee
	 	 	25	 
	 
	 	 	 	 
	9. Rabbi Trust Obligation Upon Potential Change in Control; Excise Tax-Related Provisions
	 	 	26	 
	 
	 	 	 	 
	(a) Rabbi Trust Funded Upon Potential Change in Control
	 	 	26	 
	 
	 	 	 	 
	(b) Gross-up If Excise Tax Would Apply
	 	 	26	 
	 
	 	 	 	 
	10. Non-Competition and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain Forfeitures
	 	 	28	 
	 
	 	 	 	 
	(a) Non-Competition
	 	 	28	 
	 
	 	 	 	 
	(b) Non-Disclosure; Ownership of Work
	 	 	29	 
	 
	 	 	 	 
	(c) Cooperation With Regard to Litigation
	 	 	29	 
	 
	 	 	 	 
	(d) Non-Disparagement
	 	 	29	 
	 
	 	 	 	 
	(e) Release of Employment Claims
	 	 	29	 
	 
	 	 	 	 
	(f) Forfeiture of Outstanding Options
	 	 	30	 
	 
	 	 	 	 
	(g) Forfeiture of Certain Bonuses and Profits
	 	 	30	 
	 
	 	 	 	 
	(h) Forfeiture Due to Regulatory Restrictions
	 	 	31	 
	 
	 	 	 	 
	(i) Survival
	 	 	31	 
	 
	 	 	 	 
	11. Governing Law; Disputes
	 	 	31	 
	 
	 	 	 	 
	(a) Governing Law
	 	 	31	 

ii

 

	 	 	 	 	 
	(b) Reimbursement of Expenses in Enforcing Rights
	 	 	31	 
	 
	 	 	 	 
	(c) Dispute Resolution
	 	 	32	 
	 
	 	 	 	 
	(d) Interest on Unpaid Amounts
	 	 	33	 
	 
	 	 	 	 
	12. Miscellaneous
	 	 	33	 
	 
	 	 	 	 
	(a) Integration
	 	 	33	 
	 
	 	 	 	 
	(b) Successors; Transferability
	 	 	33	 
	 
	 	 	 	 
	(c) Beneficiaries
	 	 	34	 
	 
	 	 	 	 
	(d) Notices
	 	 	34	 
	 
	 	 	 	 
	(e) Reformation
	 	 	34	 
	 
	 	 	 	 
	(f) Headings
	 	 	35	 
	 
	 	 	 	 
	(g) No General Waivers
	 	 	35	 
	 
	 	 	 	 
	(h) No Obligation To Mitigate
	 	 	35	 
	 
	 	 	 	 
	(i) Offsets; Withholding
	 	 	35	 
	 
	 	 	 	 
	(j) Successors and Assigns
	 	 	35	 
	 
	 	 	 	 
	(k) Counterparts
	 	 	35	 
	 
	 	 	 	 
	13. Indemnification
	 	 	35	 
	 
	 	 	 	 
	Attachment A
	 	 	 	 

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ROCKVILLE BANK

Employment Agreement for Joseph F. Jeamel, Jr.

As Amended and Restated as of January 1, 2009

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

W I T N E S S E T H

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

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

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

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

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

1. Employment.

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

 

 

2. Term.

     The term of employment of Executive under this Agreement (the “Term”) shall be the period
commencing on the Effective Date and ending on December 31, 2006 and any period of extension
thereof in accordance with this Section 2, except that the Term will end at a date, prior to the
end of such period or extension thereof, specified in Section 6 or 7 in the event of termination of
Executive’s employment. The Term, if not previously ended, shall be extended by one additional year
(added to the end of the Term) first on December 31, 2006 (extending the Term to December 31, 2007)
and on each succeeding December 31st thereafter (a “December 31st extension
date”) but only in the event the Bank serves written notice in accordance with Section 12(d) upon
Executive at least 60 days preceding December 31, 2006 extending the Term to December 31, 2007 and
thereafter at least 60 days preceding a December 31st extension date, in which case the
Term shall be extended to the next succeeding December 31st, subject to earlier
termination of Executive’s employment and earlier termination of the Term in accordance with
Section 6 or 7. The foregoing notwithstanding, in the event there occurs a Potential Change in
Control during the Term, the Term shall be extended automatically until the day after the earlier
of: (a) the second anniversary of the date the Change in Control is consummated; or (b) the date
the Change in Control contemplated by the Potential Change in Control is fully and finally
abandoned.

3. Offices and Duties.

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

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

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

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4. Salary and Annual Incentive Compensation.

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

     (a) Base Salary. The Bank will pay to Executive during the Term a base salary, the
annual rate of which shall be $185,000, payable in cash in substantially equal semi-monthly
installments commencing at the beginning of the Term, and otherwise in accordance with the Bank’s
usual payroll practices with respect to senior executives (except to the extent deferred under
Section 5(d)). Executive’s annual base salary shall be reviewed by the Human Resources Committee
(the “Committee”) of the Board of Directors of the Bank (the “Board”) at least once in each
calendar year, and may be increased above, but may not be reduced below, the then-current rate of
such base salary. For purposes of this Agreement, “Base Salary” means Executive’s then-current
base salary.

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

     (c) Annual Reimbursement. The Bank will reimburse Executive during the Term on an
after-tax basis and in accordance with Section 7(g) of this Agreement for his annual premium cost
to maintain the whole life insurance policy referenced in Section 5(b)(iii).

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

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

3

 

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

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

	 	(i)	 	Executive will participate as Executive Vice President in all executive and
employee vacation and time-off programs;
	 
	 	(ii)	 	The Bank will provide Executive with coverage as Executive Vice President with
respect to long-term disability insurance;
	 
	 	(iii)	 	Executive will be covered by Bank-paid group term life insurance and Executive
shall have the right to continue to maintain, at his expense, the Guardian whole life
insurance policy purchased by the Bank having an effective date of October 18, 1993;
	 
	 	(iv)	 	Upon Executive’s termination of employment with the Bank for any reason,
Executive will be entitled to participate in such retiree medical, dental and life
insurance plans as the Bank may, from time to time, offer in accordance with the terms
of such plans; and
	 
	 	(v)	 	Executive will be entitled to benefits under the Supplemental Savings and
Retirement Plan, the Supplemental Executive Retirement Plan and the Supplemental
Executive Retirement Agreement dated January 27, 2004, as the same may be amended from
time to time (collectively, the “SERPS”) in accordance with the terms thereof, with the
effective date of Executive’s participation therein to be not later than the Effective
Date.

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

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

4

 

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

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

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

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

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

     (a) Retirement. Executive may elect to terminate employment hereunder by retirement
at or after age 60 (“Retirement”). Executive’s termination of employment upon expiration of the
Term on December 31, 2006 (or any anniversary of December 31, 2006 in the event of any extension of
the Term as provided in Section 2) shall be deemed a Retirement hereunder. At the time Executive’s
employment terminates due to Retirement, the Term will terminate, all obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease except for
obligations which expressly continue after

5

 

termination of employment due to Retirement, and the
Bank will pay Executive at the time provided in Section 6(d), and Executive will be entitled to
receive, the following:

	 	(i)	 	Executive’s Compensation Accrued at Termination (as defined in Section 8(c));
	 
	 	(ii)	 	In lieu of any annual incentive compensation under Section 4(b) for the year in
which Executive’s employment terminated, a lump sum amount equal to the portion of
annual incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in stock or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually achieved in
that year (determined by the Committee following completion of the performance year and
paid at the time specified in the applicable plan), multiplied by a fraction the
numerator of which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days in the year of
termination;
	 
	 	(iii)	 	The vesting and exercisability of stock options held by Executive at
termination and all other terms of such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which such options were
granted (subject to Section 10(f) hereof);
	 
	 	(iv)	 	All restricted stock and deferred stock awards, including outstanding stock
plan awards, all other long-term incentive awards, and all deferral arrangements under
Section 5(d), shall be governed by the plans and programs under which the awards were
granted or governing the deferral, and all rights under the SERPS and any other benefit
plan shall be governed by such plans; and
	 
	 	(v)	 	Upon Retirement, if Executive is not eligible for retiree coverage under the
Bank’s health plan (the “Health Plan”) or Medicare and provided that Executive shall be
in compliance with the conditions set forth in Section 10, the Bank shall pay to
Executive a lump sum amount equal on an after-tax basis to the present value of the
total cost of medical coverage under the Health Plan that would have been incurred by
both Executive and the Bank on behalf of Executive (and his spouse
and eligible dependents, if any, for whom coverage had been provided under the
Health Plan immediately prior to Executive’s Retirement) from the date of
Executive’s Retirement until Executive’s attainment of Social Security retirement
age had Executive remained employed by the Bank during such period, calculated on
the assumption that the cost of such coverage would remain unchanged from that in
effect for the year of Executive’s Retirement. Such lump sum amount shall be
calculated by an actuary selected by the Bank and paid in cash at the time specified
in Section 6(d). Such amount shall not be subject to reduction or forfeiture by
reason of any coverage for which Executive may thereafter become eligible by reason
of subsequent employment or otherwise. For purposes of this Section, present value
shall be calculated on the basis of the discount rate set forth in the Bank’s
qualified retirement plan for the determination of lump sum payments.

