10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended: December 31, 2005

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number: 0-26001

Hudson City Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Delaware	22-3640393
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
West 80 Century Road
Paramus, New Jersey	07652
(Address of Principal Executive Offices)	(Zip Code)

(201) 967-1900
(Registrant’s telephone number, including area code)

     Securities registered pursuant to Section 12(b) of the Act: None

     Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 par value

(Title of Class)

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15d of the Act.

Yes o No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No þ

     As of February 28, 2006, the registrant had 741,466,555 shares of common stock, $0.01 par value, issued and 585,051,228 shares outstanding. The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2005 was $6,365,334,000. This figure was based on the closing price by the NASDAQ National Market for a share of the registrant’s common stock, which was $11.41 as reported in the Wall Street Journal on July 1, 2005.

     Documents Incorporated by Reference: Portions of the definitive Proxy Statement to be used in connection with the Annual Meeting of Stockholders to be held on May 30, 2006 and any adjournment thereof and which is expected to be filed with the Securities and Exchange Commission no later than April 30, 2006, are incorporated by reference into Part III.

Hudson City Bancorp, Inc.
2005 Annual Report on Form 10-K
Table of Contents

		Page
PART I
Item 1	Business		5
Item 1A	Risk Factors		49
Item 1B	Unresolved Staff Comments		52
Item 2	Properties		53
Item 3	Legal Proceedings		53
Item 4	Submission of Matters to a Vote of Security Holders		53
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		54
Item 6	Selected Financial Data		56
Item 7	Management’s Discussion and Analysis of Financial Condition and Results Of Operations		58
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		91
Item 8	Financial Statements and Supplementary Data		92
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures		133
Item 9A	Controls and Procedures		133
Item 9B	Other Information		134
PART III
Item 10	Directors and Executive Officers of the Registrant		135
Item 11	Executive Compensation		135
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		135
Item 13	Certain Relationships and Related Transactions		135
Item 14	Principal Accounting Fees and Services		136
PART IV
Item 15	Exhibits, Financial Statement Schedules		137
SIGNATURES			140
EX-10.21: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.22: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.23: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.24: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.25: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.26: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EX-10.27: EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
EX-10.28: AMENDED AND RESTATED LOAN AGREEMENT
EX-10.29: AMENDED AND RESTATED PROMISSORY NOTE
EX-10.30: AMENDED AND RESTATED PLEDGE AGREEMENT
EX-10.31: FORM OF AMENDED AND RESTATED ASSIGNMENT
EX-10.32: LOAN AGREEMENT
EX-10.33: PROMISSORY NOTE
EX-10.34: PLEDGE AGREEMENT
EX-10.35: FORM OF ASSIGNMENT
EX-11.1: STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
EX-21.1: SUBSIDIARIES
EX-23.1: CONSENT OF KPMG LLP
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION

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PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

This Annual Report on Form 10-K contains certain “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “should,” “plan,” “estimate,” “predict,” “continue,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to: (i) estimates with respect to our financial condition, results of operations and business that are subject to various factors which could cause actual results to differ materially from these estimates, (ii) statements about the benefits of the merger between us and Sound Federal Bancorp, including future financial and operating results, cost savings and accretion to reported earnings that may be realized from the merger, (iii) statements about our and Sound Federal’s plans, objectives, expectations and intentions, and (iv) other statements in this Form 10-K that are not historical facts. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control;

• there may be increases in competitive pressure among the financial institutions or from non-financial institutions;

• changes in the interest rate environment may reduce interest margins or affect the value of our investments;

• changes in deposit flows, loan demand or real estate values may adversely affect our business;

• changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently;

• general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the securities markets or the banking industry may be less favorable than we currently anticipate;

• legislative or regulatory changes may adversely affect our business;

• applicable technological changes may be more difficult or expensive than we anticipate;

• success or consummation of new business initiatives may be more difficult or expensive than we anticipate;

• litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than we anticipate;

• the risks associated with continued diversification of assets and adverse changes to credit quality;

• difficulties associated with achieving expected future financial results;

• the risk of an economic slowdown that would adversely affect credit quality and loan originations;

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• our business and Sound Federal’s business may not be combined successfully, or such combination may take longer to accomplish than expected;

• the cost savings from the merger may not be full realized or may take longer to realize than expected;

• operating costs, customer loss and business disruption following the merger, including adverse effects on relationships with employees, may be greater than expected;

• governmental approvals of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; or

• the stockholders of Sound Federal may fail to approve the merger.

Any or all of our forward-looking statements in this Form 10-K and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. We do not intend to update any of the forward-looking statements after the date of this Form 10-K or to conform these statements to actual events.

As used in this Form 10-K, unless we specify otherwise, “Hudson City Bancorp,” “our company,” “we,” “us,” and “our” refer to Hudson City Bancorp, Inc., a Delaware corporation. “Hudson City Savings” refers to Hudson City Savings Bank, a federal stock savings bank and the wholly-owned subsidiary of Hudson City Bancorp. “Hudson City, MHC” refers to Hudson City, MHC, a New Jersey mutual holding company and former majority-owner of Hudson City Bancorp.

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PART I

Item 1. Business.

Hudson City Bancorp is a Delaware corporation organized in 1999 and serves as the holding company of its only subsidiary, Hudson City Savings Bank. Hudson City Bancorp’s executive offices are located at West 80 Century Road, Paramus, New Jersey 07652 and our telephone number is (201) 967-1900.

On June 7, 2005, Hudson City Bancorp reorganized from a two-tier mutual holding company structure to a stock holding company structure and completed a stock offering in accordance with a Plan of Conversion and Reorganization (the “Plan”). Under the terms of the Plan, Hudson City, MHC, which owned 65.77% of the outstanding common stock of Hudson City Bancorp immediately prior to the conversion, merged into Hudson City Bancorp and the shares of Hudson City Bancorp common stock owned by Hudson City, MHC were cancelled. Hudson City Bancorp sold 392,980,580 shares of common stock at a price of $10.00 per share raising approximately $3.93 billion. After related expenses of $125.0 million, net proceeds from the stock offering amounted to $3.80 billion. In accordance with the Plan, we also affected a stock split pursuant to which each share of common stock outstanding or held as treasury stock before completion of the offering was split into 3.206 shares. Hudson City Bancorp contributed $3.00 billion of the net proceeds from the offering to Hudson City Savings Bank. These transactions are referred to collectively as the second-step conversion.

Hudson City Savings is a federally chartered stock savings bank subject to supervision and examination by the Office of Thrift Supervision (“OTS”). Hudson City Bancorp, as a savings and loan holding company, is also subject to supervision and examination by the OTS. Our deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). Hudson City Savings Bank has served the customers of New Jersey since 1868 and now, through de novo branching, serves the customers of Suffolk County and Richmond County (Staten Island), New York.

We are a community- and customer-oriented retail savings bank offering traditional deposit products, residential real estate mortgage loans and consumer loans. In addition, we purchase mortgages, mortgage-backed securities, securities issued by the U.S. government and government-sponsored agencies and other investments permitted by applicable laws and regulations. Except for community-related investments, we have not recently originated or invested in commercial real estate loans, loans secured by multi-family residences or commercial/industrial business loans, although we have the legal authority to make such loans. We retain in our portfolio substantially all of the loans we originate.

Our business model and product offerings allow us to serve a broad range of customers with varying demographic characteristics. Our traditional thrift products such as conforming one- to four-family residential mortgages, certificates of deposit, and passbook savings accounts appeal to a broad customer base. Our jumbo mortgage lending proficiency and our High Value Checking product allow us to target higher-income customers successfully.

Our revenues are derived principally from interest on our mortgage loans and mortgage-backed securities and interest and dividends on our investment securities. Our primary sources of funds are customer deposits, borrowings, scheduled amortization and prepayments of mortgage loans and mortgage-backed securities, maturities and calls of investment securities and funds provided by operations. We are the largest savings bank by asset size headquartered in New Jersey.

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Available Information

Our periodic and current reports, proxy and information statements, and other information that Hudson City Bancorp files with the Securities and Exchange Commission, or SEC, are made available free of charge through our website, www.hcbk.com, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Except for these reports, the information on our website is not part of this annual report. Such reports are also available on the SEC’s website at www.sec.gov, or at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC, 20549. Information may be obtained on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Proposed Acquisition of Sound Federal Bancorp, Inc.

In February 2006, we signed a definitive agreement to acquire Sound Federal Bancorp Inc. (“Sound Federal”), for $265.0 million in cash. Sound Federal has approximately $1.15 billion in assets and $969.6 million in deposits as of December 31, 2005. Sound Federal operates 14 branches in Westchester, Putnam and Rockland Counties, New York and Fairfield County, Connecticut. The addition of these branch offices will complement our organic branch expansion strategy and will give the combined institution operations in seven of the top 50 counties in the United States ranked by median household income. The transaction is subject to approval by shareholders of Sound Federal as well as customary regulatory approvals and is expected to close in the early summer of 2006.

Market Area

We conduct our operations out of our corporate offices in Paramus, Bergen County, New Jersey, 84 branches located in 15 counties throughout the State of New Jersey, four branch offices located in Suffolk County, New York and two branch offices in Richmond County (Staten Island), New York. We operate in four primary markets: northern New Jersey (Bergen, Essex, Hudson, Mercer, Middlesex, Morris, Passaic, Union and Warren Counties, and Richmond County, New York), the New Jersey shore (Atlantic, Monmouth and Ocean Counties), southwestern New Jersey (Burlington, Camden and Gloucester Counties) in the suburbs of Philadelphia and Suffolk County, New York. Branch offices in these areas give us operations in three of the top 50 counties in the United States ranked by median household income. Operating in high median household income counties fits well with our jumbo mortgage loan and time deposit business model. We plan to open approximately 10 offices in 2006 in these market areas, while continually evaluating new locations in areas that present the greatest opportunity to promote our deposit and mortgage products.

Our current market areas provide distinct differences in demographics and economic characteristics. The northern New Jersey market represents the greatest concentration of population, deposits and income in New Jersey. The combination of these counties represents more than half of the entire New Jersey population and more than half of New Jersey households. The northern New Jersey market also represents the greatest concentration of Hudson City Savings retail operations – both lending and deposit gathering – and based on its high level of economic activity, we believe that the northern New Jersey market provides significant opportunities for future growth.

The New Jersey shore market represents a strong concentration of population and income, and is an increasingly popular resort and retirement economy – providing healthy opportunities for deposit growth and residential lending. The southwestern New Jersey market consists of communities adjacent to the Philadelphia metropolitan area and represents the smallest concentration of deposits for Hudson City Savings. The Suffolk County market area has similar demographic and economic characteristics to the northern New Jersey market area. We believe the market area currently served by Sound Federal is an extension of our Northern New Jersey market area, reflecting similar demographic and economic characteristics.

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In 2005, we opened two of several planned branch locations in Richmond County (Staten Island), New York and continued our expansion efforts in Suffolk County, New York by opening three branch offices. This expansion has provided us with further resources for our retail operations and allowed for additional geographic diversification. Areas being considered for further expansion have similar demographic and economic characteristics as those in which we already have proven our ability to garner significant market share.

Our future growth opportunities will be influenced by the growth and stability of the statewide and regional economies, other demographic population trends and the competitive environment within and around the State of New Jersey and the New York metropolitan area. We expect to continue to grow through internal expansion primarily through the origination and purchase of mortgage loans, while purchasing mortgage-backed securities and investment securities as a supplement to our mortgage loans. We believe that we have developed lending products and marketing strategies to address the diverse credit-related needs of the residents in our market areas. We intend the primary funding for our growth to be customer deposits, using borrowed funds to complement our deposit initiatives given the market rate environment existing during the year. We intend to grow customer deposits by continuing to offer desirable products at competitive rates and by opening new branch offices.

Competition

We face intense competition both in making loans and attracting deposits in the market areas we serve. New Jersey and the New York metropolitan area have a high concentration of financial institutions, many of which are branches of large money center and regional banks. Some of these competitors have greater resources than we do and may offer services that we do not provide such as trust services or investment services. Customers who seek “one stop shopping” may be drawn to these institutions.

Our competition for loans comes principally from commercial banks, savings institutions, mortgage banking firms, credit unions, finance companies, mutual funds, insurance companies and brokerage and investment banking firms. Our most direct competition for deposits has historically come from commercial banks, savings banks, savings and loan associations and credit unions. We face additional competition for deposits from short-term money market funds and other corporate and government securities funds and from brokerage firms and insurance companies.

Lending Activities

Loan Portfolio Composition. Our loan portfolio primarily consists of one- to four-family residential first mortgage loans. To a lesser degree, the loan portfolio includes consumer and other loans, which primarily consist of fixed-rate second mortgage loans and home equity credit lines. We do not originate commercial real estate loans, loans secured by multi-family residences, construction loans or commercial/industrial business loans although we have the legal authority to make such loans. From time to time we purchase participation interests in multi-family and commercial first mortgage loans and commercial loans through community-based organizations. These loans amounted to $2.3 million at December 31, 2005.

At December 31, 2005, we had total loans of $15.06 billion, of which $14.83 billion, or 98.4%, were first mortgage loans. Of the first mortgage loans outstanding at that date, 82.7% were fixed-rate mortgage loans and 17.3% were adjustable-rate, or ARM loans. At December 31, 2005, consumer and other loans, primarily fixed-rate second mortgage loans and home equity credit lines, amounted to $235.6 million, or 1.6%, of total loans. We also offer guaranteed student loans through the Student Loan Marketing Association, commonly known as SallieMae, “Loan Referral Program.”

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Our loans are subject to federal and state laws and regulations. The interest rates we charge on loans are affected principally by the demand for loans, the supply of money available for lending purposes and the interest rates offered by our competitors. These factors are, in turn, affected by general and local economic conditions, monetary policies of the federal government, including the Federal Reserve Board (“FRB”), legislative tax policies and governmental budgetary matters.

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The following table presents the composition of our loan portfolio in dollar amounts and in percentages of the total portfolio at the dates indicated.

	At December 31,
	2005						2004						2003						2002						2001
				Percent						Percent						Percent						Percent						Percent
	Amount			of Total			Amount			of Total			Amount			of Total			Amount			of Total			Amount			of Total
	(Dollars in thousands)
First mortgage loans:
One- to four-family	$	14,780,819			98.13	%	$	11,120,874			97.87	%	$	8,567,442			97.32	%	$	6,708,806			96.25	%	$	5,664,973			94.93	%
FHA/VA		43,672			0.29			81,915			0.72			98,502			1.12			131,209			1.88			151,203			2.53
Multi-family and commercial		2,320			0.02			3,000			0.03			2,843			0.03			2,668			0.04			2,548			0.04
Total first mortgage loans		14,826,811			98.44			11,205,789			98.62			8,668,787			98.47			6,842,683			98.17			5,818,724			97.50
Consumer and other loans:
Fixed-rate second mortgages		205,826			1.37			127,737			1.12			105,361			1.20			93,691			1.34			115,244			1.93
Home equity credit lines		29,150			0.19			28,929			0.25			28,217			0.32			33,543			0.48			32,715			0.55
Other		662			—			584			0.01			701			0.01			983			0.01			1,488			0.02
Total consumer and other loans		235,638			1.56			157,250			1.38			134,279			1.53			128,217			1.83			149,447			2.50
Total loans		15,062,449			100.00	%		11,363,039			100.00	%		8,803,066			100.00	%		6,970,900			100.00	%		5,968,171			100.00	%
Deferred loan costs (fees)		1,653						(8,073	)					(10,255	)					(13,508	)					(12,060	)
Allowance for loan losses		(27,393	)					(27,319	)					(26,547	)					(25,501	)					(24,010	)
Net loans	$	15,036,709					$	11,327,647					$	8,766,264					$	6,931,891					$	5,932,101

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Loan Maturity. The following table presents the contractual maturity of our loans at December 31, 2005. The table does not include the effect of prepayments or scheduled principal amortization. Prepayments and scheduled principal amortization on first mortgage loans totaled $2.10 billion for 2005, $1.96 billion for 2004 and $3.53 billion for 2003.

	At December 31, 2005
	First		Consumer
	Mortgage		and
	Loans		Other Loans		Total
	(In thousands)
Amounts Due:
One year or less	$	504	$	358	$	862
After one year:
One to three years		23,370		5,906		29,276
Three to five years		20,844		18,823		39,667
Five to ten years		209,202		52,123		261,325
Ten to twenty years		2,054,238		158,428		2,212,666
Over twenty years		12,518,653		—		12,518,653
Total due after one year		14,826,307		235,280		15,061,587
Total loans	$	14,826,811	$	235,638		15,062,449
Deferred loan costs						1,653
Allowance for loan losses						(27,393	)
Net loans					$	15,036,709

The following table presents, as of December 31, 2005, the dollar amount of all loans due after December 31, 2006, and whether these loans have fixed interest rates or adjustable interest rates.

	Due After December 31, 2006
	Fixed		Adjustable		Total
	(In thousands)
First mortgage loans	$	12,257,673	$	2,568,634	$	14,826,307
Consumer and other loans		205,809		29,471		235,280
Total loans due after one year	$	12,463,482	$	2,598,105	$	15,061,587

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The following table presents our loan originations, purchases, sales and principal payments for the periods indicated.

	For the Year Ended December 31,
	2005		2004		2003
	(In thousands)
Total loans:
Balance outstanding at beginning of period	$	11,363,039	$	8,803,066	$	6,970,900
Originations:
First mortgage loans		2,068,183		1,378,709		2,168,148
Consumer and other loans		126,591		85,932		103,000
Total originations		2,194,774		1,464,641		2,271,148
Purchases:
One- to four-family first mortgage loans		3,676,260		3,099,759		3,168,892
FHA/VA first mortgage loans		—		22,334		36,064
Other first mortgage loans		—		316		293
Total purchases		3,676,260		3,122,409		3,205,249
Less:
Principal payments:
First mortgage loans		2,103,100		1,956,395		3,530,205
Consumer and other loans		48,203		62,960		96,938
Total principal payments		2,151,303		2,019,355		3,627,143
Premium amortization and discount accretion, net		8,247		5,374		14,094
Transfers to foreclosed real estate		1,750		2,348		2,994
Loan sales		10,324		—		—
Balance outstanding at end of period	$	15,062,449	$	11,363,039	$	8,803,066

Residential Mortgage Lending. Our primary lending emphasis is the origination and purchase of first mortgage loans secured by one- to four-family properties that serve as the primary or secondary residence of the owner. We do not offer loans secured by cooperative apartment units or interests therein. Since the early 1980’s, we have originated and purchased substantially all of our one- to four-family first mortgage loans for retention in our portfolio. We have developed a core competency in residential mortgage loans with principal balances in excess of the Fannie Mae single-family limit of $417,000 (“non-conforming” or “jumbo” loans). We are one of the largest jumbo residential mortgage lenders in New Jersey and one of the largest buyers of jumbo mortgages nationally. We believe that our retention and servicing of the residential mortgage loans that we originate allows us to maintain higher levels of customer service and satisfaction than originators who sell loans to third parties.

Our wholesale loan purchase program is an important component of our strategy to grow our residential loan portfolio, and complements our retail loan origination production by enabling us to diversify assets outside our local market area, thus providing a safeguard against economic trends that might affect one particular area of the nation. Through this program, we have obtained assets with a relatively low overhead cost and minimized related servicing costs. At December 31, 2005, $8.05 billion, or 54.3%, of

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our first mortgage loans were purchased loans. At December 31, 2005, approximately 63% of the mortgage loan portfolio was secured by real estate located in the states of New Jersey, New York and Connecticut. Additionally, the states of Virginia, Illinois, Massachusetts and Maryland each accounted for approximately 4% to 7% of our total mortgage loan portfolio. The remainder of the loan portfolio is secured by real estate in 31 other states.

We have developed written standard operating guidelines relating to the purchase of these assets. These guidelines include the evaluation and approval process of the various sellers from whom we choose to buy whole loans, which are primarily large national mortgage loan seller/servicers, and the types of whole loans, acceptable property locations and maximum interest rate variances. The purchase agreements, as established with each seller/servicer, contain parameters of the loan characteristics that can be included in each package. These parameters, such as maximum loan size and maximum loan-to-value ratio, generally conform to parameters utilized by us to originate mortgage loans. All loans are reviewed for compliance with the agreed upon parameters. All purchased loan packages are subject to internal due diligence procedures including review of a sampling of individual loan files. It is our policy to perform full credit reviews of between 10% to 50% of all loans purchased. Our loan review includes review of the legal documents, including the note, the mortgage and the title policy, review of the credit file, evaluating debt service ratios, review of the appraisal and verifying loan-to-value ratios and evaluating the completeness of the loan package. This review subjects the loan file to substantially the same underwriting standards used in our own loan origination process.

The loan purchase agreements recognize that the time frame to complete our due diligence reviews may not be sufficient prior to the completion of the purchase and afford us a limited period of time after closing to complete our review and return, or request substitution of, any loan for any legitimate underwriting concern. After the review period, we are still provided recourse to the seller for any breach of a representation or warranty with respect to the loans purchased. Among these representations and warranties are attestations of the legality and enforceability of the legal documentation, adequacy of insurance on the collateral real estate, compliance with regulations and certifications that all loans are current as to principal and interest at the time of purchase.

In general, the seller of a purchased loan continues to service the loan following our purchase of it. The servicing of purchased loans is governed by the servicing agreement entered into with each servicer. Oversight of the servicer is maintained by us through review of all reports, remittances and non-performing loan ratios with appropriate further action, such as contacting the servicers by phone or in writing to clarify or correct our concerns, taken as required. We also require that all servicers provide end-of-year financial statements to confirm company soundness. These servicers must also deliver industry certifications substantiating that they have in place all appropriate controls to ensure their mode of administration is in accordance with standards set by the Mortgage Bankers Association of America. These operating guidelines provide a means of evaluating and monitoring the quality of mortgage loan purchases and the servicing abilities of the loan servicers. We typically purchase loans from eight to ten of the largest nationwide mortgage producers. We purchased first mortgage loans of $3.68 billion in 2005, $3.12 billion in 2004 and $3.21 billion in 2003. The average size of our one-to-four family mortgage loans purchased during 2005 was approximately $463,000.

Most of our retail loan originations are from existing or past customers, members of our local communities or referrals from local real estate agents, licensed mortgage bankers and brokers, attorneys and builders. We believe that our extensive branch network is a significant source of new loan generation. We also employ a staff of representatives who call on real estate professionals to disseminate information regarding our loan programs and take applications directly from their clients. These representatives are paid for each origination.

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We currently offer loans that conform to underwriting standards that are based on standards specified by FannieMae (“conforming loans”), non-conforming loans, loans processed as limited documentation loans and, to a limited extent, no income or asset verification loans, as described below. These loans may be fixed-rate one- to four-family mortgage loans or adjustable-rate one- to four-family mortgage loans with maturities of up to 40 years. The non-conforming loans generally follow FannieMae guidelines, except for the loan amount. FannieMae guidelines limit the principal amount of single-family loans to $417,000; our non-conforming loans generally exceed such limits. The average size of our one- to four-family mortgage loans originated in 2005 was approximately $367,000. The overall average size of our one- to four-family first mortgage loans was approximately $326,000 at December 31, 2005. We are an approved seller/servicer for FannieMae and an approved servicer for FreddieMac. We generally hold loans for our portfolio but have, from time to time, sold loans in the secondary market. During 2005, we sold approximately $10.3 million of first mortgage loans to other financial institutions.

Our originations of first mortgage loans amounted to $2.07 billion in 2005, $1.38 billion in 2004 and $2.17 billion in 2003. During 2003, a significant number of our first mortgage loan originations were the result of refinancing of existing loans due to declining interest rates. Total refinancing of our existing first mortgage loans were as follows:

			Percent of
			First Mortgage
	Amount		Loan Originations
	(In thousands)
2005	$	156,492		7.6	%
2004		143,959		10.4
2003		530,408		24.5

We allow existing customers to modify their mortgage loans with the intent of maintaining customer relationships in periods of extensive refinancing due to a low interest rate environment. The modification allows adjustment of the existing interest rate to the currently offered fixed interest rate product with a similar or reduced term, for a fee, after past payment performance is reviewed. In general, all other terms and conditions of the existing mortgage remain the same. Modifications of existing mortgage loans were as follows:

	Mortgage Loans
	Modified
	(In thousands)
2005	$	39,254
2004		220,059
2003		1,458,836

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We offer a variety of adjustable-rate and fixed-rate one- to four-family mortgage loans with maximum loan-to-value ratios that depend on the type of property and the size of loan involved. The loan-to-value ratio is the loan amount divided by the appraised value of the property. The loan-to-value ratio is a measure commonly used by financial institutions to determine exposure to risk. Except for loans to low- and moderate-income home mortgage applicants, described below, loans on owner-occupied one- to four-family homes of up to $750,000 are generally subject to a maximum loan-to-value ratio of 80%. However, we make loans in amounts up to $400,000 with a 95% loan-to-value ratio and loans in excess of $400,000 and less than $500,000 with a 90% loan-to-value ratio if the borrower obtains private mortgage insurance. Under certain circumstances, where we deem appropriate, we will originate a first and second mortgage, up to a combined loan amount of $500,000, where the combined loan-to-value ratio is 90%. Under these circumstances, we will waive the private mortgage insurance requirements and receive a higher interest rate on the second mortgage loan than we would receive on a regular second mortgage loan. Loans in excess of $750,000 and up to $1.0 million are generally subject to a maximum 70% loan-to-value ratio. Loan-to-value ratios of 65% or less are generally required for one- to four-family loans in excess of $1.0 million and less than $1.5 million. Loans in excess of $1.5 million and less than $2.0 million are generally subject to a maximum loan-to-value ratio of 60%. Loans in excess of $2.0 million and up to $2.5 million are generally subject to a maximum loan-to-value ratio of 55%. Loans in excess of $2.5 million and up to $3.0 million are generally subject to a maximum loan-to-value ratio of 50%. At December 31, 2005, we had outstanding 433 originated mortgage loans with principal balances in excess of $750,000 with an aggregate balance of $408.5 million.

We currently offer fixed-rate mortgage loans in amounts generally up to $3.0 million with a maximum term of 40 years secured by one- to four-family residences. We price our interest rates on fixed-rate loans to be competitive in light of market conditions.

We also offer a variety of ARM loans secured by one- to four-family residential properties that initially adjust after three years, five years or ten years, in amounts generally up to $3.0 million. After the initial adjustment period, ARM loans adjust on an annual basis. The ARM loans that we currently originate have a maximum 40-year amortization period and are generally subject to the loan-to-value ratios described above. The interest rates on ARM loans fluctuate based upon a fixed spread above the monthly average yield on United States treasury securities, adjusted to a constant maturity of one year and generally are subject to a maximum increase of 2% per adjustment period and a limitation on the aggregate adjustment of 5% over the life of the loan. In the current rate environment, where the yield curve is relatively flat, the ARM loans we offer have initial interest rates below the fully indexed rate. As of December 31, 2005, the initial offered rate on these loans was 137.5 to 187.5 basis points below the current fully indexed rate. We originated $1.04 billion of one- to four-family ARM loans in 2005. At December 31, 2005, 17.3% of our one- to four-family mortgage loans consisted of ARM loans.

The origination and retention of ARM loans helps reduce exposure to increases in interest rates. However, ARM loans can pose credit risks different from the risks inherent in fixed-rate loans, primarily because as interest rates rise, the underlying payments of the borrower may rise, which increases the potential for default. The marketability of the underlying property also may be adversely affected. In order to minimize risks, we evaluate borrowers of ARM loans based on their ability to repay the loans at the higher of the initial interest rate or the fully indexed rate. In an effort to further reduce interest rate risk, we have not in the past, nor do we currently, originate ARM loans that provide for negative amortization of principal. Currently, we do not offer option ARM loans, where the borrower is given various payment options that could change payment flows to the Bank.

Early in 2005,we began to offer a limited menu of “interest-only” products. These loans are designed to appeal to our mortgage clients who wish to use their mortgage for tax deductibility purposes as well as a

Page 14

financial leveraging tool. These loans are originated as 5/1 or 10/1 ARM loans, with the interest only portion of the payment based upon the initial loan term, or offered on a 30-year fixed-rate loan, with interest-only payments for the first 10 years of the obligation. At the end of the initial 5- or 10-year interest-only period of these loans, the payment will adjust to include both principal and interest and will amortize over the remaining term so the loan will be repaid at the end of its original life. These loans are underwritten using more restrictive standards and generally are made with lower loan to value limitations imposed to help minimize any potential credit risk. These loans may involve higher risks compared to standard loan products since there is the potential for higher payments once the interest rate resets and the principle begins to amortize and they rely on a stable or rising housing market to maintain an acceptable loan-to-value ratio. However, we do not believe these programs will have a material adverse impact on our asset quality. As of December 31, 2005, we had $236.2 million of interest-only loans outstanding.

In addition to our full documentation loan program, we process some loans as limited documentation loans. We have originated these types of loans for over 15 years. Loans eligible for limited documentation processing are ARM loans and 10-, 15-, 20-, 30- and 40-year fixed-rate loans to owner-occupied primary and second home applicants. These loans are available in amounts up to 75% of the lower of the appraised value or purchase price of the property. Generally the maximum loan amount for limited documentation loans is $600,000. We do not charge borrowers additional fees for limited documentation loans. We require applicants for limited documentation loans to complete a FreddieMac/FannieMae loan application and request income, assets and credit history information from the borrower. Additionally, we obtain credit reports from outside vendors on all borrowers. We also look at other information to ascertain the credit history of the borrower. Applicants with delinquent credit histories usually do not qualify for the limited documentation processing, although relatively minor delinquencies that are adequately explained will not prohibit processing as a limited documentation loan. We reserve the right to verify income, asset information and other information where we believe circumstances warrant. We also allow certain borrowers to obtain mortgage loans without verification of income or assets. These loans are subject to somewhat higher interest rates than our regular products, and are limited to a maximum loan-to-value ratio of 65% on purchases and 60% on refinancing transactions.

Limited documentation and no verification loans may involve higher risks compared to loans with full documentation, as there is a greater opportunity for borrowers to falsify their income and ability to service their debt. We believe these programs have not had a material adverse effect on our asset quality. Unseasoned limited documentation and no verification loans are not as readily salable in the secondary market as are conforming whole loans. We do not believe that an inability to sell such loans will have a material adverse impact on our liquidity needs, because internally generated sources of liquidity are expected to be sufficient to meet our liquidity needs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and “— Sources of Funds.”

Since 1992, we have offered mortgage programs designed to address the credit needs of low- and moderate-income home mortgage applicants, first-time home buyers and low- and moderate-income home improvement loan applicants. We define low- and moderate-income applicants as borrowers residing in low- and moderate-income census tracts or households with income not greater than 80% of the median income of the Metropolitan Statistical Area in the county where the subject property is located. Our low- and moderate-income home improvement loans are discussed under “— Consumer Loans.” Among the features of the low- and moderate-income home mortgage and first-time home buyer’s programs are reduced rates, lower down payments, reduced fees and closing costs, and generally less restrictive requirements for qualification compared with our traditional one- to four-family mortgage loans. For instance, certain of these programs currently provide for loans with up to 95% loan-to-value ratios and

Page 15

rates which are 25 to 50 basis points lower than our traditional mortgage loans. In 2005, we originated $24.4 million in mortgage loans to home buyers under these programs.

Consumer Loans. At December 31, 2005, $235.6 million, or 1.6%, of our total loans consisted of consumer and other loans, primarily fixed-rate second mortgage loans and home equity credit lines. Consumer loans generally have shorter terms to maturity, which reduces our exposure to changes in interest rates. Consumer loans generally carry higher rates of interest than do one- to four-family residential mortgage loans. In addition, we believe that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities.

We offer fixed-rate second mortgage loans in amounts up to $200,000 secured by owner-occupied one- to four-family residences located in the State of New Jersey, and the portions of New York State served by our first mortgage loan products, for terms of up to 20 years. At December 31, 2005 these loans totaled $205.8 million, or 1.4% of total loans. The underwriting standards applicable to these loans generally are the same as one- to four-family first mortgage loans, except that the combined loan-to-value ratio, including the balance of the first mortgage, cannot exceed 80% of the appraised value of the property.

We also offer discounted fixed-rate second mortgage loans to low- and moderate-income borrowers in amounts up to $20,000. The borrower must use a portion of the loan proceeds for home improvements or the satisfaction of an existing obligation. The underwriting standards under this program are similar to those for standard second mortgage loans, except that the combined maximum loan-to-value ratio is 90%.

Our home equity credit line loans, which totaled $29.2 million, or 0.2% of total loans at December 31, 2005, are adjustable-rate loans secured by a second mortgage on owner-occupied one- to four-family residences located in the State of New Jersey and the portions of New York State served by our first mortgage loan products. Current interest rates on home equity credit lines are based on the “prime rate” as published in the “Money Rates” section of The Wall Street Journal (the “Index”) subject to certain interest rate limitations. Interest rates on home equity credit lines are adjusted monthly based upon changes in the Index. Minimum monthly principal payments on currently offered home equity lines of credit are based on 1/240th of the outstanding principal balance or $100 whichever is greater. The maximum credit line available is $200,000. The underwriting terms and procedures applicable to these loans are substantially the same as for our fixed-rate second mortgage loans.

Other loans totaled $662,000 at December 31, 2005 and consisted of collateralized passbook loans, overdraft protection loans, automobile loans, and unsecured personal loans. We no longer originate student loans, but offer guaranteed student loans through the SallieMae “Loan Referral Program.” As of December 31, 2005, we have suspended origination of unsecured personal loans and automobile loans.

Loan Approval Procedures and Authority. All first mortgage loans up to $600,000 must be approved by two officers in the Mortgage Origination Department. Loans in excess of $600,000 require one of the two officers approving the loan bear the title of either First Vice President-Mortgage Officer, Senior Vice President-Lending, Chief Operating Officer or Chief Executive Officer prior to the issuance of a commitment letter. The aggregate of all loans existing and/or committed by any one borrower shall not exceed $3,000,000 without the prior approval of the Board of Directors. Home equity credit lines and fixed-rate second mortgage loans in principal amounts of $25,000 or less are approved by one of our designated loan underwriters. Home equity loans in excess of $25,000, up to the $200,000 maximum, are approved by an underwriter and either our Consumer Loan Officer, Senior Vice President-Lending, Chief Executive Officer or Chief Operating Officer.

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Upon receipt of a completed loan application from a prospective borrower, we order a credit report and, except for loans originated as limited documentation or no income/no asset verification loans, we verify certain other information. If necessary, we obtain additional financial or credit-related information. We require an appraisal for all mortgage loans, except for some loans made to refinance existing mortgage loans. Appraisals may be performed by our in-house Appraisal Department or by licensed or certified third-party appraisal firms. Currently most appraisals are performed by third-party appraisers and are reviewed by our in-house Appraisal Department.

We require title insurance on all mortgage loans, except for home equity credit lines and fixed-rate second mortgage loans. For these loans, we require a property search detailing the current chain of title. We require borrowers to obtain hazard insurance and we may require borrowers to obtain flood insurance prior to closing. We require most borrowers to advance funds on a monthly basis together with each payment of principal and interest to a mortgage escrow account from which we make disbursements for items such as real estate taxes, flood insurance and private mortgage insurance premiums, if required. In a limited number of instances, at our discretion, we will waive the real estate tax escrow for the borrower, subject to an interest rate somewhat higher than our regular offered rate. Presently, we do not escrow for real estate taxes on properties located in the State of New York.

Asset Quality

One of our key operating objectives has been, and continues to be, to maintain a high level of asset quality. Through a variety of strategies, including, but not limited to, borrower workout arrangements and aggressive marketing of owned properties, we have been proactive in addressing problem and non-performing assets. These strategies, as well as our concentration on one- to four-family mortgage lending, our maintenance of sound credit standards for new loan originations and favorable real estate market conditions have resulted in relatively low delinquency ratios. This, in turn, has helped strengthen our financial condition.

Delinquent Loans and Foreclosed Assets. When a borrower fails to make required payments on a loan, we take a number of steps to induce the borrower to cure the delinquency and restore the loan to a current status. In the case of originated mortgage loans, our mortgage servicing department is responsible for collection procedures from the 15th day up to the 90th day of delinquency. Specific procedures include a late charge notice being sent at the time a payment is over 15 days past due. Telephone contact is attempted on approximately the 20th day of the month to avoid a 30-day delinquency. A second written notice is sent at the time the payment becomes 30 days past due.

We send additional letters if no contact is established by approximately the 45th day of delinquency. On the 60th day of delinquency, we send another letter followed by continued telephone contact. Between the 30th and the 60th day of delinquency, if telephone contact has not been established, an independent contractor makes a physical inspection of the property. When contact is made with the borrower at any time prior to foreclosure, we attempt to obtain full payment or work out a repayment schedule with the borrower in order to avoid foreclosure. It has been our experience that most loan delinquencies are cured within 90 days and no legal action is taken.

We send foreclosure notices when a loan is 90 days delinquent and we transfer the loan to the foreclosure/bankruptcy section for referral to legal counsel. The accrual of income on loans that do not carry private mortgage insurance or are not guaranteed by a federal agency is generally discontinued when interest or principal payments are 90 days in arrears. We commence foreclosure proceedings if the loan is not brought current between the 90th and 120th day of delinquency unless specific limited

Page 17

circumstances warrant an exception. The collection procedures for mortgage loans guaranteed by government agencies follow the collection guidelines outlined by those agencies.

We monitor delinquencies on our serviced loan portfolio, in aggregate, from reports sent to us by the servicers. Once all past due reports are received, we examine the delinquencies and contact appropriate servicer personnel to determine the collectability of the loans. We also use these reports to prepare our own monthly reports for management review. These summaries breakdown, by servicer, total principal and interest due, length of delinquency, as well as accounts in foreclosure and bankruptcy. We control, on a case-by-case basis, all accounts in foreclosure to confirm that the servicer has taken all proper steps to foreclose promptly if there is no other recourse. We also monitor whether mortgagors who filed bankruptcy are meeting their obligation to pay the mortgage debt in accordance with the terms of the bankruptcy petition.

The collection procedures for consumer and other loans include our sending periodic late notices to a borrower once a loan is past due. We attempt to make direct contact with a borrower once a loan becomes 30 days past due. Supervisory personnel in our Consumer Loan department review the delinquent loans and collection efforts on a regular basis. If collection activity is unsuccessful after 90 days, we may refer the matter to our legal counsel for further collection effort or charge-off the loan. Loans we deem to be uncollectible are proposed for charge-off. Charge-offs of consumer loans require the approval of our Consumer Loan Officer and either the Senior Vice President-Lending, our Chief Executive Officer or Chief Operating Officer.

We hold property foreclosed upon as foreclosed real estate. We carry foreclosed real estate at the lower of fair market value less estimated selling costs, or at cost. If a foreclosure action is commenced and the loan is not brought current, paid in full or refinanced before the foreclosure sale, we either sell the real property securing the loan by a foreclosure sale, or sell the property as soon thereafter as practicable.

Our policies require that management continuously monitor the status of the loan portfolio and report to the Board of Directors on a monthly basis. These reports include information on delinquent loans and foreclosed real estate.

Page 18

At December 31, 2005, 2004 and 2003, loans delinquent 60 days to 89 days and 90 days or more were as follows:

	2005										2004										2003
	60-89 Days					90 Days or More					60-89 Days					90 Days or More					60-89 Days					90 Days or More
			Principal					Principal					Principal					Principal					Principal					Principal
	No. of		Balance			No. of		Balance			No. of		Balance			No. of		Balance			No. of		Balance			No. of		Balance
	Loans		of Loans			Loans		of Loans			Loans		of Loans			Loans		of Loans			Loans		of Loans			Loans		of Loans
	(Dollars in thousands)
One- to four-family first mortgages		44	$	10,113			67	$	15,273			43	$	9,819			64	$	15,232			52	$	8,974			58	$	9,690
FHA/VA first mortgages		10		1,755			24		4,037			8		773			53		6,375			15		1,493			85		10,459
Multi-family and Commercial mortgages		—		—			—		—			1		76			—		—			—		—			—		—
Consumer and other loans		2		2			2		2			—		—			—		—			1		4			3		102
Total delinquent loans (60 days and over)		56	$	11,870			93	$	19,312			52	$	10,668			117	$	21,607			68	$	10,471			146	$	20,251
Delinquent loans (60 days and over) to total loans				0.08	%				0.13	%				0.09	%				0.19	%				0.12	%				0.23	%

Page 19

Non-performing assets, which include foreclosed real estate, net, non-accrual loans and accruing loans delinquent 90 days or more, were $20.4 million at December 31, 2005 compared with $22.5 million at December 31, 2004. Our $19.3 million in loans delinquent 90 days or more at December 31, 2005 were comprised primarily of 91 one- to four-family first mortgage loans (including VA first mortgage loans). At December 31, 2005, our largest loan delinquent 90 days or more had a balance of $658,000.

With the exception of first mortgage loans guaranteed by a federal agency or for which the borrower has obtained private mortgage insurance, we stop accruing income on loans when interest or principal payments are 90 days in arrears or earlier when the timely collectibility of such interest or principal is doubtful. We designate loans on which we stop accruing income as non-accrual loans and we reverse outstanding interest that we previously credited to income. We recognize income in the period that we collect it or when the ultimate collectibility of principal is no longer in doubt. We return a non-accrual loan to accrual status when factors indicating doubtful collection no longer exist. The accrual of income on VA loans is generally not discontinued as they are guaranteed by a federal agency.

Foreclosed real estate consists of property we acquired through foreclosure or deed in lieu of foreclosure. After foreclosure, foreclosed properties held for sale are carried at the lower of fair value minus estimated cost to sell, or at cost. A valuation allowance account is established through provisions charged to income, which results from the ongoing periodic valuations of foreclosed real estate properties. Fair market value is generally based on recent appraisals.

The following table presents information regarding non-accrual mortgage and consumer and other loans, accruing loans delinquent 90 days or more, and foreclosed real estate as of the dates indicated.

	At December 31,
	2005			2004			2003			2002			2001
	(Dollars in thousands)
Non-accrual first mortgage loans	$	9,649		$	6,057		$	4,401		$	6,053		$	8,177
Non-accrual consumer and other loans		2			—			102			19			85
Accruing loans delinquent 90 days or more		9,661			15,550			15,748			14,123			7,386
Total non-performing loans		19,312			21,607			20,251			20,195			15,648
Foreclosed real estate, net		1,040			878			1,002			1,276			250
Total non-performing assets	$	20,352		$	22,485		$	21,253		$	21,471		$	15,898
Non-performing loans to total loans		0.13	%		0.19	%		0.23	%		0.29	%		0.26	%
Non-performing assets to total assets		0.07			0.11			0.12			0.15			0.14

The total amount of interest income received during the year on non-accrual loans outstanding and additional interest income on non-accrual loans that would have been recognized if interest on all such loans had been recorded based upon original contract terms is immaterial. We are not committed to lend additional funds to borrowers on non-accrual status.

We define the population of impaired loans to be all non-accrual commercial real estate and multi-family loans. Impaired loans are individually assessed to determine whether a loan’s carrying value is not in excess of the fair value of the collateral or the present value of the loan’s cash flows. Smaller balance homogeneous loans that are collectively evaluated for impairment, such as residential mortgage loans and consumer loans, are specifically excluded from the impaired loan portfolio. We had no loans classified as

Page 20

impaired at December 31, 2005 and 2004. In addition, at December 31, 2005 and 2004, we had no loans classified as troubled debt restructurings, as defined in SFAS No. 15.

Allowance for Loan Losses. The following table presents the activity in our allowance for loan losses at or for the periods indicated.

	At or for the Year Ended December 31,
	2005			2004			2003			2002			2001
	(Dollars in thousands)
Balance at beginning of period	$	27,319		$	26,547		$	25,501		$	24,010		$	22,144
Provision for loan losses		65			790			900			1,500			1,875
Charge-offs:
First mortgage loans		(2	)		(11	)		(92	)		(3	)		(6	)
Consumer and other loans		(8	)		(9	)		(4	)		(10	)		(14	)
Total charge-offs		(10	)		(20	)		(96	)		(13	)		(20	)
Recoveries		19			2			242			4			11
Net recoveries (charge-offs)		9			(18	)		146			(9	)		(9	)
Balance at end of period	$	27,393		$	27,319		$	26,547		$	25,501		$	24,010
Allowance for loan losses to total loans		0.18	%		0.24	%		0.30	%		0.37	%		0.40	%
Allowance for loan losses to non-performing loans		141.84			126.44			131.09			126.27			153.44

The allowance for loan losses has been determined in accordance with U.S. generally accepted accounting principles, under which we are required to maintain adequate allowances for loan losses. We are responsible for the timely and periodic determination of the amount of the allowance required. We believe that our allowance for loan losses is adequate to cover specifically identifiable loan losses, as well as estimated losses inherent in our portfolio for which certain losses are probable but not specifically identifiable.

Our primary lending emphasis is the origination and purchase of one- to four-family first mortgage loans on residential properties and, to a lesser extent, second mortgage loans on one- to four-family residential properties resulting in a loan concentration in residential first mortgage loans at December 31, 2005. As a result of our lending practices, we also have a concentration of loans secured by real property located in New Jersey. Based on the composition of our loan portfolio and the growth in our loan portfolio, we believe the primary risks inherent in our portfolio are increases in interest rates, a decline in the economy, generally, and a decline in real estate market values. Any one or a combination of these events may adversely affect our loan portfolio resulting in increased delinquencies, loan losses and future levels of provisions. We consider it important to maintain the ratio of our allowance for loan losses to total loans at an acceptable level given current economic conditions, interest rates and the composition of our portfolio.

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Due to the nature of our loan portfolio, our evaluation of the adequacy of our allowance for loan losses is performed on a “pooled” basis. Each month we prepare a worksheet which categorizes the entire loan portfolio by certain risk characteristics such as loan type (one- to four-family, multi-family, etc.), loan source (originated or purchased) and payment status (i.e., current or number of days delinquent). Loans with known potential losses are categorized separately. We assign potential loss factors to the payment status categories on the basis of our assessment of the potential risk inherent in each loan type. These factors are periodically reviewed for appropriateness giving consideration to charge-off history and delinquency trends. We use this worksheet, as a tool, together with principal balances and delinquency reports, to evaluate the adequacy of the allowance for loan losses. Other key factors we consider in this process are current real estate market conditions in geographic areas where our loans are located, changes in the trend of non-performing loans, the current state of the local and national economy and loan portfolio growth.

We maintain the allowance for loan losses through provisions for loan losses that we charge to income. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. We establish the provision for loan losses after considering the results of our review of delinquency and charge-off trends, the allowance for loan loss worksheet, the amount of the allowance for loan losses in relation to the total loan balance, loan portfolio growth, U.S. generally accepted accounting principles and regulatory guidance. We have applied this process consistently and we have made minimal changes in the estimation methods and assumptions that we have used.

During 2005, we lowered the loss factors used in our worksheet on our first mortgage loans and our loan commitments to reflect the seasoning of the portfolio, and the charge-off and delinquency experience. We provided a minimal amount for loan losses during the first quarter of 2005, and did not provide for loan losses for the second through fourth quarter of 2005 reflecting recent low levels of charge-offs, the stability of the real estate market and the resulting stability of our overall loan quality. At December 31, 2005, the allowance for loan losses as a percentage of total loans was 0.18%, which, given the primary emphasis of our lending practices and the current market conditions, we consider to be at an acceptable level. The slight increase in the allowance for loan losses during 2005 was due to the minimal provision and a net recovery during 2005.

Although we believe that we have established and maintained the allowance for loan losses at adequate levels, additions may be necessary if future economic and other conditions differ substantially from the current operating environment. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant judgment and short-term change. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Comparison of Operating Results for the Years Ended December 31, 2005 and 2004— Provision for Loan Losses.”

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The following table presents our allocation of the allowance for loan losses by loan category and the percentage of loans in each category to total loans at December 31, 2005, 2004, 2003, 2002, and 2001.

	At December 31,
	2005					2004					2003					2002					2001
			Percentage					Percentage					Percentage					Percentage					Percentage
			of Loans in					of Loans in					of Loans in					of Loans in					of Loans in
			Category					Category					Category					Category					Category
			to Total					to Total					to Total					to Total					to Total
	Amount		Loans			Amount		Loans			Amount		Loans			Amount		Loans			Amount		Loans
	(Dollars in thousands)
First mortgage loans:
One- to four-family conventional	$	25,474		98.13	%	$	25,524		97.87	%	$	24,690		97.32	%	$	23,040		96.25	%	$	18,114		94.93	%
Other first mortgages		23		0.31			35		0.75			28		1.15			26		1.92			28		2.57
Total first mortgage loans		25,497		98.44			25,559		98.62			24,718		98.47			23,066		98.17			18,142		97.50
Consumer and other loans		1,774		1.56			1,305		1.38			1,152		1.53			1,097		1.83			1,247		2.50
Unallocated		122		—			455		—			677		—			1,338		—			4,621		—
Total allowance for loan losses	$	27,393		100.00	%	$	27,319		100.00	%	$	26,547		100.00	%	$	25,501		100.00	%	$	24,010		100.00	%

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Investment Activities

The Board of Directors reviews and approves our investment policy on an annual basis. The Chief Executive Officer, Chief Operating Officer and Investment Officer, as authorized by the Board of Directors, implement this policy. The Board of Directors reviews our investment activity on a monthly basis.

Our investment policy is designed primarily to manage the interest rate sensitivity of our assets and liabilities, to generate a favorable return without incurring undue interest rate and credit risk, to complement our lending activities and to provide and maintain liquidity within established guidelines. In establishing our investment strategies, we consider our interest rate sensitivity position, the types of securities to be held, liquidity and other factors. We have authority to invest in various types of assets, including U.S. Treasury obligations, securities of various federal agencies, mortgage-backed securities, certain time deposits of insured banks and savings institutions, certain bankers’ acceptances, repurchase agreements, loans of federal funds, and, subject to certain limits, corporate debt and equity securities, commercial paper and mutual funds.

Our investment policy currently does not authorize participation in hedging programs, options or futures transactions or interest rate swaps, and also prohibits the purchase of non-investment grade bonds. In the future we may amend our policy to allow us to engage in hedging transactions. Our investment policy also provides that we will not engage in any practice that the Federal Financial Institutions Examination Council considers being an unsuitable investment practice. In addition, the policy provides that we shall maintain a primary liquidity ratio, which consists of investments in cash, cash in banks, Federal funds sold, securities with remaining maturities of less than five years and adjustable-rate mortgage-backed securities repricing within one year, in an amount equal to at least 4% of total deposits and short-term borrowings. At December 31, 2005, our primary liquidity ratio was 38.0%. For information regarding the carrying values, yields and maturities of our investment securities and mortgage-backed securities, see “— Carrying Values, Rates and Maturities.”

Investment Securities. We classify investment securities as held to maturity or available for sale at the date of purchase. Held to maturity securities are reported at cost, adjusted for amortization of premium and accretion of discount. We have both the ability and positive intent to hold these securities to maturity. Available for sale securities are reported at fair market value. We currently have no securities classified as trading.

During 2005, we purchased $4.31 billion of investment securities compared with $2.11 billion during 2004, reflecting the investment of a portion of the net proceeds from our second-step conversion. Of the agency securities held as of December 31, 2005, $1.72 billion have step-up features where the interest rate is increased on scheduled future dates. These securities have call options that are generally effective prior to the initial rate increase but after an initial non-call period of three months to one year. The rate increases are at least one percent per adjustment and are fixed over the life of the security. Approximately $1.10 billion of these step-up notes will reset or mature within two years. Also included in investment securities as of December 31, 2005 were $1.42 billion of agency securities with initial periods to maturity of less than two years. The aggregate $2.52 billion of step-up notes and short-term securities maturing within two years assists in our management of interest rate risk.

Mortgage-backed Securities. All of our mortgage-backed securities are directly or indirectly insured or guaranteed by GNMA, FannieMae or FreddieMac. We classify mortgage-backed securities as held to maturity or available for sale at the date of purchase based on our assessment of our internal liquidity requirements. Held to maturity mortgage-backed securities are reported at cost, adjusted for amortization

Page 24

of premium and accretion of discount. We have both the ability and positive intent to hold these investments to maturity. Available for sale mortgage-backed securities are reported at fair market value. We currently have no mortgage-backed securities classified as trading.

At December 31, 2005, mortgage-backed securities classified as held to maturity totaled $4.39 billion, or 15.6% of total assets, while $2.52 billion, or 9.0% of total assets, were classified as available for sale. At December 31, 2005, the mortgage-backed securities portfolio had a weighted-average rate of 4.57% and a market value of approximately $6.81 billion. Of the mortgage-backed securities we held at December 31, 2005, $3.21 billion, or 46.4% of total mortgage-backed securities, had fixed rates and $3.70 billion, or 53.6% of total mortgage-backed securities, had adjustable rates. Our mortgage-backed securities portfolio includes real estate mortgage investment conduits (“REMICs”), which are securities derived by reallocating cash flows from mortgage pass-through securities or from pools of mortgage loans held by a trust. REMICs are a form of, and are often referred to as, collateralized mortgage obligations (“CMOs”). At December 31, 2005, we held $452.6 million of fixed-rate REMICs, which constituted 6.6% of our mortgage-backed securities portfolio. Mortgage-backed security purchases totaled $3.28 billion during 2005 compared with $2.20 billion during 2004. 93.1% of the mortgage-backed securities purchased during 2005 were variable-rate or hybrid instruments in order to manage our interest rate risk. Purchases of mortgage-backed securities may decline in the future to offset any significant increase in demand for one- to four-family mortgage loans.

Mortgage-backed securities generally yield less than the loans that underlie such securities because of the cost of payment guarantees or credit enhancements that reduce credit risk. However, mortgage-backed securities are more liquid than individual mortgage loans and may be used to collateralize certain borrowings. In general, mortgage-backed securities issued or guaranteed by GNMA, FannieMae and FreddieMac are weighted at no more than 20% for risk-based capital purposes, compared to the 50% risk-weighting assigned to most non-securitized residential mortgage loans.

While mortgage-backed securities carry a reduced credit risk as compared to whole loans, they remain subject to the risk of a fluctuating interest rate environment. Along with other factors, such as the geographic distribution of the underlying mortgage loans, changes in interest rates may alter the prepayment rate of those mortgage loans and affect both the prepayment rates and value of mortgage-backed securities. At December 31, 2005, we did not own any principal-only, REMIC residuals or other higher risk securities.

Page 25

The following table presents our investment securities activity for the periods indicated.

	For the Year Ended December 31,
	2005			2004			2003
				(In thousands)
Investment securities:
Carrying value at beginning of period	$	2,928,888		$	2,245,178		$	562,338
Purchases:
Held to maturity		300,000			1,769,643			—
Available for sale		4,008,680			337,306			3,089,474
Calls:
Held to maturity		(99,978	)		(436,670	)		(40	)
Available for sale		(100,007	)		(986,343	)		(1,332,072	)
Maturities:
Held to maturity		(65	)		(100	)		—
Available for sale		(1,500,000	)		—			(150	)
Sales:
Available for sale		—			—			(50,000	)
Equity securities		(10,000	)		—			(20	)
Premium amortization and discount accretion, net		16,295			32			(2,047	)
Change in unrealized gain or loss		(47,086	)		(158	)		(22,305	)
Net increase in investment securities		2,567,839			683,710			1,682,840
Carrying value at end of period	$	5,496,727		$	2,928,888		$	2,245,178

The following table presents our mortgage-backed securities activity for the periods indicated.

	For the Year Ended December 31,
	2005			2004			2003
				(In thousands)
Mortgage-backed securities:
Carrying value at beginning of period	$	5,376,629		$	5,422,701		$	6,126,161
Purchases:
Held to maturity		1,604,473			921,765			3,038,153
Available for sale		1,675,428			1,278,921			1,489,154
Principal payments:
Held to maturity		(960,630	)		(1,445,507	)		(3,387,605	)
Available for sale		(499,387	)		(282,901	)		(410,316	)
Sales:
Held to maturity		—			—			(64,590	)
Available for sale		(227,894	)		(499,067	)		(1,310,004	)
Premium amortization and discount accretion, net		(14,627	)		(14,138	)		(31,307	)
Change in unrealized gain or loss		(43,495	)		(5,145	)		(26,945	)
Net increase (decrease) in mortgage-backed securities		1,533,868			(46,072	)		(703,460	)
Carrying value at end of period	$	6,910,497		$	5,376,629		$	5,422,701

Page 26

The following table presents the composition of our money market investments, investment securities and mortgage-backed securities portfolios in dollar amount and in percentage of each investment type at the dates indicated. It also presents the coupon type for the mortgage-backed securities portfolio.

	At December 31,
			2005							2004							2003
	Carrying		Percent of			Fair		Carrying		Percent of			Fair		Carrying		Percent of			Fair
	Value		Total (1)			Value		Value		Total (1)			Value		Value		Total (1)			Value
								(Dollars in thousands)
Money market investments:
Federal funds sold	$	4,587		100.00	%	$	4,587	$	45,700		100.00	%	$	45,700	$	63,600		100.00	%	$	63,600
Investment securities:
Held to maturity:
United States government-sponsored agencies	$	1,533,050		27.89	%	$	1,506,865	$	1,333,018		45.51	%	$	1,325,054	$	—		—	%	$	—
Municipal bonds		1,166		0.02			1,190		1,231		0.04			1,282		1,366		0.06			1,443
Total held to maturity		1,534,216		27.91			1,508,055		1,334,249		45.55			1,326,336		1,366		0.06			1,443
Available for sale:
United States government-sponsored agencies		3,962,178		72.09			3,962,178		1,584,384		54.10			1,584,384		2,233,035		99.46			2,233,035
Corporate bonds		67		—			67		74		—			74		81		—			81
Equity securities		266		—			266		10,181		0.35			10,181		10,696		0.48			10,696
Total available for sale		3,962,511		72.09			3,962,511		1,594,639		54.45			1,594,639		2,243,812		99.94			2,243,812
Total investment securities	$	5,496,727		100.00	%	$	5,470,566	$	2,928,888		100.00	%	$	2,920,975	$	2,245,178		100.00	%	$	2,245,255
Mortgage-backed securities:
By issuer:
Held to maturity:
GNMA pass-through certificates	$	293,680		4.25	%	$	294,332	$	416,665		7.75	%	$	422,032	$	616,618		11.37	%	$	626,239
FNMA pass-through certificates		2,535,361		36.69			2,489,102		2,017,165		37.51			2,017,791		1,650,544		30.44			1,652,854
FHLMC pass-through certificates		1,108,195		16.04			1,082,564		561,095		10.44			554,341		439,793		8.11			433,097
FHLMC and FNMA REMICs		452,628		6.55			422,774		760,996		14.15			726,865		1,585,489		29.24			1,538,498
Total held to maturity		4,389,864		63.53			4,288,772		3,755,921		69.85			3,721,029		4,292,444		79.16			4,250,688
Available for sale:
GNMA pass-through certificates		1,700,132		24.60			1,700,132		503,839		9.37			503,839		336,458		6.20			336,458
FNMA pass-through certificates		666,485		9.64			666,485		743,380		13.83			743,380		493,383		9.10			493,383
FHLMC pass-through certificates		154,016		2.23			154,016		373,489		6.95			373,489		300,416		5.54			300,416
Available for sale		2,520,633		36.47			2,520,633		1,620,708		30.15			1,620,708		1,130,257		20.84			1,130,257
Total mortgage-backed securities	$	6,910,497		100.00	%	$	6,809,405	$	5,376,629		100.00	%	$	5,341,737	$	5,422,701		100.00	%	$	5,380,945
By coupon type:
Adjustable-rate	$	3,704,146		53.60	%	$	3,683,965	$	1,258,859		23.41		$	1,262,923	$	959,445		17.69	%	$	967,477
Fixed-rate		3,206,351		46.40			3,125,440		4,117,770		76.59			4,078,814		4,463,256		82.31			4,413,468
Total mortgage-backed securities	$	6,910,497		100.00	%	$	6,809,405	$	5,376,629		100.00	%	$	5,341,737	$	5,422,701		100.00	%	$	5,380,945
Total investment portfolio	$	12,411,811				$	12,284,558	$	8,351,217				$	8,308,412	$	7,731,479				$	7,689,800

(1) Based on carrying value for each investment type.

Page 27

Carrying Values, Rates and Maturities. The table below presents information regarding the carrying values, weighted average rates and contractual maturities of our money market investments, investment securities and mortgage-backed securities at December 31, 2005. Mortgage-backed securities are presented by issuer and by coupon type. Equity securities have been excluded from this table.

	At December 31, 2005
						More Than One Year					More Than Five Years
	One Year or Less					to Five Years					to Ten Years					More Than Ten Years					Total
			Weighted					Weighted					Weighted					Weighted					Weighted
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average
	Value		Rate			Value		Rate			Value		Rate			Value		Rate			Value		Rate
	(Dollars in thousands)
Money market investments:
Federal funds sold	$	4,587		4.25	%	$	—		—	%	$	—		—	%	$	—		—	%	$	4,587		4.25	%
Investment securities:
Held to maturity:
United States government-sponsored agencies	$	—		—		$	475,000		4.68		$	436,528		4.82		$	621,522		5.02		$	1,533,050		4.86
Municipal bonds		—		—			610		6.48			556		6.18			—		—			1,166		6.34
Total held to maturity		—		—			475,610		4.68			437,084		4.82			621,522		5.02			1,534,216		4.86
Available for sale:
United States government-sponsored agencies		496,647		3.87			2,901,169		4.18			564,362		4.49			—		—			3,962,178		4.19
Corporate bonds		5		6.43			62		5.59			—		—			—		—			67		5.65
Total available for sale		496,652		3.87			2,901,231		4.18			564,362		4.49			—		—			3,962,245		4.19
Total investment securities	$	496,652		3.87		$	3,376,841		4.25			1,001,446		4.63		$	621,522		5.02		$	5,496,461		4.37
Mortgage-backed securities:
By issuer:
Held to maturity:
GNMA pass-through certificates	$	80		7.37		$	1,813		8.63		$	129		11.36		$	291,658		4.40		$	293,680		4.43
FNMA pass-through certificates		—		—			8,943		6.46			2,425		7.04			2,523,993		4.85			2,535,361		4.86
FHLMC pass-through certificates		1		6.72			1,648		7.87			2,303		6.71			1,104,243		4.59			1,108,195		4.60
FHLMC, FNMA and REMICs		—		—			—		—			—		—			452,628		4.40			452,628		4.40
Total held to maturity		81		7.36			12,404		6.96			4,857		7.00			4,372,522		4.71			4,389,864		4.72
Available for sale:
GNMA pass-through certificates		—		—			—		—			—		—			1,700,132		4.01			1,700,132		4.01
FNMA pass-through certificates		—		—			—		—			—		—			666,485		4.86			666,485		4.86
FHLMC pass-through certificates		—		—			—		—			—		—			154,016		5.02			154,016		5.02
Total available for sale		—		—			—		—			—		—			2,520,633		4.30			2,520,633		4.30
Total mortgage-backed securities	$	81		7.36		$	12,404		6.96		$	4,857		7.00		$	6,893,155		4.56		$	6,910,497		4.57
By coupon type:
Adjustable-rate	$	—		—		$	—		—		$	387		4.73		$	3,703,759		4.38		$	3,704,146		4.38
Fixed-rate		81		7.36			12,404		6.96			4,470		7.19			3,189,396		4.78			3,206,351		4.79
Total mortgage-backed securities	$	81		7.36		$	12,404		6.96		$	4,857		7.00		$	6,893,155		4.56		$	6,910,497		4.57
Total investment portfolio	$	501,320		3.87		$	3,389,245		4.26		$	1,006,303		4.64		$	7,514,677		4.60		$	12,411,545		4.48

Page 28

Sources of Funds

General. Customer deposits, borrowed funds, scheduled amortization and prepayments of mortgage loans and mortgage-backed securities, maturities and calls of investment securities and funds provided by operations are our primary sources of funds for use in lending, investing and for other general purposes. Retail deposits generated through our branch network and longer-term wholesale borrowings are our primary means of funding our growth initiatives. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Deposits. We offer a variety of deposit accounts having a range of interest rates and terms. We currently offer passbook and statement savings accounts, interest-bearing transaction accounts including our High Value Checking product and traditional NOW accounts, checking accounts, money market accounts and time deposits. We also offer IRA accounts and qualified retirement plans.

Deposit flows are influenced significantly by general and local economic conditions, changes in prevailing market interest rates, pricing of deposits and competition. In determining our deposit rates, we consider local competition, U.S. Treasury securities offerings and the rates charged on other sources of funds. Our deposits are primarily obtained from market areas surrounding our offices. We rely primarily on paying competitive rates, providing strong customer service and maintaining long-standing relationships with customers to attract and retain these deposits. We do not use brokers to obtain deposits and currently do not accept new deposits via the internet. During the second-half of 2005, we experienced significant competitive pressure and extreme pricing of short-term deposits in the New York metropolitan area. We believed the price of borrowed funds was more economical and reflective of current rates than the price of deposits and, therefore, priced our deposits at a competitive, but prudent rate.

Total deposits decreased $94.0 million during 2005 reflecting the consolidation of the $145.8 million deposit of Hudson City, MHC, which was added to our capital as part of the second-step conversion, and the use of approximately $229.9 million of customer deposits to purchase stock in our second-step conversion. Total deposit funding provided by core deposits (defined as non-time deposit accounts) represented approximately 45.8% of total deposits as of December 31, 2005 compared with 54.1% as of December 31, 2004. The balance of core deposits decreased $995.1 million during 2005 as customers shifted deposits to higher costing short-term time deposits. The aggregate balance in our time deposit accounts was $6.17 billion as of December 31, 2005 compared with $5.27 billion as of December 31, 2004. Time deposits with remaining maturities of less than one year amounted to $4.98 billion at December 31, 2005 compared with $3.71 billion at December 31, 2004, reflecting the shift of customer deposits to short-term time deposits.

The balance in our High Value Checking account product, introduced in April 2002, was $3.52 billion, representing 67.5% of core deposits at December 31, 2005. We view our interest-bearing High Value Checking account as an attractive alternative to cash management accounts offered by brokerage firms. This account offers unlimited check writing, no charge on-line banking, no-charge bill payment and debit card availability as part of the product, and pays an interest rate generally above competitive market rates. We also offer a Business Money Market Account that has similar features and benefits to our High Value Checking account. This product, in conjunction with our regular business checking account, provides small business customers in our market area competitive returns and operating flexibility. Early in 2006 we introduced a high yielding money market checking account product, which we view as a complementary alternative investment to our High Value Checking account. This new product will pay a slightly higher rate than our High Value Checking account with fewer features.

Page 29

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Analysis of Net Interest Income” for information relating to the average balances and costs of our deposit accounts for the years ended December 31, 2005, 2004 and 2003.

The following table presents our deposit activity for the periods indicated:

	For the Year Ended December 31,
	2005			2004			2003
	(Dollars in thousands)
Total deposits at beginning of period	$	11,477,300		$	10,453,780		$	9,138,629
Net (decrease) increase in deposits		(387,736	)		808,707			1,105,812
Interest credited, net penalties		293,736			214,813			209,339
Total deposits at end of period	$	11,383,300		$	11,477,300		$	10,453,780
Net (decrease) increase	$	(94,000	)	$	1,023,520		$	1,315,151
Percent (decrease) increase		(0.82	)%		9.79	%		14.39	%

     At December 31, 2005, we had $1.38 billion in time deposits with balances of $100,000 and over maturing as follows:

Maturity Period	Amount
	(In thousands)
Three months or less	$	426,930
Over three months through six months		275,766
Over six months through 12 months		418,344
Over 12 months		257,300
Total	$	1,378,340

Page 30

The following table presents the distribution of our deposit accounts at the dates indicated by dollar amount and percent of portfolio, and the weighted average nominal interest rate on each category of deposits.

	At December 31,
	2005								2004								2003
						Weighted								Weighted								Weighted
			Percent			average					Percent			average					Percent			average
			of total			nominal					of total			nominal					of total			nominal
	Amount		deposits			rate			Amount		deposits			rate			Amount		deposits			rate
	(Dollars in thousands)
Savings	$	808,325		7.10	%		0.98	%	$	931,783		8.12	%		0.98	%	$	945,595		9.05	%		0.98	%
Interest-bearing transaction		3,616,644		31.77			3.19			4,290,099		37.38			2.46			2,808,901		26.87			2.09
Money market		342,021		3.00			1.14			564,700		4.92			0.96			623,811		5.97			0.96
Noninterest-bearing demand		442,042		3.88			—			417,502		3.64			—			396,495		3.79			—
Total		5,209,032		45.75			2.44			6,204,084		54.06			1.94			4,774,802		45.68			1.55
Time deposits:
Time deposits $100,000 and over		1,378,340		12.11			3.61			886,079		7.72			2.45			914,639		8.75			2.19
Time deposits less than $100,000 with original maturities of:
Three months or less		199,280		1.75			3.17			339,354		2.96			1.37			483,460		4.62			1.37
Over three months to twelve months		1,338,588		11.76			3.72			864,250		7.53			1.64			1,166,713		11.16			1.52
Over twelve months to twenty-four months		1,541,166		13.54			3.36			1,368,900		11.93			2.07			1,634,702		15.64			2.18
Over twenty-four months to thirty-six months		495,670		4.35			3.17			650,289		5.67			2.81			562,678		5.38			2.94
Over thirty-six months to forty-eight months		294,538		2.59			3.47			283,747		2.47			3.40			149,801		1.43			3.48
Over forty-eight months to sixty months		50,680		0.45			3.72			48,692		0.42			3.76			27,594		0.26			3.70
Over sixty months		149,724		1.32			3.93			135,160		1.18			3.87			70,850		0.68			3.79
Qualified retirement plans		726,282		6.38			3.49			696,745		6.06			2.65			668,541		6.40			2.57
Total time deposits		6,174,268		54.25			3.51			5,273,216		45.94			2.32			5,678,978		54.32			2.16
Total deposits	$	11,383,300		100.00	%		3.02		$	11,477,300		100.00	%		2.11		$	10,453,780		100.00	%		1.88

Page 31

The following table presents, by rate category, the amount of our time deposit accounts outstanding at December 31, 2005, 2004 and 2003.

	At December 31,
	2005		2004		2003
	(In thousands)
Time deposit accounts:
2.00% or less	$	56,745	$	2,318,278	$	3,025,305
2.01% to 2.50%		297,237		1,345,286		968,757
2.51% to 3.00%		462,856		511,037		813,199
3.01% to 3.50%		2,246,361		557,706		501,926
3.51% to 4.00%		2,154,784		370,029		256,672
4.01% and over		956,285		170,880		113,119
Total	$	6,174,268	$	5,273,216	$	5,678,978

The following table presents, by rate category, the remaining period to maturity of time deposit accounts outstanding as of December 31, 2005.

	Period to Maturity from December 31, 2005
	Within		Over three		Over six		Over one		Over two		Over
	three		to six		months to		to two		to three		three
	months		months		one year		years		years		years		Total
	(In thousands)
Time deposit accounts:
2.00% or less	$	46,075	$	6,027	$	3,587	$	1,049	$	6	$	1	$	56,745
2.01% to 2.50%		195,831		94,553		6,817		36		—		—		297,237
2.51% to 3.00%		185,781		110,361		144,357		22,321		—		36		462,856
3.01% to 3.50%		1,005,984		512,068		533,424		141,041		53,835		9		2,246,361
3.51% to 4.00%		411,204		543,216		542,307		481,993		93,489		82,575		2,154,784
4.01% and over		2,386		3,151		633,722		58,652		52,865		205,509		956,285
Total	$	1,847,261	$	1,269,376	$	1,864,214	$	705,092	$	200,195	$	288,130	$	6,174,268

Borrowings. Hudson City enters into sales of securities under agreements to repurchase with selected brokers and the Federal Home Loan Bank of New York (“FHLB”). These agreements are recorded as financing transactions as Hudson City maintains effective control over the transferred securities. The dollar amount of the securities underlying the agreements continues to be carried in Hudson City’s securities portfolio. The obligations to repurchase the securities are reported as a liability in the consolidated statements of financial condition. The securities underlying the agreements are delivered to the party with whom each transaction is executed. They agree to resell to Hudson City the same securities at the maturity or call of the agreement. Hudson City retains the right of substitution of the underlying securities throughout the terms of the agreements.

Hudson City has also obtained advances from the FHLB, which are generally secured by a blanket lien against our mortgage portfolio. Borrowings with the FHLB are generally limited to approximately twenty times the amount of FHLB stock owned.

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Borrowed funds at December 31 are summarized as follows:

	2005					2004
			Weighted					Weighted
			Average					Average
	Principal		Rate			Principal		Rate
	(Dollars in thousands)
Securities sold under agreements to repurchase:
FHLB	$	850,000		4.96	%	$	950,000		4.73	%
Other brokers		7,050,000		3.45			4,350,000		3.11
Total securities sold under agreements to repurchase		7,900,000		3.61			5,300,000		3.40
Advances from the FHLB		3,450,000		3.95			1,850,000		3.81
Total borrowed funds	$	11,350,000		3.72		$	7,150,000		3.51

At December 31, 2005, borrowed funds had scheduled maturities and potential call dates as indicated below. Substantially all of our borrowed funds are callable at the discretion of the issuer. These call features are generally quarterly, after an initial non-call period of three months to five years from the date of borrowing.

	Borrowings by Scheduled				Borrowings by Next
	Maturity Date				Potential Call Date
			Weighted				Weighted
			Average				Average
Year	Principal		Rate		Principal		Rate
			(Dollars in thousands)
2006	$	—		— %	$	4,175,000		3.77	%
2007		—		—		2,650,000		3.27
2008		—		—		2,975,000		3.87
2009		—		—		900,000		3.81
2010		300,000		5.68		350,000		4.01
2011		775,000		4.79		300,000		4.89
2012		1,450,000		4.06		—		—
2013		850,000		3.81		—		—
2014		2,850,000		2.84		—		—
2015		5,125,000		3.82		—		—
Total	$	11,350,000		3.72	$	11,350,000		3.72

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The amortized cost and fair value of the underlying securities used as collateral for securities sold under agreements to repurchase, the average balances and the maximum outstanding at any month-end at or for the years ended December 31, 2005 and 2004 are as follows:

	At or for the year ended
	December 31,
	2005			2004				2003
	(In thousands)
Amortized cost of collateral:
United States government-sponsored agency securities	$	2,849,947		$	2,030,978		$	615,806
Mortgage-backed securities		5,224,648			3,198,768			2,369,058
REMICs		356,579			455,598			495,074
Total amortized cost of collateral	$	8,431,174		$	5,685,344		$	3,479,938
Fair value of collateral:
United States government-sponsored agency securities	$	2,778,462		$	2,008,710		$	604,397
Mortgage-backed securities		5,119,225			3,188,386			2,387,457
REMICs		332,532			434,249			478,192
Total fair value of collateral	$	8,230,219		$	5,631,345		$	3,470,046
Average balance of outstanding repurchase agreements during the year	$	6,447,560		$	4,182,197		$	2,253,025
Maximum balance of outstanding repurchase agreements at any month-end during the year	$	7,900,000		$	5,300,000		$	3,200,000
Average cost of securities sold under agreements to repurchase		3.52	%		3.41	%		4.26	%

The average balances of our advances from the FHLB during 2005 and 2004 were $2.47 billion and $1.92 billion, respectively, and the maximum FHLB advances outstanding during 2005 and 2004 were $3.45 billion and $1.95 billion, respectively.

Subsidiaries

Hudson City Savings has two wholly owned and consolidated subsidiaries: HudCiti Service Corporation and HC Value Broker Services, Inc. HudCiti Service Corporation, which qualifies as a New Jersey investment company, has one wholly owned and consolidated subsidiary: Hudson City Preferred Funding Corporation. Hudson City Preferred Funding qualifies as a real estate investment trust, pursuant to the Internal Revenue Code of 1986, as amended, and had $6.22 billion of residential mortgage loans outstanding at December 31, 2005.

HC Value Broker Services, Inc., whose primary operating activity is the referral of insurance applications, formed a strategic alliance that jointly markets insurance products with Savings Bank Life Insurance of Massachusetts. HC Value Broker Services offers customers access to a variety of life insurance products.

Personnel

As of December 31, 2005, we had 1,019 full-time employees and 131 part-time employees. Employees are not represented by a collective bargaining unit and we consider our relationship with our employees to be good.

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REGULATION OF HUDSON CITY SAVINGS BANK AND HUDSON CITY BANCORP

General

Hudson City Savings has been a federally chartered savings bank since January 1, 2004 when it converted from a New Jersey chartered savings bank. Its deposit accounts are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”) under the Bank Insurance Fund (“BIF”). Under its charter, Hudson City Savings is subject to extensive regulation, examination and supervision by the Office of Thrift Supervision as its chartering agency, and by the FDIC as the deposit insurer. Hudson City Bancorp is a unitary savings and loan holding company regulated, examined and supervised by the Office of Thrift Supervision. Each of Hudson City Bancorp and Hudson City Savings must file reports with the Office of Thrift Supervision concerning its activities and financial condition, and must obtain regulatory approval from the Office of Thrift Supervision prior to entering into certain transactions, such as mergers with, or acquisitions of, other depository institutions. The Office of Thrift Supervision will conduct periodic examinations to assess Hudson City Bancorp and Hudson City Savings Bank’s compliance with various regulatory requirements. The Office of Thrift Supervision has primary enforcement responsibility over federally chartered savings banks and has substantial discretion to impose enforcement action on an institution that fails to comply with applicable regulatory requirements, particularly with respect to its capital requirements. In addition, the FDIC has the authority to recommend to the Director of the Office of Thrift Supervision that enforcement action be taken with respect to a particular federally chartered savings bank and, if action is not taken by the Director, the FDIC has authority to take such action under certain circumstances.

This regulation and supervision establishes a comprehensive framework of activities in which a federal savings bank can engage and is intended primarily for the protection of the deposit insurance fund and depositors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in such laws and regulations, whether by the Office of Thrift Supervision, the FDIC or through legislation, could have a material adverse impact on Hudson City Bancorp and Hudson City Savings and their operations and stockholders.

Federally Chartered Savings Bank Regulation

Activity Powers. Hudson City Savings derives its lending, investment and other activity powers primarily from the Home Owners’ Loan Act, as amended, commonly referred to as HOLA, and the regulations of the Office of Thrift Supervision thereunder. Under these laws and regulations, federal savings banks, including Hudson City Savings, generally may invest in:

• real estate mortgages;

• consumer and commercial loans;

• certain types of debt securities; and

• certain other assets.

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Hudson City Savings may also establish service corporations that may engage in activities not otherwise permissible for Hudson City Savings, including certain real estate equity investments and securities and insurance brokerage activities. These investment powers are subject to various limitations, including (1) a prohibition against the acquisition of any corporate debt security that is not rated in one of the four highest rating categories, (2) a limit of 400% of an association’s capital on the aggregate amount of loans secured by non-residential real estate property, (3) a limit of 20% of an association’s assets on commercial loans, with the amount of commercial loans in excess of 10% of assets being limited to small business loans, (4) a limit of 35% of an association’s assets on the aggregate amount of consumer loans and acquisitions of certain debt securities, (5) a limit of 5% of assets on non-conforming loans (loans in excess of the specific limitations of HOLA), and (6) a limit of the greater of 5% of assets or an association’s capital on certain construction loans made for the purpose of financing what is or is expected to become residential property.

Capital Requirements. The Office of Thrift Supervision capital regulations require federally chartered savings banks to meet three minimum capital ratios: a 1.5% tangible capital ratio, a 4% (3% if the savings bank received the highest rating on its most recent examination) leverage (core capital) ratio and an 8% total risk-based capital ratio. In assessing an institution’s capital adequacy, the Office of Thrift Supervision takes into consideration not only these numeric factors but also qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where necessary. Hudson City Savings, as a matter of prudent management, targets as its goal the maintenance of capital ratios which exceed these minimum requirements and that are consistent with Hudson City Savings’ risk profile. At December 31, 2005, Hudson City Savings exceeded each of its capital requirements as shown in the following table:

						OTS Requirements
						Minimum Capital					For Classification as
	Bank Actual					Adequacy					Well-Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(Dollars in thousands)
December 31, 2005
Tangible capital	$	4,129,937		14.68	%	$	422,069		1.50	%		n/a		n/a
Leverage (core) capital		4,129,937		14.68			1,125,518		4.00		$	1,406,897		5.00	%
Total-risk-based capital		4,157,330		41.31			805,040		8.00			1,006,300		10.00
December 31, 2004
Tangible capital	$	1,282,665		6.36	%	$	302,325		1.50	%		n/a		n/a
Leverage (core) capital		1,282,665		6.36			806,200		4.00		$	1,007,750		5.00	%
Total-risk-based capital		1,309,984		17.49			599,199		8.00			748,998		10.00

The Federal Deposit Insurance Corporation Improvement Act, or FDICIA, requires that the Office of Thrift Supervision and other federal banking agencies revise their risk-based capital standards, with appropriate transition rules, to ensure that they take into account interest rate risk, or IRR, concentration of risk and the risks of non-traditional activities. The Office of Thrift Supervision adopted regulations, effective January 1, 1994, that set forth the methodology for calculating an IRR component to be incorporated into the Office of Thrift Supervision risk-based capital regulations. On May 10, 2002, the Office of Thrift Supervision adopted an amendment to its capital regulations which eliminated the IRR component of the risk-based capital requirement.

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Pursuant to the amendment, the Office of Thrift Supervision will continue to monitor the IRR of individual institutions through the Office of Thrift Supervision requirements for IRR management, the ability of the Office of Thrift Supervision to impose individual minimum capital requirements on institutions that exhibit a high degree of IRR, and the requirements of Thrift Bulletin 13a, which provides guidance on the management of IRR and the responsibility of boards of directors in that area.

The Office of Thrift Supervision continues to monitor the IRR of individual institutions through analysis of the change in net portfolio value, or NPV. NPV is defined as the net present value of the expected future cash flows of an entity’s assets and liabilities and, therefore, hypothetically represents the value of an institution’s net worth. The Office of Thrift Supervision has also used this NPV analysis as part of its evaluation of certain applications or notices submitted by thrift institutions. The Office of Thrift Supervision, through its general oversight of the safety and soundness of savings associations, retains the right to impose minimum capital requirements on individual institutions to the extent the institution is not in compliance with certain written guidelines established by the Office of Thrift Supervision regarding NPV analysis. The Office of Thrift Supervision has not imposed any such requirements on Hudson City Savings.