6

 

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

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

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

	 	(i)	 	Executive’s Compensation Accrued at Termination;

7

 

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

8

 

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

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

9

 

will be made as soon as administratively practicable in
compliance with Section 409A of the Code and the Regulations. In the event of Executive’s death
during such six-month period, payment will be made in the payroll period next following the payroll
period in which Executive’s death occurs.

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

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

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

     (b) Termination by Executive Other Than For Good Reason. Executive may terminate his
employment
hereunder voluntarily for reasons other than Good Reason (as defined in Section 8(e)) at any
time upon 90 days’ written notice to the Bank. At the time Executive’s employment is terminated by
Executive other than for Good Reason the Term will terminate, all obligations of the Bank and
Executive under Sections 1 through 5 of this Agreement will immediately cease, and the Bank will
pay Executive at the time specified in Section 7(g), and Executive will be entitled to receive, the
following:

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

     (c) Termination by the Bank Without Cause Prior to or More than Two Years After a Change
in Control. The Bank may terminate the employment of Executive hereunder without

10

 

Cause, if at
the date of termination no Change in Control has occurred or such date of termination is at least
two years after the most recent Change in Control, upon at least 90 days’ written notice to
Executive. The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to
terminate Executive’s positions specified in Sections 1 and 3 and all other obligations of
Executive and the Bank under Section 3 at a date earlier than the expiration of such 90-day period,
if so specified by the Bank in the written notice, provided that Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the
expiration of such notice period), the Term will terminate, all remaining obligations of the Bank
and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination of employment as expressly provided herein), and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

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

11

 

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

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

12

 

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

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

13

 

	 	 	 	performance-based awards)
shall become fully vested and non-forfeitable at the date of such termination, and, in
other respects, such awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which such awards were granted;

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

If any payment or benefit under this Section 7(d) is based on Base Salary or other level of
compensation or benefits at the time of Executive’s termination and if a reduction in such Base
Salary or other level of compensation or benefit was the basis for Executive’s termination for

14

 

 Good
Reason, then the Base Salary or other level of compensation in effect before such reduction shall
be used to calculate payments or benefits under this Section 7(d).

     (e) Termination by the Bank Without Cause Within Two Years After a Change in Control.
The Bank may terminate the employment of Executive hereunder without Cause, simultaneously with or
within two years after a Change in Control, upon at least 90 days’ written notice to Executive.
The foregoing notwithstanding, the Bank may elect, by written notice to Executive, to terminate
Executive’s positions specified in Sections 1 and 3 and all other obligations of Executive and the
Bank under Section 3 at a date earlier than the expiration of such 90-day notice period, if so
specified by the Bank in the written notice, provided that Executive shall be treated as an
employee of the Bank (without any assigned duties) for all other purposes of this Agreement,
including for purposes of Sections 4 and 5, from such specified date until the expiration of such
90-day period. At the time Executive’s employment is terminated by the Bank (i.e., at the
expiration of such notice period), the Term will terminate, all remaining obligations of the Bank
and Executive under Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination of employment as expressly provided herein), and the
Bank will pay Executive at the time specified in Section 7(g), and Executive will be entitled to
receive, the following:

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

15

 

	 	 	 	governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;

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

16

 

	 	 	 	employment until the third anniversary of Executive’s termination of employment,
calculated on the assumption that the cost of such coverage would remain unchanged
from that in effect for the year in which Executive’s termination occurred. For
purposes of this Section, present value shall be calculated on the basis of the
discount rate set forth in the Bank’s qualified retirement plan for the
determination of lump sum payments.

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

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

17

 

	 	 	 	governed by
the plans and programs and the agreements and other documents pursuant to which such
options were granted;

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

18

 

	 	 	 	employment,
calculated on the assumption that the cost of such coverage would remain unchanged
from that in effect for the year in which Executive’s termination occurred. For
purposes of this Section, present value shall be calculated on the basis of the
discount rate set forth in the Bank’s qualified retirement plan for the
determination of lump sum payments.

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

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

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

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

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

19

 

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

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

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

20

 

	 	 	 	exception for payments under a
separation pay plan as set forth in Section 1.409A-1(b)(9)(iii) of the
Treasury Regulations.

	 	(vii)	 	Anything in this Agreement to the contrary
notwithstanding, payments to be made under this Agreement upon
termination of Executive’s employment which are subject to Section
409A of the Code shall be delayed for six months following such
termination of employment if Executive is a Specified Employee as
defined in Section 8(g) on the date of his termination of employment.
Any payment or reimbursement due within such six-month period shall be
delayed to the end of such six-month period. The Bank will adjust the
payment or reimbursement to reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the
six-month CMT Treasury Bill annualized yield rate as published by the
U.S. Treasury for the date on which such payment or reimbursement
would have been made but for the delay multiplied by a fraction, the
numerator of which is the number of days by which such payment or
reimbursement was delayed and the denominator of which is 365. In the
event of a reimbursement that is required by other terms of this
Agreement to be made on an after-tax basis and which is subject to the
six-
month delay provided herein, the reimbursement as adjusted in
accordance with this Section 7(g) to reflect the deferred payment
date shall be paid to Executive on an after-tax and fully
grossed-up basis so that Executive is held economically harmless.
The Bank will pay the adjusted payment or reimbursement at the
beginning of the seventh month following Executive’s termination of
employment. Notwithstanding the foregoing, if calculation of the
amounts payable by any payment date specified in this Section 7(g)
is not administratively practicable due to events beyond the
control of Executive (or Executive’s beneficiary or estate) and for
reasons that are commercially reasonable, payment will be made as
soon as administratively practicable in compliance with Section
409A of the Code and the Regulations thereunder. In the event of
Executive’s death during such six-month period, payment will be
made in the payroll period next following the payroll period in
which Executive’s death occurs.

21

 

8. Definitions Relating to Termination Events.

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

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

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

	 	(i)	 	the Company, or the mutual holding company parent of the
Company, whether it remains a mutual holding company or converts to the stock
form of organization (the “Mutual Holding Company”), merges into or
consolidates with another corporation, or merges another corporation into the
Company or the Mutual Holding Company, and as a result, with respect to the
Company, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by “Persons”
as such term is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) who were stockholders of
the Company immediately before the merger or consolidation or, with respect to
the Mutual Holding Company, less than a majority of the directors of the
resulting corporation
immediately after the merger or consolidation were directors of the Mutual
Holding Company immediately before the merger or consolidation;

22

 

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

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

	 	(i)	 	The unpaid portion of annual base salary at the rate payable, in accordance
with Section 4(a) hereof, at the date of Executive’s termination of employment, pro
rated through such date of termination, payable in a lump sum at the time specified in
Section 6(d) or 7(g) as the case may be;
	 
	 	(ii)	 	All vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans, programs, and
arrangements set forth or referred to in Sections 4(b) and 5(a) and 5(b) hereof
(including any earned and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in accordance with the
terms and conditions of the plans, programs, and 

23

 

	 	 	 	arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were granted or
accrued; and

	 	(iii)	 	Reasonable business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as authorized
under Section 5(f), in accordance the Company’s reimbursement policies as in effect at
the date of such termination, and payable in a lump sum in accordance with Section
7(g).

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

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

	 	(i)	 	the assignment to Executive of duties materially inconsistent with Executive’s
position and status as Executive Vice President, or an alteration, materially adverse
to Executive, in Executive’s position and status as Executive Vice President or in the
nature of Executive’s duties, responsibilities, and authorities or conditions of
Executive’s employment from those relating to Executive position and status as
Executive Vice President (excluding changes in assignments permitted under Section 3);
except the foregoing shall not constitute Good Reason if occurring in connection with
the termination of Executive’s employment for Cause, Disability, Retirement, as a
result of Executive’s death, or as a result of action by or with the consent of
Executive;
	 
	 	(ii)	 	(A) a material reduction by the Bank in Executive’s Base Salary, (B) the
setting of Executive’s annual target incentive opportunity or payment of earned annual
incentive not in material conformity with Section 4 hereof, (C) a change in
compensation or benefits not in material conformity with Section 5, or (D) a material
reduction, after a Change in Control, in perquisites from the level of such perquisites
as in effect immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control, except for across-the-board
perquisite reductions similarly affecting all senior executives of the Bank and all
senior executives of any Person in control of the Company;
	 
	 	(iii)	 	the relocation of the principal place of Executive’s employment to a site that
is outside of a fifty mile radius of his principal place of employment prior to such
relocation; for this purpose, required travel on the Bank’s business will not
constitute a relocation so long as the extent of such travel is substantially
consistent with Executive’s customary business travel obligations in periods prior to
the Effective Date;

24

 

	 	(iv)	 	the failure by the Bank to pay to Executive any material portion of Executive’s
compensation or to pay to Executive any material portion of an installment of deferred
compensation under any deferred compensation program of the Bank within a reasonable
time after the date such compensation is due;
	 
	 	(v)	 	the failure by the Bank to continue in effect any material compensation or
benefit plan in which Executive participated immediately prior to a Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Bank to continue
Executive’s participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amounts of compensation or
benefits provided and the level of Executive’s participation relative to other
participants, as existed at the time of the Change in Control;
	 
	 	(vi)	 	the failure of the Bank to obtain a satisfactory agreement from any successor
to the Bank, the Company or the Mutual Holding Company to fully assume the Bank’s and
the Company’s obligations and to perform under this Agreement, as contemplated in
Section 12(b) hereof, in a form reasonably acceptable to Executive; or
	 
	 	(vii)	 	any other failure by the Bank or the Company to perform any material
obligation under, or breach by the Bank or the Company of any material provision of,
this Agreement;

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

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

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

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

25

 

requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code for any
calendar year shall be determined in accordance with Regulations Section 1.409A-1(i)(6).

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

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

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

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

(A) any payments or benefits received or to be received by Executive in
connection with a Change in Control or other change in ownership or control
or Executive’s termination of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Bank,
any Person whose actions result in a Change in Control or any Person
affiliated with the Bank or such Person) (which, together with the Change in
Control Payments, constitute the “Total Payments”) shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code,
and all “excess parachute payments” within the meaning of Section 280G(b)(1)
of the Code shall be treated as subject to

26

 

the Excise Tax, unless in the
opinion of nationally-recognized tax counsel selected by Executive such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;

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

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

(ii) For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the state
and locality of Executive’s residence in the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes which
could actually be obtained from deduction of such state and local taxes by
Executive. In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account and paid to Executive hereunder, Executive shall
file for a refund of such excess Excise Tax. Executive shall repay to the Bank the
excess Excise Tax amount actually refunded to Executive by the Internal Revenue
Service within ten business days after the later of (A) the date that the Internal
Revenue Service makes a final determination (within the meaning of Section 1313 of
the Code) that an overpayment of such Excise Tax was made (and including a final
determination of the amount thereof) and (B) the actual receipt of the refund check
from the Internal Revenue Service for the amount of such
overpayment of Excise Tax by Executive; provided, however, if no refund shall be due
to Executive because such overpayment of the Excise Tax has been applied to satisfy
Executive’s other tax liabilities, Executive shall notify the Bank of such
application of the overpayment to Executive’s other tax liabilities and shall pay to
the Bank within ten business days after such application of the overpayment to
Executive’s other tax liabilities the amount of the Excise Tax that would otherwise
have been refunded. In the event that the Excise Tax is determined to exceed the
amount taken into account and paid hereunder, the Bank shall make an additional
Gross-Up Payment in respect of such excess within ten business days after the time
that the amount of such excess is determined but in no event later than 30 days
after the Change in Control. In no event shall any Gross-Up Payment be made under
this Section 9(b) later than the

27

 

last day of Executive’s taxable year next following
Executive’s taxable year in which Executive remits the Excise Tax. Anything in this
Section 9(b) to the contrary notwithstanding, any Gross-Up Payment to be made
hereunder shall be subject to such delay in payment as may apply under Section 7(g)
of this Agreement (including but not limited to Section 7(g)(vi)) in the event that
such payment is made in connection with Executive’s termination of employment and is
subject to Section 409A of the Code.

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

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

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

     (a) Non-Competition. In consideration for the compensation and benefits provided
under this Agreement, including without limitation, the compensation and benefits provided under
Sections 7(e) and (f), without the consent in writing of the Board, Executive will not, at any time
during the Term and for a period of two years following termination of Executive’s employment for
any reason, acting alone or in conjunction with others, directly or indirectly (i) engage (either
as owner, investor, partner, stockholder, employer, employee, consultant, advisor, or director) in
any business of any savings bank, savings and loan association, savings and loan holding company,
bank, bank holding company, or other
institution engaged in the business of accepting deposits or making loans, or any direct or
indirect subsidiary or affiliate of any such entity, that conducts business in any county in which
the Company or the Bank maintains an office as of Executive’s date of termination or had plans to
open an office within six months after Executive’s date of termination ; (ii) induce any customers
of the Bank or any of its affiliates with whom Executive has had contacts or relationships,
directly or indirectly, during and within the scope of his employment with the Bank, to curtail or
cancel their business with the Bank or any such affiliate; (iii) induce, or attempt to influence,
any employee of the Bank or any of its affiliates to terminate employment; or (iv) solicit, hire or
retain as an employee or independent contractor, or assist any third party in the solicitation,
hire, or retention as an employee or independent contractor, any person who during the previous
twelve months was an employee of the Bank or any affiliate; provided, however, that the limitation
contained in clause (i) above shall not apply if Executive’s employment is terminated as a result
of a termination by the

28

 

Company without Cause within two years following a Change in Control or is
terminated by Executive for Good Reason within two years following a Change in Control and,
provided further, that activities engaged in by or on behalf of the Bank are not restricted by this
covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv) above are separate and
distinct commitments independent of each of the other subparagraphs. It is agreed that the
ownership of not more than one percent of the equity securities of any company having securities
listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be
deemed inconsistent with clause (i) of this Section 10(a).

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

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

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

     (e) Release of Employment Claims. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in Sections 6 and 7 herein (other than Compensation
Accrued at Termination), that he will execute a general release agreement, in substantially the
form set forth in Attachment A to this Agreement, releasing any and all claims arising out of
Executive’s employment other than enforcement of this Agreement and rights to indemnification under
any agreement, law, Bank or Company organizational document or

29

 

policy, or otherwise. The Bank will
provide Executive with a copy of such release simultaneously with or as soon as administratively
practicable following the delivery of the notice of termination provided in Sections 6 and 7 of
this Agreement, but not later than 21 days before (45 days before if Executive’s termination is
part of an exit incentive or other employment termination program offered to a group or class of
employees) Executive’s termination of employment. Executive shall deliver the executed release to
the Bank eight days before the date provided in Section 7(g) of this Agreement for the payment of
the termination payments and benefits payable under Sections 6 and 7 of this Agreement.