Safety and Soundness Standards. Pursuant to the requirements of FDICIA, as amended by the Riegle Community Development and Regulatory Improvement Act of 1994, each federal banking agency, including the Office of Thrift Supervision, has adopted guidelines establishing general standards relating to internal controls, information and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings and compensation, fees and benefits. In general, the guidelines require, among other things, appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines. The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director, or principal stockholder.

In addition, the Office of Thrift Supervision adopted regulations to require a savings bank that is given notice by the Office of Thrift Supervision that it is not satisfying any of such safety and soundness standards to submit a compliance plan to the Office of Thrift Supervision. If, after being so notified, a savings bank fails to submit an acceptable compliance plan or fails in any material respect to implement an accepted compliance plan, the Office of Thrift Supervision may issue an order directing corrective and other actions of the types to which a significantly undercapitalized institution is subject under the “prompt corrective action” provisions of FDICIA. If a savings bank fails to comply with such an order, the Office of Thrift Supervision may seek to enforce such an order in judicial proceedings and to impose civil monetary penalties.

Prompt Corrective Action. FDICIA also established a system of prompt corrective action to resolve the problems of undercapitalized institutions. Under this system, the bank regulators are required to take certain, and authorized to take other, supervisory actions against undercapitalized institutions, based upon five categories of capitalization which FDICIA created: “well-capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically capitalized.” The severity of the action authorized or required to be taken under the prompt corrective action regulations increases as a bank’s capital decreases within the three undercapitalized categories. All banks are prohibited from paying dividends or other capital distributions or paying management fees to any controlling person if, following such distribution, the bank would be undercapitalized. The Office of Thrift Supervision is required to monitor closely the condition of an undercapitalized bank and to restrict the growth of its assets.

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An undercapitalized bank is required to file a capital restoration plan within 45 days of the date the bank receives notices that it is within any of the three undercapitalized categories, and the plan must be guaranteed by any parent holding company. The aggregate liability of a parent holding company is limited to the lesser of:

(1) an amount equal to five percent of the bank’s total assets at the time it became “undercapitalized; and

(2) the amount that is necessary (or would have been necessary) to bring the bank into compliance with all capital standards applicable with respect to such bank as of the time it fails to comply with the plan.

If a bank fails to submit an acceptable plan, it is treated as if it were “significantly undercapitalized.” Banks that are significantly or critically undercapitalized are subject to a wider range of regulatory requirements and restrictions. Under the Office of Thrift Supervision regulations, generally, a federally chartered savings bank is treated as well capitalized if its total risk-based capital ratio is 10% or greater, its Tier 1 risk-based capital ratio is 6% or greater, and its leverage ratio is 5% or greater, and it is not subject to any order or directive by the Office of Thrift Supervision to meet a specific capital level. As of December 31, 2005, Hudson City Savings was considered “well capitalized” by the Office of Thrift Supervision.

Insurance Activities. Hudson City Savings is generally permitted to engage in certain activities through its subsidiaries. However, the federal banking agencies have adopted regulations prohibiting depository institutions from conditioning the extension of credit to individuals upon either the purchase of an insurance product or annuity or an agreement by the consumer not to purchase an insurance product or annuity from an entity that is not affiliated with the depository institution. The regulations also require prior disclosure of this prohibition to potential insurance product or annuity customers.

Deposit Insurance. Pursuant to FDICIA, the FDIC established a system for setting deposit insurance premiums based upon the risks a particular bank or savings association posed to its deposit insurance funds. Under the risk-based deposit insurance assessment system, the FDIC assigns an institution to one of three capital categories based on the institution’s financial information as of its most recent quarterly financial report filed with the applicable bank regulatory agency prior to the commencement of the assessment period. The three capital categories are (1) well-capitalized, (2) adequately capitalized and (3) undercapitalized. The FDIC also assigns an institution to one of three supervisory subcategories within each capital group. The FDIC also assigns an institution to a supervisory subgroup based on a supervisory evaluation provided to the FDIC by the institution’s primary federal regulator and information that the FDIC determines to be relevant to the institution’s financial condition and the risk posed to the deposit insurance funds.

An institution’s assessment rate depends on the capital category and supervisory category to which it is assigned. Under the final risk-based assessment system, there are nine assessment risk classifications (i.e., combinations of capital groups and supervisory subgroups) to which different assessment rates are applied. Assessment rates for deposit insurance currently range from 0 basis points to 27 basis points. The capital and supervisory subgroup to which an institution is assigned by the FDIC is confidential and may not be disclosed. The assessment rates for our BIF assessable deposits are zero basis points. If the FDIC determines that assessment rates should be increased, institutions in all risk categories could be affected. The FDIC has exercised this authority several times in the past and could raise insurance assessment rates in the future.

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Under the Deposit Insurance Funds Act of 1996 (“Funds Act”), the assessment base for the payments on the bonds (“FICO bonds”) issued in the late 1980’s by the Financing Corporation to recapitalize the now defunct Federal Savings and Loan Insurance Corporation was expanded to include, beginning January 1, 1997, the deposits of BIF-insured institutions, such as Hudson City Savings. Our total expense in 2005 for the assessment for deposit insurance and the FICO payments was $1.7 million.

Under the FDIA, the FDIC may terminate the insurance of an institution’s deposits upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC. The management of Hudson City Savings does not know of any practice, condition or violation that might lead to termination of deposit insurance.

Transactions with Affiliates of Hudson City Savings. Hudson City Savings is subject to the affiliate and insider transaction rules set forth in Sections 23A, 23B, 22(g) and 22(h) of the Federal Reserve Act (“FRA”), Regulation W issued by the Federal Reserve Board (“FRB”), as well as additional limitations as adopted by the Director of the Office of Thrift Supervision. Office of Thrift Supervision regulations regarding transactions with affiliates conform to Regulation W. These provisions, among other things, prohibit or limit a savings bank from extending credit to, or entering into certain transactions with, its affiliates (which for Hudson City Savings would include Hudson City Bancorp) and principal stockholders, directors and executive officers of Hudson City Savings.

In addition, the Office of Thrift Supervision regulations include additional restrictions on savings banks under Section 11 of HOLA, including provisions prohibiting a savings bank from making a loan to an affiliate that is engaged in non-bank holding company activities and provisions prohibiting a savings association from purchasing or investing in securities issued by an affiliate that is not a subsidiary. Office of Thrift Supervision regulations also include certain specific exemptions from these prohibitions. The FRB and the Office of Thrift Supervision require each depository institution that is subject to Sections 23A and 23B to implement policies and procedures to ensure compliance with Regulation W and the Office of Thrift Supervision regulations regarding transactions with affiliates.

Section 402 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) prohibits the extension of personal loans to directors and executive officers of issuers (as defined in Sarbanes-Oxley). The prohibition, however, does not apply to mortgages advanced by an insured depository institution, such as Hudson City Savings, that are subject to the insider lending restrictions of Section 22(h) of the FRA.

Privacy Standards. Hudson City Savings is subject to Office of Thrift Supervision regulations implementing the privacy protection provisions of the Gramm-Leach-Bliley Act. These regulations require Hudson City Savings to disclose its privacy policy, including identifying with whom it shares “non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter.

The regulations also require Hudson City Savings to provide its customers with initial and annual notices that accurately reflect its privacy policies and practices. In addition, Hudson City Savings is required to provide its customers with the ability to “opt-out” of having Hudson City Savings share their non-public personal information with unaffiliated third parties before they can disclose such information, subject to certain exceptions. The implementation of these regulations did not have a material adverse effect on Hudson City Savings.

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Hudson City Savings is subject to regulatory guidelines establishing standards for safeguarding customer information. These regulations implement certain provisions of Gramm-Leach. The guidelines describe the agencies’ expectations for the creation, implementation and maintenance of an information security program, which would include administrative, technical and physical safeguards appropriate to the size and complexity of the institution and the nature and scope of its activities. The standards set forth in the guidelines are intended to ensure the security and confidentiality of customer records and information, protect against any anticipated threats or hazards to the security or integrity of such records and protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer.

Community Reinvestment Act. Under the Community Reinvestment Act (“CRA”), as implemented by the Office of Thrift Supervision regulations, any federally chartered savings bank, including Hudson City Savings, has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community. The CRA requires the Office of Thrift Supervision, in connection with its examination of a federally chartered savings bank, to assess the depository institution’s record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications by such institution.

Current CRA regulations rate an institution based on its actual performance in meeting community needs. In particular, the evaluation system focuses on three tests:

• a lending test, to evaluate the institution’s record of making loans in its service areas;

• an investment test, to evaluate the institution’s record of investing in community development projects, affordable housing, and programs benefiting low or moderate income individuals and businesses; and

• a service test, to evaluate the institution’s delivery of services through its branches, ATMs and other offices.

The CRA also requires all institutions to make public disclosure of their CRA ratings. Hudson City Savings has received a “satisfactory” rating in its most recent CRA examination. The federal banking agencies adopted regulations implementing the requirements under Gramm-Leach that insured depository institutions publicly disclose certain agreements that are in fulfillment of the CRA. Hudson City Savings has no such agreements in place at this time.

Loans to One Borrower. Under the HOLA, savings banks are generally subject to the national bank limits on loans to one borrower. Generally, savings banks may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of the institution’s unimpaired capital and unimpaired surplus. Additional amounts may be loaned, not in excess of 10% of unimpaired capital and unimpaired surplus, if such loans or extensions of credit are secured by readily-marketable collateral. Hudson City Savings is in compliance with applicable loans to one borrower limitations. At December 31, 2005, Hudson City Savings’ largest aggregate amount of loans to one borrower totaled $2.9 million. All of the loans for the largest borrower were performing in accordance with their terms and the borrower had no affiliation with Hudson City Savings.

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Qualified Thrift Lender (“QTL”) Test. The HOLA requires federal savings banks to meet a QTL test. Under the QTL test, a savings bank is required to maintain at least 65% of its “portfolio assets” (total assets less (1) specified liquid assets up to 20% of total assets, (2) intangibles, including goodwill, and (3) the value of property used to conduct business) in certain “qualified thrift investments” (primarily residential mortgages and related investments, including certain mortgage-backed securities, credit card loans, student loans, and small business loans) on a monthly basis during at least 9 out of every 12 months. As of December 31, 2005, Hudson City Savings held 79.5% of its portfolio assets in qualified thrift investments and had more than 75% of its portfolio assets in qualified thrift investments for each of the 12 months ending December 31, 2005. Therefore, Hudson City Savings qualified under the QTL test.

A savings bank that fails the QTL test and does not convert to a bank charter generally will be prohibited from: (1) engaging in any new activity not permissible for a national bank, (2) paying dividends not permissible under national bank regulations, and (3) establishing any new branch office in a location not permissible for a national bank in the institution’s home state. In addition, if the institution does not requalify under the QTL test within three years after failing the test, the institution would be prohibited from engaging in any activity not permissible for a national bank and would have to repay any outstanding advances from the FHLB as promptly as possible.

Limitation on Capital Distributions. The Office of Thrift Supervision regulations impose limitations upon certain capital distributions by federal savings banks, such as certain cash dividends, payments to repurchase or otherwise acquire its shares, payments to shareholders of another institution in a cash out merger and other distributions charged against capital.

The Office of Thrift Supervision regulates all capital distributions by Hudson City Savings directly or indirectly to Hudson City Bancorp, including dividend payments. As the subsidiary of a savings and loan holding company, Hudson City Savings currently must file a notice with the Office of Thrift Supervision at least 30 days prior to each capital distribution. However, if the total amount of all capital distributions (including each proposed capital distribution) for the applicable calendar year exceeds net income for that year to date plus the retained net income for the preceding two years, then Hudson City Savings must file an application to receive the approval of the Office of Thrift Supervision for a proposed capital distribution.

Hudson City Savings may not pay dividends to Hudson City Bancorp if, after paying those dividends, it would fail to meet the required minimum levels under risk-based capital guidelines and the minimum leverage and tangible capital ratio requirements or the Office of Thrift Supervision notified Hudson City Savings Bank that it was in need of more than normal supervision. Under the Federal Deposit Insurance Act, or FDIA, an insured depository institution such as Hudson City Savings is prohibited from making capital distributions, including the payment of dividends, if, after making such distribution, the institution would become “undercapitalized” (as such term is used in the FDIA). Payment of dividends by Hudson City Savings also may be restricted at any time at the discretion of the appropriate regulator if it deems the payment to constitute an unsafe and unsound banking practice.

In addition, Hudson City Savings may not declare or pay cash dividends on or repurchase any of its shares of common stock if the effect thereof would cause stockholders’ equity to be reduced below the amounts required for the liquidation account which was established as a result of Hudson City Savings’ conversion to stock holding company structure.

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Liquidity. Hudson City Savings maintains sufficient liquidity to ensure its safe and sound operation, in accordance with Office of Thrift Supervision regulations.

Assessments. The Office of Thrift Supervision charges assessments to recover the cost of examining federal savings banks and their affiliates. These assessments are based on three components: the size of the institution on which the basic assessment is based; the institution’s supervisory condition, which results in an additional assessment based on a percentage of the basic assessment for any savings institution with a composite rating of 3, 4 or 5 in its most recent safety and soundness examination; and the complexity of the institution’s operations, which results in an additional assessment based on a percentage of the basic assessment for any savings institution that managed over $1.00 billion in trust assets, serviced for others loans aggregating more than $1.00 billion, or had certain off-balance sheet assets aggregating more than $1.00 billion. Effective July 1, 2004, the Office of Thrift Supervision adopted a final rule replacing examination fees for savings and loan holding companies with semi-annual assessments. The Office of Thrift Supervision phased in the assessments at a rate of 25% of the first semiannual assessment on July 1, 2004, 50% of the second semiannual assessment on January 1, 2005 and 100% of the third semiannual assessment on July 1, 2005. Hudson City Savings paid an assessment of $2.6 million in 2005.

Branching. The Office of Thrift Supervision regulations authorize federally chartered savings banks to branch nationwide to the extent allowed by federal statute. This permits federal savings and loan associations with interstate networks to more easily diversify their loan portfolios and lines of business geographically. Office of Thrift Supervision authority preempts any state law purporting to regulate branching by federal savings associations.

Anti-Money Laundering and Customer Identification

Hudson City Savings is subject to Office of Thrift Supervision regulations implementing the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA PATRIOT Act. The USA PATRIOT Act gives the federal government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements. By way of amendments to the Bank Secrecy Act, Title III of the USA PATRIOT takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions, including banks, thrifts, brokers, dealers, credit unions, money transfer agents and parties registered under the Commodity Exchange Act.

Title III of the USA PATRIOT Act and the related Office of Thrift Supervision regulations impose the following requirements with respect to financial institutions:

• Establishment of anti-money laundering programs.

• Establishment of a program specifying procedures for obtaining identifying information from customers seeking to open new accounts, including verifying the identity of customers within a reasonable period of time.

• Establishment of enhanced due diligence policies, procedures and controls designed to detect and report money-laundering.

• Prohibitions on correspondent accounts for foreign shell banks and compliance with record keeping obligations with respect to correspondent accounts of foreign banks.

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• Bank regulators are directed to consider a holding company’s effectiveness in combating money laundering when ruling on Federal Reserve Act and Bank Merger Act applications.

Federal Home Loan Bank System

Hudson City Savings is a member of the FHLB system, which consists of twelve regional FHLBs, each subject to supervision and regulation by the Federal Housing Finance Board, or FHFB. The FHLB provides a central credit facility primarily for member thrift institutions as well as other entities involved in home mortgage lending. It is funded primarily from proceeds derived from the sale of consolidated obligations of the FHLBs. It makes loans to members (i.e., advances) in accordance with policies and procedures, including collateral requirements, established by the respective boards of directors of the FHLBs. These policies and procedures are subject to the regulation and oversight of the FHFB. All long-term advances are required to provide funds for residential home financing. The FHFB has also established standards of community or investment service that members must meet to maintain access to such long-term advances.

Effective December 1, 2005, the FHLB-NY implemented a new capital plan. The new capital plan resulted in an automatic exchange of shares of FHLB-NY stock held by members for shares of FHLB-NY Class B stock and changed the member’s minimum stock investment requirements. The Class B stock has a par value of $100 per share and is redeemable upon five years notice, subject to certain conditions. The Class B stock has two subclasses, one for membership stock purchase requirements and the other for activity-based stock purchase requirements. The minimum stock investment requirement in the FHLB-NY Class B stock is the sum of the membership stock purchase requirement, determined on an annual basis at the end of each calendar year, and the activity-based stock purchase requirement, determined on a daily basis. For Hudson City Savings, the membership stock purchase requirement is 0.2% of the Mortgage-Related Assets, as defined by the FHLB-NY, which consists principally of residential mortgage loans and mortgage-backed securities, including CMOs and REMICs, held by Hudson City Savings. The activity-based stock purchase requirement for Hudson City Savings is equal to the sum of: (1) 4.5% of outstanding borrowing from the FHLB-NY; (2) 4.5% of the outstanding principal balance of Acquired Member Assets, as defined by the FHLB-NY, and delivery commitments for Acquired Member Assets; (3) a specified dollar amount related to certain off-balance sheet items, which for Hudson City Savings is zero; and (4) a specified percentage ranging from 0 to 5% of the carrying value on the FHLB-NY’s balance sheet of derivative contracts between the FHLB-NY and its members, which for Hudson City Savings is also zero. The FHLB-NY can adjust the specified percentages and dollar amount from time to time within the ranges established by the FHLB-NY capital plan. Prior to December 1, 2005, Hudson City Savings was required to acquire and hold shares of capital stock in the FHLB-NY in an amount at least equal to 1% of the aggregate principal amount of its unpaid residential mortgage loans and similar obligations at the beginning of each year or 5% of its outstanding borrowings from the FHLB-NY, whichever was greater. At December 31, 2005, the amount of FHLB stock held by us satisfies the requirements of this new plan.

Federal Reserve System

FRB regulations require federally chartered savings banks to maintain non-interest-earning cash reserves against their transaction accounts (primarily NOW and demand deposit accounts). A reserve of 3% is to be maintained against aggregate transaction accounts between $7 million and $47.6 million (subject to adjustment by the FRB) plus a reserve of 10% (subject to adjustment by the FRB between 8% and 14%) against that portion of total transaction accounts in excess of $47.6 million. The first $7 million of otherwise reservable balances (subject to adjustment by the FRB) is exempt from the reserve requirements. Hudson City Savings is in compliance with the foregoing requirements. Because required

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reserves must be maintained in the form of either vault cash, a non-interest-bearing account at a Federal Reserve Bank or a pass-through account as defined by the FRB, the effect of this reserve requirement is to reduce Hudson City Savings’ interest-earning assets. FHLB system members are also authorized to borrow from the Federal Reserve “discount window,” but FRB regulations require institutions to exhaust all FHLB sources before borrowing from a Federal Reserve Bank.

Federal Holding Company Regulation

Hudson City Bancorp is a unitary savings and loan holding company within the meaning of the HOLA. As such, Hudson City Bancorp is registered with the Office of Thrift Supervision and is subject to the Office of Thrift Supervision regulation, examination, supervision and reporting requirements. In addition, the Office of Thrift Supervision has enforcement authority over Hudson City Bancorp and its savings bank subsidiary. Among other things, this authority permits the Office of Thrift Supervision to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings bank.

Restrictions Applicable to New Savings and Loan Holding Companies. Gramm-Leach also restricts the powers of new unitary savings and loan holding companies. Under Gramm-Leach, all unitary savings and loan holding companies formed after May 4, 1999, such as Hudson City Bancorp, are limited to financially related activities permissible for bank holding companies, as defined under Gramm-Leach. Accordingly, Hudson City Bancorp’s activities are restricted to:

• furnishing or performing management services for a savings institution subsidiary of such holding company;

• conducting an insurance agency or escrow business;

• holding, managing, or liquidating assets owned or acquired from a savings institution subsidiary of such company;

• holding or managing properties used or occupied by a savings institution subsidiary of such company;

• acting as trustee under a deed of trust;

• any other activity (i) that the FRB, by regulation, has determined to be permissible for bank holding companies under Section 4(c) of the Bank Holding Company Act of 1956 (the “BHC Act”), unless the Director of the Office of Thrift Supervision, by regulation, prohibits or limits any such activity for savings and loan holding companies, or (ii) in which multiple savings and loan holding companies were authorized by regulation to directly engage in on March 5, 1987;

• purchasing, holding, or disposing of stock acquired in connection with a qualified stock issuance if the purchase of such stock by such holding company is approved by the Director of the Office of Thrift Supervision; and

• any activity permissible for financial holding companies under section 4(k) of the BHC Act.

Permissible activities which are deemed to be financial in nature or incidental thereto under section 4(k) of the BHC Act include:

• lending, exchanging, transferring, investing for others, or safeguarding money or securities;

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• insurance activities or providing and issuing annuities, and acting as principal, agent, or broker;

• financial, investment, or economic advisory services;

• issuing or selling instruments representing interests in pools of assets that a bank is permitted to hold directly;

• underwriting, dealing in, or making a market in securities;

• activities previously determined by the FRB to be closely related to banking;

• activities that bank holding companies are permitted to engage in outside of the U.S.; and

• portfolio investments made by an insurance company.

In addition, Hudson City Bancorp cannot be acquired or acquire a company unless the acquirer or target, as applicable, is engaged solely in financial activities.

Restrictions Applicable to All Savings and Loan Holding Companies. Federal law prohibits a savings and loan holding company, including Hudson City Bancorp, directly or indirectly, from acquiring:

• control (as defined under HOLA) of another savings institution (or a holding company parent) without prior Office of Thrift Supervision approval;

• through merger, consolidation, or purchase of assets, another savings institution or a holding company thereof, or acquiring all or substantially all of the assets of such institution (or a holding company) without prior Office of Thrift Supervision approval; or

• control of any depository institution not insured by the FDIC (except through a merger with and into the holding company’s savings institution subsidiary that is approved by the Office of Thrift Supervision).

A savings and loan holding company may not acquire as a separate subsidiary an insured institution that has a principal office outside of the state where the principal office of its subsidiary institution is located, except:

• in the case of certain emergency acquisitions approved by the FDIC;

• if such holding company controls a savings institution subsidiary that operated a home or branch office in such additional state as of March 5, 1987; or

• if the laws of the state in which the savings institution to be acquired is located specifically authorize a savings institution chartered by that state to be acquired by a savings institution chartered by the state where the acquiring savings institution or savings and loan holding company is located or by a holding company that controls such a state chartered association.

If the savings institution subsidiary of a federal mutual holding company fails to meet the QTL test set forth in Section 10(m) of the HOLA and regulations of the Office of Thrift Supervision, the holding company must register with the FRB as a bank holding company under the BHC Act within one year of the savings institution’s failure to so qualify.

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The HOLA prohibits a savings and loan holding company (directly or indirectly, or through one or more subsidiaries) from acquiring another savings association or holding company thereof without prior written approval of the Office of Thrift Supervision; acquiring or retaining, with certain exceptions, more than 5% of a non-subsidiary savings association, a non-subsidiary holding company, or a non-subsidiary company engaged in activities other than those permitted by the HOLA; or acquiring or retaining control of a depository institution that is not federally insured. In evaluating applications by holding companies to acquire savings associations, the Office of Thrift Supervision must consider the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on the risk to the insurance funds, the convenience and needs of the community and competitive factors.

Federal Securities Law

Hudson City Bancorp’s securities are registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. As such, Hudson City Bancorp is subject to the information, proxy solicitation, insider trading, and other requirements and restrictions of the Securities Exchange Act of 1934.

Delaware Corporation Law

Hudson City Bancorp is incorporated under the laws of the State of Delaware, and is therefore subject to regulation by the State of Delaware. In addition, the rights of Hudson City Bancorp’s shareholders are governed by the Delaware General Corporation Law.

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TAXATION

Federal

General. The following discussion is intended only as a summary and does not purport to be a comprehensive description of the tax rules applicable to Hudson City Savings or Hudson City Bancorp. For federal income tax purposes, Hudson City Savings reports its income on the basis of a taxable year ending December 31, using the accrual method of accounting, and is generally subject to federal income taxation in the same manner as other corporations. Hudson City Savings and Hudson City Bancorp constitute an affiliated group of corporations and are therefore eligible to report their income on a consolidated basis. Hudson City Savings is not currently under audit by the Internal Revenue Service and has not been audited by the IRS during the past five years.

Bad Debt Reserves. Pursuant to the Small Business Job Protection Act of 1996, Hudson City Savings is no longer permitted to use the reserve method of accounting for bad debts, and has recaptured (taken into income) over a multi-year period a portion of the balance of its tax bad debt reserve as of December 31, 1995. Since Hudson City Savings had already provided a deferred tax liability equal to the amount of such recapture, the recapture did not adversely impact Hudson City Savings’ financial condition or results of operations.

Distributions. To the extent that Hudson City Savings makes “non-dividend distributions” to stockholders, such distributions will be considered to result in distributions from Hudson City Savings’ unrecaptured tax bad debt reserve “base year reserve,” i.e., its reserve as of December 31, 1987, to the extent thereof and then from its supplemental reserve for losses on loans, and an amount based on the amount distributed will be included in Hudson City Savings’ taxable income. Non-dividend distributions include distributions in excess of Hudson City Savings’ current and accumulated earnings and profits, distributions in redemption of stock and distributions in partial or complete liquidation. However, dividends paid out of Hudson City Savings’ current or accumulated earnings and profits, as calculated for federal income tax purposes, will not constitute non-dividend distributions and, therefore, will not be included in Hudson City Savings’ income.

The amount of additional taxable income created from a non-dividend distribution is equal to the lesser of Hudson City Savings’ base year reserve and supplemental reserve for losses on loans or an amount that, when reduced by the tax attributable to the income, is equal to the amount of the distribution. Thus, in certain situations, approximately one and one-half times the non-dividend distribution would be included in gross income for federal income tax purposes, assuming a 35% federal corporate income tax rate. Hudson City Savings does not intend to pay dividends that would result in the recapture of any portion of its bad debt reserve.

Corporate Alternative Minimum Tax. In addition to the regular corporate income tax, corporations generally are subject to an alternative minimum tax, or AMT, in an amount equal to 20% of alternative minimum taxable income, to the extent the AMT exceeds the corporation’s regular income tax. The AMT is available as a credit against future regular income tax. We do not expect to be subject to the AMT.

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Elimination of Dividends; Dividends Received Deduction. Hudson City Bancorp may exclude from its income 100% of dividends received from Hudson City Savings because Hudson City Savings is a member of the affiliated group of corporations of which Hudson City Bancorp is the parent.

State

New Jersey State Taxation. Hudson City Savings files New Jersey Corporate Business income tax returns. Generally, the income of savings institutions in New Jersey, which is calculated based on federal taxable income, subject to certain adjustments, is subject to New Jersey tax at a rate of 9.00%. Savings institutions must also calculate, as part of their corporate tax return, an Alternative Minimum Assessment (“AMA”), which for Hudson City Savings is based on New Jersey gross receipts. Hudson City Savings must calculate its corporate business tax and the AMA, then pay the higher amount. In future years, if the corporate business tax is greater than the AMA paid in prior years, Hudson City Savings may apply the prepaid AMA against its corporate business taxes (up to 50% of the corporate business tax, subject to certain limitations). Hudson City Savings is not currently under audit with respect to its New Jersey income tax returns and Hudson City Savings’ state tax returns have not been audited for the past five years.

Hudson City Bancorp is required to file a New Jersey income tax return and will generally be subject to a state income tax at a 9% rate. However, if Hudson City Bancorp meets certain requirements, it may be eligible to elect to be taxed as a New Jersey Investment Company, which would allow it to be taxed at a rate of 3.60%. Further, investment companies are not subject to the AMA. If Hudson City Bancorp does not qualify as an investment company, it would be subject to taxation at the higher of the 9% corporate business rate on taxable income or the AMA.

Delaware State Taxation. As a Delaware holding company not earning income in Delaware, Hudson City Bancorp is exempt from Delaware corporate income tax but is required to file annual returns and pay annual fees and a franchise tax to the State of Delaware.

New York State Taxation. New York State imposes an annual franchise tax on banking corporations, based on net income allocable to New York State, at a rate of 7.5%. If, however, the application of an alternative minimum tax (based on taxable assets allocated to New York, “alternative” net income, or a flat minimum fee) results in a greater tax, an alternative minimum tax will be imposed. In addition, New York State imposes a tax surcharge of 17.0% of the New York State Franchise Tax, calculated using an annual franchise tax rate of 9.0% (which represents the 2000 annual franchise tax rate), allocable to business activities carried on in the Metropolitan Commuter Transportation District. These taxes apply to Hudson City Savings.

New York City Taxation. Hudson City Savings is also subject to the New York City Financial Corporation Tax calculated, subject to a New York City income and expense allocation, on a similar basis as the New York State Franchise Tax. A significant portion of Hudson City Savings’ entire net income for New York City purposes is allocated outside the jurisdiction which has the effect of significantly reducing the New York City taxable income of Hudson City Savings.

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Item 1A. Risk Factors.

Changes In Interest Rates Could Adversely Affect Our Results of Operations And Financial Condition. Our earnings may be adversely impacted by an increase in interest rates because the majority of our interest-earning assets are long-term, fixed rate mortgage-related assets that will not reprice as long-term interest rates increase while a majority of our interest bearing liabilities are expected to reprice as interest rates increase. At December 31, 2005, 82.8% of our loans with contractual maturities of greater than one year had fixed rates of interest, and 99.5% of our total loans had contractual maturities of five or more years. Overall, at December 31, 2005, 85.5% of our total interest-earning assets had contractual maturities of more than five years. Conversely, our interest-bearing liabilities generally have much shorter contractual maturities. A significant portion of our deposits, including the $3.62 billion in our interest-bearing transaction accounts as of December 31, 2005, have no contractual maturities and are likely to reprice quickly as short-term interest rates increase. In addition, 80.7% of our certificates of deposit will mature within one year and 36.8% of our borrowed funds may be called by the lenders within one year. Therefore, in an increasing rate environment, our cost of funds is expected to increase more rapidly than the yields earned on our loan portfolio and securities portfolio. An increasing rate environment is expected to cause a narrowing of our net interest rate spread and a decrease in our earnings.

We anticipate that short-term interest rates will continue to increase in 2006, as it is anticipated the Federal Open Market Committee will continue to increase the Fed funds rate at its current measured pace in the near term. We also anticipate long-term interest rates will increase at a similar rate, thus maintaining the flat market yield curve. The result of this potential market interest rate scenario, where the market yield curve remains flat, would have a negative impact on our results of operations and our net interest margin as the yields on our interest-earning assets and the costs of our interest-bearing liabilities will increase at a similar rate, thus maintaining the current narrow spread. In addition, our interest-bearing liabilities will reset to the current market interest rates faster than our interest-earning assets as our interest-bearing liabilities generally have shorter periods to reset than our interest-earning assets and our originated and purchased interest-earning assets generally have commitment periods of up to 90 days.

The impact of changes in interest rates on our interest income is generally felt in later periods than the impact on our interest expense due to the timing of the recording on the balance sheet of our interest-earning assets and interest-bearing liabilities. The recording of interest-earning assets on the balance sheet generally lags the current market due to normal delays of up to three months between the time we commit to originate or purchase a mortgage loan and the time we fund the loan, while the recording of interest-bearing liabilities on the balance sheet generally reflects the current market rates. This timing difference is expected to have an adverse impact on our net interest income in a rising interest rate environment. Additionally, if both short- and long-term interest rates increase by the same amount, the resulting environment is also likely to have a negative impact on our results of operations, as our interest-bearing liabilities will reset to the current market interest rate faster than our interest-earning assets.

Also impacting our net interest income and net interest rate spread is the level of prepayment activity on our mortgage-related assets. Mortgage prepayment rates will vary due to a number of factors, including the regional economy where the mortgage loan or the underlying mortgages of the mortgage-backed security were originated, seasonal factors and demographic variables. However, the major factors affecting prepayment rates are the prevailing market interest rates, related mortgage refinancing opportunities and competition. Generally, the level of prepayment activity directly affects the yield earned on those assets, as the payments received on the interest-earning assets will be reinvested at the prevailing market interest rate. In a rising interest rate environment, prepayment rates tend to decrease and,

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therefore, the yield earned on our existing mortgage-related assets will remain constant instead of increasing. This would adversely affect our net interest margin and, therefore, our net interest income.

Office of Thrift Supervision Thrift Bulletin 13a provides guidance on the management of interest rate risk and the responsibility of boards of directors in that area. Under Thrift Bulletin 13a, the Office of Thrift Supervision monitors the interest rate risk of institutions through analysis of the change in net portfolio value, or NPV. NPV is defined as the net present value of the expected future cash flows of an entity’s assets and liabilities and, therefore, hypothetically represents the value of an institution’s net worth. The Office of Thrift Supervision, through its general oversight of the safety and soundness of savings associations, retains the right to impose minimum capital requirements on individual institutions to the extent the institution is not in compliance with certain written guidelines established by the Office of Thrift Supervision regarding NPV analysis. In March 2005, the Board of Directors of Hudson City Savings revised its internal interest rate risk policy to narrow the permissible range for the change in NPV under certain interest rate shock scenarios. Although $3.00 billion of the proceeds from the second-step conversion were contributed to Hudson City Savings, improving its interest rate risk position as measured by Thrift Bulletin 13a, we expect the Office of Thrift Supervision will continue to closely monitor the interest rate risk of Hudson City Savings.

Our Plans To Increase The Level Of Our Adjustable-Rate Assets May Be Difficult To Implement And May Decrease Our Profitability. One component of our plans for reducing our interest rate risk is to grow our variable-rate and short-term investments at an equivalent rate as our fixed-rate investments. While we believe that in the anticipated rising interest rate environment market demand for variable-rate assets will increase and pricing terms will therefore become more favorable to us, there is no assurance that this will be the case. If we are unable to originate or purchase variable-rate assets at favorable rates, we will either not be able to execute successfully this component of our interest rate risk reduction strategy or our profitability may decrease, or both.

Because We Compete Primarily On The Basis Of The Interest Rates We Offer Depositors And The Terms Of Loans We Offer Borrowers, Our Margins Could Decrease If We Were Required To Increase Deposit Rates Or Lower Interest Rates On Loans In Response To Competitive Pressures. We face intense competition both in making loans and attracting deposits. The New Jersey and metropolitan New York market areas have a high concentration of financial institutions, many of which are branches of large money center and regional banks. Some of these competitors have significantly greater resources than we do and may offer services that we do not provide such as trust and investment services. Customers who seek “one stop shopping” may be drawn to these institutions.

We compete primarily on the basis of the rates we pay on deposits and the rates and other terms we charge on the mortgage loans we originate or purchase, as well as the quality of our customer service. Our competition for loans comes principally from mortgage banking firms, commercial banks, savings institutions, credit unions, finance companies, mutual funds, insurance companies and brokerage and investment banking firms operating locally and elsewhere. Some of the largest mortgage originators in the country have significant operations in New Jersey. In addition, we purchase a significant volume of mortgage loans in the wholesale markets, and our competition in these markets also includes many other types of institutional investors located throughout the country. Price competition for loans might result in us originating fewer loans or earning less on our loans.

Our most direct competition for deposits comes from commercial banks, savings banks, savings and loan associations and credit unions. There are large money-center and regional financial institutions operating throughout our market area, and we also face strong competition from other community-based financial institutions. As interest rates continue to rise, we would expect to face additional significant competition

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for deposits from short-term money market funds and other corporate and government securities funds and from brokerage firms and insurance companies, in addition to the money center and regional financial institutions. To the extent the equity markets continue to improve, we would also expect significant competition from brokerage firms and mutual funds. Price competition for deposits might result in us attracting or retaining fewer deposits or paying more on our deposits.

We May Fail to Realize the Anticipated Benefits of the Merger with Sound Federal and May Not Receive Required Regulatory Approvals or Such Approvals, if Received, May Be Subject to Adverse Regulatory Conditions. The success of the merger with Sound Federal will depend on, among other things, our ability to realize anticipated cost savings and to combine our business and Sound Federal’s business in a manner that does not materially disrupt our existing customer relationships or those of Sound Federal or result in decreased revenues from any loss of customers. If we are not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

Hudson City and Sound Federal have operated and, until completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of our or Sound Federal’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the merger.

Before the merger may be completed, the approval of the Office of Thrift Supervision must be obtained. We cannot guarantee that we will receive the approval of the Office of Thrift Supervision. In addition, the Office of Thrift Supervision may impose conditions on the completion of the merger or require changes in the terms of the merger. These conditions or changes could have the effect of delaying the merger or imposing additional costs or limiting the possible revenues of the combined company.

We May Not Be Able To Successfully Implement Our Plans For Growth. Since our conversion to the mutual holding company form of organization in 1999, we have experienced rapid and significant growth. Our assets have grown from $8.52 billion at December 31, 1999 to $28.08 billion at December 31, 2005. We acquired a significant amount of capital from the second-step conversion, which we plan to use to continue implementing our growth strategy, primarily by building our core banking business through internal growth and increased de novo branching. In addition, we will consider expansion opportunities through the acquisition of branches and other financial institutions. There can be no assurance, however, that we will continue to experience such rapid growth, or any growth, in the future. Significant changes in interest rates or the competition we face may make it difficult to attract the level of customer deposits needed to fund our internal growth at projected levels. In addition, we may have difficulty finding suitable sites for de novo branches. Our expansion plans may result in us opening branches in geographic markets in which we have no previous experience, and, therefore, our ability to grow effectively in those markets will be dependent on our ability to identify and retain management personnel familiar with the new markets. Furthermore, any future acquisitions of branches or of other financial institutions would present many challenges associated with integrating merged institutions and expanding operations. We cannot assure you that we will be able to adequately and profitably implement our possible future growth or that we will not have to incur additional expenditures beyond current projections to support such growth.

The Geographic Concentration Of Our Loan Portfolio And Lending Activities Makes Us Vulnerable To A Downturn In The Local Economy. Originating loans secured by residential real estate is our primary business. Our financial results may be adversely affected by changes in prevailing economic conditions, either nationally or in our local New Jersey and metropolitan New York market areas,

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including decreases in real estate values, adverse employment conditions, the monetary and fiscal policies of the federal and state government and other significant external events. As of December 31, 2005, approximately 63% of our loan portfolio was secured by properties located in New Jersey, New York and Connecticut. Decreases in real estate values could adversely affect the value of property used as collateral for our loans. Adverse changes in the economy may also have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings. In addition, if poor economic conditions result in decreased demand for real estate loans, our profits may decrease because our alternative investments may earn less income for us than real estate loans.

Changes In The Regulation Of Financial Services Companies Could Adversely Affect Our Business. Proposals for further regulation of the financial services industry are continually being introduced in Congress and various state legislatures. The agencies regulating the financial services industry also periodically adopt changes to their regulations. It is possible that one or more legislative proposals may be adopted or regulatory changes may be made that would have an adverse effect on our business.

Our Stock Benefit Plans Will Increase Our Costs, Which Will Reduce Our Profitability And Stockholders’ Equity. During the third quarter of 2005, our employee stock ownership plan purchased approximately 15.7 million shares of common stock at an aggregate cost of $189.3 million, adding to the previous 22.3 million shares purchased following our initial conversion in 1999. Under current accounting standards, we will record annual employee stock ownership plan expenses in an amount equal to the fair market value of shares committed to be released to employees for that year. These shares will be released to participants over a forty-year period. If our common stock appreciates in value over time, compensation expense relating to the employee stock ownership plan will increase.

In the second quarter of 2006, we plan to implement a stock incentive plan pursuant to which our officers and directors, at no cost to them, could be awarded shares of common stock in an aggregate amount up to 8% of the shares of common stock outstanding. Under current accounting standards, as the shares are awarded and vest, we will recognize compensation expense equal to the fair market value of such shares at grant. In the event that a portion of the shares used to fund the plan are newly issued shares purchased from us, the issuance of additional shares will decrease our net income per share and stockholders’ equity per share and will dilute existing stockholders’ ownership and voting interests.

Our Return On Average Equity Is Low Compared To Other Companies. This Could Negatively Impact The Price Of Our Common Stock. The net proceeds from the second-step conversion, completed in June 2005, substantially increased our equity capital. It will take a significant period of time to prudently invest this capital. Our ability to leverage our new capital and grow our balance sheet profitably will be significantly affected by industry competition for loans and deposits, as well as our need to manage interest rate risk. As a result, our return on equity, which is the ratio of our earnings divided by our average stockholders’ equity, will be lower than that of our peer group. To the extent that the stock market values a company based in part on its return on equity, our low return on equity relative to our peer group could negatively affect the trading price of our stock.

Item 1B. Unresolved Staff Comments.

None.

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Item 2. Properties.

During 2005, we conducted our business through our two executive office buildings located in Paramus, NJ, our operations center located in Glen Rock, NJ, and 90 branch offices. At December 31, 2005, we owned 33 of our locations and leased the remaining 60. Our lease arrangements are typically long-term arrangements with third parties that generally contain several options to renew at the expiration date of the lease.

For additional information regarding our lease obligations, see Note 8 of Notes to Consolidated Financial Statements in Item 8 “Financial Statements and Supplementary Data.”

Item 3. Legal Proceedings.

We are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. We believe that these routine legal proceedings, in the aggregate, are immaterial to our financial condition and results of operation.

Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted during the quarter ended December 31, 2005 to a vote of security holders of Hudson City Bancorp through the solicitation of proxies or otherwise.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

On July 13, 1999, Hudson City Bancorp, Inc. common stock commenced trading on the Nasdaq National Market under the symbol “HCBK.” The table below shows the reported high and low sales prices of the common stock during the periods indicated. Certain share, per share and dividend information reflects the 3.206 to 1 stock split effected as part of our second-step conversion and stock offering completed in June 2005.

	Sales Price				Dividend Information
	High		Low		Amount Per Share		Date of Payment
2004
First quarter	$	12.60	$	11.17	$	0.050	March 1, 2004
Second quarter		11.97		9.79		0.053	June 1, 2004
Third quarter		11.20		10.06		0.056	September 1, 2004
Fourth quarter		12.79		10.85		0.059	December 1, 2004
2005
First quarter		11.82		10.75		0.062	March 1, 2005
Second quarter		11.69		10.09		0.066	June 1, 2005
Third quarter		12.61		11.36		0.070	September 1, 2005
Fourth quarter		12.25		11.15		0.070	December 1, 2005

On January 17, 2006, the Board of Directors of Hudson City Bancorp declared a quarterly cash dividend of $0.075 per common share outstanding that was paid on March 1, 2006 to stockholders of record as of the close of business on February 3, 2006. The Board of Directors intends to review the payment of dividends quarterly and plans to continue to maintain a regular quarterly dividend in the future, dependent upon our earnings, financial condition and other relevant factors.

Hudson City Bancorp is subject to the requirements of Delaware law that generally limits dividends to an amount equal to the difference between the amount by which total assets exceed total liabilities and the amount equal to the aggregate par value of the outstanding shares of capital stock. If there is no difference between these amounts, dividends are limited to net income for the current and/or immediately preceding year.

As the principal asset of Hudson City Bancorp, Hudson City Savings provides the principal source of funds for the payment of dividends by Hudson City Bancorp. Hudson City Savings is subject to certain restrictions that may limit its ability to pay dividends. Hudson City Savings may not pay dividends to Hudson City Bancorp if paying such dividends would cause it to fail to meet capital requirements or cause its stockholders’ equity to be reduced below the amounts required for its liquidation account. See Note 3 of Notes to Consolidated Financial Statements in Item 8 of this report for a further discussion of the liquidation account. For more information regarding the limitations on dividends paid by Hudson City Savings, see “Regulation of Hudson City Savings Bank and Hudson City Bancorp – Federally Chartered Savings Bank Regulation – Limitation on Capital Distributions.”

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As of February 3, 2006, there were approximately 34,252 holders of record of Hudson City Bancorp common stock.

The following table reports information regarding repurchases of our common stock during the fourth quarter of 2005 and the stock repurchase plans approved by our Board of Directors.

					Total Number of		Maximum Number
	Total				Shares Purchased		of Shares that May
	Number of		Average		as Part of Publicly		Yet Be Purchased
	Shares		Price Paid		Announced Plans		Under the Plans or
Period	Purchased		per Share		or Programs		Programs (1) (2) (3)
October 1 thru October 31, 2005		450,000	$	11.65		450,000		29,430,000
November 1 thru November 30, 2005		5,206,000		11.77		5,206,000		24,224,000
December 1 thru December 31, 2005		3,207,000		11.95		3,207,000		21,017,000
Total		8,863,000		11.83		8,863,000

(1)	On October 18, 2005, Hudson City Bancorp announced the adoption of its sixth Stock Repurchase Program, which authorized the purchase of up to 29,880,000 shares of common stock. This program has no expiration date.
(2)	The fifth Stock Repurchase Program, which had been suspended due to the second-step conversion and stock offering, was terminated during the fourth quarter of 2005 upon adoption of the sixth repurchase plan. No other repurchase plan or program expired during the quarter.
(3)	Shares indicated are determined as of the close of business on the last day of the period presented.

Information regarding equity plan compensation is presented under the headings “Equity Compensation Plan Information” in the Company’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006, and is incorporated herein by reference.

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Item 6. Selected Financial Data

The summary information presented below under “Selected Financial Condition Data,” “Selected Operating Data” and “Selected Financial Ratios and Other Data” at or for each of the years presented is derived in part from the audited consolidated financial statements of Hudson City Bancorp. The following information is only a summary and you should read it in conjunction with our audited consolidated financial statements in Item 8 of this document. Certain share, per share and dividend information reflects the 3.206 to 1 stock split effected in conjunction with our second-step conversion and stock offering completed June 7, 2005.

	At December 31,
	2005		2004		2003		2002		2001
	(In thousands)
Selected Financial Condition Data:
Total assets	$	28,075,353	$	20,145,981	$	17,033,360	$	14,144,604	$	11,426,768
Loans		15,062,449		11,363,039		8,803,066		6,970,900		5,968,171
Federal Home Loan Bank of New York stock		226,962		140,000		164,850		137,500		81,149
Investment securities held to maturity		1,534,216		1,334,249		1,366		1,406		1,441
Investment securities available for sale		3,962,511		1,594,639		2,243,812		560,932		167,427
Mortgage-backed securities held to maturity		4,389,864		3,755,921		4,292,444		4,734,266		4,478,488
Mortgage-backed securities available for sale		2,520,633		1,620,708		1,130,257		1,391,895		530,690
Total cash and cash equivalents		102,259		168,183		254,584		240,796		101,814
Foreclosed real estate, net		1,040		878		1,002		1,276		250
Total deposits		11,383,300		11,477,300		10,453,780		9,138,629		7,912,762
Total borrowed funds		11,350,000		7,150,000		5,150,000		3,600,000		2,150,000
Total stockholders’ equity		5,201,476		1,402,884		1,329,366		1,316,083		1,288,736

	For the Year Ended December 31,
	2005		2004		2003		2002		2001
	(In thousands)
Selected Operating Data:
Total interest and dividend income	$	1,178,908	$	915,058	$	777,328	$	784,217	$	690,498
Total interest expense		616,774		430,066		376,354		395,774		403,427
Net interest income		562,134		484,992		400,974		388,443		287,071
Provision for loan losses		65		790		900		1,500		1,875
Net interest income after provision for loan losses		562,069		484,202		400,074		386,943		285,196
Non-interest income:
Service charges and other income		5,267		5,128		5,338		5,947		4,694
Gains on securities transactions, net		2,740		11,429		24,326		2,066		—
Total non-interest income		8,007		16,557		29,664		8,013		4,694
Total non-interest expense		127,703		118,348		102,527		93,541		81,824
Income before income tax expense		442,373		382,411		327,211		301,415		208,066
Income tax expense		166,318		143,145		119,801		109,382		73,517
Net income	$	276,055	$	239,266	$	207,410	$	192,033	$	134,549

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	At or for the Year Ended December 31,
	2005			2004			2003			2002			2001
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on average assets		1.14	%		1.29	%		1.34	%		1.50	%		1.32	%
Return on average stockholders’ equity		7.52			17.66			15.38			14.84			10.09
Net interest rate spread (1)		1.84			2.43			2.37			2.66			2.12
Net interest margin (2)		2.35			2.66			2.65			3.10			2.87
Non-interest expense to average assets		0.53			0.64			0.66			0.73			0.80
Efficiency ratio (3)		22.40			23.60			23.81			23.59			28.04
Average interest-earning assets to average interest-bearing liabilities		1.20	x		1.09	x		1.11	x		1.14	x		1.19	x
Share and Per Share Data:
Basic earnings per share	$	0.49		$	0.41		$	0.35		$	0.32		$	0.21
Diluted earnings per share		0.48			0.40			0.34			0.32			0.21
Cash dividends paid per common share		0.268			0.218			0.162			0.108			0.073
Dividend pay-out ratio (4)		54.69	%		53.17	%		46.29	%		33.75	%		34.76	%
Stockholders’ equity per common share	$	9.44		$	7.85		$	7.33		$	7.22		$	6.87
Weighted average number of common shares outstanding:
basic		567,789,397			576,621,209			585,316,009			592,880,271			627,934,521
diluted		581,063,426			593,000,573			601,681,732			609,157,242			637,953,989
Capital Ratios:
Average stockholders’ equity to average assets		15.10	%		7.29	%		8.73	%		10.12	%		13.05	%
Stockholders’ equity to assets (5)		18.53			6.96			7.80			9.30			11.28
Regulatory Capital Ratios of Bank:
Leverage capital (6)		14.68	%		6.36	%		7.52	%		8.85	%		10.64	%
Total risk-based capital (7)		41.31			17.49			20.89			26.81			31.96
Asset Quality Ratios:
Non-performing loans to total loans		0.13	%		0.19	%		0.23	%		0.29	%		0.26	%
Non-performing assets to total assets		0.07			0.11			0.12			0.15			0.14
Allowance for loan losses to non-performing loans		141.84			126.44			131.09			126.27			153.44
Allowance for loan losses to total loans		0.18			0.24			0.30			0.37			0.40
Net charge-offs (recoveries) to average loans		—			—			—			—			—
Branch and Deposit Data:
Number of deposit accounts		484,956			476,627			491,293			503,998			495,871
Branches		90			85			81			81			80
Average deposits per branch (thousands)	$	126,481		$	135,027		$	129,059		$	112,823		$	98,910

(1)	Determined by subtracting the weighted average cost of average total interest-bearing liabilities from the weighted average yield on average total interest-earning assets.
(2)	Determined by dividing net interest income by average total interest-earning assets.
(3)	Determined by dividing total non-interest expense by the sum of net interest income and total non-interest income.
(4)	The dividend pay-out ratio for 2004 and 2005 uses amount per share information that does not reflect the dividend waiver by Hudson City, MHC.
(5)	We had no goodwill at any of the dates presented. Accordingly, our tangible stockholders’ equity to assets is the same at each date as our stockholders’ equity to assets.
(6)	Ratios determined pursuant to FDIC regulations for 2003 and prior years. Beginning January 1, 2004, Hudson City Savings became subject to the capital requirements under OTS regulations.
(7)	The calculation is the same under both OTS and FDIC regulations.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis should be read in conjunction with Hudson City Bancorp’s Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements in Item 8, and the other statistical data provided elsewhere in this document.

Executive Summary

Our results of operations depend primarily on net interest income, which, in part, is a direct result of the market interest rate environment. Net interest income is the difference between the interest income we earn on our interest-earning assets, primarily mortgage loans, mortgage-backed securities and investment securities, and the interest we pay on our interest-bearing liabilities, primarily time deposits, interest-bearing transaction deposits and borrowed funds. Net interest income is affected by the shape of the market yield curve, the timing of the placement and repricing of interest-earning assets and interest-bearing liabilities on our balance sheet, and the prepayment rate on our mortgage-related assets. Our results of operations may also be affected significantly by general and local economic and competitive conditions, particularly those with respect to changes in market interest rates, government policies and actions of regulatory authorities. Our results are also affected by the market price of our stock, as the expense of certain of our employee stock compensation plans is related to the current price of our common stock.

We completed the second-step conversion and stock offering in June 2005, selling a total of 392,980,580 shares of common stock at a purchase price of $10.00 per share and raising approximately $3.93 billion. The net $3.80 billion increase to stockholders’ equity due to the conversion reflected the receipt of the $3.93 billion gross offering proceeds less the payment of $125.0 million in conversion related expenses. Equity was further increased by $145.8 million due to the consolidation of Hudson City, MHC into Hudson City Bancorp, Inc. We also effected a stock split pursuant to which each share of common stock outstanding or held as treasury stock before completion of the offering was split into 3.206 shares. All prior share and per share data has been adjusted to reflect the 3.206 to 1 stock split effected as part of the second-step conversion and stock offering. Hudson City Bancorp contributed $3.00 billion of the net proceeds to Hudson City Savings Bank, resulting in a significant increase in the Bank’s capital.

The amount of funds available for investment from the net offering proceeds was approximately $3.57 billion, reflecting a further $229.9 million reduction from the net offering proceeds due to the use of customer deposits to purchase stock. Of this amount available for investment, approximately $2.80 billion was invested in securities with maturities or initial rate reset dates of less than two years. The remainder of the proceeds available for investment was primarily used to purchase adjustable-rate mortgage-backed securities and, to a lesser extent, purchase and originate first mortgage loans.

During 2005 we grew our balance sheet $7.93 billion, reflecting the use of the net offering proceeds and internally generated growth. The internally generated growth, consistent with our traditional thrift business model, primarily reflected a $3.70 billion increase in total loans, funded by a $4.20 billion increase in borrowed funds. The growth in our core investment of residential first mortgage loans was due to our continued strong levels of loan purchases, which allowed us to grow and geographically diversify our mortgage loan portfolio at a relatively low overhead cost. The new borrowed funds had ten-year maturities and initial non-call periods of one to five years.

Our net income for 2005 increased 15.4% to $276.1 million for the year 2005, generally due to the growth in our interest-earning assets. Basic and diluted earnings per share for 2005 were $0.49 and $0.48, respectively, compared with $0.41 and $0.40, respectively, for 2004. Our return on average assets was

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1.14% for 2005. Total stockholders’ equity increased $3.80 billion during 2005, primarily due to the completion of our second-step conversion and stock offering. Our return on average stockholders’ equity was 7.52% for 2005.

Short-term market interest rates increased during 2005 following increases during the entirety of 2004. The Federal Open Market Committee of the Federal Reserve Bank (“FOMC”) increased the overnight lending rate 25 basis points at each of the regularly scheduled meetings beginning in June 2004 to the current rate of 4.50%. Intermediate-term market interest rates, those with maturities of two to five years, and long-term market interest rates, in particular the 10-year bond, also increased during the year 2005, but at a slower pace than short-term interest rates. The result of these market interest rate changes was a continued flattening of the market yield curve during 2005. This interest rate environment, where short-term rates increased to the same level as intermediate- and long-term rates, had a negative impact on our results of operations and net interest margin as our interest-bearing liabilities generally price off short-term market interest rates while our interest-earning assets generally price off long-term interest rates.

In this rate environment, our net interest margin decreased 31 basis points and our net interest rate spread decreased 59 basis points when comparing the year 2005 to 2004. The decrease in these ratios reflected the flattening market yield curve as our interest income, in general, reflects movements in long-term rates while our interest expense, in general, reflects movements in short-term rates. The smaller decrease in our net interest margin, when compared to our net interest rate spread, reflected the infusion of capital due to the completion of our second-step conversion.

The increase in our interest income for the year ended December 31, 2005 was primarily derived from the overall growth in our interest-earning assets, while the increase in our interest expense reflected both the growth in our interest-bearing liabilities and increases in prevailing interest rates. Net interest income increased $77.1 million for the year 2005, when compared to the corresponding period in 2004, reflecting the larger growth of our interest-earning assets when compared to the growth of our interest-bearing liabilities. Interest-earning assets increased approximately 31.3% for the year 2005, as compared to prior year period, while our interest-bearing liabilities increased 20.1% for the year 2005. This difference in growth rates offset the negative impact of the flattening market yield curve, where the yield on our interest-earning assets decreased 9 basis points during the year 2005, as compared to the prior year, while the cost of our interest-bearing liabilities increased 50 basis points, over that same period.

We anticipate that short-term interest rates will continue to increase in 2006, as it is anticipated the FOMC will continue to increase the Fed funds rate at its current measured pace in the near term. We also anticipate long-term interest rates will increase at a similar rate, thus maintaining the flat market yield curve. The result of this potential market interest rate scenario, where the market yield curve remains flat, would have a negative impact on our results of operations and our net interest margin as the yields on our interest-earning assets and the costs of our interest-bearing liabilities will increase at a similar rate, thus maintaining the current narrow spread. In addition, our interest-bearing liabilities will reset to the current market interest rates faster than our interest-earning assets as our interest-bearing liabilities generally have shorter periods to reset than our interest-earning assets. Our originated and purchased interest-earning assets generally have commitment periods of up to 90 days. However, we expect the planned growth in our balance sheet resulting from the infusion of capital due to the completion of the second-step conversion will continue to offset the impact of movements in interest rates on our net interest income.

We plan to grow our assets in 2006 primarily through the origination and purchase of mortgage loans, while purchasing investment and mortgage-backed securities as a supplement to our investments in mortgage loans. We also plan that approximately half of the growth in interest-earning assets will be short-term or variable-rate in nature, in order to assist in the management of our interest rate risk. We

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consider a loan or security to be variable rate if there exists a contractual rate adjustment during the life of the instrument, including those variable-rate mortgage-related assets with three-, five- or ten-year initial fixed-rate periods.

The primary funding for our asset growth is expected to come from customer deposits and borrowed funds, using the funding source that is most reasonably priced given the overall market interest rate conditions. In the second half of 2005, we experienced extreme competitive pricing of short-term deposits in the New York metropolitan market. During this period, wholesale borrowing costs were more economical and reflective of current rates. We expect this condition to continue in the first six months of 2006. We plan that the funds borrowed will primarily have initial non-call periods of one to five years and final maturities of ten years in order to extend the maturity of our liabilities and assist in the management of our interest rate risk. We intend to grow customer deposits by continuing to offer desirable products at competitive, but prudent rates and by opening new branch offices. We opened three branch offices in Suffolk County, NY and two branch offices in Richmond County (Staten Island), NY during 2005. We will continue to explore branch expansion opportunities in market areas that present significant opportunities for our traditional thrift business model and intend to expand our branch network by ten to fifteen branches annually.

On February 9, 2006, Hudson City announced a definitive agreement to acquire Sound Federal Bancorp, Inc. (“Sound Federal”) for $20.75 per share in cash, representing an aggregate transaction value of approximately $265.0 million. Sound Federal has 14 branch offices in Westchester, Rockland and Putnam Counties, New York and Fairfield County, Connecticut. This network will complement our current branch network as well as our organic branch expansion plans. Sound Federal has $1.15 billion in assets and $969.6 million in deposits as of December 31, 2005. The transaction is subject to approval by shareholders of Sound Federal as well as customary regulatory approvals, and is expected to close in the early summer of 2006.

Comparison of Financial Condition at December 31, 2005 and December 31, 2004

During 2005, our total assets increased $7.93 billion, or 39.4%, to $28.08 billion at December 31, 2005 from $20.15 billion at December 31, 2004, reflecting the investment of the proceeds from the second-step conversion and stock offering, which was completed in June 2005, and internally generated growth. We raised approximately $3.93 billion from the second-step conversion, which was reduced by $125.0 million in related expenses and $229.9 million due to the use of customer deposits to purchase stock to $3.57 billion, reflecting the net cash available for investment. Of the proceeds, approximately $1.50 billion was directly invested into government-sponsored agency discount notes yielding approximately 3.24%, $900.0 million was invested into callable government-sponsored agency securities with an average yield of 3.94%, and $400.0 million was invested into government-sponsored agency step-up notes with an initial average yield of 4.00%. All the discount notes purchased immediately after the second-step conversion matured during the third and fourth quarters of 2005 and were subsequently reinvested primarily into callable government-sponsored agency securities with maturities not exceeding two years or callable government sponsored agency step-up notes. These purchases and maturities were reflected in the $2.57 billion increase in total investment securities during 2005. The remainder of the proceeds from the second-step conversion was primarily used to purchase adjustable-rate mortgage-backed securities and, to a lesser extent, purchase and originate one- to four-family first mortgage loans.

Loans increased $3.70 billion, or 32.6%, to $15.06 billion at December 31, 2005 from $11.36 billion at December 31, 2004. The increase in loans reflected our continued loan purchase activity as well as our focus on the origination of one- to four-family first mortgage loans, primarily in New Jersey and the New York metropolitan area. For the year 2005, we purchased first mortgage loans of $3.68 billion and

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originated first mortgage loans of $2.07 billion, compared with purchases of $3.12 billion and originations of $1.38 billion for 2004. The larger volume of purchased mortgage loans in 2005, when compared to the volume of loan originations, allowed us to continue to grow and geographically diversify our mortgage loan portfolio at a relatively low overhead cost while maintaining our traditional thrift business model. The increase in origination and purchase activity, when compared to the prior year, reflected the investment of part of the proceeds from our second-step conversion and stock offering. We will continue to purchase mortgage loans to grow and diversify our portfolio, as opportunities and funding are available.

Our first mortgage loan originations and purchases were exclusively in one-to four-family mortgage loans. Approximately 25.4% of the mortgage loan purchases and 52.9% of the mortgage loan originations were variable-rate loans, which we consider to be any loan with a contractual annual rate adjustment, including those loans with an initial fixed-rate period of one to ten years. At December 31, 2005, fixed-rate mortgage loans accounted for 82.7% of our first mortgage loan portfolio compared with 92.5% at December 31, 2004. Notwithstanding the decrease in the percent of fixed-rate loans to total loans, this percentage of fixed-rate loans to total loans may have an adverse impact on our earnings in a rising rate environment as the interest rate on these loans would not reprice to current market interest rates, while our interest-bearing deposits and callable borrowed funds would reprice, from time to time, to the higher market interest rates. At December 31, 2005, we were committed to purchase and originate $715.4 million and $260.8 million, respectively, of first mortgage loans, which are expected to settle during the first quarter of 2006.

Total mortgage-backed securities increased $1.53 billion to $6.91 billion at December 31, 2005 from $5.38 billion at December 31, 2004 reflecting the investment of part of the proceeds from our second-step conversion and our growth initiatives. This increase in total mortgage-backed securities resulted from $3.28 billion in purchases of securities, all of which are directly or indirectly insured or guaranteed by a government agency or government-sponsored enterprise. Of these purchases, approximately 93.1% were variable-rate or hybrid instruments, with initial fixed-rate periods ranging from one to seven years. At December 31, 2005, variable-rate mortgage-backed securities accounted for 53.6% of our portfolio compared with 23.4% at December 31, 2004. We intend to continue to purchase variable-rate securities, as well as originate and purchase variable-rate mortgage loans, growing our fixed-rate and variable-rate portfolios by equal amounts, as part of our strategy to assist in the management of our interest rate risk. At December 31, 2005, we were committed to purchase $452.5 million of when-issued government agency or government-sponsored agency variable-rate mortgage-backed securities, which are expected to settle during the first quarter of 2006.

Accrued interest receivable increased $43.2 million, primarily due to increased balances in loans and investments. The $12.7 million increase in banking premises and equipment, net, reflected additional growth related to our branch expansion strategy. The $41.4 million increase in other assets primarily reflected the increase in the deferred tax asset related to the increase in the unrealized loss on our available for sale investment and mortgage-backed securities.

Total liabilities increased $4.13 billion, or 22.0%, to $22.87 billion at December 31, 2005 compared with $18.74 billion at December 31, 2004. Borrowed funds increased $4.20 billion, or 58.7%, to $11.35 billion at December 31, 2005 from $7.15 billion at December 31, 2004. The additional borrowed funds were primarily used to fund our asset growth. Borrowed funds were comprised of $7.90 billion of securities sold under agreements to repurchase and $3.45 billion of Federal Home Loan Bank advances. The fair market value of securities pledged as collateral for our reverse repurchase agreements was approximately $8.23 billion. Advances from the Federal Home Loan Bank utilize our mortgage loan portfolio as

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collateral. The $5.13 billion in new borrowings have initial non-call periods ranging from one to five years, final maturities of ten years, and a weighted-average rate of 3.82%.

Total deposits decreased $94.0 million during 2005, reflecting the consolidation of the $145.8 million deposit of Hudson City, MHC, which was added to our capital, and the use of approximately $229.9 million of customer deposits to purchase stock during our second-step stock offering. We experienced increased competitive pressure and extreme pricing of short-term deposits during the second-half of 2005 in the New York metropolitan area. We believed the price of borrowed funds was more economical and reflective of current rates than the price of deposits and therefore priced our deposits at a competitive, but prudent rate, resulting in the use of borrowed funds at a greater rate to fund our asset growth. During 2005, a portion of our customers shifted deposits to the higher costing time deposit accounts from the High Value Checking account product. At December 31, 2005, the aggregate balance in our time deposits was $6.17 billion and the aggregate balance in the High Value Checking account was $3.52 billion compared with $5.27 billion and $4.19 billion, respectively, at December 31, 2004.

Total stockholders’ equity increased $3.80 billion to $5.20 billion at December 31, 2005 from $1.40 billion at December 31, 2004. The increase in stockholders’ equity was primarily due to the net offering proceeds of $3.80 billion, a $145.8 million increase due to the consolidation of the deposit of Hudson City, MHC into Hudson City Bancorp as part of the second-step conversion, and net income of $276.1 million for 2005. Also increasing stockholders’ equity was a $2.8 million increase due to the exercise of stock options, a $9.4 million permanent tax benefit due to the exercise of stock options and the vesting of employee stock benefit plans, and an $11.9 million increase due to the commitment of shares for our employee stock benefit plans. These increases to stockholders’ equity were partially offset by cash dividends declared and paid to common stockholders of $102.1 million, purchases of 15,719,223 shares for our employee stock ownership plan at an aggregate cost of $189.3 million, and purchases of 9,119,768 shares of treasury stock at an aggregate cost of $107.5 million. Further decreasing stockholders’ equity were purchases of 115,839 shares of common stock for our recognition and retention plan at an aggregate cost of $1.3 million and a $54.4 million further increase in our accumulated other comprehensive loss primarily due to higher market interest rates decreasing the market value of our available for sale portfolio.

In October 2005, a sixth stock repurchase plan was approved to repurchase up to 29,880,000 shares, or approximately five percent of the then outstanding common stock. The fifth repurchase plan was terminated upon approval of the sixth plan. As of December 31, 2005, 21,017,000 shares are available for repurchase under this program. At December 31, 2005, the ratio of total stockholders’ equity to total assets was 18.53% compared with 6.96% at December 31, 2004. For 2005, the ratio of average stockholders’ equity to average assets was 15.10% compared with 7.29% for the year ended December 31, 2004. The increase in these ratios was primarily due to our completion of the second-step conversion and stock offering. Stockholders’ equity per common share, calculated using the period-end share count of outstanding shares, less purchased but unallocated employee stock ownership plan shares and less purchased but unvested management plan shares, was $9.44 at December 31, 2005 compared with $7.85 at December 31, 2004, reflecting the funds received from our second-step conversion.

Analysis of Net Interest Income

Net interest income represents the difference between the interest income we earn on our interest-earning assets, such as mortgage loans, mortgage-backed securities and investment securities, and the expense we pay on interest-bearing liabilities, such as time deposits and borrowed funds. Net interest income depends

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on our volume of interest-earning assets and interest-bearing liabilities and the interest rates we earned or paid on them.

Average Balance Sheet. The following table presents certain information regarding our financial condition and net interest income for 2005, 2004, and 2003. The table presents the average yield on interest-earning assets and the average cost of interest-bearing liabilities for the periods indicated. We derived the yields and costs by dividing income or expense by the average balance of interest-earning assets or interest-bearing liabilities, respectively, for the periods shown. We derived average balances from daily balances over the periods indicated. Interest income includes fees that we considered adjustments to yields. Yields on tax-exempt obligations were not computed on a tax equivalent basis.

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	For the Year Ended December 31,
	2005							2004							2003
					Average							Average							Average
	Average				Yield/			Average				Yield/			Average				Yield/
	Balance		Interest		Cost			Balance		Interest		Cost			Balance		Interest		Cost
								(Dollars in thousands)
Assets:
Interest-earnings assets:
First mortgage loans, net (1)	$	12,656,118	$	689,435		5.45	%	$	9,783,953	$	539,966		5.52	%	$	6,989,907	$	414,417		5.93	%
Consumer and other loans		185,320		10,786		5.82			144,621		8,650		5.98			129,087		8,379		6.49
Federal funds sold		236,288		5,013		2.12			124,755		1,580		1.27			170,302		1,794		1.05
Mortgage-backed securities, at amortized cost		6,218,312		273,063		4.39			5,379,439		242,335		4.50			5,948,336		268,235		4.51
Federal Home Loan Bank stock		169,781		9,394		5.53			150,104		3,213		2.14			156,721		4,424		2.82
Investment securities at amortized cost		4,503,416		191,217		4.25			2,671,263		119,314		4.47			1,733,236		80,079		4.62
Total interest-earning assets		23,969,235		1,178,908		4.92			18,254,135		915,058		5.01			15,127,589		777,328		5.14
Noninterest-earning assets		324,004							334,712							325,230
Total assets	$	24,293,239						$	18,588,847						$	15,452,819
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings accounts	$	980,707		9,709		0.99		$	942,486		9,359		0.99		$	927,191		10,680		1.15
Interest-bearing transaction accounts		4,124,359		118,530		2.87			3,575,468		79,750		2.23			1,971,581		43,516		2.21
Money market accounts		469,254		5,172		1.10			593,426		5,681		0.96			623,442		6,889		1.10
Time deposits		5,546,364		160,325		2.89			5,482,554		120,023		2.19			5,970,416		148,254		2.48
Total interest-bearing deposits		11,120,684		293,736		2.64			10,593,934		214,813		2.03			9,492,630		209,339		2.21
Borrowed funds		8,917,089		323,038		3.62			6,098,282		215,253		3.53			4,090,459		167,015		4.08
Total interest-bearing liabilities		20,037,773		616,774		3.08			16,692,216		430,066		2.58			13,583,089		376,354		2.77
Noninterest-bearing liabilities:
Noninterest-bearing deposits		437,790							415,905							409,220
Other noninterest-bearing liabilities		148,523							125,929							111,706
Total noninterest-bearing liabilities		586,313							541,834							520,926
Total liabilities		20,624,086							17,234,050							14,104,015
Stockholders’ equity		3,669,153							1,354,797							1,348,804
Total liabilities and stockholders’ equity	$	24,293,239						$	18,588,847						$	15,452,819
Net interest income			$	562,134						$	484,992						$	400,974
Net interest rate spread (2)						1.84	%						2.43	%						2.37	%
Net interest-earning assets	$	3,931,462						$	1,561,919						$	1,544,500
Net interest margin (3)						2.35	%						2.66	%						2.65	%
Ratio of interest-earning assets to interest-bearing liabilities						1.20	x						1.09	x						1.11	x

(1)	Amount is net of deferred loan fees and allowance for loan losses and includes non-performing loans.
(2)	Determined by subtracting the weighted average cost of average total interest-bearing liabilities from the weighted average yield on average total interest-earning assets.
(3)	Determined by dividing net interest income by average total interest-earning assets.
(4)	At December 31, 2005, the weighted-average rate on our outstanding interest-earning assets, other than our FHLB stock, was as follows: first mortgage loans, 5.64%, consumer and other loans, 5.81%, federal funds sold, 4.25%, mortgage-backed securities, 4.75%, investment securities, 4.37%. At December 31, 2005, the weighted-average rate on our outstanding interest-bearing liabilities was as follows: savings accounts, 0.98%, interest-bearing transaction accounts, 3.19%, money market accounts, 1.14%, time deposits, 3.51%, borrowed funds, 3.72%.

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Rate/Volume Analysis. The following table presents the extent to which the changes in interest rates and the changes in volume of our interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense during the periods indicated. Information is provided in each category with respect to:

• changes attributable to changes in volume (changes in volume multiplied by prior rate);

• changes attributable to changes in rate (changes in rate multiplied by prior volume); and

• the net change.

The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

	2005 Compared to 2004									2004 Compared to 2003
	Increase (Decrease) Due To									Increase (Decrease) Due To
	Volume			Rate			Net			Volume			Rate			Net
							(In thousands)
Interest-earning assets:
First mortgage loans, net	$	156,410		$	(6,941	)	$	149,469		$	155,901		$	(30,352	)	$	125,549
Consumer and other loans		2,373			(237	)		2,136			960			(689	)		271
Federal funds sold		1,963			1,470			3,433			(540	)		326			(214	)
Mortgage-backed securities		36,795			(6,067	)		30,728			(25,313	)		(587	)		(25,900	)
Federal Home Loan Bank stock		472			5,709			6,181			(181	)		(1,030	)		(1,211	)
Investment securities		78,056			(6,153	)		71,903			41,920			(2,685	)		39,235
Total		276,069			(12,219	)		263,850			172,747			(35,017	)		137,730
Interest-bearing liabilities:
Savings accounts		350			—			350			175			(1,496	)		(1,321	)
Interest-bearing transaction accounts		13,514			25,266			38,780			35,836			398			36,234
Money market accounts		(1,279	)		770			(509	)		(331	)		(877	)		(1,208	)
Time deposits		1,416			38,886			40,302			(11,613	)		(16,618	)		(28,231	)
Borrowed funds		102,151			5,634			107,785			73,146			(24,908	)		48,238
Total		116,152			70,556			186,708			97,213			(43,501	)		53,712
Net change in net interest income	$	159,917		$	(82,775	)	$	77,142		$	75,534		$	8,484		$	84,018

Comparison of Operating Results for the Years Ended December 31, 2005 and 2004

General. Net income was $276.1 million for the year 2005, reflecting an increase of $36.8 million, or 15.4%, compared with net income of $239.3 million for the year 2004. Basic and diluted earnings per common share were $0.49 and $0.48, respectively, for 2005 compared with basic and diluted earnings per share of $0.41 and $0.40, respectively, for 2004. For the year 2005 our return on average stockholders’ equity was 7.52% compared with 17.66% for the year 2004. Our return on average assets for 2005 was 1.14% compared with 1.29% for 2004. The decreases in these ratios were primarily due to the receipt of the net proceeds from our second-step conversion and stock offering completed in June 2005, which significantly increased average stockholders’ equity and average assets. The decrease in the return on average assets also reflected our balance sheet growth during a period of narrowing net interest rate spreads and a flattening market yield curve.

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Interest and Dividend Income. Total interest and dividend income increased $263.9 million, or 28.8%, to $1.18 billion for 2005 compared with $915.1 million for 2004. The increase in total interest and dividend income was primarily due to a $5.72 billion, or 31.3%, increase in the average balance of total interest-earning assets to $23.97 billion for 2005 compared with $18.25 billion for 2004. The growth in the average balance of total interest-earning assets was consistent with the growth initiatives employed by us during recent periods and also reflected the receipt of the net offering proceeds from our second-step conversion. The increase in interest and dividend income due to the increase in the average balance was partially offset by a decrease of nine basis points in the weighted-average yield on total interest-earning assets to 4.92% for the year 2005 from 5.01% for the year 2004. This decrease in the weighted-average yield reflected a shift in our interest-earning asset mix to shorter-term investment securities to help manage our interest rate risk. Investments of this type included the purchase of agency discount notes from the second-step conversion net offering proceeds, and the origination and purchase of a larger percentage of variable-rate mortgage loans and mortgage-backed securities.

The $149.4 million increase in interest and fee income on first mortgage loans was primarily due to a $2.88 billion increase in the average balance of first mortgage loans, which reflected our continued emphasis on balance sheet growth in our core investment in first mortgage loans. The increase in mortgage loan income due to the increase in the average balance was partially offset by a seven basis point decrease in the weighted-average yield, which reflected the larger volume of originations and purchases of variable-rate loans during 2005, which generally have initial yields that are less than fixed-rate loans.

The $71.9 million increase in interest and dividends on total investment securities was primarily due to an increase in the average balance of total investment securities of $1.83 billion, which reflected the investment of part of the net proceeds from the second-step conversion and stock offering, and the investment of certain of the cash flows from the prepayment activity on our mortgage-related assets in 2004 into investment securities. The increase in interest and dividends on total investment securities due to the increase in the average balance was partially offset by a 22 basis point decrease in the weighted-average yield reflecting purchases of securities with maturity or initial rate reset dates of less than two years, in order to assist in our management of interest rate risk.

The $30.8 million increase in interest income on total mortgage-backed securities was due to an $838.9 million increase in the average balance of total mortgage-backed securities, which primarily reflected the purchase of variable-rate securities during 2005 from the investment of part of the net proceeds from the second-step offering to assist in our management of interest rate risk. The increase in income due to the increase in the average balance was partially offset by a 11 basis point decrease in the weighted-average yield, reflecting the larger volume of purchases of variable-rate and hybrid instruments, which generally have initial yields that are less than fixed-rate securities.

Interest Expense. Total interest expense, comprised of interest on deposits and interest on borrowed funds, increased $186.7 million, or 43.4%, to $616.8 million for the year 2005 from $430.1 million for the year 2004. This increase was primarily due to a $3.35 billion, or 20.1%, increase in the average balance of total interest-bearing liabilities to $20.04 billion for 2005 compared with $16.69 billion for 2004. This increase in interest-bearing liabilities was primarily used to fund asset growth. The increase in total interest expense was also due to a 50 basis point increase in the weighted-average cost of total interest-bearing liabilities to 3.08% for the year 2005 compared with 2.58% for the year 2004, which reflected the growth of our interest-bearing liabilities during the rising short-term interest rate environment experienced during 2004 and 2005.

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Interest expense on borrowed funds increased $107.7 million primarily due to a $2.82 billion increase in the average balance of borrowed funds and, to a lesser extent, a nine basis point increase in the weighted-average cost of borrowed funds. The increase in the average balance of borrowed funds was used to fund asset growth. The $5.13 billion of new borrowings incurred during 2005 all had maturity periods of ten years and initial non-call periods of one to five years, extending the overall maturity of our liabilities in order to assist in the management of interest rate risk. The new borrowings had a weighted-average rate of 3.82%. The increase in the average cost of borrowed funds reflected the continued growth of our borrowed funds in the increasing intermediate- and long-term interest rate environment that existed during 2004 and 2005.

The $78.9 million increase in interest expense on interest-bearing deposits for the year 2005 was due to a $526.8 million increase in the average balance of interest-bearing deposits and a 61 basis point increase in the weighted-average cost of interest-bearing deposits. The growth in the average balance of interest-bearing deposits was primarily used to fund our growth initiatives and was primarily due to increases in our interest-bearing transaction account. The increase in the weighted-average cost of interest-bearing deposits, experienced principally in interest-bearing transaction accounts and time deposits, reflected the rising short-term market interest rate environment experienced during 2004 and 2005 and the need to increase rates on these deposit products in the highly competitive deposit market of the New York metropolitan area.

The $38.7 million increase in interest expense on our interest-bearing transaction accounts reflected an increase in the average balance of interest-bearing transaction accounts of $548.9 million, primarily due to the growth of our High Value Checking account product, and a 64 basis point increase in the weighted-average cost due to the rising short-term market interest rate environment. The $40.3 million increase in interest expense on our time deposit accounts reflected a 70 basis point increase in the weighted-average cost, due to the rising short-term market interest rate environment, and a $63.8 million increase in the average balance of time deposit accounts. We intend to continue to fund future asset growth using customer deposits as our primary source of funds, by continuing to pay competitive, but prudent rates and by opening new branch offices. We will continue to supplement deposit growth using borrowed funds.

Net Interest Income. Net interest income increased $77.1 million, or 15.9%, to $562.1 million for the year 2005 compared with $485.0 million for the year 2004. This increase primarily reflected the investment of the net offering proceeds from our second-step conversion and our internally generated growth initiatives, the combination of which resulted in a larger increase in the average balance of total interest-earning assets when compared to the increase in the average balance of total interest-bearing liabilities. The increase due to our growth was partially offset by an increase in the costs of our interest-bearing deposits and borrowed funds. Our net interest rate spread decreased 59 basis points to 1.84% for 2005 from 2.43% for 2004 and our net interest margin decreased 31 basis points to 2.35% for 2005 from 2.66% for 2004.

The decrease in these ratios was primarily due to an increase in the weighted-average cost of interest-bearing liabilities and a decrease in the weighted-average yield on interest-earning assets. The increase in the cost of our interest-bearing liabilities reflected the rising short-term interest rate environment and the borrowing of funds with longer terms to initial reprice or maturity than in previous periods. The decrease in the yield on our interest-earning assets reflected the shift in our investment portfolio to shorter-term interest-earning assets, accomplished by purchasing and originating a larger percentage of variable-rate instruments and purchasing agency discount notes with part of the proceeds from our second-step conversion and stock offering. The smaller decrease in our net interest margin, when compared to the decrease in our net interest rate spread, reflected the infusion of capital due to the completion of our second-step conversion.

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Provision for Loan Losses. Our provision for loan losses during 2005 was $65,000 compared with $790,000 during 2004. The decrease in the provision reflected recent favorable charge-off trends and strong payment performance by our borrowers during 2005 resulting in a positive delinquency experience. Net recoveries for the year 2005 were $9,000 compared with net charge-offs of $18,000 for the year 2004. The allowance for loan losses increased $74,000 to $27.4 million at December 31, 2005 from $27.3 million at December 31, 2004. The ratio of the allowance for loan losses to total loans was 0.18% at December 31, 2005 compared with 0.24% at December 31, 2004.

Non-performing loans, defined as non-accruing loans and accruing loans delinquent 90 days or more, decreased $2.3 million to $19.3 million at December 31, 2005 from $21.6 million at December 31, 2004, reflecting decreases in delinquencies primarily in our serviced loan portfolio. The ratio of non-performing loans to total loans was 0.13% at December 31, 2005 compared with 0.19% at December 31, 2004. The ratio of the allowance for loan losses to non-performing loans was 141.84% at December 31, 2005 compared with 126.44% at December 31, 2004.