     (f) Forfeiture of Outstanding Options. The provisions of Sections 6 and 7
notwithstanding, if Executive willfully and materially fails to substantially comply with any
restrictive covenant under this Section 10 or willfully and materially fails to substantially
comply with any material obligation under this Agreement, all options to purchase common stock
granted by the Company and then held by Executive or a transferee of Executive shall be immediately
forfeited and thereupon such options shall be cancelled. Notwithstanding the foregoing, Executive
shall not forfeit any option unless and until there shall have been delivered to him, within six
months after the Board (i) had knowledge of conduct or an event allegedly constituting grounds for
such forfeiture and (ii) had reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote of the membership of
the Board (excluding Executive) at a meeting of the Board called and held for such purpose (after
giving Executive reasonable notice specifying the nature of the grounds for such forfeiture and not
less than 30 days to correct the acts or omissions complained of, if correctable, and affording
Executive the opportunity, together with his counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, Executive has engaged and continues to engage in conduct
set forth in this Section 10(f) which constitutes grounds for forfeiture of Executive’s options;
provided, however, that if any option is exercised after delivery of such notice and the Board
subsequently makes the determination described in this sentence, Executive shall be required to pay
to the Company an amount equal to the difference between the aggregate value of the shares acquired
upon such exercise at the date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any term or provision
of any option agreement. In addition, options granted to Executive on or after the Effective Date,
and gains resulting from the exercise of such options, shall be subject to forfeiture in accordance
with the Company’s standard policies relating to such forfeitures and clawbacks, as such
policies are in effect at the time of grant of such options.

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

30

 

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

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

11. Governing Law; Disputes.

     (a) Governing Law. This Agreement and the rights and obligations of the Company, the
Bank and Executive are governed by and are to be construed, administered, and enforced in
accordance with the laws of the State of Connecticut, without regard to conflicts of law
principles. If under the governing law, any portion of this Agreement is at any time deemed to be
in conflict with any applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary to conform thereto
or, if that is not possible, to be omitted therefrom. The invalidity of any such portion shall not
affect the force, effect, and validity of the remaining portion thereof. If any court determines
that any provision of Section 10 of this Agreement is unenforceable because of the duration or
geographic scope of such provision, it is the parties’ intent that such court shall have the power
to modify the duration or geographic scope of such provision, as the case may be, to the extent
necessary to render the provision enforceable and, in its modified form, such provision shall be
enforced. Anything in this Agreement to the contrary notwithstanding, the terms of this Agreement
shall be interpreted and applied in a manner consistent with the requirements of Section 409A of
the Code and the Regulations so as not to subject Executive to the payment of any tax penalty or
interest which may be imposed by Section 409A of the Code and the Bank shall have no right to
accelerate or make any payment under this Agreement except to the extent such action would not
subject Executive to the payment of any tax penalty or interest under Section 409A of the Code. If
all or a portion of the benefits and
payments provided under this Agreement constitute taxable income to Executive for any taxable
year that is prior to the taxable year in which such payments and/or benefits are to be paid to
Executive as a result of the Agreement’s failure to comply with the requirements of Section 409A of
the Code and the Regulations, the applicable payment or benefit shall be paid immediately to
Executive to the extent such payment or benefit is required to be included in income. If Executive
becomes subject to any tax penalty or interest under Section 409A of the Code by reason of this
Agreement, the Bank shall reimburse Executive on a fully grossed-up and after-tax basis for any
such tax penalty or interest (so that Executive is held economically harmless) ten business days
prior to the date such tax penalty or interest is due and payable by Executive to the government.

     (b) Reimbursement of Expenses in Enforcing Rights. Upon submission of invoices, the
Bank shall promptly pay or reimburse all reasonable costs and expenses (including fees and
disbursements of counsel and pension experts) incurred by Executive or Executive’s surviving spouse
in seeking to interpret this Agreement or enforce rights pursuant to this Agreement or in any
proceeding in connection therewith brought by Executive or Executive’s surviving spouse,

31

 

whether or
not Executive or Executive’s surviving spouse is ultimately successful in enforcing such rights or
in such proceeding; provided, however, that no reimbursement shall be owed with respect to expenses
relating to any unsuccessful assertion of rights or proceeding if and to the extent that such
assertion or proceeding was initiated or maintained in bad faith or was frivolous, as determined
in accordance with Section 11(c) or a court having jurisdiction over the matter. Any such payment
or reimbursement shall be made on an after-tax basis each calendar quarter for all costs and
expenses actually incurred as provided in this Section 11(b) and in accordance with the provisions
of Section 7(g) of this Agreement, but not later than the last day of the year in which the expense
was incurred.

     (c) Dispute Resolution.

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

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

(iii) Arbitration. Any dispute arising under or in connection with
this Agreement which has not been resolved by mediation as provided herein
within 45 days after initiation of the mediation procedure, shall be
finally resolved by arbitration in accordance with the CPR Rules for
Non-Administered Arbitration then currently in effect, by three independent
and impartial arbitrators, of whom each party shall designate one;
provided, however, that if one party fails to participate in either the
negotiation or mediation as agreed herein, the other party can

32

 

commence
arbitration prior to the expiration of the time periods set forth above.
The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C.
§§1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof. The place of arbitration
shall be Hartford, Connecticut. For purposes of entering any judgment upon
an award rendered by the arbitrators, the Company, the Bank and Executive
hereby consent to the jurisdiction of any or all of the following courts:
(i) the United States District Court for the District of Connecticut, (ii)
any of the courts of the State of Connecticut, or (iii) any other court
having jurisdiction. The Company, the Bank and Executive hereby agree that
a judgment upon an award rendered by the arbitrators may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Subject to Section 11(b) of this Agreement, the Bank shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 11(c) in accordance with the provisions of Section
7(g) of this Agreement, but not later than the last day of the year in
which the expense was incurred. Notwithstanding any provision in this
Section 11(c), Executive shall be entitled to seek specific performance of
Executive’s right to be paid during the pendency of any dispute or
controversy arising under or in connection with this Agreement.

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

12. Miscellaneous.

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

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

33

 

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

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

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

If to the Bank or the Company:

ROCKVILLE BANK

1645 Ellington Road

South Windsor, CT 06074

Att: Chief Executive Officer

If to Executive:

Joseph F. Jeamel, Jr.

c/o Ira Goldman, Esq.

Shipman & Goodwin LLP

One Constitution Plaza

Hartford, CT 06103-1919

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

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

34

 

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

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

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

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

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

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

13. Indemnification.

     All rights to indemnification by the Bank or the Company now existing in favor of Executive as
provided in the Bank’s and the Company’s Certificate of Incorporation or By-laws or pursuant to
other agreements in effect on or immediately prior to the Effective Date shall continue in full
force and effect from the Effective Date (including all periods after the expiration of the Term),
and the Bank and the Company shall also advance expenses for which indemnification may be
ultimately claimed as such expenses are incurred to the fullest extent permitted under applicable
law and in accordance with Section 7(g); provided, however, that any determination required to be
made with respect to whether Executive’s conduct complies with the standards required to be met as
a condition of indemnification or advancement of expenses under applicable law and the
Bank’s or the Company’s Certificate of Incorporation, By-laws, or other agreement shall be
made by independent counsel mutually acceptable to Executive and the Company (except to the extent
otherwise required by law). After the date hereof, the Bank and

35

 

the Company shall not amend its
Certificate of Incorporation or By-laws or any agreement in any manner which adversely affects the
rights of Executive to indemnification thereunder. Any provision contained herein notwithstanding,
this Agreement shall not limit or reduce any rights of Executive to indemnification pursuant to
applicable law. In addition, the Company will maintain directors’ and officers’ liability
insurance in effect and covering acts and omissions of Executive during the Term and for a period
of six years thereafter on terms substantially no less favorable than those in effect on the date
of execution of this Agreement.

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

	 	 	 	 	 
	 	ROCKVILLE BANK

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ROCKVILLE FINANCIAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	
Joseph J. Jeamel, Jr.