During 2005, we lowered the loss factors used in our analysis of the loan loss allowance for our first mortgage loans to reflect the seasoning of the purchased loan portfolio and the recent favorable charge-off experience and delinquency trends. As a result of these trends, we recorded no provision during the second, third and fourth quarters of 2005 and a minimal provision for loan losses in the year 2005 to reflect probable losses resulting from the actual growth in our loan portfolio. We consider the ratio of allowance for loan losses to total loans at December 31, 2005, given our primary lending emphasis and current market conditions, to be adequate.

Although we believe that we have established and maintained the allowance for loan losses at adequate levels, additions may be necessary if future economic and other conditions differ substantially from the current operating environment. Although we use the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant judgment and short-term change. See “Critical Accounting Policies.”

Non-Interest Income. Total non-interest income decreased $8.6 million to $8.0 million for 2005 from $16.6 million for 2004. The decrease in non-interest income primarily reflected the decrease in gains on securities transactions, net, as no sales of securities occurred during the second, third or fourth quarters of 2005, and minimal sales occurred in the first quarter of 2005.

Non-Interest Expense. Total non-interest expense increased $9.4 million, or 7.9%, to $127.7 million for 2005 from $118.3 million for 2004. The increase primarily reflected normal salary adjustments, and increases in net occupancy expense, employee compensation and advertising expense due to our branch expansion program. Our efficiency ratio was 22.40% for the year 2005 compared with 23.60% for the year 2004. Our ratio of non-interest expense to average total assets for 2005 was 0.53% compared with 0.64% for 2004. The decrease in these ratios reflected our ability to leverage our existing infrastructure to support continuing asset growth while controlling operating expenses, as our average assets grew in excess of 30.0% during 2005.

Income Taxes. Income tax expense increased $23.2 million, or 16.2%, to $166.3 million for 2005 from $143.1 million for 2004, reflecting the 15.7% increase in income before income tax expense. Our effective tax rate for the year 2005 was 37.60% compared with 37.43% for 2004. Our effective tax rate may increase approximately 2% in future years related to a change in New Jersey tax regulations regarding the deductibility of dividends received from a real estate investment trust subsidiary.

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Comparison of Financial Condition at December 31, 2004 and December 31, 2003

During 2004, our total assets increased $3.12 billion, or 18.3%, to $20.15 billion at December 31, 2004 from $17.03 billion at December 31, 2003. Loans increased $2.56 billion, or 29.1%, to $11.36 billion at December 31, 2004 from $8.80 billion at December 31, 2003. The increase in loans reflected our loan purchase activity, our continued focus on the origination of one- to four-family first mortgage loans, primarily in New Jersey and the New York metropolitan area, and a significant decline in loan prepayment activity during the period. For 2004, we purchased first mortgage loans of $3.12 billion and originated first mortgage loans of $1.38 billion, compared with purchases of $3.21 billion and originations of $2.17 billion for 2003. The larger volume of purchased mortgage loans, when compared to the amount of mortgage loans originated, allowed us to grow and geographically diversify our mortgage loan portfolio at a relatively low overhead cost while maintaining our traditional thrift business model.

We will continue to purchase mortgage loans to grow and diversify our portfolio, as opportunities and funding are available. The lower volume of origination activity was primarily due to a decline in refinancing activity.

Our first mortgage loan originations and purchases were exclusively in one-to four-family mortgage loans and were primarily fixed-rate loans. At December 31, 2004, fixed-rate mortgage loans accounted for 92.5% of our first mortgage loan portfolio compared with 90.9% at December 31, 2003. This percentage of fixed-rate loans to total loans may have an adverse impact on our earnings in a rising rate environment as the interest rate on these loans would not reprice, while our interest-bearing deposits and callable borrowed funds would reprice, from time to time, to the higher market interest rates.

During 2004, $144.0 million of our loan originations were the result of refinancing of our existing mortgage loans compared with $530.4 million during 2003. The dollar amount of refinancing of existing mortgage loans was included in total loan originations. We allow customers with Hudson City originated loans to modify, for a fee, their existing mortgage loans with the intent of maintaining customer relationships in periods of extensive refinancing due to low long-term interest rates. In general, all terms and conditions of the existing mortgage loan remain the same except the adjustment of the interest rate to the currently offered fixed-rate product with a similar term to maturity or to a reduced term at the request of the borrower. Modifications of our existing mortgage loans during 2004 were approximately $220.1 million compared with $1.46 billion during 2003. These loan modifications were not reflected in loan origination totals. We feel loan refinancing and modification activity are inversely related to the level of interest rates. The decrease in the refinancing and modification activity, when comparing the 2004 activity to the 2003 activity, was due to the general stability of long-term interest rates during 2004 compared to the steeply declining interest rate environment during the first half of 2003 and prior periods. If long-term rates increase or remain relatively stable, we expect the amount of loan refinancings and modifications to remain at the 2004 levels or decrease.

Investment securities held to maturity increased to $1.33 billion at December 31, 2004 from $1.4 million at December 31, 2003. During 2004, we began to classify certain of our government-sponsored agency security purchases as held to maturity. This increase in investment securities held to maturity reflected, in part, the subsequent reinvestment of part of the resulting cash flows from the $649.2 million decrease of investment securities available for sale due to calls of such securities during 2004. The increase in investment securities held to maturity also represented a strategy to shorten the overall final maturity of our interest-earning assets, while continuing to grow our balance sheet, by investing a portion of the cash flows from our mortgage-related assets into investment securities. Of the agency securities purchased and classified as held to maturity, $621.6 million have step-up features, where the interest rate is increased on scheduled future dates. These securities have call options that are generally effective prior to the initial

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rate increase but after an initial non-call period of three months to one year. The initial rate for the securities purchased was higher than interest rates on similar agency securities offered at the time of purchase without the step-up feature. The rate increases are at least one percent per adjustment and are fixed over the life of the security.

Overall, the aggregate balance of the mortgage-backed securities portfolio remained relatively stable at $5.38 billion at December 31, 2004 compared with $5.42 billion at December 31, 2003. Payments received on mortgage-backed securities were primarily reinvested into fixed-rate mortgage-backed securities at the prevailing market interest rates. Accrued interest receivable increased $17.3 million, primarily due to increased balances in loans and investments. Fixed assets increased $5.0 million primarily due to our branch expansion.

Total liabilities increased $3.04 billion, or 19.4%, to $18.74 billion at December 31, 2004 compared with $15.70 billion at December 31, 2003. Total deposits increased $1.03 billion, or 9.8%, to $11.48 billion at December 31, 2004 from $10.45 billion at December 31, 2003. The increase in total deposits was primarily used to fund our growth initiatives. Interest-bearing deposits increased $1.00 billion primarily due to an increase of $1.48 billion in our interest-bearing High Value Checking account product, partially offset by a $405.8 million decrease in time deposits. We believe the increase in interest-bearing deposits was due primarily to our consistent offering of competitive rates on our interest-bearing High Value Checking account product. The balance in the High Value Checking account at December 31, 2004 was $4.19 billion compared with $2.71 billion at December 31, 2003. We believe the decrease in time deposits was due, in part, to transfers to our High Value Checking account and significant competition for deposits in the New York metropolitan area.

Borrowed funds increased $2.00 billion, or 38.8%, to $7.15 billion at December 31, 2004 from $5.15 billion at December 31, 2003. The additional borrowed funds were primarily used to fund our asset growth. Borrowed funds were comprised of $5.30 billion of securities sold under agreements to repurchase and $1.85 billion of FHLB advances. Securities pledged as collateral against our securities sold under agreements to repurchase had a market value at December 31, 2004 of approximately $5.63 billion. Advances from the FHLB utilize our mortgage portfolio as collateral. The $3.75 billion in new borrowings, which had initial call dates of predominately two to four years from the date of borrowing, were partially offset by calls and maturities of borrowed funds in an aggregate amount of $1.75 billion.

Total stockholders’ equity increased $73.5 million, or 5.5%, to $1.40 billion at December 31, 2004 from $1.33 billion at December 31, 2003. The increase in stockholders’ equity was primarily due to net income of $239.3 million for 2004, a $6.5 million increase due to the exercise of 2,886,042 stock options, a $20.9 million permanent tax benefit due to the exercise of stock options and the vesting of employee stock benefit plans, and a $19.5 million increase due to the commitment of shares for our employee stock benefit plans.

These increases to stockholders’ equity were partially offset by repurchases of 14,716,187 shares of our common stock at an aggregate cost of $161.7 million, purchases of 641,200 shares of common stock for our recognition and retention plan at an aggregate cost of $7.3 million, cash dividends declared and paid to common stockholders of $40.5 million and a $3.1 million increase in accumulated other comprehensive loss primarily due to a decrease in the fair value of our available for sale investment portfolio. As of December 31, 2004 there remained 9,862,365 shares authorized to be purchased under our then current stock repurchase program. The decrease from prior years in the amount of the cash dividend paid to common stockholders reflects the waiver of receipt of the dividend by Hudson City, MHC, the majority stockholder of Hudson City Bancorp in accordance with the regulations and policies of the OTS. Prior to 2004, Hudson City, MHC was subject to the policies of the FDIC, which did not permit dividend waivers.

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At December 31, 2004, the ratio of total stockholders’ equity to total assets was 6.96% compared with 7.80% at December 31, 2003. For the year ended December 31, 2004, the ratio of average stockholders’ equity to average assets was 7.29% compared with 8.73% for the year ended December 31, 2003.

The decrease in these ratios was primarily due to our capital management strategy of planned asset growth, and a slower percentage growth in stockholders’ equity as compared to the percentage growth in assets, due to payment of cash dividends and stock repurchases. Stockholders’ equity per common share was $7.85 at December 31, 2004 compared with $7.33 at December 31, 2003.

Comparison of Operating Results for the Years Ended December 31, 2004 and 2003

General. Net income was $239.3 million for the year ended December 31, 2004, an increase of $31.9 million, or 15.4%, compared with net income of $207.4 million for the year ended December 31, 2003. Basic and diluted earnings per common share were $0.41 and $0.40, respectively, for 2004 compared with basic and diluted earnings per share of $0.35 and $0.34, respectively, for 2003. For the year ended December 31, 2004 our return on average stockholders’ equity was 17.66% compared with 15.38% for 2003. The increase in the return on average stockholders’ equity was primarily due to the growth of our net income and a slower percentage growth of stockholders’ equity due to payment of cash dividends and stock repurchases. Our return on average assets for 2004 was 1.29% compared with 1.34% for 2003. The decrease in the return on average assets was primarily due to our overall balance sheet growth in the prevailing interest rate environments of 2003 and 2004.

Interest and Dividend Income. Total interest and dividend income increased $137.8 million, or 17.7%, to $915.1 million for the year ended December 31, 2004 compared with $777.3 million for the year ended December 31, 2003. The increase in total interest and dividend income was primarily due to a $3.12 billion, or 20.6%, increase in the average balance of total interest-earning assets to $18.25 billion for the year ended December 31, 2004 compared with $15.13 billion for the year ended December 31, 2003. The growth in the average balance of total interest-earning assets was consistent with the growth initiatives employed by us during recent periods. The impact on interest and dividend income from the increase in the average balance of our total interest-earning assets was partially off-set by a 13 basis point decrease in the average yield on total interest-earning assets to 5.01% for 2004 from 5.14% for 2003, primarily reflecting the growth of our interest-earning assets during the prevailing interest rate environments of 2003 and 2004.

The $125.6 million increase in interest and fee income on first mortgage loans was primarily due to a $2.79 billion increase in the average balance of first mortgage loans, which reflected our continued emphasis on balance sheet growth in our core business of first mortgage loans. The increase in mortgage loan income due to the increase in the average balance was partially offset by a 41 basis point decrease in the average yield, which reflected the large volume of loan origination and purchase activity during the prevailing long-term interest rate environments of 2003 and 2004.

The $39.2 million increase in interest and dividends on total investment securities was primarily due to an increase in the average balance of investment securities of $938.0 million, which reflected the subsequent reinvestment of certain of the cash flows from the prepayment activity on our mortgage-related assets in 2003 and 2004 into investment securities, and was consistent with the decision to shorten the overall weighted-average life of our interest-earning assets by investing in callable securities with initial call dates of three months to one year and final maturity dates of five to seven years. The increase in income on total investment securities due to the increase in the average balance was partially offset by a 15 basis

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point decrease in the average yield on our investment securities, which reflected the large volume of purchases made during the prevailing interest rate environments of 2003 and 2004.

The $25.9 million decrease in interest income on total mortgage-backed securities was primarily due to a $568.9 million decrease in the average balance of total mortgage-backed securities, which reflected the high volume of prepayment activity, the sales of mortgage-backed securities available for sale, and the subsequent reinvestment of certain of the resulting cash flows into investment securities or purchased mortgage loans. The decrease in interest income on total mortgage-backed securities also reflected a 1 basis point decrease in the average yield on mortgage-backed securities.

The impact on mortgage-backed securities interest income of the decline in the average balance and weighted average yield was partially offset by the slowing of the net premium amortization due to the decline in prepayment activity during the second half of 2003 and 2004.

Interest Expense. Total interest expense, comprised of interest on deposits and interest on borrowed funds, increased $53.7 million, or 14.3%, to $430.1 million for the year ended December 31, 2004 from $376.4 million for the year ended December 31, 2003. This increase was primarily due to a $3.11 billion, or 22.9%, increase in the average balance of total interest-bearing liabilities to $16.69 billion for the year ended December 31, 2004 compared with $13.58 billion for the year ended December 31, 2003. The impact of the increase in the average balance of total interest-bearing liabilities was offset, in part, by a 19 basis point decrease in the average cost of total interest-bearing liabilities to 2.58% for 2004 from 2.77% for 2003.

Interest expense on borrowed funds increased $48.3 million primarily due to a $2.01 billion increase in the average balance of borrowed funds to $6.10 billion for 2004, the impact of which was partially offset by a 55 basis point decrease in the average cost of borrowed funds to 3.53% for 2004. The increase in the average balance of borrowed funds was used to fund asset growth. The decrease in the average cost of borrowed funds reflected the continued growth of our borrowed funds in the prevailing interest rate environments that existed during 2003 and 2004. We intend to continue to use borrowed funds as a funding source for our asset growth initiatives, with new borrowings primarily having periods to initial repricing of three to five years.

Interest expense on interest-bearing deposits increased $5.5 million primarily due to a $1.10 billion increase in the average balance of interest-bearing deposits to $10.59 billion for 2004, the impact of which was partially offset by an 18 basis point decrease in the average cost to 2.03%. The increase in the average balance of interest-bearing deposits, primarily used to fund asset growth, reflected a $1.61 billion increase in the average balance of interest-bearing transaction accounts due to the growth in our High Value Checking account product. We believe the increase in the average balance of interest-bearing deposits was primarily due to our consistent offering of competitive rates on our High Value Checking account product. We believe the $487.9 million decrease in the average balance of time deposits was due in part to transfers to our High Value Checking account and significant competition for deposits in the New York metropolitan area. We intend to continue to fund future asset growth using customer deposits as our primary source of funds, by continuing to pay competitive rates and by opening new branch offices, while supplementing the deposit growth with borrowed funds.

The 18 basis point decrease in the average cost of interest-bearing deposits primarily reflected a 29 basis point decrease in the average cost of our time deposits, a 16 basis point decrease in the average cost of savings accounts and a 14 basis point decrease in the average cost of money market accounts. These decreases were partially offset by a 2 basis point increase in the average cost of interest-bearing transaction deposits reflecting the increasing short-term interest rate environment of 2004. This decrease

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in the average cost of interest-bearing deposits reflected the prevailing interest rate environments experienced during 2003 and 2004.

Net Interest Income. Net interest income increased $84.0 million, or 20.9%, to $485.0 million for the year ended December 31, 2004 compared with $401.0 million for the year ended December 31, 2003. This increase primarily reflected our growth initiatives, which resulted in increases in the average balance of both interest-earning assets and interest-bearing liabilities, and the net interest rate spread earned on this growth. Our net interest rate spread, determined by subtracting the weighted-average cost of total interest-bearing liabilities from the weighted-average yield on total interest-earning assets, increased 6 basis points to 2.43% for 2004 from 2.37% for 2003. Our net interest margin, determined by dividing net interest income by total average interest-earning assets, increased 1 basis point to 2.66% for 2004 from 2.65% for 2003.

The increases in these ratios reflected the larger decrease in the cost of total interest-bearing liabilities compared with the decrease in the yield of total interest-earning assets primarily due to the decreased prepayment activity on our mortgage-related assets, and the resulting decrease in the amortization of the net premium on these assets. The increase in these ratios also reflected the overall shift in our asset mix towards first mortgage loans, which have a higher yield than our other interest-earning assets, the impact of which was partially offset by an overall shift in our liability mix toward borrowed funds, which have a higher average rate than our other interest-bearing liabilities.

Provision for Loan Losses. Our provision for loan losses for the year ended December 31, 2004 was $790,000 compared with $900,000 for the year ended December 31, 2003. Net charge-offs for the year ended December 31, 2004 were $18,000 compared with net recoveries of $146,000 for the year ended December 31, 2003. The allowance for loan losses increased $772,000 to $27.3 million at December 31, 2004 from $26.5 million at December 31, 2003. The increase in the allowance for loan losses, through the provision for loan losses, reflected the overall growth of the loan portfolio, increases in non-performing loans and low levels of charge-offs.

Non-performing loans, defined as non-accruing loans and accruing loans delinquent 90 days or more, increased $1.3 million to $21.6 million at December 31, 2004 from $20.3 million at December 31, 2003, primarily reflecting increases in non-accrual loans. The ratio of non-performing loans to total loans was 0.19% at December 31, 2004 compared with 0.23% at December 31, 2003. The ratio of the allowance for loan losses to non-performing loans was 126.44% at December 31, 2004 compared with 131.09% at December 31, 2003. The ratio of the allowance for loan losses to total loans was 0.24% at December 31, 2004 compared with 0.30% at December 31, 2003.

During 2004, we lowered the loss factors used in our worksheet on our purchased mortgage loans to reflect the seasoning of the portfolio, and the charge-off and delinquency experience. Notwithstanding such decrease, we have maintained a minimal provision for loan losses during 2004 to reflect expected losses resulting from the actual growth in our loan portfolio. We consider the ratio of allowance for loan losses to total loans at December 31, 2004, given our primary lending emphasis and current market conditions, to be at an acceptable level. Furthermore, the increase in the allowance for loan losses during 2004 reflected the growth in the loan portfolio, the low levels of loan charge-offs, the stability in the real estate market and the resulting stability in our overall loan quality.

Non-Interest Income. Total non-interest income decreased $13.1 million to $16.6 million for the year ended December 31, 2004 from $29.7 million for the year ended December 31, 2003. The decrease in non-interest income primarily reflected a $12.9 million decrease in gains on securities transactions, net to $11.4 million for 2004 from $24.3 million for 2003, primarily due to decreases in sales of mortgage-

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backed securities. The $11.4 million gain on securities transactions during 2004 resulted from an opportunity to realize gains from the sale of certain available for sale mortgage-backed securities prior to interest rate changes, such as seen in the second quarter of 2004, which would have had an adverse impact on their fair market value. The historically low interest rate environment enabled us to realize these gains on the sales of securities, as the lower rates increased the fair value of the fixed-rate securities sold. The gains in 2003 resulted from the enhanced opportunities to realize gains due to the declining interest rate environment. The total cash flow from the sales of these securities during 2004 was $510.5 million, which was subsequently reinvested into mortgage loans and investment securities.

Non-Interest Expense. Total non-interest expense increased $15.8 million, or 15.4%, to $118.3 million for the year ended December 31, 2004 from $102.5 million for the year ended December 31, 2003. The increase was primarily due to increases in compensation and employee benefit expense related to our employee stock benefit plans, compensation expense related to staff increases due to our branch expansion program, occupancy expenses due to our branch expansion program and expenses related to internal control evaluation and testing in order to comply with the new certification requirements imposed by the Sarbanes-Oxley Act and other regulatory costs. Our efficiency ratio was 23.60% for 2004 compared with 23.81% for 2003. Our ratio of non-interest expense to average total assets for 2004 was 0.64% compared with 0.66% for 2003. The relative stability of these ratios reflected our efforts to control costs, notwithstanding the actual increase in non-interest expense, as our average assets grew in excess of 20.0% when comparing 2004 to 2003.

Income Taxes. Income tax expense increased $23.3 million, or 19.4%, to $143.1 million for the year ended December 31, 2004 from $119.8 million for the year ended December 31, 2003, primarily due to the 16.9% increase in income before income tax expense. Our effective tax rate increased for 2004 to 37.43% from 36.61% for 2003, primarily due to the expense of the employee stock ownership plan, which is not fully deductible for income tax purposes.

Liquidity and Capital Resources

The term “liquidity” refers to our ability to generate adequate amounts of cash to fund loan originations, loan and security purchases, deposit withdrawals, repayment of borrowings and operating expenses. Our primary sources of funds are scheduled amortization and prepayments of loan principal and mortgage-backed securities, deposits, borrowed funds, maturities and calls of investment securities and funds provided by our operations. Our membership in the FHLB provides us access to additional sources of borrowed funds, which is generally limited to approximately twenty times the amount of FHLB stock owned. We also have the ability to access the capital markets from time to time, depending on market conditions.

Our investment policy provides that we shall maintain a primary liquidity ratio, which consists of investments in cash, cash in banks, Federal funds sold, securities with remaining maturities of less than five years and adjustable-rate mortgage-backed securities repricing within one year, in an amount equal to at least 4% of total deposits and short-term borrowings. At December 31, 2005, our primary liquidity ratio was 38.0%.

Deposit flows, calls of investment securities and borrowed funds, and prepayments of loans and mortgage-backed securities are strongly influenced by interest rates, general and local economic conditions and competition in the marketplace. These factors reduce the predictability of the timing of these sources of funds. As mortgage interest rates decline, customer prepayment activity tends to accelerate causing an increase in cash flow from both our mortgage loan and mortgage-backed security portfolios. If our pricing is competitive, the demand for mortgage originations also accelerates. When

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mortgage rates increase, the opposite effect on prepayment activity tends to occur and our loan origination and purchase activity becomes increasingly dependent on the strength of our residential real estate market and the volume of home purchases and new construction activity in the markets we serve.

The second-step conversion provided a significant amount of net available proceeds for investment. We raised approximately $3.93 billion in our second-step conversion, which was completed in June 2005. The net $3.80 billion in cash proceeds from the second-step conversion reflected the receipt of the $3.93 billion in offering proceeds less the payment of $125.0 million in conversion related expenses. The amount of funds available for investment was $3.57 billion, reflecting a further $229.9 million reduction from the net offering proceeds due to the use of customer deposits to purchase stock.

Principal repayments on loans were $2.15 billion during the year 2005 compared with $2.02 billion for the year 2004. The increase in payments on loans reflected the growth of our loan portfolio during this period of relatively stable long-term interest rates and prepayment activity. Principal payments received on mortgage-backed securities totaled $1.46 billion during 2005 compared with $1.73 billion during 2004. The decrease in payments on mortgage-backed securities reflected the decline in the aggregate balance of mortgage-backed securities during 2004, and a decline in the prepayment rate. Maturities and calls of investment securities totaled $1.70 billion during 2005, which included the $1.50 billion of maturing agency discount notes purchased with a portion of the net offering proceeds, compared with maturities and calls of $1.42 billion during the corresponding period in 2004. The decrease in maturities and calls, when not including the maturing discount notes, reflected the relatively stable long-term interest rate environment during 2005 resulting in a decrease in call activity.

Total deposits decreased $94.0 million during the year 2005 compared with an increase of $1.02 billion during the year 2004. Deposit flows, in general, are affected by the level of market interest rates, the interest rates and products offered by competitors, the volatility of equity markets, and other factors. The decrease in deposits during 2005 was due primarily to the consolidation of the $145.8 million deposit of Hudson City, MHC, as part of the second-step conversion, which was added to our capital, and the use of approximately $229.9 million of customer deposits to purchase stock during our offering. Time deposit accounts scheduled to mature within one year were $4.98 billion at December 31, 2005. We anticipate that we will have sufficient resources to meet this current funding commitment. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of these time deposits will remain with us as renewed time deposits or transfers to other deposit products. We are committed to maintaining a strong liquidity position; therefore we monitor our liquidity position on a daily basis.

For the year 2005, we borrowed an additional $5.13 billion compared with new borrowings of $3.75 billion for the year 2004. We made $925.0 million in principal payments on borrowed funds during 2005 compared with $1.75 billion for 2004. The funds borrowed during 2005 all have initial non-call periods ranging from one to five years and final maturities of ten years, and were primarily used to fund our asset growth. At December 31, 2005, there were no borrowed funds scheduled to mature within one year. However, we had $4.18 billion in borrowed funds, with a weighted-average rate of 3.77%, that have the potential to be called within one year. We anticipate we will have sufficient resources to meet this funding commitment by borrowing new funds at the prevailing market interest rate, or by paying-off the borrowed funds as they are called.

Our primary investing activities are the origination and purchase of one-to four-family real estate loans and consumer and other loans, the purchase of mortgage-backed securities, and the purchase of investment securities. Of the $3.57 billion in net proceeds from the second-step conversion available for investment, approximately $1.50 billion was directly invested into government-sponsored agency

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discount notes yielding approximately 3.24%, all of which matured during the second-half of 2005. These funds were subsequently reinvested primarily into callable government-sponsored agency securities with maturities not exceeding two years, government-sponsored agency step-up securities. We also directly invested approximately $900.0 million of the offering proceeds into callable government-sponsored agency securities with an average yield of 3.94% and approximately $400.0 million into government-sponsored agency step-up notes with an average yield of 4.00%. The remainder of the proceeds was primarily used to purchase adjustable-rate mortgage-backed securities and, to a lesser extent, purchase and originate first mortgage loans.

We originated total loans of $2.19 billion during the year 2005 compared with $1.46 billion during the year 2004. Of the first mortgage loan originations during 2005, 52.9% were variable-rate loans. During the year 2005 we purchased total loans of $3.68 billion compared with $3.12 billion during the year 2004. Of the first mortgage loan purchases during 2005, 25.4% were variable-rate loans. The continued larger volume of purchased mortgage loans in 2005, when compared to originated loans, allowed us to grow and geographically diversify our mortgage loan portfolio at a relatively low overhead cost while maintaining our traditional thrift business model. The increase in loan purchases also reflected the asset growth strategies we have employed during recent periods, using borrowed funds as our primary funding source. We will continue to purchase mortgage loans to grow and diversify our portfolio, as opportunities and funding are available.

Purchases of mortgage-backed securities during the year 2005 were $3.28 billion compared with $2.20 billion during the year 2004. The increase in purchases of mortgage-backed securities reflected the shift of security purchases to variable-rate mortgage-backed securities to assist in our management of interest rate risk and the investment of part of the net proceeds from our second-step conversion. Of the mortgage-backed securities purchased during 2005, 93.1% were variable-rate securities. During the year 2005, we purchased $4.31 billion of investment securities, of which $2.80 billion was invested directly from the net offering proceeds, compared with purchases of $2.11 billion during the year 2004. This decrease in purchases of investment securities, outside the investment of the net offering proceeds, reflected the lower amount of cash flows available for investment in 2005 due to the lower amount of calls of investment securities and the shift of security purchases to variable-rate mortgage-backed securities.

As part of the membership requirements of the FHLB, we are required to hold a certain dollar amount of FHLB common stock based on our asset size or our borrowings from the FHLB. During the year 2005, we increased our amount of FHLB common stock held by $87.0 million due to purchases of $104.2 million exceeding redemptions of $17.2 million, necessitated by increases in our amount of outstanding borrowings with the FHLB and the implementation of a new capital plan by the FHLB. During the year 2004, we redeemed $24.9 million of FHLB stock, decreasing our FHLB common stock held by that amount, due to our declining balance of borrowed funds at the FHLB. The net purchases made during 2005 brought our total investment in FHLB stock to $227.0 million, the amount we are currently required to hold.

Cash dividends declared and paid during 2005 were $102.1 million compared with $40.5 million during 2004. In both 2004 and 2005, Hudson City, MHC applied for and was granted approval from the OTS to waive receipt of dividends declared by Hudson City Bancorp. These waivers of dividend payments were effective for the entirety of 2004 and the first six months of 2005. Beginning in the third quarter of 2005, due to the consolidation of Hudson City, MHC into Hudson City Bancorp as part of the second-step conversion, dividends were paid on all outstanding shares of Hudson City Bancorp common stock. The dividend pay-out ratio using amount per share information, which does not reflect the dividend waiver by Hudson City, MHC in periods prior to the third quarter of 2005, was 54.69% for the year 2005 compared with 53.17% for the year 2004. On January 17, 2006, the Board of Directors declared a quarterly cash

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dividend of $0.075 per common share. The dividend was paid on March 1, 2006 to stockholders of record at the close of business on February 3, 2006.

During 2005, the independent trustee of our Employee Stock Ownership Plan purchased 15,719,223 shares of outstanding common stock at an aggregate cost of $189.3 million. Also during 2005, the trustee of our recognition and retention plan purchased 115,839 shares of common stock for our recognition and retention plan at an aggregate cost of $1.3 million due to awards to employees made during the period.

Under our stock repurchase programs, shares of Hudson City Bancorp common stock may be purchased in the open market and through other privately negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate use. In October 2005, a sixth stock repurchase plan was approved by the Board of Directors and the OTS to repurchase up to 29,880,000 shares, or approximately five percent of the then outstanding common stock. The fifth stock repurchase program, which had been suspended in late 2004 due to our second-step conversion and stock offering, was canceled due to the approval of this sixth plan. During 2005 we purchased 9,119,768 of our common stock at an aggregate cost of $107.5 million, including the purchase of 256,768 shares in April 2005 directly from vesting shares in our recognition and retention plan for payment of income taxes. At December 31, 2005, there remained 21,017,000 shares to be purchased in the sixth plan. During 2004, we purchased 14,716,187 shares at an aggregate cost of $161.7 million under our stock repurchase program.

At December 31, 2005, Hudson City Savings exceeded all regulatory capital requirements. Hudson City Savings’ tangible capital ratio, leverage (core) capital ratio and total risk-based capital ratio were 14.68%, 14.68% and 41.31%, respectively. These ratios reflect the $3.00 billion contribution of net offering proceeds from Hudson City Bancorp.

The primary source of liquidity for Hudson City Bancorp, the holding company of Hudson City Savings, is capital distributions from the banking subsidiary. During the year 2005, Hudson City Bancorp received $259.3 million in dividend payments from Hudson City Savings, which amounted to approximately 96.4% of Hudson City Savings’ net income for that period. The primary use of these funds is the payment of dividends to our shareholders, the repurchase of our common stock and the lending of funds to the independent trustee of our ESOP for the purchase of shares. Hudson City Bancorp’s ability to continue these activities is solely dependent upon capital distributions from Hudson City Savings. Applicable federal law may limit the amount of capital distributions Hudson City Savings may make. (See “Item 1 — Business — Regulation of Hudson City Savings Bank and Hudson City Bancorp — Federally Chartered Savings Bank Regulations — Limitation on Capital Distributions”)

Management of Interest Rate Risk

As a financial institution, our primary component of market risk is interest rate volatility. Our net income is primarily based on net interest income, and fluctuations in interest rates will ultimately impact the level of both income and expense recorded on a large portion of our assets and liabilities. Fluctuations in interest rates will also affect the market value of all interest-earning assets, other than those that possess a short term to maturity. During 2005, short-term interest rates increased to the same levels as intermediate- and long-term interest rates, resulting in a flat, and occasionally inverted, market yield curve. This interest rate environment had an adverse impact on our net interest income as our interest-bearing liabilities generally price off short-term interest rates, while our interest-earning assets, a majority of which have initial terms to maturity or repricing greater than one year, generally price off long-term rates.

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The timing of the placement of interest-earning assets and interest-bearing liabilities on our balance sheet, particularly during this rising short-term interest rate environment, also had an adverse impact on our net interest income. The impact of interest rate changes on our interest income is generally felt in later periods than the impact on our interest expense due to the timing of the recording on the balance sheet of our interest-earning assets and interest-bearing liabilities. The recording of interest-earning assets on the balance sheet generally lags the current market due to normal commitment period of up to three months for the purchase or origination of mortgage loans and mortgage-backed securities, while the recording of interest-bearing liabilities on the balance sheet is generally concurrent with the current market.

Also impacting our net interest income and net interest rate spread is the level of prepayment activity on our mortgage-related assets. The actual amount of time before mortgage loans and mortgage-backed securities are repaid can be significantly impacted by changes in market interest rates and mortgage prepayment rates. Mortgage prepayment rates will vary due to a number of factors, including the regional economy in the area where the underlying mortgages were originated, seasonal factors, demographic variables and the assumability of the underlying mortgages. However, the major factors affecting prepayment rates are prevailing interest rates, related mortgage refinancing opportunities and competition. Generally, the level of prepayment activity directly affects the yield earned on those assets, as the payments received on the interest-earning assets will be reinvested at the prevailing market interest rate. Prepayment rates are generally inversely related to the prevailing market interest rate, thus, as market interest rates increase, prepayment rates tend to decrease.

Prepayment activity was relatively stable during 2005 and 2004, when compared to the significant prepayment activity experienced during 2003, as long-term market interest rate have been relatively stable during 2005 and 2004, with a slight increase in rates during 2005. The mortgage-related assets resulting from this prepayment activity during 2005 and 2004 will tend to not prepay as fast, as their contractual interest rates are relatively low. The slowing of the prepayment activity in turn decreased the amount of related premium amortized on these assets during 2005 and 2004, when compared to the net amortization during 2003.

The primary objectives of our interest rate risk management strategy are to:

• evaluate the interest rate risk inherent in our balance sheet accounts;

• determine the appropriate level of interest rate risk given our business plan, the current business environment and our capital and liquidity requirements; and

• manage interest rate risk in a manner consistent with the approved guidelines and policies set by our Board of Directors.

We seek to manage our asset/liability mix to help minimize the impact that interest rate fluctuations may have on our earnings. To achieve the objectives of managing interest rate risk, our Asset/Liability Committee meets weekly to discuss and monitor the market interest rate environment compared to interest rates that are offered on our products. This committee consists of the Chief Executive Officer, the Chief Operating Officer, the Investment Officer and other senior officers of the institution as required. The Asset/Liability Committee presents periodic reports to the Board of Directors at its regular meetings and, on a quarterly basis, presents a comprehensive report addressing the results of activities and strategies and the effect that changes in interest rates will have on our results of operations and the present value of our equity.

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Historically, our lending activities have emphasized one- to four-family fixed-rate first and second mortgage loans. Our growth in variable-rate mortgage loans has helped reduce our exposure to interest rate fluctuations and is expected to benefit our long-term profitability, as the rate earned on the mortgage loan will increase as prevailing market rates increase. However, the prevailing interest rate environment, and the desires of our customers, has resulted in a demand for long-term hybrid and fixed-rate first mortgage loans. This may have an adverse impact on our net interest income, particularly in a rising interest rate environment.

During 2005 our investment and mortgage-backed security purchases were generally short-term in nature in order to give us additional interest rate risk protection and offset the increases in fixed-rate first mortgage loan originations and purchases. Our mortgage-backed security purchases were primarily variable-rate or hybrid instruments, and our investment security purchases were U.S. government-sponsored agency securities with final maturities of two years or less or with step-up features. At December 31, 2005, approximately 53.6% of our mortgage-backed security portfolio was variable-rate, which we define as having a contractual rate adjustment during the life of the security, including those securities with a set initial fixed-rate period. Approximately $1.72 billion of the government-sponsored agency securities held at December 31, 2005 have step-up features, where the interest rate is increased on scheduled future dates. These securities have call options that are generally effective prior to the initial rate increase but after an initial non-call period of three months to one year. The rate increases are one-half of one percent to two percent per adjustment and are fixed over the life of the security.

Our primary source of funds has been deposits, consisting primarily of time deposits and the interest-bearing High Value Checking account product, which have substantially shorter terms to maturity than our mortgage loan portfolio. We use securities sold under agreements to repurchase and FHLB advances as additional sources of funds. These borrowings are generally long-term to maturity, in an effort to offset our short-term deposit liabilities and assist in managing our interest rate risk. Certain of these borrowings have call options that could shorten their maturities in a changing interest rate environment. We intend to continue to grow our borrowed funds, as part of our interest rate risk management strategy with new borrowings having maturities of ten years and initial non-call periods of one to five years. During 2005 our borrowed funds increased significantly when compared to our deposits due to the use of deposits by our customers to purchase stock in our second-step conversion and the significant competition for deposits in the New York metropolitan area.

Due to the nature of our operations, we are not subject to foreign currency exchange or commodity price risk. Instead, our mortgage loan portfolio, the majority of which is located in New Jersey, New York and Connecticut, is subject to risks associated with the local economy. The purchases of first mortgage loans have allowed us to geographically diversify our mortgage loan portfolio in order to attempt to mitigate this concentration risk. We do not own any trading assets. We did not engage in any hedging transactions that use derivative instruments (such as interest rate swaps and caps) during 2005 and did not have any such hedging transactions in place at December 31, 2005. In the future, we may, with approval of our Board of Directors, engage in hedging transactions utilizing derivative instruments, but we have no current plans to do so.

Simulation Model. We use a simulation model as our primary means to calculate and monitor the interest rate risk inherent in our portfolio. This model reports net interest income and the present value of equity in different interest rate environments, assuming an instantaneous and permanent interest rate shock to all interest rate-sensitive assets and liabilities. We assume maturing or called instruments are reinvested into the same type of product, with the rate earned or paid reset to our currently offered rate for loans and deposits, or the current market rate for securities and borrowed funds.

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Our interest-earning assets and interest-bearing liabilities are generally reported at the earlier of their maturity date or next rate reset date, subject to prepayment rates, non-maturity deposit decay rates, and the call of certain of our investment securities and borrowed funds. In the preparation of the simulation model, we are required to make certain assumptions regarding reporting changes, which are highly subjective to the current interest rate environment. The information presented in the following table is based on the following assumptions:

• we assumed an annual prepayment rate for fixed-rate first mortgage loans of 125% of the FHLMC fixed-rate index of moderately seasoned loans and an annual prepayment rate for variable-rate first mortgage loans of 125% of the FHLMC 5 year balloon index of new loans;

• we assumed an annual prepayment rate for our mortgage-backed securities using the prepayment index associated with the security type;

• we reported savings accounts that had no stated maturity using decay rates (the assumed rate at which the balance of existing accounts would decline) of: 5.0% in less than six months, 5.0% in six months to one year, 5.0% in one year to two years, 5.0% in two years to three years, 10.0% in three years to five years, and 70.0% in more than five years;

• we reported interest-bearing transaction accounts that had no stated maturity using decay rates of : 5.0% in less than six months, 5.0% in six months to one year, 10.0% in one to two years, 10.0% in two to three years, 20.0% in three years to five years, and 50.0% in more than five years;

• we reported money market accounts that had no stated maturity using decay rates of: 2.5% in less than six months, 2.5% in six months to one year, 10.0% in one to two years, 10.0% in two to three years, 20.0% in three years to five years, and 55.0% in more than five years;

• the model will report callable investment securities and borrowed funds at the earlier of their next call date or maturity date given the rate of the instrument in relation to the current market rate environment and the call option frequency, and the model assumed no calls of investment securities and $3.28 billion of calls of borrowed funds over the next year.

The prepayment rate on our first mortgage loans and mortgage-backed securities will fluctuate given the current market interest rate environment. We use 125% of the FHLMC index for our first mortgage loans as we hold a high percentage of jumbo loans in our portfolio, which tend to prepay faster than conforming product, and a high percentage of our loans are in the active New York metropolitan market area. Generally, prepayment rates have decreased during 2005 due to the relative stability of intermediate- and long-term market interest rates over that period. Our determination of deposit decay rates is based on historical experience with the varying non-maturity deposit types and an analysis of our current deposit base. The change in the deposit decay rates for regular savings deposits and interest-bearing transaction accounts from the decay rate used at December 31, 2004 was due to the decline in those balances during 2005 due to a shift in deposits to time deposits. The deposit decay rate assumptions are examined by a third party for reasonableness.

Prepayment rates, deposit decay rates and anticipated calls of investment securities or borrowed funds can have a significant impact on the results of the simulation model. While we believe that our assumptions are reasonable, actual future deposit decay activity, mortgage and mortgage-backed securities prepayments, and the timing of calls of federal agency bonds and borrowings may vary materially from our estimates and assumptions. Significant increases in market interest rates may tend to reduce

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prepayment speeds on our mortgage-related assets, as fewer borrowers refinance their loans. At the same time, deposit decay rates may tend to increase in the shorter-term periods, as depositors seek higher yielding investments elsewhere. If these trends occur, we could experience larger negative percent changes in our model results in the varying rate shock scenarios.

As a primary means of managing interest rate risk, we monitor the impact of interest rate changes on our net interest income over the next twelve-month period. This model does not purport to provide estimates of net interest income over the next twelve-month period, but attempts to assess the impact of a simultaneous and parallel interest rate change on our net interest income. The following table reports the changes to our net interest income over various interest rate change scenarios. Our internal policy sets a maximum change of 40.0% given a positive or negative 200 basis point interest rate shock.

Change in	Percent Change in
Interest Rates	Net Interest Income
(Basis points)
200		(8.50	)%
100		(3.66	)
50		(1.64	)
0		—
(50)		(0.19	)
(100)		(3.13	)
(200)		(13.36	)

As indicated in the table, the percent change in our net interest income in the positive 200 basis point shock scenario is negative 8.50% compared with negative 6.80% at December 31, 2004. The percent change in net interest in the negative 100 basis point shock scenario was negative 3.13% at December 31, 2005 compared with negative 5.81% in the negative basis 100 basis point scenario at December 31, 2004. We did not report the change in the negative 200 basis point scenario at December 31, 2004 as the results would not have been meaningful given market interest rates at that time. The negative change to net interest income in the positive change scenarios was primarily due to the expected call, and subsequent reset to higher market interest rates, of our borrowed funds. The negative change to net interest income in the negative change scenarios was primarily due to the expected call of our government-sponsored agency securities and the acceleration of the prepayment speeds on our mortgage-related assets, and the subsequent reset to lower market interest rates of the reinvested assets.

We also monitor our interest rate risk by monitoring changes in the present value of equity in the different rate environments. The present value of equity is the difference between the estimated fair value of interest rate-sensitive assets and liabilities. The changes in market value of assets and liabilities due to changes in interest rates reflect the interest sensitivity of those assets and liabilities as their values are derived from the characteristics of the asset or liability (i.e., fixed-rate, adjustable-rate, caps, floors) relative to the current interest rate environment. For example, in a rising interest rate environment the fair market value of a fixed-rate asset will decline, whereas the fair market value of an adjustable-rate asset, depending on its repricing characteristics, may not decline. Increases in the market value of assets will increase the present value of equity whereas decreases in the market value of assets will decrease the present value of equity. Conversely, increases in the market value of liabilities will decrease the present value of equity whereas decreases in the market value of liabilities will increase the present value of equity.

The following table presents the estimated present value of equity over a range of interest rate change scenarios at December 31, 2005. The present value ratio shown in the table is the present value of equity

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as a percent of the present value of total assets in each of the different rate environments. Our current policy sets a minimum ratio of the present value of equity to the fair value of assets in the current interest rate environment (no rate shock) of 8.00%, a minimum present value ratio of 6.50% in the plus 200 basis point interest rate shock scenario and a minimum present value ratio of 6.00% in the minus 200 basis point scenario.

											Present Value of Equity
											As Percent of Present
			Present Value of Equity								Value of Assets
Change in			Dollar		Dollar			Percent			Present			Change in
Interest Rates			Amount		Change			Change			Value Ratio			Basis Points
(Basis points)			(Dollars in thousands)
	200		$	4,852,550	$	(1,271,138	)		(20.76	)%		18.71	%		(309	)
	100			5,526,081		(597,607	)		(9.76	)		20.45			(135	)
	50			5,850,832		(272,856	)		(4.46	)		21.21			(59	)
	0			6,123,688		—			—			21.80			—
	(50	)		6,258,319		134,631			2.20			21.96			16
	(100	)		5,984,036		(139,652	)		(2.28	)		20.95			(85	)
	(200	)		5,012,180		(1,111,508	)		(18.15	)		17.57			(423	)

As indicated in the table, our present value ratio in the positive 200 basis point scenario was 18.71% compared with 9.44% at December 31, 2004. The increase in the present value ratio was primarily due to the infusion of capital due to the completion of our second-step conversion and stock offering. The change in the present value ratio in the positive 200 basis point scenario was negative 309 basis points at December 31, 2005 compared with negative 307 basis points at December 31, 2004. The decreases in the present value of equity and the present value ratio in the increasing rate scenarios in the December 31, 2005 analysis were primarily due to the high percentage of fixed-rate mortgage loans, mortgage-backed securities and investment securities in our portfolio. At December 31, 2005, fixed-rate interest earning-assets were 70.3% of total interest-earning assets. This percentage of fixed-rate interest-earning assets to total interest-earning assets may have an adverse impact on our earnings in a rising rate environment, as these assets will not reprice in a rising rate environment.

The present value ratio in the negative 100 basis point change was 20.95% at December 31, 2005 compared with 11.02% in the negative 100 basis point change at December 31, 2004. The increase in the present value ratio was primarily due to the infusion of capital due to the completion of our second-step conversion and stock offering. The change in the present value ratio in the negative 100 basis point scenario was negative 85 basis points at December 31, 2005 compared with negative 149 basis points in the negative 100 basis point scenario at December 31, 2004. We did not report the change in the negative 200 basis point scenario at December 31, 2004 as the results would not have been meaningful given market interest rates at that time. The decreases in the present value of equity and the present value ratio in the increasing rate scenarios in the December 31, 2005 analysis were primarily due to the growth of our fixed-rate borrowed funds with long terms to maturity, which generally do not reprice in a decreasing rate environment.

The methods we used in simulation modeling are also inherently imprecise. This type of modeling requires that we make assumptions that may not reflect the manner in which actual yields and costs respond to changes in market interest rates. For example, we assume the composition of the interest rate-sensitive assets and liabilities will remain constant over the period being measured and that all interest rate shocks will be uniformly reflected across the yield curve, regardless of the duration to maturity or

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repricing. The table assumes that we will take no action in response to the changes in interest rates. In addition, prepayment estimates and other assumptions within the model are subjective in nature, involve uncertainties, and, therefore, cannot be determined with precision. Accordingly, although the previous two tables may provide an estimate of our interest rate risk at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in interest rates on our net interest income or present value of equity.

Gap Analysis. The matching of the repricing characteristics of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate-sensitive” and by monitoring a financial institution’s interest rate sensitivity “gap.” An asset or liability is said to be “interest rate-sensitive” within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period.

A gap is considered negative when the amount of interest-bearing liabilities maturing or repricing within a specific time period exceeds the amount of interest-earning assets maturing or repricing within that same period. A gap is considered positive when the amount of interest-earning assets maturing or repricing within a specific time period exceeds the amount of interest-bearing liabilities maturing or repricing within that same time period. During a period of rising interest rates, a financial institution with a negative gap position would be expected, absent the effects of other factors, to experience a greater increase in the costs of its interest-bearing liabilities relative to the yields of its interest-earning assets and thus a decrease in the institution’s net interest income. An institution with a positive gap position would be expected, absent the effect of other factors, to experience the opposite result. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to reduce net interest income.

The following table, referred to as the gap table, presents the amounts of our interest-earning assets and interest-bearing liabilities outstanding at December 31, 2005, which we anticipate to reprice or mature in each of the future time periods shown. Except for prepayment activity and non-maturity deposit decay rates, we determined the amounts of assets and liabilities that reprice or mature during a particular period in accordance with the earlier of the term to rate reset or the contractual maturity of the asset or liability. For purposes of this table, assumptions used in decay rates and prepayment activity are similar to those used in the preparation of our simulation model. Borrowed funds are reported at the anticipated call date, for those that are callable within one year, or at their contractual maturity date. We have excluded originated non-accrual mortgage loans of $4,312,000 and non-accrual other loans of $2,000 from the table.

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	At December 31, 2005
										More than			More than
				More than			More than			two years			three years
	Six months			six months			one year to			to three			to five			More than
	or less			to one year			two years			years			years			five years			Total
							(Dollars in thousands)
Interest-earning assets:
First mortgage loans	$	1,145,635		$	1,153,163		$	1,891,448		$	1,798,985		$	2,504,606		$	6,328,662		$	14,822,499
Consumer and other loans		29,198			295			1,410			4,390			18,772			181,571			235,636
Federal funds sold		4,587			—			—			—			—			—			4,587
Mortgage-backed securities		1,178,360			1,423,167			893,377			1,098,697			1,352,854			964,042			6,910,497
FHLB stock		226,962			—			—			—			—			—			226,962
Investment securities		499,815			1,097,103			915,622			69,886			1,762,959			1,151,342			5,496,727
Total interest-earning assets		3,084,557			3,673,728			3,701,857			2,971,958			5,639,191			8,625,617			27,696,908
Interest-bearing liabilities:
Savings accounts		40,983			41,582			40,320			40,320			80,640			564,480			808,325
Interest-bearing transaction accounts		178,319			178,319			361,664			361,664			723,329			1,813,349			3,616,644
Money market accounts		8,551			8,551			34,202			34,202			68,404			188,111			342,021
Time deposits		3,116,637			1,864,214			705,092			200,195			288,130			—			6,174,268
Borrowed funds		700,000			2,525,000			—			—			250,000			7,875,000			11,350,000
Total interest-bearing liabilities		4,044,490			4,617,666			1,141,278			636,381			1,410,503			10,440,940			22,291,258
Interest rate sensitivity gap	$	(959,933	)	$	(943,938	)	$	2,560,579		$	2,335,577		$	4,228,688		$	(1,815,323	)	$	5,405,650
Cumulative interest rate sensitivity gap	$	(959,933	)	$	(1,903,871	)	$	656,708		$	2,992,285		$	7,220,973		$	5,405,650
Cumulative interest rate sensitivity gap as a percent of total assets		(3.42	)%		(6.78	)%		2.34	%		10.66	%		25.72	%		19.25	%
Cumulative interest-earning assets as a percent of interest-bearing liabilities		76.27	%		78.02	%		106.70	%		128.66	%		160.93	%		124.25	%

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As indicated in the gap table our interest-bearing liabilities maturing or repricing within one year exceeded our interest-earning assets maturing or repricing within the same period by $1.90 billion compared with $1.06 billion at December 31, 2004. This represented a cumulative one-year interest rate sensitivity gap as a percent of total assets of negative 6.8% at December 31, 2005, compared with negative 5.3% at December 31, 2004. The ratio of interest-earning assets maturing or repricing within one year to interest-bearing liabilities maturing or repricing within one year was 78.0% at December 31, 2005 compared with 78.2% at December 31, 2004. This negative gap position is expected to have an adverse impact on our net interest income in a rising interest rate environment. The change in these ratios, year-to-year, was partially due to the larger amount of anticipated calls of borrowed funds in the current year due to the rising interest rate environment and a shift of our customer deposits to time deposit maturities of less than one year, due to internal pricing strategies, from our High Value Checking account product, which had decay rate assumptions primarily in excess of one year.

The methods used in the gap table are inherently imprecise. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Certain assets, such as adjustable-rate loans and mortgage-backed securities, have features that limit changes in interest rates on a short-term basis and over the life of the loan. If interest rates change, prepayment and early withdrawal levels would likely deviate from those assumed in calculating the table. Finally, the ability of borrowers to make payments on their adjustable-rate loans may decrease if interest rates increase.

Off-Balance Sheet Arrangements and Contractual Obligations

Hudson City is a party to certain off-balance sheet arrangements, which occur in the normal course of our business, to meet the credit needs of our customers and the growth initiatives of the Bank. These arrangements are primarily commitments to originate and purchase mortgage loans, and to purchase mortgage-backed securities.

The following table reports the amounts of contractual obligations for Hudson City as of December 31, 2005.

	Payments Due By Period
			Less Than		1 Year to		3 Years to		More Than
Contractual Obligation	Total		1 Year		3 Years		5 Years		5 Years
	(In thousands)
First mortgage loan originations	$	260,755	$	260,755	$	—	$	—	$	—
Mortgage loan purchases		715,445		715,445		—		—		—
Mortgage-backed security purchases		452,500		452,500		—		—		—
Operating leases		95,573		5,199		11,238		10,665		68,471
Total	$	1,524,273	$	1,433,899	$	11,238	$	10,665	$	68,471

Commitments to extend credit are agreements to lend money to a customer as long as there is no violation of any condition established in the contract. Commitments to fund first mortgage loans generally have fixed expiration dates of approximately 90 days and other termination clauses. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Hudson City Savings evaluates each customer’s credit-worthiness on a case-by-case basis. Additionally, we have available home equity and overdraft lines of credit, which do not have fixed expiration dates, of approximately $82.1 million. We are not obligated to advance further

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amounts on credit lines if the customer is delinquent, or otherwise in violation of the agreement. The commitments to purchase first mortgage loans and mortgage-backed securities had a normal period from trade date to settlement date of approximately 60 days.

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R) (revised 2004), “Share-Based Payment.” This Statement is a revision of SFAS No. 123(R), “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. SFAS No. 123(R) (revised 2004) established standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. This Statement requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. This Statement establishes grant date fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees, except for equity instruments held by employee share ownership plans. We adopted this Statement effective on January 1, 2006, using the modified prospective method, based upon guidance from the Securities and Exchange Commission (“SEC”), which delayed the original effective date of July 1, 2005. We do not expect the adoption of SFAS No. 123(R) (revised 2004) will have a material impact on our financial condition or results of operations.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections”, which replaces APB No. 20, “Accounting Changes”, and SFAS No. 3, “ Reporting Changes in Interim Financial Statements”. SFAS No. 154 changes the accounting for, and reporting of, a change in accounting principle. SFAS No. 154 requires retrospective application to prior period’s financial statements of voluntary changes in accounting principle and changes required by new accounting standards when the standard does not include specific transition provisions, unless it is impracticable to do so. SFAS No. 154 is effective for accounting changes and corrections of errors in fiscal years beginning after December 15, 2005 and will only effect Hudson City’s financial statements upon adoption of a voluntary change in accounting principle or upon adoption of a new standard that does not contain transition provisions.

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In November 2005, the FASB issued FSP No. 115-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” which addresses the determination of when an investment is considered impaired, whether the impairment is other-than-temporary and how to measure an impairment loss. FSP No. 115-1 also addresses accounting considerations subsequent to the recognition of an other-than-temporary impairment on a debt security and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP No. 115-1 replaces the impairment guidance in Emerging Issues Task Force Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” with references to existing authoritative literature concerning other-than-temporary impairment determinations (principally SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and SEC Staff Accounting Bulletin No. 59, “ Accounting for Noncurrent Marketable Equity Securities”). Under FSP No. 115-1, impairment losses must be recognized in earnings for the entire difference between the security’s cost and its fair value at the financial statement date, without considering partial recoveries subsequent to that date. FSP No. 115-1 also requires that an investor recognize an other-than-temporary impairment loss when a decision to sell a security has been made and the investor does not expect the fair value of the security to fully recover prior to the expected time of sale. FSP No. 115-1 is effective for reporting periods beginning after December 15, 2005. We do not expect our application of FSP 115-1 to have a material impact on our financial condition or results of operations.

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Impact of Inflation and Changing Prices

The Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements of Hudson City Bancorp have been prepared in accordance with U.S. generally accepted accounting principles, commonly referred as GAAP. GAAP generally requires the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike industrial companies, our assets and liabilities are primarily monetary in nature. As a result, changes in market interest rates have a greater impact on performance than do the effects of inflation.

Critical Accounting Policies

Note 1 to our Audited Consolidated Financial Statements in Item 8 of this report contains a summary of our significant accounting policies. We believe our policies with respect to the methodology for our determination of the allowance for loan losses and asset impairment judgments, including other than temporary declines in the value of our securities, involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. Changes in these judgments, assumptions or estimates could cause reported results to differ materially. These critical policies and their application are continually reviewed by management, and are periodically reviewed with the Audit Committee and our Board of Directors.

Allowance for Loan Losses. The allowance for loan losses has been determined in accordance with U.S. generally accepted accounting principles, under which we are required to maintain adequate allowances for loan losses. We are responsible for the timely and periodic determination of the amount of the allowance required. We believe that our allowance for loan losses is adequate to cover specifically identifiable loan losses, as well as estimated losses inherent in our portfolio for which certain losses are probable but not specifically identifiable.

Our primary lending emphasis is the origination and purchase of one- to four-family first mortgage loans on residential properties and, to a lesser extent, second mortgage loans on one- to four-family residential properties resulting in a loan concentration in residential first mortgage loans at December 31, 2005. As a result of our lending practices, we also have a concentration of loans secured by real property located in New Jersey, New York and Connecticut. Based on the composition of our loan portfolio and the growth in our loan portfolio, we believe the primary risks inherent in our portfolio are increases in interest rates, a decline in the economy, generally, and a decline in real estate market values. Any one or a combination of these events may adversely affect our loan portfolio resulting in increased delinquencies, loan losses and future levels of provisions. We consider it important to maintain the ratio of our allowance for loan losses to total loans at an acceptable level given current economic conditions, interest rates and the composition of our portfolio.

Due to the nature of our loan portfolio, our evaluation of the adequacy of our allowance for loan losses is performed on a “pooled” basis. Each month we prepare a worksheet which categorizes the entire loan portfolio by certain risk characteristics such as loan type (one- to four-family, multi-family, etc.), loan source (originated or purchased) and payment status (i.e., current or number of days delinquent). Loans

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with known potential losses are categorized separately. We assign potential loss factors to the payment status categories on the basis of our assessment of the potential risk inherent in each loan type. These factors are periodically reviewed for appropriateness giving consideration to charge-off history and delinquency trends. We use this worksheet, as a tool, together with principal balances and delinquency reports, to evaluate the adequacy of the allowance for loan losses. Other key factors we consider in this process are current real estate market conditions in geographic areas where our loans are located, changes in the trend of non-performing loans, the current state of the local and national economy and loan portfolio growth.

We maintain the allowance for loan losses through provisions for loan losses that we charge to income. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. We establish the provision for loan losses after considering the results of our review of delinquency and charge-off trends, the allowance for loan loss worksheet, the amount of the allowance for loan losses in relation to the total loan balance, loan portfolio growth, U.S. generally accepted accounting principles and regulatory guidance. We have applied this process consistently and we have made minimal changes in the estimation methods and assumptions that we have used.

During 2005, we lowered the loss factors used in our worksheet on our first mortgage loans to reflect the seasoning of the portfolio and recent charge-off and delinquency experience. We provided a minimal amount for loan losses during the first quarter of 2005, and did not provide for loan losses for the second through fourth quarters of 2005 reflecting recent low levels of charge-offs, the stability in the real estate market and the resulting stability in our overall loan quality. At December 31, 2005, the allowance for loan losses as a percentage of total loans was 0.18%, which, given the primary emphasis of our lending practices and the current market conditions, we consider to be at an acceptable level. The slight increase in the allowance for loan losses during 2005 was due to the minimal provision and net recovery during 2005.

We believe that we have established and maintained the allowance for loan losses at adequate levels. Additions may be necessary if future economic and other conditions differ substantially from the current operating environment. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant judgment and short-term change.

Asset Impairment Judgments. Certain of our assets are carried in our consolidated statements of financial condition at fair value or at the lower of cost or fair value. Valuation allowances are established when necessary to recognize impairment of such assets. We periodically perform analyses to test for impairment of various assets. In addition to our impairment analyses related to loans discussed above, another significant impairment analysis relates to the value of other than temporary declines in the value of our securities.

Our available for sale portfolio is carried at estimated fair value, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income in stockholders’ equity. The securities which we have the positive intent and ability to hold to maturity are classified as held to maturity and are carried at amortized cost. We conduct a periodic review and evaluation of the securities portfolio to determine if the value of any security has declined below its carrying value and whether such decline is other than temporary.

If such decline is deemed other than temporary, we would adjust the carrying amount of the security by writing down the security to fair market value through a charge to current period operations. The market values of our securities are significantly affected by changes in interest rates. In general, as interest rates

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rise, the market value of fixed-rate securities will decrease; as interest rates fall, the market value of fixed-rate securities will increase. With significant changes in interest rates, we evaluate our intent and ability to hold the security to maturity or for a sufficient time to recover the recorded principal balance. Estimated fair values for securities are based on published or securities dealers’ market values.

Pension and Other Postretirement Benefit Assumptions. Non-contributory retirement and post-retirement defined benefit plans are maintained for certain employees, including retired employees, hired on or before July 31, 2005 who have met other eligibility requirements of the plans. The measurement date for year-end disclosure information is December 31 and the measurement date for net periodic benefit cost is January 1.

The expected cost of benefits provided under the qualified and non-qualified defined benefit retirement plans is based primarily on years of service, compensation and assumptions regarding interest rates, investment returns and life expectancy. Funding of the qualified retirement plan is actuarially determined on an annual basis. It is our policy to fund the qualified retirement plan sufficiently to meet the minimum requirements set forth in the Employee Retirement Income Security Act of 1974. Our defined pension plan met all minimum funding requirements as of December 31, 2005, based on the actuarial valuation of the plan assets and the benefit obligation. We contributed $160,000 to the plan assets in 2005. We anticipate contributing funds to the plan assets during 2006 to meet any minimum funding requirements that may become payable as a result of the actuarial valuation of plan assets and the benefit obligation in 2006.

The expected cost of benefits other than pensions provided for retired employees is actuarially determined and accrued ratably from the date of hire to the date the employee is fully eligible to receive the benefits. Participants generally become eligible for retiree health care and life insurance benefits after ten years of service.

During 2005, we enacted changes to the plans in an effort to control expenses related to the maintenance of these plans. First, we discontinued participation in both the defined pension and post-retirement health benefit plans for employees hired on or after August 1, 2005. We believe the retirement funding opportunities provided by our employee stock ownership plan and defined contribution plan, both of which generate substantial expenses for the Bank, should allow those new employees not participating in the plans to provide for their own retirement. Second, for employees who retired after December 31, 2005, we capped our contributions associated with the post-retirement health benefit plan, for years after 2007, to the contribution made during 2007. These changes had an immaterial impact on the current period expenses associated with the maintenance of these plans, but did decrease the projected and accumulated benefits obligations. We anticipate future periodic expense savings from these plan amendments due to the reduction in the benefit obligations.

We provide our actuary with certain rate assumptions used in measuring our benefit obligation. The most significant of these is the discount rate used to calculate the period-end present value of the benefit obligations, and the expense to be included in the following year’s financial statements. A lower discount rate will result in a higher benefit obligation and expense, while a higher discount rate will result in a lower benefit obligation and expense. The discount rate assumption was determined based on a cash flow-yield curve model specific to our pension and post-retirement plans. We compare this rate to certain market indices, such as long-term treasury bonds, or the Moody’s or Merrill Lynch bond indices, for reasonableness. A discount rate of 5.75% was selected for the December 31, 2005 measurement date and the 2006 expense calculation.

For our pension plan, we also assumed a rate of salary increase of 4.25% for future periods. This rate is comparable to actual salary increases experienced over prior years. We assumed a return on plan assets of

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8.75% for future periods. We actuarially determine the return on plan assets based on actual plan experience over the previous ten years. The actual return on plan assets was 1.3% for 2005.

For our post-retirement benefit plan, the assumed health care cost trend rate used to measure the expected cost of other benefits for 2005 was 10.00%. The rate was assumed to decrease gradually to 4.75% for 2013 and remain at that level thereafter. Changes to the assumed health care cost trend rate are expected to have an immaterial impact as we capped our obligations to contribute to the premium cost of coverage to the post-retirement health benefit plan at the 2007 premium level.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Information regarding quantitative and qualitative disclosures about market risk appears under
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Management of Interest Rate Risk.

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Item 8. Financial Statements and Supplementary Data.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Hudson City Bancorp, Inc.:

We have audited the accompanying consolidated statements of financial condition of Hudson City Bancorp, Inc. and subsidiary (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2005. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hudson City Bancorp, Inc. and subsidiary as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Hudson City Bancorp, Inc. and subsidiary’s internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 14, 2006 expressed an unqualified opinion on management’s assessment of, and the effective operation of, internal control over financial reporting.

New York, New York
March 14, 2006

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Hudson City Bancorp, Inc.:

We have audited management’s assessment, included in the accompanying Management Report on Internal Control Over Financial Reporting, that Hudson City Bancorp, Inc. and subsidiary (the “Company) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Hudson City Bancorp, Inc. and subsidiary maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition of Hudson City Bancorp, Inc. and subsidiary as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2005, and our report dated March 14, 2006 expressed an unqualified opinion on those consolidated financial statements.

New York, New York
March 14, 2006

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Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition

	December 31,			December 31,
	2005			2004
	(In thousands)
Assets:
Cash and due from banks	$	97,672		$	122,483
Federal funds sold		4,587			45,700
Total cash and cash equivalents		102,259			168,183
Investment securities held to maturity, market value of $1,508,055 at December 31, 2005 and $1,326,336 at December 31, 2004		1,534,216			1,334,249
Investment securities available for sale, at market value		3,962,511			1,594,639
Federal Home Loan Bank of New York stock		226,962			140,000
Mortgage-backed securities held to maturity, market value of $4,288,772 at December 31, 2005 and $3,721,029 at December 31, 2004		4,389,864			3,755,921
Mortgage-backed securities available for sale, at market value		2,520,633			1,620,708
Loans		15,062,449			11,363,039
Deferred loan costs (fees)		1,653			(8,073	)
Allowance for loan losses		(27,393	)		(27,319	)
Net loans		15,036,709			11,327,647
Foreclosed real estate, net		1,040			878
Accrued interest receivable		140,723			97,490
Banking premises and equipment, net		49,132			36,399
Other assets		111,304			69,867
Total Assets	$	28,075,353		$	20,145,981
Liabilities and Stockholders’ Equity:
Deposits:
Interest-bearing	$	10,941,258		$	11,059,798
Noninterest-bearing		442,042			417,502
Total deposits		11,383,300			11,477,300
Borrowed funds		11,350,000			7,150,000
Accrued expenses and other liabilities		140,577			115,797
Total liabilities		22,873,877			18,743,097
Common stock, $0.01 par value, 3,200,000,000 shares authorized; 741,466,555 shares issued, 588,905,543 shares outstanding at December 31, 2005 and 596,777,836 shares outstanding at December 31, 2004		7,415			7,415
Additional paid-in capital		4,533,329			565,403
Retained earnings		1,759,492			1,588,792
Treasury stock, at cost; 152,561,012 shares at December 31, 2005 and 144,688,719 shares at December 31, 2004		(798,232	)		(696,812	)
Unallocated common stock held by the employee stock ownership plan		(234,264	)		(47,552	)
Unearned common stock held by the recognition and retention plan		(2,815	)		(5,267	)
Accumulated other comprehensive loss, net of tax		(63,449	)		(9,095	)
Total stockholders’ equity		5,201,476			1,402,884
Commitments and contingencies
Total Liabilities and Stockholders’ Equity	$	28,075,353		$	20,145,981

See accompanying notes to consolidated financial statements.

Page 95

Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Income

	Year Ended December 31,
	2005		2004		2003
	(In thousands, except per share data)
Interest and Dividend Income:
Interest and fees on first mortgage loans	$	689,435	$	539,966	$	414,417
Interest and fees on consumer and other loans		10,786		8,650		8,379
Interest on mortgage-backed securities held to maturity		182,309		174,596		217,962
Interest on mortgage-backed securities available for sale		90,754		67,739		50,273
Interest on investment securities held to maturity		72,582		41,435		87
Interest and dividends on investment securities available for sale		118,635		77,879		79,992
Dividends on Federal Home Loan Bank of New York stock		9,394		3,213		4,424
Interest on federal funds sold		5,013		1,580		1,794
Total interest and dividend income		1,178,908		915,058		777,328
Interest Expense:
Interest on deposits		293,736		214,813		209,339
Interest on borrowed funds		323,038		215,253		167,015
Total interest expense		616,774		430,066		376,354
Net interest income		562,134		484,992		400,974
Provision for Loan Losses		65		790		900
Net interest income after provision for loan losses		562,069		484,202		400,074
Non-interest Income:
Service charges and other income		5,267		5,128		5,338
Gains on securities transactions, net		2,740		11,429		24,326
Total non-interest income		8,007		16,557		29,664
Non-interest Expense:
Compensation and employee benefits		83,211		79,195		68,776
Net occupancy expense		20,211		16,035		14,981
Federal deposit insurance assessment		1,656		1,644		1,564
Computer and related services		2,498		2,041		1,714
Other expense		20,127		19,433		15,492
Total non-interest expense		127,703		118,348		102,527
Income before income tax expense		442,373		382,411		327,211
Income Tax Expense		166,318		143,145		119,801
Net income	$	276,055	$	239,266	$	207,410
Basic earnings per share	$	0.49	$	0.41	$	0.35
Diluted earnings per share	$	0.48	$	0.40	$	0.34

See accompanying notes to consolidated financial statements.

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Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Changes in Stockholders’ Equity

												Unallocated			Unearned			Accumulated
			Additional									Common			Common			Other			Total
	Common		Paid-In			Retained			Treasury			Stock Held			Stock Held			Comprehensive			Stockholders’
	Stock		Capital			Earnings			Stock			by the ESOP			by the RRP			Income (Loss)			Equity
	(In thousands)
Balance at December 31, 2002	$	7,415	$	525,394		$	1,291,960		$	(465,249	)	$	(51,474	)	$	(16,253	)	$	24,290		$	1,316,083
Comprehensive income:
Net income		—		—			207,410			—			—			—			—			207,410
Other comprehensive income:
Unrealized holding losses arising during period (net of tax of $9,065)		—		—			—			—			—			—			(15,859	)		(15,859	)
Reclassification adjustment for gains in net income (net of tax of $9,937)		—		—			—			—			—			—			(14,389	)		(14,389	)
Total comprehensive income																						177,162
Declaration of dividends ($0.162 per share)		—		—			(95,627	)		—			—			—			—			(95,627	)
Tax benefit from stock plans		—		7,686			—			—			—			—			—			7,686
Allocation of ESOP stock		—		5,724			—			—			1,961			—			—			7,685
Vesting of RRP stock		—		(317	)		—			—			—			6,790			—			6,473
Purchase of treasury stock		—		—			—			(101,057	)		—			—			—			(101,057	)
Exercise of stock options		—		—			(7,486	)		18,447			—			—			—			10,961
Balance at December 31, 2003		7,415		538,487			1,396,257			(547,859	)		(49,513	)		(9,463	)		(5,958	)		1,329,366
Comprehensive income:
Net income		—		—			239,266			—			—			—			—			239,266
Other comprehensive income:
Unrealized holding gains arising during period (net of tax of $2,503)		—		—			—			—			—			—			3,623			3,623
Reclassification adjustment for gains in net income (net of tax of $4,669)		—		—			—			—			—			—			(6,760	)		(6,760	)
Total comprehensive income																						236,129
Declaration of dividends ($0.218 per share)		—		—			(40,482	)		—			—			—			—			(40,482	)
Tax benefit from stock plans		—		20,880			—			—			—			—			—			20,880
Allocation of ESOP stock		—		8,544			—			—			1,961			—			—			10,505
Purchase of RRP stock		—		—			—			—			—			(7,299	)		—			(7,299	)
Vesting of RRP stock		—		(2,508	)		—			—			—			11,495			—			8,987
Purchase of treasury stock		—		—			—			(161,662	)		—			—			—			(161,662	)
Exercise of stock options		—		—			(6,249	)		12,709			—			—			—			6,460
Balance at December 31, 2004		7,415		565,403			1,588,792			(696,812	)		(47,552	)		(5,267	)		(9,095	)		1,402,884
Comprehensive income:
Net income		—		—			276,055			—			—			—			—			276,055
Other comprehensive income:
Unrealized holding losses arising during period (net of tax of $35,884)		—		—			—			—			—			—			(51,958	)		(51,958	)
Reclassification adjustment for gains in net income (net of tax of $1,119)		—		—			—			—			—			—			(1,621	)		(1,621	)
Minimum pension liability adjustment		—		—			—			—			—			—			(775	)		(775	)
Total comprehensive income																						221,701
Common stock offering		—		3,953,001			—			—			—			—			—			3,953,001
Declaration of dividends ($0.268 per share)		—		—			(102,103	)		—			—			—			—			(102,103	)
Tax benefit from stock plans		—		9,431			—			—			—			—			—			9,431
Purchase of ESOP stock		—		—			—			—			(189,348	)		—			—			(189,348	)
Allocation of ESOP stock		—		5,632			—			—			2,636			—			—			8,268
Purchase of RRP stock		—		—			—			—			—			(1,290	)		—			(1,290	)
Vesting of RRP stock		—		(138	)		—			—			—			3,742			—			3,604
Purchase of treasury stock		—		—			—			(107,499	)		—			—			—			(107,499	)
Exercise of stock options		—		—			(3,252	)		6,079			—			—			—			2,827
Balance at December 31, 2005	$	7,415	$	4,533,329		$	1,759,492		$	(798,232	)	$	(234,264	)	$	(2,815	)	$	(63,449	)	$	5,201,476

See accompanying notes to consolidated financial statements.

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Hudson City Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows

	Year Ended December 31,
	2005			2004			2003
	(In thousands)
Cash Flows from Operating Activities:
Net income .	$	276,055		$	239,266		$	207,410
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, accretion and amortization expense		10,197			24,129			44,497
Provision for loan losses		65			790			900
Gains on net securities transactions		(2,740	)		(11,429	)		(24,326	)
Allocation of stock for employee benefit plans		11,872			19,492			14,158
Deferred tax benefit		(6,505	)		(6,912	)		(6,392	)
Net proceeds from sale of foreclosed real estate		1,588			2,509			3,144
Increase in accrued interest receivable		(43,233	)		(17,270	)		(10,972	)
Decrease in other assets		2,070			6,418			2,606
Increase in accrued expenses and other liabilities		24,005			15,583			8,565
Tax benefit from stock plans		9,431			20,880			7,686
Net Cash Provided by Operating Activities		282,805			293,456			247,276
Cash Flows from Investing Activities:
Originations of loans		(2,194,774	)		(1,464,641	)		(2,271,148	)
Purchases of loans		(3,676,260	)		(3,122,409	)		(3,205,249	)
Payments on loans		2,154,125			2,016,447			3,630,638
Principal collection of mortgage-backed securities held to maturity		960,630			1,445,507			3,387,605
Proceeds from sales of mortgage-backed securities held to maturity		—			—			68,652
Purchases of mortgage-backed securities held to maturity		(1,604,473	)		(921,765	)		(3,038,153	)
Principal collection of mortgage-backed securities available for sale		499,387			282,901			410,316
Proceeds from sales of mortgage-backed securities available for sale		230,632			510,496			1,329,731
Purchases of mortgage-backed securities available for sale		(1,675,428	)		(1,278,921	)		(1,489,154	)
Proceeds from maturities and calls of investment securities held to maturity		100,043			436,770			40
Purchases of investment securities held to maturity		(300,000	)		(1,769,643	)		—
Proceeds from maturities and calls of investment securities available for sale		1,600,029			986,343			1,332,222
Proceeds from sales of investment securities available for sale		9,980			—			50,557
Purchases of investment securities available for sale		(4,008,680	)		(337,306	)		(3,089,474	)
Purchases of Federal Home Loan Bank of New York stock		(104,162	)		—			(27,350	)
Redemption of Federal Home Loan Bank of New York stock		17,200			24,850			—
Purchases of premises and equipment, net		(18,566	)		(9,023	)		(2,149	)
Net Cash Used in Investment Activities		(8,010,317	)		(3,200,394	)		(2,912,916	)
Cash Flows from Financing Activities:
Net (decrease) increase in deposits		(94,000	)		1,023,520			1,315,151
Proceeds from borrowed funds		5,125,000			3,750,000			2,025,000
Principal payments on borrowed funds		(925,000	)		(1,750,000	)		(475,000	)
Cash proceeds from the common stock offering — net		3,953,001			—			—
Dividends paid		(102,103	)		(40,482	)		(95,627	)
Purchases of stock by the ESOP		(189,348	)		—			—
Purchases of stock by the RRP		(1,290	)		(7,299	)		—
Purchases of treasury stock		(107,499	)		(161,662	)		(101,057	)
Exercise of stock options		2,827			6,460			10,961
Net Cash Provided by Financing Activities		7,661,588			2,820,537			2,679,428
Net (Decrease) Increase in Cash and Cash Equivalents		(65,924	)		(86,401	)		13,788
Cash and Cash Equivalents at Beginning of Year		168,183			254,584			240,796
Cash and Cash Equivalents at End of Year	$	102,259		$	168,183		$	254,584
Supplemental Disclosures:
Interest paid	$	599,037		$	422,862		$	373,234
Income taxes paid	$	167,200		$	133,800		$	122,535

See accompanying notes to consolidated financial statements.

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1. Summary of Significant Accounting Policies

     a) Basis of Presentation

The following are the significant accounting and reporting policies applied by Hudson City Bancorp, Inc. (“Hudson City Bancorp”) and its wholly-owned subsidiary, Hudson City Savings Bank (“Hudson City Savings”), in the preparation of the accompanying consolidated financial statements. The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles. All significant intercompany transactions and balances have been eliminated in consolidation. As used in these consolidated financial statements, “Hudson City” refers to Hudson City Bancorp, Inc. and its consolidated subsidiary, depending on the context.

Hudson City Bancorp is a Delaware corporation organized in March 1999 by Hudson City Savings in connection with the conversion and reorganization of Hudson City Savings from a New Jersey mutual savings bank into a two-tiered mutual savings bank holding company structure. Prior to June 7, 2005, a majority of Hudson City Bancorp’s common stock was owned by Hudson City, MHC, a mutual holding company. On June 7, 2005, Hudson City Bancorp completed a second-step conversion and related common stock offering which culminated with Hudson City, MHC merging into Hudson City Bancorp. All prior share and per share data, and the balances in the common stock and the additional paid-in capital accounts for periods prior to June 7, 2005 have been adjusted to reflect the 3.206 to 1 stock split effected as part of the second-step conversion and stock offering. See Note 2.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and income for the period. Actual results could differ from these estimates.

     b) Comprehensive Income

Comprehensive income is comprised of net income and other comprehensive income. Other comprehensive income includes items such as unrealized gains and losses on securities available for sale, net of tax and minimum pension liabilities. Comprehensive income is presented in the consolidated statements of changes in stockholders’ equity.

     c) Statements of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, amounts due from banks and federal funds sold. Generally, federal funds are sold for one-day periods. Transfers of loans to foreclosed real estate of $1,750,000, $2,348,000 and $2,994,000 for the years ended December 31, 2005, 2004 and 2003, respectively, did not result in cash receipts or cash payments.

     d) Investment Securities

Investment securities are classified as either held to maturity or available for sale. Investment securities classified as held to maturity are stated at cost, adjusted for amortization of premiums and accretion of discounts. Amortization and accretion is reflected as an adjustment to interest income over the life of the security using the effective interest method. Hudson City has both the ability and the positive intent to hold these investment securities to maturity. Securities available for sale are carried at fair value, with unrealized gains and losses, net of tax, reported as a component of accumulated other comprehensive income, which is

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included in stockholders’ equity. Realized gains and losses are recognized when securities are sold or called using the specific identification method. The estimated fair market value of all investment securities is determined by use of quoted market prices.

     e) Mortgage-Backed Securities

Mortgage-backed securities include pass-through certificates, which represent participating interests in pools of long-term first mortgage loans originated and serviced by third-party issuers of the securities, and real estate mortgage investment conduits (“REMICs”), which are debt securities that are secured by mortgage loans or other mortgage-backed securities.

Mortgage-backed securities are classified as either held to maturity or available for sale. Mortgage-backed securities classified as held to maturity are stated at cost, adjusted for amortization of premiums and accretion of discounts. Amortization and accretion is reflected as an adjustment to interest income over the life of the security using the effective yield method. Hudson City has both the ability and the positive intent to hold these investment securities to maturity. Mortgage-backed securities available for sale are carried at fair value, with unrealized gains and losses, net of tax, reported as a component of other comprehensive income or loss, which is included in stockholders’ equity. Realized gains and losses are recognized when securities are sold using the specific identification method. The estimated fair market value of these securities is determined by use of quoted market prices.

     f) Security Impairment

We periodically perform analyses to test for impairment of various assets. A significant impairment analysis relates to the other than temporary declines in the value of our securities. We conduct periodic reviews and evaluations of our securities portfolio to determine if the value of any security has declined below its carrying value and whether such decline is other than temporary. If such decline is deemed other than temporary, we would adjust the amount of the security by writing it down to fair market value through a charge to current period operations.

     g) Loans

Loans are stated at their principal amounts outstanding. Interest income on loans is accrued and credited to income as earned. Net loan origination fees and broker costs are deferred and amortized to interest income over the life of the loan using the effective interest method. Purchased loans are stated at their principal amounts outstanding, adjusted for amortization of premiums and accretion of discounts. Such amortization and accretion is reflected in interest income over the life of the purchased loan using the effective interest method.

A loan is considered delinquent when we have not received a payment within 30 days of its contractual due date. The accrual of income on loans that do not carry private mortgage insurance or are not guaranteed by a federal agency is generally discontinued when interest or principal payments are 90 days in arrears or when the timely collection of such income is doubtful. Loans on which the accrual of income has been discontinued are designated as non-accrual loans and outstanding interest previously credited is reversed. It is recognized subsequently in the period collected or when the ultimate collection of principal is no longer in doubt. A non-accrual loan is returned to accrual status when factors indicating doubtful collection no longer exist.

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Hudson City defines the population of impaired loans to be all non-accrual commercial real estate and multi-family loans. Impaired loans are individually assessed to determine that the loan’s carrying value is not in excess of the fair value of the collateral or the present value of the loan’s expected future cash flows. Smaller balance homogeneous loans that are collectively evaluated for impairment, such as residential mortgage loans and consumer loans, are specifically excluded from the impaired loan portfolio.

     h) Allowance for Loan Losses

The allowance for loan losses has been determined in accordance with U.S. generally accepted accounting principles, under which we are required to maintain adequate allowances for loan losses. We are responsible for the timely and periodic determination of the amount of the allowance required. We believe that our allowance for loan losses is adequate to cover specifically identifiable loan losses, as well as estimated losses inherent in our portfolio for which certain losses are probable but not specifically identifiable.