 	 
	 	 	 
	 	 	 
	 

36

 

ATTACHMENT A

RELEASE

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

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

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

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

 

 

By signing this Release, you further agree as follows:

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

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

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

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Received By:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

2EX-10.3

Exhibit 10.3

CHANGE-IN-CONTROL

AND

RESTRICTIVE COVENANT AGREEMENT

FOR CERTAIN OFFICERS

OF ROCKVILLE BANK

January 2, 2009

PERSONAL AND CONFIDENTIAL

Mr. John T. Lund

Rockville Bank

1645 Ellington Road

South Windsor, CT 06074

Dear John:

     Rockville Bank (the “Bank”) and Rockville Financial, Inc. (the “Company”) consider it
essential to the best interests of the Company’s stockholders to foster the continued employment of
key management personnel. In this connection, the Boards of Directors of the Bank and the Company
(the “Board”) recognize that the possibility of a change in ownership or control of the Bank or the
Company may result in the departure or distraction of such personnel to the detriment of the Bank
and the Company and its stockholders. As you are a skilled and dedicated Bank executive with
important management responsibilities and talents, the Bank and the Company believe that their best
interests will be served if you are encouraged to remain with the Bank.

     The Bank and the Company have determined that your ability to perform your responsibilities
and utilize your talents for the benefit of the Bank and the Company, and the Bank’s ability to
retain you as an employee, will be significantly enhanced if you are provided with fair and
reasonable protection from the risks of a change in ownership or control of the Bank or the
Company. Accordingly, in order to induce you to remain in the employ of the Bank, you, the Bank
and the Company agree as follows:

     1. Term of Agreement.

          (a) Generally. Except as provided in Section 1(b) hereof, (i) this Agreement shall be
effective as of January 2, 2009 and shall continue in effect through December 31, 2009, and (ii)
commencing on January 1, 2010, and each January 1 thereafter, this Agreement shall be automatically
extended for one additional year unless, not later than November 30th of the preceding year, either
party to this Agreement gives notice to the other that the Agreement shall not be extended under
this Section 1(a); provided, however, that no such notice by the Bank or the Company shall be
effective if a Change in Control or Potential Change in Control (both as defined herein) shall have
occurred prior to the date of such notice.

 

 

          (b) Upon a Change in Control. If a Change in Control shall have occurred at any time
during the period in which this Agreement is effective, this Agreement shall continue in effect for
(i) the remainder of the month in which the Change in Control occurred and (ii) a term of 24 months
beyond the month in which such Change in Control occurred (such entire period hereinafter referred
to as the “Protected Period”).

     2. Change in Control; Potential Change in Control.

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

               (i) the Company, or the mutual holding company parent of the Company, whether it remains a
mutual holding company or converts to the stock form of organization (the “Mutual Holding
Company”), merges into or consolidates with another corporation, or merges another corporation into
the Company or the Mutual Holding Company, and as a result, with respect to the Company, less than
a majority of the combined voting power of the resulting corporation immediately after the merger
or consolidation is held by “Persons” as such term is used for purposes of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) who were stockholders of
the Company immediately before the merger or consolidation or, with respect to the Mutual Holding
Company, less than a majority of the directors of the resulting corporation immediately after the
merger or consolidation were directors of the Mutual Holding Company immediately before the merger
or consolidation;

               (ii) following a conversion of the Mutual Holding Company to the stock form of organization,
any Person (other than any trustee or other fiduciary holding securities under an employee benefit
plan of the Bank or the Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the resulting corporation representing
25% or more of the combined voting power of the resulting corporation’s then-outstanding
securities;

               (iii) during any period of twenty-four months (not including any period prior to the Effective
Date of this Agreement), individuals who at the beginning of such period constitute the board of
directors of the Company, and any new director (other than (A) a director nominated by a Person who
has entered into an agreement with the Company to effect a transaction described in Sections
(2)(a)(i), (ii) or (iv) hereof, (B) a director nominated by any Person (including the Company) who
publicly announces an intention to take or to consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which if consummated would constitute a Change in
Control or (C) a director nominated by any Person who is the Beneficial Owner, directly or
indirectly, of securities of the Company representing 25% or more of the combined voting power of
the Company’s securities) whose election by the board of directors of the Company or nomination for
election by the Company’s stockholders was approved in advance by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;

               (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially all of the
Company’s assets; or

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

          (b) A “Potential Change in Control” shall be deemed to have occurred if:

               (i) the Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;

2

 

               (ii) any Person (including the Company) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in Control; or

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

          (c) Employee Covenants. You agree that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, you will remain in the employ of the Bank
until the earliest of (i) a date which is 180 days from the occurrence of such Potential Change in
Control, (ii) the termination of your employment by reason of Disability (as defined herein) or
(iii) the date on which you first become entitled under this Agreement to receive the benefits
provided in Section 3(b) hereof.

          (d) Company Covenant Regarding Potential Change in Control or Change in Control. In
the event of a Potential Change in Control or a Change in Control, the Bank or the Company shall,
not later than 15 days thereafter, have established one or more rabbi trusts and shall deposit
therein cash in an amount sufficient to provide for full payment of all potential obligations of
the Bank and the Company that would arise assuming consummation of a Change in Control, or has
arisen in the case of an actual Change in Control, and a subsequent termination of your employment
under Section 3(b). Such rabbi trust(s) shall be irrevocable and shall provide that neither the
Bank nor the Company may, directly or indirectly, use or recover any assets of the trust(s) until
such time as all obligations which potentially could arise hereunder have been settled and paid in
full or otherwise extinguished, subject only to the claims of creditors of the Bank and the Company
in the event of insolvency or bankruptcy of the Bank or the Company; provided, however, that if no
Change in Control has occurred within two years after such Potential Change in Control, such rabbi
trust(s) shall at the end of such two-year period become revocable and may thereafter be revoked by
the Bank.

     3. Termination.

          (a) Termination by the Bank for Cause, by You Without Good Reason, or by Reason of Death
or Disability. If during the Protected Period your employment by the Bank is terminated by the
Bank for Cause, by you without Good Reason, or because of your death or Disability, the Bank and
the Company shall be relieved of their obligation to make any payments to you other than (i)
payment of amounts otherwise accrued and owing but not yet paid and (ii) any amounts payable under
then-existing employee benefit programs at the time such amounts are due.

          (b) Termination by the Bank Without Cause or by You for Good Reason. If during the
Protected Period your employment by the Bank is terminated by the Bank without Cause or by you for
Good Reason, you shall be entitled to the compensation and benefits described in this Section 3(b).
If your employment by the Bank is terminated prior to a Change in Control at the request of a
Person engaging in a transaction or series of transactions that would result in a Change in
Control, the Protected Period shall commence upon the subsequent occurrence of a Change in Control,
your actual termination shall be deemed a termination occurring during the Protected Period and
covered by this Section 3(b), your Date of Termination shall be deemed to have occurred immediately
following the Change in Control, and Notice of Termination shall be deemed to have been given by
the Bank immediately prior to your actual termination. Your continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstances constituting Good
Reason hereunder. The compensation and benefits provided under this Section 3(b) are as follows:

               (i) The Bank shall pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given, on the fifth day following the Date of
Termination, and you shall receive all other amounts to which you are entitled under any
compensation or benefit plan of the Bank, at the time such payments are due in accordance with the
terms of such compensation or benefit plan.

3

 

               (ii) In the payroll period next following the payroll period in which your Date of Termination
occurs, the Bank shall pay you, in lieu of any further salary, bonus or severance payments for
periods subsequent to the Date of Termination, a lump sum amount in cash equal two times the sum
of:

               (A) the greater of (I) your annual base salary in effect immediately prior to the
Change in Control or (II) your annual base salary in effect at the time Notice of
Termination is given; and

               (B) the greater of (I) your annual target bonus for the year in which the Change in
Control occurs or, (II) if no such target bonus has yet been determined for such year,
the annual bonus actually earned by you in the year immediately preceding the year in
which the Change in Control occurs.

               (iii) In the payroll period next following the payroll period in which your Date of
Termination occurs, in lieu of any annual incentive compensation payable to you under any bonus or
incentive plan (the “Incentive Plan”) for the year in which your employment is terminated, the Bank
shall pay you an amount equal to the portion of your annual target incentive compensation
potentially payable in cash to you (i.e., excluding the portion payable in stock or in other
non-cash awards) for the year of termination, multiplied by a fraction the numerator of which is
the number of days you were employed in the year of termination and the denominator of which is
365; provided, however, if you have previously deferred any award payable under any such Incentive
Plan, the terms of the applicable Incentive Plan shall determine the time of payment of the cash
amount that is payable under this Section 3(b)(iii) in lieu of such award.