Our primary lending emphasis is the origination and purchase of one- to four-family first mortgage loans on residential properties and, to a lesser extent, second mortgage loans on one- to four-family residential properties resulting in a loan concentration in residential first mortgage loans at December 31, 2005. We are one of the largest jumbo residential mortgage lenders in New Jersey and one of the largest buyers of jumbo mortgages nationally. As a result of our lending practices, we also have a concentration of loans secured by real property located in New Jersey, New York and Connecticut. Based on the composition of our loan portfolio and the growth in our loan portfolio, we believe the primary risks inherent in our portfolio are increases in interest rates, a decline in the economy, generally, and a decline in real estate market values. Any one or a combination of these events may adversely affect our loan portfolio resulting in increased delinquencies, loan losses and future levels of provisions. We consider it important to maintain the ratio of our allowance for loan losses to total loans at an acceptable level given current economic conditions, interest rates and the composition of our portfolio.

Due to the nature of our loan portfolio, our evaluation of the adequacy of our allowance for loan losses is performed on a “pooled” basis. Each month we prepare an analysis which categorizes the entire loan portfolio by certain risk characteristics such as loan type (one- to four-family, multi-family, etc.), loan source (originated or purchased) and payment status (i.e., current or number of days delinquent). Loans with known potential losses are categorized separately. We assign potential loss factors to the payment status categories on the basis of our assessment of the potential risk inherent in each loan type. These factors are periodically reviewed for appropriateness giving consideration to charge-off history and delinquency trends. We use this analysis, as a tool, together with principal balances and delinquency reports, to evaluate the adequacy of the allowance for loan losses. Other key factors we consider in this process are current real estate market conditions in geographic areas where our loans are located, changes in the trend of non-performing loans, the current state of the local and national economy and loan portfolio growth.

We maintain the allowance for loan losses through provisions for loan losses that we charge to income. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. We establish the provision for loan losses after considering the results of our review of delinquency and charge-off trends, the allowance for loan loss worksheet, the amount of the allowance for loan losses in relation to the total loan balance, loan portfolio growth, U.S. generally accepted accounting principles and regulatory guidance. We have applied this process consistently and we have made minimal changes in the estimation methods and assumptions that we have used.

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     i) Foreclosed Real Estate

Foreclosed real estate is property acquired through foreclosure or deed in lieu of foreclosure. After foreclosure, foreclosed properties held for sale are carried at the lower of fair value minus estimated cost to sell, or at cost. Fair market value is generally based on recent appraisals. Subsequent provisions, which may result from the ongoing periodic valuations of these properties, are charged to income in the period in which they are identified and credited to a valuation allowance account. Foreclosed real estate is reported net of the valuation allowance. Carrying costs, such as maintenance and taxes, are charged to operating expenses as incurred.

     j) Banking Premises and Equipment

Land is carried at cost. Buildings, leasehold improvements and furniture, fixtures and equipment are carried at cost, less accumulated depreciation and leasehold amortization. Buildings are depreciated over their estimated useful lives using the straight-line method. Furniture, fixtures and equipment are depreciated over their estimated useful lives using the double-declining balance method. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the respective leases. The costs for major improvements and renovations are capitalized, while maintenance, repairs and minor improvements are charged to operating expenses as incurred. Gains and losses on dispositions are reflected currently as other non-interest income or expense.

     k) Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

     l) Employee Benefit Plans

Hudson City maintains certain noncontributory retirement and postretirement benefit plans, which cover employees hired prior to August 1, 2005 who have met the eligibility requirements of the plans. Certain health care and life insurance benefits are provided for retired employees. The expected cost of benefits provided for retired employees is actuarially determined and accrued ratably from the date of hire to the date the employee is fully eligible to receive the benefits.

The employee stock ownership plan (“ESOP”) is accounted for in accordance with the provisions of Statement of Position 93-6, “Employer’s Accounting for Employee Stock Ownership Plans.”

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The funds borrowed by the ESOP from Hudson City Bancorp to purchase Hudson City Bancorp common stock are being repaid from Hudson City Savings’ contributions and dividends paid on unallocated ESOP shares over a period of up to 40 years. Hudson City common stock not allocated to participants is recorded as a reduction of stockholders’ equity at cost. Compensation expense for the ESOP is based on the average price of our stock during each quarter.

The Hudson City stock option plans and the recognition and retention plans (“RRP”) are accounted for in accordance with the provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), and related Interpretations. Accordingly, no compensation expense has been recognized for the stock option plans. The fair value pro forma disclosures required by Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” are presented below. Expense for the RRP in the amount of the fair value of the common stock at the date of grant is recognized ratably over the vesting period. Unvested and unallocated RRP shares are recorded as a reduction of stockholders’ equity at cost.

Had expense for Hudson City’s stock option plans been determined based on the fair value at the grant date for our stock options consistent with the method of SFAS No. 123, our net income and earnings per share for all expenses related to stock options and stocks granted in our recognition and retention plans would have been reduced to the pro forma amounts that follow:

	2005			2004			2003
	(In thousands, except per share data)
Net income, as reported	$	276,055		$	239,266		$	207,410
Add: expense recognized for the recognition and retention plans, net of related tax effect		2,249			5,623			4,103
Less: total stock option and recognition and retention plans expense, determined under the fair value method, net of related tax effect		(3,738	)		(8,939	)		(6,529	)
Pro forma net income	$	274,566		$	235,950		$	204,984
Basic earnings per share:
As reported	$	0.49		$	0.41		$	0.35
Pro forma		0.48			0.41			0.35
Diluted earnings per share:
As reported	$	0.48		$	0.40		$	0.34
Pro forma		0.47			0.40			0.34

The fair value of the option grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	For the Year Ended December 31,
	2005			2004			2003
Expected dividend yield		2.23	%		1.69	%		2.24	%
Expected volatility		21.57			19.66			24.71
Risk-free interest rate		3.64			3.05			2.98
Expected option life	5 years			5 years			5 years

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     m) Borrowed Funds

Hudson City enters into sales of securities under agreements to repurchase with selected brokers and the Federal Home Loan Bank (“FHLB”). These agreements are recorded as financing transactions as Hudson City maintains effective control over the transferred securities. The dollar amount of the securities underlying the agreements continues to be carried in Hudson City’s securities portfolio. The obligations to repurchase the securities are reported as a liability in the consolidated statements of financial condition. The securities underlying the agreements are delivered to the party with whom each transaction is executed. They agree to resell to Hudson City the same securities at the maturity or call of the agreement. Hudson City retains the right of substitution of the underlying securities throughout the terms of the agreements.

Hudson City has also obtained advances from the FHLB, which are generally secured by a blanket lien against our mortgage portfolio. Total borrowings with the FHLB are generally limited to approximately twenty times the amount of FHLB stock owned or the fair value of our mortgage portfolio, whichever is greater.

     n) Earnings Per Share

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or resulted in the issuance of common stock. These potentially dilutive shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method. Shares issued and shares reacquired during any period are weighted for the portion of the period that they were outstanding.

In computing both basic and diluted earnings per share, the weighted average number of common shares outstanding includes the ESOP shares previously allocated to participants and shares committed to be released for allocation to participants and the RRP shares which have vested or have been allocated to participants. ESOP and RRP shares that have been purchased but have not been committed to be released have not been considered in computing basic and diluted earnings per share.

2. Plan of Conversion and Reorganization

On June 7, 2005, Hudson City Bancorp, Hudson City Savings and Hudson City, MHC reorganized from a two-tier mutual holding company structure to a stock holding company structure, and Hudson City Bancorp completed a stock offering, all in accordance with a Plan of Conversion and Reorganization (the “Plan”). Under the terms of the Plan, Hudson City, MHC, which owned 65.77% of the outstanding common stock of Hudson City Bancorp immediately prior to the conversion, merged into Hudson City Bancorp and the shares of Hudson City Bancorp common stock owned by Hudson City, MHC were cancelled. Hudson City Bancorp sold 392,980,580 shares of common stock at a price of $10.00 per share raising approximately $3.93 billion. After related costs of $125.0 million, net proceeds from the stock offering amounted to $3.80 billion. The amount reported in the Consolidated Statements of Changes in Stockholders’ Equity reflects the $145.8 million consolidation of the deposit of Hudson City, MHC. In accordance with the Plan, we also effected a stock split pursuant to which each share of common stock outstanding or held as treasury stock before completion of the offering

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was split into 3.206 shares. Hudson City Bancorp contributed $3.00 billion of the net proceeds from the offering to Hudson City Savings Bank.

3. Stockholders’ Equity

Upon completion of the second-step conversion, Hudson City Bancorp established a “liquidation account” in an amount equal to the total equity of Hudson City Savings as of the latest practicable date prior to the second-step conversion. The liquidation account was established to provide a limited priority claim to the assets of Hudson City Savings to “eligible account holders” and “supplemental eligible account holders”, as defined in the Plan, who continue to maintain deposits in Hudson City Savings after the second-step conversion. In the unlikely event of a complete liquidation of Hudson City Savings at a time when Hudson City Savings has a positive net worth, and only in such event, each eligible account holder and supplemental eligible account holder would be entitled to receive a liquidation distribution, prior to any payment to the stockholders of Hudson City Bancorp. This distribution would be based upon each eligible account holder’s and supplemental account holder’s proportionate share of the then total remaining qualifying deposits. In the unlikely event of a complete liquidation of Hudson City Savings and Hudson City Bancorp does not have sufficient assets (other than the stock of Hudson City Savings) to fund the obligation under the liquidation account, Hudson City Savings will fund the remaining obligation as if Hudson City Savings had established the liquidation account rather than Hudson City Bancorp; provided, however, that this obligation of Hudson City Savings to fund the liquidation account on behalf of Hudson City Bancorp will not become effective until three years following the completion of the second-step conversion. Any assets remaining after the liquidation rights of eligible account holders and supplemental eligible account holders are satisfied would be distributed to Hudson City Bancorp as the sole stockholder of Hudson City Savings.

Under our stock repurchase programs shares of Hudson City Bancorp may be purchased in the open market or through other privately negotiated transactions, from time-to-time, depending on market conditions. The repurchased shares are held as treasury stock for general corporate use. During the years ended December 31, 2005 and 2004, we purchased 9,119,768 and 14,716,187 shares of our common stock at an aggregate cost of $107.5 and $161.7 million, respectively. At December 31, 2005, there were 21,017,000 shares remaining to be repurchased under our existing stock repurchase program.

On July 1, 2005, Hudson City Bancorp signed an agreement with the independent trustee of the Hudson City Savings Bank Employee Stock Ownership Plan (“ESOP”), which provided a commitment to lend funds to allow the trustee to purchase up to 15,719,223 shares of Hudson City Bancorp common stock. The independent trustee purchased these shares during the third quarter of 2005 at an average price of $12.05 per share. The loan will be repaid and the shares purchased will be allocated to employees over a forty-year period.

4. Restrictions on Cash and Due From Banks

Cash reserves are required to be maintained on deposit with the Federal Reserve Bank based on deposits. The average amount of the reserves on deposit for the years ended December 31, 2005 and 2004 was approximately $9,540,000 and $26,281,000, respectively.

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5. Investment Securities

The amortized cost and estimated fair market value of investment securities at December 31 are as follows:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(In thousands)
2005
Held to Maturity:
United States government-sponsored agencies	$	1,533,050	$	—	$	(26,185	)	$	1,506,865
Municipal bonds		1,166		24		—			1,190
Total held to maturity	$	1,534,216	$	24	$	(26,185	)	$	1,508,055
Available for Sale:
United States government-sponsored agencies	$	4,022,316	$	—	$	(60,138	)	$	3,962,178
Corporate bonds		67		—		—			67
Equity securities		168		98		—			266
Total available for sale	$	4,022,551	$	98	$	(60,138	)	$	3,962,511
2004
Held to Maturity:
United States government-sponsored agencies	$	1,333,018	$	1,144	$	(9,108	)	$	1,325,054
Municipal bonds		1,231		51		—			1,282
Total held to maturity	$	1,334,249	$	1,195	$	(9,108	)	$	1,326,336
Available for Sale:
United States government-sponsored agencies	$	1,597,351	$	919	$	(13,886	)	$	1,584,384
Corporate bonds		74		1		(1	)		74
Equity securities		10,168		63		(50	)		10,181
Total available for sale	$	1,607,593	$	983	$	(13,937	)	$	1,594,639

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The following tables summarize the fair value and unrealized losses of those investment securities which reported an unrealized loss at December 31, 2005 and 2004, and if the unrealized loss position was continuous for the twelve months prior to December 31, 2005 and 2004.

	Less Than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
2005
United States government-sponsored agencies	$	4,174,994	$	43,833	$	1,294,049	$	42,490	$	5,469,043	$	86,323
2004
United States government-sponsored agencies	$	1,543,473	$	18,231	$	216,626	$	4,763	$	1,760,099	$	22,994
Corporate bonds		66		1		—		—		66		1
Equity securities		9,950		50		—		—		9,950		50
Total	$	1,553,489	$	18,282	$	216,626	$	4,763	$	1,770,115	$	23,045

The unrealized losses are primarily due to the changes in interest rates. We have not classified these items as impaired as the scheduled coupon payments have been made, we anticipate collecting the entire principal balance as scheduled, we believe the price variation is temporary in nature and we have the intent and ability to hold these securities to maturity or for a sufficient amount of time to recover the recorded principal.

The amortized cost and estimated fair market value of investment securities held to maturity and available for sale at December 31, 2005, by contractual maturity, are shown below. The expected maturity may differ from the contractual maturity because issuers may have the right to call or prepay obligations. Equity securities have been excluded from this table.

			Estimated
	Amortized		Fair Market
	Cost		Value
	(In thousands)
Held to Maturity
Due after one year through five years	$	475,610	$	468,368
Due after five years through ten years		437,084		430,180
Due after ten years		621,522		609,507
Total held to maturity	$	1,534,216	$	1,508,055
Available for Sale
Due in one year or less	$	500,005	$	496,652
Due after one year through five years		2,940,885		2,901,231
Due after five years through ten years		581,493		564,362
Total available for sale	$	4,022,383	$	3,962,245

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Interest and dividend income for the years ended December 31, 2005, 2004 and 2003 consists of the following:

	2005		2004		2003
	(In thousands)
United States government-sponsored agencies	$	191,133	$	118,653	$	79,411
Municipal bonds		75		83		87
Corporate bonds		4		4		7
Equity securities		5		574		574
Total interest and dividend income	$	191,217	$	119,314	$	80,079

Gross realized losses on sales of investment securities available for sale during 2005 were $20,000. Gross realized gains on calls of investment securities available for sale during 2005 were $22,000. There were no gains or losses from investment securities transactions during 2004. Gross realized gains on sales of investment securities available for sale during 2003 were $537,000. The carrying value of securities pledged as required security for deposits and for other purposes required by law amounted to $15,205,000 and $15,509,000 at December 31, 2005 and 2004, respectively.

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6. Mortgage-Backed Securities

The amortized cost and estimated fair market value of mortgage-backed securities at December 31 are as follows:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair Market
	Cost		Gains		Losses			Value
			(In thousands)
2005
Held to Maturity:
GNMA pass-through certificates	$	293,680	$	1,089	$	(437	)	$	294,332
FNMA pass-through certificates		2,535,361		2,685		(48,944	)		2,489,102
FHLMC pass-through certificates		1,108,195		758		(26,389	)		1,082,564
FHLMC and FNMA — REMICs		452,628		13		(29,867	)		422,774
Total held to maturity	$	4,389,864	$	4,545	$	(105,637	)	$	4,288,772
Available for Sale:
GNMA pass-through certificates	$	1,726,111	$	72	$	(26,051	)	$	1,700,132
FNMA pass-through certificates		683,604		—		(17,119	)		666,485
FHLMC pass-through certificates		156,835		—		(2,819	)		154,016
Total available for sale	$	2,566,550	$	72	$	(45,989	)	$	2,520,633
2004
Held to Maturity:
GNMA pass-through certificates	$	416,665	$	5,453	$	(86	)	$	422,032
FNMA pass-through certificates		2,017,165		9,923		(9,297	)		2,017,791
FHLMC pass-through certificates		561,095		1,296		(8,050	)		554,341
FHLMC, FNMA and GNMA-REMICs		760,996		132		(34,263	)		726,865
Total held to maturity	$	3,755,921	$	16,804	$	(51,696	)	$	3,721,029
Available for Sale:
GNMA pass-through certificates	$	504,812	$	1,196	$	(2,169	)	$	503,839
FNMA pass-through certificates		747,252		812		(4,684	)		743,380
FHLMC pass-through certificates		371,066		2,852		(429	)		373,489
Total available for sale	$	1,623,130	$	4,860	$	(7,282	)	$	1,620,708

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The following tables summarize the fair value and unrealized losses of those mortgage-backed securities which reported an unrealized loss at December 31, 2005 and 2004, and if the unrealized loss position was continuous for the twelve months prior to December 31, 2005 and 2004.

	Less Than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
					(In thousands)
2005
GNMA pass-through certificates	$	1,693,276	$	25,640	$	51,814	$	848	$	1,745,090	$	26,488
FNMA pass-through certificates		2,837,631		64,306		49,552		1,757		2,887,183		66,063
FHLMC pass-through certificates		1,107,426		28,086		42,889		1,122		1,150,315		29,208
FHLMC and FNMA — REMIC’s		401,538		29,361		20,192		506		421,730		29,867
Total	$	6,039,871	$	147,393	$	164,447	$	4,233	$	6,204,318	$	151,626
2004
GNMA pass-through certificates	$	320,069	$	2,255	$	—	$	—	$	320,069	$	2,255
FNMA pass-through certificates		1,575,778		9,462		196,579		4,519		1,772,357		13,981
FHLMC pass-through certificates		223,234		1,597		244,757		6,882		467,991		8,479
FHLMC and FNMA — REMIC’s		23,720		174		699,272		34,089		722,992		34,263
Total	$	2,142,801	$	13,488	$	1,140,608	$	45,490	$	3,283,409	$	58,978

The unrealized losses are primarily due to the changes in interest rates. We have not classified these items as impaired as the scheduled principal and interest payments have been made, we anticipate collecting the entire principal balance as scheduled, we believe the price variation is temporary in nature and we have the intent and ability to hold these securities to maturity or for a sufficient amount of time to recover the recorded principal.

The amortized cost and estimated fair market value of mortgage-backed securities held to maturity and available for sale at December 31, 2005, by contractual maturity, are shown below.

			Estimated
	Amortized		Fair Market
	Cost		Value
	(In thousands)
Held to Maturity
Due in one year or less	$	81	$	82
Due after one year through five years		12,404		12,745
Due after five years through ten years		4,857		5,057
Due after ten years		4,372,522		4,270,888
Total held to maturity	$	4,389,864	$	4,288,772
Available for Sale
Due after ten years		2,566,550		2,520,633
Total available for sale	$	2,566,550	$	2,520,633

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Gross realized gains on sales of mortgage-backed securities available for sale were $ 2,738,000 during 2005 and $11,429,000 during 2004. Gross realized gains on sales of mortgage-backed securities available for sale and mortgage-backed securities held to maturity during 2003 were $19,727,000 and $4,062,000, respectively.

7. Loans and Allowance for Loan Losses

Loans at December 31 are summarized as follows:

	2005		2004
	(In thousands)
First mortgage loans:
One- to four-family	$	14,780,819	$	11,120,874
FHA/VA		43,672		81,915
Multi-family and commercial		2,320		3,000
Total first mortgage loans		14,826,811		11,205,789
Consumer and other loans:
Fixed–rate second mortgages		205,826		127,737
Home equity credit lines		29,150		28,929
Other		662		584
Total consumer and other loans		235,638		157,250
Total loans	$	15,062,449	$	11,363,039

At December 31, 2005, approximately 63% of the mortgage loan portfolio was secured by real estate located in the State of New Jersey, New York and Connecticut. Additionally, the States of Virginia, Illinois, Massachusettes and Maryland each account for approximately 4% to 7% of our total mortgage portfolio. The ultimate ability to collect the loan portfolio and realize the carrying value of real estate is subject to changes in the real estate market and future economic conditions. There are no loans classified as impaired at December 31, 2005.

The following is a comparative summary of loans on which the accrual of income has been discontinued and loans that are contractually past due 90 days or more but have not been classified non-accrual at December 31:

	2005		2004
	(In thousands)
Non-accrual loans	$	9,651	$	6,057
Accruing loans delinquent 90 days or more		9,661		15,550
Total non-performing loans	$	19,312	$	21,607

The total amount of interest income received during the year on non-accrual loans outstanding and additional interest income on non-accrual loans that would have been recognized if interest on all such loans had been recorded based upon original contract terms is immaterial. Hudson City is not committed to lend additional funds to borrowers on non-accrual status.

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An analysis of the allowance for loan losses at December 31 follows:

	2005			2004			2003
	(In thousands)
Balance at beginning of year	$	27,319		$	26,547		$	25,501
Charge-offs		(10	)		(20	)		(96	)
Recoveries		19			2			242
Net recoveries (charge-offs)		9			(18	)		146
Provision for loan losses		65			790			900
Balance at end of year	$	27,393		$	27,319		$	26,547

8. Banking Premises and Equipment, net

A summary of the net carrying value of banking premises and equipment at December 31 is as follows:

	2005			2004
	(In thousands)
Land	$	5,215		$	5,215
Buildings		34,199			32,378
Leasehold improvements		23,435			15,493
Furniture, fixtures and equipment		53,722			44,955
Total acquisition cost		116,571			98,041
Accumulated depreciation and amortization		(67,439	)		(61,642	)
Total banking premises and equipment, net	$	49,132		$	36,399

Amounts charged to net occupancy expense for depreciation and amortization of banking premises and equipment amounted to $5,833,000, $3,978,000 and $3,520,000 in 2005, 2004 and 2003, respectively.

Hudson City has entered into non-cancelable operating lease agreements with respect to banking premises and equipment. It is expected that many agreements will be renewed at expiration in the normal course of business.

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Future minimum rental commitments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year are as follows:

Year	Amount
	(In thousands)
2006	$	5,199
2007		5,670
2008		5,568
2009		5,462
2010		5,203
Thereafter		68,471
Total	$	95,573

Net occupancy expense included gross rental expense for certain bank premises of $5,566,000 in 2005, $4,279,000 in 2004 and $3,810,000 in 2003, and rental income of $301,000, $358,000 and $603,000 for the respective years.

9. Deposits

Deposits at December 31 are summarized as follows:

	2005					2004
	Balance		Percent			Balance		Percent
			(Dollars in thousands)
Savings	$	808,325		7.10	%	$	931,783		8.12	%
Noninterest-bearing demand		442,042		3.88			417,502		3.64
Interest-bearing transaction		3,616,644		31.77			4,290,099		37.38
Money market		342,021		3.00			564,700		4.92
Time deposits		6,174,268		54.25			5,273,216		45.94
Total deposits	$	11,383,300		100.00	%	$	11,477,300		100.00	%

Time deposits of $100,000 and over amounted to $1,378,340,000 and $886,079,000 at December 31, 2005 and 2004, respectively. Interest expense on time deposits of $100,000 and over for the years ended December 31, 2005, 2004 and 2003 was $30,690,000, $18,182,000 and $20,078,000, respectively. Included in noninterest-bearing demand accounts are mortgage escrow deposits of $60,506,000 and $54,115,000 at December 31, 2005 and 2004, respectively.

Scheduled maturities of time deposits are as follows:

Year	Amount
	(In thousands)
2006	$	4,980,851
2007		705,092
2008		200,195
2009		184,795
2010		103,335
Total	$	6,174,268

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10. Borrowed Funds

Borrowed funds at December 31 are summarized as follows:

	2005					2004
			Weighted					Weighted
			Average					Average
	Principal		Rate			Principal		Rate
			(Dollars in thousands)
Securities sold under agreements to repurchase:
FHLB	$	850,000		4.96	%	$	950,000		4.73	%
Other brokers		7,050,000		3.45			4,350,000		3.11
Total securities sold under agreements to repurchase		7,900,000		3.61			5,300,000		3.40
Advances from the FHLB		3,450,000		3.95			1,850,000		3.81
Total borrowed funds	$	11,350,000		3.72		$	7,150,000		3.51

At December 31, 2005, borrowed funds had scheduled maturities and potential call dates as follows:

	Borrowings by Scheduled					Borrowings by Next
	Maturity Date as of					Potential Call Date as of
	December 31, 2005					December 31, 2005
			Weighted					Weighted
			Average					Average
Year	Principal		Rate			Principal		Rate
	(Dollars in thousands)
2006	$	—		—	%	$	4,175,000		3.77	%
2007		—		—			2,650,000		3.27
2008		—		—			2,975,000		3.87
2009		—		—			900,000		3.81
2010		300,000		5.68			350,000		4.01
2011		775,000		4.79			300,000		4.89
2012		1,450,000		4.06			—		—
2013		850,000		3.81			—		—
2014		2,850,000		2.84			—		—
2015		5,125,000		3.82			—		—
Total	$	11,350,000		3.72		$	11,350,000		3.72

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The amortized cost and fair value of the underlying securities used as collateral for securities sold under agreements to repurchase, the average balances and the maximum outstanding at any month-end at or for the years ended December 31, 2005 and 2004 are as follows:

	At or for the year ended
	December 31,
	2005			2004			2003
	(In thousands)
Amortized cost of collateral:
United States government-sponsored agency securities	$	2,849,947		$	2,030,978		$	615,806
Mortgage-backed securities		5,224,648			3,198,768			2,369,058
REMICs		356,579			455,598			495,074
Total amortized cost of collateral	$	8,431,174		$	5,685,344		$	3,479,938
Fair value of collateral:
United States government-sponsored agency securities	$	2,778,462		$	2,008,710		$	604,397
Mortgage-backed securities		5,119,225			3,188,386			2,387,457
REMICs		332,532			434,249			478,192
Total fair value of collateral	$	8,230,219		$	5,631,345		$	3,470,046
Average balance of outstanding repurchase agreements during the year	$	6,447,560		$	4,182,197		$	2,253,025
Maximum balance of outstanding repurchase agreements at any month-end during the year	$	7,900,000		$	5,300,000		$	3,200,000
Average cost of securities sold under agreements to repurchase		3.52	%		3.41	%		4.26	%

The average balances of our advances from the FHLB during 2005 and 2004 were $2.47 billion and $1.92 billion, respectively, and the maximum FHLB advances outstanding during 2005 and 2004 were $3.45 billion and $1.95 billion, respectively.

11. Employee Benefit Plans

     a) Retirement and Other Postretirement Benefits

Non-contributory retirement and postretirement plans are maintained to cover employees hired prior to August 1, 2005, including retired employees, who have met the eligibility requirements of the plans. Benefits under the qualified and non-qualified defined benefit retirement plans are based primarily on years of service and compensation. In 2005, participation in the non-contributory retirement plan was restricted to those employees hired on or before July 31, 2005. Employees hired on or after August 1, 2005 will not participate in the plan. Also in 2005, the plan for post-retirement benefits, other than pensions, was changed to restrict participation to those employees hired on or before July 31, 2005, and placed a cap on the premium value of the non-contributory coverage provided at the 2007 premium rate, beginning in 2008, for those eligible employees who retire after December 31, 2005.

Funding of the qualified retirement plan is actuarially determined on an annual basis. It is our policy to fund the qualified retirement plan sufficiently to meet the minimum requirements set forth in the Employee Retirement Income Security Act of 1974. The non-qualified retirement plan, for certain

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executive officers, is unfunded and had a projected benefit obligation of $7,484,000 at December 31, 2005 and $6,396,000 at December 31, 2004. Certain health care and life insurance benefits are provided to eligible retired employees (“other benefits”). Participants generally become eligible for retiree health care and life insurance benefits after ten years of service. The measurement date for year-end disclosure information is December 31 and the measurement date for net periodic benefit cost is January 1.

The following table shows the change in benefit obligation, the change in plan assets, and the funded status for the retirement plans and other benefits at December 31:

	Retirement Plans						Other Benefits
	2005			2004			2005			2004
				(In thousands)
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	83,268		$	73,753		$	46,396		$	41,464
Service cost		3,048			2,945			1,921			2,120
Interest cost		4,784			4,527			2,492			2,318
Plan amendments		1,884			—			(28,171	)		—
Participant contributions		—			—			40			25
Reduction due to Medicare Prescription Plan		—			—			—			(5,399	)
Actuarial (gain) loss		(176	)		4,185			15,003			7,415
Benefits paid		(2,715	)		(2,142	)		(1,427	)		(1,547	)
Benefit obligation at end of year		90,093			83,268			36,254			46,396
Change in Plan Assets:
Fair value of plan assets at beginning of year		78,901			76,066			—			—
Actual return on plan assets		3,411			4,974			—			—
Employer contribution		493			3			1,387			1,522
Participant contributions		—			—			40			25
Benefits paid		(2,715	)		(2,142	)		(1,427	)		(1,547	)
Fair value of plan assets at end of year		80,090			78,901			—			—
Funded Status		(10,003	)		(4,367	)		(36,254	)		(46,396	)
Unrecognized prior service cost		1,874			15			(27,193	)		—
Unrecognized net actuarial loss (gain)		15,851			13,098			15,615			1,232
Prepaid (accrued) benefit cost	$	7,722		$	8,746		$	(47,832	)	$	(45,164	)

In 2003, President Bush signed into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“Medicare Act”). Effective July 1, 2004, Hudson City adopted FASB Staff Position 106-2, which requires companies to recognize the effects of the Medicare Act. The effect of the Medicare Act reduced the accumulated postretirement benefit obligation by $5,399,000 as of January 1, 2004. In addition, the Medicare Act reduced the net periodic benefit cost by $802,000 and $684,000 for the years ended December 31, 2005 and 2004, respectively.

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Amounts recognized in the consolidated statements of financial condition consist of:

	Retirement Plans						Other Benefits
	2005			2004			2005			2004
				(In thousands)
Prepaid benefit cost	$	13,090		$	13,763		$	—		$	—
Accrued benefit cost		(5,368	)		(5,017	)		(47,832	)		(45,164	)
Minimum pension liability		(775	)		—			—			—
Net amount recognized	$	6,947		$	8,746		$	(47,832	)	$	(45,164	)

The accumulated benefit obligation for all defined benefit retirement plans was $76,096,000 and $71,137,000 at December 31, 2005 and 2004, respectively.

Net periodic benefit cost (income) for the year ended December 31 included the following components:

	Retirement Plans									Other Benefits
	2005			2004			2003			2005			2004			2003
							(In thousands)
Service cost	$	3,048		$	2,945		$	2,709		$	1,921		$	2,120		$	1,643
Interest cost		4,784			4,527			4,270			2,492			2,318			1,958
Expected return on assets		(6,774	)		(6,532	)		(5,286	)		—			—			—
Amortization of:
Net loss (gain)		435			59			528			621			(40	)		(368	)
Unrecognized prior service cost		25			(16	)		(16	)		(978	)		—			—
Unrecognized remaining net assets		—			—			—			—			—			—
Net periodic benefit cost	$	1,518		$	983		$	2,205		$	4,056		$	4,398		$	3,233

The following are the weighted average assumptions used to determine net periodic benefit cost for the period ended December 31:

	Retirement Plans									Other Benefits
	2005			2004			2003			2005			2004			2003
Discount rate		5.75	%		6.25	%		6.50	%		5.75	%		6.25	%		6.50	%
Expected return on assets		8.75			8.75			8.75			—			—			—
Rate of compensation increase		4.25			4.75			5.00			—			—			—

The following are the weighted-average assumptions used to determine benefit obligations at December 31:

	Retirement Plans						Other Benefits
	2005			2004			2005			2004
Discount rate		5.75	%		5.75	%		5.75	%		5.75	%
Rate of compensation increase		4.25			4.25			—			—

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The overall expected return on assets assumption is based on the historical performance of the pension fund. The average return over the past ten years was determined for the market value of assets, which is the value used in the calculation of annual net periodic benefit cost.

The assumed health care cost trend rate used to measure the expected cost of other benefits for 2006 was 10.00%. The rate was assumed to decrease gradually to 4.75% for 2013 and remain at that level thereafter. A 1% change in the assumed health care cost trend rate would have the following effects on other benefits:

	1% Increase		1% Decrease
	(In thousands)
Effect on total service cost and interest cost	$	48	$	(49	)
Effect on other benefit obligations		1,249		(1,185	)

The retirement plan’s weighted-average asset allocations at December 31, 2005 and 2004, by asset category were as follows:

	Plan Assets
	at December 31,
Asset Category	2005			2004
Equity securities		60.2	%		59.0	%
Fixed Income		25.2			37.0
Cash		14.6			4.0
Total		100.0	%		100.0	%

Equity securities include Hudson City Bancorp, Inc. common stock in the amount of $8.5 million (10.6% of total plan assets) as of December 31, 2005, and $8.0 million (10.1% of total plan assets) as of December 31, 2004. This stock was purchased for an aggregate amount of $6.0 million from a contribution by Hudson City in July 2003. Our plan may not purchase our common stock if the fair value of our common stock held by the plan equals or exceeds 10% of the fair value of plan assets. We review with the plan administrator the rebalancing of plan assets if the fair value our common stock held by the plan exceeds 20% of the fair value of the total plan assets.

Funds in Hudson City’s qualified retirement plan are invested in a commingled asset allocation fund (the “Fund”) of a well-established asset management company and in Hudson City Bancorp, Inc. common stock. The purpose of the Fund is to provide a diversified portfolio of equities, fixed income instruments and cash. Its trustee, in the trustee’s absolute discretion, manages the Fund. The Fund is maintained with the objective of providing investment results that outperform a static mix of 55% equity, 35% bond and 10% cash, as well as the median manager of balanced funds. In order to achieve the Fund’s return objective, the Fund will combine fundamental analysis and a quantitative proprietary model to allocate and reallocate assets among the three broad investment categories of equities, money market instruments and other fixed income obligations. As market and economic conditions change, these ratios will be adjusted in moderate increments of about five percentage points. It is intended that the equity portion will represent approximately 40% to 70%, the bond portion approximately 25% to 55% and the money market

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portion 0% to 25%. Performance results are reviewed at least annually with the asset management company of the Fund.

We contributed $160,000 to the plan assets in 2005. We anticipate contributing funds to the plan assets during 2006 to meet any minimum funding requirements that may become payable as a result of the actuarial valuation of plan assets and the benefit obligation in 2006.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid under the current provisions of the plans. The expected payments reported as other benefits reflect the Medicare subsidy.

	Retirement		Other
	Plans		Benefits
	(In thousands)
2006	$	3,602	$	1,661
2007		3,731		1,798
2008		3,938		1,968
2009		4,250		2,155
2010		4,404		2,289
2011 through 2015		28,922		13,994

     b) Employee Stock Ownership Plan

The ESOP is a tax-qualified plan designed to invest primarily in Hudson City common stock that provides employees with the opportunity to receive an employer-funded retirement benefit based primarily on the value of Hudson City common stock. The ESOP was authorized to purchase 27,879,000 shares following our initial public offering and an additional 15,719,000 shares following our second-step conversion. The ESOP administrator did purchase, in aggregate, 43,598,000 shares of Hudson City common stock at an average price of $5.69 per share with loans from Hudson City Bancorp.

The combined outstanding loan principal at December 31, 2005 was $241.0 million. Those shares purchased were pledged as collateral for the loan and are released from the pledge for allocation to participants as loan payments are made. The loan will be repaid and the shares purchased will be allocated to employees in equal installments of shares over a forty-year period.

At December 31, 2005, shares allocated to participants were 6,073,404. For the plan year ending December 31, 2006, there are 962,185 shares that are committed to be released and will be allocated to participants at the end of the plan year. Unallocated ESOP shares held in suspense totaled 37,525,195 at December 31, 2005 and had a fair market value of $454.8 million. ESOP compensation expense for the years ended December 31, 2005, 2004 and 2003 was $11,119,000, $10,505,000 and $7,685,000, respectively.

The ESOP restoration plan is a non-qualified plan that provides supplemental benefits to certain executives who are prevented from receiving the full benefits contemplated by the employee stock ownership plan’s benefit formula. The supplemental payments consist of payments representing shares

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that cannot be allocated to participants under the ESOP due to the legal limitations imposed on tax-qualified plans and, in the case of participants who retire before the repayment in full of the ESOP’s loan, payments representing the shares that would have been allocated if employment had continued through the full term of the loan. Compensation expense related to this plan amounted to $6,560,000 in 2005, $4,173,000 in 2004 and $5,018,000 in 2003.

     c) Recognition and Retention Plans

The purpose of the RRP is to promote the growth and profitability of Hudson City Bancorp by providing directors, officers and employees with an equity interest in Hudson City Bancorp as an incentive to achieve corporate goals. The RRP have invested money primarily in shares of Hudson City common stock that were used to make restricted stock awards.

The RRP were authorized, in the aggregate, to purchase not more than 14,901,000 shares of common stock, and have purchased 14,887,855 shares on the open market at an average price of $2.91 per share.

As a general rule, restricted stock grants are held in escrow for the benefit of the award recipient until vested. Awards outstanding generally vest in five annual installments commencing one year from the date of the award. As of December 31, 2005, common stock that had not been awarded totaled 13,625 shares. Expense attributable to the RRP amounted to $3,604,000 for the year 2005, $8,987,000 for 2004 and $6,473,000 for 2003.

A summary of the status of the granted, but unvested shares under the RRP as of December 31, and changes during those years, is presented below:

	Restricted Stock Awards
	2005			2004			2003
Outstanding at beginning of year		2,973,759			5,601,236			8,212,202
Granted		150,682			762,868			52,899
Vested		(2,172,680	)		(3,390,345	)		(2,663,865	)
Outstanding at end of year		951,761			2,973,759			5,601,236

     d) Stock Option Plans

Each stock option granted entitles the holder to purchase one share of Hudson City’s common stock at an exercise price not less than the fair market value of a share of common stock at the date of grant. Options granted generally vest over a five year period from the date of grant and will expire no later than 10 years following the grant date. Under the Hudson City stock option plans, 36,323,960 shares of Hudson City Bancorp, Inc. common stock have been reserved for issuance. Directors and employees have been granted 36,503,507 stock options, including 207,106 shares previously issued, but forfeited by plan participants prior to exercise.

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A summary of the status of the granted, but unexercised stock options as of December 31, and changes during those years, is presented below:

	2005					2004					2003
				Weighted					Weighted					Weighted
	Number of			Average		Number of			Average		Number of			Average
	Stock			Exercise		Stock			Exercise		Stock			Exercise
	Options			Price		Options			Price		Options			Price
Outstanding at beginning of year		22,425,161		$	3.95		22,009,657		$	2.53		26,385,571		$	2.40
Granted		496,930			11.17		3,305,393			11.93		557,850			6.14
Exercised		(1,247,475	)		2.26		(2,886,042	)		2.24		(4,905,551	)		2.23
Forfeited		(14,747	)		8.13		(3,847	)		3.10		(28,213	)		3.05
Outstanding at end of year		21,659,869			4.21		22,425,161			3.95		22,009,657			2.53

The following table summarizes information about our stock options outstanding at December 31, 2005:

			Options Outstanding					Options Exercisable
					Weighted
					Average	Weighted				Weighted
			Number		Remaining	Average		Number		Average
Exercise			Of Options		Contractual	Exercise		Of Options		Exercise
Price			Outstanding		Life	Price		Exercisable		Price
	$	2.16		14,553,679	4 years	$	2.16		14,553,679	$	2.16
		3.09		262,231	5 years		3.09		194,244		3.09
		3.40		441,145	5 years		3.40		330,858		3.40
		3.59		820,736	5 years		3.59		615,552		3.59
		4.20		500,132	6 years		4.20		284,689		4.20
		5.53		769,440	6 years		5.53		769,440		5.53
		5.96		263,350	7 years		5.96		92,147		5.96
		6.35		256,480	7 years		6.35		256,480		6.35
		10.33		448,840	8 years		10.33		89,768		10.33
		11.17		487,312	9 years		11.17		—		—
		11.91		371,890	8 years		11.91		74,363		11.91
		12.22		2,484,634	8 years		12.22		128,240		12.22
		4.21		21,659,869			4.21		17,389,460		2.67

     e) Incentive Plans

A tax-qualified profit sharing and savings plan is maintained based on Hudson City’s profitability. All employees are eligible after one year of employment and the attainment of age 21. The expense was $1,440,000, $1,380,000 and $1,320,000 in 2005, 2004 and 2003, respectively.

Certain incentive plans are maintained to recognize key executives who are able to make substantial contributions to the long-term success and financial strength of Hudson City. At the end of each performance period, the value of the award is determined in accordance with established criteria.

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Participants can elect cash payment or elect to defer the award until retirement. The expense related to these plans was $5,742,000 in 2005, $2,988,000 in 2004 and $2,482,000 in 2003.

12. Income Taxes

Income tax expense (benefit) for each of the years in the three-year period ended December 31, 2005 is summarized as follows:

	2005			2004			2003
				(In thousands)
Federal:
Current	$	160,263		$	139,839		$	120,498
Deferred		(5,573	)		(4,838	)		(4,564	)
Total federal		154,690			135,001			115,934
State:
Current		12,560			10,218			5,695
Deferred		(932	)		(2,074	)		(1,828	)
Total state		11,628			8,144			3,867
Total income tax expense	$	166,318		$	143,145		$	119,801

Not included in the above table are deferred income tax benefits of $37,003,000, $2,166,000 and $19,002,000 for 2005, 2004 and 2003, respectively, which represent the deferred income tax benefit on the net unrealized losses of securities available for sale.

The amounts reported as income tax expense vary from the amounts that would be reported by applying the statutory federal income tax rate to income before income taxes due to the following:

	2005			2004			2003
	(Dollars in thousands)
Income before income tax expense	$	442,373		$	382,411		$	327,211
Statutory income tax rate		35	%		35	%		35	%
Computed expected income tax expense		154,831			133,844			114,524
State income taxes, net of federal income tax benefit		7,558			5,294			2,514
Tax-exempt interest		(67	)		(71	)		(84	)
ESOP fair market value adjustment		1,971			2,990			2,003
Other, net		2,025			1,088			844
Income tax expense	$	166,318		$	143,145		$	119,801

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The net deferred tax asset at December 31 consists of the following:

	2005		2004
	(In thousands)
Deferred tax asset:
Deferred loan origination fees	$	1,985	$	1,425
Postretirement benefits		20,028		18,667
Loan loss reserve		10,146		10,116
Mortgage premium amortization		5,417		5,417
Non-accrual interest income		156		105
Non-qualified benefit plans		15,999		12,358
Net unrealized loss on securities available for sale		43,283		6,281
Other		7,952		6,954
		104,966		61,323
Deferred tax liability:
Discount accretion		257		239
Retirement plan		5,282		5,622
Other		3,160		2,702
		8,699		8,563
Net deferred tax asset	$	96,267	$	52,760

The net deferred tax asset represents the anticipated federal and state tax benefits expected to be realized in future years upon the utilization of the underlying tax attributes comprising this balance. In management’s opinion, in view of Hudson City’s previous, current and projected future earnings trends, such net deferred tax asset will more likely than not be fully realized. Accordingly, no valuation allowance was deemed to be required at December 31, 2005 and 2004.

Retained earnings at December 31, 2005 included approximately $49,000,000 for which no deferred income taxes have been provided. This amount represents the base year allocation of income to bad debt deduction for tax purposes. Under SFAS No. 109, this amount is treated as a permanent difference and deferred taxes are not recognized unless it appears that it will be reduced and result in taxable income in the foreseeable future. Events that would result in taxation of these reserves include failure to qualify as a bank for tax purposes or distributions in complete or partial liquidation.

13. Fair Value of Financial Instruments

The fair value of financial instruments represents the estimated amounts at which the asset or liability could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. These estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Further, certain tax implications related to the realization of the unrealized gains and losses could have a substantial impact on these fair value estimates and have not been incorporated into any of the estimates.

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Carrying amounts of cash, due from banks and federal funds sold are considered to approximate fair value. The fair value of one- to four-family mortgages and home equity loans are generally estimated using the present value of expected future cash flows. For time deposits and borrowed funds, the fair value is estimated by discounting estimated future cash flows using currently offered rates. For deposit liabilities payable on demand, the fair value is the carrying value at the reporting date. There is no material difference between the fair value and the committed amounts of our off-balance commitments.

Other important elements that are not deemed to be financial assets or liabilities and, therefore, not considered in these estimates include the value of Hudson City’s retail branch delivery system, its existing core deposit base and banking premises and equipment.

The estimated fair value of Hudson City’s financial instruments at December 31 are summarized as follows:

	2005				2004
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
	(In thousands)
Assets:
Cash and due from banks	$	97,672	$	97,672	$	122,483	$	122,483
Federal funds sold		4,587		4,587		45,700		45,700
Investment securities held to maturity		1,534,216		1,508,055		1,334,249		1,326,336
Investment securities available for sale		3,962,511		3,962,511		1,594,639		1,594,639
Federal Home Loan Bank of New York stock		226,962		226,962		140,000		140,000
Mortgage-backed securities held to maturity		4,389,864		4,288,772		3,755,921		3,721,029
Mortgage-backed securities available for sale		2,520,633		2,520,633		1,620,708		1,620,708
Loans, net		15,036,709		15,183,250		11,327,647		11,486,022
Liabilities:
Deposits		11,383,300		11,376,587		11,477,300		11,475,827
Borrowed funds		11,350,000		11,237,494		7,150,000		7,238,626

14. Regulatory Capital

Deposits at Hudson City Savings are insured up to standard limits of coverage provided by the Bank Insurance Fund (“BIF”) of the Federal Deposit Insurance Corporation (“FDIC”). Effective January 1, 2004, Hudson City Savings converted from a New Jersey state-chartered savings bank to a federally chartered savings bank and is now subject to comprehensive regulation, supervision and periodic examination by the Office of Thrift Supervision (“OTS”).

The OTS capital regulations require federally chartered savings banks to meet three minimum capital ratios: a 1.5% tangible capital ratio, a 4% leverage (core capital) ratio and an 8% total risk-based capital ratio. In assessing an institution’s capital adequacy, the OTS takes into consideration not only these numeric factors but also qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where necessary. Hudson City Savings, as a matter of prudent management, targets as its goal the maintenance of capital ratios which exceed these minimum requirements and that are consistent with Hudson City Savings’ risk profile.

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The OTS may take certain supervisory actions under the prompt corrective action regulations of FDICIA with respect to an undercapitalized institution. Such actions could have a direct material effect on the institution’s financial statements. The regulations establish a framework for the classification of savings institutions into five categories: well-capitalized, adequately-capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Under the OTS regulations, an institution is considered well-capitalized if it has a leverage (Tier 1) capital ratio of at least 5.0% and a total risk-based capital ratio of at least 10.0%. Hudson City Savings may not pay dividends to Hudson City Bancorp if, after paying those dividends, it would fail to meet the required minimum levels under risk-based capital guidelines and the minimum leverage and tangible capital ratio requirements.

The foregoing capital ratios are based in part on specific quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the OTS about capital components, risk-weightings and other factors. Management believes that, as of December 31, 2005, Hudson City Savings met all capital adequacy requirements to which it is subject and would have been categorized as a well-capitalized institution under the prompt corrective action regulations. There have been no conditions or events since December 31, 2005 that management believes have changed Hudson City Savings’ capital classification.

The following is a summary of Hudson City Savings’ actual capital amounts and ratios as of December 31, 2005 and 2004, compared to the OTS minimum capital adequacy requirements and the OTS requirements for classification as a well-capitalized institution:

						OTS Requirements
						Minimum Capital					For Classification as
	Bank Actual					Adequacy					Well-Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(Dollars in thousands)
December 31, 2005
Tangible capital	$	4,129,937		14.68	%	$	422,069		1.50	%		n/a		n/a
Leverage (core) capital		4,129,937		14.68			1,125,518		4.00		$	1,406,897		5.00	%
Total-risk-based capital		4,157,330		41.31			805,040		8.00			1,006,300		10.00
December 31, 2004
Tangible capital	$	1,282,665		6.36	%	$	302,325		1.50	%		n/a		n/a
Leverage (core) capital		1,282,665		6.36			806,200		4.00		$	1,007,750		5.00	%
Total-risk-based capital		1,309,984		17.49			599,199		8.00			748,998		10.00

Hudson City Bancorp is regulated, supervised and examined by the OTS as a savings and loan holding company and, as such, is not subject to regulatory capital requirements.

15. Off-Balance Sheet Risk and Contingencies

Hudson City Savings is a party to commitments to extend credit in the normal course of business to meet the financial needs of its customers and commitments to purchase loans and mortgage-backed securities to meet our growth initiatives. Commitments to extend credit are agreements to lend money to a customer as long as there is no violation of any condition established in the contract.

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Commitments to fund first mortgage loans generally have fixed expiration dates or other termination clauses, whereas home equity lines of credit have no expiration date. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Hudson City Savings evaluates each customer’s credit-worthiness on a case-by-case basis.

At December 31, 2005, Hudson City Savings had fixed- and variable-rate first mortgage loan commitments to extend credit of approximately $156,035,000 and $104,720,000, respectively, commitments to purchase fixed-rate first mortgage loans of $715,445,000, commitments to purchase variable rate mortgage-backed securities of $452,500,000 and unused home equity and overdraft lines of credit of approximately $82,143,000. No commitments are included in the accompanying financial statements. There is no exposure to credit loss in the event the other party to commitments to extend credit does not exercise its rights to borrow under the commitment.

In the normal course of business, there are various outstanding legal proceedings. In the opinion of management, the consolidated financial statements of Hudson City will not be materially affected as a result of such legal proceedings.

16. Parent Company Only Financial Statements

The following condensed financial statements for Hudson City Bancorp, Inc. (parent company only) reflect Hudson City Bancorp’s investment in its wholly-owned subsidiary, Hudson City Savings, using the equity method of accounting.

Statements of Financial Condition

	December 31,		December 31,
	2005		2004
	(In thousands)
Assets:
Cash and due from bank	$	894,128	$	76,761
Investment in subsidiary		4,067,146		1,273,453
ESOP loan receivable		240,958		52,715
Other assets		83		81
Total Assets	$	5,202,315	$	1,403,010
Liabilities and Stockholders’ Equity:
Accrued expenses	$	839	$	126
Total stockholder’s equity		5,201,476		1,402,884
Total Liabilities and Stockholders’ Equity	$	5,202,315	$	1,403,010

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16. Parent Company Only Financial Statements (continued)

Statements of Income

	Year Ended December 31,
	2005		2004		2003
	(In thousands)
Income:
Dividends received from subsidiary	$	259,329	$	226,592	$	203,149
Interest on ESOP loan receivable		6,954		4,128		4,180
Interest on deposit with subsidiary		5,964		423		721
Total income		272,247		231,143		208,050
Expenses		1,733		673		749
Income before income tax expense and equity in undistributed earnings of subsidiary		270,514		230,470		207,301
Income tax expense		4,205		1,464		1,555
Income before equity in undistributed earnings of subsidiary		266,309		229,006		205,746
Equity in undistributed earnings of subsidiary		9,746		10,260		1,664
Net Income	$	276,055	$	239,266	$	207,410

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16. Parent Company Only Financial Statements (continued)

Statements of Cash Flows

	Year Ended December 31,
	2005			2004			2003
				(In thousands)
Cash Flows from Operating Activities:
Net income	$	276,055		$	239,266		$	207,410
Adjustments to reconcile net income to cash provided by operating activities:
Equity in undistributed earnings		(9,746	)		(10,260	)		(1,664	)
(Increase) decrease in other assets		(2	)		14			(5	)
Increase (decrease) in accrued expenses		713			96			(28	)
Net Cash Provided by Operating Activities		267,020			229,116			205,713
Cash Flows from Investing Activities:
Capital contribution to subsidiary		(3,000,000	)		—			—
Loan to ESOP		(189,348	)		—			—
Principal collected on ESOP loan		1,105			726			674
Net Cash (Used) Provided by Investing Activities		(3,188,243	)		726			674
Cash Flows from Financing Activities:
Proceeds from second-step conversion and stock offering, net		3,953,001			—			—
Purchase of treasury stock		(107,499	)		(161,662	)		(101,057	)
Exercise of stock options		2,827			6,460			10,961
Cash dividends paid to unallocated ESOP shares		(7,636	)		(5,120	)		(3,978	)
Cash dividends paid		(102,103	)		(40,482	)		(95,627	)
Net Cash Provided (Used) by Financing Activities		3,738,590			(200,804	)		(189,701	)
Net Increase in Cash Due from Bank		817,367			29,038			16,686
Cash Due from Bank at Beginning of Year		76,761			47,723			31,037
Cash Due from Bank at End of Year	$	894,128		$	76,761		$	47,723

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17. Selected Quarterly Financial Data (Unaudited)

The following tables are a summary of certain quarterly financial data for the years ended December 31, 2005 and 2004.

	2005 Quarter Ended
	March 31		June 30		September 30		December 31
	(In thousands, except per share data)
Interest and dividend income	$	253,619	$	279,204	$	313,787	$	332,298
Interest expense		127,733		147,517		161,611		179,913
Net interest income		125,886		131,687		152,176		152,385
Provision for loan losses		65		—		—		—
Net interest income after provision for loan losses		125,821		131,687		152,176		152,385
Non-interest income		3,873		1,245		1,413		1,476
Non-interest expense		30,765		30,256		32,923		33,759
Income before income tax expense		98,929		102,676		120,666		120,102
Income tax expense		37,000		38,385		45,635		45,298
Net income	$	61,929	$	64,291	$	75,031	$	74,804
Basic earnings per share	$	0.11	$	0.11	$	0.13	$	0.13
Diluted earnings per share	$	0.11	$	0.11	$	0.13	$	0.13

	2004 Quarter Ended
	March 31		June 30		September 30		December 31
	(In thousands, except per share data)
Interest and dividend income	$	213,027	$	220,791	$	234,261	$	246,979
Interest expense		97,488		101,831		110,293		120,454
Net interest income		115,539		118,960		123,968		126,525
Provision for loan losses		225		225		225		115
Net interest income after provision for loan losses		115,314		118,735		123,743		126,410
Non-interest income		3,631		3,916		4,899		4,111
Non-interest expense		29,053		29,184		28,888		31,223
Income before income tax expense		89,892		93,467		99,754		99,298
Income tax expense		33,663		35,049		37,734		36,699
Net income	$	56,229	$	58,418	$	62,020	$	62,599
Basic earnings per share	$	0.10	$	0.10	$	0.11	$	0.11
Diluted earnings per share	$	0.09	$	0.10	$	0.11	$	0.11

Page 129

18. Earnings Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations.

	For the Year Ended December 31,
	2005						2004						2003
					Per						Per						Per
					Share						Share						Share
	Income		Shares		Amount		Income		Shares		Amount		Income		Shares		Amount
	(In thousands, except per share data)
Net income	$	276,055					$	239,266					$	207,410
Basic earnings per share:
Income available to common stockholders	$	276,055		567,789	$	0.49	$	239,266		576,621	$	0.41	$	207,410		585,316	$	0.35
Effect of dilutive common stock equivalents		—		13,274				—		16,380				—		16,366
Diluted earnings per share:
Income available to common stockholders	$	276,055		581,063	$	0.48	$	239,266		593,001	$	0.40	$	207,410		601,682	$	0.34

19. Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123(R) (revised 2004), “Share-Based Payment.” This Statement is a revision of SFAS No. 123(R), “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related implementation guidance. SFAS No. 123(R) (revised 2004) established standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. This Statement requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. This Statement establishes grant date fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees, except for equity instruments held by employee share ownership plans. We adopted this Statement effective on January 1, 2006, using the modified prospective method, based upon guidance from the Securities and Exchange Commission (“SEC”), which delayed the original effective date of July 1, 2005. We do not expect the adoption of SFAS No. 123(R) (revised 2004) will have a material impact on our financial condition or results of operations.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections”, which replaces APB No. 20, “Accounting Changes”, and SFAS No. 3, “ Reporting Changes in Interim Financial Statements”. SFAS No. 154 changes the accounting for, and reporting of, a change in accounting principle. SFAS No. 154 requires retrospective application to prior period’s financial statements of voluntary changes in accounting principle and changes required by new accounting standards when the standard does not include specific transition provisions, unless it is impracticable to do so. SFAS No. 154 is effective for accounting changes and corrections of errors in fiscal years beginning after December 15, 2005 and will only effect Hudson City’s financial statements upon adoption of a voluntary change in accounting principle or upon adoption of a new standard that does not contain transition provisions.

Page 130

In November 2005, the FASB issued FSP No. 115-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” which addresses the determination of when an investment is considered impaired, whether the impairment is other-than-temporary and how to measure an impairment loss. FSP No. 115-1 also addresses accounting considerations subsequent to the recognition of an other-than-temporary impairment on a debt security and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP No. 115-1 replaces the impairment guidance in Emerging Issues Task Force Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments,” with references to existing authoritative literature concerning other-than-temporary impairment determinations (principally

Page 131

SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and SEC Staff Accounting Bulletin No. 59, “ Accounting for Noncurrent Marketable Equity Securities”). Under FSP No. 115-1, impairment losses must be recognized in earnings for the entire difference between the security’s cost and its fair value at the financial statement date, without considering partial recoveries subsequent to that date. FSP No. 115-1 also requires that an investor recognize an other-than-temporary impairment loss when a decision to sell a security has been made and the investor does not expect the fair value of the security to fully recover prior to the expected time of sale. FSP No. 115-1 is effective for reporting periods beginning after December 15, 2005. We do not expect our application of FSP 115-1 to have a material impact on our financial condition or results of operations.

20. Subsequent Event

On February 9, 2006, Hudson City announced a definitive agreement to acquire Sound Federal Bancorp, Inc. (“Sound Federal”) for $20.75 per share in cash, representing an aggregate transaction value of approximately $265 million. The transaction will be accounted for under the purchase method of accounting, as per SFAS No. 141, “Business Combinations”. The transaction is subject to approval by shareholders of Sound Federal as well as customary regulatory approvals, and is expected to close in the early summer of 2006. We consider the impact on our financial statements of this acquisition to be immaterial.

Page 132

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Ronald E. Hermance, Jr., our Chairman, President and Chief Executive Officer, and Denis J. Salamone, our Senior Executive Vice President and Chief Operating Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2005. Based upon their evaluation, they each found that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and that such information is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosures.

Management Report on Internal Control Over Financial Reporting

The management of Hudson City Bancorp, Inc. (“Hudson City”) is responsible for establishing and maintaining adequate internal control over financial reporting. Hudson City’s internal control system is a process designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of Hudson City; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Hudson City’s assets that could have a material effect on our financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Hudson City’s management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2005. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on our assessment we believe that, as of December 31, 2005, the company’s internal control over financial reporting is effective based on those criteria.

Hudson City’s independent registered public accounting firm that audited the consolidated financial statements has issued an audit report on our assessment of, and the effective operation of, the company’s internal control over financial reporting as of December 31, 2005. This report appears on page 93.

Page 133

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the fourth quarter of 2005 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting and we identified no material weaknesses requiring corrective action with respect to those controls.

Item 9B. Other Information.

None.

Page 134

PART III

Item 10. Directors and Executive Officers of the Company.

Information regarding directors and executive officers of the Company is presented under the headings “Proposal 1 — Election of Directors-General,” “-Who Our Directors Are,” “-Our Directors Backgrounds,” “-Nominees for Election as Directors,” “-Continuing Directors,” “-Meetings of the Board of Directors and Its Committees,” “-Executive Officers,” “-Director Compensation,” “-Executive Officer Compensation,” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006, and is incorporated herein by reference.

Audit Committee Financial Expert

Information regarding the audit committee of the Company’s Board of Directors, including information regarding audit committee financial expert serving on the audit committee, is presented under the heading “Corporate Governance – Meetings of the Board of Directors and its Committees” in the Company’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006, and is incorporated herein by reference.

Code of Ethics

We have adopted a written code of ethics that applies to our principal executive officer and senior financial officers, which is available free of charge by contacting Louis Beierle, our Investor Relations Officer, at (201) 967-8290.

Item 11. Executive Compensation.

Information regarding executive compensation is presented under the headings “Election of Directors-Director Compensation,” “ –Executive Officer Compensation,” “-Summary Compensation Table,” “Employment Agreements,” “Change of Control Agreements,” and “Benefit Plans” in the Company’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006, and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

Information regarding security ownership of certain beneficial owners and management is presented under the heading “Security Ownership of Certain Beneficial Owners and Management” in the Company’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006, and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions.

Information regarding certain relationships and related transactions is presented under the heading “Certain Transactions with Members of our Board of Directors and Executive Officers” in the Company’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006, and is incorporated herein by reference.

Page 135

Item 14. Principal Accounting Fees and Services.

Information regarding principal accounting fees and services is presented under the heading “Proposal 3 – Ratification of Appointment of Independent Auditors” in Hudson City Bancorp’s definitive Proxy Statement for the 2006 Annual Meeting of Stockholders to be held on May 30, 2006, which will be filed with the SEC no later than April 30, 2006 and is incorporated herein by reference.

Page 136

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) List of Documents Filed as Part of this Annual Report on Form 10-K

(1) The following consolidated financial statements are in Item 8 of this annual report:

• Reports of Independent Registered Public Accounting Firm

• Consolidated Statements of Financial Condition as of December 31, 2005 and 2004

• Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003

• Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2005, 2004 and 2003

• Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003

• Notes to Consolidated Financial Statements

(2) Financial Statement Schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto in Item 8 of this annual report.

(b) Exhibits Required by Item 601 of Regulation S-K

Page 137

EXHIBIT	DESCRIPTION
2.1	Amended and Restated Plan of Conversion and Reorganization of Hudson City, MHC, Hudson City Bancorp, Inc. and Hudson City Savings Bank (1)
2.2	Agreement and Plan of Merger, dated February 8, 2006, by and between Hudson City Bancorp, Inc. and Sound Federal Bancorp, Inc. (2)
3.1	Certificate of Incorporation of Hudson City Bancorp, Inc. (3)
3.2	Amended and Restated Bylaws of Hudson City Bancorp, Inc. (4)
4.1	Certificate of Incorporation of Hudson City Bancorp, Inc. (See Exhibit 3.1)
4.2	Amended and Restated Bylaws of Hudson City Bancorp, Inc. (See Exhibit 3.2)
4.3	Form of Stock Certificate of Hudson City Bancorp, Inc. (3)
10.1	Employee Stock Ownership Plan of Hudson City Savings Bank (Incorporating amendments No. 1,2,3,4,and 5) (5)
10.2	Profit Incentive Bonus Plan of Hudson City Savings Bank (5)
10.3	Supplementary Savings Plan of Hudson City Savings Bank (3)
10.4	Form of One-Year Change in Control Agreement by and among Hudson City Savings Bank and Hudson City Bancorp, Inc. and certain officers (3)
10.5	Form of Two-Year Change in Control Agreement by and among Hudson City Savings Bank and Hudson City Bancorp, Inc. and certain officers (5)
10.6	Severance Pay Plan of Hudson City Savings Bank (3)
10.7	ESOP Restoration Plan of Hudson City Savings Bank (Incorporating Amendment No.1) (5)
10.8	Hudson City Savings Bank Outside Directors Consultation Plan (3)
10.9	Hudson City Savings Bank Supplemental Executive Retirement Plan (3)
10.10	Hudson City Bancorp, Inc. 2000 Stock Option Plan (6)
10.11	Hudson City Bancorp, Inc. 2000 Recognition and Retention Plan (6)
10.12	Hudson City Bancorp, Inc. Denis J. Salamone Restricted Stock Award Plan (7)
10.13	Hudson City Bancorp, Inc. Denis J. Salamone Stock Option Plan (7)
10.14	Hudson City Bancorp, Inc. 2004 Employment Inducement Stock Program with Ronald E. Butkovich (8)
10.15	Hudson City Bancorp, Inc. 2004 Employment Inducement Stock Program with Christopher Nettleton (8)
10.16	Hudson City Savings Bank Post Retirement Death Benefit for Senior Officers between Hudson City Savings Bank and Ronald E. Hermance, Jr. (5)
10.17	Hudson City Savings Bank Post Retirement Death Benefit for Senior Officers between Hudson City Savings Bank and Leonard S. Gudelski (5)
10.18	Hudson City Savings Bank Post Retirement Death Benefit for Senior Officers between Hudson City Savings Bank and Denis J. Salamone (5)
10.19	Hudson City Savings Bank Post Retirement Death Benefit for Senior Officers between Hudson City Savings Bank and John M. Tassillo (5)
10.20	Hudson City Savings Bank Post Retirement Death Benefit for Senior Officers between Hudson City Savings Bank and James C. Kranz (5)
10.21	Amended and Restated Employment Agreement between Hudson City Bancorp, Inc. and Ronald E. Hermance, Jr. (*)
10.22	Amended and Restated Employment Agreement between Hudson City Savings Bank and Ronald E. Hermance, Jr. (*)
10.23	Amended and Restated Employment Agreement between Hudson City Bancorp, Inc. and John M. Tassillo (*)
10.24	Amended and Restated Employment Agreement between Hudson City Savings Bank and John M. Tassillo (*)
10.25	Amended and Restated Employment Agreement between Hudson City Bancorp, Inc. and Denis J. Salamone (*)
10.26	Amended and Restated Employment Agreement between Hudson City Savings Bank and Denis J. Salamone (*)
10.27	Executive Officer Annual Incentive Plan of Hudson City Savings Bank (*)
10.28	Amended and Restated Loan Agreement by and between Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc. (*)
10.29	Amended and Restated Promissory Note between Employee Stock Ownership Plan Trust and Hudson City Bancorp, Inc. (*)

Page 138

EXHIBIT	DESCRIPTION
10.30	Amended and Restated Pledge Agreement by and between Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc. (*)
10.31	Form of Amended and Restated Assignment between Employee Stock Ownership Plan Trust and Hudson City Bancorp, Inc. (*)
10.32	Loan Agreement by and between Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc. (*)
10.33	Promissory Note between Employee Stock Ownership Plan Trust and Hudson City Bancorp, Inc. (*)
10.34	Pledge Agreement by and between Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc. (*)
10.35	Form of Assignment between Employee Stock Ownership Plan Trust and Hudson City Bancorp, Inc. (*)
11.1	Statement Re: Computation of Per Share Earnings
21.1	Subsidiaries of Hudson City Bancorp, Inc.
23.1	Consent of KPMG LLP (9)
31.1	Certification of Disclosure of Ronald E. Hermance, Jr.
31.2	Certification of Disclosure of Denis J. Salamone
32.1	Statement Furnished Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

(1)	Incorporated herein by reference to the Exhibits to the Registrant’s Registration Statement No. 333-122989 on Form S-3 filed with the Securities and Exchange Commission on February 25, 2005, as amended.
(2)	Incorporated herein by reference to the Exhibits to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 10, 2006.
(3)	Incorporated herein by reference to the Exhibits to the Registrant’s Registration Statement No. 333-74383 on Form S-1, filed with the Securities and Exchange Commission on March 15, 1999, as amended.
(4)	Incorporated herein by reference to the Exhibits to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 27, 2003.
(5)	Incorporated herein by reference to the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 filed with the Securities and Exchange Commission on February 25, 2005.
(6)	Incorporated herein by reference to the Exhibits to the Registrant’s Registration Statement No. 333-95193 on Form S-8, filed with the Securities and Exchange Commission on January 21, 2000.
(7)	Incorporated herein by reference to the Exhibits to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the Securities and Exchange Commission on March 28, 2002.
(8)	Incorporated herein by reference to the Exhibits to the Registrant’s Registration Statement No. 333-114536 on Form S-8, filed with the Securities and Exchange Commission on April 16, 2004.
(9)	Submitted only with filing in electronic format.
(*)	Filed herewith.

Page 139

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Paramus, New Jersey, on March 14, 2006.

		Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
	Ronald E. Hermance, Jr.
	Chairman, President and Chief Executive Officer (principal executive officer)
By:	/s/ Denis J. Salamone
	Denis J. Salamone Senior Executive Vice President and Chief Operating Officer (principal financial and accounting officer)

Page 140

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

NAME	TITLE	DATE
/s/ Ronald E. Hermance, Jr.  Ronald E. Hermance, Jr.	Director, Chairman, President and Chief Executive Officer (principal executive officer)	March 14, 2006
/s/ Denis J. Salamone  Denis J. Salamone	Director, Senior Executive Vice President and Chief Operating Officer (principal financial and accounting officer)	March 14, 2006
/s/ Michael W. Azzara  Michael W. Azzara	Director	March 14, 2006
/s/ William G. Bardel  William G. Bardel	Director	March 14, 2006
/s/ Scott A. Belair  Scott A. Belair	Director	March 14, 2006
/s/ John D. Birchby  John D. Birchby	Director	March 14, 2006
/s/ Victoria H. Bruni  Victoria H. Bruni	Director	March 14, 2006
/s/ William J. Cosgrove  William J. Cosgrove	Director	March 14, 2006
/s/ Andrew J. Egner, Jr.  Andrew J. Egner, Jr.	Director	March 14, 2006
/s/ Leonard S. Gudelski  Leonard S. Gudelski	Director	March 14, 2006
/s/ Donald O. Quest  Donald O. Quest	Director	March 14, 2006
/s/ Joseph G. Sponholz  Joseph G. Sponholz	Director	March 14, 2006

Page 141

EX-10.21

EXHIBIT 10.21

Amended and Restated

Employment Agreement

between

Hudson City Bancorp, Inc.

and

Ronald E. Hermance Jr.

Made and Entered into
as of June 7, 2005

Hudson City Bancorp, Inc.
Amended and Restated Employment Agreement

     This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07562-1473 (the “Company”) and Ronald E. Hermance Jr., an individual residing at 4634 Carlton Dunes 2, Fernandina Beach, Florida 32034 (the “Executive”).

Introductory Statement

     The Executive currently serves the Company and Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States with an office at West 80 Century Road, Paramus, New Jersey 07652-1473, and a wholly owned subsidiary of the Company (the “Bank”), in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Company (“Board”) has determined that it is in the best interests of the Company to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

     Section 1. Employment.

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

     Section 2. Employment Period; Remaining Unexpired Employment Period.

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

     (b) On the day after the Employment Commencement Date and on each day thereafter, the Employment Period shall be extended by one day, such that on any date the Employment Period will expire on the day before the third (3^rd) anniversary of such date. These extensions shall continue in perpetuity until discontinued by: (i) notice to the Executive given by the Company that it has elected to discontinue the extensions; (ii) notice by the Executive to the Company that he has elected to discontinue the extensions; or (iii) termination of the Executive’s employment with the Company, whether by resignation, discharge or otherwise. On the date on which such a notice is deemed given, or on the effective date of a termination of the Executive’s employment with the Company, the Employment Period shall be converted to a fixed period of three (3) years ending on the day before the third (3^rd) anniversary of such date.

Page 1 of 20

EXHIBIT 10.21

     (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the earliest of the date in question, any earlier date on which the Executive or the Company is deemed to have given a notice to discontinue extensions of the Employment Period, and any earlier date on which the Executive’s employment with the Company was terminated.

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

     Section 3. Duties.

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

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

     Section 4. Cash Compensation.

     In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him a salary at an initial annual rate of Nine Hundred Fifty Thousand dollars ($950,000), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of this Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Page 2 of 20

EXHIBIT 10.21

     Section 5. Employee Benefit Plans and Programs.

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

     Section 6. Indemnification and Insurance.

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

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

     Section 7. Outside Activities.

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

     Section 8. Working Facilities and Expenses.

     The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Company and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Company shall provide to the Executive for his exclusive use an automobile owned or leased by the Company and appropriate to his position, to be used in the performance of his duties hereunder, including commuting to and from his personal residence. The Company shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, all expenses

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     EXHIBIT 10.21

associated with his business use of the aforementioned automobile, fees for memberships in such clubs and organizations as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, and his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Company may reasonably require.

     Section 9. Termination of Employment Due to Death.

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

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

     (b) The Company shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Company. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

     Section 10. Termination Due to Disability.

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

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

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

Page 4 of 20

EXHIBIT 10.21

his death, the Company shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

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

          Section 11. Discharge with Cause.

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

     (i) the Board, by a majority vote of its membership, determines that the Executive (A) has willfully and intentionally failed to perform his assigned duties under this Agreement in any material respect (including, for these purposes, the Executive’s inability to perform such duties as a result of drug or alcohol dependency); (B) has willfully and intentionally engaged in dishonest or illegal conduct in connection with his performance of services for the Company or has been convicted of a felony; (C) has willfully violated, in any material respect, any law, rule, regulation, written agreement or final cease-and-desist order with respect to his performance of services for the Company; or (D) has willfully and intentionally breached the material terms of this Agreement in any material respect; and

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

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

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

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

Page 5 of 20

EXHIBIT 10.21

written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

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

          Section 12. Discharge without Cause.

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

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

          (b) In addition to the Standard Termination Entitlements:

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

     (ii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending

Page 6 of 20

EXHIBIT 10.21

immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

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

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

BSP = SSP x (ABP / ASP)

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

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

Page 7 of 20

EXHIBIT 10.21

beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

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

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

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

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his

Page 8 of 20

EXHIBIT 10.21

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

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

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

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

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

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

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

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

Page 9 of 20

EXHIBIT 10.21

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

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

          Section 13. Resignation.

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

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

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

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

     (iii) a material failure by the Company, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

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

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

Page 10 of 20

EXHIBIT 10.21

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

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

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

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

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

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

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

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

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

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

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

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EXHIBIT 10.21

to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

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

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

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

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

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

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

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

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

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

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

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of

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EXHIBIT 10.21

Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

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

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

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

          Section 16. Tax Indemnification.

          (a) If the Executive’s employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to the Executive (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

X   =                         E x P   1–[FI x (1–SLI) + SLI + E+ M]

where:
E =	the percentage rate at which an excise tax is assessed under section 4999 of the Code;
P =	the amount with respect to which such excise tax is assessed, determined without regard to this section 16;
FI =	the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

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EXHIBIT 10.21

SLI =	the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and
M =	the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

Such computation shall be made at the expense of the Company by an attorney or a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in the ownership of a substantial portion of the assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon the Executive on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

          (b) With respect to any payment that is presumed to be a parachute payment for purposes of section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the Executive the written opinion, in form and substance reasonably satisfactory to the Executive, of the Tax Advisor or of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that (i) no 280G Change in Control has occurred, or (ii) all or part of the payment or benefit in question is not a parachute payment for purposes of section 280G of the Code, or (iii) all or a part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or (iv) for some other reason which shall be set forth in detail in such letter, no excise tax is due under section 4999 of the Code with respect to such payment or benefit (the “Opinion Letter”). If the Company delivers an Opinion Letter, the Tax Advisor shall recompute, and the Company shall make, the Tax Indemnity Payment in reliance on the information contained in the Opinion Letter.

          (c) In the event that the Executive’s liability for the excise tax under section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made under section 16(b), when increased by the amount of the payment made to the Executive under this section 16(c), or when reduced by the amount of the payment made to the Company under this section 16(c), equals the amount that should have properly been paid to the Executive under section 16(a). The interest paid to the Company under this section 16(c) shall be determined at the rate provided under section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this section 16, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or

Page 14 of 20

EXHIBIT 10.21

proceeding to which the Executive is a party as a result of positions taken on his federal income tax return with respect to his liability for excise taxes under section 4999 of the Code.

          Section 17. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Company prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Company, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 17 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

          Section 18. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 18 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 19. Solicitation.

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

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

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

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EXHIBIT 10.21

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

     Section 20. No Effect on Employee Benefit Plans or Programs.

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

     Section 21. Successors and Assigns.

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

     Section 22. Notices.

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

If to the Executive:

4634 Carlton Dunes 2
Fernandina Beach, Florida 32034

If to the Company:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Compensation Committee

Page 16 of 20

EXHIBIT 10.21

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 23. Indemnification for Attorneys’ Fees.

          The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Unless it is determined that the Executive has acted frivolously or in bad faith, the Company shall pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of or in connection with his consultation with legal counsel or arising out of any action, suit, proceeding, tax controversy or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code. This section 23(b) shall apply whether such consultation, action, suit, proceeding or contest arises before, on, after or as a result of a Change of Control.

          Section 24. Severability.

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

          Section 25. Waiver.

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

          Section 26. Counterparts.

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

          Section 27. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts

Page 17 of 20

EXHIBIT 10.21

having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement though him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 28. Headings and Construction.

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

          Section 29. Entire Agreement; Modifications.

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

          Section 30. Non-Duplication.

          In the event that the Executive shall perform services for the Bank or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company, the Bank and all of their respective direct or indirect subsidiaries and affiliates.

          Section 31. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them; provided, however, that the Company shall be jointly and severally liable with the Bank for all obligations of the Bank under the Bank Agreement. It is the intent and purpose of this section 31 that the Executive have the same legal and economic rights that he would have if all of his services were rendered to and all of his compensation was paid by the Company. This section 31 shall be construed and enforced to give effect to such intent and purpose.

          Section 32. Required Regulatory Provisions.

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

Page 18 of 20

EXHIBIT 10.21

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

		Ronald E. Hermance Jr.
		Hudson City Bancorp, Inc.
Attest:		Attest:
By		By
	Veronica Olszewski		Michael W. Azzara
	Senior Vice President and Corporate		Chairman of the Compensation
	Secretary		Committee of the Board of Directors
[Seal]

Page 19 of 20

EX-10.22 3 y18482exv10w22.htm EX-10.22: AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT 10.22

Amended and Restated

Employment Agreement

between

Hudson City Savings Bank

and

Ronald E. Hermance Jr.

Made and Entered into
as of June 7, 2005

Hudson City Savings Bank

Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Bank”) and Ronald E. Hermance Jr., an individual residing at 4634 Carlton Dunes 2, Fernandina Beach, Florida 32034 (the “Executive”).

Introductory Statement

          The Executive currently serves Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Company”) and the Bank, a wholly owned subsidiary of the Company, in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Bank (“Board”) has determined that it is in the best interests of the Bank to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

          Section 1. Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

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

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

Page 1 of 19

EXHIBIT 10.22

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him a salary at an initial annual rate of Nine Hundred Fifty Thousand dollars ($950,000), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of the Company Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

          Section 5. Employee Benefit Plans and Programs.

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

Page 2 of 19

EXHIBIT 10.22

programs and consistent with the Bank’s customary practices in each case as applied to senior executive officers of the Bank.

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

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

          Section 9. Termination of Employment Due to Death.

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

          (a) The Bank shall pay to the Executive’s estate his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment shall be made at the time and in the manner

Page 3 of 19

EXHIBIT 10.22

prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Executive’s termination of employment.

          (b) The Bank shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Bank. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

          Section 10. Termination Due to Disability.

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

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

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

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

          Section 11. Discharge with Cause.

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

Page 4 of 19

EXHIBIT 10.22

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

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

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

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

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

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

Page 5 of 19

EXHIBIT 10.22

give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

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

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

          (b) In addition to the Standard Termination Entitlements:

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

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

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

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EXHIBIT 10.22

have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Bank.

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

BSP = SSP x (ABP / ASP)

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

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

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that

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EXHIBIT 10.22

his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

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

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

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

Page 8 of 19

EXHIBIT 10.22

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

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

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

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

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

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

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

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

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

          Section 13. Resignation.

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

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

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EXHIBIT 10.22

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

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

     (iii) a material failure by the Bank, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

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

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

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

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

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

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

Page 10 of 19

EXHIBIT 10.22

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

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

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

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

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

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

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

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

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

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

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

Page 11 of 19

EXHIBIT 10.22

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

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

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

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

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

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

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

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

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes

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EXHIBIT 10.22

contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

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

          Section 16. Covenant Not To Compete.

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

          Section 17. Confidentiality.

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

          Section 18. Solicitation.

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

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

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company,

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EXHIBIT 10.22

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

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

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

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

          Section 20. Successors and Assigns.

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

          Section 21. Notices.

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

          If to the Executive:

4634 Carlton Dunes 2
Fernandina Beach, Florida 32034

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EXHIBIT 10.22

          If to the Bank:

Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees .

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

          Section 23. Severability.

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

          Section 24. Waiver.

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

          Section 25. Counterparts.

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

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EXHIBIT 10.22

          Section 26. Governing Law.

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

          Section 27. Headings and Construction.

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

          Section 28. Entire Agreement; Modifications.

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

          Section 29. Non-Duplication.

          In the event that the Executive shall perform services for the Company or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Bank hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Bank, the Company and all of their respective direct or indirect subsidiaries and affiliates.

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

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

          Section 31. Required Regulatory Provisions.

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

          (a) Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive under section 12 hereof (exclusive of amounts described in section 9(a) and exclusive of amounts described in sections 12(b)(vi) and 12(b)(vii)

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EXHIBIT 10.22

to the extent such amounts are attributable to stock options, stock appreciation rights and/or shares that are vested on the date of the Executive’s termination of employment, without regard to any actual or deemed acceleration triggered by such termination) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to his termination of employment with the Bank (or for his entire period of employment with the Bank if less than five calendar years).

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

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

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

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

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

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

Page 17 of 19

EXHIBIT 10.22

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

		Ronald E. Hermance Jr.
		Hudson City Savings Bank
Attest:
By		By
	Veronica Olszewski		Michael W. Azzara
	Senior Vice President and Corporate		Chairman of the Human Resource
	Secretary		Committee of the Board of Directors
[Seal]

Page 18 of 19

EX-10.23 4 y18482exv10w23.htm EX-10.23: AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT 10.23

Amended and Restated

Employment Agreement

between

Hudson City Bancorp, Inc.

and

John M. Tassillo

Made and Entered into
as of June 7, 2005

Page 1 of 20

EXHIBIT 10.23

Hudson City Bancorp, Inc.
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07562-1473 (the “Company”) and John M. Tassillo, an individual residing at 151 Prospect Ave. Apt 6e1 Hackensack, New Jersey 07601 (the “Executive”).

Introductory Statement

          The Executive currently serves the Company and Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States with an office at West 80 Century Road, Paramus, New Jersey 07652-1473, and a wholly owned subsidiary of the Company (the “Bank”), in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Company (“Board”) has determined that it is in the best interests of the Company to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

          Section 1. Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

          (b) On the day after the Employment Commencement Date and on each day thereafter, the Employment Period shall be extended by one day, such that on any date the Employment Period will expire on the day before the third (3^rd) anniversary of such date. These extensions shall continue in perpetuity until discontinued by: (i) notice to the Executive given by the Company that it has elected to discontinue the extensions; (ii) notice by the Executive to the Company that he has elected to discontinue the extensions; or (iii) termination of the Executive’s employment with the Company, whether by resignation, discharge or otherwise. On the date on which such a notice is deemed given, or on the effective date of a termination of the Executive’s employment with the Company, the Employment Period shall be converted to a fixed period of three (3) years ending on the day before the third (3^rd) anniversary of such date.

Page 2 of 20

EXHIBIT 10.23

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the earliest of the date in question, any earlier date on which the Executive or the Company is deemed to have given a notice to discontinue extensions of the Employment Period, and any earlier date on which the Executive’s employment with the Company was terminated.

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him a salary at an initial annual rate of Three Hundred Eighty Thousand dollars ($380,000), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of this Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Page 3 of 20

EXHIBIT 10.23

          Section 5. Employee Benefit Plans and Programs.

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

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Company and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Company shall provide to the Executive for his exclusive use an automobile owned or leased by the Company and appropriate to his position, to be used in the performance of his duties hereunder, including commuting to and from his personal residence. The Company shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, all expenses

Page 4 of 20

EXHIBIT 10.23

associated with his business use of the aforementioned automobile, fees for memberships in such clubs and organizations as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, and his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Company may reasonably require.

          Section 9. Termination of Employment Due to Death.

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

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

          (b) The Company shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Company. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

          Section 10. Termination Due to Disability.

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

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

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

Page 5 of 20

EXHIBIT 10.23

his death, the Company shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

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

          Section 11. Discharge with Cause.

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

     (i) the Board, by a majority vote of its membership, determines that the Executive (A) has willfully and intentionally failed to perform his assigned duties under this Agreement in any material respect (including, for these purposes, the Executive’s inability to perform such duties as a result of drug or alcohol dependency); (B) has willfully and intentionally engaged in dishonest or illegal conduct in connection with his performance of services for the Company or has been convicted of a felony; (C) has willfully violated, in any material respect, any law, rule, regulation, written agreement or final cease-and-desist order with respect to his performance of services for the Company; or (D) has willfully and intentionally breached the material terms of this Agreement in any material respect; and

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

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

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

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

Page 6 of 20

EXHIBIT 10.23

written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

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

          Section 12. Discharge without Cause.

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

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

          (b) In addition to the Standard Termination Entitlements:

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

     (ii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending

Page 7 of 20

EXHIBIT 10.23

immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

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

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

BSP = SSP x (ABP / ASP)

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

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

Page 8 of 20

EXHIBIT 10.23

beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

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

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

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

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his

Page 9 of 20

EXHIBIT 10.23

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

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

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

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

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

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

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

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

Page 10 of 20

EXHIBIT 10.23

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

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

          Section 13. Resignation.

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

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

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

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

     (iii) a material failure by the Company, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

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

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

Page 11 of 20

EXHIBIT 10.23

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

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

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

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

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

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

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

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

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

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

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

Page 12 of 20

EXHIBIT 10.23

to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

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

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

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

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

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

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

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

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

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

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

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of

Page 13 of 20

EXHIBIT 10.23

Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

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

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

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

          Section 16. Tax Indemnification.

          (a) If the Executive’s employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to the Executive (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

     

          where:

          E = the percentage rate at which an excise tax is assessed under section 4999 of the Code;

          P = the amount with respect to which such excise tax is assessed, determined without regard to this section 16;

          FI = the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

Page 14 of 20

EXHIBIT 10.23

SLI = the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

          M = the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

Such computation shall be made at the expense of the Company by an attorney or a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in the ownership of a substantial portion of the assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon the Executive on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

          (b) With respect to any payment that is presumed to be a parachute payment for purposes of section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the Executive the written opinion, in form and substance reasonably satisfactory to the Executive, of the Tax Advisor or of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that (i) no 280G Change in Control has occurred, or (ii) all or part of the payment or benefit in question is not a parachute payment for purposes of section 280G of the Code, or (iii) all or a part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or (iv) for some other reason which shall be set forth in detail in such letter, no excise tax is due under section 4999 of the Code with respect to such payment or benefit (the “Opinion Letter”). If the Company delivers an Opinion Letter, the Tax Advisor shall recompute, and the Company shall make, the Tax Indemnity Payment in reliance on the information contained in the Opinion Letter.

          (c) In the event that the Executive’s liability for the excise tax under section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made under section 16(b), when increased by the amount of the payment made to the Executive under this section 16(c), or when reduced by the amount of the payment made to the Company under this section 16(c), equals the amount that should have properly been paid to the Executive under section 16(a). The interest paid to the Company under this section 16(c) shall be determined at the rate provided under section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this section 16, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or

Page 15 of 20

EXHIBIT 10.23

proceeding to which the Executive is a party as a result of positions taken on his federal income tax return with respect to his liability for excise taxes under section 4999 of the Code.

          Section 17. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Company prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Company, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 17 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

          Section 18. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 18 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 19. Solicitation.

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

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

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

Page 16 of 20

EXHIBIT 10.23

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

          Section 20. No Effect on Employee Benefit Plans or Programs.

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

          Section 21. Successors and Assigns.

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

          Section 22. Notices.

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

          If to the Executive:

151 Prospect Ave. Apt 6e1
Hackensack, New Jersey 07601

          If to the Company:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Compensation Committee

Page 17 of 20

EXHIBIT 10.23

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 23. Indemnification for Attorneys’ Fees.

          The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Unless it is determined that the Executive has acted frivolously or in bad faith, the Company shall pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of or in connection with his consultation with legal counsel or arising out of any action, suit, proceeding, tax controversy or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code. This section 23(b) shall apply whether such consultation, action, suit, proceeding or contest arises before, on, after or as a result of a Change of Control.

          Section 24. Severability.

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

          Section 25. Waiver.

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

          Section 26. Counterparts.

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

          Section 27. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action,

Page 18 of 20

EXHIBIT 10.23

complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement though him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 28. Headings and Construction.

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

          Section 29. Entire Agreement; Modifications.

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

          Section 30. Non-Duplication.

          In the event that the Executive shall perform services for the Bank or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company, the Bank and all of their respective direct or indirect subsidiaries and affiliates.

          Section 31. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them; provided, however, that the Company shall be jointly and severally liable with the Bank for all obligations of the Bank under the Bank Agreement. It is the intent and purpose of this section 31 that the Executive have the same legal and economic rights that he would have if all of his services were rendered to and all of his compensation was paid by the Company. This section 31 shall be construed and enforced to give effect to such intent and purpose.

          Section 32. Required Regulatory Provisions.

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

Page 19 of 20

EXHIBIT 10.23

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

		John M. Tassillo
		Hudson City Bancorp, Inc.
Attest:		Attest:
By		By
	Veronica Olszewski		Ronald E. Hermance Jr.
	Senior Vice President and Corporate		Chairman of the Board of Directors,
	Secretary		President and Chief Executive
[Seal]

Page 20 of 20

EX-10.24 5 y18482exv10w24.htm EX-10.24: AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT 10.24

Amended and Restated

Employment Agreement

between

Hudson City Savings Bank

and

John M. Tassillo

Made and Entered into
as of June 7, 2005

Page 1 of 19

Hudson City Savings Bank
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Bank”) and John M. Tassillo, an individual residing at 151 Prospect Ave. Apt 6e1 Hackensack, New Jersey 07601 (the “Executive”).

Introductory Statement

          The Executive currently serves Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Company”) and the Bank, a wholly owned subsidiary of the Company, in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Bank (“Board”) has determined that it is in the best interests of the Bank to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

          Section 1. Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

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

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

Page 2 of 19

EXHIBIT 10.24

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him a salary at an initial annual rate of Three Hundred Eighty Thousand dollars ($380,000), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of the Company Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

          Section 5. Employee Benefit Plans and Programs.

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

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programs and consistent with the Bank’s customary practices in each case as applied to senior executive officers of the Bank.

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

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

          Section 9. Termination of Employment Due to Death.

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

          (a) The Bank shall pay to the Executive’s estate his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment shall be made at the time and in the manner

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prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Executive’s termination of employment.

          (b) The Bank shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Bank. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

          Section 10. Termination Due to Disability.

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

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

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

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

          Section 11. Discharge with Cause.

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

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

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

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

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

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

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

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give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

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

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

          (b) In addition to the Standard Termination Entitlements:

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

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

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

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have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Bank.

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

BSP = SSP x (ABP / ASP)

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

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

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that

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his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

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

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

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

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

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

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

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

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

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

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

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

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

          Section 13. Resignation.

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

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

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

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

     (iii) a material failure by the Bank, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes

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contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

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

          Section 16. Covenant Not To Compete.

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

          Section 17. Confidentiality.

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

          Section 18. Solicitation.

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

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

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company,

Page 14 of 19

EXHIBIT 10.24

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

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

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

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

          Section 20. Successors and Assigns.

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

          Section 21. Notices.

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

          If to the Executive:

151 Prospect Ave. Apt 6e1
Hackensack, New Jersey 07601

Page 15 of 19

EXHIBIT 10.24

          If to the Bank:

Hudson City Savings Bank,
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees.

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

          Section 23. Severability.

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

          Section 24. Waiver.

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

          Section 25. Counterparts.

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

Page 16 of 19

EXHIBIT 10.24

          Section 26. Governing Law.

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

          Section 27. Headings and Construction.

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

          Section 28. Entire Agreement; Modifications.

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

          Section 29. Non-Duplication.

          In the event that the Executive shall perform services for the Company or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Bank hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Bank, the Company and all of their respective direct or indirect subsidiaries and affiliates.

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

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

          Section 31. Required Regulatory Provisions.

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

          (a) Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive under section 12 hereof (exclusive of amounts described in section 9(a) and exclusive of amounts described in sections 12(b)(vi) and 12(b)(vii)

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EXHIBIT 10.24

to the extent such amounts are attributable to stock options, stock appreciation rights and/or shares that are vested on the date of the Executive’s termination of employment, without regard to any actual or deemed acceleration triggered by such termination) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to his termination of employment with the Bank (or for his entire period of employment with the Bank if less than five calendar years).

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

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

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

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

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

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

Page 18 of 19

EXHIBIT 10.24

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

		John M. Tassillo
		Hudson City Savings Bank
Attest:
By		By
	Veronica Olszewski		Ronald E. Hermance Jr.
	Senior Vice President and Corporate Secretary		Chairman of the Board of Directors, President and Chief Executive Officer
[Seal]

Page 19 of 19

EX-10.25 6 y18482exv10w25.htm EX-10.25: AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT 10.25

Amended and Restated

Employment Agreement

between

Hudson City Bancorp, Inc.

and

Denis J. Salamone

Made and Entered into
as of June 7, 2005

Page 1 of 20

EXHIBIT 10.25

Hudson City Bancorp, Inc.
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07562-1473 (the “Company”) and Denis J. Salamone, an individual residing at 440 Hillcrest Road, Ridgewood, New Jersey 07450 (the “Executive”).

Introductory Statement

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

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

Agreement

          Section 1.Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

          (b) On the day after the Employment Commencement Date and on each day thereafter, the Employment Period shall be extended by one day, such that on any date the Employment Period will expire on the day before the third (3^rd) anniversary of such date. These extensions shall continue in perpetuity until discontinued by: (i) notice to the Executive given by the Company that it has elected to discontinue the extensions; (ii) notice by the Executive to the Company that he has elected to discontinue the extensions; or (iii) termination of the Executive’s employment with the Company, whether by resignation, discharge or otherwise. On the date on which such a notice is deemed given, or on the effective date of a termination of the Executive’s employment with the Company, the Employment Period shall be converted to a fixed period of three (3) years ending on the day before the third (3^rd) anniversary of such date.

Page 2 of 20

EXHIBIT 10.25

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the earliest of the date in question, any earlier date on which the Executive or the Company is deemed to have given a notice to discontinue extensions of the Employment Period, and any earlier date on which the Executive’s employment with the Company was terminated.

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

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

Page 3 of 20

EXHIBIT 10.25

          Section 5. Employee Benefit Plans and Programs.

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

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Company and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Company shall provide to the Executive for his exclusive use an automobile owned or leased by the Company and appropriate to his position, to be used in the performance of his duties hereunder, including commuting to and from his personal residence. The Company shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, all expenses

Page 4 of 20

EXHIBIT 10.25

associated with his business use of the aforementioned automobile, fees for memberships in such clubs and organizations as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, and his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Company may reasonably require.

          Section 9. Termination of Employment Due to Death.

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

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

          (b) The Company shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Company. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

          Section 10. Termination Due to Disability.

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

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

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

Page 5 of 20

EXHIBIT 10.25

his death, the Company shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

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

          Section 11. Discharge with Cause.

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

     (i) the Board, by a majority vote of its membership, determines that the Executive (A) has willfully and intentionally failed to perform his assigned duties under this Agreement in any material respect (including, for these purposes, the Executive’s inability to perform such duties as a result of drug or alcohol dependency); (B) has willfully and intentionally engaged in dishonest or illegal conduct in connection with his performance of services for the Company or has been convicted of a felony; (C) has willfully violated, in any material respect, any law, rule, regulation, written agreement or final cease-and-desist order with respect to his performance of services for the Company; or (D) has willfully and intentionally breached the material terms of this Agreement in any material respect; and

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

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

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

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

Page 6 of 20

EXHIBIT 10.25

written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

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

          Section 12. Discharge without Cause.

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

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

          (b) In addition to the Standard Termination Entitlements:

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

     (ii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending

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EXHIBIT 10.25

immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

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

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

BSP = SSP x (ABP / ASP)

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

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

Page 8 of 20

EXHIBIT 10.25

beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

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

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

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

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his

Page 9 of 20

EXHIBIT 10.25

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

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

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

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

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

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

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

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

Page 10 of 20

EXHIBIT 10.25

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

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

          Section 13. Resignation.

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

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

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

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

     (iii) a material failure by the Company, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

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

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

Page 11 of 20

EXHIBIT 10.25

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

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

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

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

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

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

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

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

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

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

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

Page 12 of 20

EXHIBIT 10.25

to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

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

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

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

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

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

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

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

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

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

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

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of

Page 13 of 20

EXHIBIT 10.25

Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

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

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

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

          Section 16. Tax Indemnification.

          (a) If the Executive’s employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to the Executive (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

where:
E =	the percentage rate at which an excise tax is assessed under section 4999 of the Code;
P =	the amount with respect to which such excise tax is assessed, determined without regard to this section 16;
FI =	the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

Page 14 of 20

EXHIBIT 10.25

SLI =	the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and
M =	the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

Such computation shall be made at the expense of the Company by an attorney or a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in the ownership of a substantial portion of the assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon the Executive on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

          (b) With respect to any payment that is presumed to be a parachute payment for purposes of section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the Executive the written opinion, in form and substance reasonably satisfactory to the Executive, of the Tax Advisor or of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that (i) no 280G Change in Control has occurred, or (ii) all or part of the payment or benefit in question is not a parachute payment for purposes of section 280G of the Code, or (iii) all or a part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or (iv) for some other reason which shall be set forth in detail in such letter, no excise tax is due under section 4999 of the Code with respect to such payment or benefit (the “Opinion Letter”). If the Company delivers an Opinion Letter, the Tax Advisor shall recompute, and the Company shall make, the Tax Indemnity Payment in reliance on the information contained in the Opinion Letter.

          (c) In the event that the Executive’s liability for the excise tax under section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made under section 16(b), when increased by the amount of the payment made to the Executive under this section 16(c), or when reduced by the amount of the payment made to the Company under this section 16(c), equals the amount that should have properly been paid to the Executive under section 16(a). The interest paid to the Company under this section 16(c) shall be determined at the rate provided under section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this section 16, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or

Page 15 of 20

EXHIBIT 10.25

proceeding to which the Executive is a party as a result of positions taken on his federal income tax return with respect to his liability for excise taxes under section 4999 of the Code.

          Section 17. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Company prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Company, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 17 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

          Section 18. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 18 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 19. Solicitation.

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

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

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

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EXHIBIT 10.25

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

          Section 20. No Effect on Employee Benefit Plans or Programs.

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

          Section 21. Successors and Assigns.

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

          Section 22. Notices.

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

If to the Executive:
	440 Hillcrest Road Ridgewood, New Jersey 07450
If to the Company:
	Hudson City Bancorp, Inc. West 80 Century Road Paramus, New Jersey 07652-1473
	Attention:      Chairman, Compensation Committee

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EXHIBIT 10.25

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention:     W. Edward Bright, Esq.

          Section 23. Indemnification for Attorneys’ Fees.

          The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Unless it is determined that the Executive has acted frivolously or in bad faith, the Company shall pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of or in connection with his consultation with legal counsel or arising out of any action, suit, proceeding, tax controversy or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code. This section 23(b) shall apply whether such consultation, action, suit, proceeding or contest arises before, on, after or as a result of a Change of Control.

          Section 24. Severability.

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

          Section 25. Waiver.

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

          Section 26. Counterparts.

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

          Section 27. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts

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EXHIBIT 10.25

having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement though him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 28. Headings and Construction.

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

          Section 29. Entire Agreement; Modifications.

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

          Section 30. Non-Duplication.

          In the event that the Executive shall perform services for the Bank or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company, the Bank and all of their respective direct or indirect subsidiaries and affiliates.

          Section 31. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them; provided, however, that the Company shall be jointly and severally liable with the Bank for all obligations of the Bank under the Bank Agreement. It is the intent and purpose of this section 31 that the Executive have the same legal and economic rights that he would have if all of his services were rendered to and all of his compensation was paid by the Company. This section 31 shall be construed and enforced to give effect to such intent and purpose.

          Section 32. Required Regulatory Provisions.

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

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EXHIBIT 10.25

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

		Denis J. Salamone
		Hudson City Bancorp, Inc.
Attest:		Attest:
By		By
	Veronica Olszewski Senior Vice President and Corporate Secretary		Ronald E. Hermance Jr. Chairman of the Board of Directors, President and Chief Executive Officer
[Seal]

Page 20 of 20

EX-10.26 7 y18482exv10w26.htm EX-10.26: AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT 10.26

Amended and Restated

Employment Agreement

between

Hudson City Savings Bank

and

Denis J. Salamone

Made and Entered into
as of June 7, 2005

Page 1 of 19

Hudson City Savings Bank
Amended and Restated Employment Agreement

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

Introductory Statement

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

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

Agreement

          Section 1. Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

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

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

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EXHIBIT 10.26

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

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

          Section 5. Employee Benefit Plans and Programs.

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

Page 3 of 19

EXHIBIT 10.26

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

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

          Section 9. Termination of Employment Due to Death.

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

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

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

Page 4 of 19

EXHIBIT 10.26

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

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

          Section 10. Termination Due to Disability.

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

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

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

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

          Section 11. Discharge with Cause.

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

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

Page 5 of 19

EXHIBIT 10.26

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

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

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

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

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

          Section 12. Discharge without Cause.

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

Page 6 of 19

EXHIBIT 10.26

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

          (b) In addition to the Standard Termination Entitlements:

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

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

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

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

BSP = SSP x (ABP / ASP)

Page 7 of 19

EXHIBIT 10.26

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

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

PSP = PPB – APB

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

Page 8 of 19

EXHIBIT 10.26

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

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

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

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

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

Page 9 of 19

EXHIBIT 10.26

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

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

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

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

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

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

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

          Section 13. Resignation.

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

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

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

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

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

Page 10 of 19

EXHIBIT 10.26

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

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

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

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

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

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

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

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

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

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

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

Page 11 of 19

EXHIBIT 10.26

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

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

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

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

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

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

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

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

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

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

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

Page 12 of 19

EXHIBIT 10.26

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

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

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

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

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

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

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

          Section 16. Covenant Not To Compete.

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

Page 13 of 19

EXHIBIT 10.26

          Section 17. Confidentiality.

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

          Section 18. Solicitation.

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

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

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

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

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

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

Page 14 of 19

EXHIBIT 10.26

          Section 20. Successors and Assigns.

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

          Section 21. Notices.

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

          If to the Executive:

440 Hillcrest Road
Ridgewood, New Jersey 07450

          If to the Bank:

Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees.

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

Page 15 of 19

EXHIBIT 10.26

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

          Section 23. Severability.

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

          Section 24. Waiver.

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

          Section 25. Counterparts.

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

          Section 26. Governing Law.

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

          Section 27. Headings and Construction.

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

          Section 28. Entire Agreement; Modifications.

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

          Section 29. Non-Duplication.

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

Page 16 of 19

EXHIBIT 10.26

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

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

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

          Section 31. Required Regulatory Provisions.

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

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

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

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

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

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

Page 17 of 19

EXHIBIT 10.26

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

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

Page 18 of 19

EXHIBIT 10.26

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

		Denis J. Salamone
		Hudson City Savings Bank
Attest:
By		By
	Veronica Olszewski		Ronald E. Hermance Jr.
	Senior Vice President and Corporate		Chairman of the Board of Directors,
	Secretary		President and Chief Executive Officer
[Seal]

Page 19 of 19

EX-10.27 8 y18482exv10w27.htm EX-10.27: EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

EXHIBIT 10.27

Executive Officer Annual Incentive Plan

of

Hudson City Bancorp, Inc.

Adopted on January 18, 2005
Effective as of January 1, 2005

TABLE OF CONTENTS

		Page
	Article I
	Plan Objectives
Section 1.1	Purpose	1
	Article II
	Plan Duration
Section 2.1	Term	1
	Article III
	Definitions
Section 3.1	Bank	1
Section 3.2	Base Salary	1
Section 3.3	Board	1
Section 3.4	Change of Control	1
Section 3.5	Code	3
Section 3.6	Company	3
Section 3.7	Company and the Bank	3
Section 3.8	Corporate Performance Objectives	3
Section 3.9	Committee	3
Section 3.10	Disabled	3
Section 3.11	Discharge for Cause	3
Section 3.12	Effective Date	4
Section 3.13	Employee	4
Section 3.14	ERISA	4
Section 3.14	Exchange Act	4
Section 3.15	GAAP	4
Section 3.16	Participant	4
Section 3.17	Plan	4
Section 3.18	Plan Year	4
Section 3.19	Retires	4
Section 3.20	Section 162(m) Employee	4

i

Table of Contents
(continued)

		Page
Section 3.21	Taxable Year		4
	Article IV
	Eligibility and Participation
Section 4.1	Eligibility		5
Section 4.2	Participation		5
Section 4.3	Termination of Employment		5
Section 4.4	Change of Control		5
Section 4.5	Other Terminations		5
Section 4.6	Prorated Awards		5
	Article V
	Award Opportunity
Section 5.1	Awards		6
Section 5.2	Award Matrix		6
	Article VI
	Establishment of Corporate Performance Objectives
Section 6.1	Performance Objectives		6
Section 6.2	Award Matrix		8
Section 6.3	Adjustments		8
Section 6.4	Negative Discretion		8
	Article VII
	Determination and Payment of Awards
Section 7.1	Certification of Corporate Performance Objectives		9
Section 7.2	Deferral of Awards		9
	Article VIII
	Maximum Award
Section 8.1	Maximum Award		9

ii

Table of Contents
(continued)

		Page
	Article IX
	Administration
Section 9.1	Committee		9
Section 9.2	Committee Action		9
Section 9.3	Committee Responsibilities		10
	Article X
	Amendment and Termination
Section 10.1	Amendment		10
Section 10.2	Termination		10
	Article XI
	Miscellaneous
Section 11.1	No Right to Continued Employment		10
Section 11.2	Non-Alienation of Benefits		10
Section 11.3	No Effect Prior to Shareholder Approval		11
Section 11.4	Status of Plan Under ERISA		11
Section 11.5	Construction and Language		11
Section 11.6	Governing Law		11
Section 11.7	Headings		11
Section 11.8	Withholding		11
Section 11.9	Notices		12
Section 11.10	Indemnification		12
Section 11.11	Severability		12
Section 11.12	Waiver		12
Section 11.13	No Deposit Account		12
Section 11.14	Successors and Assigns		12
Section 11.15	Required Provisions		13

iii

Executive Officer Annual Incentive Plan
of
Hudson City Bancorp, Inc.

Article I

Plan Objectives

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

Article II

Plan Duration

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

Article III

Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          Section 3.19 “Plan Year” means the calendar year.

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

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

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

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Article IV

Eligibility And Participation

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

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

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

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

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

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

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Article V

Award Opportunity

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

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

Article VI

Establishment Of Corporate Performance Objectives

          Section 6.1 Performance Objectives.

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

     (i) Basic earnings per common share,

     (ii) Basic cash earnings per common share,

     (iii) Diluted earnings per common share,

     (iv) Diluted cash earnings per common share,

     (v) Net income,

     (vi) Cash earnings,

6

     (vii) Net interest income,

     (viii) Non-interest income,

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

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

     (xi) Efficiency ratio,

     (xii) Cash efficiency ratio,

     (xiii) Return on average assets,

     (xiv) Cash return on average assets,

     (xv) Return on average stockholders’ equity,

     (xvi) Cash return on average stockholders’ equity,

     (xvii) Return on average tangible stockholders’ equity,

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

     (xix) Core earnings,

     (xx) Operating income,

     (xxi) Operating efficiency ratio,

     (xxii) Net interest rate spread,

     (xxiii) Loan production volume,

     (xxiv) Non-performing loans,

     (xxv) Cash flow,

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

     (xxvii) Any combination of the foregoing.

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

7

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

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

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

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

8

Article VII

Determination And Payment Of Awards

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

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

Article VIII

Maximum Award

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

Article IX

Administration

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

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

9

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

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

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

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

Article X

Amendment And Termination

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

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

Article XI

Miscellaneous

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

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

10

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

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

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

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

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

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

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

11

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

          (a) If to the Committee:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652
Attention: Corporate Secretary

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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EX-10.28 9 y18482exv10w28.htm EX-10.28: AMENDED AND RESTATED LOAN AGREEMENT

EXHIBIT 10.28

Amended and Restated Loan Agreement

by and between

Employee Stock Ownership Plan Trust
of
Hudson City Savings Bank

and

Hudson City Bancorp, Inc.

Made and Entered Into as of
June 21, 2005

EXHIBIT 10.28

TABLE OF CONTENTS

		Page
	ARTICLE I
	DEFINITIONS
Section 1.1	Amended and Restated Pledge Agreement	2
Section 1.2	Amended and Restated Promissory Note	2
Section 1.3	Business Day	2
Section 1.4	Code	2
Section 1.5	Default	2
Section 1.6	ERISA	2
Section 1.7	Event of Default	2
Section 1.8	Fiscal Year	2
Section 1.9	Independent Counsel	2
Section 1.10	Loan	2
Section 1.11	Loan Documents	3
Section 1.12	Principal Amount	3
Section 1.13	Register	3
	ARTICLE II
	THE LOAN; PRINCIPAL AMOUNT; INTEREST;
	SECURITY INDEMNIFICATION
Section 2.1	The Loan; Principal Amount	3
Section 2.2	Interest	3
Section 2.3	Promissory Note	4
Section 2.4	Payment of Trust Loan	4
Section 2.5	Prepayment	6
Section 2.6	Method of Payments	6
Section 2.7	Security	7
Section 2.8	Registration of the Promissory Note	8
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 3.1	Power; Authority; Consents	8
Section 3.2	Due Execution; Validity; Enforceability	8
Section 3.3	Properties; Priority of Liens	8
Section 3.4	No Defaults; Compliance with Laws	9
Section 3.5	Purchases of Common Stock	9

i
 

EXHIBIT 10.28

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF THE LENDER
Section 4.1	Power; Authority; Consents	9
Section 4.2	Due Execution; Validity; Enforceability	9
Section 4.3	ESOP; Contributions	9
Section 4.4	Trustee; Committee	10
Section 4.5	Compliance with Laws; Actions	10
	ARTICLE V
	EVENTS OF DEFAULT
Section 5.1	Events of Default under Loan Agreement	10
Section 5.2	Lender’s Rights upon Event of Default	11
	ARTICLE VI
	MISCELLANEOUS PROVISIONS
Section 6.1	Payments Due to the Lender	12
Section 6.2	Payments	11
Section 6.3	Survival	12
Section 6.4	Modifications, Consents and Waivers; Entire Agreement	12
Section 6.5	Remedies Cumulative	13
Section 6.6	Further Assurances; Compliance with Covenants	12
Section 6.7	Notices	13
Section 6.8	Counterparts	14
Section 6.9	Construction; Governing Law	14
Section 6.10	Severability	14
Section 6.11	Binding Effect; No Assignment or Delegation	15
EXHIBIT A Form of Amended and Restated Promissory Note		A1
EXHIBIT B Form of Amended and Restated Pledge Agreement		B1
EXHIBIT C Form of Amended and Restated Assignment		C1

ii
 

Amended and Restated Loan Agreement

          This Amended and Restated Loan Agreement (“Amended and Restated Loan Agreement”) is made and entered into as of the 21^st day of June, 2005, by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), a trust forming part of the Employee Stock Ownership Plan of Hudson City Savings Bank (“ESOP”), acting through and by its Trustee, GreatBanc Trust Company (“Trustee”), a trust corporation organized under the laws of the state of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York, 10111-2000; and Hudson City Bancorp, Inc. (“Lender”), a corporation organized and existing under the laws of the state of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473.

W I T N E S S E T H:

          Whereas, the Borrower and the Lender are parties to the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999 (“First Loan Agreement”), pursuant to which the Lender agreed to loan the Borrower certain amounts to purchase shares of common stock of Hudson City Bancorp, Inc. (“Common Stock”) pursuant to the terms set forth in the First Loan Agreement;

          Whereas, pursuant to the First Loan Agreement, the Borrower borrowed $58,645,380 from the Lender (“First Loan”) and used the proceeds of the First Loan to purchase 27,879,376 shares of Common Stock (based on a 2 to 1 stock split effected in June 2002 and a 3.2060 to 1 stock split effected in June 2005);

          Whereas, under the First Loan, a total of 22,303,450 shares of Common Stock are scheduled to be released for allocation to participants in the ESOP during the years 2005 through 2028, with a final allocation of 464,716 shares of Common Stock in 2029;

          Whereas, the Compensation Committee of the Lender (“Committee”) has authorized the Borrower to purchase additional shares of Common Stock, either directly from Hudson City Bancorp, Inc. or in open market purchases in an amount not to exceed 15,719,223 of the shares of Common Stock issued in connection with the transactions effected pursuant to the Plan of Conversion and Reorganization adopted by Hudson City Savings Bank on December 16, 2004, as amended (the “Reorganization”);

          Whereas, the Committee has further authorized the Borrower to borrow funds from the Lender for the purpose of financing authorized purchases of Common Stock (“Second Loan”); and

          Whereas, the Lender is willing to make the Second Loan to the Borrower for such purpose pursuant to the terms of the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., dated as of the date hereof (the “Second Loan Agreement”) subject to the conditions that (i) the First Loan Agreement be amended and restated in accordance with the terms hereinafter set forth and (ii) the Promissory Note and Pledge Agreement entered into by the Borrower and the Lender on the

EXHIBIT 10.28

date of, and in connection with, the First Loan Agreement, be amended and restated to reflect the terms of this Amended and Restated Loan Agreement.

          Now, Therefore, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          The following definitions shall apply for purposes of this Amended and Restated Loan Agreement, except to the extent that a different meaning is plainly indicated by the context:

          Section 1.1 Amended and Restated Pledge Agreement means the agreement described in Section 2.7(a).

          Section 1.2 Amended and Restated Promissory Note means the promissory note described in Section 2.3.

          Section 1.3 Business Day means any day other than a Saturday, Sunday or other day on which banks are authorized or required to close under federal law or the laws of the State of New Jersey.

          Section 1.4 Code means the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

          Section 1.5 Default means an event or condition which would constitute an Event of Default. The determination as to whether an event or condition would constitute an Event of Default shall be determined without regard to any applicable requirement of notice or lapse of time.

          Section 1.6 ERISA means the Employee Retirement Income Security Act of 1974, as amended (including the corresponding provisions of any succeeding law).

          Section 1.7 Event of Default means an event or condition described in Article V.

          Section 1.8 Fiscal Year means the fiscal year of Hudson City Bancorp, Inc.

          Section 1.9 Independent Counsel means Thacher Proffitt & Wood llp or other counsel mutually satisfactory to both the Lender and the Borrower.

          Section 1.10 Loan means the loan described in section 2.1.

          Section 1.11 Loan Documents means, collectively, this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement and all other documents now or hereafter executed and delivered in connection with such documents, including all amendments, modifications and supplements of or to all such documents.

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EXHIBIT 10.28

          Section 1.12 Principal Amount means the face amount of the Amended and Restated Promissory Note, determined as set forth in section 2.1(b).

          Section 1.13 Register means the register described in section 2.8.

ARTICLE II

THE LOAN; PRINCIPAL AMOUNT;
INTEREST; SECURITY INDEMNIFICATION

               Section 2.1 The Loan; Principal Amount.

          (a) The Lender hereby agrees to extend the term of the First Loan such that payments on the Principal Amount shall be made in accordance with section 2.4.

          (b) For all purposes of this Amended and Restated Loan Agreement, the Principal Amount on any date shall be equal to the excess, if any, of:

     (i) $58,645,380; over

     (ii) the aggregate amount of any repayments of such amount made before such date.

The Lender shall remain on the Register a record of, and shall record on the Amended and Restated Promissory Note, the Principal Amount, any changes in the Principal Amount and the effective date of any changes in the Principal Amount.

               Section 2.2 Interest.

          (a) The Borrower shall pay to the Lender interest on the Principal Amount, for the period commencing on the date of this Amended and Restated Loan Agreement and continuing until the Principal Amount shall be paid in full, at the rate of five percent (5.00%) per annum. Interest payable under this Agreement shall be computed on the basis of a year of 360 days and months consisting of 30 days each and actual days elapsed (including the first day but excluding the last) occurring in the period to which the computation relates.

          (b) Except as otherwise provided in this section 2.2(b), accrued interest on the Principal Amount shall be payable by the Borrower quarterly in arrears commencing on the last Business Day of the first calendar quarter to end following the date of this Amended and Restated Loan Agreement and continuing on the last Business Day of each calendar quarter thereafter and upon the payment or prepayment of the Loan. All interest on the Principal Amount shall be paid by the Borrower in immediately available funds. The Lender shall remit to the Borrower, at least three (3) Business Days before the end of each calendar quarter, a statement of the interest payment due under section 2.2(a) for such quarter; provided, however, that a delay or failure by the Lender in providing the Borrower with such statement shall not alter the Borrower’s obligation to make such payment.

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EXHIBIT 10.28

          (c) Anything in this Amended and Restated Loan Agreement or the Amended and Restated Promissory Note to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payment referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

               Section 2.3 Promissory Note.

          The Loan shall be evidenced by an Amended and Restated Promissory Note of the Borrower in substantially the form of Exhibit A attached hereto, dated the date hereof, payable to the order of the Lender in the Principal Amount and otherwise duly completed.

               Section 2.4 Payment of Trust Loan.

          The Principal Amount of the Loan shall be repaid in annual installments payable on the last Business Day of each December ending after the date of this Agreement. The amount of each such annual installment shall be that portion of the lesser of (i) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Amended and Restated Pledge Agreement, of a cumulative fraction of the Collateral (within the meaning of the Amended and Restated Pledge Agreement and determined as of the last Business Day of December, 2005) equal to the percentage set forth in Column II below and (ii) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Amended and Restated Pledge Agreement, of Collateral (within the meaning of the Amended and Restated Pledge Agreement), valued as of the date of payment, and collateral released pursuant to the terms of the Second Loan, also valued as of the date of payment, having an aggregate value equal to twenty-five and three quarters percent (25.75%) of the compensation taken into account under the ESOP for each person entitled to share in such allocation:

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2005	2/80
2006	4/80
2007	6/80
2008	8/80
2009	10/80
2010	12/80
2011	14/80
2012	16/80

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EXHIBIT 10.28

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2013	18/80
2014	20/80
2015	22/80
2016	24/80
2017	26/80
2018	28/80
2019	30/80
2020	32/80
2021	34/80
2022	36/80
2023	38/80
2024	40/80
2025	42/80
2026	44/80
2027	46/80
2028	48/80
2029	50/80
2030	52/80
2031	54/80
2032	56/80
2033	58/80
2034	60/80
2035	62/80
2036	64/80
2037	66/80
2038	68/80
2039	70/80
2040	72/80
2041	74/80
2042	76/80
2043	78/80
2044	80/80

provided, however, that the Borrower shall not be required to make any payment of principal due to be made in any Fiscal Year to the extent that such payment would not be deductible for federal income tax purposes for such Fiscal Year under Section 404 of the Code; provided further, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and under section 2.4(i) of the Second Loan Agreement in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Second Loan shall be

5

EXHIBIT 10.28

reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Amended and Restated Pledge Agreement and the Pledge Agreement relating to the Second Loan)), subject to the limitation set forth in clause (ii). Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes. Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last Business Day of December, 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

               Section 2.5 Prepayment.

          The Borrower shall be entitled to prepay the Loan in whole or in part, at any time and from time to time; provided, however, that the Borrower shall give notice to the Lender of any such prepayment. Any such prepayment shall be: (a) permanent and irrevocable; (b) accompanied by all accrued interest through the date of such prepayment; (c) made without premium or penalty; and (d) applied first to the installment of principal due and payable in the Fiscal Year in which the prepayment is made and second in the order of the maturity of the remaining installments thereof unless the Lender and the Borrower agree to apply such prepayments in some other order.

               Section 2.6 Method of Payments.

          (a) All payments of principal, interest, other charges (including indemnities) and other amounts payable by the Borrower hereunder shall be made in lawful money of the United States, in immediately available funds, to the Lender at the address specified in or pursuant to this Amended and Restated Loan Agreement for notices to the Lender, not later than 3:00 P.M., Eastern Standard time, on the date on which such payment shall become due. Any such payment made on such date but after such time shall, if the amount paid bears interest, and except as expressly provided to the contrary herein, be deemed to have been made on, and interest shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any payment of principal or interest becomes due on a day other than a Business Day, such payment may be made on the next succeeding Business Day, and when paid, such payment shall include interest to the day on which such payment is in fact made.

          (b) Notwithstanding anything to the contrary contained in this Amended and Restated Loan Agreement or the Amended and Restated Promissory Note, neither the Borrower nor the Trustee shall be obligated to make any payment, repayment or prepayment on the Amended and Restated Promissory Note or take or refrain from taking any other action hereunder or under the Amended and Restated Promissory Note if doing so would cause the ESOP to cease to be an employee stock ownership plan within the meaning of section 4975(e)(7) of the Code or qualified under section 401(a) of the Code or cause the Borrower to cease to be a

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EXHIBIT 10.28

tax exempt trust under section 501(a) of the Code or if such act or failure to act would cause the Borrower or the Trustee to engage in any “prohibited transaction” as such term is defined in section 4975(c) of the Code and the regulations promulgated thereunder which is not exempted by section 4975(c)(2) or (d) of the Code and the regulations promulgated thereunder or in section 406 of ERISA and the regulations promulgated thereunder which is not exempted by section 408(b) of ERISA and the regulations promulgated thereunder; provided, however, that in each case, the Borrower or the Trustee or both, as the case may be, may act or refrain from acting pursuant to this section 2.6(b) on the basis of an opinion of Independent Counsel. The Borrower and the Trustee may consult with Independent Counsel, and any opinion of such Independent Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such opinion of Independent Counsel. Nothing contained in this section 2.6(b) shall be construed as imposing a duty on either the Borrower or the Trustee to consult with Independent Counsel. Any obligation of the Borrower or the Trustee to make any payment, repayment or prepayment on the Amended and Restated Promissory Note or to take or refrain from taking any other act hereunder or under the Amended and Restated Promissory Note which is excused pursuant to this section 2.6(b) shall be considered a binding obligation of the Borrower or the Trustee, or both, as the case may be, for the purposes of determining whether a Default or Event of Default has occurred hereunder or under the Amended and Restated Promissory Note and nothing in this section 2.6(b) shall be construed as providing a defense to any remedies otherwise available upon a Default or an Event of Default hereunder (other than the remedy of specific performance).

               Section 2.7 Security.

          (a) In order to secure the due payment and performance by the Borrower of all of its obligations under this Amended and Restated Loan Agreement, simultaneously with the execution and delivery of this Amended and Restated Loan Agreement by the Borrower, the Borrower shall:

               (i) pledge to the Lender as Collateral (as defined in the Amended and Restated Pledge Agreement), and grant to the Lender a first priority lien on and security interest in, the Common Stock purchased with the Principal Amount, by the execution and delivery to the Lender of an Amended and Restated Pledge Agreement in the form attached hereto as Exhibit B; and

               (ii) execute and deliver, or cause to be executed and delivered, such other agreements, instruments and documents as the Lender may reasonably require in order to effect the purposes of the Amended and Restated Pledge Agreement and this Amended and Restated Loan Agreement, including, but not limited to, the Form of Amended and Restated Assignment in the form attached hereto as Exhibit C.

          (b) The Lender shall release from encumbrance under the Amended and Restated Pledge Agreement and transfer to the Borrower, as of the date on which any payment or prepayment of the Principal Amount is made, the number of shares of Common Stock held as Collateral determined pursuant to section 6.4 of the ESOP.

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EXHIBIT 10.28

               Section 2.8 Registration of the Promissory Note.

          (a) The Lender shall maintain a Register providing for the registration of the Principal Amount and any stated interest and of transfer and exchange of the Amended and Restated Promissory Note. Transfer of the Amended and Restated Promissory Note may be effected only by the surrender of the old instrument and either the reissuance by the Borrower of the old instrument to the new holder or the issuance by the Borrower of a new instrument to the new holder. The old Amended and Restated Promissory Note so surrendered shall be canceled by the Lender and returned to the Borrower after such cancellation.

          (b) Any new Amended and Restated Promissory Note issued pursuant to section 2.8(a) shall carry the same rights to interest (unpaid and to accrue) carried by the Amended and Restated Promissory Note so transferred or exchanged so that there will not be any loss or gain of interest on the note surrendered. Such new Amended and Restated Promissory Note shall be subject to all of the provisions and entitled to all of the benefits of this Agreement. Prior to due presentment for registration or transfer, the Borrower may deem and treat the registered holder of any Amended and Restated Promissory Note as the holder thereof for purposes of payment and all other purposes. A notation shall be made on each new Amended and Restated Promissory Note of the amount of all payments of principal and interest theretofore paid.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

          The Borrower hereby represents and warrants to the Lender as follows:

               Section 3.1 Power; Authority; Consents.

          The Borrower has the power to execute, deliver and perform this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement, all of which have been duly authorized by all necessary and proper corporate or other action.

               Section 3.2 Due Execution; Validity; Enforceability.

          Each of the Loan Documents, including, without limitation, this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement, have been duly executed and delivered by the Borrower; and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

               Section 3.3 Properties; Priority of Liens.

          The liens which have been created and granted by the Amended and Restated Pledge Agreement constitute valid, first liens on the properties and assets covered by the Amended and Restated Pledge Agreement, subject to no prior or equal lien.

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EXHIBIT 10.28

               Section 3.4 No Defaults; Compliance with Laws.

          The Borrower is not in default in any material respect under any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which it is a party or by which it is bound, or any other agreement or other instrument by which any of the properties or assets owned by it is materially affected.

               Section 3.5 Purchases of Common Stock.

          The Borrower has valid, legal and marketable title to the Collateral, free and clear of any liens, other than a pledge to the Lender pursuant to the Amended and Restated Pledge Agreement. Neither the execution and delivery of the Loan Documents nor the performance of any obligation thereunder violates any provision of law or conflicts with or results in a breach of or creates (with or without the giving of notice or lapse of time, or both) a default under any agreement to which the Borrower is a party or by which it is bound or any of its properties is affected. No consent of any federal, state or local governmental authority, agency or other regulatory body, the absence of which could have a materially adverse effect on the Borrower or the Trustee, is or was required to be obtained in connection with the execution, delivery or performance of the Loan Documents and the transactions contemplated therein or in connection therewith.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE LENDER

          The Lender hereby represents and warrants to the Borrower as follows:

               Section 4.1 Power; Authority; Consents.

          The Lender has the power to execute, deliver and perform this Amended and Restated Loan Agreement, the Amended and Restated Pledge Agreement and all documents executed by the Lender in connection with the Loan, all of which have been duly authorized by all necessary and proper corporate or other action. No consent, authorization or approval or other action by any governmental authority or regulatory body, and no notice by the Lender to, or filing by the Lender with, any governmental authority or regulatory body is required for the due execution, delivery and performance of this Amended and Restated Loan Agreement.

               Section 4.2 Due Execution; Validity; Enforceability.

          This Amended and Restated Loan Agreement and the Amended and Restated Pledge Agreement have been duly executed and delivered by the Lender; and each constitutes a valid and legally binding obligation of the Lender, enforceable in accordance with its terms.

               Section 4.3 ESOP; Contributions.

          The ESOP and the Borrower have been duly created, organized and maintained by the Lender in compliance with all applicable laws, regulations and rulings. The ESOP qualifies as an “employee stock ownership plan” as defined in section 4975(e)(7) the Code. The

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EXHIBIT 10.28

ESOP provides that the Lender may make contributions to the ESOP in an amount necessary to enable the Trustee to amortize the Loan in accordance with the terms of the Amended and Restated Promissory Note and this Amended and Restated Loan Agreement, and the Lender will make such contributions; provided, however, that no such contributions shall be required to the extent they would adversely affect the qualification of the ESOP under section 401(a) of the Code.

               Section 4.4 Trustee; Committee.

          The Lender has taken such action as is required to be taken by it to duly appoint the Trustee and the members of the Committee. The Committee constitutes the Committee defined in and described in the plan document for the Employee Stock Ownership Plan of Hudson City Savings Bank and the Trust Agreement by and between the Trustee and Hudson City Savings Bank made as of June 21, 1999, as amended from time to time. The Lender expressly acknowledges and agrees that this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement are being executed by the Trustee not in its individual capacity but solely as trustee of and on behalf of the Borrower.

               Section 4.5 Compliance with Laws; Actions.

          Neither the execution and delivery by the Lender of this Amended and Restated Loan Agreement or any instruments required thereby, nor compliance with the terms and provisions of any such documents by the Lender, constitutes a violation of any provision of any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality, or an event of default under any agreement, to which the Lender is a party or by which the Lender is bound or to which the Lender is subject, which violation or event of default would have a material adverse effect on the Lender. There is no action or proceeding pending or threatened against either of the ESOP or the Borrower before any court or administrative agency.

ARTICLE V

EVENTS OF DEFAULT

               Section 5.1 Events of Default under Loan Agreement.

          Each of the following events shall constitute an “Event of Default” hereunder:

          (a) Failure to make any payment or mandatory prepayment of principal on the Amended and Restated Promissory Note, or failure to make any payment of interest on the Amended and Restated Promissory Note, within five (5) Business Days after the date when due.

          (b) Failure by the Borrower to perform or observe any term, condition or covenant of this Amended and Restated Loan Agreement or of any of the other Loan Documents, including, without limitation, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement, provided, however, that such failure is not cured by the Borrower within five (5) Business Days after notice of such failure is provided to the Borrower by the Lender.

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EXHIBIT 10.28

          (c) Any representation or warranty made in writing to the Lender in any of the Loan Documents or any certificate, statement or report made or delivered in compliance with this Amended and Restated Loan Agreement, shall have been false or misleading in any material respect when made or delivered.

               Section 5.2 Lender’s Rights upon Event of Default.

          If an Event of Default under this Amended and Restated Loan Agreement shall occur and be continuing, the Lender shall have no rights to assets of the Borrower other than: (a) contributions (other than contributions of Common Stock) that are made by the Lender to enable the Borrower to meet its obligations pursuant to this Amended and Restated Loan Agreement and earnings attributable to the investment of such contributions and (b) “Eligible Collateral” (as defined in the Amended and Restated Pledge Agreement); provided, however, that: (i) the value of the Borrower’s assets transferred to the Lender following an Event of Default in satisfaction of the due and unpaid amount of the Loan shall not exceed the amount in default (without regard to amounts owing solely as a result of any acceleration of the Loan); (ii) the Borrower’s assets shall be transferred to the Lender following an Event of Default only to the extent of the failure of the Borrower to meet the payment schedule of the Loan; and (iii) all rights of the Lender to the Common Stock purchased with the proceeds of the Loan covered by the Amended and Restated Pledge Agreement following an Event of Default shall be governed by the terms of the Amended and Restated Pledge Agreement.

ARTICLE VI

MISCELLANEOUS PROVISIONS

               Section 6.1 Payments Due to the Lender.

          If any amount is payable by the Borrower to the Lender pursuant to any indemnity obligation contained herein, then the Borrower shall pay, at the time or times provided therefor, any such amount and shall indemnify the Lender against and hold it harmless from any loss or damage resulting from or arising out of the nonpayment or delay in payment of any such amount. If any amounts as to which the Borrower has so indemnified the Lender hereunder shall be assessed or levied against the Lender, the Lender may notify the Borrower and make immediate payment thereof, together with interest or penalties in connection therewith, and shall thereupon be entitled to and shall receive immediate reimbursement therefor from the Borrower, together with interest on each such amount as provided in section 2.2. Notwithstanding any other provision contained in this Amended and Restated Loan Agreement, the covenants and agreements of the Borrower contained in this section 6.1 shall survive: (a) payment of the Amended and Restated Promissory Note and (b) termination of this Amended and Restated Loan Agreement.

               Section 6.2 Payments.

          All payments hereunder and under the Amended and Restated Promissory Note shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments shall not be less than the amounts otherwise specified to be paid under

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EXHIBIT 10.28

this Amended and Restated Loan Agreement and the Amended and Restated Promissory Note, subject to any applicable tax withholding requirements. Upon payment in full of the Amended and Restated Promissory Note, the Lender shall mark such Amended and Restated Promissory Note “Paid” and return it to the Borrower.

               Section 6.3 Survival.

          All agreements, representations and warranties made herein shall survive the delivery of this Amended and Restated Loan Agreement and the Amended and Restated Promissory Note.

               Section 6.4 Modifications, Consents and Waivers; Entire Agreement.

          No modification, amendment or waiver of or with respect to any provision of this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note, the Amended and Restated Pledge Agreement, or any of the other Loan Documents, nor consent to any departure from any of the terms or conditions thereof, shall in any event be effective unless it shall be in writing and signed by the party against whom enforcement thereof is sought. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No consent to or demand on a party in any case shall, of itself, entitle it to any other or further notice or demand in similar or other circumstances. This Amended and Restated Loan Agreement embodies the entire agreement and understanding between the Lender and the Borrower and supersedes all prior agreements and understandings relating to the subject matter hereof other than the Second Loan Agreement, and instruments and agreements executed thereunder.

               Section 6.5 Remedies Cumulative.

          Each and every right granted to the Lender hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of the Lender or the holder of the Amended and Restated Promissory Note to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or future exercise thereof or the exercise of any other right. The due payment and performance of the obligations under the Loan Documents shall be without regard to any counterclaim, right of offset or any other claim whatsoever which the Borrower may have against the Lender and without regard to any other obligation of any nature whatsoever which the Lender may have to the Borrower, and no such counterclaim or offset shall be asserted by the Borrower in any action, suit or proceeding instituted by the Lender for payment or performance of such obligations.

               Section 6.6 Further Assurances; Compliance with Covenants.

          At any time and from time to time, upon the request of the Lender, the Borrower shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further documents and instruments and do such other acts and things as the Lender may reasonably request in order to fully effect the terms of this Amended and Restated Loan

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EXHIBIT 10.28

Agreement, the Amended and Restated Promissory Note, the Amended and Restated Pledge Agreement, the other Loan Documents and any other agreements, instructions and documents delivered pursuant hereto or in connection with the Loan.

               Section 6.7 Notices.

          Except as otherwise specifically provided for herein, all notices, requests, reports and other communications pursuant to this Amended and Restated Loan Agreement shall be in writing, either by letter (delivered by hand or commercial messenger service or sent by registered or certified mail, return receipt requested, except for routine reports delivered in compliance with Article VI hereof which may be sent by ordinary first-class mail) or telex or facsimile, addressed as follows:

(a) If to the Borrower:

Employee Stock Ownership Plan Trust
     of Hudson City Bancorp, Inc.
Hudson City Savings Bank
West 80 Century City Road
Paramus, New Jersey 07652-1473
Attention: Senior Personnel Officer

with copies to:

GreatBanc Trust Company
45 Rockefeller Plaza, Suite 2055
New York, New York 10111-2000
Attention: Mr. Stephen J. Hartman, Jr.

Thacher Proffitt & Wood llp
Two World Financial Center, 28th Floor
New York New York 10281
Attention: W. Edward Bright, Esq.

The Goldstein Law Firm, P.C.
12 Corporate Woods Boulevard
Albany, New York 12211-2350
Attention: Brian P. Goldstein, Esq.

(b) If to the Lender:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Chief Financial Officer

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EXHIBIT 10.28

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center, 28^th Floor
New York New York 10281
Attention: W. Edward Bright, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

               Section 6.8 Counterparts.

          This Amended and Restated Loan Agreement may be signed in any number of counterparts which, when taken together, shall constitute one and the same document.

               Section 6.9 Construction; Governing Law.

          The headings used in the table of contents and in this Amended and Restated Loan Agreement are for convenience only and shall not be deemed to constitute a part hereof. All uses herein of any gender or of singular or plural terms shall be deemed to include uses of the other genders or plural or singular terms, as the context may require. All references in this Amended and Restated Loan Agreement to an Article or section shall be to an Article or section of this Amended and Restated Loan Agreement, unless otherwise specified. This Amended and Restated Loan Agreement, the Amended and Restated Promissory Note, the Amended and Restated Pledge Agreement and the other Loan Documents shall be governed by, and construed and interpreted in accordance with, the laws of the State of New Jersey. It is intended that the transactions contemplated by this Amended and Restated Loan Agreement constitute an exempt loan within the meaning of Treasury Regulation §54.4975-7(b)(1)(iii) and Department of Labor Regulation §2550.408b-3, and the provisions hereof shall be construed and enforced in such manner as shall be necessary to give effect to such intent.

               Section 6.10 Severability.

          Wherever possible, each provision of this Amended and Restated Loan Agreement shall be interpreted in such manner as to be effective and valid under applicable law; however, the provisions of this Amended and Restated Loan Agreement are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Amended and Restated Loan Agreement in any jurisdiction. Each of the covenants, agreements and conditions contained in this Amended and Restated Loan Agreement is independent, and compliance by a party with any

14

EXHIBIT 10.28

of them shall not excuse non-compliance by such party with any other. The Borrower shall not take any action the effect of which shall constitute a breach or violation of any provision of this Amended and Restated Loan Agreement.

               Section 6.11 Binding Effect; No Assignment or Delegation.

          This Amended and Restated Loan Agreement shall be binding upon and inure to the benefit of the Borrower and its successors and the Lender and its successors and assigns. The rights and obligations of the Borrower under this Agreement shall not be assigned or delegated without the prior written consent of the Lender, and any purported assignment or delegation without such consent shall be void.

15

EXHIBIT 10.28

     In Witness Whereof, the parties hereto have caused this Amended and Restated Loan Agreement to be duly executed as of the date first above written.

Employee Stock Ownership Plan Trust
Of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
Title:	Chairman and Chief Executive Officer

16

EX-10.29 10 y18482exv10w29.htm EX-10.29: AMENDED AND RESTATED PROMISSORY NOTE

EXHIBIT 10.29

AMENDED AND RESTATED PROMISSORY NOTE

For the Principal Amount,	Paramus, New Jersey
as defined below	June 21, 2005

          FOR VALUE RECEIVED, the undersigned, Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), acting by and through its Trustee, GreatBanc Trust Company (“Trustee”), hereby promises to pay to the order of Hudson City Bancorp, Inc. (“Lender”) the Principal Amount, as determined under the Amended and Restated Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (“Amended and Restated Loan Agreement”) pursuant to which this Amended and Restated Promissory Note is issued, payable in annual installments each of which shall be the lesser of (i) the portion of the principal amount of the loan which will result in the release for allocation to participants in the Employee Stock Ownership Plan of Hudson City Savings Bank (the “ESOP”) of a cumulative fraction of the collateral (valued at December 30, 2005) equal to 2/80 as of the last business day of December, 2005 and increased by 2/80 as of each succeeding December, to 80/80 on the last business day of December, 2044, and (ii) the portion of the principal amount of the loan which results in the release for allocation to ESOP participants of total collateral (valued as of the date of payment) under the Amended and Restated Loan Agreement and that certain Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (“Second Loan Agreement”) having a value equal to 25.75% of compensation taken into account under the ESOP for each person entitled to share in the allocation. Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes; provided, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and under clause (i) of the Promissory Note relating to the Second Loan in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Second Loan shall be reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Amended and Restated Pledge Agreement and the Pledge Agreement relating to the Second Loan)), subject to the limitation set forth in clause (ii). Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last business day of December, 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

          This Amended and Restated Promissory Note shall bear interest at the rate per annum set forth or established under the Amended and Restated Loan Agreement, such interest to be payable quarterly in arrears, commencing on June 30, 2005 and thereafter on the last Business Day of each calendar quarter and upon payment or prepayment of this Amended and Restated Promissory Note.

          Anything herein to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payments of interest which are not made as a result of the limitation referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

          Payments of both principal and interest on this Amended and Restated Promissory Note are to be made at the principal office of the Lender at West 80 Century Road, Paramus, New Jersey 07652 or such other place as the holder hereof shall designate to the Borrower in writing, in lawful money of the United States of America in immediately available funds.

          Failure to make any payment of principal on this Amended and Restated Promissory Note, or failure to make any payment of interest on this Amended and Restated Promissory Note, within five (5) Business Days after the date when due, shall constitute a default hereunder, whereupon the principal amount of and accrued interest on this Amended and Restated Promissory Note shall immediately become due and payable in accordance with the terms of the Amended and Restated Loan Agreement.

          This Amended and Restated Promissory Note is subject, in all respects, to the terms and provisions of the Amended and Restated Loan Agreement, which is incorporated herein by this reference, and is secured by an Amended and Restated Pledge Agreement between the Borrower and the Lender of even date herewith and is entitled to the benefits thereof. All capitalized terms that are not defined herein shall have the meanings assigned to them in the Amended and Restated Loan Agreement unless the context clearly indicates otherwise.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.

EX-10.30 11 y18482exv10w30.htm EX-10.30: AMENDED AND RESTATED PLEDGE AGREEMENT

EXHIBIT 10.30

AMENDED AND RESTATED PLEDGE AGREEMENT

by and between

EMPLOYEE STOCK OWNERSHIP PLAN TRUST
of
HUDSON CITY SAVINGS BANK

and

HUDSON CITY BANCORP, INC.

Made and Entered Into as of
June 21, 2005

EXHIBIT 10.30

TABLE OF CONTENTS

	PAGE
Section 1. Definitions		1
Section 2. Pledge		2
Section 3. Representations and Warranties of the Pledgor		2
Section 4. Eligible Collateral		2
Section 5. Delivery		3
Section 6. Events of Default		3
Section 7. Payment in Full		4
Section 8. No Waiver		4
Section 9. Binding Effect; No Assignment or Delegation		4
Section 10. Governing Law		4
Section 11. Notices		5
Section 12. Interpretation		6
Section 13. Construction		6

- i -
 

EXHIBIT 10.30

AMENDED AND RESTATED PLEDGE AGREEMENT

          This AMENDED AND RESTATED PLEDGE AGREEMENT (“Amended and Restated Pledge Agreement”) is made as of the 21^st day of June, 2005, by and between the EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF HUDSON CITY SAVINGS BANK, acting by and through its Trustee, GreatBanc Trust Company, a trust corporation organized under the laws of the State of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York 10111-2000 (“Pledgor”), and Hudson City Bancorp, Inc., a corporation organized and existing under the laws of the State of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (“Pledgee”).

W I T N E S S E TH:

          Whereas, this Amended and Restated Pledge Agreement is being executed and delivered to the Pledgee pursuant to the terms of an Amended and Restated Loan Agreement of even date herewith (“Amended and Restated Loan Agreement”), by and between the Pledgor and the Pledgee;

          Now, Therefore, in consideration of the mutual agreements contained herein and in the Amended and Restated Loan Agreement, the parties hereto do hereby covenant and agree as follows:

          Section 1. Definitions. The following definitions shall apply for purposes of this Amended and Restated Pledge Agreement, except to the extent that a different meaning is plainly indicated by the context; all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Amended and Restated Loan Agreement:

     (a) Collateral shall mean the Pledged Shares and, subject to section 5 hereof, and to the extent permitted by applicable law, all rights with respect thereto, and all proceeds of such Pledged Shares and rights.

     (b) Event of Default shall mean an event so defined in the Amended and Restated Loan Agreement.

     (c) Liabilities shall mean all the obligations of the Pledgor to the Pledgee, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under the Amended and Restated Loan Agreement and the Amended and Restated Promissory Note.

     (d) Pledged Shares shall mean 22,768,166 of the 27,879,376 shares (based on a 2 to 1 stock split effected in June 2002 and a 3.2060 stock split effected in June 2005) of Common Stock of Hudson City Bancorp, Inc. purchased by the Pledgor with the proceeds of the loan made by the Pledgee to the Pledgor pursuant to the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999, which have not been allocated to ESOP participants as of the date hereof and are subject to the terms of the Amended and Restated Loan Agreement and the Amended and Restated

-1-

Promissory Note, but excluding any such shares previously released pursuant to section 4.

          Section 2. Pledge. To secure the payment of and performance of all the Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the Pledgee a security interest in and lien upon, the Collateral.

          Section 3. Representations and Warranties of the Pledgor. The Pledgor represents, warrants, and covenants to the Pledgee as follows:

     (a) to the actual knowledge of the Trustee, the execution, delivery and performance of this Amended and Restated Pledge Agreement and the pledging of the Collateral hereunder do not and will not conflict with, result in a violation of, or constitute a default under any agreement binding upon the Pledgor;

     (b) the Pledged Shares are and will continue to be owned by the Pledgor free and clear of any liens or rights of any other person except the lien hereunder and under the Amended and Restated Loan Agreement in favor of the Pledgee, and the security interest of the Pledgee in the Pledged Shares and the proceeds thereof is and will continue to be prior to and senior to the rights of all others;

     (c) to the actual knowledge of the Trustee, this Amended and Restated Pledge Agreement is the legal, valid, binding and enforceable obligation of the Pledgor in accordance with its terms;

     (d) the Pledgor shall, from time to time, upon request of the Pledgee, promptly deliver to the Pledgee such stock powers, proxies, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request; and

     (e) subject to the first sentence of section 4(b), the Pledgor shall not, so long as any Liabilities are outstanding, sell, assign, exchange, pledge or otherwise transfer or encumber any of its rights in and to any of the Collateral.

     Section 4. Eligible Collateral.

     (a) As used herein the term “Eligible Collateral” shall mean that amount of Collateral which has an aggregate fair market value equal to the amount by which the Pledgor is in default (without regard to any amounts owing solely as the result of an acceleration of the Amended and Restated Loan Agreement) or such lesser amount of Collateral as may be required pursuant to section 12 of this Amended and Restated Pledge Agreement.

     (b) The Pledged Shares shall be released from this Amended and Restated Pledge Agreement in a manner conforming to the requirements of Treasury Regulations Section 54.4975-7(b)(8), as the same may be from time to time amended or supplemented, and section 6.4(a) of the ESOP. Subject to such Regulations, the Pledgee may from time to time, after any Default or Event of Default, and without prior notice to

-2-

the Pledgor, transfer all or any part of the Eligible Collateral into the name of the Pledgee or its nominee, with or without disclosing that such Eligible Collateral is subject to any rights of the Pledgor and may from time to time, whether before or after any of the Liabilities shall become due and payable, without notice to the Pledgor, take all or any of the following actions: (i) notify the parties obligated on any of the Eligible Collateral to make payment to the Pledgee of any amounts due or to become due thereunder, (ii) release or exchange all or any part of the Eligible Collateral, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto, and (iii) take control of any proceeds of the Eligible Collateral.

     Section 5. Delivery.

     (a) The Pledgor shall deliver to the Pledgee upon execution of this Amended and Restated Pledge Agreement an assignment by the Pledgor of all the Pledgor’s rights to and interest in the Pledged Shares.

     (b) So long as no Default or Event of Default shall have occurred and be continuing, (i) the Pledgor shall be entitled to exercise any and all voting and other rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Amended and Restated Pledge Agreement, and (ii) the Pledgor shall be entitled to receive any and all cash dividends or other distributions paid in respect of the Collateral.

     Section 6. Events of Default.

     (a) If a Default or an Event of Default shall be existing, in addition to the rights it may have under the Amended and Restated Loan Agreement, the Amended and Restated Promissory Note, and this Amended and Restated Pledge Agreement, or by virtue of any other instrument, (i) the Pledgee may exercise, with respect to the Eligible Collateral, from time to time any rights and remedies available to it under the Uniform Commercial Code as in effect from time to time in the State of New Jersey or otherwise available to it and (ii) the Pledgee shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Eligible Collateral. Written notification of intended disposition of any of the Eligible Collateral shall be given by the Pledgee to the Pledgor at least three (3) Business Days before such disposition. Subject to section 13 below, any proceeds of any disposition of Eligible Collateral may be applied by the Pledgee to the payment of expenses in connection with the Eligible Collateral, including, without limitation, reasonable attorneys’ fees and legal expenses, and any balance of such proceeds may be applied by the Pledgee toward the payment of such of the Liabilities as are in Default, and in such order of application, as the Pledgee may from time to time elect. No action of the Pledgee permitted hereunder shall impair or affect its rights in and to the Eligible Collateral. All rights and remedies of the Pledgee expressed hereunder are in addition to all other rights and remedies possessed by it, including, without limitation, those contained in the documents referred to in the definition of Liabilities in section 1 hereof.

-3-

     (b) In any sale of any of the Eligible Collateral after a Default or an Event of Default shall have occurred, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers or further restrict such prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Eligible Collateral), or in order to obtain such required approval of the sale or of the purchase by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale’s being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable or accountable to the Pledgor for any discount allowed by reason of the fact that such Eligible Collateral is sold in compliance with any such limitation or restriction.

               Section 7. Payment in Full. Upon the payment in full of all outstanding Liabilities, this Amended and Restated Pledge Agreement shall terminate and the Pledgee shall forthwith assign, transfer and deliver to the Pledgor, against receipt and without recourse to the Pledgee, all Collateral then held by the Pledgee pursuant to this Amended and Restated Pledge Agreement.

               Section 8. No Waiver. No failure or delay on the part of the Pledgee in exercising any right or remedy hereunder or under any other document which confers or grants any rights in the Pledgee in respect of the Liabilities shall operate as a waiver thereof nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy of the Pledgee.

               Section 9. Binding Effect; No Assignment or Delegation. This Amended and Restated Pledge Agreement shall be binding upon and inure to the benefit of the Pledgor, the Pledgee and their respective successors and assigns, except that the Pledgor may not assign or transfer its rights hereunder without the prior written consent of the Pledgee (which consent shall not unreasonably be withheld). Each duty or obligation of the Pledgor to the Pledgee pursuant to the provisions of this Amended and Restated Pledge Agreement shall be performed in favor of any person or entity designated by the Pledgee, and any duty or obligation of the Pledgee to the Pledgor may be performed by any other person or entity designated by the Pledgee.

               Section 10. Governing Law. This Amended and Restated Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to agreements to be performed wholly within the State of New Jersey.

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               Section 11. Notices. All notices, requests, instructions or documents hereunder shall be in writing and delivered by hand or commercial messenger service or sent by United States mail, registered or certified, return receipt requested, with proper postage prepaid, or by telex or facsimile, addressed as follows:

(a) If to the Pledgee:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Chief Financial Officer

      with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center, 28th Floor
New York, New York 10281
Attention: W. Edward Bright, Esq.

(b) If to the Pledgor:

Employee Stock Ownership Plan Trust
  of Hudson City Savings Bank
c/o Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Senior Personnel Officer

                  with copies to:

GreatBanc Trust Company
45 Rockefeller Plaza, Suite 2055
New York, New York 10111-2000
Attention: Mr. Stephen J. Hartman, Jr.

Thacher Proffitt & Wood llp
Two World Financial Center, 28th Floor
New York, New York 10281
Attention: W. Edward Bright, Esq.

The Goldstein Law Firm, P.C.
12 Corporate Woods Boulevard
Albany, New York 12211-2350
Attention: Brian P. Goldstein, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business

-5-

Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

          Section 12. Interpretation. Wherever possible each provision of this Amended and Restated Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited by or invalid under such law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions hereof.

          Section 13. Construction. All provisions hereof shall be construed so as to maintain (a) the ESOP as a qualified leveraged employee stock ownership plan under section 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986 (the “Code”), (b) the Trust as exempt from taxation under section 501(a) of the Code and (c) the Trust Loan as an exempt loan under section 54.4975-7(b) of the Treasury Regulations and as described in Department of Labor Regulation section 2550.408b-3.

          In Witness Whereof, this Amended and Restated Pledge Agreement has been duly executed by the parties hereto as of the day and year first above written.

Employee Stock Ownership Plan Trust
of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee     and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
Title:	President and Chief Executive Officer

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EX-10.31 12 y18482exv10w31.htm EX-10.31: FORM OF AMENDED AND RESTATED ASSIGNMENT

EXHIBIT 10.31

FORM OF AMENDED AND RESTATED ASSIGNMENT

     In consideration of the loan made by Hudson City Bancorp, Inc. (“Lender”) to the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”) pursuant to the Amended and Restated Loan Agreement between the Lender and the Borrower of even date herewith (“Amended and Restated Loan Agreement”) and pursuant to the Amended and Restated Pledge Agreement between the Lender and the Borrower of even date herewith pertaining thereto, subject to the terms of the Amended and Restated Loan Agreement and the Amended and Restated Pledge Agreement, the undersigned Borrower hereby transfers, assigns and conveys to Lender all its right, title and interest in and to those certain shares of common stock of the Lender which are subject to the terms of the Amended and Restated Loan Agreement, and agrees to transfer and endorse to Lender the certificates representing such shares as and when required pursuant to the Amended and Restated Loan Agreement or Amended and Restated Pledge Agreement. This Amended and Restated Assignment supersedes, in its entirety, that certain Assignment dated June 21, 1999 executed by the Borrower in favor of the Lender.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President

June 21, 2005

EX-10.32 13 y18482exv10w32.htm EX-10.32: LOAN AGREEMENT

EXHIBIT 10.32

Loan Agreement

by and between

Employee Stock Ownership Plan Trust
of
Hudson City Savings Bank

and

Hudson City Bancorp, Inc.

Made and Entered Into as of
June 21, 2005

EXHIBIT 10.32

TABLE OF CONTENTS

	Page
ARTICLE I
DEFINITIONS
Section 1.1 Business Day		2
Section 1.2 Code		2
Section 1.3 Default		2
Section 1.4 ERISA		2
Section 1.5 Event of Default		2
Section 1.6 Fiscal Year		2
Section 1.7 Independent Counsel		2
Section 1.8 Loan		2
Section 1.9 Loan Documents		2
Section 1.10 Pledge Agreement		2
Section 1.11 Principal Amount		2
Section 1.12 Promissory Note		2
Section 1.13 Register		2
ARTICLE II
THE LOAN; PRINCIPAL AMOUNT; INTEREST;
SECURITY INDEMNIFICATION
Section 2.1 The Loan; Principal Amount		3
Section 2.2 Interest		4
Section 2.3 Promissory Note		4
Section 2.4 Payment of Trust Loan		4
Section 2.5 Prepayment		6
Section 2.6 Method of Payments		6
Section 2.7 Use of Proceeds of Loan		7
Section 2.8 Security		8
Section 2.9 Registration of the Promissory Note		8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 3.1 Power; Authority; Consents		9
Section 3.2 Due Execution; Validity; Enforceability		9
Section 3.3 Properties; Priority of Liens		9
Section 3.4 No Defaults; Compliance with Laws		9
Section 3.5 Purchases of Common Stock		9

i

EXHIBIT 10.32

	Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LENDER
Section 4.1 Power; Authority; Consents		10
Section 4.2 Due Execution; Validity; Enforceability		10
Section 4.3 ESOP; Contributions		10
Section 4.4 Trustee; Committee		10
Section 4.5 Compliance with Laws; Actions		10
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 Events of Default under Loan Agreement		11
Section 5.2 Lender’s Rights upon Event of Default		11
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Payments Due to the Lender		11
Section 6.2 Payments		12
Section 6.3 Survival		12
Section 6.4 Modifications, Consents and Waivers; Entire Agreement		12
Section 6.5 Remedies Cumulative		12
Section 6.6 Further Assurances; Compliance with Covenants		13
Section 6.7 Notices		13
Section 6.8 Counterparts		14
Section 6.9 Construction; Governing Law		14
Section 6.10 Severability		14
Section 6.11 Binding Effect; No Assignment or Delegation		15
EXHIBIT A Form of Promissory Note		A-1
EXHIBIT B Form of Pledge Agreement		B-1
EXHIBIT C Form of Assignment		C-1

ii

Loan Agreement

     This Loan Agreement (“Loan Agreement”) is made and entered into as of the 21^st day of June, 2005, by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), a trust forming part of the Employee Stock Ownership Plan of Hudson City Savings Bank (“ESOP”), acting through and by its Trustee, GreatBanc Trust Company (“Trustee”), a trust corporation organized under the laws of the state of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York, 10111-2000; and Hudson City Bancorp, Inc. (“Lender”), a corporation organized and existing under the laws of the state of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473.

WITNESSETH :

     Whereas, the Borrower and the Lender are parties to the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999 (“First Loan Agreement”), pursuant to which the Lender agreed to loan the Borrower certain amounts to purchase shares of common stock of Hudson City Bancorp, Inc. (“Common Stock”) pursuant to the terms set forth in the First Loan Agreement;

     Whereas, pursuant to the First Loan Agreement, the Borrower borrowed $58,645,380 from the Lender (“First Loan”) and used the proceeds of the First Loan to purchase 27,879,376 shares of Common Stock (based on a 2 to 1 stock split effected in June 2002 and a 3.2060 to 1 stock split effected in June 2005);

     Whereas, under the First Loan, a total of 22,303,450 shares of Common Stock are scheduled to be released for allocation to participants in the ESOP during the years 2005 through 2028, with a final allocation of 464,716 shares of Common Stock in 2029;

     Whereas, the Compensation Committee of the Lender (“Committee”) has authorized the Borrower to purchase additional shares of Common Stock, either directly from Hudson City Bancorp, Inc. or in open market purchases in an amount not to exceed 15,719,223 of the shares of Common Stock issued in connection with the transactions effected pursuant to the Plan of Conversion and Reorganization adopted by Hudson City Savings Bank on December 16, 2004, as amended (the “Reorganization”);

     Whereas, the Committee has further authorized the Borrower to borrow funds from the Lender for the purpose of financing authorized purchases of Common Stock; and

     Whereas, the Lender is willing to make a loan to the Borrower for such purpose pursuant to the terms of this Loan Agreement subject to the condition that the First Loan and the First Loan Agreement be amended and restated (the First Loan, as amended and restated, the “Amended and Restated Loan” and the First Loan Agreement, as amended and restated, the “Amended and Restated Loan Agreement”) concurrently with the execution and delivery of this Loan Agreement.

     Now, Therefore, the parties hereto agree as follows:

EXHIBIT 10.32

ARTICLE I

DEFINITIONS

     The following definitions shall apply for purposes of this Loan Agreement, except to the extent that a different meaning is plainly indicated by the context:

          Section 1.1 Business Day means any day other than a Saturday, Sunday or other day on which banks are authorized or required to close under federal law or the laws of the State of New Jersey.

          Section 1.2 Code means the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

          Section 1.3 Default means an event or condition which would constitute an Event of Default. The determination as to whether an event or condition would constitute an Event of Default shall be determined without regard to any applicable requirement of notice or lapse of time.

          Section 1.4 ERISA means the Employee Retirement Income Security Act of 1974, as amended (including the corresponding provisions of any succeeding law).

          Section 1.5 Event of Default means an event or condition described in Article V.

          Section 1.6 Fiscal Year means the fiscal year of Hudson City Bancorp, Inc.

          Section 1.7 Independent Counsel means Thacher Proffitt & Wood llp or other counsel mutually satisfactory to both the Lender and the Borrower.

          Section 1.8 Loan means the loan described in section 2.1.

          Section 1.9 Loan Documents means, collectively, this Loan Agreement, the Promissory Note and the Pledge Agreement and all other documents now or hereafter executed and delivered in connection with such documents, including all amendments, modifications and supplements of or to all such documents.

          Section 1.10 Pledge Agreement means the agreement described in section 2.8(a).

          Section 1.11 Principal Amount means the face amount of the Promissory Note, determined as set forth in section 2.1(c).

          Section 1.12 Promissory Note means the promissory note described in section 2.3.

          Section 1.13 Register means the register described in section 2.9.

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EXHIBIT 10.32

ARTICLE II

THE LOAN; PRINCIPAL AMOUNT;
INTEREST; SECURITY INDEMNIFICATION

          Section 2.1 The Loan; Principal Amount.

     (a) The Lender hereby agrees to lend to the Borrower such amounts, and at such times, as shall be determined under this section 2.1; provided, however, that in no event shall the aggregate amount lent under this Loan Agreement from time to time exceed the aggregate amount paid by the Borrower, exclusive of commissions, fees and other charges, to purchase an additional number of shares of Common Stock not to exceed 15,719,223 of the shares of Common Stock issued in connection with the Reorganization.

     (b) Subject to the limitations of section 2.1(a), the Borrower shall determine the amounts borrowed under this Agreement, and the times at which such borrowings are effected. Each such determination shall be evidenced in a writing which shall set forth the amount to be borrowed and the date on which the Lender shall disburse such amount, and such writing shall be furnished to the Lender by notice from the Borrower. The Lender shall disburse to the Borrower the amount specified in each such notice on the date specified therein or, if later, as promptly as practicable following the Lender’s receipt of such notice; provided, however, that the Lender shall have no obligation to disburse funds pursuant to this Agreement (i) following the occurrence of a Default or an Event of Default until such time as such Default or Event of Default shall have been cured; and (ii) on any date on which Common Stock is listed or admitted to trading on an established market (including but not limited to the NASDAQ Stock Market), while the Borrower is in possession of funds previously advanced under this Agreement that have not been used to purchase Common Stock; and (iii) on any date on which Common Stock is listed or admitted to trading on an established market (including but limited to the NASDAQ Stock Market), to the extent that the making of such advance would permit the Borrower to purchase more than 6,000,000 shares of Common Stock during the period of 10 business days after the making of such advance or the period of 10 business days ending on the date of such advance.

     (c) For all purposes of this Loan Agreement, the Principal Amount on any date shall be equal to the excess, if any, of:

          (i) the aggregate amount disbursed by the Lender pursuant to section 2.1(b) on or before such date; over

          (ii) the aggregate amount of any repayments of such amount made before such date.

The Lender shall remain on the Register a record of, and shall record on the Promissory Note, the Principal Amount, any changes in the Principal Amount and the effective date of any changes in the Principal Amount.

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EXHIBIT 10.32

          Section 2.2 Interest.

     (a) The Borrower shall pay to the Lender interest on the Principal Amount, for the period commencing on the date of this Loan Agreement and continuing until the Principal Amount shall be paid in full, at the rate of five percent (5.00%) per annum. Interest payable under this Agreement shall be computed on the basis of a year of 360 days and months consisting of 30 days each and actual days elapsed (including the first day but excluding the last) occurring in the period to which the computation relates.

     (b) Except as otherwise provided in this section 2.2(b), accrued interest on the Principal Amount shall be payable by the Borrower quarterly in arrears commencing on the last Business Day of the first calendar quarter to end following the date of this Agreement and continuing on the last Business Day of each calendar quarter thereafter and upon the payment or prepayment of the Loan. All interest on the Principal Amount shall be paid by the Borrower in immediately available funds. The Lender shall remit to the Borrower, at least three (3) Business Days before the end of each calendar quarter, a statement of the interest payment due under section 2.2(a) for such quarter; provided, however, that a delay or failure by the Lender in providing the Borrower with such statement shall not alter the Borrower’s obligation to make such payment.

     (c) Anything in this Loan Agreement or the Promissory Note to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payment referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

          Section 2.3 Promissory Note.

     The Loan shall be evidenced by a Promissory Note of the Borrower in substantially the form of Exhibit A attached hereto, dated the date hereof, payable to the order of the Lender in the Principal Amount and otherwise duly completed.

          Section 2.4 Payment of Trust Loan.

     The Principal Amount of the Loan shall be repaid in annual installments payable on the last Business Day of each December ending after the date of this Agreement. The amount of each such annual installment shall be that portion of the lesser of (i) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Pledge Agreement, of a cumulative fraction of the Collateral (within the meaning of the Pledge Agreement and determined as of the last Business Day of December, 2005) equal to the percentage set forth in Column II below and (ii) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Pledge Agreement, of Collateral (within the meaning of the Pledge Agreement), valued as of the date of

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EXHIBIT 10.32

payment, and collateral released pursuant to the terms of the Amended and Restated Loan, also valued as of the date of payment, having an aggregate value equal to twenty-five and three quarters percent (25.75%) of the compensation taken into account under the ESOP for each person entitled to share in such allocation:

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2005		2/80
2006		4/80
2007		6/80
2008		8/80
2009		10/80
2010		12/80
2011		14/80
2012		16/80
2013		18/80
2014		20/80
2015		22/80
2016		24/80
2017		26/80
2018		28/80
2019		30/80
2020		32/80
2021		34/80
2022		36/80
2023		38/80
2024		40/80
2025		42/80
2026		44/80
2027		46/80
2028		48/80
2029		50/80
2030		52/80
2031		54/80
2032		56/80
2033		58/80
2034		60/80
2035		62/80
2036		64/80
2037		66/80
2038		68/80
2039		70/80
2040		72/80
2041		74/80

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EXHIBIT 10.32

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2042		76/80
2043		78/80
2044		80/80

provided, however, that the Borrower shall not be required to make any payment of principal due to be made in any Fiscal Year to the extent that such payment would not be deductible for federal income tax purposes for such Fiscal Year under Section 404 of the Code; provided further, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and under section 2.4(i) of the Amended and Restated Loan Agreement in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Amended and Restated Loan shall be reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Pledge Agreement and the Pledge Agreement relating to the Amended and Restated Loan)), subject to the limitation set forth in clause (ii). Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes. Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last Business Day of December 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

          Section 2.5 Prepayment.