               (iv) Stock options held by you at termination, if not then vested and exercisable, will become
fully vested and exercisable at the date of such termination, and, in other respects (including the
period following termination during which such options may be exercised), such options shall be
governed by the plans and programs and the agreements and other documents pursuant to which such
options were granted.

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

               (vi) The Bank shall provide you with a cash allowance for outplacement and job search
activities (including, but not limited to, office and secretarial expenses) in the amount of 20% of
your annual base salary and annual target bonus taken into account under Section 3(b)(ii) hereof,
provided that such cash allowance shall apply only to those costs or obligations that are
incurred by you before the last day of the second calendar year following the calendar year in
which your Date of Termination occurs. Payments of such cash allowance shall be made on the
fifteenth day following the submission of each receipt to the Bank evidencing costs or obligations
incurred by you in connection with outplacement and job search activities, but in no event later
than the last day of the third calendar year following the calendar year in which your Date of
Termination occurs.

               (vii) If you elect after termination of employment continued coverage under the Bank’s health
plan in accordance with the applicable provisions of the Consolidated Omnibus Reconciliation Act of
1985 (“COBRA”), the Bank will pay you on a monthly basis during such COBRA continuation period an
amount equal on an after-tax basis to the total cost of such coverage.

4

 

          (c) Reimbursements; Section 409A Exemptions; Delayed Payments Under Section 409A.

               (i) Any reimbursements made or in-kind benefits provided under this Agreement shall be subject
to the following conditions:

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

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

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

               (ii) Any reimbursement under Section 3(b)(vii) for expenses for medical coverage that are made
during the period of time you are entitled to continuation coverage under the Bank’s health plan
pursuant to COBRA shall be exempt from Section 409A of the Code and the six-month delay in payment
described hereinbelow pursuant to Section 1.409A-1(b)(9)(v)(B) of the Treasury Regulations.

               (iii) Any reimbursement under Section 3(b)(vi) relating to outplacement expenses shall be
exempt from Section 409A of the Code and the six-month delay in payment described hereinbelow
pursuant to Section 1.409A-1(b)(9)(v)(A) of the Treasury Regulations and shall not be subject to
Section 3(c)(i) above.

               (iv) Your right to reimbursements under this Agreement shall be treated as a right to a series
of separate payments under Section 1.409A-2(b)(2)(iii) of the Treasury Regulations.

               (v) It is intended that: (A) payments made under this Agreement due to your termination of
employment that are paid on or before the 15th day of the third month following the end
of the taxable year in which your termination of employment occurs shall be exempt from compliance
with Section 409A of the Code pursuant to the exemption for short-term deferrals set forth in
Section 1.409A-1(b)(4) of the Treasury Regulations (the “Exempt Short-Term Deferral Payments”); and
(B) payments under this Agreement, other than Exempt Short-Term Deferral Payments, that are made on
or before the last day of the second taxable year following the taxable year in which you terminate
employment in an aggregate amount not exceeding two times the lesser of: (I) the sum of your
annualized compensation based on your annual rate of pay for the taxable year preceding the taxable
year in which you terminate employment (adjusted for any increase during that year that was
expected to continue indefinitely if you had not terminated employment); or (II) the maximum amount
that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code
for the year in which you terminate employment shall be exempt from compliance with Section 409A of
the Code pursuant to the exception for payments under a separation pay plan as set forth in Section
1.409A-1(b)(9)(iii) of the Treasury Regulations.

               (vi) Anything in this Agreement to the contrary notwithstanding, payments to be made under
this Agreement upon your termination of employment which are subject to Section 409A of the Code
shall be delayed for six months following such termination of employment if you are a Specified
Employee as defined in Section 3(f)(vi) on the date of your termination of employment. Any payment
or reimbursement due within such six-month period shall be delayed to the end of such six-month
period. The Bank will adjust the payment or reimbursement to reflect the deferred payment date by
multiplying the payment or reimbursement by the product of the six-month CMT Treasury Bill
annualized yield rate as published by the U.S. Treasury for the date on which such payment or
reimbursement would have been made but for the delay multiplied by a fraction, the numerator of
which is the number of days by which such payment or reimbursement was delayed and the denominator
of which is 365. The Bank will pay the

5

 

adjusted payment or reimbursement at the beginning of the
seventh month following your termination of
employment. Notwithstanding the foregoing, if calculation of the amounts payable by any payment
date specified in this Agreement is not administratively practicable due to events beyond your
control (or the control of your beneficiary or estate) and for reasons that are commercially
reasonable, payment will be made as soon as administratively practicable in compliance with Section
409A of the Code and the Treasury Regulations thereunder. In the event of your death during such
six-month period, payment will be made in the payroll period next following the payroll period in
which your death occurs.

          (d) Limitation on Change in Control Payments. In the event that:

               (i) the aggregate payments or benefits to be made to you pursuant to this Agreement, together
with other payments and benefits which you have a right to receive from the Bank, which are deemed
to be parachute payments as defined in Section 280G of the Code (the “Termination Benefits”) would
be deemed to include an “excess parachute payment” under Section 280G of the Code; and

               (ii) if such Termination Benefits were reduced to an amount (the “Non-Triggering Amount”), the
value of which is one dollar ($1.00) less than an amount equal to three times your “base amount”,
as determined in accordance with said Section 280G and the Non-Triggering Amount less the product
of the marginal rate of any applicable state and federal income tax and the Non-Triggering Amount
would be greater than the aggregate value of the Termination Benefits (without such reduction)
minus (A) the amount of tax required to be paid by you by Section 4999 of the Code and further
minus (B) the product of the Termination Benefits and the marginal rate of any applicable state and
federal income tax,

then the Termination Benefits shall be reduced to the Non-Triggering Amount. The reduction
required hereby among the Termination Benefits shall be allocated to the payments and benefits set
forth in Section 3(b) in the following order until the reduction is fully accomplished: Section
3(b)(ii), 3(b)(iii), 3(b)(vi) and 3(b)(vii).

          (e) Notice. During the Protected Period, any purported termination of your employment
by the Bank or the Company or by you shall be communicated by written Notice of Termination to the
other party hereto.

          (f) Certain Definitions. Except as otherwise indicated in this Agreement, all
definitions in this Section 3(f) shall be applicable during the Protected Period only.

               (i) Disability. “Disability” shall have the meaning provided in Section 409A of the
Code and the Treasury Regulations thereunder.

               (ii) Cause. “Cause” shall mean termination on account of (A) the willful and
continued failure by you to substantially perform your duties with the Bank (other than any such
failure resulting from your incapacity due to physical or mental illness or Disability or any
failure after the issuance of a Notice of Termination by you for Good Reason) which failure is
demonstrably and materially damaging to the financial condition or reputation of the Company, the
Bank and/or their affiliates, and which failure continues more than 48 hours after a written demand
for substantial performance is delivered to you by the Chief Executive Officer of the Bank, which
demand specifically identifies the manner in which the Chief Executive Officer believes that you
have not substantially performed your duties and the demonstrable and material damage caused
thereby or (B) the willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, the Bank or their affiliates, monetarily or otherwise. No act, or
failure to act, on your part shall be deemed “willful” unless done, or omitted to be done, by you
not in good faith and without reasonable belief that your action or omission was in the best
interest of the Bank and the Company.