     The Borrower shall be entitled to prepay the Loan in whole or in part, at any time and from time to time; provided, however, that the Borrower shall give notice to the Lender of any such prepayment. Any such prepayment shall be: (a) permanent and irrevocable; (b) accompanied by all accrued interest through the date of such prepayment; (c) made without premium or penalty; and (d) applied first to the installment of principal due and payable in the Fiscal Year in which the prepayment is made and second in the order of the maturity of the remaining installments thereof unless the Lender and the Borrower agree to apply such prepayments in some other order.

          Section 2.6 Method of Payments.

     (a) All payments of principal, interest, other charges (including indemnities) and other amounts payable by the Borrower hereunder shall be made in lawful money of the

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EXHIBIT 10.32

United States, in immediately available funds, to the Lender at the address specified in or pursuant to this Loan Agreement for notices to the Lender, not later than 3:00 P.M., Eastern Standard time, on the date on which such payment shall become due. Any such payment made on such date but after such time shall, if the amount paid bears interest, and except as expressly provided to the contrary herein, be deemed to have been made on, and interest shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any payment of principal or interest becomes due on a day other than a Business Day, such payment may be made on the next succeeding Business Day, and when paid, such payment shall include interest to the day on which such payment is in fact made.

          (b) Notwithstanding anything to the contrary contained in this Loan Agreement or the Promissory Note, neither the Borrower nor the Trustee shall be obligated to make any payment, repayment or prepayment on the Promissory Note or take or refrain from taking any other action hereunder or under the Promissory Note if doing so would cause the ESOP to cease to be an employee stock ownership plan within the meaning of section 4975(e)(7) of the Code or qualified under section 401(a) of the Code or cause the Borrower to cease to be a tax exempt trust under section 501(a) of the Code or if such act or failure to act would cause the Borrower or the Trustee to engage in any “prohibited transaction” as such term is defined in section 4975(c) of the Code and the regulations promulgated thereunder which is not exempted by section 4975(c)(2) or (d) of the Code and the regulations promulgated thereunder or in section 406 of ERISA and the regulations promulgated thereunder which is not exempted by section 408(b) of ERISA and the regulations promulgated thereunder; provided, however, that in each case, the Borrower or the Trustee or both, as the case may be, may act or refrain from acting pursuant to this section 2.6(b) on the basis of an opinion of Independent Counsel. The Borrower and the Trustee may consult with Independent Counsel, and any opinion of such Independent Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such opinion of Independent Counsel. Nothing contained in this section 2.6(b) shall be construed as imposing a duty on either the Borrower or the Trustee to consult with Independent Counsel. Any obligation of the Borrower or the Trustee to make any payment, repayment or prepayment on the Promissory Note or to take or refrain from taking any other act hereunder or under the Promissory Note which is excused pursuant to this section 2.6(b) shall be considered a binding obligation of the Borrower or the Trustee, or both, as the case may be, for the purposes of determining whether a Default or Event of Default has occurred hereunder or under the Promissory Note and nothing in this section 2.6(b) shall be construed as providing a defense to any remedies otherwise available upon a Default or an Event of Default hereunder (other than the remedy of specific performance).

          Section 2.7 Use of Proceeds of Loan.

     The entire proceeds of the Loan shall be used solely for acquiring shares of Common Stock, and for no other purpose whatsoever.

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EXHIBIT 10.32

          Section 2.8 Security.

     (a) In order to secure the due payment and performance by the Borrower of all of its obligations under this Loan Agreement, simultaneously with the execution and delivery of this Loan Agreement by the Borrower, the Borrower shall:

               (i) pledge to the Lender as Collateral (as defined in the Pledge Agreement), and grant to the Lender a first priority lien on and security interest in, the Common Stock purchased with the Principal Amount, by the execution and delivery to the Lender of a Pledge Agreement in the form attached hereto as Exhibit B; and

               (ii) execute and deliver, or cause to be executed and delivered, such other agreements, instruments and documents as the Lender may reasonably require in order to effect the purposes of the Pledge Agreement and this Loan Agreement, including, but not limited to, the Form of Assignment in the form attached hereto as Exhibit C.

     (b) The Lender shall release from encumbrance under the Pledge Agreement and transfer to the Borrower, as of the date on which any payment or prepayment of the Principal Amount is made, the number of shares of Common Stock held as Collateral determined pursuant to section 6.4 of the ESOP.

          Section 2.9 Registration of the Promissory Note.

     (a) The Lender shall maintain a Register providing for the registration of the Principal Amount and any stated interest and of transfer and exchange of the Promissory Note. Transfer of the Promissory Note may be effected only by the surrender of the old instrument and either the reissuance by the Borrower of the old instrument to the new holder or the issuance by the Borrower of a new instrument to the new holder. The old Promissory Note so surrendered shall be canceled by the Lender and returned to the Borrower after such cancellation.

     (b) Any new Promissory Note issued pursuant to section 2.9(a) shall carry the same rights to interest (unpaid and to accrue) carried by the Promissory Note so transferred or exchanged so that there will not be any loss or gain of interest on the note surrendered. Such new Promissory Note shall be subject to all of the provisions and entitled to all of the benefits of this Agreement. Prior to due presentment for registration or transfer, the Borrower may deem and treat the registered holder of any Promissory Note as the holder thereof for purposes of payment and all other purposes. A notation shall be made on each new Promissory Note of the amount of all payments of principal and interest theretofore paid.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

     The Borrower hereby represents and warrants to the Lender as follows:

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EXHIBIT 10.32

          Section 3.1 Power; Authority; Consents.

     The Borrower has the power to execute, deliver and perform this Loan Agreement, the Promissory Note and the Pledge Agreement, all of which have been duly authorized by all necessary and proper corporate or other action.

          Section 3.2 Due Execution; Validity; Enforceability.

     Each of the Loan Documents, including, without limitation, this Loan Agreement, the Promissory Note and the Pledge Agreement, have been duly executed and delivered by the Borrower; and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

          Section 3.3 Properties; Priority of Liens.

     The liens which have been created and granted by the Pledge Agreement constitute valid, first liens on the properties and assets covered by the Pledge Agreement, subject to no prior or equal lien.

          Section 3.4 No Defaults; Compliance with Laws.

     The Borrower is not in default in any material respect under any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which it is a party or by which it is bound, or any other agreement or other instrument by which any of the properties or assets owned by it is materially affected.

          Section 3.5 Purchases of Common Stock.

     Upon consummation of any purchase of Common Stock by the Borrower with the proceeds of the Loan, the Borrower shall acquire valid, legal and marketable title to all of the Common Stock so purchased, free and clear of any liens, other than a pledge to the Lender of the Common Stock so purchased pursuant to the Pledge Agreement. Neither the execution and delivery of the Loan Documents nor the performance of any obligation thereunder violates any provision of law or conflicts with or results in a breach of or creates (with or without the giving of notice or lapse of time, or both) a default under any agreement to which the Borrower is a party or by which it is bound or any of its properties is affected. No consent of any federal, state or local governmental authority, agency or other regulatory body, the absence of which could have a materially adverse effect on the Borrower or the Trustee, is or was required to be obtained in connection with the execution, delivery or performance of the Loan Documents and the transactions contemplated therein or in connection therewith, including, without limitation, with respect to the transfer of the shares of Common Stock purchased with the proceeds of the Loan pursuant thereto.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE LENDER

     The Lender hereby represents and warrants to the Borrower as follows:

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EXHIBIT 10.32

          Section 4.1 Power; Authority; Consents.

     The Lender has the power to execute, deliver and perform this Loan Agreement, the Pledge Agreement and all documents executed by the Lender in connection with the Loan, all of which have been duly authorized by all necessary and proper corporate or other action. No consent, authorization or approval or other action by any governmental authority or regulatory body, and no notice by the Lender to, or filing by the Lender with, any governmental authority or regulatory body is required for the due execution, delivery and performance of this Loan Agreement.

          Section 4.2 Due Execution; Validity; Enforceability.

     This Loan Agreement and the Pledge Agreement have been duly executed and delivered by the Lender; and each constitutes a valid and legally binding obligation of the Lender, enforceable in accordance with its terms.

          Section 4.3 ESOP; Contributions.

     The ESOP and the Borrower have been duly created, organized and maintained by the Lender in compliance with all applicable laws, regulations and rulings. The ESOP qualifies as an “employee stock ownership plan” as defined in section 4975(e)(7) the Code. The ESOP provides that the Lender may make contributions to the ESOP in an amount necessary to enable the Trustee to amortize the Loan in accordance with the terms of the Promissory Note and this Loan Agreement, and the Lender will make such contributions; provided, however, that no such contributions shall be required to the extent they would adversely affect the qualification of the ESOP under section 401(a) of the Code.

          Section 4.4 Trustee; Committee.

     The Lender has taken such action as is required to be taken by it to duly appoint the Trustee and the members of the Committee. The Committee constitutes the Committee defined in and described in the plan document for the Employee Stock Ownership Plan of Hudson City Savings Bank and the Trust Agreement by and between the Trustee and Hudson City Savings Bank made as of June 21, 1999, as amended from time to time. The Lender expressly acknowledges and agrees that this Loan Agreement, the Promissory Note and the Pledge Agreement are being executed by the Trustee not in its individual capacity but solely as trustee of and on behalf of the Borrower.

          Section 4.5 Compliance with Laws; Actions.

     Neither the execution and delivery by the Lender of this Loan Agreement or any instruments required thereby, nor compliance with the terms and provisions of any such documents by the Lender, constitutes a violation of any provision of any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality, or an event of default under any agreement, to which the Lender is a party or by which the Lender is bound or to which the Lender is subject, which violation or event of default would have a material adverse effect on the Lender. There is no action or proceeding pending or threatened against either of the ESOP or the Borrower before any court or administrative agency.

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EXHIBIT 10.32

ARTICLE V

EVENTS OF DEFAULT

          Section 5.1 Events of Default under Loan Agreement.

     Each of the following events shall constitute an “Event of Default” hereunder:

     (a) Failure to make any payment or mandatory prepayment of principal on the Promissory Note, or failure to make any payment of interest on the Promissory Note, within five (5) Business Days after the date when due.

     (b) Failure by the Borrower to perform or observe any term, condition or covenant of this Loan Agreement or of any of the other Loan Documents, including, without limitation, the Promissory Note and the Pledge Agreement, provided, however, that such failure is not cured by the Borrower within five (5) Business Days after notice of such failure is provided to the Borrower by the Lender.

     (c) Any representation or warranty made in writing to the Lender in any of the Loan Documents or any certificate, statement or report made or delivered in compliance with this Loan Agreement, shall have been false or misleading in any material respect when made or delivered.

          Section 5.2 Lender’s Rights upon Event of Default.

     If an Event of Default under this Loan Agreement shall occur and be continuing, the Lender shall have no rights to assets of the Borrower other than: (a) contributions (other than contributions of Common Stock) that are made by the Lender to enable the Borrower to meet its obligations pursuant to this Loan Agreement and earnings attributable to the investment of such contributions and (b) “Eligible Collateral” (as defined in the Pledge Agreement); provided, however, that: (i) the value of the Borrower’s assets transferred to the Lender following an Event of Default in satisfaction of the due and unpaid amount of the Loan shall not exceed the amount in default (without regard to amounts owing solely as a result of any acceleration of the Loan); (ii) the Borrower’s assets shall be transferred to the Lender following an Event of Default only to the extent of the failure of the Borrower to meet the payment schedule of the Loan; and (iii) all rights of the Lender to the Common Stock purchased with the proceeds of the Loan covered by the Pledge Agreement following an Event of Default shall be governed by the terms of the Pledge Agreement.

ARTICLE VI

MISCELLANEOUS PROVISIONS

          Section 6.1 Payments Due to the Lender.

     If any amount is payable by the Borrower to the Lender pursuant to any indemnity obligation contained herein, then the Borrower shall pay, at the time or times provided therefor, any such amount and shall indemnify the Lender against and hold it harmless from any loss or

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EXHIBIT 10.32

damage resulting from or arising out of the nonpayment or delay in payment of any such amount. If any amounts as to which the Borrower has so indemnified the Lender hereunder shall be assessed or levied against the Lender, the Lender may notify the Borrower and make immediate payment thereof, together with interest or penalties in connection therewith, and shall thereupon be entitled to and shall receive immediate reimbursement therefor from the Borrower, together with interest on each such amount as provided in section 2.2. Notwithstanding any other provision contained in this Loan Agreement, the covenants and agreements of the Borrower contained in this section 6.1 shall survive: (a) payment of the Promissory Note and (b) termination of this Loan Agreement.

          Section 6.2 Payments.

     All payments hereunder and under the Promissory Note shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments shall not be less than the amounts otherwise specified to be paid under this Loan Agreement and the Promissory Note, subject to any applicable tax withholding requirements. Upon payment in full of the Promissory Note, the Lender shall mark such Promissory Note “Paid” and return it to the Borrower.

          Section 6.3 Survival.

     All agreements, representations and warranties made herein shall survive the delivery of this Loan Agreement and the Promissory Note.

          Section 6.4 Modifications, Consents and Waivers; Entire Agreement.

     No modification, amendment or waiver of or with respect to any provision of this Loan Agreement, the Promissory Note, the Pledge Agreement, or any of the other Loan Documents, nor consent to any departure from any of the terms or conditions thereof, shall in any event be effective unless it shall be in writing and signed by the party against whom enforcement thereof is sought. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No consent to or demand on a party in any case shall, of itself, entitle it to any other or further notice or demand in similar or other circumstances. This Loan Agreement embodies the entire agreement and understanding between the Lender and the Borrower and supersedes all prior agreements and understandings relating to the subject matter hereof other than the Amended and Restated Loan Agreement and instruments and agreements executed thereunder.

          Section 6.5 Remedies Cumulative.

     Each and every right granted to the Lender hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of the Lender or the holder of the Promissory Note to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or future exercise thereof or the exercise of any other right. The due payment and performance of the obligations under the Loan Documents shall be without regard to any counterclaim, right of offset or any other claim whatsoever which the Borrower may have against the Lender and

12

EXHIBIT 10.32

without regard to any other obligation of any nature whatsoever which the Lender may have to the Borrower, and no such counterclaim or offset shall be asserted by the Borrower in any action, suit or proceeding instituted by the Lender for payment or performance of such obligations.

          Section 6.6 Further Assurances; Compliance with Covenants.

     At any time and from time to time, upon the request of the Lender, the Borrower shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further documents and instruments and do such other acts and things as the Lender may reasonably request in order to fully effect the terms of this Loan Agreement, the Promissory Note, the Pledge Agreement, the other Loan Documents and any other agreements, instructions and documents delivered pursuant hereto or in connection with the Loan.

          Section 6.7 Notices.

     Except as otherwise specifically provided for herein, all notices, requests, reports and other communications pursuant to this Loan Agreement shall be in writing, either by letter (delivered by hand or commercial messenger service or sent by registered or certified mail, return receipt requested, except for routine reports delivered in compliance with Article VI hereof which may be sent by ordinary first-class mail) or telex or facsimile, addressed as follows:

(a)	If to the Borrower:
	Employee Stock Ownership Plan Trust
	of Hudson City Bancorp, Inc.
	Hudson City Savings Bank
	West 80 Century City Road
	Paramus, New Jersey 07652-1473
	Attention: Senior Personnel Officer
with copies to:
	GreatBanc Trust Company
	45 Rockefeller Plaza, Suite 2055
	New York, New York 10111-2000
	Attention: Mr. Stephen J. Hartman, Jr.
	Thacher Proffitt & Wood llp
	Two World Financial Center, 28th Floor
	New York New York 10281
	Attention: W. Edward Bright, Esq.
	The Goldstein Law Firm, P.C.
	12 Corporate Woods Boulevard
	Albany, New York 12211-2350
	Attention: Brian P. Goldstein, Esq.

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EXHIBIT 10.32

(b)	If to the Lender:
	Hudson City Bancorp, Inc.
	West 80 Century Road
	Paramus, New Jersey 07652-1473
	Attention: Chief Financial Officer
with a copy to:
	Thacher Proffitt & Wood llp
	Two World Financial Center, 28th Floor
	New York New York 10281
	Attention: W. Edward Bright, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

          Section 6.8 Counterparts.

     This Loan Agreement may be signed in any number of counterparts which, when taken together, shall constitute one and the same document.

          Section 6.9 Construction; Governing Law.

     The headings used in the table of contents and in this Loan Agreement are for convenience only and shall not be deemed to constitute a part hereof. All uses herein of any gender or of singular or plural terms shall be deemed to include uses of the other genders or plural or singular terms, as the context may require. All references in this Loan Agreement to an Article or section shall be to an Article or section of this Loan Agreement, unless otherwise specified. This Loan Agreement, the Promissory Note, the Pledge Agreement and the other Loan Documents shall be governed by, and construed and interpreted in accordance with, the laws of the State of New Jersey. It is intended that the transactions contemplated by this Loan Agreement constitute an exempt loan within the meaning of Treasury Regulation §54.4975-7(b)(1)(iii) and Department of Labor Regulation §2550.408b-3, and the provisions hereof shall be construed and enforced in such manner as shall be necessary to give effect to such intent.

          Section 6.10 Severability.

     Wherever possible, each provision of this Loan Agreement shall be interpreted in such manner as to be effective and valid under applicable law; however, the provisions of this Loan Agreement are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability

14

EXHIBIT 10.32

shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Loan Agreement in any jurisdiction. Each of the covenants, agreements and conditions contained in this Loan Agreement is independent, and compliance by a party with any of them shall not excuse non-compliance by such party with any other. The Borrower shall not take any action the effect of which shall constitute a breach or violation of any provision of this Loan Agreement.

          Section 6.11 Binding Effect; No Assignment or Delegation.

     This Loan Agreement shall be binding upon and inure to the benefit of the Borrower and its successors and the Lender and its successors and assigns. The rights and obligations of the Borrower under this Agreement shall not be assigned or delegated without the prior written consent of the Lender, and any purported assignment or delegation without such consent shall be void.

15

EXHIBIT 10.32

     In Witness Whereof, the parties hereto have caused this Loan Agreement to be duly executed as of the date first above written.

Employee Stock Ownership Plan Trust Of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	Ronald E. Hermance, Jr.
Title:	President and Chief Executive Officer

16

EX-10.33 14 y18482exv10w33.htm EX-10.33: PROMISSORY NOTE

EXHIBIT 10.33

PROMISSORY NOTE

For the Principal Amount,
as defined below Paramus, New Jersey
June 21, 2005

     FOR VALUE RECEIVED, the undersigned, Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), acting by and through its Trustee, GreatBanc Trust Company (“Trustee”), hereby promises to pay to the order of Hudson City Bancorp, Inc. (“Lender”) the Principal Amount, as determined under the Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (“Loan Agreement”) pursuant to which this Promissory Note is issued, payable in annual installments each of which shall be the lesser of (i) the portion of the principal amount of the loan which will result in the release for allocation to participants in the Employee Stock Ownership Plan of Hudson City Savings Bank (the “ESOP”) of a cumulative fraction of the collateral (valued at December 30, 2005) equal to 2/80 as of the last business day of December, 2005 and increased by 2/80 as of each succeeding December, to 80/80 on the last business day of December, 2044, and (ii) the portion of the principal amount of the loan which results in the release for allocation to ESOP participants of total collateral (valued as of the date of payment) under the Loan Agreement and that certain Amended and Restated Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (the “Amended and Restated Loan Agreement”) having an aggregate value equal to 25.75% of compensation taken into account under the ESOP for each person entitled to share in the allocation; provided, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and pursuant to clause (i) of the Promissory Note relating to the Amended and Restated Loan in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Amended and Restated Loan shall be reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Pledge Agreement and the Pledge Agreement relating to the Amended and Restated Loan)), subject to the limitation set forth in clause (ii). Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes. Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last Business Day of December, 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

     This Promissory Note shall bear interest at the rate per annum set forth or established under the Loan Agreement, such interest to be payable quarterly in arrears, commencing on June 30, 2005 and thereafter on the last Business Day of each calendar quarter and upon payment or prepayment of this Promissory Note.

     Anything herein to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payments of interest which are not made as a result of the limitation referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

     Payments of both principal and interest on this Promissory Note are to be made at the principal office of the Lender at West 80 Century Road, Paramus, New Jersey 07652 or such other place as the holder hereof shall designate to the Borrower in writing, in lawful money of the United States of America in immediately available funds.

     Failure to make any payment of principal on this Promissory Note, or failure to make any payment of interest on this Promissory Note, within five (5) Business Days after the date when due, shall constitute a default hereunder, whereupon the principal amount of and accrued interest on this Promissory Note shall immediately become due and payable in accordance with the terms of the Loan Agreement.

     This Promissory Note is subject, in all respects, to the terms and provisions of the Loan Agreement, which is incorporated herein by this reference, and is secured by a Pledge Agreement between the Borrower and the Lender of even date herewith and is entitled to the benefits thereof. All capitalized terms that are not defined herein shall have the meanings assigned to them in the Loan Agreement unless the context clearly indicates otherwise.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.

EX-10.34 15 y18482exv10w34.htm EX-10.34: PLEDGE AGREEMENT

EXHIBIT 10.34

PLEDGE AGREEMENT

by and between

EMPLOYEE STOCK OWNERSHIP PLAN TRUST
of
HUDSON CITY SAVINGS BANK

and

HUDSON CITY BANCORP, INC.

Made and Entered Into as of
June 21, 2005

Exhibit 10.34

TABLE OF CONTENTS

	PAGE
Section 1. Definitions		1
Section 2. Pledge		1
Section 3. Representations and Warranties of the Pledgor		2
Section 4. Eligible Collateral		2
Section 5. Delivery		3
Section 6. Events of Default		3
Section 7. Payment in Full		4
Section 8. No Waiver		4
Section 9. Binding Effect; No Assignment or Delegation		4
Section 10. Governing Law		4
Section 11. Notices		4
Section 12. Interpretation		5
Section 13. Construction		6

PLEDGE AGREEMENT

          This PLEDGE AGREEMENT (“Pledge Agreement”) is made as of the 21^st day of June, 2005, by and between the EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF HUDSON CITY SAVINGS BANK, acting by and through its Trustee, GreatBanc Trust Company, a trust corporation organized under the laws of the State of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York 10111-2000 (“Pledgor”), and Hudson City Bancorp, Inc., a corporation organized and existing under the laws of the State of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (“Pledgee”).

W I T N E S S E T H:

          Whereas, this Pledge Agreement is being executed and delivered to the Pledgee pursuant to the terms of a Loan Agreement of even date herewith (“Loan Agreement”), by and between the Pledgor and the Pledgee;

          Now, Therefore, in consideration of the mutual agreements contained herein and in the Loan Agreement, the parties hereto do hereby covenant and agree as follows:

          Section 1. Definitions. The following definitions shall apply for purposes of this Pledge Agreement, except to the extent that a different meaning is plainly indicated by the context; all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Loan Agreement:

     (a) Collateral shall mean the Pledged Shares and, subject to section 5 hereof, and to the extent permitted by applicable law, all rights with respect thereto, and all proceeds of such Pledged Shares and rights.

     (b) Event of Default shall mean an event so defined in the Loan Agreement.

     (c) Liabilities shall mean all the obligations of the Pledgor to the Pledgee, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under the Loan Agreement and the Promissory Note.

     (d) Pledged Shares shall mean all the shares of Common Stock of Hudson City Bancorp, Inc. purchased by the Pledgor with the proceeds of the loan made by the Pledgee to the Pledgor pursuant to the Loan Agreement, but excluding any such shares previously released pursuant to section 4.

          Section 2. Pledge. To secure the payment of and performance of all the Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the Pledgee a security interest in and lien upon, the Collateral.

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          Section 3. Representations and Warranties of the Pledgor. The Pledgor represents, warrants, and covenants to the Pledgee as follows:

     (a) to the actual knowledge of the Trustee, the execution, delivery and performance of this Pledge Agreement and the pledging of the Collateral hereunder do not and will not conflict with, result in a violation of, or constitute a default under any agreement binding upon the Pledgor;

     (b) the Pledged Shares are and will continue to be owned by the Pledgor free and clear of any liens or rights of any other person except the lien hereunder and under the Loan Agreement in favor of the Pledgee, and the security interest of the Pledgee in the Pledged Shares and the proceeds thereof is and will continue to be prior to and senior to the rights of all others;

     (c) to the actual knowledge of the Trustee, this Pledge Agreement is the legal, valid, binding and enforceable obligation of the Pledgor in accordance with its terms;

     (d) the Pledgor shall, from time to time, upon request of the Pledgee, promptly deliver to the Pledgee such stock powers, proxies, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request; and

     (e) subject to the first sentence of section 4(b), the Pledgor shall not, so long as any Liabilities are outstanding, sell, assign, exchange, pledge or otherwise transfer or encumber any of its rights in and to any of the Collateral.

          Section 4. Eligible Collateral.

     (a) As used herein the term “Eligible Collateral” shall mean that amount of Collateral which has an aggregate fair market value equal to the amount by which the Pledgor is in default (without regard to any amounts owing solely as the result of an acceleration of the Loan Agreement) or such lesser amount of Collateral as may be required pursuant to section 12 of this Pledge Agreement.

     (b) The Pledged Shares shall be released from this Pledge Agreement in a manner conforming to the requirements of Treasury Regulations Section 54.4975-7(b)(8), as the same may be from time to time amended or supplemented, and section 6.4(a) of the ESOP. Subject to such Regulations, the Pledgee may from time to time, after any Default or Event of Default, and without prior notice to the Pledgor, transfer all or any part of the Eligible Collateral into the name of the Pledgee or its nominee, with or without disclosing that such Eligible Collateral is subject to any rights of the Pledgor and may from time to time, whether before or after any of the Liabilities shall become due and payable, without notice to the Pledgor, take all or any of the following actions: (i) notify the parties obligated on any of the Eligible Collateral to make payment to the Pledgee of any amounts due or to become due thereunder, (ii) release or exchange all or any part of the Eligible Collateral, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any

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nature of any party with respect thereto, and (iii) take control of any proceeds of the Eligible Collateral.

          Section 5. Delivery.

     (a) The Pledgor shall deliver to the Pledgee upon execution of this Pledge Agreement an assignment by the Pledgor of all the Pledgor’s rights to and interest in the Pledged Shares.

     (b) So long as no Default or Event of Default shall have occurred and be continuing, (i) the Pledgor shall be entitled to exercise any and all voting and other rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement, and (ii) the Pledgor shall be entitled to receive any and all cash dividends or other distributions paid in respect of the Collateral.

          Section 6. Events of Default.

     (a) If a Default or an Event of Default shall be existing, in addition to the rights it may have under the Loan Agreement, the Promissory Note, and this Pledge Agreement, or by virtue of any other instrument, (i) the Pledgee may exercise, with respect to the Eligible Collateral, from time to time any rights and remedies available to it under the Uniform Commercial Code as in effect from time to time in the State of New Jersey or otherwise available to it and (ii) the Pledgee shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Eligible Collateral. Written notification of intended disposition of any of the Eligible Collateral shall be given by the Pledgee to the Pledgor at least three (3) Business Days before such disposition. Subject to section 13 below, any proceeds of any disposition of Eligible Collateral may be applied by the Pledgee to the payment of expenses in connection with the Eligible Collateral, including, without limitation, reasonable attorneys’ fees and legal expenses, and any balance of such proceeds may be applied by the Pledgee toward the payment of such of the Liabilities as are in Default, and in such order of application, as the Pledgee may from time to time elect. No action of the Pledgee permitted hereunder shall impair or affect its rights in and to the Eligible Collateral. All rights and remedies of the Pledgee expressed hereunder are in addition to all other rights and remedies possessed by it, including, without limitation, those contained in the documents referred to in the definition of Liabilities in section 1 hereof.

     (b) In any sale of any of the Eligible Collateral after a Default or an Event of Default shall have occurred, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers or further restrict such prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Eligible Collateral),

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or in order to obtain such required approval of the sale or of the purchase by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale’s being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable or accountable to the Pledgor for any discount allowed by reason of the fact that such Eligible Collateral is sold in compliance with any such limitation or restriction.

          Section 7. Payment in Full. Upon the payment in full of all outstanding Liabilities, this Pledge Agreement shall terminate and the Pledgee shall forthwith assign, transfer and deliver to the Pledgor, against receipt and without recourse to the Pledgee, all Collateral then held by the Pledgee pursuant to this Pledge Agreement.

          Section 8. No Waiver. No failure or delay on the part of the Pledgee in exercising any right or remedy hereunder or under any other document which confers or grants any rights in the Pledgee in respect of the Liabilities shall operate as a waiver thereof nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy of the Pledgee.

          Section 9. Binding Effect; No Assignment or Delegation. This Pledge Agreement shall be binding upon and inure to the benefit of the Pledgor, the Pledgee and their respective successors and assigns, except that the Pledgor may not assign or transfer its rights hereunder without the prior written consent of the Pledgee (which consent shall not unreasonably be withheld). Each duty or obligation of the Pledgor to the Pledgee pursuant to the provisions of this Pledge Agreement shall be performed in favor of any person or entity designated by the Pledgee, and any duty or obligation of the Pledgee to the Pledgor may be performed by any other person or entity designated by the Pledgee.

          Section 10. Governing Law. This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to agreements to be performed wholly within the State of New Jersey.

          Section 11. Notices. All notices, requests, instructions or documents hereunder shall be in writing and delivered by hand or commercial messenger service or sent by United States mail, registered or certified, return receipt requested, with proper postage prepaid, or by telex or facsimile, addressed as follows:

(a) If to the Pledgee:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Chief Financial Officer

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with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center,
New York, New York 10281
Attention: W. Edward Bright, Esq.

(b) If to the Pledgor:

Employee Stock Ownership Plan Trust
of Hudson City Savings Bank
c/o Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Senior Personnel Officer

with copies to:
GreatBanc Trust Company
45 Rockefeller Plaza, Suite 2055
New York, New York 10111-2000
Attention: Mr. Stephen J. Hartman, Jr.

Thacher Proffitt & Wood llp
Two World Financial Center, 28^th Floor
New York, New York 10281
Attention: W. Edward Bright, Esq.

The Goldstein Law Firm, P.C.
12 Corporate Woods Boulevard
Albany, New York 12211-2350
Attention: Brian P. Goldstein, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

          Section 12. Interpretation. Wherever possible each provision of this Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited by or invalid under such law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions hereof.

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          Section 13. Construction. All provisions hereof shall be construed so as to maintain (a) the ESOP as a qualified leveraged employee stock ownership plan under section 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986 (the “Code”), (b) the Trust as exempt from taxation under section 501(a) of the Code and (c) the Trust Loan as an exempt loan under section 54.4975-7(b) of the Treasury Regulations and as described in Department of Labor Regulation section 2550.408b-3.

          In Witness Whereof, this Pledge Agreement has been duly executed by the parties hereto as of the day and year first above written.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
Title:	Chairman and Chief Executive Officer

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EX-10.35 16 y18482exv10w35.htm EX-10.35: FORM OF ASSIGNMENT

EXHIBIT 10.35

FORM OF ASSIGNMENT

     In consideration of the loan made by Hudson City Bancorp, Inc. (“Lender”) to the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”) pursuant to the Loan Agreement between the Lender and the Borrower of even date herewith (“Loan Agreement”) and pursuant to the Pledge Agreement between the Lender and the Borrower of even date herewith pertaining thereto, subject to the terms of the Loan Agreement and the Pledge Agreement, the undersigned Borrower hereby transfers, assigns and conveys to Lender all its right, title and interest in and to those certain shares of common stock of the Lender which it shall purchase with the proceeds of the loan made pursuant to the Loan Agreement, and agrees to transfer and endorse to Lender the certificates representing such shares as and when required pursuant to the Loan Agreement or Pledge Agreement.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President

June 21, 2005

EX-11.1 17 y18482exv11w1.htm EX-11.1: STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS

EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS

For the Year Ended December 31, 2005

1.	Net income	$	276,055,000
2.	Total weighted average common shares outstanding-basic		567,789,397
3.	Basic earnings per share	$	0.49
4.	Total weighted average common shares outstanding-diluted		581,063,426
5.	Diluted earnings per share	$	0.48

EX-21.1 18 y18482exv21w1.htm EX-21.1: SUBSIDIARIES

EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT

The following is a list of the subsidiaries of Hudson City Bancorp, Inc.:
Name	State of Incorporation
Hudson City Savings Bank	New Jersey
The following is a list of the subsidiaries of Hudson City Savings Bank:
Name	State of Incorporation
HudCiti Service Corporation	New Jersey
Name	State of Incorporation
HC Value Broker Services, Inc	New Jersey
The following is a list of the subsidiaries of HudCiti Service Corporation:
Name	State of Incorporation
Hudson City Preferred Funding Corp.	Delaware

  EX-23.1 19 y18482exv23w1.htm EX-23.1: CONSENT OF KPMG LLP

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Hudson City Bancorp, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-73090, No. 333-95193, No. 333-78969 and No. 333-114536) on Form S-8 of Hudson City Bancorp, Inc. of our reports dated March 14, 2006, with respect to the consolidated statements of financial condition of Hudson City Bancorp, Inc. and subsidiary as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2005, management’s assessment of effectiveness of internal control over financial reporting as of December 31, 2005 and the effectiveness of internal control over financial reporting as of December 31, 2005, which reports appear in the December 31, 2005 annual report on Form 10-K of Hudson City Bancorp, Inc.

New York, New York
March 14, 2006

EX-31.1 20 y18482exv31w1.htm EX-31.1: CERTIFICATION

EXHIBIT 31.1
CERTIFICATION OF DISCLOSURE

I, Ronald E. Hermance, Jr., certify that:

1.	I have reviewed this Annual Report on Form 10-K of Hudson City Bancorp, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-l5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2006	By:	/s/ Ronald E. Hermance, Jr.
		Ronald E. Hermance, Jr.
		Chairman, President and Chief Executive Officer

EX-31.2 21 y18482exv31w2.htm EX-31.2: CERTIFICATION

EXHIBIT 31.2
CERTIFICATION OF DISCLOSURE

I, Denis J. Salamone, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Hudson City Bancorp, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-l5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2006	By:	/s/ Denis J. Salamone
		Denis J. Salamone
		Senior Executive Vice President and Chief Operating Officer

EX-32.1 22 y18482exv32w1.htm EX-32.1: CERTIFICATION

EXHIBIT 32.1

STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

The undersigned, Ronald E. Hermance, Jr., is the chief executive officer of Hudson City Bancorp, Inc. (the “Company”), and Denis J. Salamone, is the principal financial officer of the Company.

This statement is being furnished in connection with the filing by the Company of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 (the “Report”).

By execution of this statement, we certify that:

A)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and
B)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

Date: March 14, 2006	By:	/s/ Ronald E. Hermance, Jr.
		Ronald E. Hermance, Jr.
		Chairman, President and Chief Executive Officer
Date: March 14, 2006	By:	/s/ Denis J. Salamone
		Denis J. Salamone
		Senior Executive Vice President and Chief Operating Officer

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EX-10.22

EXHIBIT 10.22

Amended and Restated

Employment Agreement

between

Hudson City Savings Bank

and

Ronald E. Hermance Jr.

Made and Entered into
as of June 7, 2005

Hudson City Savings Bank

Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Bank”) and Ronald E. Hermance Jr., an individual residing at 4634 Carlton Dunes 2, Fernandina Beach, Florida 32034 (the “Executive”).

Introductory Statement

          The Executive currently serves Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Company”) and the Bank, a wholly owned subsidiary of the Company, in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Bank (“Board”) has determined that it is in the best interests of the Bank to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

          Section 1. Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

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

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

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him a salary at an initial annual rate of Nine Hundred Fifty Thousand dollars ($950,000), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of the Company Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

          Section 5. Employee Benefit Plans and Programs.

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

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programs and consistent with the Bank’s customary practices in each case as applied to senior executive officers of the Bank.

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

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

          Section 9. Termination of Employment Due to Death.

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

          (a) The Bank shall pay to the Executive’s estate his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment shall be made at the time and in the manner

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prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Executive’s termination of employment.

          (b) The Bank shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Bank. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

          Section 10. Termination Due to Disability.

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

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

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

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

          Section 11. Discharge with Cause.

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

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

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

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

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

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

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

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give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

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

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

          (b) In addition to the Standard Termination Entitlements:

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

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

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

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have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Bank.

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

BSP = SSP x (ABP / ASP)

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

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

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that

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his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

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

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

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

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

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

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

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

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

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

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

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

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

          Section 13. Resignation.

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

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

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

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

     (iii) a material failure by the Bank, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Page 11 of 19

EXHIBIT 10.22

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

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

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

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

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

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

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

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

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes

Page 12 of 19

EXHIBIT 10.22

contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

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

          Section 16. Covenant Not To Compete.

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

          Section 17. Confidentiality.

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

          Section 18. Solicitation.

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

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

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company,

Page 13 of 19

EXHIBIT 10.22

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

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

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

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

          Section 20. Successors and Assigns.

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

          Section 21. Notices.

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

          If to the Executive:

4634 Carlton Dunes 2
Fernandina Beach, Florida 32034

Page 14 of 19

EXHIBIT 10.22

          If to the Bank:

Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees .

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

          Section 23. Severability.

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

          Section 24. Waiver.

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

          Section 25. Counterparts.

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

Page 15 of 19

EXHIBIT 10.22

          Section 26. Governing Law.

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

          Section 27. Headings and Construction.

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

          Section 28. Entire Agreement; Modifications.

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

          Section 29. Non-Duplication.

          In the event that the Executive shall perform services for the Company or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Bank hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Bank, the Company and all of their respective direct or indirect subsidiaries and affiliates.

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

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

          Section 31. Required Regulatory Provisions.

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

          (a) Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive under section 12 hereof (exclusive of amounts described in section 9(a) and exclusive of amounts described in sections 12(b)(vi) and 12(b)(vii)

Page 16 of 19

EXHIBIT 10.22

to the extent such amounts are attributable to stock options, stock appreciation rights and/or shares that are vested on the date of the Executive’s termination of employment, without regard to any actual or deemed acceleration triggered by such termination) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to his termination of employment with the Bank (or for his entire period of employment with the Bank if less than five calendar years).

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

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

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

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

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

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

Page 17 of 19

EXHIBIT 10.22

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

		Ronald E. Hermance Jr.
		Hudson City Savings Bank
Attest:
By		By
	Veronica Olszewski		Michael W. Azzara
	Senior Vice President and Corporate		Chairman of the Human Resource
	Secretary		Committee of the Board of Directors
[Seal]

Page 18 of 19

EX-10.23

EXHIBIT 10.23

Amended and Restated

Employment Agreement

between

Hudson City Bancorp, Inc.

and

John M. Tassillo

Made and Entered into
as of June 7, 2005

Page 1 of 20

EXHIBIT 10.23

Hudson City Bancorp, Inc.
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07562-1473 (the “Company”) and John M. Tassillo, an individual residing at 151 Prospect Ave. Apt 6e1 Hackensack, New Jersey 07601 (the “Executive”).

Introductory Statement

          The Executive currently serves the Company and Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States with an office at West 80 Century Road, Paramus, New Jersey 07652-1473, and a wholly owned subsidiary of the Company (the “Bank”), in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Company (“Board”) has determined that it is in the best interests of the Company to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

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

Agreement

          Section 1. Employment.

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

          Section 2. Employment Period; Remaining Unexpired Employment Period.

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

          (b) On the day after the Employment Commencement Date and on each day thereafter, the Employment Period shall be extended by one day, such that on any date the Employment Period will expire on the day before the third (3^rd) anniversary of such date. These extensions shall continue in perpetuity until discontinued by: (i) notice to the Executive given by the Company that it has elected to discontinue the extensions; (ii) notice by the Executive to the Company that he has elected to discontinue the extensions; or (iii) termination of the Executive’s employment with the Company, whether by resignation, discharge or otherwise. On the date on which such a notice is deemed given, or on the effective date of a termination of the Executive’s employment with the Company, the Employment Period shall be converted to a fixed period of three (3) years ending on the day before the third (3^rd) anniversary of such date.

Page 2 of 20

EXHIBIT 10.23

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the earliest of the date in question, any earlier date on which the Executive or the Company is deemed to have given a notice to discontinue extensions of the Employment Period, and any earlier date on which the Executive’s employment with the Company was terminated.

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

          Section 3. Duties.

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

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

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him a salary at an initial annual rate of Three Hundred Eighty Thousand dollars ($380,000), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of this Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Page 3 of 20

EXHIBIT 10.23

          Section 5. Employee Benefit Plans and Programs.

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

          Section 6. Indemnification and Insurance.

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

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

          Section 7. Outside Activities.

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

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Company and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Company shall provide to the Executive for his exclusive use an automobile owned or leased by the Company and appropriate to his position, to be used in the performance of his duties hereunder, including commuting to and from his personal residence. The Company shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, all expenses

Page 4 of 20

EXHIBIT 10.23

associated with his business use of the aforementioned automobile, fees for memberships in such clubs and organizations as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, and his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Company may reasonably require.

          Section 9. Termination of Employment Due to Death.

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

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

          (b) The Company shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Company. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

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

          Section 10. Termination Due to Disability.

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

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

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

Page 5 of 20

EXHIBIT 10.23

his death, the Company shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

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

          Section 11. Discharge with Cause.

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

     (i) the Board, by a majority vote of its membership, determines that the Executive (A) has willfully and intentionally failed to perform his assigned duties under this Agreement in any material respect (including, for these purposes, the Executive’s inability to perform such duties as a result of drug or alcohol dependency); (B) has willfully and intentionally engaged in dishonest or illegal conduct in connection with his performance of services for the Company or has been convicted of a felony; (C) has willfully violated, in any material respect, any law, rule, regulation, written agreement or final cease-and-desist order with respect to his performance of services for the Company; or (D) has willfully and intentionally breached the material terms of this Agreement in any material respect; and

     (ii) at least forty-five (45) days prior to the votes contemplated by section 11(a)(i), the Company has provided the Executive with notice of intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

     (iii) after the giving of the Notice of Intent to Discharge and before the taking of the votes contemplated by section 11(a)(i), the Executive (together with his legal counsel, if he so desires) is afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for his discharge; and

     (iv) after the votes contemplated by section 11(a)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of his termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution adopted by the Board, certified by the corporate secretary and signed by each member of the Board voting in favor of adoption of the resolution, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for his discharge (the “Final Discharge Notice”).

For purposes of this section 11, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the

Page 6 of 20

EXHIBIT 10.23

written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

          (b) If the Executive is discharged during the Employment Period with Cause, the Company shall pay and provide to him (or, in the event of his death, to his estate, his surviving beneficiaries and his dependents) the Standard Termination Entitlements only. Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged, or is discharged without Cause, within forty-five (45) days after the giving of a Notice of Intent to Discharge, all payments withheld during the period of suspension shall be promptly restored and, if no termination has occurred, payments of salary and cash compensation shall resume. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

          The Company may discharge the Executive at any time during the Employment Period and, unless such discharge constitutes a discharge with Cause:

          (a) The Company shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements:

     (i) During the Remaining Unexpired Employment Period, the Company shall provide for the Executive and his dependents continued group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance benefits on substantially the same terms and conditions (including any required premium-sharing arrangements, co-payments and deductibles) in effect for them immediately prior to the Executive’s termination. The coverage provided under this section 12(b)(i) may, at the election of the Company, be secondary to the coverage provided as part of the Standard Termination Entitlements and to any employer-paid coverage provided by a subsequent employer or through Medicare, with the result that benefits under the other coverages will offset the coverage required by this section 12(b)(i).

     (ii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending

Page 7 of 20

EXHIBIT 10.23

immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

where: “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “BS” is the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination; “PR” is the number of payroll periods that occur during a year under the Company’s normal payroll practices; “I” equals the applicable federal short term rate established under section 1274 of the Internal Revenue Code of 1986 (the “Code”) for the month in which the Executive’s termination of employment occurs (the “Short Term AFR”) and “n” equals the product of the Remaining Unexpired Employment Period at the Executive’s termination of employment (expressed in years and fractions of years) multiplied by the number of payroll periods that occur during a year under the Company’s normal payroll practices. The Salary Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of base salary which the Executive might otherwise have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Company.

          (iii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the annual bonuses (if any) that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the “Bonus Severance Payment”). The Bonus Severance Payment shall be computed using the following formula:

BSP = SSP x (ABP / ASP)

where: “BSP” is the amount of the Bonus Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “ABP” is the aggregate of the annual bonuses paid or declared (whether or not paid) for the most recent period of three (3) calendar years to end on or before the Executive’s termination of employment; and “ASP” is the aggregate base salary actually paid to the Executive during such period of three (3) calendar years (excluding any year for which no bonus was declared or paid). The Bonus Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of participation in annual bonus plans of the Company which the Executive might otherwise have.

          (iv) The Company shall pay to the Executive (or in the event of his death, to his estate), a lump sum payment in an amount equal to the excess (if any) of: (A) the present value of the aggregate benefits to which he would be entitled under any and all tax-qualified and non-tax-qualified defined benefit plans maintained by, or covering employees of, the Company (the “Pension Plans”) if he had continued working for the Company during the Remaining Unexpired Employment Period; over (B) the present value of the benefits to which the Executive and his spouse and/or designated

Page 8 of 20

EXHIBIT 10.23

beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

     (v) The Company shall pay to the Executive (or in the event of his death, to his estate) a lump sum payment in an amount equal to the present value of the additional employer contributions that would have been credited directly to his account(s) under any and all tax-qualified and non-tax qualified defined contribution plans maintained by, or covering employees of, the Company (the “Non-ESOP DC Plans”), plus the fair market value of the additional shares of employer securities or other property that would have been allocated to his account as a result of employer contributions or dividends under any tax-qualified leveraged employee stock ownership plan and any related non-tax-qualified supplemental plan maintained by, or covering employees of, the Company (the “ESOP Plans”) if he had continued in employment during the Remaining Unexpired Employment Period (the “Defined Contribution Severance Payment”). The Defined Contribution Severance Payment shall be computed according to the following formula:

DCSP = [SSP x (EC / BS)] + [(STK + PROP) x Y]

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his

Page 9 of 20

EXHIBIT 10.23

termination of employment; “BS” is the Executive’s compensation taken into account in computing EC; “Y” is the aggregate (expressed in years and fractions of years) of the Remaining Unexpired Employment Period and the number of years and fractions of years that have elapsed between the end of plan year for which EC was computed and the date of the Executive’s termination of employment; “STK” is the fair market value (determined by the final reported sales price for stock of the same class on the last trading day before the Executive’s termination of employment) of the employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment; and “PROP” is the fair market value (determined as of the day before the Executive’s termination of employment using the same valuation methodology used to value the assets of the ESOP Plans) of the property other than employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment. The Defined Contribution Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accounts under the Non-ESOP DC Plans and the ESOP Plans in respect of the Remaining Unexpired Employment Period.

     (vi) At the election of the Company made within 30 days following the Executive’s termination of employment, upon the surrender of options or appreciation rights issued to the Executive under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, the Company shall make a lump sum payment in an amount equal to the product of:

     (A) the excess of (I) the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment, over (II) the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; multiplied by

     (B) the number of shares with respect to which options or appreciation rights are being surrendered.

For the purpose of computing this payment, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, even if he is not vested under such plan or program.

     (vii) At the election of the Company made within 30 days following the Executive’s termination of employment, upon the surrender of any shares awarded to the Executive under any restricted stock plan maintained by, or covering employees of, the Company, the Company shall make a lump sum payment in an amount equal to the product of:

     (A) the fair market value of a share of stock of the same class of stock granted under such plan, determined as of the date of the Executive’s termination of employment; multiplied by

     (B) the number of shares which are being surrendered.

Page 10 of 20

EXHIBIT 10.23

For purposes of computing this payment, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he is not vested under such plan.

The payments and benefits described in section 12(b) are referred to in this Agreement as the “Additional Termination Entitlements”.

          Section 13. Resignation.

          (a) The Executive may resign from his employment with the Company at any time. A resignation under this section 13 shall be effected by notice of resignation given by the Executive to the Company and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given by the Executive. The Executive’s resignation from any of the positions within the Company to which he has been assigned shall be deemed a resignation from all such positions.

          (b) The Executive’s resignation shall be deemed to be for “Good Reason” if the effective date of resignation occurs within ninety (90) days after any of the following:

     (i) the failure of the Company (whether by act or omission of the Board, or otherwise) to appoint or re-appoint or elect or re-elect the Executive to the position(s) with the Company specified in section 3 of this Agreement (other than to any such position as an officer of the Board) or to a more senior office;

     (ii) if the Executive is or becomes a member of the Board, the failure of the Company’s shareholders (whether in an election in which the Executive stands as a nominee or in an election where the Executive is not a nominee) to elect or re-elect the Executive to membership at the expiration of his term of membership, unless such failure is a result of the Executive’s refusal to stand for election;

     (iii) a material failure by the Company, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

     (iv) any reduction of the Executive’s rate of base salary in effect from time to time, whether or not material, or any failure (other than due to reasonable administrative error that is cured promptly upon notice) to pay any portion of the Executive’s compensation as and when due;

     (v) any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his total compensation package, disregarding for this purpose any change that results from an across-the-board reduction that affects all similarly situated employees in a similar manner; provided that the Executive shall have given notice of such material adverse effect to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

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EXHIBIT 10.23

     (vi) any material breach by the Company of any material term, condition or covenant contained in this Agreement; provided that the Executive shall have given notice of such material adverse effect to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given; or

     (vii) a change in the Executive’s principal place of employment, without his consent, to a place that is not the principal executive office of the Bank, or a relocation of the Bank’s principal executive office to a location that is both more than twenty-five (25) miles away from the Executive’s principal residence and more than twenty-five (25) miles away from the location of the Bank’s principal executive office on the date of this Agreement.

In all other cases, a resignation by the Executive shall be deemed to be without Good Reason.

          (c) In the event of the Executive’s resignation before the expiration of the Employment Period, the Company shall pay and deliver the Standard Termination Entitlements. In addition, if the Executive’s resignation is deemed to be a resignation with Good Reason, the Company shall also pay and deliver the Additional Termination Entitlements.

          Section 14. Terms and Conditions of the Additional Termination Entitlements.

          The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any termination of employment are not capable of accurate measurement as of the date first above written and that the Additional Termination Entitlements constitute reasonable damages therefor under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may condition the payment and delivery of the Additional Termination Entitlements on the receipt of the Executive’s resignation from any and all positions which he holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them.

          Section 15. Termination Upon or Following a Change of Control.

          (a) A “Change of Control” shall be deemed to have occurred upon the happening of any of the following events:

     (i) the consummation of a reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

     (A) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

     (B) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior

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EXHIBIT 10.23

to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

     (ii) the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

     (iii) a complete liquidation or dissolution of the Company;

     (iv) the occurrence of any event if, immediately following such event, at least 50% of the members of the Board of Directors of the Company do not belong to any of the following groups:

     (A) individuals who were members of the Board of Directors of the Company on the date of this Agreement; or

     (B) individuals who first became members of the Board of Directors of the Company after the date of this Agreement either:

     (1) upon election to serve as a member of the Board of Directors of the Company by affirmative vote of three-quarters of the members of such board, or of a nominating committee thereof, in office at the time of such first election; or

     (2) upon election by the shareholders of the Board of Directors of the Company to serve as a member of such board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board of Directors of the Company, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board of Directors of the Company; or

     (v) any event which would be described in section 15(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this section 15(a), the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of

Page 13 of 20

EXHIBIT 10.23

Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

          (c) Notwithstanding anything in this Agreement to the contrary, if the Executive’s employment with the Company terminates due to death or disability within one (1) year after the occurrence of a Pending Change of Control and if a Change of Control occurs within two (2) years after such termination of employment, he (or in the event of his death, his estate) shall be entitled to receive the Standard Termination Entitlements and the Additional Termination Entitlements that would have been payable if a Change of Control had occurred on the date of his termination of employment and he had resigned with Good Reason immediately thereafter; provided, that payment shall be deferred without interest until, and shall be payable immediately upon, the actual occurrence of a Change of Control.

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

          (e) Notwithstanding anything in this Agreement to the contrary, for purposes of computing the Additional Termination Entitlements due upon a termination of employment that occurs, or is deemed to have occurred, after a Change of Control, the Remaining Unexpired Employment Period shall be deemed to be three (3) full years.

          Section 16. Tax Indemnification.

          (a) If the Executive’s employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to the Executive (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

     

          where:

          E = the percentage rate at which an excise tax is assessed under section 4999 of the Code;

          P = the amount with respect to which such excise tax is assessed, determined without regard to this section 16;

          FI = the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

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EXHIBIT 10.23

SLI = the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

          M = the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

Such computation shall be made at the expense of the Company by an attorney or a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in the ownership of a substantial portion of the assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon the Executive on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

          (b) With respect to any payment that is presumed to be a parachute payment for purposes of section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the Executive the written opinion, in form and substance reasonably satisfactory to the Executive, of the Tax Advisor or of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that (i) no 280G Change in Control has occurred, or (ii) all or part of the payment or benefit in question is not a parachute payment for purposes of section 280G of the Code, or (iii) all or a part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or (iv) for some other reason which shall be set forth in detail in such letter, no excise tax is due under section 4999 of the Code with respect to such payment or benefit (the “Opinion Letter”). If the Company delivers an Opinion Letter, the Tax Advisor shall recompute, and the Company shall make, the Tax Indemnity Payment in reliance on the information contained in the Opinion Letter.

          (c) In the event that the Executive’s liability for the excise tax under section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made under section 16(b), when increased by the amount of the payment made to the Executive under this section 16(c), or when reduced by the amount of the payment made to the Company under this section 16(c), equals the amount that should have properly been paid to the Executive under section 16(a). The interest paid to the Company under this section 16(c) shall be determined at the rate provided under section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this section 16, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or

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EXHIBIT 10.23

proceeding to which the Executive is a party as a result of positions taken on his federal income tax return with respect to his liability for excise taxes under section 4999 of the Code.

          Section 17. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Company prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Company, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 17 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

          Section 18. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 18 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 19. Solicitation.

          The Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Company, he shall not, without the written consent of the Company and the Bank, either directly or indirectly:

          (a) solicit, offer employment to, or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any of their respective subsidiaries or affiliates to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits or making loans, that conducts business within the Competitive Market;

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits, or making loans, that conducts business within the Competitive Market, that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing such officer to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to such other entity;

Page 16 of 20

EXHIBIT 10.23

          (c) solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company to terminate an existing business or commercial relationship with the Company.

          Section 20. No Effect on Employee Benefit Plans or Programs.

          The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time; provided, however, that nothing in this Agreement shall be deemed to duplicate any compensation or benefits provided under any agreement, plan or program covering the Executive to which the Company is a party and any duplicative amount payable under any such agreement, plan or program shall be applied as an offset to reduce the amounts otherwise payable hereunder.

          Section 21. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the Executive, his legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations hereunder at least 60 days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

          Section 22. Notices.

          Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

          If to the Executive:

151 Prospect Ave. Apt 6e1
Hackensack, New Jersey 07601

          If to the Company:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Compensation Committee

Page 17 of 20

EXHIBIT 10.23

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 23. Indemnification for Attorneys’ Fees.

          The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Unless it is determined that the Executive has acted frivolously or in bad faith, the Company shall pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of or in connection with his consultation with legal counsel or arising out of any action, suit, proceeding, tax controversy or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code. This section 23(b) shall apply whether such consultation, action, suit, proceeding or contest arises before, on, after or as a result of a Change of Control.

          Section 24. Severability.

          A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

          Section 25. Waiver.

          Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

          Section 26. Counterparts.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

          Section 27. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action,

Page 18 of 20

EXHIBIT 10.23

complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement though him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 28. Headings and Construction.

          The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

          Section 29. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements (including, without limitation, the Prior Agreement), understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.

          Section 30. Non-Duplication.

          In the event that the Executive shall perform services for the Bank or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company, the Bank and all of their respective direct or indirect subsidiaries and affiliates.

          Section 31. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them; provided, however, that the Company shall be jointly and severally liable with the Bank for all obligations of the Bank under the Bank Agreement. It is the intent and purpose of this section 31 that the Executive have the same legal and economic rights that he would have if all of his services were rendered to and all of his compensation was paid by the Company. This section 31 shall be construed and enforced to give effect to such intent and purpose.

          Section 32. Required Regulatory Provisions.

          Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and any regulations promulgated thereunder and Federal Deposit Insurance Corporation regulation 12 CFR Part 359, Golden Parachute and Indemnification Payments.

Page 19 of 20

EXHIBIT 10.23

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his hand, all as of the day and year first above written.

		John M. Tassillo
		Hudson City Bancorp, Inc.
Attest:		Attest:
By		By
	Veronica Olszewski		Ronald E. Hermance Jr.
	Senior Vice President and Corporate		Chairman of the Board of Directors,
	Secretary		President and Chief Executive
[Seal]

Page 20 of 20

EX-10.24

EXHIBIT 10.24

Amended and Restated

Employment Agreement

between

Hudson City Savings Bank

and

John M. Tassillo

Made and Entered into
as of June 7, 2005

Page 1 of 19

Hudson City Savings Bank
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Bank”) and John M. Tassillo, an individual residing at 151 Prospect Ave. Apt 6e1 Hackensack, New Jersey 07601 (the “Executive”).

Introductory Statement

          The Executive currently serves Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Company”) and the Bank, a wholly owned subsidiary of the Company, in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of July 13, 1999 (the “Prior Agreement”). The Board of Directors of the Bank (“Board”) has determined that it is in the best interests of the Bank to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

          The terms and conditions which the Bank and the Executive have agreed to are as follows.

Agreement

          Section 1. Employment.

          The Bank hereby continues to employ the Executive, and the Executive hereby accepts such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

          Section 2. Employment Period; Remaining Unexpired Employment Period.

          (a) The Bank shall employ the Executive during an initial period of three (3) years beginning on the date hereof (the “Employment Commencement Date”) and ending on the day before the third (3^rd) anniversary of the Employment Commencement Date, and during the period of any additional extensions described in section 2(b) (the “Employment Period”).

          (b) The Board shall conduct an annual review of the Executive’s performance on or about each anniversary of the Employment Commencement Date (each, an “Anniversary Date”) and may, on the basis of such review and by written notice to the Executive, offer to extend the Employment Period through the day before the third (3^rd) anniversary of the relevant Anniversary Date. In such event, the Employment Period shall be deemed extended in the absence of objection from the Executive by written notice to Bank given within ten (10) business days after his receipt of the Bank’s offer of extension.

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the Employment Commencement Date or, if later, on the day before the third (3^rd) anniversary of the last Anniversary Date as of which the Employment Period was extended pursuant to section 2(b).

Page 2 of 19

EXHIBIT 10.24

          (d) Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment before the end of the Employment Period with or without notice for any reason. This Agreement shall determine the relative rights and obligations of the Bank and the Executive in the event of any such termination. In addition, nothing in this Agreement shall require the termination of the Executive’s employment at the expiration of the Employment Period. If the Executive’s employment continues beyond the expiration of the Employment Period, any such continuation shall be on an “at-will” basis unless the Bank and the Executive agree otherwise.

          Section 3. Duties.

          (a) The Executive shall serve as Executive Vice President and Treasurer of the Company. The Executive shall have such power, authority and responsibility and perform such duties as are prescribed by or under the By-Laws of the Bank, and as are customarily associated with such positions. The Executive shall devote his full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence, and other than his performance of services pursuant to the terms of the employment agreement between the Company and the Executive, dated as of the date hereof (“Company Agreement”)) to the business and affairs of the Bank and shall use his best efforts to advance its best interests.

          (b) If duly elected, the Executive shall serve as a member of the Board and as Chairman of the Board (or in another position as a member of the Board), without additional remuneration therefor; provided, however, that failure to elect the Executive to the position of Chairman of the Board (or other position as a member of the Board) shall not by itself constitute a breach of the Agreement or entitle the Executive to severance benefits hereunder.

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him a salary at an initial annual rate of Three Hundred Eighty Thousand dollars ($380,000), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of the Company Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

          Section 5. Employee Benefit Plans and Programs.

          During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified or non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and

Page 3 of 19

EXHIBIT 10.24

programs and consistent with the Bank’s customary practices in each case as applied to senior executive officers of the Bank.

          Section 6. Indemnification and Insurance.

          (a) During the Employment Period and for a period of six years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the Bank’s request. The coverage provided to the Executive pursuant to this section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

          (b) To the maximum extent permitted under applicable law, during the Employment Period and for a period of six years thereafter, the Bank shall indemnify the Executive against and hold him harmless from any costs, liabilities, losses and exposures to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof.

          Section 7. Outside Activities.

          The Executive may serve as a member of the boards of directors of such business, community and charitable organizations as he may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld); provided, however, that such service shall not materially interfere with the performance of his duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Bank and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Bank shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Bank may reasonably require.

          Section 9. Termination of Employment Due to Death.

          The Executive’s employment with the Bank shall terminate, automatically and without any further action on the part of any party to this Agreement, on the date of the Executive’s death. In such event:

          (a) The Bank shall pay to the Executive’s estate his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment shall be made at the time and in the manner

Page 4 of 19

EXHIBIT 10.24

prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Executive’s termination of employment.

          (b) The Bank shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Bank. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

The payments and benefits described in sections 9(a) and (b) shall be referred to in this Agreement as the “Standard Termination Entitlements.”

          Section 10. Termination Due to Disability.

          The Bank may terminate the Executive’s employment upon a determination, by vote of a majority of the members of the Board, acting in reliance on the written advice of a medical professional acceptable to them, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing his assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing his assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

          (a) The Bank shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements, the Bank shall continue to pay the Executive his base salary, at the annual rate in effect for him immediately prior to the termination of his employment, during a period ending on the earliest of: (i) the expiration of one hundred and eighty (180) days after the date of termination of his employment; (ii) the date on which long-term disability insurance benefits are first payable to him under any long-term disability insurance plan covering employees of the Bank or the Company (the “LTD Eligibility Date”); (iii) the date of his death; and (iv) the expiration of the Remaining Unexpired Employment Period (the “Initial Continuation Period”). If the end of the Initial Continuation Period is neither the LTD Eligibility Date nor the date of his death, the Bank shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

A termination of employment due to disability under this section 10 shall be effected by notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given to the Executive.

          Section 11. Discharge with Cause.

          (a) The Bank may terminate the Executive’s employment during the Employment Period, and such termination shall be deemed to have occurred with “Cause” only if:

Page 5 of 19

EXHIBIT 10.24

     (i) the Board, by a majority vote of its membership, determines that the Executive should be terminated because of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or material breach of any provision of this Agreement, in each case as measured against standards generally prevailing at the relevant time in the savings and community banking industry; and

     (ii) at least forty-five (45) days prior to the votes contemplated by section 11(a)(i), the Bank has provided the Executive with notice of intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

     (iii) after the giving of the Notice of Intent to Discharge and before the taking of the votes contemplated by section 11(a)(i), the Executive (together with his legal counsel, if he so desires) is afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for his discharge; and

     (iv) after the votes contemplated by section 11(a)(i), the Bank has furnished to the Executive a notice of termination which shall specify the effective date of his termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution adopted by the Board, certified by the corporate secretary and signed by each member of the Board voting in favor of adoption of the resolution, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for his discharge (the “Final Discharge Notice”).

For purposes of this section 11, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Bank. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Bank shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Bank.

          (b) If the Executive is discharged during the Employment Period with Cause, the Bank shall pay and provide to him (or, in the event of his death, to his estate, his surviving beneficiaries and his dependents) the Standard Termination Entitlements only. Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged, or is discharged without Cause, within forty-five (45) days after the giving of a Notice of Intent to Discharge, all payments withheld during the period of suspension shall be promptly restored and, if no termination has occurred, payments of salary and cash compensation shall resume. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not

Page 6 of 19

EXHIBIT 10.24

give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

          The Bank may discharge the Executive at any time during the Employment Period and, unless such discharge constitutes a discharge with Cause:

          (a) The Bank shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements:

     (i) During the Remaining Unexpired Employment Period, the Bank shall provide for the Executive and his dependents continued group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance benefits on substantially the same terms and conditions (including any required premium-sharing arrangements, co-payments and deductibles) in effect for them immediately prior to the Executive’s termination. The coverage provided under this section 12(b)(i) may, at the election of the Bank, be secondary to the coverage provided as part of the Standard Termination Entitlements and to any employer-paid coverage provided by a subsequent employer or through Medicare, with the result that benefits under the other coverages will offset the coverage required by this section 12(b)(i).

     (ii) The Bank shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

where: “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “BS” is the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination; “PR” is the number of payroll periods that occur during a year under the Bank’s normal payroll practices; “I” equals the applicable federal short term rate established under section 1274 of the Internal Revenue Code of 1986 (the “Code”) for the month in which the Executive’s termination of employment occurs (the “Short Term AFR”) and “n” equals the product of the Remaining Unexpired Employment Period at the Executive’s termination of employment (expressed in years and fractions of years) multiplied by the number of payroll periods that occur during a year under the Bank’s normal payroll practices. The Salary Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of base salary which the Executive might otherwise

Page 7 of 19

EXHIBIT 10.24

have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Bank.

     (iii) The Bank shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the annual bonuses (if any) that the Executive would have earned if he had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the “Bonus Severance Payment”). The Bonus Severance Payment shall be computed using the following formula:

BSP = SSP x (ABP / ASP)

where: “BSP” is the amount of the Bonus Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “ABP” is the aggregate of the annual bonuses paid or declared (whether or not paid) for the most recent period of three (3) calendar years to end on or before the Executive’s termination of employment; and “ASP” is the aggregate base salary actually paid to the Executive during such period of three (3) calendar years (excluding any year for which no bonus was declared or paid). The Bonus Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of participation in annual bonus plans of the Bank which the Executive might otherwise have.

     (iv) The Bank shall pay to the Executive (or in the event of his death, to his estate), a lump sum payment in an amount equal to the excess (if any) of: (A) the present value of the aggregate benefits to which he would be entitled under any and all tax-qualified and non-tax-qualified defined benefit plans maintained by, or covering employees of, the Bank (the “Pension Plans”) if he had continued working for the Bank during the Remaining Unexpired Employment Period; over (B) the present value of the benefits to which the Executive and his spouse and/or designated beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that

Page 8 of 19

EXHIBIT 10.24

his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

     (v) The Bank shall pay to the Executive (or in the event of his death, to his estate) a lump sum payment in an amount equal to the present value of the additional employer contributions that would have been credited directly to his account(s) under any and all tax-qualified and non-tax qualified defined contribution plans maintained by, or covering employees of, the Bank (the “Non-ESOP DC Plans”), plus the fair market value of the additional shares of employer securities or other property that would have been allocated to his account as a result of employer contributions or dividends under any tax-qualified leveraged employee stock ownership plan and any related non-tax-qualified supplemental plan maintained by, or covering employees of, the Bank (the “ESOP Plans”) if he had continued in employment during the Remaining Unexpired Employment Period (the “Defined Contribution Severance Payment”). The Defined Contribution Severance Payment shall be computed according to the following formula:

DCSP = [SSP x (EC / BS)] + [(STK + PROP) x Y]

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his termination of employment; “BS” is the Executive’s compensation taken into account in computing EC; “Y” is the aggregate (expressed in years and fractions of years) of the Remaining Unexpired Employment Period and the number of years and fractions of years that have elapsed between the end of plan year for which EC was computed and the date of the Executive’s termination of employment; “STK” is the fair market value (determined by the final reported sales price for stock of the same class on the last trading day before the Executive’s termination of employment) of the employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment; and “PROP” is the fair market value (determined as of the day before the Executive’s termination of employment using the same valuation methodology used to value the assets of the ESOP Plans) of the property other than employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment. The Defined Contribution Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accounts under the Non-ESOP DC Plans and the ESOP Plans in respect of the Remaining Unexpired Employment Period.

Page 9 of 19

EXHIBIT 10.24

     (vi) At the election of the Bank made within 30 days following the Executive’s termination of employment, upon the surrender of options or appreciation rights issued to the Executive under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, the Bank shall make a lump sum payment in an amount equal to the product of:

     (A) the excess of (I) the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment, over (II) the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; multiplied by

     (B) the number of shares with respect to which options or appreciation rights are being surrendered.

For the purpose of computing this payment, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he is not vested under such plan or program.

     (vii) At the election of the Bank made within 30 days following the Executive’s termination of employment, upon the surrender of any shares awarded to the Executive under any restricted stock plan maintained by, or covering employees of, the Bank, the Bank shall make a lump sum payment in an amount equal to the product of:

     (A) the fair market value of a share of stock of the same class of stock granted under such plan, determined as of the date of the Executive’s termination of employment; multiplied by

     (B) the number of shares which are being surrendered.

For purposes of computing this payment, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he is not vested under such plan.

The payments and benefits described in section 12(b) are referred to in this Agreement as the “Additional Termination Entitlements”.

          Section 13. Resignation.

          (a) The Executive may resign from his employment with the Bank at any time. A resignation under this section 13 shall be effected by notice of resignation given by the Executive to the Bank and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given by the Executive. The Executive’s resignation from any of the positions within the Bank to which he has been assigned shall be deemed a resignation from all such positions.

          (b) The Executive’s resignation shall be deemed to be for “Good Reason” if the effective date of resignation occurs within ninety (90) days after any of the following:

Page 10 of 19

EXHIBIT 10.24

     (i) the failure of the Bank (whether by act or omission of the Board, or otherwise) to appoint or re-appoint or elect or re-elect the Executive to the position(s) with the Bank specified in section 3 of this Agreement (other than to any such position as an officer of the Board) or to a more senior office;

     (ii) if the Executive is or becomes a member of the Board, the failure of the Bank’s shareholders (whether in an election in which the Executive stands as a nominee or in an election where the Executive is not a nominee) to elect or re-elect the Executive to membership at the expiration of his term of membership, unless such failure is a result of the Executive’s refusal to stand for election;

     (iii) a material failure by the Bank, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

     (iv) any reduction of the Executive’s rate of base salary in effect from time to time, whether or not material, or any failure (other than due to reasonable administrative error that is cured promptly upon notice) to pay any portion of the Executive’s compensation as and when due;

     (v) any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his total compensation package, disregarding for this purpose any change that results from an across-the-board reduction that affects all similarly situated employees in a similar manner; provided that the Executive shall have given notice of such material adverse effect to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

     (vi) any material breach by the Bank of any material term, condition or covenant contained in this Agreement; provided that the Executive shall have given notice of such material adverse effect to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given; or

     (vii) a change in the Executive’s principal place of employment, without his consent, to a place that is not the principal executive office of the Bank, or a relocation of the Bank’s principal executive office to a location that is both more than twenty-five (25) miles away from the Executive’s principal residence and more than twenty-five (25) miles away from the location of the Bank’s principal executive office on the date of this Agreement.

In all other cases, a resignation by the Executive shall be deemed to be without Good Reason.

          (c) In the event of the Executive’s resignation before the expiration of the Employment Period, the Bank shall pay and deliver the Standard Termination Entitlements. In addition, if the Executive’s resignation is deemed to be a resignation with Good Reason, the Bank shall also pay and deliver the Additional Termination Entitlements.

Page 11 of 19

EXHIBIT 10.24

          Section 14. Terms and Conditions of the Additional Termination Entitlements.

          The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any termination of employment are not capable of accurate measurement as of the date first above written and that the Additional Termination Entitlements constitute reasonable damages therefor under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may condition the payment and delivery of the Additional Termination Entitlements on the receipt of the Executive’s resignation from any and all positions which he holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them.

          Section 15. Termination Upon or Following a Change of Control.

          (a) A “Change of Control” shall be deemed to have occurred upon the happening of any of the following events:

     (i) the consummation of a reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

     (A) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

     (B) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Bank;

     (ii) the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

     (iii) a complete liquidation or dissolution of the Bank;

     (iv) the occurrence of any event if, immediately following such event, at least 50% of the members of the Board of Directors of the Bank do not belong to any of the following groups:

     (A) individuals who were members of the Board of Directors of the Bank on the date of this Agreement; or

Page 12 of 19

EXHIBIT 10.24

     (B) individuals who first became members of the Board of Directors of the Bank after the date of this Agreement either:

     (1) upon election to serve as a member of the Board of Directors of the Bank by affirmative vote of three-quarters of the members of such board, or of a nominating committee thereof, in office at the time of such first election; or

     (2) upon election by the shareholders of the Board of Directors of the Bank to serve as a member of such board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board of Directors of the Bank, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board of Directors of the Bank; or

     (v) any event which would be described in section 15(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this section 15(a), the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

          (c) Notwithstanding anything in this Agreement to the contrary, if the Executive’s employment with the Bank terminates due to death or disability within one (1) year after the occurrence of a Pending Change of Control and if a Change of Control occurs within two (2) years after such termination of employment, he (or in the event of his death, his estate) shall be entitled to receive the Standard Termination Entitlements and the Additional Termination Entitlements that would have been payable if a Change of Control had occurred on the date of his termination of employment and he had resigned with Good Reason immediately thereafter; provided, that payment shall be deferred without interest until, and shall be payable immediately upon, the actual occurrence of a Change of Control.

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes

Page 13 of 19

EXHIBIT 10.24

contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

          (e) Notwithstanding anything in this Agreement to the contrary, for purposes of computing the Additional Termination Entitlements due upon a termination of employment that occurs, or is deemed to have occurred, after a Change of Control, the Remaining Unexpired Employment Period shall be deemed to be three (3) full years.

          Section 16. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Bank, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 16 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

          Section 17. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 17 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 18. Solicitation.

          The Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Bank, he shall not, without the written consent of the Company and the Bank, either directly or indirectly:

          (a) solicit, offer employment to, or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any of their respective subsidiaries or affiliates to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits or making loans, that conducts business within the Competitive Market;

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company,

Page 14 of 19

EXHIBIT 10.24

savings and loan holding company, or other institution engaged in the business of accepting deposits, or making loans, that conducts business within the Competitive Market, that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing such officer to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to such other entity;

          (c) solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company to terminate an existing business or commercial relationship with the Company.

          Section 19. No Effect on Employee Benefit Plans or Programs.

          The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time; provided, however, that nothing in this Agreement shall be deemed to duplicate any compensation or benefits provided under any agreement, plan or program covering the Executive to which the Bank is a party and any duplicative amount payable under any such agreement, plan or program shall be applied as an offset to reduce the amounts otherwise payable hereunder.

          Section 20. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the Executive, his legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations hereunder at least 60 days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

          Section 21. Notices.

          Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

          If to the Executive:

151 Prospect Ave. Apt 6e1
Hackensack, New Jersey 07601

Page 15 of 19

EXHIBIT 10.24

          If to the Bank:

Hudson City Savings Bank,
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees.

          The Bank shall indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees and expenses, incurred by him in connection with or arising out of any action, suit or proceeding (including any tax controversy) in which he may be involved, as a result of his efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise.

          Section 23. Severability.

          A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

          Section 24. Waiver.

          Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

          Section 25. Counterparts.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

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EXHIBIT 10.24

          Section 26. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under, or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement through him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 27. Headings and Construction.

          The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

          Section 28. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements (including, without limitation, the Prior Agreement), understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.

          Section 29. Non-Duplication.

          In the event that the Executive shall perform services for the Company or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Bank hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Bank, the Company and all of their respective direct or indirect subsidiaries and affiliates.

          Section 30. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them.

          Section 31. Required Regulatory Provisions.

          The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

          (a) Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive under section 12 hereof (exclusive of amounts described in section 9(a) and exclusive of amounts described in sections 12(b)(vi) and 12(b)(vii)

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EXHIBIT 10.24

to the extent such amounts are attributable to stock options, stock appreciation rights and/or shares that are vested on the date of the Executive’s termination of employment, without regard to any actual or deemed acceleration triggered by such termination) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to his termination of employment with the Bank (or for his entire period of employment with the Bank if less than five calendar years).

          (b) Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and any regulations promulgated thereunder and Federal Deposit Insurance Corporation regulation 12 CFR Part 359, Golden Parachute and Indemnification Payments.

          (c) Notwithstanding anything herein contained to the contrary, if the Executive is suspended and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(3) or 1818(g)(1)), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

          (d) Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(4) or (g)(1)), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the Bank and the Executive shall not be affected.

          (e) Notwithstanding anything herein contained to the contrary, if the Bank is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act), all obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights of the Bank and the Executive shall not be affected.

          (f) Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Director of the Office of Thrift Supervision (“OTS”) or his or her designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director of the OTS or his or her designee at the time such Director or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Director to be in an unsafe or unsound condition.

The vested rights of the parties shall not be affected. If and to the extent that any of the foregoing provisions is not, or shall cease to be, required by applicable law, rule or regulation, the same shall became inoperative in the case of the Bank as though eliminated by formal amendment of this Agreement.

Page 18 of 19

EXHIBIT 10.24

          IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be executed and the Executive has hereunto set his hand, all as of the day and year first above written.

		John M. Tassillo
		Hudson City Savings Bank
Attest:
By		By
	Veronica Olszewski		Ronald E. Hermance Jr.
	Senior Vice President and Corporate Secretary		Chairman of the Board of Directors, President and Chief Executive Officer
[Seal]

Page 19 of 19

EX-10.25

EXHIBIT 10.25

Amended and Restated

Employment Agreement

between

Hudson City Bancorp, Inc.

and

Denis J. Salamone

Made and Entered into
as of June 7, 2005

Page 1 of 20

EXHIBIT 10.25

Hudson City Bancorp, Inc.
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07562-1473 (the “Company”) and Denis J. Salamone, an individual residing at 440 Hillcrest Road, Ridgewood, New Jersey 07450 (the “Executive”).

Introductory Statement

          The Executive currently serves the Company and Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States with an office at West 80 Century Road, Paramus, New Jersey 07652-1473, and a wholly owned subsidiary of the Company (the “Bank”), in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of October 29, 2001 (the “Prior Agreement”). The Board of Directors of the Company (“Board”) has determined that it is in the best interests of the Company to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

          The terms and conditions which the Company and the Executive have agreed to are as follows.

Agreement

          Section 1.Employment.

          The Company hereby continues to employ the Executive, and the Executive hereby accepts such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

          Section 2. Employment Period; Remaining Unexpired Employment Period.

          (a) The Company shall employ the Executive during an initial period of three (3) years beginning on the date hereof (the “Employment Commencement Date”) and ending on the day before the third (3^rd) anniversary of the Employment Commencement Date, and during the period of any additional extensions described in section 2(b) (the “Employment Period”).

          (b) On the day after the Employment Commencement Date and on each day thereafter, the Employment Period shall be extended by one day, such that on any date the Employment Period will expire on the day before the third (3^rd) anniversary of such date. These extensions shall continue in perpetuity until discontinued by: (i) notice to the Executive given by the Company that it has elected to discontinue the extensions; (ii) notice by the Executive to the Company that he has elected to discontinue the extensions; or (iii) termination of the Executive’s employment with the Company, whether by resignation, discharge or otherwise. On the date on which such a notice is deemed given, or on the effective date of a termination of the Executive’s employment with the Company, the Employment Period shall be converted to a fixed period of three (3) years ending on the day before the third (3^rd) anniversary of such date.

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EXHIBIT 10.25

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the earliest of the date in question, any earlier date on which the Executive or the Company is deemed to have given a notice to discontinue extensions of the Employment Period, and any earlier date on which the Executive’s employment with the Company was terminated.

          (d) Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment before the end of the Employment Period with or without notice for any reason. This Agreement shall determine the relative rights and obligations of the Company and the Executive in the event of any such termination. In addition, nothing in this Agreement shall require the termination of the Executive’s employment at the expiration of the Employment Period. If the Executive’s employment continues beyond the expiration of the Employment Period, any such continuation shall be on an “at-will” basis unless the Company and the Executive agree otherwise.

          Section 3. Duties.

          (a) The Executive shall serve as Senior Executive Vice President and Chief Operating Officer of the Company. The Executive shall have such power, authority and responsibility and perform such duties as are prescribed by or under the By-Laws of the Company, and as are customarily associated with such positions. The Executive shall devote his full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence, and other than his performance of services pursuant to the terms of the employment agreement between the Bank and the Executive, dated as of the date hereof (“Bank Agreement”)) to the business and affairs of the Company and shall use his best efforts to advance its best interests.

          (b) If duly elected, the Executive shall serve as a member of the Board and as Chairman of the Board (or in another position as a member of the Board), without additional remuneration therefor; provided, however, that failure to elect the Executive to the position of Chairman of the Board (or other position as a member of the Board) shall not by itself constitute a breach of the Agreement or entitle the Executive to severance benefits hereunder.

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him a salary at an initial annual rate of Five Hundred Seventy Five Thousand dollars ($575,000), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of this Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

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EXHIBIT 10.25

          Section 5. Employee Benefit Plans and Programs.

          During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified or non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices in each case as applied to senior executive officers of the Company.

          Section 6. Indemnification and Insurance.

          (a) During the Employment Period and for a period of six years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the Company’s request. The coverage provided to the Executive pursuant to this section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

          (b) To the maximum extent permitted under applicable law, during the Employment Period and for a period of six years thereafter, the Company shall indemnify the Executive against and hold him harmless from any costs, liabilities, losses and exposures to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Company or any subsidiary or affiliate thereof.

          Section 7. Outside Activities.

          The Executive may serve as a member of the boards of directors of such business, community and charitable organizations as he may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld); provided, however, that such service shall not materially interfere with the performance of his duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Company and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Company shall provide to the Executive for his exclusive use an automobile owned or leased by the Company and appropriate to his position, to be used in the performance of his duties hereunder, including commuting to and from his personal residence. The Company shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, all expenses

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EXHIBIT 10.25

associated with his business use of the aforementioned automobile, fees for memberships in such clubs and organizations as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, and his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Company may reasonably require.

          Section 9. Termination of Employment Due to Death.

          The Executive’s employment with the Company shall terminate, automatically and without any further action on the part of any party to this Agreement, on the date of the Executive’s death. In such event:

          (a) The Company shall pay to the Executive’s estate his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment shall be made at the time and in the manner prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Executive’s termination of employment.

          (b) The Company shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Company. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

          The payments and benefits described in sections 9(a) and (b) shall be referred to in this Agreement as the “Standard Termination Entitlements.”

          Section 10. Termination Due to Disability.

          The Company may terminate the Executive’s employment upon a determination, by vote of a majority of the members of the Board, acting in reliance on the written advice of a medical professional acceptable to them, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing his assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing his assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

          (a) The Company shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements, the Company shall continue to pay the Executive his base salary, at the annual rate in effect for him immediately prior to the termination of his employment, during a period ending on the earliest of: (i) the expiration of one hundred and eighty (180) days after the date of termination of his employment; (ii) the date on which long-term disability insurance benefits are first payable to him under any long-term disability insurance plan covering employees of the Bank or the Company (the “LTD Eligibility Date”); (iii) the date of his death; and (iv) the expiration of the Remaining Unexpired Employment Period (the “Initial Continuation Period”). If the end of the Initial Continuation Period is neither the LTD Eligibility Date nor the date of

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EXHIBIT 10.25

his death, the Company shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

A termination of employment due to disability under this section 10 shall be effected by notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given to the Executive.

          Section 11. Discharge with Cause.

          (a) The Company may terminate the Executive’s employment during the Employment Period, and such termination shall be deemed to have occurred with “Cause” only if:

     (i) the Board, by a majority vote of its membership, determines that the Executive (A) has willfully and intentionally failed to perform his assigned duties under this Agreement in any material respect (including, for these purposes, the Executive’s inability to perform such duties as a result of drug or alcohol dependency); (B) has willfully and intentionally engaged in dishonest or illegal conduct in connection with his performance of services for the Company or has been convicted of a felony; (C) has willfully violated, in any material respect, any law, rule, regulation, written agreement or final cease-and-desist order with respect to his performance of services for the Company; or (D) has willfully and intentionally breached the material terms of this Agreement in any material respect; and

     (ii) at least forty-five (45) days prior to the votes contemplated by section 11(a)(i), the Company has provided the Executive with notice of intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

     (iii) after the giving of the Notice of Intent to Discharge and before the taking of the votes contemplated by section 11(a)(i), the Executive (together with his legal counsel, if he so desires) is afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for his discharge; and

     (iv) after the votes contemplated by section 11(a)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of his termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution adopted by the Board, certified by the corporate secretary and signed by each member of the Board voting in favor of adoption of the resolution, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for his discharge (the “Final Discharge Notice”).

For purposes of this section 11, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the

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EXHIBIT 10.25

written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

          (b) If the Executive is discharged during the Employment Period with Cause, the Company shall pay and provide to him (or, in the event of his death, to his estate, his surviving beneficiaries and his dependents) the Standard Termination Entitlements only. Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged, or is discharged without Cause, within forty-five (45) days after the giving of a Notice of Intent to Discharge, all payments withheld during the period of suspension shall be promptly restored and, if no termination has occurred, payments of salary and cash compensation shall resume. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

          The Company may discharge the Executive at any time during the Employment Period and, unless such discharge constitutes a discharge with Cause:

          (a) The Company shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements:

     (i) During the Remaining Unexpired Employment Period, the Company shall provide for the Executive and his dependents continued group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance benefits on substantially the same terms and conditions (including any required premium-sharing arrangements, co-payments and deductibles) in effect for them immediately prior to the Executive’s termination. The coverage provided under this section 12(b)(i) may, at the election of the Company, be secondary to the coverage provided as part of the Standard Termination Entitlements and to any employer-paid coverage provided by a subsequent employer or through Medicare, with the result that benefits under the other coverages will offset the coverage required by this section 12(b)(i).

     (ii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending

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EXHIBIT 10.25

immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

where: “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “BS” is the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination; “PR” is the number of payroll periods that occur during a year under the Company’s normal payroll practices; “I” equals the applicable federal short term rate established under section 1274 of the Internal Revenue Code of 1986 (the “Code”) for the month in which the Executive’s termination of employment occurs (the “Short Term AFR”) and “n” equals the product of the Remaining Unexpired Employment Period at the Executive’s termination of employment (expressed in years and fractions of years) multiplied by the number of payroll periods that occur during a year under the Company’s normal payroll practices. The Salary Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of base salary which the Executive might otherwise have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Company.

     (iii) The Company shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the annual bonuses (if any) that the Executive would have earned if he had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the “Bonus Severance Payment”). The Bonus Severance Payment shall be computed using the following formula:

BSP = SSP x (ABP / ASP)

where: “BSP” is the amount of the Bonus Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “ABP” is the aggregate of the annual bonuses paid or declared (whether or not paid) for the most recent period of three (3) calendar years to end on or before the Executive’s termination of employment; and “ASP” is the aggregate base salary actually paid to the Executive during such period of three (3) calendar years (excluding any year for which no bonus was declared or paid). The Bonus Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of participation in annual bonus plans of the Company which the Executive might otherwise have.

     (iv) The Company shall pay to the Executive (or in the event of his death, to his estate), a lump sum payment in an amount equal to the excess (if any) of: (A) the present value of the aggregate benefits to which he would be entitled under any and all tax-qualified and non-tax-qualified defined benefit plans maintained by, or covering employees of, the Company (the “Pension Plans”) if he had continued working for the Company during the Remaining Unexpired Employment Period; over (B) the present value of the benefits to which the Executive and his spouse and/or designated

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EXHIBIT 10.25

beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

     (v) The Company shall pay to the Executive (or in the event of his death, to his estate) a lump sum payment in an amount equal to the present value of the additional employer contributions that would have been credited directly to his account(s) under any and all tax-qualified and non-tax qualified defined contribution plans maintained by, or covering employees of, the Company (the “Non-ESOP DC Plans”), plus the fair market value of the additional shares of employer securities or other property that would have been allocated to his account as a result of employer contributions or dividends under any tax-qualified leveraged employee stock ownership plan and any related non-tax-qualified supplemental plan maintained by, or covering employees of, the Company (the “ESOP Plans”) if he had continued in employment during the Remaining Unexpired Employment Period (the “Defined Contribution Severance Payment”). The Defined Contribution Severance Payment shall be computed according to the following formula:

DCSP = [SSP x (EC / BS)] + [(STK + PROP) x Y]

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his

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EXHIBIT 10.25

termination of employment; “BS” is the Executive’s compensation taken into account in computing EC; “Y” is the aggregate (expressed in years and fractions of years) of the Remaining Unexpired Employment Period and the number of years and fractions of years that have elapsed between the end of plan year for which EC was computed and the date of the Executive’s termination of employment; “STK” is the fair market value (determined by the final reported sales price for stock of the same class on the last trading day before the Executive’s termination of employment) of the employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment; and “PROP” is the fair market value (determined as of the day before the Executive’s termination of employment using the same valuation methodology used to value the assets of the ESOP Plans) of the property other than employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment. The Defined Contribution Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accounts under the Non-ESOP DC Plans and the ESOP Plans in respect of the Remaining Unexpired Employment Period.

     (vi) At the election of the Company made within 30 days following the Executive’s termination of employment, upon the surrender of options or appreciation rights issued to the Executive under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, the Company shall make a lump sum payment in an amount equal to the product of:

     (A) the excess of (I) the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment, over (II) the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; multiplied by

     (B) the number of shares with respect to which options or appreciation rights are being surrendered.

For the purpose of computing this payment, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, even if he is not vested under such plan or program.

     (vii) At the election of the Company made within 30 days following the Executive’s termination of employment, upon the surrender of any shares awarded to the Executive under any restricted stock plan maintained by, or covering employees of, the Company, the Company shall make a lump sum payment in an amount equal to the product of:

     (A) the fair market value of a share of stock of the same class of stock granted under such plan, determined as of the date of the Executive’s termination of employment; multiplied by

     (B) the number of shares which are being surrendered.

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EXHIBIT 10.25

For purposes of computing this payment, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he is not vested under such plan.

The payments and benefits described in section 12(b) are referred to in this Agreement as the “Additional Termination Entitlements”.

          Section 13. Resignation.

          (a) The Executive may resign from his employment with the Company at any time. A resignation under this section 13 shall be effected by notice of resignation given by the Executive to the Company and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given by the Executive. The Executive’s resignation from any of the positions within the Company to which he has been assigned shall be deemed a resignation from all such positions.

          (b) The Executive’s resignation shall be deemed to be for “Good Reason” if the effective date of resignation occurs within ninety (90) days after any of the following:

     (i) the failure of the Company (whether by act or omission of the Board, or otherwise) to appoint or re-appoint or elect or re-elect the Executive to the position(s) with the Company specified in section 3 of this Agreement (other than to any such position as an officer of the Board) or to a more senior office;

     (ii) if the Executive is or becomes a member of the Board, the failure of the Company’s shareholders (whether in an election in which the Executive stands as a nominee or in an election where the Executive is not a nominee) to elect or re-elect the Executive to membership at the expiration of his term of membership, unless such failure is a result of the Executive’s refusal to stand for election;

     (iii) a material failure by the Company, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position as an officer of the Board); provided that the Executive shall have given notice of such failure to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

     (iv) any reduction of the Executive’s rate of base salary in effect from time to time, whether or not material, or any failure (other than due to reasonable administrative error that is cured promptly upon notice) to pay any portion of the Executive’s compensation as and when due;

     (v) any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his total compensation package, disregarding for this purpose any change that results from an across-the-board reduction that affects all similarly situated employees in a similar manner; provided that the Executive shall have given notice of such material adverse effect to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given;

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EXHIBIT 10.25

     (vi) any material breach by the Company of any material term, condition or covenant contained in this Agreement; provided that the Executive shall have given notice of such material adverse effect to the Company, and the Company has not fully cured such failure within thirty (30) days after such notice is deemed given; or

     (vii) a change in the Executive’s principal place of employment, without his consent, to a place that is not the principal executive office of the Bank, or a relocation of the Bank’s principal executive office to a location that is both more than twenty-five (25) miles away from the Executive’s principal residence and more than twenty-five (25) miles away from the location of the Bank’s principal executive office on the date of this Agreement.

In all other cases, a resignation by the Executive shall be deemed to be without Good Reason.

          (c) In the event of the Executive’s resignation before the expiration of the Employment Period, the Company shall pay and deliver the Standard Termination Entitlements. In addition, if the Executive’s resignation is deemed to be a resignation with Good Reason, the Company shall also pay and deliver the Additional Termination Entitlements.

          Section 14. Terms and Conditions of the Additional Termination Entitlements.

          The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any termination of employment are not capable of accurate measurement as of the date first above written and that the Additional Termination Entitlements constitute reasonable damages therefor under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may condition the payment and delivery of the Additional Termination Entitlements on the receipt of the Executive’s resignation from any and all positions which he holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them.

          Section 15. Termination Upon or Following a Change of Control.

          (a) A “Change of Control” shall be deemed to have occurred upon the happening of any of the following events:

     (i) the consummation of a reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

     (A) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

     (B) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior

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EXHIBIT 10.25

to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

     (ii) the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

     (iii) a complete liquidation or dissolution of the Company;

     (iv) the occurrence of any event if, immediately following such event, at least 50% of the members of the Board of Directors of the Company do not belong to any of the following groups:

     (A) individuals who were members of the Board of Directors of the Company on the date of this Agreement; or

     (B) individuals who first became members of the Board of Directors of the Company after the date of this Agreement either:

     (1) upon election to serve as a member of the Board of Directors of the Company by affirmative vote of three-quarters of the members of such board, or of a nominating committee thereof, in office at the time of such first election; or

     (2) upon election by the shareholders of the Board of Directors of the Company to serve as a member of such board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board of Directors of the Company, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board of Directors of the Company; or

     (v) any event which would be described in section 15(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this section 15(a), the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of

Page 13 of 20

EXHIBIT 10.25

Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

          (c) Notwithstanding anything in this Agreement to the contrary, if the Executive’s employment with the Company terminates due to death or disability within one (1) year after the occurrence of a Pending Change of Control and if a Change of Control occurs within two (2) years after such termination of employment, he (or in the event of his death, his estate) shall be entitled to receive the Standard Termination Entitlements and the Additional Termination Entitlements that would have been payable if a Change of Control had occurred on the date of his termination of employment and he had resigned with Good Reason immediately thereafter; provided, that payment shall be deferred without interest until, and shall be payable immediately upon, the actual occurrence of a Change of Control.

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

          (e) Notwithstanding anything in this Agreement to the contrary, for purposes of computing the Additional Termination Entitlements due upon a termination of employment that occurs, or is deemed to have occurred, after a Change of Control, the Remaining Unexpired Employment Period shall be deemed to be three (3) full years.

          Section 16. Tax Indemnification.

          (a) If the Executive’s employment terminates under circumstances entitling him (or in the event of his death, his estate) to the Additional Termination Entitlements, the Company shall pay to the Executive (or in the event of his death, his estate) an additional amount intended to indemnify him against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

where:
E =	the percentage rate at which an excise tax is assessed under section 4999 of the Code;
P =	the amount with respect to which such excise tax is assessed, determined without regard to this section 16;
FI =	the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

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EXHIBIT 10.25

SLI =	the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and
M =	the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

Such computation shall be made at the expense of the Company by an attorney or a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Tax Advisor”) and shall be based on the following assumptions: (i) that a change in ownership, a change in effective ownership or control, or a change in the ownership of a substantial portion of the assets, of the Bank or the Company has occurred within the meaning of section 280G of the Code (a “280G Change of Control”); (ii) that all direct or indirect payments made to or benefits conferred upon the Executive on account of his termination of employment are “parachute payments” within the meaning of section 280G of the Code; and (iii) that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

          (b) With respect to any payment that is presumed to be a parachute payment for purposes of section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the Executive the written opinion, in form and substance reasonably satisfactory to the Executive, of the Tax Advisor or of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that (i) no 280G Change in Control has occurred, or (ii) all or part of the payment or benefit in question is not a parachute payment for purposes of section 280G of the Code, or (iii) all or a part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or (iv) for some other reason which shall be set forth in detail in such letter, no excise tax is due under section 4999 of the Code with respect to such payment or benefit (the “Opinion Letter”). If the Company delivers an Opinion Letter, the Tax Advisor shall recompute, and the Company shall make, the Tax Indemnity Payment in reliance on the information contained in the Opinion Letter.

          (c) In the event that the Executive’s liability for the excise tax under section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made under section 16(b), when increased by the amount of the payment made to the Executive under this section 16(c), or when reduced by the amount of the payment made to the Company under this section 16(c), equals the amount that should have properly been paid to the Executive under section 16(a). The interest paid to the Company under this section 16(c) shall be determined at the rate provided under section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this section 16, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or

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EXHIBIT 10.25

proceeding to which the Executive is a party as a result of positions taken on his federal income tax return with respect to his liability for excise taxes under section 4999 of the Code.

          Section 17. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Company prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Company, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 17 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

          Section 18. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 18 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 19. Solicitation.

          The Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Company, he shall not, without the written consent of the Company and the Bank, either directly or indirectly:

          (a) solicit, offer employment to, or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any of their respective subsidiaries or affiliates to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits or making loans, that conducts business within the Competitive Market;

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits, or making loans, that conducts business within the Competitive Market, that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing such officer to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to such other entity;

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EXHIBIT 10.25

          (c) solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company to terminate an existing business or commercial relationship with the Company.

          Section 20. No Effect on Employee Benefit Plans or Programs.

          The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time; provided, however, that nothing in this Agreement shall be deemed to duplicate any compensation or benefits provided under any agreement, plan or program covering the Executive to which the Company is a party and any duplicative amount payable under any such agreement, plan or program shall be applied as an offset to reduce the amounts otherwise payable hereunder.

          Section 21. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the Executive, his legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations hereunder at least 60 days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

          Section 22. Notices.

          Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:
	440 Hillcrest Road Ridgewood, New Jersey 07450
If to the Company:
	Hudson City Bancorp, Inc. West 80 Century Road Paramus, New Jersey 07652-1473
	Attention:      Chairman, Compensation Committee

Page 17 of 20

EXHIBIT 10.25

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention:     W. Edward Bright, Esq.

          Section 23. Indemnification for Attorneys’ Fees.

          The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Unless it is determined that the Executive has acted frivolously or in bad faith, the Company shall pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of or in connection with his consultation with legal counsel or arising out of any action, suit, proceeding, tax controversy or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code. This section 23(b) shall apply whether such consultation, action, suit, proceeding or contest arises before, on, after or as a result of a Change of Control.

          Section 24. Severability.

          A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

          Section 25. Waiver.

          Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

          Section 26. Counterparts.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

          Section 27. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts

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EXHIBIT 10.25

having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement though him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 28. Headings and Construction.

          The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

          Section 29. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements (including, without limitation, the Prior Agreement), understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.

          Section 30. Non-Duplication.

          In the event that the Executive shall perform services for the Bank or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company, the Bank and all of their respective direct or indirect subsidiaries and affiliates.

          Section 31. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them; provided, however, that the Company shall be jointly and severally liable with the Bank for all obligations of the Bank under the Bank Agreement. It is the intent and purpose of this section 31 that the Executive have the same legal and economic rights that he would have if all of his services were rendered to and all of his compensation was paid by the Company. This section 31 shall be construed and enforced to give effect to such intent and purpose.

          Section 32. Required Regulatory Provisions.

          Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and any regulations promulgated thereunder and Federal Deposit Insurance Corporation regulation 12 CFR Part 359, Golden Parachute and Indemnification Payments.

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EXHIBIT 10.25

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his hand, all as of the day and year first above written.

		Denis J. Salamone
		Hudson City Bancorp, Inc.
Attest:		Attest:
By		By
	Veronica Olszewski Senior Vice President and Corporate Secretary		Ronald E. Hermance Jr. Chairman of the Board of Directors, President and Chief Executive Officer
[Seal]

Page 20 of 20

EX-10.26

EXHIBIT 10.26

Amended and Restated

Employment Agreement

between

Hudson City Savings Bank

and

Denis J. Salamone

Made and Entered into
as of June 7, 2005

Page 1 of 19

Hudson City Savings Bank
Amended and Restated Employment Agreement

          This Amended And Restated Employment Agreement (the “Agreement”) is made and entered into as of June 7, 2005 between Hudson City Savings Bank, a savings bank organized and operating under the federal laws of the United States and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Bank”) and Denis J. Salamone, an individual residing at 440 Hillcrest Road, Ridgewood, New Jersey 07450 (the “Executive”).

Introductory Statement

          The Executive currently serves Hudson City Bancorp, Inc., a business corporation organized and operating under the laws of the State of Delaware and having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (the “Company”) and the Bank, a wholly owned subsidiary of the Company, in an executive capacity pursuant to an Employment Agreement between the Executive, the Company and the Bank made and entered into as of October 29, 2001 (the “Prior Agreement”). The Board of Directors of the Bank (“Board”) has determined that it is in the best interests of the Bank to amend and restate the Prior Agreement to reflect the Bank’s conversion from a New Jersey chartered savings bank to a federal savings association and to reflect other changes in the Bank’s operating environment. The Executive has agreed to this amendment and restatement.

          The terms and conditions which the Bank and the Executive have agreed to are as follows.

Agreement

          Section 1. Employment.

          The Bank hereby continues to employ the Executive, and the Executive hereby accepts such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

          Section 2. Employment Period; Remaining Unexpired Employment Period.

          (a) The Bank shall employ the Executive during an initial period of three (3) years beginning on the date hereof (the “Employment Commencement Date”) and ending on the day before the third (3^rd) anniversary of the Employment Commencement Date, and during the period of any additional extensions described in section 2(b) (the “Employment Period”).

          (b) The Board shall conduct an annual review of the Executive’s performance on or about each anniversary of the Employment Commencement Date (each, an “Anniversary Date”) and may, on the basis of such review and by written notice to the Executive, offer to extend the Employment Period through the day before the third (3^rd) anniversary of the relevant Anniversary Date. In such event, the Employment Period shall be deemed extended in the absence of objection from the Executive by written notice to Bank given within ten (10) business days after his receipt of the Bank’s offer of extension.

          (c) Except as otherwise expressly provided in this Agreement, any reference in this Agreement to the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the day before the third (3^rd) anniversary of the Employment Commencement Date or, if later, on the day before the third (3^rd) anniversary of the last Anniversary Date as of which the Employment Period was extended pursuant to section 2(b).

Page 2 of 19

EXHIBIT 10.26

          (d) Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment before the end of the Employment Period with or without notice for any reason. This Agreement shall determine the relative rights and obligations of the Bank and the Executive in the event of any such termination. In addition, nothing in this Agreement shall require the termination of the Executive’s employment at the expiration of the Employment Period. If the Executive’s employment continues beyond the expiration of the Employment Period, any such continuation shall be on an “at-will” basis unless the Bank and the Executive agree otherwise.

          Section 3. Duties.

          (a) The Executive shall serve as Senior Executive Vice President and Chief Operating Officer of the Company. The Executive shall have such power, authority and responsibility and perform such duties as are prescribed by or under the By-Laws of the Bank, and as are customarily associated with such positions. The Executive shall devote his full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence, and other than his performance of services pursuant to the terms of the employment agreement between the Company and the Executive, dated as of the date hereof (“Company Agreement”)) to the business and affairs of the Bank and shall use his best efforts to advance its best interests.

          (b) If duly elected, the Executive shall serve as a member of the Board and as Chairman of the Board (or in another position as a member of the Board), without additional remuneration therefor; provided, however, that failure to elect the Executive to the position of Chairman of the Board (or other position as a member of the Board) shall not by itself constitute a breach of the Agreement or entitle the Executive to severance benefits hereunder.

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him a salary at an initial annual rate of Five Hundred Seventy Five Thousand dollars ($575,000), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. The Board shall review the Executive’s annual rate of salary at such times during the Employment Period as it deems appropriate, but not less frequently than once every twelve (12) months, and may, in its discretion, approve a salary increase. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he shall continue to perform services for the Company in accordance with the terms of the Company Agreement, but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

          Section 5. Employee Benefit Plans and Programs.

          During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified or non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Bank’s customary practices in each case as applied to senior executive officers of the Bank.

Page 3 of 19

EXHIBIT 10.26

          Section 6. Indemnification and Insurance.

          (a) During the Employment Period and for a period of six years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the Bank’s request. The coverage provided to the Executive pursuant to this section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

          (b) To the maximum extent permitted under applicable law, during the Employment Period and for a period of six years thereafter, the Bank shall indemnify the Executive against and hold him harmless from any costs, liabilities, losses and exposures to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof.

          Section 7. Outside Activities.

          The Executive may serve as a member of the boards of directors of such business, community and charitable organizations as he may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld); provided, however, that such service shall not materially interfere with the performance of his duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

          Section 8. Working Facilities and Expenses.

          The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his principal place of employment with a private office, secretarial services and other support services and facilities suitable to his positions with the Bank and necessary or appropriate in connection with the performance of his assigned duties under this Agreement. The Bank shall reimburse the Executive for his ordinary and necessary business expenses, including, without limitation, his travel and entertainment expenses incurred in connection with the performance of his duties under this Agreement, in each case upon presentation to the payer of an itemized account of such expenses in such form as the Bank may reasonably require.

          Section 9. Termination of Employment Due to Death.

          The Executive’s employment with the Bank shall terminate, automatically and without any further action on the part of any party to this Agreement, on the date of the Executive’s death. In such event:

          (a) The Bank shall pay to the Executive’s estate his earned but unpaid compensation (including, without limitation, salary and all other items which constitute wages under applicable law) as of the date of his termination of employment. This payment shall be made at the time and in the manner prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Executive’s termination of employment.

          (b) The Bank shall provide the benefits, if any, due to the Executive’s estate, surviving dependents or designated beneficiaries under the employee benefit plans and programs and

Page 4 of 19

EXHIBIT 10.26

compensation plans and programs maintained for the benefit of the officers and employees of the Bank. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

The payments and benefits described in sections 9(a) and (b) shall be referred to in this Agreement as the “Standard Termination Entitlements.”

          Section 10. Termination Due to Disability.

          The Bank may terminate the Executive’s employment upon a determination, by vote of a majority of the members of the Board, acting in reliance on the written advice of a medical professional acceptable to them, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing his assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing his assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

          (a) The Bank shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements, the Bank shall continue to pay the Executive his base salary, at the annual rate in effect for him immediately prior to the termination of his employment, during a period ending on the earliest of: (i) the expiration of one hundred and eighty (180) days after the date of termination of his employment; (ii) the date on which long-term disability insurance benefits are first payable to him under any long-term disability insurance plan covering employees of the Bank or the Company (the “LTD Eligibility Date”); (iii) the date of his death; and (iv) the expiration of the Remaining Unexpired Employment Period (the “Initial Continuation Period”). If the end of the Initial Continuation Period is neither the LTD Eligibility Date nor the date of his death, the Bank shall continue to pay the Executive his base salary, at an annual rate equal to sixty percent (60%) of the annual rate in effect for him immediately prior to the termination of his employment, during an additional period ending on the earliest of the LTD Eligibility Date, the date of his death and the expiration of the Remaining Unexpired Employment Period.

          A termination of employment due to disability under this section 10 shall be effected by notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given to the Executive.

          Section 11. Discharge with Cause.

          (a) The Bank may terminate the Executive’s employment during the Employment Period, and such termination shall be deemed to have occurred with “Cause” only if:

     (i) the Board, by a majority vote of its membership, determines that the Executive should be terminated because of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or material breach of any provision of this Agreement, in each case as measured against standards generally prevailing at the relevant time in the savings and community banking industry; and

Page 5 of 19

EXHIBIT 10.26

     (ii) at least forty-five (45) days prior to the votes contemplated by section 11(a)(i), the Bank has provided the Executive with notice of intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

     (iii) after the giving of the Notice of Intent to Discharge and before the taking of the votes contemplated by section 11(a)(i), the Executive (together with his legal counsel, if he so desires) is afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for his discharge; and

     (iv) after the votes contemplated by section 11(a)(i), the Bank has furnished to the Executive a notice of termination which shall specify the effective date of his termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution adopted by the Board, certified by the corporate secretary and signed by each member of the Board voting in favor of adoption of the resolution, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for his discharge (the “Final Discharge Notice”).

For purposes of this section 11, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Bank. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Bank shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Bank.

          (b) If the Executive is discharged during the Employment Period with Cause, the Bank shall pay and provide to him (or, in the event of his death, to his estate, his surviving beneficiaries and his dependents) the Standard Termination Entitlements only. Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged, or is discharged without Cause, within forty-five (45) days after the giving of a Notice of Intent to Discharge, all payments withheld during the period of suspension shall be promptly restored and, if no termination has occurred, payments of salary and cash compensation shall resume. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge.

          Section 12. Discharge without Cause.

          The Bank may discharge the Executive at any time during the Employment Period and, unless such discharge constitutes a discharge with Cause:

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EXHIBIT 10.26

          (a) The Bank shall pay and deliver to the Executive (or in the event of his death before payment, to his estate and surviving dependents and beneficiaries, as applicable) the Standard Termination Entitlements.

          (b) In addition to the Standard Termination Entitlements:

     (i) During the Remaining Unexpired Employment Period, the Bank shall provide for the Executive and his dependents continued group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance benefits on substantially the same terms and conditions (including any required premium-sharing arrangements, co-payments and deductibles) in effect for them immediately prior to the Executive’s termination. The coverage provided under this section 12(b)(i) may, at the election of the Bank, be secondary to the coverage provided as part of the Standard Termination Entitlements and to any employer-paid coverage provided by a subsequent employer or through Medicare, with the result that benefits under the other coverages will offset the coverage required by this section 12(b)(i).

     (ii) The Bank shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the salary that the Executive would have earned if he had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the “Salary Severance Payment”). The Salary Severance Payment shall be computed using the following formula:

where: “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “BS” is the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination; “PR” is the number of payroll periods that occur during a year under the Bank’s normal payroll practices; “I” equals the applicable federal short term rate established under section 1274 of the Internal Revenue Code of 1986 (the “Code”) for the month in which the Executive’s termination of employment occurs (the “Short Term AFR”) and “n” equals the product of the Remaining Unexpired Employment Period at the Executive’s termination of employment (expressed in years and fractions of years) multiplied by the number of payroll periods that occur during a year under the Bank’s normal payroll practices. The Salary Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of base salary which the Executive might otherwise have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Bank.

     (iii) The Bank shall make a lump sum payment to the Executive (or, in the event of his death before payment, to his estate), in an amount equal to the estimated present value of the annual bonuses (if any) that the Executive would have earned if he had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the “Bonus Severance Payment”). The Bonus Severance Payment shall be computed using the following formula:

BSP = SSP x (ABP / ASP)

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EXHIBIT 10.26

where: “BSP” is the amount of the Bonus Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before the deduction of applicable federal, state and local withholding taxes); “ABP” is the aggregate of the annual bonuses paid or declared (whether or not paid) for the most recent period of three (3) calendar years to end on or before the Executive’s termination of employment; and “ASP” is the aggregate base salary actually paid to the Executive during such period of three (3) calendar years (excluding any year for which no bonus was declared or paid). The Bonus Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to a continuation of participation in annual bonus plans of the Bank which the Executive might otherwise have.

     (iv) The Bank shall pay to the Executive (or in the event of his death, to his estate), a lump sum payment in an amount equal to the excess (if any) of: (A) the present value of the aggregate benefits to which he would be entitled under any and all tax-qualified and non-tax-qualified defined benefit plans maintained by, or covering employees of, the Bank (the “Pension Plans”) if he had continued working for the Bank during the Remaining Unexpired Employment Period; over (B) the present value of the benefits to which the Executive and his spouse and/or designated beneficiaries are actually entitled under such plans (the “Pension Severance Payment”). The Pension Severance Payment shall be computed according to the following formula:

PSP = PPB – APB

where: “PSP” is the amount of the Pension Severance Payment (before deductions for applicable federal, state and local withholding taxes); “APB” is the aggregate lump sum present value of the actual vested pension benefits payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis of the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin, determined by reference to Table VI of section 1.72-9 of the Income Tax Regulations (the “Assumed Life Expectancy”), and on the basis of an interest rate assumption equal to the “applicable interest rate” determined in accordance with section 417(e)(3)(A)(II) of the Code (the “417(e) Rate”); and “PPB” is the lump sum present value of the pension benefits (whether or not vested) that would be payable under the Pension Plans in the form of a straight life annuity beginning at the earliest date permitted under the Pension Plans, computed on the basis that the Executive’s actual age at termination of employment is his attained age as of his last birthday that would occur during the Remaining Unexpired Employment Period, that his service for benefit accrual purposes under the Pension Plans is equal to the aggregate of his actual service plus the Remaining Unexpired Employment Period, that his average compensation figure used in determining his accrued benefit is equal to the highest annual rate of salary achieved by the Executive during the period of three (3) years ending immediately prior to the date of termination, that the Executive’s life expectancy at the earliest date on which payments under the Pension Plans could begin is the Assumed Life Expectancy and that the interest rate assumption used is equal to the 417(e) Rate. The Pension Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accrued benefits under the Pension Plans in respect of the Remaining Unexpired Employment Period.

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EXHIBIT 10.26

     (v) The Bank shall pay to the Executive (or in the event of his death, to his estate) a lump sum payment in an amount equal to the present value of the additional employer contributions that would have been credited directly to his account(s) under any and all tax-qualified and non-tax qualified defined contribution plans maintained by, or covering employees of, the Bank (the “Non-ESOP DC Plans”), plus the fair market value of the additional shares of employer securities or other property that would have been allocated to his account as a result of employer contributions or dividends under any tax-qualified leveraged employee stock ownership plan and any related non-tax-qualified supplemental plan maintained by, or covering employees of, the Bank (the “ESOP Plans”) if he had continued in employment during the Remaining Unexpired Employment Period (the “Defined Contribution Severance Payment”). The Defined Contribution Severance Payment shall be computed according to the following formula:

DCSP = [SSP x (EC / BS)] + [(STK + PROP) x Y]

where: “DCSP” is the amount of the Defined Contribution Severance Payment (before deductions for applicable federal, state and local withholding taxes); “SSP” is the amount of the Salary Severance Payment (before deductions for applicable federal, state and local withholding taxes); “EC” is the amount of employer contributions actually credited to the Executive’s accounts under the Non-ESOP Plans for the last plan year to end before his termination of employment; “BS” is the Executive’s compensation taken into account in computing EC; “Y” is the aggregate (expressed in years and fractions of years) of the Remaining Unexpired Employment Period and the number of years and fractions of years that have elapsed between the end of plan year for which EC was computed and the date of the Executive’s termination of employment; “STK” is the fair market value (determined by the final reported sales price for stock of the same class on the last trading day before the Executive’s termination of employment) of the employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment; and “PROP” is the fair market value (determined as of the day before the Executive’s termination of employment using the same valuation methodology used to value the assets of the ESOP Plans) of the property other than employer securities actually allocated to the Executive’s accounts under the ESOP Plans in respect of employer contributions and dividends applied to loan amortization payments for the last plan year to end before his termination of employment. The Defined Contribution Severance Payment shall be made within five (5) business days after the Executive’s termination of employment and shall be in lieu of any claim to any actual increase in his accounts under the Non-ESOP DC Plans and the ESOP Plans in respect of the Remaining Unexpired Employment Period.

     (vi) At the election of the Bank made within 30 days following the Executive’s termination of employment, upon the surrender of options or appreciation rights issued to the Executive under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, the Bank shall make a lump sum payment in an amount equal to the product of:

     (A) the excess of (I) the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment, over (II) the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; multiplied by

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EXHIBIT 10.26

     (B) the number of shares with respect to which options or appreciation rights are being surrendered.

For the purpose of computing this payment, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he is not vested under such plan or program.

     (vii) At the election of the Bank made within 30 days following the Executive’s termination of employment, upon the surrender of any shares awarded to the Executive under any restricted stock plan maintained by, or covering employees of, the Bank, the Bank shall make a lump sum payment in an amount equal to the product of:

     (A) the fair market value of a share of stock of the same class of stock granted under such plan, determined as of the date of the Executive’s termination of employment; multiplied by

     (B) the number of shares which are being surrendered.

For purposes of computing this payment, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he is not vested under such plan.

The payments and benefits described in section 12(b) are referred to in this Agreement as the “Additional Termination Entitlements”.

          Section 13. Resignation.

          (a) The Executive may resign from his employment with the Bank at any time. A resignation under this section 13 shall be effected by notice of resignation given by the Executive to the Bank and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given by the Executive. The Executive’s resignation from any of the positions within the Bank to which he has been assigned shall be deemed a resignation from all such positions.

          (b) The Executive’s resignation shall be deemed to be for “Good Reason” if the effective date of resignation occurs within ninety (90) days after any of the following:

     (i) the failure of the Bank (whether by act or omission of the Board, or otherwise) to appoint or re-appoint or elect or re-elect the Executive to the position(s) with the Bank specified in section 3 of this Agreement (other than to any such position as an officer of the Board) or to a more senior office;

     (ii) if the Executive is or becomes a member of the Board, the failure of the Bank’s shareholders (whether in an election in which the Executive stands as a nominee or in an election where the Executive is not a nominee) to elect or re-elect the Executive to membership at the expiration of his term of membership, unless such failure is a result of the Executive’s refusal to stand for election;

     (iii) a material failure by the Bank, whether by amendment of its certificate of incorporation or organization, by-laws, action of the Board or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in section 3 of this Agreement (other than such functions, duties or responsibilities associated with a position

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EXHIBIT 10.26

as an officer of the Board); provided that the Executive shall have given notice of such failure to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

     (iv) any reduction of the Executive’s rate of base salary in effect from time to time, whether or not material, or any failure (other than due to reasonable administrative error that is cured promptly upon notice) to pay any portion of the Executive’s compensation as and when due;

     (v) any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his total compensation package, disregarding for this purpose any change that results from an across-the-board reduction that affects all similarly situated employees in a similar manner; provided that the Executive shall have given notice of such material adverse effect to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given;

     (vi) any material breach by the Bank of any material term, condition or covenant contained in this Agreement; provided that the Executive shall have given notice of such material adverse effect to the Bank, and the Bank has not fully cured such failure within thirty (30) days after such notice is deemed given; or

     (vii) a change in the Executive’s principal place of employment, without his consent, to a place that is not the principal executive office of the Bank, or a relocation of the Bank’s principal executive office to a location that is both more than twenty-five (25) miles away from the Executive’s principal residence and more than twenty-five (25) miles away from the location of the Bank’s principal executive office on the date of this Agreement.

In all other cases, a resignation by the Executive shall be deemed to be without Good Reason.

          (c) In the event of the Executive’s resignation before the expiration of the Employment Period, the Bank shall pay and deliver the Standard Termination Entitlements. In addition, if the Executive’s resignation is deemed to be a resignation with Good Reason, the Bank shall also pay and deliver the Additional Termination Entitlements.

          Section 14. Terms and Conditions of the Additional Termination Entitlements.

          The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any termination of employment are not capable of accurate measurement as of the date first above written and that the Additional Termination Entitlements constitute reasonable damages therefor under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may condition the payment and delivery of the Additional Termination Entitlements on the receipt of the Executive’s resignation from any and all positions which he holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them.

          Section 15. Termination Upon or Following a Change of Control.

          (a) A “Change of Control” shall be deemed to have occurred upon the happening of any of the following events:

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EXHIBIT 10.26

     (i) the consummation of a reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

     (A) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

     (B) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Bank;

     (ii) the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

     (iii) a complete liquidation or dissolution of the Bank;

     (iv) the occurrence of any event if, immediately following such event, at least 50% of the members of the Board of Directors of the Bank do not belong to any of the following groups:

     (A) individuals who were members of the Board of Directors of the Bank on the date of this Agreement; or

     (B) individuals who first became members of the Board of Directors of the Bank after the date of this Agreement either:

     (1) upon election to serve as a member of the Board of Directors of the Bank by affirmative vote of three-quarters of the members of such board, or of a nominating committee thereof, in office at the time of such first election; or

     (2) upon election by the shareholders of the Board of Directors of the Bank to serve as a member of such board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board of Directors of the Bank, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11

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EXHIBIT 10.26

of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board of Directors of the Bank; or

     (v) any event which would be described in section 15(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this section 15(a), the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (b) For purposes of this Agreement, a “Pending Change of Control” shall mean: (i) the signing of a definitive agreement for a transaction which, if consummated, would result in a Change of Control; (ii) the commencement of a tender offer which, if successful, would result in a Change of Control; or (iii) the circulation of a proxy statement seeking proxies in opposition to management in an election contest which, if successful, would result in a Change of Control.

          (c) Notwithstanding anything in this Agreement to the contrary, if the Executive’s employment with the Bank terminates due to death or disability within one (1) year after the occurrence of a Pending Change of Control and if a Change of Control occurs within two (2) years after such termination of employment, he (or in the event of his death, his estate) shall be entitled to receive the Standard Termination Entitlements and the Additional Termination Entitlements that would have been payable if a Change of Control had occurred on the date of his termination of employment and he had resigned with Good Reason immediately thereafter; provided, that payment shall be deferred without interest until, and shall be payable immediately upon, the actual occurrence of a Change of Control.

          (d) Notwithstanding anything in this Agreement to the contrary: (i) in the event of the Executive’s resignation within sixty (60) days after the occurrence of a Change of Control, he shall be entitled to receive the Standard Termination Entitlements and Additional Termination Entitlements that would be payable if his resignation were a resignation for Good Reason, without regard to the actual circumstances of his resignation; and (ii) for a period of one (1) year after the occurrence of a Change of Control, no discharge of the Executive shall be deemed a discharge with Cause unless the votes contemplated by section 11(a) of this Agreement are supported by at least two-thirds of the members of the Board at the time the vote is taken who were also members of the Board immediately prior to the Change of Control.

          (e) Notwithstanding anything in this Agreement to the contrary, for purposes of computing the Additional Termination Entitlements due upon a termination of employment that occurs, or is deemed to have occurred, after a Change of Control, the Remaining Unexpired Employment Period shall be deemed to be three (3) full years.

          Section 16. Covenant Not To Compete.

          The Executive hereby covenants and agrees that, in the event of his termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one year following the date of his termination of employment with the Bank, he shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working within any city or county in the State of New Jersey or any other county in which the Company or the Bank maintains an office (“Competitive Market”); provided, however, that this section 16 shall not apply if the Executive is entitled to the Additional Termination Entitlements.

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EXHIBIT 10.26

          Section 17. Confidentiality.

          Unless he obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of himself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of his employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 17 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

          Section 18. Solicitation.

          The Executive hereby covenants and agrees that, for a period of one year following his termination of employment with the Bank, he shall not, without the written consent of the Company and the Bank, either directly or indirectly:

          (a) solicit, offer employment to, or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any of their respective subsidiaries or affiliates to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits or making loans, that conducts business within the Competitive Market;

          (b) provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits, or making loans, that conducts business within the Competitive Market, that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing such officer to terminate his employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to such other entity;

          (c) solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company to terminate an existing business or commercial relationship with the Company.

          Section 19. No Effect on Employee Benefit Plans or Programs.

          The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time; provided, however, that nothing in this Agreement shall be deemed to duplicate any compensation or benefits provided under any agreement, plan or program covering the Executive to which the Bank is a party and any duplicative amount payable under any such agreement, plan or program shall be applied as an offset to reduce the amounts otherwise payable hereunder.

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EXHIBIT 10.26

          Section 20. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the Executive, his legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations hereunder at least 60 days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

          Section 21. Notices.

          Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

          If to the Executive:

440 Hillcrest Road
Ridgewood, New Jersey 07450

          If to the Bank:

Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473

Attention: Chairman, Human Resources Committee

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center
New York, New York 10281

Attention: W. Edward Bright, Esq.

          Section 22. Indemnification for Attorneys’ Fees.

          The Bank shall indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees and expenses, incurred by him in connection with or arising out of any action, suit or proceeding (including any tax controversy) in which he may be involved, as a result of his efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to

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EXHIBIT 10.26

indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise.

          Section 23. Severability.

          A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

          Section 24. Waiver.

          Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

          Section 25. Counterparts.

          This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

          Section 26. Governing Law.

          Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts entered into and to be performed entirely within the State of New Jersey. The federal and state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of this Agreement or in any way relating to the rights or obligations of any person under, or the acts or omissions of the Bank, the Board or any duly authorized person acting on their behalf in relation to the Agreement. By executing this Agreement, the Executive, for himself and any other person claiming any rights under the Agreement through him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 27. Headings and Construction.

          The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

          Section 28. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements (including, without limitation, the Prior Agreement), understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto.

          Section 29. Non-Duplication.

          In the event that the Executive shall perform services for the Company or any other direct or indirect subsidiary or affiliate of the Company or the Bank, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Bank hereunder, it

Page 16 of 19

EXHIBIT 10.26

being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Bank, the Company and all of their respective direct or indirect subsidiaries and affiliates.

          Section 30. Relative Obligations of the Bank and the Company.

          If the Executive performs services for both the Bank and the Company, any entitlement of the Executive to severance compensation and other termination benefits under this Agreement shall be determined on the basis of the aggregate compensation payable to the Executive by the Bank and the Company, and liability therefor shall be apportioned between the Bank and the Company in the same manner as compensation paid to the Executive for services to each of them.

          Section 31. Required Regulatory Provisions.

          The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

          (a) Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive under section 12 hereof (exclusive of amounts described in section 9(a) and exclusive of amounts described in sections 12(b)(vi) and 12(b)(vii) to the extent such amounts are attributable to stock options, stock appreciation rights and/or shares that are vested on the date of the Executive’s termination of employment, without regard to any actual or deemed acceleration triggered by such termination) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to his termination of employment with the Bank (or for his entire period of employment with the Bank if less than five calendar years).

          (b) Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(k), and any regulations promulgated thereunder and Federal Deposit Insurance Corporation regulation 12 CFR Part 359, Golden Parachute and Indemnification Payments.

          (c) Notwithstanding anything herein contained to the contrary, if the Executive is suspended and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(3) or 1818(g)(1)), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

          (d) Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818(e)(4) or (g)(1)), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the Bank and the Executive shall not be affected.

          (e) Notwithstanding anything herein contained to the contrary, if the Bank is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act), all obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights of the Bank and the Executive shall not be affected.

Page 17 of 19

EXHIBIT 10.26

          (f) Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Director of the Office of Thrift Supervision (“OTS”) or his or her designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director of the OTS or his or her designee at the time such Director or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Director to be in an unsafe or unsound condition.

The vested rights of the parties shall not be affected. If and to the extent that any of the foregoing provisions is not, or shall cease to be, required by applicable law, rule or regulation, the same shall became inoperative in the case of the Bank as though eliminated by formal amendment of this Agreement.

Page 18 of 19

EXHIBIT 10.26

          IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to be executed and the Executive has hereunto set his hand, all as of the day and year first above written.

		Denis J. Salamone
		Hudson City Savings Bank
Attest:
By		By
	Veronica Olszewski		Ronald E. Hermance Jr.
	Senior Vice President and Corporate		Chairman of the Board of Directors,
	Secretary		President and Chief Executive Officer
[Seal]

Page 19 of 19

EX-10.27

EXHIBIT 10.27

Executive Officer Annual Incentive Plan

of

Hudson City Bancorp, Inc.

Adopted on January 18, 2005
Effective as of January 1, 2005

TABLE OF CONTENTS

		Page
	Article I
	Plan Objectives
Section 1.1	Purpose	1
	Article II
	Plan Duration
Section 2.1	Term	1
	Article III
	Definitions
Section 3.1	Bank	1
Section 3.2	Base Salary	1
Section 3.3	Board	1
Section 3.4	Change of Control	1
Section 3.5	Code	3
Section 3.6	Company	3
Section 3.7	Company and the Bank	3
Section 3.8	Corporate Performance Objectives	3
Section 3.9	Committee	3
Section 3.10	Disabled	3
Section 3.11	Discharge for Cause	3
Section 3.12	Effective Date	4
Section 3.13	Employee	4
Section 3.14	ERISA	4
Section 3.14	Exchange Act	4
Section 3.15	GAAP	4
Section 3.16	Participant	4
Section 3.17	Plan	4
Section 3.18	Plan Year	4
Section 3.19	Retires	4
Section 3.20	Section 162(m) Employee	4

i

Table of Contents
(continued)

		Page
Section 3.21	Taxable Year		4
	Article IV
	Eligibility and Participation
Section 4.1	Eligibility		5
Section 4.2	Participation		5
Section 4.3	Termination of Employment		5
Section 4.4	Change of Control		5
Section 4.5	Other Terminations		5
Section 4.6	Prorated Awards		5
	Article V
	Award Opportunity
Section 5.1	Awards		6
Section 5.2	Award Matrix		6
	Article VI
	Establishment of Corporate Performance Objectives
Section 6.1	Performance Objectives		6
Section 6.2	Award Matrix		8
Section 6.3	Adjustments		8
Section 6.4	Negative Discretion		8
	Article VII
	Determination and Payment of Awards
Section 7.1	Certification of Corporate Performance Objectives		9
Section 7.2	Deferral of Awards		9
	Article VIII
	Maximum Award
Section 8.1	Maximum Award		9

ii

Table of Contents
(continued)

		Page
	Article IX
	Administration
Section 9.1	Committee		9
Section 9.2	Committee Action		9
Section 9.3	Committee Responsibilities		10
	Article X
	Amendment and Termination
Section 10.1	Amendment		10
Section 10.2	Termination		10
	Article XI
	Miscellaneous
Section 11.1	No Right to Continued Employment		10
Section 11.2	Non-Alienation of Benefits		10
Section 11.3	No Effect Prior to Shareholder Approval		11
Section 11.4	Status of Plan Under ERISA		11
Section 11.5	Construction and Language		11
Section 11.6	Governing Law		11
Section 11.7	Headings		11
Section 11.8	Withholding		11
Section 11.9	Notices		12
Section 11.10	Indemnification		12
Section 11.11	Severability		12
Section 11.12	Waiver		12
Section 11.13	No Deposit Account		12
Section 11.14	Successors and Assigns		12
Section 11.15	Required Provisions		13

iii

Executive Officer Annual Incentive Plan
of
Hudson City Bancorp, Inc.

Article I

Plan Objectives

          Section 1.1 Purpose. The purpose of the Plan is to achieve the following objectives: (i) to promote the achievement of Hudson City Bancorp, Inc.’s and Hudson City Savings Bank’s performance objectives; (ii) to link executive compensation to specific corporate performance objectives; (iii) to provide a competitive reward structure for executive management; and (iv) to encourage involvement in and communication regarding Hudson City Bancorp, Inc.’s and Hudson City Savings Bank’s strategic plans and objectives.

Article II

Plan Duration

          Section 2.1 Term. The Plan shall be effective for five consecutive Plan Years beginning on the Effective Date and ending on December 31, 2009.

Article III

Definitions

     The following definitions shall apply for purposes of this Plan unless a different meaning is clearly indicated by the context:

          Section 3.1 “Bank” means Hudson City Savings Bank, a federally chartered savings association, and any successor thereto.

          Section 3.2 “Base Salary” means, for any Participant for a Plan Year, such Participant’s annual rate of base salary as of January 1 of the Plan Year.

          Section 3.3 “Board” means the Board of Directors of the Company.

          Section 3.4 “Change of Control” means any of the following events:

     (a) the consummation of a reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

     (i) at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by

persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(ii) at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities entitled to vote generally in the election of directors of the Company;

     (b) the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

     (c) a complete liquidation or dissolution of the Company;

     (d) the occurrence of any event if, immediately following such event, at least 50% of the members of the Board of Directors of Hudson City Bancorp, Inc. do not belong to any of the following groups:

     (i) individuals who were members of the Board of Directors of Hudson City Bancorp, Inc. on January 1, 2005; or

     (ii) individuals who first became members of the Board of Directors of Hudson City Bancorp, Inc. after January 1, 2005 either:

     (A) upon election to serve as a member of the Board of Directors of Hudson City Bancorp, Inc. by affirmative vote of three-quarters of the members of such board, or of a nominating committee thereof, in office at the time of such first election; or

     (B) upon election by the shareholders of the Company to serve as a member of such board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board of Directors of Hudson City Bancorp, Inc., or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation

2

14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board of Directors of Hudson City Bancorp, Inc.; or

     (e) any event which would be described in section 3.4(a), (b), (c) or (d) if the term “Bank” were substituted for the terms “Company” or “Hudson City Bancorp, Inc.” therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or a subsidiary of either of them, by the Company, the Bank, or any subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this section 3.4, the term “person” shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          Section 3.5 “Code” means the Internal Revenue Code of 1986, including the corresponding provisions of any succeeding law.

          Section 3.6 “Company” means Hudson City Bancorp, Inc., a Delaware corporation, and any successor thereto.

          Section 3.7 “Company and the Bank” means the Company, together with any other organization that is required to be considered, along with the Company, a single entity for purposes of consolidated financial reporting under GAAP.

          Section 3.8 “Corporate Performance Objectives” means for any Plan Year those objective performance objectives selected and established by the Committee in accordance with the requirements of Article VI of the Plan.

          Section 3.9 “Committee” means a committee consisting of those members of the Compensation Committee of the Company whom are outside directors as defined in section 162(m) of the Code or such other committee consisting of outside directors as defined in section 162(m) of the Code as the Board may appoint to serve as the Committee. The Committee shall at all times consist of at least two members who are outside directors as defined in section 162(m) of the Code.

          Section 3.10 “Disabled” means, with respect to any Participant, suffering from a mental or physical condition of total incapacity which the Committee shall have determined, on the basis of competent medical evidence, is likely to be permanent and precludes further performance of duty with the Company and the Bank.

          Section 3.11 “Discharge for Cause” means the termination upon the finding of the Committee of an intentional failure to perform stated duties, breach of a fiduciary duty involving personal dishonesty which results in material loss to the Company, the Bank or one of their affiliates, or willful violation of any law, rule or regulation, (other than traffic violations or similar offenses), or final cease-and-desist order which results in material loss to the Company, the Bank or one of their affiliates.

3

          Section 3.12 “Effective Date” means January 1, 2005, subject to approval by the Company’s shareholders at the meeting of shareholders on May 27, 2005, or any adjournment or postponement thereof.

          Section 3.13 “Employee” means any individual employed by the Company or the Bank as an employee, but does not mean an individual who renders service solely as a director or independent contractor.

          Section 3.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

          Section 3.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including the corresponding provisions of any succeeding law.

          Section 3.16 “GAAP” means generally accepted accounting principles, as amended from time to time and applied in preparing the financial statements of the Company and the Bank.

          Section 3.17 “Participant” means an Employee who is selected by the Committee as eligible to participate in the Plan for a Plan Year.

          Section 3.18 “Plan” means the Executive Officer Annual Incentive Plan of Hudson City Bancorp, Inc.

          Section 3.19 “Plan Year” means the calendar year.

          Section 3.20 “Retires” means, with respect to any Employee, terminates employment at a time when the Employee is eligible to receive a benefit based upon his retirement or early retirement as set forth in any tax-qualified retirement or pension plan of the Company or the Bank.

          Section 3.21 “Section 162(m) Employee” means at any date (i) any individual who, with respect to the previous taxable year of the Company, was a “covered employee” of the Company within the meaning of section 162(m) of the Code, as hereinafter defined; provided, however, that the term “Section 162(m) Employee” shall not include any such individual who is designated by the Committee, in its discretion, at the time of any Award or at any subsequent time, as reasonably expected not to be such a “covered employee” with respect to the current taxable year of the Company and (ii) any individual who is designated by the Committee, in its discretion, at the time of any Award or at any subsequent time, as reasonably expected to be such a “covered employee” with respect to the current taxable year of the Company or with respect to the taxable year of the Company in which any applicable Award will be paid.

          Section 3.22 “Taxable Year” means the taxable year of the Company for federal income tax purposes.

4

Article IV

Eligibility And Participation

          Section 4.1 Eligibility. The Committee shall annually select the individual Employees, if any, eligible for participation in the Plan. Eligibility shall be limited to top executive-level Employees whose functional responsibility includes the establishment of strategic direction and long-range plans for the Company and the Bank, including, but not limited to, the Chief Executive Officer, Chief Operating Officer, Senior Executive Vice Presidents, Executive Vice Presidents and Senior Vice Presidents.

          Section 4.2 Participation. An Employee who holds or assumes an eligible position shall not be a Participant for any Plan Year unless selected by the Committee to participate in the Plan for the Plan Year. An Employee who is hired, transferred or promoted into an eligible position during a Plan Year and selected to participate in the Plan for that Plan Year shall receive a prorated award for that Plan Year. In no event shall a person who is a Section 162(m) Employee be added to the Plan for any Plan Year after the close of the eighth month of the Plan Year.

          Section 4.3 Termination of Employment. In general, a Participant must be employed by the Company and/or the Bank on the last day of the Plan Year to receive an award. A Participant who Retires, dies or becomes Disabled during a Plan Year shall receive a prorated award for that Plan Year. In these circumstances, the amount of any prorated award shall be calculated and paid after the end of the Plan Year on the basis of the level of attainment of the established performance goals for the entire Plan Year.

          Section 4.4 Change of Control. A Participant who terminates employment with the Company and the Bank on or after the effective date of a Change of Control shall be eligible for a prorated award, provided that his termination was not a Discharge for Cause. In these circumstances, the amount of any prorated award shall be calculated and paid at or as soon as practicable following termination of employment on the basis of the level of attainment of the established performance goals for the portion of the Plan Year preceding the Change of Control, annualized to project full-year performance.

          Section 4.5 Other Terminations. The Committee shall have the authority to determine whether a Participant who otherwise ceases employment prior to the end of a Plan Year is eligible to receive a prorated award for that Plan Year; provided, however, that following the occurrence of a Change of Control, the Committee may not exercise its authority to deny a prorated award to any Participant whose termination of employment is not a Discharge for Cause.

          Section 4.6 Prorated Awards. Prorated awards shall be calculated by dividing the applicable annual award by twelve and multiplying the result by the number of months of the Participant’s service during the Plan Year, rounded to the next highest whole month.

5

Article V

Award Opportunity

          Section 5.1 Awards. The Committee shall provide an award opportunity to Participants who assist the Company and the Bank in achieving certain Corporate Performance Objectives for a Plan Year. The award opportunity for each Plan Year shall be a percentage of each Participant’s Base Salary for the Plan Year. The amount of a Participant’s award, if any, shall be based on the degree to which the Company and the Bank achieve their Corporate Performance Objectives.

          Section 5.2 Award Opportunity Level. The Committee recognizes that the level of control and influence a Participant has over the achievement of Corporate Performance Objectives is influenced by the Participant’s level of responsibility. As such, the Committee shall establish annually, as provided below, a matrix which shall establish for each Participant the award opportunity for such Participant if the Company and the Bank achieve their target Corporate Performance Objectives. The matrix may also include enhanced or reduced award opportunity levels for such Participant if the Company and the Bank achieve at a level above or below the target Corporate Performance Objectives.

Article VI

Establishment Of Corporate Performance Objectives

          Section 6.1 Performance Objectives.

     (a) As soon as practicable, but in any event within the first ninety (90) days of each Plan Year, the Committee shall establish specific Corporate Performance Objectives for the Company and the Bank, including target levels and, if deemed appropriate by the Committee, one or more enhanced or reduced award opportunity levels associated with each Corporate Performance Objective. If the Committee adds a Participant to the Plan for a Plan Year after initially establishing the award opportunities and Corporate Performance Objectives for the Plan Year, it shall establish the award opportunities and Corporate Performance Objectives applicable to the new Participant within 30 days after adding the Participant to the Plan. The Corporate Performance Objectives for a Plan Year shall be based on one or more of the following criteria:

     (i) Basic earnings per common share,

     (ii) Basic cash earnings per common share,

     (iii) Diluted earnings per common share,

     (iv) Diluted cash earnings per common share,

     (v) Net income,

     (vi) Cash earnings,

6

     (vii) Net interest income,

     (viii) Non-interest income,

     (ix) General and administrative expense to average assets ratio,

     (x) Cash general and administrative expense to average assets ratio,

     (xi) Efficiency ratio,

     (xii) Cash efficiency ratio,

     (xiii) Return on average assets,

     (xiv) Cash return on average assets,

     (xv) Return on average stockholders’ equity,

     (xvi) Cash return on average stockholders’ equity,

     (xvii) Return on average tangible stockholders’ equity,

     (xviii) Cash return on average tangible stockholders’ equity,

     (xix) Core earnings,

     (xx) Operating income,

     (xxi) Operating efficiency ratio,

     (xxii) Net interest rate spread,

     (xxiii) Loan production volume,

     (xxiv) Non-performing loans,

     (xxv) Cash flow,

     (xxvi) Strategic business objectives, consisting of one or more objectives based upon meeting specified cost targets, business expansion goals, and goals relating to acquisitions or divestitures, or goals relating to capital raising and capital management,

     (xxvii) Any combination of the foregoing.

The Corporate Performance Objectives may be expressed on an absolute and/or relative basis, or a before- or after-tax basis, may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company and/or the past or current performance of other companies and may include or exclude any or all extraordinary or non-recurring items.

7

     (b) Those Corporate Performance Objectives which have meanings ascribed to them by GAAP shall have the meanings assigned to them under GAAP as in effect and applied to the Company and the Bank on the date on which the Corporate Performance Objectives are established, without giving effect to any subsequent changes in GAAP, unless the Committee specifically provides otherwise when it establishes the Corporate Performance Objectives. Corporate Performance Objectives based upon cash earnings or cash returns shall refer to or be calculated based upon net income adjusted to exclude non-cash charges for goodwill amortization and non-cash amortization expenses relating to employee stock ownership plans and restricted stock plans and (if applicable) related tax benefits. Corporate Performance Objectives based upon cash general and administrative expenses shall refer to general and administrative expenses, calculated in accordance with GAAP, adjusted to eliminate non-cash charges for goodwill amortization and non-cash amortization expenses relating to employee stock ownership plans and restricted stock plans and (if applicable) related tax benefits.

          Section 6.2 Award Matrix. The Committee shall assign a percentage weight to each Corporate Performance Objective for each Plan Year. The weight assigned to any one or more Corporate Performance Objectives may be zero, but the aggregate weight assigned to all Corporate Performance Objectives shall equal 100%. The Committee may assign different weightings to Corporate Performance Objectives for each Participant or classes of Participants. The Committee shall establish a matrix which shall set forth the Corporate Performance Objectives, the target and other applicable performance levels with respect thereto, the weighting of such Corporate Performance Objectives, if any, and the corresponding award opportunity for each Participant.

          Section 6.3 Adjustments. Under normal business conditions, once established for a Plan Year as provided herein, Corporate Performance Objectives shall not be subject to revision or alteration. However, unusual conditions may warrant a reexamination of such criteria. Such conditions may include, but not be limited to, a Change of Control, declaration and distribution of stock dividends or stock splits, mergers, consolidation or reorganizations, acquisitions or dispositions of material business units, or infrequently occurring or extraordinary gains or losses. In the event the Committee determines that, upon reexamination, alteration of the Corporate Performance Objectives is appropriate, the Committee shall reestablish the Corporate Performance Objectives to maintain as closely as possible the previously established expected level of overall performance of the Participants, taken as a whole, as is practicable. Notwithstanding the foregoing, any adjustments to the award opportunities or Corporate Performance Objectives applicable to a Section 162(m) Employee for a Plan Year shall conform to the requirements of section 162(m) of the Code and the regulations promulgated pursuant thereto.

          Section 6.4 Negative Discretion. The Committee may, in its sole discretion, determine to adjust the amount of an award computed by applying the award matrix contemplated by section 6.2 for any or all Participants if it determines that prevailing circumstances (including but not limited to, the subjective appraisal of the Participant’s performance for the Plan Year) warrant; provided, however, that in the case of Section 162(m) Employees, any such adjustment shall result in a reduced payment.

8

Article VII

Determination And Payment Of Awards

          Section 7.1 Certification of Corporate Performance Objectives. As promptly as practicable, but in any event within 75 days after the end of each Plan Year, the Committee shall certify the performance of the Company and the Bank relative to the Corporate Performance Objectives established for Participants. Each Participant’s award shall be determined by multiplying the Participant’s Base Salary earned during the applicable Plan Year by the percentage set forth in the matrix established pursuant to sections 6.2 and 6.3 of the Plan, as possibly adjusted down, but not up, for such subjective factors as the Committee deems appropriate, including, but not limited to, whether the Participant’s overall individual performance met expectations. Awards under the Plan shall be paid in cash, subject to applicable withholding taxes, as soon as practicable following the end of the Plan Year but in no event later than March 15 of the year immediately following the Plan Year.

          Section 7.2 Deferral of Awards. In lieu of receiving a cash payment in respect of Awards payable under the Plan, Participants may elect to defer Awards pursuant to the terms of the Officers’ Deferred Compensation Plan of Hudson City Bancorp, Inc. if such plan is adopted and in effect.

Article VIII

Maximum Award

          Section 8.1 Maximum Award. The maximum award that may be paid to any Participant for any Plan Year shall be Three Million Dollars ($3,000,000).

Article IX

Administration

          Section 9.1 Committee. The Plan shall be administered by the Committee.

          Section 9.2 Committee Action. The Committee shall hold such meetings, and may make such administrative rules and regulations, as it may deem proper. A majority of the members of the Committee shall constitute a quorum, and the action of a majority of the members of the Committee present at a meeting at which a quorum is present, as well as actions taken pursuant to the unanimous written consent of all of the members of the Committee without holding a meeting, shall be deemed to be actions of the Committee. All actions of the Committee shall be final and conclusive and shall be binding upon the Company and all other interested parties. Any person dealing with the Committee shall be fully protected in relying upon any written notice, instruction, direction or other communication signed by the Secretary of the Committee and one member of the Committee, by two members of the Committee or by a representative of the Committee authorized to sign the same in its behalf.

9

          Section 9.3 Committee Responsibilities. Subject to the terms and conditions of the Plan and such limitations as may be imposed by the Board, the Committee shall be responsible for the overall management and administration of the Plan and shall have such authority as shall be necessary or appropriate in order to carry out its responsibilities, including, without limitation, the authority:

     (a) to interpret and construe the Plan, and to determine all questions that may arise under the Plan as to eligibility for participation in the Plan;

     (b) to adopt rules and regulations for the operation and administration of the Plan; and

     (c) to take any other action not inconsistent with the provisions of the Plan that it may deem necessary or appropriate.

Article X

Amendment And Termination

          Section 10.1 Amendment. The Board may amend or revise the Plan in whole or in part at any time; provided, however, that to the extent required to comply with section 162(m) of the Code, no such amendment or revision shall be effective if it amends a material term of the Plan unless approved by a majority of the votes cast on a proposal to approve such amendment or revision.

          Section 10.2 Termination. The Board may suspend or terminate the Plan in whole or in part at any time by giving written notice of such suspension or termination to the Committee.

Article XI

Miscellaneous

          Section 11.1 No Right to Continued Employment. Neither the establishment of the Plan nor any provisions of the Plan nor any action of the Board or the Committee with respect to the Plan shall be held or construed to confer upon any Participant any right to continuation of his or her position as an Employee. The Company and the Bank reserve the right to dismiss any Participant or otherwise deal with any Participant to the same extent as though the Plan had not been adopted.

          Section 11.2 Non-Alienation of Benefits. Except as may otherwise be required by law, no distribution or payment under the Plan to any Participant, former Participant or beneficiary shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void; nor shall any such distribution or payment be in any way liable for or subject to the debts, contracts, liabilities, engagements or torts of any person entitled to such distribution or payment. If any

10

Participant, former Participant or beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any such distribution or payment, voluntarily or involuntarily, the Committee, in its sole discretion, may cancel such distribution or payment or may hold or cause to be held or applied to such distribution or payment, or any part thereof, to or for the benefit of such Participant, former Participant or beneficiary, in such manner as the Committee shall direct; provided, however, that no such action by the Committee shall cause the acceleration or deferral of any benefit payments from the date on which such payments are scheduled to be made.

          Section 11.3 No Effect Prior to Shareholder Approval. The Plan shall not be effective or implemented prior to approval by the holders of a majority of the total votes eligible to be cast at any duly called annual or special meeting of the Company.

          Section 11.4 Status of Plan Under ERISA. The Plan is intended to be a non-qualified incentive compensation program that is exempt from the regulatory requirements of the ERISA. The Plan is not intended to comply with the requirements of section 401(a) of the Code or to be subject to Parts 2, 3 and 4 of Title I of ERISA. The Plan shall be administered and construed so as to effectuate this intent.

          Section 11.5 Construction and Language. Wherever appropriate in the Plan, words used in the singular may be read in the plural, words used in the plural may be read in the singular, and the masculine gender may be read as referring equally to the feminine gender or the neuter.

          Section 11.6 Governing Law. The Plan shall be construed, administered and enforced according to the laws of the State of New Jersey, without giving effect to the conflict of laws principles thereof, except to the extent that such laws are preempted by federal law. The federal and state courts having jurisdiction in Bergen County, New Jersey shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan or in any way relating to the rights or obligations of any person under, or the acts or omissions of the Company, the Bank, the Board, the Committee or any duly authorized person acting in their behalf in relation to the Plan. By participating in this Plan, the Participant, for himself and any other person claiming any rights under the Plan through him, agrees to submit himself, and any such legal action described herein that he shall bring, to the sole jurisdiction of such courts for the adjudication and resolution of such disputes.

          Section 11.7 Headings. The headings of Articles and sections are included solely for convenience of reference. If there is any conflict between such headings and the text of the Plan, the text shall control.

          Section 11.8 Withholding. Payments from this Plan shall be subject to all applicable federal, state and local income withholding taxes. The Company, the Bank or the Committee shall have the right to require any person entitled to receive a payment under this Plan to pay the amount of any tax which is required to be withheld with respect to such payment, or, in lieu thereof, to deduct from the amount payable the amount required to be withheld.

11

          Section 11.9 Notices. Any communication required or permitted to be given under the Plan, including any notice, direction, designation, comment, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below, or at such other address as one such party may by written notice specify to the other party:

          (a) If to the Committee:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652
Attention: Corporate Secretary

     (b) If to a Participant, to the Participant’s address as shown in the Company and the Bank’s personnel records.

          Section 11.10 Indemnification. The Company shall indemnify, hold harmless and defend each Participant, former Participant and beneficiary, against their reasonable costs, including legal fees, incurred by them or arising out of any action, suit or proceeding in which they may be involved, as a result of their efforts, in good faith, to defend or enforce the obligations of the Company and the Bank under the terms of the Plan.

          Section 11.11 Severability. A determination that any provision of the Plan is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

          Section 11.12 Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions of the Plan shall not be deemed a waiver of such term, covenant or condition. A waiver of any provision of the Plan must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

          Section 11.13 No Deposit Account. Nothing in this Plan shall be held or construed to establish any deposit account for any Participant or any deposit liability on the part of the Company or the Bank.Participants’ rights hereunder shall be equivalent to those of a general unsecured creditor of the Company and the Bank.

          Section 11.14 Successors and Assigns. The provisions of the Plan will inure to the benefit of and be binding upon the Participants and their respective legal representatives and testate or intestate distributes, and the Company and the Bank and their respective successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company or the Bank may be sold or otherwise transferred.

12

          Section 11.15 Required Provisions. The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Company and the Bank:

     (a) Notwithstanding anything herein contained to the contrary, in no event will the aggregate amount of compensation payable by the Bank to any person on account of his termination of employment exceed three times such person’s average annual total compensation for the last five consecutive calendar years to end prior to his termination of employment with the Company and the Bank or for his entire period of employment with the Company and the Bank and their respective predecessors, if less than five calendar years.

     (b) Notwithstanding anything herein contained to the contrary, any payments pursuant to this Plan, are subject to and conditioned upon their compliance with section 1828(k) of the Federal Deposit Insurance Act and any regulations promulgated thereunder and Federal Deposit Insurance Corporation regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.

     (c) Notwithstanding anything herein contained to the contrary, if any Participant is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, the Bank’s obligations under this Plan shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Participant all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

     (d) Notwithstanding anything herein contained to the contrary, if the Participant is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, all prospective obligations of the Bank under this Plan shall terminate as of the effective date of the order, but vested rights and obligations of the Bank and the Participant shall not be affected.

     (e) Notwithstanding anything herein contained to the contrary, if the Bank is in default, within the meaning of section 3(x)(1) of the Federal Deposit Insurance Act, all prospective obligations of the Bank under this Plan shall terminate as of the date of default, but vested rights and obligations of the Bank and the Participant shall not be affected.

13

     (f) Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a continuation of this Plan is necessary for the continued operation of the Bank: (i) by the Director of the Office of Thrift Supervision or his designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance Act; or (ii) by the Director of the Office of Thrift Supervision or his designee at the time such Director or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Director to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions is not or shall cease to be required by applicable law, rule or regulation, the same shall become inoperative automatically as though eliminated by formal amendment of the Plan. Any of the foregoing provisions which, by their terms, apply only to the Bank shall not affect the rights and obligations of the Company.

14

EX-10.28

EXHIBIT 10.28

Amended and Restated Loan Agreement

by and between

Employee Stock Ownership Plan Trust
of
Hudson City Savings Bank

and

Hudson City Bancorp, Inc.

Made and Entered Into as of
June 21, 2005

EXHIBIT 10.28

TABLE OF CONTENTS

		Page
	ARTICLE I
	DEFINITIONS
Section 1.1	Amended and Restated Pledge Agreement	2
Section 1.2	Amended and Restated Promissory Note	2
Section 1.3	Business Day	2
Section 1.4	Code	2
Section 1.5	Default	2
Section 1.6	ERISA	2
Section 1.7	Event of Default	2
Section 1.8	Fiscal Year	2
Section 1.9	Independent Counsel	2
Section 1.10	Loan	2
Section 1.11	Loan Documents	3
Section 1.12	Principal Amount	3
Section 1.13	Register	3
	ARTICLE II
	THE LOAN; PRINCIPAL AMOUNT; INTEREST;
	SECURITY INDEMNIFICATION
Section 2.1	The Loan; Principal Amount	3
Section 2.2	Interest	3
Section 2.3	Promissory Note	4
Section 2.4	Payment of Trust Loan	4
Section 2.5	Prepayment	6
Section 2.6	Method of Payments	6
Section 2.7	Security	7
Section 2.8	Registration of the Promissory Note	8
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 3.1	Power; Authority; Consents	8
Section 3.2	Due Execution; Validity; Enforceability	8
Section 3.3	Properties; Priority of Liens	8
Section 3.4	No Defaults; Compliance with Laws	9
Section 3.5	Purchases of Common Stock	9

i
 

EXHIBIT 10.28

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF THE LENDER
Section 4.1	Power; Authority; Consents	9
Section 4.2	Due Execution; Validity; Enforceability	9
Section 4.3	ESOP; Contributions	9
Section 4.4	Trustee; Committee	10
Section 4.5	Compliance with Laws; Actions	10
	ARTICLE V
	EVENTS OF DEFAULT
Section 5.1	Events of Default under Loan Agreement	10
Section 5.2	Lender’s Rights upon Event of Default	11
	ARTICLE VI
	MISCELLANEOUS PROVISIONS
Section 6.1	Payments Due to the Lender	12
Section 6.2	Payments	11
Section 6.3	Survival	12
Section 6.4	Modifications, Consents and Waivers; Entire Agreement	12
Section 6.5	Remedies Cumulative	13
Section 6.6	Further Assurances; Compliance with Covenants	12
Section 6.7	Notices	13
Section 6.8	Counterparts	14
Section 6.9	Construction; Governing Law	14
Section 6.10	Severability	14
Section 6.11	Binding Effect; No Assignment or Delegation	15
EXHIBIT A Form of Amended and Restated Promissory Note		A1
EXHIBIT B Form of Amended and Restated Pledge Agreement		B1
EXHIBIT C Form of Amended and Restated Assignment		C1

ii
 

Amended and Restated Loan Agreement

          This Amended and Restated Loan Agreement (“Amended and Restated Loan Agreement”) is made and entered into as of the 21^st day of June, 2005, by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), a trust forming part of the Employee Stock Ownership Plan of Hudson City Savings Bank (“ESOP”), acting through and by its Trustee, GreatBanc Trust Company (“Trustee”), a trust corporation organized under the laws of the state of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York, 10111-2000; and Hudson City Bancorp, Inc. (“Lender”), a corporation organized and existing under the laws of the state of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473.

W I T N E S S E T H:

          Whereas, the Borrower and the Lender are parties to the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999 (“First Loan Agreement”), pursuant to which the Lender agreed to loan the Borrower certain amounts to purchase shares of common stock of Hudson City Bancorp, Inc. (“Common Stock”) pursuant to the terms set forth in the First Loan Agreement;

          Whereas, pursuant to the First Loan Agreement, the Borrower borrowed $58,645,380 from the Lender (“First Loan”) and used the proceeds of the First Loan to purchase 27,879,376 shares of Common Stock (based on a 2 to 1 stock split effected in June 2002 and a 3.2060 to 1 stock split effected in June 2005);

          Whereas, under the First Loan, a total of 22,303,450 shares of Common Stock are scheduled to be released for allocation to participants in the ESOP during the years 2005 through 2028, with a final allocation of 464,716 shares of Common Stock in 2029;

          Whereas, the Compensation Committee of the Lender (“Committee”) has authorized the Borrower to purchase additional shares of Common Stock, either directly from Hudson City Bancorp, Inc. or in open market purchases in an amount not to exceed 15,719,223 of the shares of Common Stock issued in connection with the transactions effected pursuant to the Plan of Conversion and Reorganization adopted by Hudson City Savings Bank on December 16, 2004, as amended (the “Reorganization”);

          Whereas, the Committee has further authorized the Borrower to borrow funds from the Lender for the purpose of financing authorized purchases of Common Stock (“Second Loan”); and

          Whereas, the Lender is willing to make the Second Loan to the Borrower for such purpose pursuant to the terms of the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., dated as of the date hereof (the “Second Loan Agreement”) subject to the conditions that (i) the First Loan Agreement be amended and restated in accordance with the terms hereinafter set forth and (ii) the Promissory Note and Pledge Agreement entered into by the Borrower and the Lender on the

EXHIBIT 10.28

date of, and in connection with, the First Loan Agreement, be amended and restated to reflect the terms of this Amended and Restated Loan Agreement.

          Now, Therefore, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          The following definitions shall apply for purposes of this Amended and Restated Loan Agreement, except to the extent that a different meaning is plainly indicated by the context:

          Section 1.1 Amended and Restated Pledge Agreement means the agreement described in Section 2.7(a).

          Section 1.2 Amended and Restated Promissory Note means the promissory note described in Section 2.3.

          Section 1.3 Business Day means any day other than a Saturday, Sunday or other day on which banks are authorized or required to close under federal law or the laws of the State of New Jersey.

          Section 1.4 Code means the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

          Section 1.5 Default means an event or condition which would constitute an Event of Default. The determination as to whether an event or condition would constitute an Event of Default shall be determined without regard to any applicable requirement of notice or lapse of time.

          Section 1.6 ERISA means the Employee Retirement Income Security Act of 1974, as amended (including the corresponding provisions of any succeeding law).

          Section 1.7 Event of Default means an event or condition described in Article V.

          Section 1.8 Fiscal Year means the fiscal year of Hudson City Bancorp, Inc.

          Section 1.9 Independent Counsel means Thacher Proffitt & Wood llp or other counsel mutually satisfactory to both the Lender and the Borrower.

          Section 1.10 Loan means the loan described in section 2.1.

          Section 1.11 Loan Documents means, collectively, this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement and all other documents now or hereafter executed and delivered in connection with such documents, including all amendments, modifications and supplements of or to all such documents.

2

EXHIBIT 10.28

          Section 1.12 Principal Amount means the face amount of the Amended and Restated Promissory Note, determined as set forth in section 2.1(b).

          Section 1.13 Register means the register described in section 2.8.

ARTICLE II

THE LOAN; PRINCIPAL AMOUNT;
INTEREST; SECURITY INDEMNIFICATION

               Section 2.1 The Loan; Principal Amount.

          (a) The Lender hereby agrees to extend the term of the First Loan such that payments on the Principal Amount shall be made in accordance with section 2.4.

          (b) For all purposes of this Amended and Restated Loan Agreement, the Principal Amount on any date shall be equal to the excess, if any, of:

     (i) $58,645,380; over

     (ii) the aggregate amount of any repayments of such amount made before such date.

The Lender shall remain on the Register a record of, and shall record on the Amended and Restated Promissory Note, the Principal Amount, any changes in the Principal Amount and the effective date of any changes in the Principal Amount.

               Section 2.2 Interest.

          (a) The Borrower shall pay to the Lender interest on the Principal Amount, for the period commencing on the date of this Amended and Restated Loan Agreement and continuing until the Principal Amount shall be paid in full, at the rate of five percent (5.00%) per annum. Interest payable under this Agreement shall be computed on the basis of a year of 360 days and months consisting of 30 days each and actual days elapsed (including the first day but excluding the last) occurring in the period to which the computation relates.

          (b) Except as otherwise provided in this section 2.2(b), accrued interest on the Principal Amount shall be payable by the Borrower quarterly in arrears commencing on the last Business Day of the first calendar quarter to end following the date of this Amended and Restated Loan Agreement and continuing on the last Business Day of each calendar quarter thereafter and upon the payment or prepayment of the Loan. All interest on the Principal Amount shall be paid by the Borrower in immediately available funds. The Lender shall remit to the Borrower, at least three (3) Business Days before the end of each calendar quarter, a statement of the interest payment due under section 2.2(a) for such quarter; provided, however, that a delay or failure by the Lender in providing the Borrower with such statement shall not alter the Borrower’s obligation to make such payment.

3

EXHIBIT 10.28

          (c) Anything in this Amended and Restated Loan Agreement or the Amended and Restated Promissory Note to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payment referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

               Section 2.3 Promissory Note.

          The Loan shall be evidenced by an Amended and Restated Promissory Note of the Borrower in substantially the form of Exhibit A attached hereto, dated the date hereof, payable to the order of the Lender in the Principal Amount and otherwise duly completed.

               Section 2.4 Payment of Trust Loan.

          The Principal Amount of the Loan shall be repaid in annual installments payable on the last Business Day of each December ending after the date of this Agreement. The amount of each such annual installment shall be that portion of the lesser of (i) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Amended and Restated Pledge Agreement, of a cumulative fraction of the Collateral (within the meaning of the Amended and Restated Pledge Agreement and determined as of the last Business Day of December, 2005) equal to the percentage set forth in Column II below and (ii) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Amended and Restated Pledge Agreement, of Collateral (within the meaning of the Amended and Restated Pledge Agreement), valued as of the date of payment, and collateral released pursuant to the terms of the Second Loan, also valued as of the date of payment, having an aggregate value equal to twenty-five and three quarters percent (25.75%) of the compensation taken into account under the ESOP for each person entitled to share in such allocation:

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2005	2/80
2006	4/80
2007	6/80
2008	8/80
2009	10/80
2010	12/80
2011	14/80
2012	16/80

4

EXHIBIT 10.28

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2013	18/80
2014	20/80
2015	22/80
2016	24/80
2017	26/80
2018	28/80
2019	30/80
2020	32/80
2021	34/80
2022	36/80
2023	38/80
2024	40/80
2025	42/80
2026	44/80
2027	46/80
2028	48/80
2029	50/80
2030	52/80
2031	54/80
2032	56/80
2033	58/80
2034	60/80
2035	62/80
2036	64/80
2037	66/80
2038	68/80
2039	70/80
2040	72/80
2041	74/80
2042	76/80
2043	78/80
2044	80/80

provided, however, that the Borrower shall not be required to make any payment of principal due to be made in any Fiscal Year to the extent that such payment would not be deductible for federal income tax purposes for such Fiscal Year under Section 404 of the Code; provided further, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and under section 2.4(i) of the Second Loan Agreement in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Second Loan shall be

5

EXHIBIT 10.28

reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Amended and Restated Pledge Agreement and the Pledge Agreement relating to the Second Loan)), subject to the limitation set forth in clause (ii). Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes. Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last Business Day of December, 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

               Section 2.5 Prepayment.

          The Borrower shall be entitled to prepay the Loan in whole or in part, at any time and from time to time; provided, however, that the Borrower shall give notice to the Lender of any such prepayment. Any such prepayment shall be: (a) permanent and irrevocable; (b) accompanied by all accrued interest through the date of such prepayment; (c) made without premium or penalty; and (d) applied first to the installment of principal due and payable in the Fiscal Year in which the prepayment is made and second in the order of the maturity of the remaining installments thereof unless the Lender and the Borrower agree to apply such prepayments in some other order.

               Section 2.6 Method of Payments.