               (iii) Good Reason. “Good Reason” shall mean, without your express written consent,
the occurrence upon or after a Change in Control of any of the following circumstances provided

6

 

that you shall have given notice of such circumstance(s) to the Bank within a period not to exceed
90 days
of the initial existence of such circumstance(s) and the Bank shall not have remedied such
circumstance(s) within 30 days after receipt of such notice:

     (A) the assignment to you of any duties materially inconsistent with the position in
the Bank that you held immediately prior to the Change in Control, or a material adverse
alteration in the nature or status of your responsibilities or the conditions of your
employment from those in effect immediately prior to such Change in Control;

     (B) a material reduction in your annual base salary or perquisites as in effect
immediately prior to the Change in Control or as the same may be increased from time to
time except for across-the-board perquisite reductions similarly affecting all senior
executives of the Bank and all senior executives of any Person in control of the Bank or
the Company;

     (C) the relocation of the principle place of your employment to a location more than
50 miles from the location of such place of employment on the date of this Agreement;
except for required travel on the Bank’s business to an extent substantially consistent
with your business travel obligations prior to the Change in Control;

     (D) the failure by the Bank to pay to you any material portion of your compensation
or to pay to you any material portion of an installment of deferred compensation under
any deferred compensation program of the Bank within a reasonable time after the date
such compensation is due;

     (E) the failure by the Bank to continue in effect any material compensation or
benefit plan in which you participated immediately prior to the Change in Control, unless
an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Bank to continue your participation
therein (or in such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amounts of benefits provided and the level of your
participation relative to other participants, as existed at the time of the Change in
Control;

     (F) the failure of the Bank to obtain a satisfactory agreement from any successor to
the Bank or the Company to assume and agree to perform this Agreement, as contemplated in
Section 7 hereof; or

     (G) any purported termination of your employment that is not effected pursuant to a
Notice of Termination that is in material compliance with the requirements of Section
3(f)(iv) hereof (and, if applicable, the requirements of Section 3(f)(ii) hereof), which
purported termination shall not be effective for purposes of this Agreement.

               (iv) Notice of Termination. “Notice of Termination” shall mean notice indicating the
specific termination provision in this Agreement relied upon and setting forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your employment under the
provision so indicated.

               (v) Date of Termination. “Date of Termination” shall mean (A) if your employment is
terminated for Disability, 30 days after Notice of Termination is given (provided that you shall
not have returned to the full-time performance of your duties during such 30-day period) or (B) if
your employment is terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination for Cause, shall not be less than 30 days from the date such
Notice of Termination is given and, in the case of a termination for Good Reason, shall not be less
than 30 nor more than 60 days from the date such Notice of Termination is given).

               (vi) Specified Employee. “Specified Employee” shall mean an employee of the Bank, at a
time when any stock of the Company is publicly traded on an established securities market or

7

 

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

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

          (a) Non-Competition. In consideration for the compensation and benefits provided
under this Agreement, without the consent in writing of the Chief Executive Officer of the Bank,
you will not, at any time during the term of this Agreement and for a period of two years following
your termination of employment during the Protected Period, acting alone or in conjunction with
others, directly or indirectly (i) engage (either as owner, investor, partner, stockholder,
employer, employee, consultant, advisor, or director) in any business of any savings bank, savings
and loan association, savings and loan holding company, bank, bank holding company, or other
institution engaged in the business of accepting deposits or making loans, or any direct or
indirect subsidiary or affiliate of any such entity, that conducts business in any county in which
the Company or the Bank maintains an office as of your date of termination or in any county in
which the Company or the Bank had plans to open an office within six months after your date of
termination; (ii) induce any customers of the Bank or any of its affiliates with whom you have had
contacts or relationships, directly or indirectly, during and within the scope of your employment
with the Bank, to curtail or cancel their business with the Bank or any such affiliate; (iii)
induce, or attempt to influence, any employee of the Bank or any of its affiliates to terminate
employment; or (iv) solicit, hire or retain as an employee or independent contractor, or assist any
third party in the solicitation, hire, or retention as an employee or independent contractor, any
person who during the previous twelve months was an employee of the Bank or any affiliate;
provided, however, that activities engaged in by or on behalf of the Bank are not restricted by
this covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv) above are separate and
distinct commitments independent of each of the other subparagraphs. It is agreed that the
ownership of not more than one percent of the equity securities of any company having securities
listed on an exchange or regularly traded in the over-the-counter market shall not, of itself, be
deemed inconsistent with clause (i) of this Section 4(a).

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

     (c) Cooperation With Regard to Litigation. You agree to cooperate with the Bank and
the Company, during the term of this Agreement and thereafter (including following your termination
of employment for any reason), by making yourself available to testify on behalf of the Bank or the
Company or any subsidiary or affiliate of the Bank or the Company, in any action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, and to assist the Bank and
the Company, or any subsidiary or affiliate of the Company, in any such action, suit, or
proceeding, by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Bank or the Company, or any
subsidiary or affiliate of the Company, as requested. The Bank agrees to reimburse you for all
expenses actually incurred in connection with your provision of testimony or assistance. Such
reimbursement shall be made, on an after tax basis, each calendar quarter in accordance with the
provisions of Section 3(c) of this Agreement, but not later than the last day of the year in which
the expense was incurred.

8

 

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

     (e) Release of Employment Claims. You agree, as a condition to your receipt of any
payments or benefits provided for in Section 3(b) herein (other than compensation accrued at
termination as provided in Section 3(b)(i)), that you will execute a general release agreement, in
substantially the form set forth in Attachment A to this Agreement, releasing any and all claims
arising out of your employment other than enforcement of this Agreement and rights to
indemnification under any agreement, law, Bank or Company organizational document or policy, or
otherwise. The Bank will provide you with a copy of such release simultaneously with or as soon as
practicable following the delivery of the Notice of Termination but not later than 21 days before
(45 days before if your termination is part of an exit incentive or other employment termination
program offered to a group or class of employees) the Date of Termination. You must deliver the
executed release to the Bank not later than eight days before the date of payment of your
compensation and benefits provided for under this Agreement.

     (f) Forfeiture of Outstanding Options. Anything in this Agreement to the contrary
notwithstanding, if you willfully and materially fail to substantially comply with any restrictive
covenant under this Section 4 or willfully and materially fail to substantially comply with any
material obligation under this Agreement, all options to purchase common stock granted by the Bank
and then held by you or your transferee shall be immediately forfeited and thereupon such options
shall be cancelled. Any such forfeiture shall apply to such options notwithstanding any term or
provision of any option agreement. In addition, options granted to you and gains resulting from the
exercise of such options, shall be subject to forfeiture in accordance with the Bank’s standard
policies relating to such forfeitures and clawbacks, as such policies are in effect at the time of
grant of such options.

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

     (i) Survival. The provisions of this Section 4 shall survive the end of the term of
this Agreement and any termination or expiration of this Agreement.

     5. Mitigation. You shall not be required to mitigate the amount of payment provided
for under this Agreement by seeking other employment or otherwise, nor shall the amount of payment
or benefit provided for under this Agreement be reduced by any compensation earned by you as the
result of employment by another employer, by retirement benefits, by offset against any amount
claimed to be owed by you to the Bank, or otherwise.

     6. Costs of Proceedings. The Bank shall pay all costs and expenses, including all
attorneys’ fees and disbursements, of the Bank and the Company and you, in connection with any
legal proceedings undertaken pursuant to Section 13, whether or not instituted by the Bank, the
Company or you, relating to the interpretation or enforcement of any provision of this Agreement;
provided that if you instituted the proceeding and a finding is entered that you instituted
the proceeding in bad faith, you shall pay all of your costs and expenses, including attorneys’
fees and disbursements. The Bank or the Company shall pay prejudgment interest on any money
judgment obtained by you as a result of such proceeding, calculated at the prime rate determined by
the Bank as in effect from time to time from the date that payment should have been made to you
under this Agreement. Any such payment or reimbursement to you shall be made on an after-tax basis
each calendar quarter for all costs and expenses actually incurred as provided in this

9

 

Section 6 and in accordance with the provisions of Section 3(c) of this Agreement, but not later
than the last day of the year in which the expense was incurred.

     7. Successors; Binding Agreement.

          (a) The Bank and the Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Bank or the Company to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Bank and the Company would be required to perform it if
no such succession had taken place. As used in this Agreement, “Bank “and “Company” shall mean
the Bank and the Company respectively as hereinbefore defined and any successor to its or their
business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation
of law, or otherwise and, in the case of an acquisition of the Bank or the Company in which the
corporate existence of the Bank or the Company, as the case may be, continues, the ultimate parent
company following such acquisition. Subject to the foregoing, the Bank and the Company may transfer
and assign this Agreement and the Bank’s and the Company’s rights and obligations hereunder.
Neither this Agreement nor the rights or obligations hereunder of the parties hereto shall be
transferable or assignable by you, except in accordance with the laws of descent and distribution
or as specified in (b) below.