          (a) All payments of principal, interest, other charges (including indemnities) and other amounts payable by the Borrower hereunder shall be made in lawful money of the United States, in immediately available funds, to the Lender at the address specified in or pursuant to this Amended and Restated Loan Agreement for notices to the Lender, not later than 3:00 P.M., Eastern Standard time, on the date on which such payment shall become due. Any such payment made on such date but after such time shall, if the amount paid bears interest, and except as expressly provided to the contrary herein, be deemed to have been made on, and interest shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any payment of principal or interest becomes due on a day other than a Business Day, such payment may be made on the next succeeding Business Day, and when paid, such payment shall include interest to the day on which such payment is in fact made.

          (b) Notwithstanding anything to the contrary contained in this Amended and Restated Loan Agreement or the Amended and Restated Promissory Note, neither the Borrower nor the Trustee shall be obligated to make any payment, repayment or prepayment on the Amended and Restated Promissory Note or take or refrain from taking any other action hereunder or under the Amended and Restated Promissory Note if doing so would cause the ESOP to cease to be an employee stock ownership plan within the meaning of section 4975(e)(7) of the Code or qualified under section 401(a) of the Code or cause the Borrower to cease to be a

6

EXHIBIT 10.28

tax exempt trust under section 501(a) of the Code or if such act or failure to act would cause the Borrower or the Trustee to engage in any “prohibited transaction” as such term is defined in section 4975(c) of the Code and the regulations promulgated thereunder which is not exempted by section 4975(c)(2) or (d) of the Code and the regulations promulgated thereunder or in section 406 of ERISA and the regulations promulgated thereunder which is not exempted by section 408(b) of ERISA and the regulations promulgated thereunder; provided, however, that in each case, the Borrower or the Trustee or both, as the case may be, may act or refrain from acting pursuant to this section 2.6(b) on the basis of an opinion of Independent Counsel. The Borrower and the Trustee may consult with Independent Counsel, and any opinion of such Independent Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such opinion of Independent Counsel. Nothing contained in this section 2.6(b) shall be construed as imposing a duty on either the Borrower or the Trustee to consult with Independent Counsel. Any obligation of the Borrower or the Trustee to make any payment, repayment or prepayment on the Amended and Restated Promissory Note or to take or refrain from taking any other act hereunder or under the Amended and Restated Promissory Note which is excused pursuant to this section 2.6(b) shall be considered a binding obligation of the Borrower or the Trustee, or both, as the case may be, for the purposes of determining whether a Default or Event of Default has occurred hereunder or under the Amended and Restated Promissory Note and nothing in this section 2.6(b) shall be construed as providing a defense to any remedies otherwise available upon a Default or an Event of Default hereunder (other than the remedy of specific performance).

               Section 2.7 Security.

          (a) In order to secure the due payment and performance by the Borrower of all of its obligations under this Amended and Restated Loan Agreement, simultaneously with the execution and delivery of this Amended and Restated Loan Agreement by the Borrower, the Borrower shall:

               (i) pledge to the Lender as Collateral (as defined in the Amended and Restated Pledge Agreement), and grant to the Lender a first priority lien on and security interest in, the Common Stock purchased with the Principal Amount, by the execution and delivery to the Lender of an Amended and Restated Pledge Agreement in the form attached hereto as Exhibit B; and

               (ii) execute and deliver, or cause to be executed and delivered, such other agreements, instruments and documents as the Lender may reasonably require in order to effect the purposes of the Amended and Restated Pledge Agreement and this Amended and Restated Loan Agreement, including, but not limited to, the Form of Amended and Restated Assignment in the form attached hereto as Exhibit C.

          (b) The Lender shall release from encumbrance under the Amended and Restated Pledge Agreement and transfer to the Borrower, as of the date on which any payment or prepayment of the Principal Amount is made, the number of shares of Common Stock held as Collateral determined pursuant to section 6.4 of the ESOP.

7

EXHIBIT 10.28

               Section 2.8 Registration of the Promissory Note.

          (a) The Lender shall maintain a Register providing for the registration of the Principal Amount and any stated interest and of transfer and exchange of the Amended and Restated Promissory Note. Transfer of the Amended and Restated Promissory Note may be effected only by the surrender of the old instrument and either the reissuance by the Borrower of the old instrument to the new holder or the issuance by the Borrower of a new instrument to the new holder. The old Amended and Restated Promissory Note so surrendered shall be canceled by the Lender and returned to the Borrower after such cancellation.

          (b) Any new Amended and Restated Promissory Note issued pursuant to section 2.8(a) shall carry the same rights to interest (unpaid and to accrue) carried by the Amended and Restated Promissory Note so transferred or exchanged so that there will not be any loss or gain of interest on the note surrendered. Such new Amended and Restated Promissory Note shall be subject to all of the provisions and entitled to all of the benefits of this Agreement. Prior to due presentment for registration or transfer, the Borrower may deem and treat the registered holder of any Amended and Restated Promissory Note as the holder thereof for purposes of payment and all other purposes. A notation shall be made on each new Amended and Restated Promissory Note of the amount of all payments of principal and interest theretofore paid.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

          The Borrower hereby represents and warrants to the Lender as follows:

               Section 3.1 Power; Authority; Consents.

          The Borrower has the power to execute, deliver and perform this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement, all of which have been duly authorized by all necessary and proper corporate or other action.

               Section 3.2 Due Execution; Validity; Enforceability.

          Each of the Loan Documents, including, without limitation, this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement, have been duly executed and delivered by the Borrower; and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

               Section 3.3 Properties; Priority of Liens.

          The liens which have been created and granted by the Amended and Restated Pledge Agreement constitute valid, first liens on the properties and assets covered by the Amended and Restated Pledge Agreement, subject to no prior or equal lien.

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EXHIBIT 10.28

               Section 3.4 No Defaults; Compliance with Laws.

          The Borrower is not in default in any material respect under any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which it is a party or by which it is bound, or any other agreement or other instrument by which any of the properties or assets owned by it is materially affected.

               Section 3.5 Purchases of Common Stock.

          The Borrower has valid, legal and marketable title to the Collateral, free and clear of any liens, other than a pledge to the Lender pursuant to the Amended and Restated Pledge Agreement. Neither the execution and delivery of the Loan Documents nor the performance of any obligation thereunder violates any provision of law or conflicts with or results in a breach of or creates (with or without the giving of notice or lapse of time, or both) a default under any agreement to which the Borrower is a party or by which it is bound or any of its properties is affected. No consent of any federal, state or local governmental authority, agency or other regulatory body, the absence of which could have a materially adverse effect on the Borrower or the Trustee, is or was required to be obtained in connection with the execution, delivery or performance of the Loan Documents and the transactions contemplated therein or in connection therewith.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE LENDER

          The Lender hereby represents and warrants to the Borrower as follows:

               Section 4.1 Power; Authority; Consents.

          The Lender has the power to execute, deliver and perform this Amended and Restated Loan Agreement, the Amended and Restated Pledge Agreement and all documents executed by the Lender in connection with the Loan, all of which have been duly authorized by all necessary and proper corporate or other action. No consent, authorization or approval or other action by any governmental authority or regulatory body, and no notice by the Lender to, or filing by the Lender with, any governmental authority or regulatory body is required for the due execution, delivery and performance of this Amended and Restated Loan Agreement.

               Section 4.2 Due Execution; Validity; Enforceability.

          This Amended and Restated Loan Agreement and the Amended and Restated Pledge Agreement have been duly executed and delivered by the Lender; and each constitutes a valid and legally binding obligation of the Lender, enforceable in accordance with its terms.

               Section 4.3 ESOP; Contributions.

          The ESOP and the Borrower have been duly created, organized and maintained by the Lender in compliance with all applicable laws, regulations and rulings. The ESOP qualifies as an “employee stock ownership plan” as defined in section 4975(e)(7) the Code. The

9

EXHIBIT 10.28

ESOP provides that the Lender may make contributions to the ESOP in an amount necessary to enable the Trustee to amortize the Loan in accordance with the terms of the Amended and Restated Promissory Note and this Amended and Restated Loan Agreement, and the Lender will make such contributions; provided, however, that no such contributions shall be required to the extent they would adversely affect the qualification of the ESOP under section 401(a) of the Code.

               Section 4.4 Trustee; Committee.

          The Lender has taken such action as is required to be taken by it to duly appoint the Trustee and the members of the Committee. The Committee constitutes the Committee defined in and described in the plan document for the Employee Stock Ownership Plan of Hudson City Savings Bank and the Trust Agreement by and between the Trustee and Hudson City Savings Bank made as of June 21, 1999, as amended from time to time. The Lender expressly acknowledges and agrees that this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement are being executed by the Trustee not in its individual capacity but solely as trustee of and on behalf of the Borrower.

               Section 4.5 Compliance with Laws; Actions.

          Neither the execution and delivery by the Lender of this Amended and Restated Loan Agreement or any instruments required thereby, nor compliance with the terms and provisions of any such documents by the Lender, constitutes a violation of any provision of any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality, or an event of default under any agreement, to which the Lender is a party or by which the Lender is bound or to which the Lender is subject, which violation or event of default would have a material adverse effect on the Lender. There is no action or proceeding pending or threatened against either of the ESOP or the Borrower before any court or administrative agency.

ARTICLE V

EVENTS OF DEFAULT

               Section 5.1 Events of Default under Loan Agreement.

          Each of the following events shall constitute an “Event of Default” hereunder:

          (a) Failure to make any payment or mandatory prepayment of principal on the Amended and Restated Promissory Note, or failure to make any payment of interest on the Amended and Restated Promissory Note, within five (5) Business Days after the date when due.

          (b) Failure by the Borrower to perform or observe any term, condition or covenant of this Amended and Restated Loan Agreement or of any of the other Loan Documents, including, without limitation, the Amended and Restated Promissory Note and the Amended and Restated Pledge Agreement, provided, however, that such failure is not cured by the Borrower within five (5) Business Days after notice of such failure is provided to the Borrower by the Lender.

10

EXHIBIT 10.28

          (c) Any representation or warranty made in writing to the Lender in any of the Loan Documents or any certificate, statement or report made or delivered in compliance with this Amended and Restated Loan Agreement, shall have been false or misleading in any material respect when made or delivered.

               Section 5.2 Lender’s Rights upon Event of Default.

          If an Event of Default under this Amended and Restated Loan Agreement shall occur and be continuing, the Lender shall have no rights to assets of the Borrower other than: (a) contributions (other than contributions of Common Stock) that are made by the Lender to enable the Borrower to meet its obligations pursuant to this Amended and Restated Loan Agreement and earnings attributable to the investment of such contributions and (b) “Eligible Collateral” (as defined in the Amended and Restated Pledge Agreement); provided, however, that: (i) the value of the Borrower’s assets transferred to the Lender following an Event of Default in satisfaction of the due and unpaid amount of the Loan shall not exceed the amount in default (without regard to amounts owing solely as a result of any acceleration of the Loan); (ii) the Borrower’s assets shall be transferred to the Lender following an Event of Default only to the extent of the failure of the Borrower to meet the payment schedule of the Loan; and (iii) all rights of the Lender to the Common Stock purchased with the proceeds of the Loan covered by the Amended and Restated Pledge Agreement following an Event of Default shall be governed by the terms of the Amended and Restated Pledge Agreement.

ARTICLE VI

MISCELLANEOUS PROVISIONS

               Section 6.1 Payments Due to the Lender.

          If any amount is payable by the Borrower to the Lender pursuant to any indemnity obligation contained herein, then the Borrower shall pay, at the time or times provided therefor, any such amount and shall indemnify the Lender against and hold it harmless from any loss or damage resulting from or arising out of the nonpayment or delay in payment of any such amount. If any amounts as to which the Borrower has so indemnified the Lender hereunder shall be assessed or levied against the Lender, the Lender may notify the Borrower and make immediate payment thereof, together with interest or penalties in connection therewith, and shall thereupon be entitled to and shall receive immediate reimbursement therefor from the Borrower, together with interest on each such amount as provided in section 2.2. Notwithstanding any other provision contained in this Amended and Restated Loan Agreement, the covenants and agreements of the Borrower contained in this section 6.1 shall survive: (a) payment of the Amended and Restated Promissory Note and (b) termination of this Amended and Restated Loan Agreement.

               Section 6.2 Payments.

          All payments hereunder and under the Amended and Restated Promissory Note shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments shall not be less than the amounts otherwise specified to be paid under

11

EXHIBIT 10.28

this Amended and Restated Loan Agreement and the Amended and Restated Promissory Note, subject to any applicable tax withholding requirements. Upon payment in full of the Amended and Restated Promissory Note, the Lender shall mark such Amended and Restated Promissory Note “Paid” and return it to the Borrower.

               Section 6.3 Survival.

          All agreements, representations and warranties made herein shall survive the delivery of this Amended and Restated Loan Agreement and the Amended and Restated Promissory Note.

               Section 6.4 Modifications, Consents and Waivers; Entire Agreement.

          No modification, amendment or waiver of or with respect to any provision of this Amended and Restated Loan Agreement, the Amended and Restated Promissory Note, the Amended and Restated Pledge Agreement, or any of the other Loan Documents, nor consent to any departure from any of the terms or conditions thereof, shall in any event be effective unless it shall be in writing and signed by the party against whom enforcement thereof is sought. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No consent to or demand on a party in any case shall, of itself, entitle it to any other or further notice or demand in similar or other circumstances. This Amended and Restated Loan Agreement embodies the entire agreement and understanding between the Lender and the Borrower and supersedes all prior agreements and understandings relating to the subject matter hereof other than the Second Loan Agreement, and instruments and agreements executed thereunder.

               Section 6.5 Remedies Cumulative.

          Each and every right granted to the Lender hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of the Lender or the holder of the Amended and Restated Promissory Note to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or future exercise thereof or the exercise of any other right. The due payment and performance of the obligations under the Loan Documents shall be without regard to any counterclaim, right of offset or any other claim whatsoever which the Borrower may have against the Lender and without regard to any other obligation of any nature whatsoever which the Lender may have to the Borrower, and no such counterclaim or offset shall be asserted by the Borrower in any action, suit or proceeding instituted by the Lender for payment or performance of such obligations.

               Section 6.6 Further Assurances; Compliance with Covenants.

          At any time and from time to time, upon the request of the Lender, the Borrower shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further documents and instruments and do such other acts and things as the Lender may reasonably request in order to fully effect the terms of this Amended and Restated Loan

12

EXHIBIT 10.28

Agreement, the Amended and Restated Promissory Note, the Amended and Restated Pledge Agreement, the other Loan Documents and any other agreements, instructions and documents delivered pursuant hereto or in connection with the Loan.

               Section 6.7 Notices.

          Except as otherwise specifically provided for herein, all notices, requests, reports and other communications pursuant to this Amended and Restated Loan Agreement shall be in writing, either by letter (delivered by hand or commercial messenger service or sent by registered or certified mail, return receipt requested, except for routine reports delivered in compliance with Article VI hereof which may be sent by ordinary first-class mail) or telex or facsimile, addressed as follows:

(a) If to the Borrower:

Employee Stock Ownership Plan Trust
     of Hudson City Bancorp, Inc.
Hudson City Savings Bank
West 80 Century City Road
Paramus, New Jersey 07652-1473
Attention: Senior Personnel Officer

with copies to:

GreatBanc Trust Company
45 Rockefeller Plaza, Suite 2055
New York, New York 10111-2000
Attention: Mr. Stephen J. Hartman, Jr.

Thacher Proffitt & Wood llp
Two World Financial Center, 28th Floor
New York New York 10281
Attention: W. Edward Bright, Esq.

The Goldstein Law Firm, P.C.
12 Corporate Woods Boulevard
Albany, New York 12211-2350
Attention: Brian P. Goldstein, Esq.

(b) If to the Lender:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Chief Financial Officer

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EXHIBIT 10.28

with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center, 28^th Floor
New York New York 10281
Attention: W. Edward Bright, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

               Section 6.8 Counterparts.

          This Amended and Restated Loan Agreement may be signed in any number of counterparts which, when taken together, shall constitute one and the same document.

               Section 6.9 Construction; Governing Law.

          The headings used in the table of contents and in this Amended and Restated Loan Agreement are for convenience only and shall not be deemed to constitute a part hereof. All uses herein of any gender or of singular or plural terms shall be deemed to include uses of the other genders or plural or singular terms, as the context may require. All references in this Amended and Restated Loan Agreement to an Article or section shall be to an Article or section of this Amended and Restated Loan Agreement, unless otherwise specified. This Amended and Restated Loan Agreement, the Amended and Restated Promissory Note, the Amended and Restated Pledge Agreement and the other Loan Documents shall be governed by, and construed and interpreted in accordance with, the laws of the State of New Jersey. It is intended that the transactions contemplated by this Amended and Restated Loan Agreement constitute an exempt loan within the meaning of Treasury Regulation §54.4975-7(b)(1)(iii) and Department of Labor Regulation §2550.408b-3, and the provisions hereof shall be construed and enforced in such manner as shall be necessary to give effect to such intent.

               Section 6.10 Severability.

          Wherever possible, each provision of this Amended and Restated Loan Agreement shall be interpreted in such manner as to be effective and valid under applicable law; however, the provisions of this Amended and Restated Loan Agreement are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Amended and Restated Loan Agreement in any jurisdiction. Each of the covenants, agreements and conditions contained in this Amended and Restated Loan Agreement is independent, and compliance by a party with any

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EXHIBIT 10.28

of them shall not excuse non-compliance by such party with any other. The Borrower shall not take any action the effect of which shall constitute a breach or violation of any provision of this Amended and Restated Loan Agreement.

               Section 6.11 Binding Effect; No Assignment or Delegation.

          This Amended and Restated Loan Agreement shall be binding upon and inure to the benefit of the Borrower and its successors and the Lender and its successors and assigns. The rights and obligations of the Borrower under this Agreement shall not be assigned or delegated without the prior written consent of the Lender, and any purported assignment or delegation without such consent shall be void.

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EXHIBIT 10.28

     In Witness Whereof, the parties hereto have caused this Amended and Restated Loan Agreement to be duly executed as of the date first above written.

Employee Stock Ownership Plan Trust
Of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
Title:	Chairman and Chief Executive Officer

16

EX-10.29

EXHIBIT 10.29

AMENDED AND RESTATED PROMISSORY NOTE

For the Principal Amount,	Paramus, New Jersey
as defined below	June 21, 2005

          FOR VALUE RECEIVED, the undersigned, Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), acting by and through its Trustee, GreatBanc Trust Company (“Trustee”), hereby promises to pay to the order of Hudson City Bancorp, Inc. (“Lender”) the Principal Amount, as determined under the Amended and Restated Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (“Amended and Restated Loan Agreement”) pursuant to which this Amended and Restated Promissory Note is issued, payable in annual installments each of which shall be the lesser of (i) the portion of the principal amount of the loan which will result in the release for allocation to participants in the Employee Stock Ownership Plan of Hudson City Savings Bank (the “ESOP”) of a cumulative fraction of the collateral (valued at December 30, 2005) equal to 2/80 as of the last business day of December, 2005 and increased by 2/80 as of each succeeding December, to 80/80 on the last business day of December, 2044, and (ii) the portion of the principal amount of the loan which results in the release for allocation to ESOP participants of total collateral (valued as of the date of payment) under the Amended and Restated Loan Agreement and that certain Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (“Second Loan Agreement”) having a value equal to 25.75% of compensation taken into account under the ESOP for each person entitled to share in the allocation. Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes; provided, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and under clause (i) of the Promissory Note relating to the Second Loan in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Second Loan shall be reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Amended and Restated Pledge Agreement and the Pledge Agreement relating to the Second Loan)), subject to the limitation set forth in clause (ii). Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last business day of December, 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

          This Amended and Restated Promissory Note shall bear interest at the rate per annum set forth or established under the Amended and Restated Loan Agreement, such interest to be payable quarterly in arrears, commencing on June 30, 2005 and thereafter on the last Business Day of each calendar quarter and upon payment or prepayment of this Amended and Restated Promissory Note.

          Anything herein to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payments of interest which are not made as a result of the limitation referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

          Payments of both principal and interest on this Amended and Restated Promissory Note are to be made at the principal office of the Lender at West 80 Century Road, Paramus, New Jersey 07652 or such other place as the holder hereof shall designate to the Borrower in writing, in lawful money of the United States of America in immediately available funds.

          Failure to make any payment of principal on this Amended and Restated Promissory Note, or failure to make any payment of interest on this Amended and Restated Promissory Note, within five (5) Business Days after the date when due, shall constitute a default hereunder, whereupon the principal amount of and accrued interest on this Amended and Restated Promissory Note shall immediately become due and payable in accordance with the terms of the Amended and Restated Loan Agreement.

          This Amended and Restated Promissory Note is subject, in all respects, to the terms and provisions of the Amended and Restated Loan Agreement, which is incorporated herein by this reference, and is secured by an Amended and Restated Pledge Agreement between the Borrower and the Lender of even date herewith and is entitled to the benefits thereof. All capitalized terms that are not defined herein shall have the meanings assigned to them in the Amended and Restated Loan Agreement unless the context clearly indicates otherwise.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.

EX-10.30

EXHIBIT 10.30

AMENDED AND RESTATED PLEDGE AGREEMENT

by and between

EMPLOYEE STOCK OWNERSHIP PLAN TRUST
of
HUDSON CITY SAVINGS BANK

and

HUDSON CITY BANCORP, INC.

Made and Entered Into as of
June 21, 2005

EXHIBIT 10.30

TABLE OF CONTENTS

	PAGE
Section 1. Definitions		1
Section 2. Pledge		2
Section 3. Representations and Warranties of the Pledgor		2
Section 4. Eligible Collateral		2
Section 5. Delivery		3
Section 6. Events of Default		3
Section 7. Payment in Full		4
Section 8. No Waiver		4
Section 9. Binding Effect; No Assignment or Delegation		4
Section 10. Governing Law		4
Section 11. Notices		5
Section 12. Interpretation		6
Section 13. Construction		6

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EXHIBIT 10.30

AMENDED AND RESTATED PLEDGE AGREEMENT

          This AMENDED AND RESTATED PLEDGE AGREEMENT (“Amended and Restated Pledge Agreement”) is made as of the 21^st day of June, 2005, by and between the EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF HUDSON CITY SAVINGS BANK, acting by and through its Trustee, GreatBanc Trust Company, a trust corporation organized under the laws of the State of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York 10111-2000 (“Pledgor”), and Hudson City Bancorp, Inc., a corporation organized and existing under the laws of the State of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (“Pledgee”).

W I T N E S S E TH:

          Whereas, this Amended and Restated Pledge Agreement is being executed and delivered to the Pledgee pursuant to the terms of an Amended and Restated Loan Agreement of even date herewith (“Amended and Restated Loan Agreement”), by and between the Pledgor and the Pledgee;

          Now, Therefore, in consideration of the mutual agreements contained herein and in the Amended and Restated Loan Agreement, the parties hereto do hereby covenant and agree as follows:

          Section 1. Definitions. The following definitions shall apply for purposes of this Amended and Restated Pledge Agreement, except to the extent that a different meaning is plainly indicated by the context; all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Amended and Restated Loan Agreement:

     (a) Collateral shall mean the Pledged Shares and, subject to section 5 hereof, and to the extent permitted by applicable law, all rights with respect thereto, and all proceeds of such Pledged Shares and rights.

     (b) Event of Default shall mean an event so defined in the Amended and Restated Loan Agreement.

     (c) Liabilities shall mean all the obligations of the Pledgor to the Pledgee, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under the Amended and Restated Loan Agreement and the Amended and Restated Promissory Note.

     (d) Pledged Shares shall mean 22,768,166 of the 27,879,376 shares (based on a 2 to 1 stock split effected in June 2002 and a 3.2060 stock split effected in June 2005) of Common Stock of Hudson City Bancorp, Inc. purchased by the Pledgor with the proceeds of the loan made by the Pledgee to the Pledgor pursuant to the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999, which have not been allocated to ESOP participants as of the date hereof and are subject to the terms of the Amended and Restated Loan Agreement and the Amended and Restated

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Promissory Note, but excluding any such shares previously released pursuant to section 4.

          Section 2. Pledge. To secure the payment of and performance of all the Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the Pledgee a security interest in and lien upon, the Collateral.

          Section 3. Representations and Warranties of the Pledgor. The Pledgor represents, warrants, and covenants to the Pledgee as follows:

     (a) to the actual knowledge of the Trustee, the execution, delivery and performance of this Amended and Restated Pledge Agreement and the pledging of the Collateral hereunder do not and will not conflict with, result in a violation of, or constitute a default under any agreement binding upon the Pledgor;

     (b) the Pledged Shares are and will continue to be owned by the Pledgor free and clear of any liens or rights of any other person except the lien hereunder and under the Amended and Restated Loan Agreement in favor of the Pledgee, and the security interest of the Pledgee in the Pledged Shares and the proceeds thereof is and will continue to be prior to and senior to the rights of all others;

     (c) to the actual knowledge of the Trustee, this Amended and Restated Pledge Agreement is the legal, valid, binding and enforceable obligation of the Pledgor in accordance with its terms;

     (d) the Pledgor shall, from time to time, upon request of the Pledgee, promptly deliver to the Pledgee such stock powers, proxies, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request; and

     (e) subject to the first sentence of section 4(b), the Pledgor shall not, so long as any Liabilities are outstanding, sell, assign, exchange, pledge or otherwise transfer or encumber any of its rights in and to any of the Collateral.

     Section 4. Eligible Collateral.

     (a) As used herein the term “Eligible Collateral” shall mean that amount of Collateral which has an aggregate fair market value equal to the amount by which the Pledgor is in default (without regard to any amounts owing solely as the result of an acceleration of the Amended and Restated Loan Agreement) or such lesser amount of Collateral as may be required pursuant to section 12 of this Amended and Restated Pledge Agreement.

     (b) The Pledged Shares shall be released from this Amended and Restated Pledge Agreement in a manner conforming to the requirements of Treasury Regulations Section 54.4975-7(b)(8), as the same may be from time to time amended or supplemented, and section 6.4(a) of the ESOP. Subject to such Regulations, the Pledgee may from time to time, after any Default or Event of Default, and without prior notice to

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the Pledgor, transfer all or any part of the Eligible Collateral into the name of the Pledgee or its nominee, with or without disclosing that such Eligible Collateral is subject to any rights of the Pledgor and may from time to time, whether before or after any of the Liabilities shall become due and payable, without notice to the Pledgor, take all or any of the following actions: (i) notify the parties obligated on any of the Eligible Collateral to make payment to the Pledgee of any amounts due or to become due thereunder, (ii) release or exchange all or any part of the Eligible Collateral, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto, and (iii) take control of any proceeds of the Eligible Collateral.

     Section 5. Delivery.

     (a) The Pledgor shall deliver to the Pledgee upon execution of this Amended and Restated Pledge Agreement an assignment by the Pledgor of all the Pledgor’s rights to and interest in the Pledged Shares.

     (b) So long as no Default or Event of Default shall have occurred and be continuing, (i) the Pledgor shall be entitled to exercise any and all voting and other rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Amended and Restated Pledge Agreement, and (ii) the Pledgor shall be entitled to receive any and all cash dividends or other distributions paid in respect of the Collateral.

     Section 6. Events of Default.

     (a) If a Default or an Event of Default shall be existing, in addition to the rights it may have under the Amended and Restated Loan Agreement, the Amended and Restated Promissory Note, and this Amended and Restated Pledge Agreement, or by virtue of any other instrument, (i) the Pledgee may exercise, with respect to the Eligible Collateral, from time to time any rights and remedies available to it under the Uniform Commercial Code as in effect from time to time in the State of New Jersey or otherwise available to it and (ii) the Pledgee shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Eligible Collateral. Written notification of intended disposition of any of the Eligible Collateral shall be given by the Pledgee to the Pledgor at least three (3) Business Days before such disposition. Subject to section 13 below, any proceeds of any disposition of Eligible Collateral may be applied by the Pledgee to the payment of expenses in connection with the Eligible Collateral, including, without limitation, reasonable attorneys’ fees and legal expenses, and any balance of such proceeds may be applied by the Pledgee toward the payment of such of the Liabilities as are in Default, and in such order of application, as the Pledgee may from time to time elect. No action of the Pledgee permitted hereunder shall impair or affect its rights in and to the Eligible Collateral. All rights and remedies of the Pledgee expressed hereunder are in addition to all other rights and remedies possessed by it, including, without limitation, those contained in the documents referred to in the definition of Liabilities in section 1 hereof.

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     (b) In any sale of any of the Eligible Collateral after a Default or an Event of Default shall have occurred, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers or further restrict such prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Eligible Collateral), or in order to obtain such required approval of the sale or of the purchase by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale’s being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable or accountable to the Pledgor for any discount allowed by reason of the fact that such Eligible Collateral is sold in compliance with any such limitation or restriction.

               Section 7. Payment in Full. Upon the payment in full of all outstanding Liabilities, this Amended and Restated Pledge Agreement shall terminate and the Pledgee shall forthwith assign, transfer and deliver to the Pledgor, against receipt and without recourse to the Pledgee, all Collateral then held by the Pledgee pursuant to this Amended and Restated Pledge Agreement.

               Section 8. No Waiver. No failure or delay on the part of the Pledgee in exercising any right or remedy hereunder or under any other document which confers or grants any rights in the Pledgee in respect of the Liabilities shall operate as a waiver thereof nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy of the Pledgee.

               Section 9. Binding Effect; No Assignment or Delegation. This Amended and Restated Pledge Agreement shall be binding upon and inure to the benefit of the Pledgor, the Pledgee and their respective successors and assigns, except that the Pledgor may not assign or transfer its rights hereunder without the prior written consent of the Pledgee (which consent shall not unreasonably be withheld). Each duty or obligation of the Pledgor to the Pledgee pursuant to the provisions of this Amended and Restated Pledge Agreement shall be performed in favor of any person or entity designated by the Pledgee, and any duty or obligation of the Pledgee to the Pledgor may be performed by any other person or entity designated by the Pledgee.

               Section 10. Governing Law. This Amended and Restated Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to agreements to be performed wholly within the State of New Jersey.

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               Section 11. Notices. All notices, requests, instructions or documents hereunder shall be in writing and delivered by hand or commercial messenger service or sent by United States mail, registered or certified, return receipt requested, with proper postage prepaid, or by telex or facsimile, addressed as follows:

(a) If to the Pledgee:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Chief Financial Officer

      with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center, 28th Floor
New York, New York 10281
Attention: W. Edward Bright, Esq.

(b) If to the Pledgor:

Employee Stock Ownership Plan Trust
  of Hudson City Savings Bank
c/o Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Senior Personnel Officer

                  with copies to:

GreatBanc Trust Company
45 Rockefeller Plaza, Suite 2055
New York, New York 10111-2000
Attention: Mr. Stephen J. Hartman, Jr.

Thacher Proffitt & Wood llp
Two World Financial Center, 28th Floor
New York, New York 10281
Attention: W. Edward Bright, Esq.

The Goldstein Law Firm, P.C.
12 Corporate Woods Boulevard
Albany, New York 12211-2350
Attention: Brian P. Goldstein, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business

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Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

          Section 12. Interpretation. Wherever possible each provision of this Amended and Restated Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited by or invalid under such law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions hereof.

          Section 13. Construction. All provisions hereof shall be construed so as to maintain (a) the ESOP as a qualified leveraged employee stock ownership plan under section 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986 (the “Code”), (b) the Trust as exempt from taxation under section 501(a) of the Code and (c) the Trust Loan as an exempt loan under section 54.4975-7(b) of the Treasury Regulations and as described in Department of Labor Regulation section 2550.408b-3.

          In Witness Whereof, this Amended and Restated Pledge Agreement has been duly executed by the parties hereto as of the day and year first above written.

Employee Stock Ownership Plan Trust
of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee     and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
Title:	President and Chief Executive Officer

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EX-10.31

EXHIBIT 10.31

FORM OF AMENDED AND RESTATED ASSIGNMENT

     In consideration of the loan made by Hudson City Bancorp, Inc. (“Lender”) to the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”) pursuant to the Amended and Restated Loan Agreement between the Lender and the Borrower of even date herewith (“Amended and Restated Loan Agreement”) and pursuant to the Amended and Restated Pledge Agreement between the Lender and the Borrower of even date herewith pertaining thereto, subject to the terms of the Amended and Restated Loan Agreement and the Amended and Restated Pledge Agreement, the undersigned Borrower hereby transfers, assigns and conveys to Lender all its right, title and interest in and to those certain shares of common stock of the Lender which are subject to the terms of the Amended and Restated Loan Agreement, and agrees to transfer and endorse to Lender the certificates representing such shares as and when required pursuant to the Amended and Restated Loan Agreement or Amended and Restated Pledge Agreement. This Amended and Restated Assignment supersedes, in its entirety, that certain Assignment dated June 21, 1999 executed by the Borrower in favor of the Lender.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President

June 21, 2005

EX-10.32

EXHIBIT 10.32

Loan Agreement

by and between

Employee Stock Ownership Plan Trust
of
Hudson City Savings Bank

and

Hudson City Bancorp, Inc.

Made and Entered Into as of
June 21, 2005

EXHIBIT 10.32

TABLE OF CONTENTS

	Page
ARTICLE I
DEFINITIONS
Section 1.1 Business Day		2
Section 1.2 Code		2
Section 1.3 Default		2
Section 1.4 ERISA		2
Section 1.5 Event of Default		2
Section 1.6 Fiscal Year		2
Section 1.7 Independent Counsel		2
Section 1.8 Loan		2
Section 1.9 Loan Documents		2
Section 1.10 Pledge Agreement		2
Section 1.11 Principal Amount		2
Section 1.12 Promissory Note		2
Section 1.13 Register		2
ARTICLE II
THE LOAN; PRINCIPAL AMOUNT; INTEREST;
SECURITY INDEMNIFICATION
Section 2.1 The Loan; Principal Amount		3
Section 2.2 Interest		4
Section 2.3 Promissory Note		4
Section 2.4 Payment of Trust Loan		4
Section 2.5 Prepayment		6
Section 2.6 Method of Payments		6
Section 2.7 Use of Proceeds of Loan		7
Section 2.8 Security		8
Section 2.9 Registration of the Promissory Note		8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
Section 3.1 Power; Authority; Consents		9
Section 3.2 Due Execution; Validity; Enforceability		9
Section 3.3 Properties; Priority of Liens		9
Section 3.4 No Defaults; Compliance with Laws		9
Section 3.5 Purchases of Common Stock		9

i

EXHIBIT 10.32

	Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LENDER
Section 4.1 Power; Authority; Consents		10
Section 4.2 Due Execution; Validity; Enforceability		10
Section 4.3 ESOP; Contributions		10
Section 4.4 Trustee; Committee		10
Section 4.5 Compliance with Laws; Actions		10
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 Events of Default under Loan Agreement		11
Section 5.2 Lender’s Rights upon Event of Default		11
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Payments Due to the Lender		11
Section 6.2 Payments		12
Section 6.3 Survival		12
Section 6.4 Modifications, Consents and Waivers; Entire Agreement		12
Section 6.5 Remedies Cumulative		12
Section 6.6 Further Assurances; Compliance with Covenants		13
Section 6.7 Notices		13
Section 6.8 Counterparts		14
Section 6.9 Construction; Governing Law		14
Section 6.10 Severability		14
Section 6.11 Binding Effect; No Assignment or Delegation		15
EXHIBIT A Form of Promissory Note		A-1
EXHIBIT B Form of Pledge Agreement		B-1
EXHIBIT C Form of Assignment		C-1

ii

Loan Agreement

     This Loan Agreement (“Loan Agreement”) is made and entered into as of the 21^st day of June, 2005, by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), a trust forming part of the Employee Stock Ownership Plan of Hudson City Savings Bank (“ESOP”), acting through and by its Trustee, GreatBanc Trust Company (“Trustee”), a trust corporation organized under the laws of the state of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York, 10111-2000; and Hudson City Bancorp, Inc. (“Lender”), a corporation organized and existing under the laws of the state of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473.

WITNESSETH :

     Whereas, the Borrower and the Lender are parties to the Loan Agreement by and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999 (“First Loan Agreement”), pursuant to which the Lender agreed to loan the Borrower certain amounts to purchase shares of common stock of Hudson City Bancorp, Inc. (“Common Stock”) pursuant to the terms set forth in the First Loan Agreement;

     Whereas, pursuant to the First Loan Agreement, the Borrower borrowed $58,645,380 from the Lender (“First Loan”) and used the proceeds of the First Loan to purchase 27,879,376 shares of Common Stock (based on a 2 to 1 stock split effected in June 2002 and a 3.2060 to 1 stock split effected in June 2005);

     Whereas, under the First Loan, a total of 22,303,450 shares of Common Stock are scheduled to be released for allocation to participants in the ESOP during the years 2005 through 2028, with a final allocation of 464,716 shares of Common Stock in 2029;

     Whereas, the Compensation Committee of the Lender (“Committee”) has authorized the Borrower to purchase additional shares of Common Stock, either directly from Hudson City Bancorp, Inc. or in open market purchases in an amount not to exceed 15,719,223 of the shares of Common Stock issued in connection with the transactions effected pursuant to the Plan of Conversion and Reorganization adopted by Hudson City Savings Bank on December 16, 2004, as amended (the “Reorganization”);

     Whereas, the Committee has further authorized the Borrower to borrow funds from the Lender for the purpose of financing authorized purchases of Common Stock; and

     Whereas, the Lender is willing to make a loan to the Borrower for such purpose pursuant to the terms of this Loan Agreement subject to the condition that the First Loan and the First Loan Agreement be amended and restated (the First Loan, as amended and restated, the “Amended and Restated Loan” and the First Loan Agreement, as amended and restated, the “Amended and Restated Loan Agreement”) concurrently with the execution and delivery of this Loan Agreement.

     Now, Therefore, the parties hereto agree as follows:

EXHIBIT 10.32

ARTICLE I

DEFINITIONS

     The following definitions shall apply for purposes of this Loan Agreement, except to the extent that a different meaning is plainly indicated by the context:

          Section 1.1 Business Day means any day other than a Saturday, Sunday or other day on which banks are authorized or required to close under federal law or the laws of the State of New Jersey.

          Section 1.2 Code means the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

          Section 1.3 Default means an event or condition which would constitute an Event of Default. The determination as to whether an event or condition would constitute an Event of Default shall be determined without regard to any applicable requirement of notice or lapse of time.

          Section 1.4 ERISA means the Employee Retirement Income Security Act of 1974, as amended (including the corresponding provisions of any succeeding law).

          Section 1.5 Event of Default means an event or condition described in Article V.

          Section 1.6 Fiscal Year means the fiscal year of Hudson City Bancorp, Inc.

          Section 1.7 Independent Counsel means Thacher Proffitt & Wood llp or other counsel mutually satisfactory to both the Lender and the Borrower.

          Section 1.8 Loan means the loan described in section 2.1.

          Section 1.9 Loan Documents means, collectively, this Loan Agreement, the Promissory Note and the Pledge Agreement and all other documents now or hereafter executed and delivered in connection with such documents, including all amendments, modifications and supplements of or to all such documents.

          Section 1.10 Pledge Agreement means the agreement described in section 2.8(a).

          Section 1.11 Principal Amount means the face amount of the Promissory Note, determined as set forth in section 2.1(c).

          Section 1.12 Promissory Note means the promissory note described in section 2.3.

          Section 1.13 Register means the register described in section 2.9.

2

EXHIBIT 10.32

ARTICLE II

THE LOAN; PRINCIPAL AMOUNT;
INTEREST; SECURITY INDEMNIFICATION

          Section 2.1 The Loan; Principal Amount.

     (a) The Lender hereby agrees to lend to the Borrower such amounts, and at such times, as shall be determined under this section 2.1; provided, however, that in no event shall the aggregate amount lent under this Loan Agreement from time to time exceed the aggregate amount paid by the Borrower, exclusive of commissions, fees and other charges, to purchase an additional number of shares of Common Stock not to exceed 15,719,223 of the shares of Common Stock issued in connection with the Reorganization.

     (b) Subject to the limitations of section 2.1(a), the Borrower shall determine the amounts borrowed under this Agreement, and the times at which such borrowings are effected. Each such determination shall be evidenced in a writing which shall set forth the amount to be borrowed and the date on which the Lender shall disburse such amount, and such writing shall be furnished to the Lender by notice from the Borrower. The Lender shall disburse to the Borrower the amount specified in each such notice on the date specified therein or, if later, as promptly as practicable following the Lender’s receipt of such notice; provided, however, that the Lender shall have no obligation to disburse funds pursuant to this Agreement (i) following the occurrence of a Default or an Event of Default until such time as such Default or Event of Default shall have been cured; and (ii) on any date on which Common Stock is listed or admitted to trading on an established market (including but not limited to the NASDAQ Stock Market), while the Borrower is in possession of funds previously advanced under this Agreement that have not been used to purchase Common Stock; and (iii) on any date on which Common Stock is listed or admitted to trading on an established market (including but limited to the NASDAQ Stock Market), to the extent that the making of such advance would permit the Borrower to purchase more than 6,000,000 shares of Common Stock during the period of 10 business days after the making of such advance or the period of 10 business days ending on the date of such advance.

     (c) For all purposes of this Loan Agreement, the Principal Amount on any date shall be equal to the excess, if any, of:

          (i) the aggregate amount disbursed by the Lender pursuant to section 2.1(b) on or before such date; over

          (ii) the aggregate amount of any repayments of such amount made before such date.

The Lender shall remain on the Register a record of, and shall record on the Promissory Note, the Principal Amount, any changes in the Principal Amount and the effective date of any changes in the Principal Amount.

3

EXHIBIT 10.32

          Section 2.2 Interest.

     (a) The Borrower shall pay to the Lender interest on the Principal Amount, for the period commencing on the date of this Loan Agreement and continuing until the Principal Amount shall be paid in full, at the rate of five percent (5.00%) per annum. Interest payable under this Agreement shall be computed on the basis of a year of 360 days and months consisting of 30 days each and actual days elapsed (including the first day but excluding the last) occurring in the period to which the computation relates.

     (b) Except as otherwise provided in this section 2.2(b), accrued interest on the Principal Amount shall be payable by the Borrower quarterly in arrears commencing on the last Business Day of the first calendar quarter to end following the date of this Agreement and continuing on the last Business Day of each calendar quarter thereafter and upon the payment or prepayment of the Loan. All interest on the Principal Amount shall be paid by the Borrower in immediately available funds. The Lender shall remit to the Borrower, at least three (3) Business Days before the end of each calendar quarter, a statement of the interest payment due under section 2.2(a) for such quarter; provided, however, that a delay or failure by the Lender in providing the Borrower with such statement shall not alter the Borrower’s obligation to make such payment.

     (c) Anything in this Loan Agreement or the Promissory Note to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payment referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

          Section 2.3 Promissory Note.

     The Loan shall be evidenced by a Promissory Note of the Borrower in substantially the form of Exhibit A attached hereto, dated the date hereof, payable to the order of the Lender in the Principal Amount and otherwise duly completed.

          Section 2.4 Payment of Trust Loan.

     The Principal Amount of the Loan shall be repaid in annual installments payable on the last Business Day of each December ending after the date of this Agreement. The amount of each such annual installment shall be that portion of the lesser of (i) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Pledge Agreement, of a cumulative fraction of the Collateral (within the meaning of the Pledge Agreement and determined as of the last Business Day of December, 2005) equal to the percentage set forth in Column II below and (ii) that portion of the Principal Amount which will result in the release for allocation to participants in the ESOP, pursuant to the Pledge Agreement, of Collateral (within the meaning of the Pledge Agreement), valued as of the date of

4

EXHIBIT 10.32

payment, and collateral released pursuant to the terms of the Amended and Restated Loan, also valued as of the date of payment, having an aggregate value equal to twenty-five and three quarters percent (25.75%) of the compensation taken into account under the ESOP for each person entitled to share in such allocation:

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2005		2/80
2006		4/80
2007		6/80
2008		8/80
2009		10/80
2010		12/80
2011		14/80
2012		16/80
2013		18/80
2014		20/80
2015		22/80
2016		24/80
2017		26/80
2018		28/80
2019		30/80
2020		32/80
2021		34/80
2022		36/80
2023		38/80
2024		40/80
2025		42/80
2026		44/80
2027		46/80
2028		48/80
2029		50/80
2030		52/80
2031		54/80
2032		56/80
2033		58/80
2034		60/80
2035		62/80
2036		64/80
2037		66/80
2038		68/80
2039		70/80
2040		72/80
2041		74/80

5

EXHIBIT 10.32

Column I	Column II
Installment Due on	Cumulative Fraction
Last Business Day	of Collateral
of December in	Released
2042		76/80
2043		78/80
2044		80/80

provided, however, that the Borrower shall not be required to make any payment of principal due to be made in any Fiscal Year to the extent that such payment would not be deductible for federal income tax purposes for such Fiscal Year under Section 404 of the Code; provided further, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and under section 2.4(i) of the Amended and Restated Loan Agreement in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Amended and Restated Loan shall be reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Pledge Agreement and the Pledge Agreement relating to the Amended and Restated Loan)), subject to the limitation set forth in clause (ii). Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes. Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last Business Day of December 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

          Section 2.5 Prepayment.

     The Borrower shall be entitled to prepay the Loan in whole or in part, at any time and from time to time; provided, however, that the Borrower shall give notice to the Lender of any such prepayment. Any such prepayment shall be: (a) permanent and irrevocable; (b) accompanied by all accrued interest through the date of such prepayment; (c) made without premium or penalty; and (d) applied first to the installment of principal due and payable in the Fiscal Year in which the prepayment is made and second in the order of the maturity of the remaining installments thereof unless the Lender and the Borrower agree to apply such prepayments in some other order.

          Section 2.6 Method of Payments.

     (a) All payments of principal, interest, other charges (including indemnities) and other amounts payable by the Borrower hereunder shall be made in lawful money of the

6

EXHIBIT 10.32

United States, in immediately available funds, to the Lender at the address specified in or pursuant to this Loan Agreement for notices to the Lender, not later than 3:00 P.M., Eastern Standard time, on the date on which such payment shall become due. Any such payment made on such date but after such time shall, if the amount paid bears interest, and except as expressly provided to the contrary herein, be deemed to have been made on, and interest shall continue to accrue and be payable thereon until, the next succeeding Business Day. If any payment of principal or interest becomes due on a day other than a Business Day, such payment may be made on the next succeeding Business Day, and when paid, such payment shall include interest to the day on which such payment is in fact made.

          (b) Notwithstanding anything to the contrary contained in this Loan Agreement or the Promissory Note, neither the Borrower nor the Trustee shall be obligated to make any payment, repayment or prepayment on the Promissory Note or take or refrain from taking any other action hereunder or under the Promissory Note if doing so would cause the ESOP to cease to be an employee stock ownership plan within the meaning of section 4975(e)(7) of the Code or qualified under section 401(a) of the Code or cause the Borrower to cease to be a tax exempt trust under section 501(a) of the Code or if such act or failure to act would cause the Borrower or the Trustee to engage in any “prohibited transaction” as such term is defined in section 4975(c) of the Code and the regulations promulgated thereunder which is not exempted by section 4975(c)(2) or (d) of the Code and the regulations promulgated thereunder or in section 406 of ERISA and the regulations promulgated thereunder which is not exempted by section 408(b) of ERISA and the regulations promulgated thereunder; provided, however, that in each case, the Borrower or the Trustee or both, as the case may be, may act or refrain from acting pursuant to this section 2.6(b) on the basis of an opinion of Independent Counsel. The Borrower and the Trustee may consult with Independent Counsel, and any opinion of such Independent Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such opinion of Independent Counsel. Nothing contained in this section 2.6(b) shall be construed as imposing a duty on either the Borrower or the Trustee to consult with Independent Counsel. Any obligation of the Borrower or the Trustee to make any payment, repayment or prepayment on the Promissory Note or to take or refrain from taking any other act hereunder or under the Promissory Note which is excused pursuant to this section 2.6(b) shall be considered a binding obligation of the Borrower or the Trustee, or both, as the case may be, for the purposes of determining whether a Default or Event of Default has occurred hereunder or under the Promissory Note and nothing in this section 2.6(b) shall be construed as providing a defense to any remedies otherwise available upon a Default or an Event of Default hereunder (other than the remedy of specific performance).

          Section 2.7 Use of Proceeds of Loan.

     The entire proceeds of the Loan shall be used solely for acquiring shares of Common Stock, and for no other purpose whatsoever.

7

EXHIBIT 10.32

          Section 2.8 Security.

     (a) In order to secure the due payment and performance by the Borrower of all of its obligations under this Loan Agreement, simultaneously with the execution and delivery of this Loan Agreement by the Borrower, the Borrower shall:

               (i) pledge to the Lender as Collateral (as defined in the Pledge Agreement), and grant to the Lender a first priority lien on and security interest in, the Common Stock purchased with the Principal Amount, by the execution and delivery to the Lender of a Pledge Agreement in the form attached hereto as Exhibit B; and

               (ii) execute and deliver, or cause to be executed and delivered, such other agreements, instruments and documents as the Lender may reasonably require in order to effect the purposes of the Pledge Agreement and this Loan Agreement, including, but not limited to, the Form of Assignment in the form attached hereto as Exhibit C.

     (b) The Lender shall release from encumbrance under the Pledge Agreement and transfer to the Borrower, as of the date on which any payment or prepayment of the Principal Amount is made, the number of shares of Common Stock held as Collateral determined pursuant to section 6.4 of the ESOP.

          Section 2.9 Registration of the Promissory Note.

     (a) The Lender shall maintain a Register providing for the registration of the Principal Amount and any stated interest and of transfer and exchange of the Promissory Note. Transfer of the Promissory Note may be effected only by the surrender of the old instrument and either the reissuance by the Borrower of the old instrument to the new holder or the issuance by the Borrower of a new instrument to the new holder. The old Promissory Note so surrendered shall be canceled by the Lender and returned to the Borrower after such cancellation.

     (b) Any new Promissory Note issued pursuant to section 2.9(a) shall carry the same rights to interest (unpaid and to accrue) carried by the Promissory Note so transferred or exchanged so that there will not be any loss or gain of interest on the note surrendered. Such new Promissory Note shall be subject to all of the provisions and entitled to all of the benefits of this Agreement. Prior to due presentment for registration or transfer, the Borrower may deem and treat the registered holder of any Promissory Note as the holder thereof for purposes of payment and all other purposes. A notation shall be made on each new Promissory Note of the amount of all payments of principal and interest theretofore paid.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

     The Borrower hereby represents and warrants to the Lender as follows:

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EXHIBIT 10.32

          Section 3.1 Power; Authority; Consents.

     The Borrower has the power to execute, deliver and perform this Loan Agreement, the Promissory Note and the Pledge Agreement, all of which have been duly authorized by all necessary and proper corporate or other action.

          Section 3.2 Due Execution; Validity; Enforceability.

     Each of the Loan Documents, including, without limitation, this Loan Agreement, the Promissory Note and the Pledge Agreement, have been duly executed and delivered by the Borrower; and each constitutes the valid and legally binding obligation of the Borrower, enforceable in accordance with its terms.

          Section 3.3 Properties; Priority of Liens.

     The liens which have been created and granted by the Pledge Agreement constitute valid, first liens on the properties and assets covered by the Pledge Agreement, subject to no prior or equal lien.

          Section 3.4 No Defaults; Compliance with Laws.

     The Borrower is not in default in any material respect under any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which it is a party or by which it is bound, or any other agreement or other instrument by which any of the properties or assets owned by it is materially affected.

          Section 3.5 Purchases of Common Stock.

     Upon consummation of any purchase of Common Stock by the Borrower with the proceeds of the Loan, the Borrower shall acquire valid, legal and marketable title to all of the Common Stock so purchased, free and clear of any liens, other than a pledge to the Lender of the Common Stock so purchased pursuant to the Pledge Agreement. Neither the execution and delivery of the Loan Documents nor the performance of any obligation thereunder violates any provision of law or conflicts with or results in a breach of or creates (with or without the giving of notice or lapse of time, or both) a default under any agreement to which the Borrower is a party or by which it is bound or any of its properties is affected. No consent of any federal, state or local governmental authority, agency or other regulatory body, the absence of which could have a materially adverse effect on the Borrower or the Trustee, is or was required to be obtained in connection with the execution, delivery or performance of the Loan Documents and the transactions contemplated therein or in connection therewith, including, without limitation, with respect to the transfer of the shares of Common Stock purchased with the proceeds of the Loan pursuant thereto.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE LENDER

     The Lender hereby represents and warrants to the Borrower as follows:

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EXHIBIT 10.32

          Section 4.1 Power; Authority; Consents.

     The Lender has the power to execute, deliver and perform this Loan Agreement, the Pledge Agreement and all documents executed by the Lender in connection with the Loan, all of which have been duly authorized by all necessary and proper corporate or other action. No consent, authorization or approval or other action by any governmental authority or regulatory body, and no notice by the Lender to, or filing by the Lender with, any governmental authority or regulatory body is required for the due execution, delivery and performance of this Loan Agreement.

          Section 4.2 Due Execution; Validity; Enforceability.

     This Loan Agreement and the Pledge Agreement have been duly executed and delivered by the Lender; and each constitutes a valid and legally binding obligation of the Lender, enforceable in accordance with its terms.

          Section 4.3 ESOP; Contributions.

     The ESOP and the Borrower have been duly created, organized and maintained by the Lender in compliance with all applicable laws, regulations and rulings. The ESOP qualifies as an “employee stock ownership plan” as defined in section 4975(e)(7) the Code. The ESOP provides that the Lender may make contributions to the ESOP in an amount necessary to enable the Trustee to amortize the Loan in accordance with the terms of the Promissory Note and this Loan Agreement, and the Lender will make such contributions; provided, however, that no such contributions shall be required to the extent they would adversely affect the qualification of the ESOP under section 401(a) of the Code.

          Section 4.4 Trustee; Committee.

     The Lender has taken such action as is required to be taken by it to duly appoint the Trustee and the members of the Committee. The Committee constitutes the Committee defined in and described in the plan document for the Employee Stock Ownership Plan of Hudson City Savings Bank and the Trust Agreement by and between the Trustee and Hudson City Savings Bank made as of June 21, 1999, as amended from time to time. The Lender expressly acknowledges and agrees that this Loan Agreement, the Promissory Note and the Pledge Agreement are being executed by the Trustee not in its individual capacity but solely as trustee of and on behalf of the Borrower.

          Section 4.5 Compliance with Laws; Actions.

     Neither the execution and delivery by the Lender of this Loan Agreement or any instruments required thereby, nor compliance with the terms and provisions of any such documents by the Lender, constitutes a violation of any provision of any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality, or an event of default under any agreement, to which the Lender is a party or by which the Lender is bound or to which the Lender is subject, which violation or event of default would have a material adverse effect on the Lender. There is no action or proceeding pending or threatened against either of the ESOP or the Borrower before any court or administrative agency.

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EXHIBIT 10.32

ARTICLE V

EVENTS OF DEFAULT

          Section 5.1 Events of Default under Loan Agreement.

     Each of the following events shall constitute an “Event of Default” hereunder:

     (a) Failure to make any payment or mandatory prepayment of principal on the Promissory Note, or failure to make any payment of interest on the Promissory Note, within five (5) Business Days after the date when due.

     (b) Failure by the Borrower to perform or observe any term, condition or covenant of this Loan Agreement or of any of the other Loan Documents, including, without limitation, the Promissory Note and the Pledge Agreement, provided, however, that such failure is not cured by the Borrower within five (5) Business Days after notice of such failure is provided to the Borrower by the Lender.

     (c) Any representation or warranty made in writing to the Lender in any of the Loan Documents or any certificate, statement or report made or delivered in compliance with this Loan Agreement, shall have been false or misleading in any material respect when made or delivered.

          Section 5.2 Lender’s Rights upon Event of Default.

     If an Event of Default under this Loan Agreement shall occur and be continuing, the Lender shall have no rights to assets of the Borrower other than: (a) contributions (other than contributions of Common Stock) that are made by the Lender to enable the Borrower to meet its obligations pursuant to this Loan Agreement and earnings attributable to the investment of such contributions and (b) “Eligible Collateral” (as defined in the Pledge Agreement); provided, however, that: (i) the value of the Borrower’s assets transferred to the Lender following an Event of Default in satisfaction of the due and unpaid amount of the Loan shall not exceed the amount in default (without regard to amounts owing solely as a result of any acceleration of the Loan); (ii) the Borrower’s assets shall be transferred to the Lender following an Event of Default only to the extent of the failure of the Borrower to meet the payment schedule of the Loan; and (iii) all rights of the Lender to the Common Stock purchased with the proceeds of the Loan covered by the Pledge Agreement following an Event of Default shall be governed by the terms of the Pledge Agreement.

ARTICLE VI

MISCELLANEOUS PROVISIONS

          Section 6.1 Payments Due to the Lender.

     If any amount is payable by the Borrower to the Lender pursuant to any indemnity obligation contained herein, then the Borrower shall pay, at the time or times provided therefor, any such amount and shall indemnify the Lender against and hold it harmless from any loss or

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EXHIBIT 10.32

damage resulting from or arising out of the nonpayment or delay in payment of any such amount. If any amounts as to which the Borrower has so indemnified the Lender hereunder shall be assessed or levied against the Lender, the Lender may notify the Borrower and make immediate payment thereof, together with interest or penalties in connection therewith, and shall thereupon be entitled to and shall receive immediate reimbursement therefor from the Borrower, together with interest on each such amount as provided in section 2.2. Notwithstanding any other provision contained in this Loan Agreement, the covenants and agreements of the Borrower contained in this section 6.1 shall survive: (a) payment of the Promissory Note and (b) termination of this Loan Agreement.

          Section 6.2 Payments.

     All payments hereunder and under the Promissory Note shall be made without set-off or counterclaim and in such amounts as may be necessary in order that all such payments shall not be less than the amounts otherwise specified to be paid under this Loan Agreement and the Promissory Note, subject to any applicable tax withholding requirements. Upon payment in full of the Promissory Note, the Lender shall mark such Promissory Note “Paid” and return it to the Borrower.

          Section 6.3 Survival.

     All agreements, representations and warranties made herein shall survive the delivery of this Loan Agreement and the Promissory Note.

          Section 6.4 Modifications, Consents and Waivers; Entire Agreement.

     No modification, amendment or waiver of or with respect to any provision of this Loan Agreement, the Promissory Note, the Pledge Agreement, or any of the other Loan Documents, nor consent to any departure from any of the terms or conditions thereof, shall in any event be effective unless it shall be in writing and signed by the party against whom enforcement thereof is sought. Any such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No consent to or demand on a party in any case shall, of itself, entitle it to any other or further notice or demand in similar or other circumstances. This Loan Agreement embodies the entire agreement and understanding between the Lender and the Borrower and supersedes all prior agreements and understandings relating to the subject matter hereof other than the Amended and Restated Loan Agreement and instruments and agreements executed thereunder.

          Section 6.5 Remedies Cumulative.

     Each and every right granted to the Lender hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of the Lender or the holder of the Promissory Note to exercise, and no delay in exercising, any right shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or future exercise thereof or the exercise of any other right. The due payment and performance of the obligations under the Loan Documents shall be without regard to any counterclaim, right of offset or any other claim whatsoever which the Borrower may have against the Lender and

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EXHIBIT 10.32

without regard to any other obligation of any nature whatsoever which the Lender may have to the Borrower, and no such counterclaim or offset shall be asserted by the Borrower in any action, suit or proceeding instituted by the Lender for payment or performance of such obligations.

          Section 6.6 Further Assurances; Compliance with Covenants.

     At any time and from time to time, upon the request of the Lender, the Borrower shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further documents and instruments and do such other acts and things as the Lender may reasonably request in order to fully effect the terms of this Loan Agreement, the Promissory Note, the Pledge Agreement, the other Loan Documents and any other agreements, instructions and documents delivered pursuant hereto or in connection with the Loan.

          Section 6.7 Notices.

     Except as otherwise specifically provided for herein, all notices, requests, reports and other communications pursuant to this Loan Agreement shall be in writing, either by letter (delivered by hand or commercial messenger service or sent by registered or certified mail, return receipt requested, except for routine reports delivered in compliance with Article VI hereof which may be sent by ordinary first-class mail) or telex or facsimile, addressed as follows:

(a)	If to the Borrower:
	Employee Stock Ownership Plan Trust
	of Hudson City Bancorp, Inc.
	Hudson City Savings Bank
	West 80 Century City Road
	Paramus, New Jersey 07652-1473
	Attention: Senior Personnel Officer
with copies to:
	GreatBanc Trust Company
	45 Rockefeller Plaza, Suite 2055
	New York, New York 10111-2000
	Attention: Mr. Stephen J. Hartman, Jr.
	Thacher Proffitt & Wood llp
	Two World Financial Center, 28th Floor
	New York New York 10281
	Attention: W. Edward Bright, Esq.
	The Goldstein Law Firm, P.C.
	12 Corporate Woods Boulevard
	Albany, New York 12211-2350
	Attention: Brian P. Goldstein, Esq.

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EXHIBIT 10.32

(b)	If to the Lender:
	Hudson City Bancorp, Inc.
	West 80 Century Road
	Paramus, New Jersey 07652-1473
	Attention: Chief Financial Officer
with a copy to:
	Thacher Proffitt & Wood llp
	Two World Financial Center, 28th Floor
	New York New York 10281
	Attention: W. Edward Bright, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

          Section 6.8 Counterparts.

     This Loan Agreement may be signed in any number of counterparts which, when taken together, shall constitute one and the same document.

          Section 6.9 Construction; Governing Law.

     The headings used in the table of contents and in this Loan Agreement are for convenience only and shall not be deemed to constitute a part hereof. All uses herein of any gender or of singular or plural terms shall be deemed to include uses of the other genders or plural or singular terms, as the context may require. All references in this Loan Agreement to an Article or section shall be to an Article or section of this Loan Agreement, unless otherwise specified. This Loan Agreement, the Promissory Note, the Pledge Agreement and the other Loan Documents shall be governed by, and construed and interpreted in accordance with, the laws of the State of New Jersey. It is intended that the transactions contemplated by this Loan Agreement constitute an exempt loan within the meaning of Treasury Regulation §54.4975-7(b)(1)(iii) and Department of Labor Regulation §2550.408b-3, and the provisions hereof shall be construed and enforced in such manner as shall be necessary to give effect to such intent.

          Section 6.10 Severability.

     Wherever possible, each provision of this Loan Agreement shall be interpreted in such manner as to be effective and valid under applicable law; however, the provisions of this Loan Agreement are severable, and if any clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability

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EXHIBIT 10.32

shall affect only such clause or provision, or part thereof, in such jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Loan Agreement in any jurisdiction. Each of the covenants, agreements and conditions contained in this Loan Agreement is independent, and compliance by a party with any of them shall not excuse non-compliance by such party with any other. The Borrower shall not take any action the effect of which shall constitute a breach or violation of any provision of this Loan Agreement.

          Section 6.11 Binding Effect; No Assignment or Delegation.

     This Loan Agreement shall be binding upon and inure to the benefit of the Borrower and its successors and the Lender and its successors and assigns. The rights and obligations of the Borrower under this Agreement shall not be assigned or delegated without the prior written consent of the Lender, and any purported assignment or delegation without such consent shall be void.

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EXHIBIT 10.32

     In Witness Whereof, the parties hereto have caused this Loan Agreement to be duly executed as of the date first above written.

Employee Stock Ownership Plan Trust Of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	Ronald E. Hermance, Jr.
Title:	President and Chief Executive Officer

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EX-10.33

EXHIBIT 10.33

PROMISSORY NOTE

For the Principal Amount,
as defined below Paramus, New Jersey
June 21, 2005

     FOR VALUE RECEIVED, the undersigned, Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”), acting by and through its Trustee, GreatBanc Trust Company (“Trustee”), hereby promises to pay to the order of Hudson City Bancorp, Inc. (“Lender”) the Principal Amount, as determined under the Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (“Loan Agreement”) pursuant to which this Promissory Note is issued, payable in annual installments each of which shall be the lesser of (i) the portion of the principal amount of the loan which will result in the release for allocation to participants in the Employee Stock Ownership Plan of Hudson City Savings Bank (the “ESOP”) of a cumulative fraction of the collateral (valued at December 30, 2005) equal to 2/80 as of the last business day of December, 2005 and increased by 2/80 as of each succeeding December, to 80/80 on the last business day of December, 2044, and (ii) the portion of the principal amount of the loan which results in the release for allocation to ESOP participants of total collateral (valued as of the date of payment) under the Loan Agreement and that certain Amended and Restated Loan Agreement made and entered into between the Borrower and the Lender as of June 21, 2005 (the “Amended and Restated Loan Agreement”) having an aggregate value equal to 25.75% of compensation taken into account under the ESOP for each person entitled to share in the allocation; provided, however, that if the total aggregate number of shares of Common Stock scheduled to be released pursuant to clause (i) hereunder and pursuant to clause (i) of the Promissory Note relating to the Amended and Restated Loan in any year is less than one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement, the terms of the Loan and the Amended and Restated Loan shall be reduced such that the aggregate number of shares of Common Stock scheduled to be released in such year shall be equal to one hundred and three percent (103%) of the number of shares of Common Stock that would have been required to be released under the First Loan Agreement in the absence of its amendment and restatement (or, if less, the total number of shares of Common Stock then pledged as Collateral (as defined in the Pledge Agreement and the Pledge Agreement relating to the Amended and Restated Loan)), subject to the limitation set forth in clause (ii). Principal payments may be deferred to the extent that such payments would be in excess of the amount described above or otherwise would be nondeductible for federal income tax purposes. Any payment not required to be made pursuant to clause (ii) of the above provision shall be deferred to and be payable on the earlier of the last Business Day of December, 2044 or the last day of the first Plan Year in which such proviso would not apply to alleviate a requirement of payment; and payment not required to be made pursuant to the immediately preceding sentence shall be deferred to, and be payable on, the last day of the first Plan Year in which such payment may be made on a tax deductible basis.

     This Promissory Note shall bear interest at the rate per annum set forth or established under the Loan Agreement, such interest to be payable quarterly in arrears, commencing on June 30, 2005 and thereafter on the last Business Day of each calendar quarter and upon payment or prepayment of this Promissory Note.

     Anything herein to the contrary notwithstanding, the obligation of the Borrower to make payments of interest shall be subject to the limitation that payments of interest shall not be required to be made to the Lender to the extent that the Lender’s receipt thereof would not be permissible under the law or laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Any such payments of interest which are not made as a result of the limitation referred to in the preceding sentence shall be made by the Borrower to the Lender on the earliest interest payment date or dates on which the receipt thereof would be permissible under the laws applicable to the Lender limiting rates of interest which may be charged or collected by the Lender. Such deferred interest shall not bear interest.

     Payments of both principal and interest on this Promissory Note are to be made at the principal office of the Lender at West 80 Century Road, Paramus, New Jersey 07652 or such other place as the holder hereof shall designate to the Borrower in writing, in lawful money of the United States of America in immediately available funds.

     Failure to make any payment of principal on this Promissory Note, or failure to make any payment of interest on this Promissory Note, within five (5) Business Days after the date when due, shall constitute a default hereunder, whereupon the principal amount of and accrued interest on this Promissory Note shall immediately become due and payable in accordance with the terms of the Loan Agreement.

     This Promissory Note is subject, in all respects, to the terms and provisions of the Loan Agreement, which is incorporated herein by this reference, and is secured by a Pledge Agreement between the Borrower and the Lender of even date herewith and is entitled to the benefits thereof. All capitalized terms that are not defined herein shall have the meanings assigned to them in the Loan Agreement unless the context clearly indicates otherwise.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.

EX-10.34

EXHIBIT 10.34

PLEDGE AGREEMENT

by and between

EMPLOYEE STOCK OWNERSHIP PLAN TRUST
of
HUDSON CITY SAVINGS BANK

and

HUDSON CITY BANCORP, INC.

Made and Entered Into as of
June 21, 2005

Exhibit 10.34

TABLE OF CONTENTS

	PAGE
Section 1. Definitions		1
Section 2. Pledge		1
Section 3. Representations and Warranties of the Pledgor		2
Section 4. Eligible Collateral		2
Section 5. Delivery		3
Section 6. Events of Default		3
Section 7. Payment in Full		4
Section 8. No Waiver		4
Section 9. Binding Effect; No Assignment or Delegation		4
Section 10. Governing Law		4
Section 11. Notices		4
Section 12. Interpretation		5
Section 13. Construction		6

PLEDGE AGREEMENT

          This PLEDGE AGREEMENT (“Pledge Agreement”) is made as of the 21^st day of June, 2005, by and between the EMPLOYEE STOCK OWNERSHIP PLAN TRUST OF HUDSON CITY SAVINGS BANK, acting by and through its Trustee, GreatBanc Trust Company, a trust corporation organized under the laws of the State of Illinois and having an office at 45 Rockefeller Plaza, Suite 2055, New York, New York 10111-2000 (“Pledgor”), and Hudson City Bancorp, Inc., a corporation organized and existing under the laws of the State of Delaware, having an office at West 80 Century Road, Paramus, New Jersey 07652-1473 (“Pledgee”).

W I T N E S S E T H:

          Whereas, this Pledge Agreement is being executed and delivered to the Pledgee pursuant to the terms of a Loan Agreement of even date herewith (“Loan Agreement”), by and between the Pledgor and the Pledgee;

          Now, Therefore, in consideration of the mutual agreements contained herein and in the Loan Agreement, the parties hereto do hereby covenant and agree as follows:

          Section 1. Definitions. The following definitions shall apply for purposes of this Pledge Agreement, except to the extent that a different meaning is plainly indicated by the context; all capitalized terms used but not defined herein shall have the respective meanings assigned to them in the Loan Agreement:

     (a) Collateral shall mean the Pledged Shares and, subject to section 5 hereof, and to the extent permitted by applicable law, all rights with respect thereto, and all proceeds of such Pledged Shares and rights.

     (b) Event of Default shall mean an event so defined in the Loan Agreement.

     (c) Liabilities shall mean all the obligations of the Pledgor to the Pledgee, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under the Loan Agreement and the Promissory Note.

     (d) Pledged Shares shall mean all the shares of Common Stock of Hudson City Bancorp, Inc. purchased by the Pledgor with the proceeds of the loan made by the Pledgee to the Pledgor pursuant to the Loan Agreement, but excluding any such shares previously released pursuant to section 4.

          Section 2. Pledge. To secure the payment of and performance of all the Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the Pledgee a security interest in and lien upon, the Collateral.

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          Section 3. Representations and Warranties of the Pledgor. The Pledgor represents, warrants, and covenants to the Pledgee as follows:

     (a) to the actual knowledge of the Trustee, the execution, delivery and performance of this Pledge Agreement and the pledging of the Collateral hereunder do not and will not conflict with, result in a violation of, or constitute a default under any agreement binding upon the Pledgor;

     (b) the Pledged Shares are and will continue to be owned by the Pledgor free and clear of any liens or rights of any other person except the lien hereunder and under the Loan Agreement in favor of the Pledgee, and the security interest of the Pledgee in the Pledged Shares and the proceeds thereof is and will continue to be prior to and senior to the rights of all others;

     (c) to the actual knowledge of the Trustee, this Pledge Agreement is the legal, valid, binding and enforceable obligation of the Pledgor in accordance with its terms;

     (d) the Pledgor shall, from time to time, upon request of the Pledgee, promptly deliver to the Pledgee such stock powers, proxies, and similar documents, satisfactory in form and substance to the Pledgee, with respect to the Collateral as the Pledgee may reasonably request; and

     (e) subject to the first sentence of section 4(b), the Pledgor shall not, so long as any Liabilities are outstanding, sell, assign, exchange, pledge or otherwise transfer or encumber any of its rights in and to any of the Collateral.

          Section 4. Eligible Collateral.

     (a) As used herein the term “Eligible Collateral” shall mean that amount of Collateral which has an aggregate fair market value equal to the amount by which the Pledgor is in default (without regard to any amounts owing solely as the result of an acceleration of the Loan Agreement) or such lesser amount of Collateral as may be required pursuant to section 12 of this Pledge Agreement.

     (b) The Pledged Shares shall be released from this Pledge Agreement in a manner conforming to the requirements of Treasury Regulations Section 54.4975-7(b)(8), as the same may be from time to time amended or supplemented, and section 6.4(a) of the ESOP. Subject to such Regulations, the Pledgee may from time to time, after any Default or Event of Default, and without prior notice to the Pledgor, transfer all or any part of the Eligible Collateral into the name of the Pledgee or its nominee, with or without disclosing that such Eligible Collateral is subject to any rights of the Pledgor and may from time to time, whether before or after any of the Liabilities shall become due and payable, without notice to the Pledgor, take all or any of the following actions: (i) notify the parties obligated on any of the Eligible Collateral to make payment to the Pledgee of any amounts due or to become due thereunder, (ii) release or exchange all or any part of the Eligible Collateral, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any

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nature of any party with respect thereto, and (iii) take control of any proceeds of the Eligible Collateral.

          Section 5. Delivery.

     (a) The Pledgor shall deliver to the Pledgee upon execution of this Pledge Agreement an assignment by the Pledgor of all the Pledgor’s rights to and interest in the Pledged Shares.

     (b) So long as no Default or Event of Default shall have occurred and be continuing, (i) the Pledgor shall be entitled to exercise any and all voting and other rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Pledge Agreement, and (ii) the Pledgor shall be entitled to receive any and all cash dividends or other distributions paid in respect of the Collateral.

          Section 6. Events of Default.

     (a) If a Default or an Event of Default shall be existing, in addition to the rights it may have under the Loan Agreement, the Promissory Note, and this Pledge Agreement, or by virtue of any other instrument, (i) the Pledgee may exercise, with respect to the Eligible Collateral, from time to time any rights and remedies available to it under the Uniform Commercial Code as in effect from time to time in the State of New Jersey or otherwise available to it and (ii) the Pledgee shall have the right, for and in the name, place and stead of the Pledgor, to execute endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Eligible Collateral. Written notification of intended disposition of any of the Eligible Collateral shall be given by the Pledgee to the Pledgor at least three (3) Business Days before such disposition. Subject to section 13 below, any proceeds of any disposition of Eligible Collateral may be applied by the Pledgee to the payment of expenses in connection with the Eligible Collateral, including, without limitation, reasonable attorneys’ fees and legal expenses, and any balance of such proceeds may be applied by the Pledgee toward the payment of such of the Liabilities as are in Default, and in such order of application, as the Pledgee may from time to time elect. No action of the Pledgee permitted hereunder shall impair or affect its rights in and to the Eligible Collateral. All rights and remedies of the Pledgee expressed hereunder are in addition to all other rights and remedies possessed by it, including, without limitation, those contained in the documents referred to in the definition of Liabilities in section 1 hereof.

     (b) In any sale of any of the Eligible Collateral after a Default or an Event of Default shall have occurred, the Pledgee is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers or further restrict such prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Eligible Collateral),

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or in order to obtain such required approval of the sale or of the purchase by any governmental regulatory authority or official, and the Pledgor further agrees that such compliance shall not result in such sale’s being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Pledgee be liable or accountable to the Pledgor for any discount allowed by reason of the fact that such Eligible Collateral is sold in compliance with any such limitation or restriction.

          Section 7. Payment in Full. Upon the payment in full of all outstanding Liabilities, this Pledge Agreement shall terminate and the Pledgee shall forthwith assign, transfer and deliver to the Pledgor, against receipt and without recourse to the Pledgee, all Collateral then held by the Pledgee pursuant to this Pledge Agreement.

          Section 8. No Waiver. No failure or delay on the part of the Pledgee in exercising any right or remedy hereunder or under any other document which confers or grants any rights in the Pledgee in respect of the Liabilities shall operate as a waiver thereof nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy of the Pledgee.

          Section 9. Binding Effect; No Assignment or Delegation. This Pledge Agreement shall be binding upon and inure to the benefit of the Pledgor, the Pledgee and their respective successors and assigns, except that the Pledgor may not assign or transfer its rights hereunder without the prior written consent of the Pledgee (which consent shall not unreasonably be withheld). Each duty or obligation of the Pledgor to the Pledgee pursuant to the provisions of this Pledge Agreement shall be performed in favor of any person or entity designated by the Pledgee, and any duty or obligation of the Pledgee to the Pledgor may be performed by any other person or entity designated by the Pledgee.

          Section 10. Governing Law. This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to agreements to be performed wholly within the State of New Jersey.

          Section 11. Notices. All notices, requests, instructions or documents hereunder shall be in writing and delivered by hand or commercial messenger service or sent by United States mail, registered or certified, return receipt requested, with proper postage prepaid, or by telex or facsimile, addressed as follows:

(a) If to the Pledgee:

Hudson City Bancorp, Inc.
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Chief Financial Officer

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with a copy to:

Thacher Proffitt & Wood llp
Two World Financial Center,
New York, New York 10281
Attention: W. Edward Bright, Esq.

(b) If to the Pledgor:

Employee Stock Ownership Plan Trust
of Hudson City Savings Bank
c/o Hudson City Savings Bank
West 80 Century Road
Paramus, New Jersey 07652-1473
Attention: Senior Personnel Officer

with copies to:
GreatBanc Trust Company
45 Rockefeller Plaza, Suite 2055
New York, New York 10111-2000
Attention: Mr. Stephen J. Hartman, Jr.

Thacher Proffitt & Wood llp
Two World Financial Center, 28^th Floor
New York, New York 10281
Attention: W. Edward Bright, Esq.

The Goldstein Law Firm, P.C.
12 Corporate Woods Boulevard
Albany, New York 12211-2350
Attention: Brian P. Goldstein, Esq.

Any notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand or by commercial messenger service, or sent by telex or facsimile, to such party at its address specified above, or, if sent by mail, on the third Business Day after the day deposited in the mail, postage prepaid, addressed as aforesaid. Any party may change the person or address to whom or which notices are to be given hereunder, by notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given only when actually received by the party to whom it is addressed.

          Section 12. Interpretation. Wherever possible each provision of this Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited by or invalid under such law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions hereof.

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          Section 13. Construction. All provisions hereof shall be construed so as to maintain (a) the ESOP as a qualified leveraged employee stock ownership plan under section 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986 (the “Code”), (b) the Trust as exempt from taxation under section 501(a) of the Code and (c) the Trust Loan as an exempt loan under section 54.4975-7(b) of the Treasury Regulations and as described in Department of Labor Regulation section 2550.408b-3.

          In Witness Whereof, this Pledge Agreement has been duly executed by the parties hereto as of the day and year first above written.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President
Hudson City Bancorp, Inc.
By:	/s/ Ronald E. Hermance, Jr.
Title:	Chairman and Chief Executive Officer

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EX-10.35

EXHIBIT 10.35

FORM OF ASSIGNMENT

     In consideration of the loan made by Hudson City Bancorp, Inc. (“Lender”) to the Employee Stock Ownership Plan Trust of Hudson City Savings Bank (“Borrower”) pursuant to the Loan Agreement between the Lender and the Borrower of even date herewith (“Loan Agreement”) and pursuant to the Pledge Agreement between the Lender and the Borrower of even date herewith pertaining thereto, subject to the terms of the Loan Agreement and the Pledge Agreement, the undersigned Borrower hereby transfers, assigns and conveys to Lender all its right, title and interest in and to those certain shares of common stock of the Lender which it shall purchase with the proceeds of the loan made pursuant to the Loan Agreement, and agrees to transfer and endorse to Lender the certificates representing such shares as and when required pursuant to the Loan Agreement or Pledge Agreement.

Employee Stock Ownership Plan Trust of Hudson City Savings Bank
By:	GreatBanc Trust Company, as Trustee and not in any other capacity
By:	/s/ Stephen J. Hartman, Jr.
Title:	Senior Vice President

June 21, 2005

EX-11.1

EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS

For the Year Ended December 31, 2005

1.	Net income	$	276,055,000
2.	Total weighted average common shares outstanding-basic		567,789,397
3.	Basic earnings per share	$	0.49
4.	Total weighted average common shares outstanding-diluted		581,063,426
5.	Diluted earnings per share	$	0.48

EX-21.1

EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT

The following is a list of the subsidiaries of Hudson City Bancorp, Inc.:
Name	State of Incorporation
Hudson City Savings Bank	New Jersey
The following is a list of the subsidiaries of Hudson City Savings Bank:
Name	State of Incorporation
HudCiti Service Corporation	New Jersey
Name	State of Incorporation
HC Value Broker Services, Inc	New Jersey
The following is a list of the subsidiaries of HudCiti Service Corporation:
Name	State of Incorporation
Hudson City Preferred Funding Corp.	Delaware

  EX-23.1 19 y18482exv23w1.htm EX-23.1: CONSENT OF KPMG LLP

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Hudson City Bancorp, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-73090, No. 333-95193, No. 333-78969 and No. 333-114536) on Form S-8 of Hudson City Bancorp, Inc. of our reports dated March 14, 2006, with respect to the consolidated statements of financial condition of Hudson City Bancorp, Inc. and subsidiary as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2005, management’s assessment of effectiveness of internal control over financial reporting as of December 31, 2005 and the effectiveness of internal control over financial reporting as of December 31, 2005, which reports appear in the December 31, 2005 annual report on Form 10-K of Hudson City Bancorp, Inc.

New York, New York
March 14, 2006

EX-23.1

EX-23.1

EX-31.1

EXHIBIT 31.1
CERTIFICATION OF DISCLOSURE

I, Ronald E. Hermance, Jr., certify that:

1.	I have reviewed this Annual Report on Form 10-K of Hudson City Bancorp, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-l5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2006	By:	/s/ Ronald E. Hermance, Jr.
		Ronald E. Hermance, Jr.
		Chairman, President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2
CERTIFICATION OF DISCLOSURE

I, Denis J. Salamone, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Hudson City Bancorp, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-l5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 14, 2006	By:	/s/ Denis J. Salamone
		Denis J. Salamone
		Senior Executive Vice President and Chief Operating Officer

EX-32.1

EXHIBIT 32.1

STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

The undersigned, Ronald E. Hermance, Jr., is the chief executive officer of Hudson City Bancorp, Inc. (the “Company”), and Denis J. Salamone, is the principal financial officer of the Company.

This statement is being furnished in connection with the filing by the Company of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 (the “Report”).

By execution of this statement, we certify that:

A)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and
B)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

Date: March 14, 2006	By:	/s/ Ronald E. Hermance, Jr.
		Ronald E. Hermance, Jr.
		Chairman, President and Chief Executive Officer
Date: March 14, 2006	By:	/s/ Denis J. Salamone
		Denis J. Salamone
		Senior Executive Vice President and Chief Operating Officer