          (b) This Agreement shall inure to the benefit of and be enforceable by you and your personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. In the event of your death, all amounts otherwise payable to you hereunder shall, unless
otherwise provided herein, be paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to your estate.

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

If to the Bank or the Company:

ROCKVILLE BANK

1645 Ellington Road

South Windsor, CT 06074

Att: Chief Executive Officer

If to you:

To the address first provided hereinabove.

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

     9. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by you
and such officer as may be designated by the Board. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the time or at any prior or subsequent time. Any payments provided for
hereunder shall be paid net of any applicable withholding required under federal, state or local
law. The obligations of the Company and the Bank under this

10

 

Agreement shall survive the expiration of this Agreement to the extent necessary to give
effect to this Agreement.

     10. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

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

     12. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and during the term of this Agreement
cancels and supersedes the provisions of all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer, employee or
representative of any party hereof with respect to the subject matter contained herein. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not expressly set forth in this Agreement.

     13 .Dispute Resolution

          (a) Negotiation. The Bank and the Company (collectively, the “Employer”) and you
shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement
promptly by negotiation between the Chief Executive Officer of the Bank and you. Any party may
give the other party written notice of any dispute in accordance with the notice procedures set
forth in Section 8. Within 15 days after delivery of the notice, the receiving party shall submit
to the other, in accordance with the notice procedures set forth in Section 8, a written response.
The notice and response shall include a statement of that party’s position and summary of arguments
supporting that position. Within 30 days after delivery of the initial notice, the parties shall
meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence.

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

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

11

 

Subject to Section 6 of this Agreement, the Bank shall bear all costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section 13(c). Notwithstanding any
provision in this Section 13(c), you shall be entitled to seek specific performance of your right
to be paid during the pendency of any dispute or controversy arising under or in connection with
this Agreement.

          (d) Interest on Unpaid Amounts. Any amount which has become payable pursuant to the
terms of this Agreement or any decision by arbitrators or judgment by a court of law pursuant to
this Section 12 but which has not been timely paid shall bear interest at the prime rate in effect
at the time such amount first becomes payable, as quoted by the Bank, except as otherwise provided
in Section 3(c)(vi) of this Agreement (concerning interest payable with respect to certain delayed
payments that are subject to Section 409A of the Code).

     14. Governing Law. This Agreement is governed by and is to be construed,
administered, and enforced in accordance with the laws of the State of Connecticut, without regard
to its conflicts of law principles. If under the governing law, any portion of this Agreement is at
any time deemed to be in conflict with any applicable statute, rule, regulation, ordinance, or
other principle of law, such portion shall be deemed to be modified or altered to the extent
necessary to conform thereto or, if that is not possible, to be omitted from this Agreement. The
invalidity of any such portion shall not affect the force, effect, and validity of the remaining
portion thereof. If any court determines that any provision of Section 4 of this Agreement is
unenforceable because of the duration or geographic scope of such provision, it is the parties’
intent that such court shall have the power to modify the duration or geographic scope of such
provision, as the case may be, to the extent necessary to render the provision enforceable and, in
its modified form, such provision shall be enforced. Anything in this Agreement to the contrary
notwithstanding, the terms of this Agreement shall be interpreted and applied in a manner
consistent with the requirements of Section 409A of the Code and the Treasury Regulations so as not
to subject you to the payment of any tax penalty or interest which may be imposed by Section 409A
of the Code and the Company shall have no right to accelerate or make any payment under this
Agreement except to the extent such action would not subject you to the payment of any tax penalty
or interest under Section 409A of the Code. If all or a portion of the benefits and payments
provided under this Agreement constitute taxable income to you for any taxable year that is prior
to the taxable year in which such payments and/or benefits are to be paid to you as a result of the
Agreement’s failure to comply with the requirements of Section 409A of the Code and the
Regulations, the applicable payment or benefit shall be paid immediately to you to the extent such
payment or benefit is required to be included in your income. If you become subject to any tax
penalty or interest under Section 409A of the Code by reason of this Agreement, the Company shall
reimburse you on a fully grossed-up and after-tax basis for any such tax penalty or interest (so
that you are held economically harmless) ten business days prior to the date such tax penalty or
interest is due and payable by you to the government.

     If this letter sets forth our agreement on the subject matter hereof, kindly sign and return
to the Bank the enclosed copy of this letter, which will then constitute our agreement on this
subject.

	 	 	 	 	 	 	 	 	 	 	 
	ROCKVILLE BANK	 	 	 	ROCKVILLE FINANCIAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:
	 	 	 	 	 	Name:	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 

Agreed to this __ day of                                         , 2009.

	 	 	 
	 

Name

	 	 

12

 

ATTACHMENT A

RELEASE

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

In consideration for the benefits provided under your Change in Control and Restrictive Covenant
Agreement with Rockville Bank (the “Agreement”), and more specifically enumerated in Exhibit 1
hereto, by your signature below, you, for yourself and on behalf of your heirs, executors, agents,
representatives, successors and assigns, hereby release and forever discharge Rockville Financial,
Inc., its past and present parent corporations, subsidiaries, divisions, subdivisions, affiliates
and related companies (collectively, the “Company”) and the Company’s past, present and future
agents, directors, officers, employees, representatives, assigns, stockholders, attorneys, agents,
insurers, employee benefit programs (and the trustees, administrators, fiduciaries and insurers of
such programs), and any other persons acting by, through, under or in concert with any of the
persons or entities listed herein, and their successors (hereinafter “those associated with the
Company”) and with respect to any and all claims, demands, actions and liabilities, whether in law
or equity, which you may have against the Company or those associated with the Company of whatever
kind, including but not limited to those arising out of your employment with the Company or the
termination of that employment. You agree that this Release covers, but is not limited to, claims
arising under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., Title VII
of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act of
1990, 42 U.S.C. § 12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., the
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., the Connecticut Fair
Employment Practices Act, C.G.S. § 46a-51 et seq., Family and Medical Leave Act of 1993 and any
local, state or federal law, regulation or order providing workers’ compensation benefits,
restricting an employer’s right to terminate employees or otherwise regulating employment,
enforcing express or implied employment contracts or requiring an employer to deal with employees
fairly or in good faith, or dealing with discrimination in employment on the basis of sex, race,
color, national origin, veteran status, marital status, religion, disability, handicap, or age.
You also agree that this Release includes claims based on wrongful termination of employment,
breach of contract (express or implied), tort, or claims otherwise related to your employment or
termination of employment with the Company and any claim for attorneys’ fees, expenses or costs of
litigation.

This Release covers all claims based on any facts or events, whether known or unknown by you, that
occurred on or before the date of this Release. You expressly waive all rights you might have under
any law that is intended to protect you from waiving unknown claims and by your signature below
indicate your understanding of the significance of doing so. Examples of released claims include,
but are not limited to: (a) claims that in any way relate to your employment with the Company, or
the termination of that employment, such as claims for compensation, bonuses, commissions, lost
wages, or unused accrued vacation or sick pay (other than under your Agreement); (b) claims that in
any way relate to the design or administration of any employee benefit program; (c) claims that you
have irrevocable or vested rights to severance or similar benefits (other than under your
Agreement) or to post-employment health or group insurance benefits (other than under your
Agreement); (d) any claim, such as a benefit claim, that was explicitly or implicitly denied before
you signed this Release; (e) any claim you might have for extra benefits as a consequence of
payments you receive because of signing this Release; or (f) any claim to attorneys’ fees or other
indemnities. Except to enforce your Agreement or this Release, you agree that you will never
commence, prosecute, or cause to be commenced or prosecuted any lawsuit or proceeding of any kind
against the Company or those associated with the Company in any forum and agree to withdraw with
prejudice all complaints or charges, if any, that you have filed against the Company or those
associated with the Company.

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

 

 

benefits under the Company’s benefit plans; (iv) any rights or claims under the Age Discrimination
in Employment Act or any other law that arise after you sign this Release; or (v) your right to
enforce this Release or any of the foregoing items described in this paragraph.

By signing this Release, you further agree as follows:

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

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

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

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

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

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

	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 
	Signature:

	 	 	 	 	 	Date:
	 

	 	 

	 	 	 	 
	Received by:

	 	 	 	 	 	Date:
	 

	 	 

	 	 	 	 

2

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