DIME COMMUNITY BANCSHARES INC (Form: 10-K, Received: 03/16/2009 16:22:20)

BENEFIT MAINTENANCE PLAN

DIME COMMUNITY BANCSHARES, INC.

_________________________________

Adopted Effective as of November 1, 1992

Amended and Restated Effective as of December 31, 2008

TABLE OF CONTENTS

		Page
ARTICLE I -DEFINITIONS
Section 1.1	Actuarial Equivalent	1
Section 1.2	Affiliated Employer	1
Section 1.3	Applicable Limitation	1
Section 1.4	Bank	2
Section 1.5	Beneficiary	2
Section 1.6	Board	2
Section 1.7	Change in Control	2
Section 1.8	Code	2
Section 1.9	Committee	2
Section 1.10	Company	2
Section 1.11	Disability	2
Section 1.12	Eligible Employee	2
Section 1.13	Employee	3
Section 1.14	Employer	3
Section 1.15	Employer Contributions	3
Section 1.16	ERISA	3
Section 1.17	ESOP	3
Section 1.18	Exchange Act	3
Section 1.19	Fair Market Value of a Share	3
Section 1.20	Former Participant	3
Section 1.21	Savings Plan	3
Section 1.22	Memorandum Account	4
Section 1.23	Participant Account	4
Section 1.24	Plan	4
Section 1.25	Retirement Plan	4
Section 1.26	Specified Employee	4
Section 1.27	Share	4
Section 1.28	Stock Unit	4
Section 1.29	Termination of Service	4
Section 1.30	Unforeseeable Emergency	4
ARTICLE II -PARTICIPATION		5
Section 2.1	Eligibility for Participation	5
Section 2.2	Commencement of Participation	5
Section 2.3	Termination of Participation	5
ARTICLE III -BENEFITS TO PARTICIPANTS		5
Section 3.1	Supplemental Retirement Benefit	5
Section 3.2	Supplemental Savings Benefiit	6
Section 3.3	Supplemental ESOP Benefits	8
ARTICLE IV -DEATH BENEFITS		11
Section 4.1	Supplemental Retirement Plan Death Benefits	11
Section 4.2	Supplemental Savings Plan Death Benefits	11
Section 4.3	Supplemental ESOP Death Benefits	11
Section 4.4	Beneficiaries	11
ARTICLE V -DISTRIBUTIONS		12
Section 5.1	Scheduled Distributions to Participant	12
Section 5.2	Mandatory Cashout of Small Balances	13
Section 5.3	Restrictions on Payments to Specified Employees	13
Section 5.4	One-Time Election During	13
ARTICLE VI -TRUST FUND		14
Section 6.1	Establishment of Trust	14
Section 6.2	Contributions to Trust	14
Section 6.3	Unfunded Character of Plan	14
Section 6.4	Payments in the Event of a Change in Control	14
ARTICLE VII -ADMINISTRATION		15
Section 7.1	The Committee	15
Section 7.2	Liability of Committee Members and their Delegates	16
Section 7.3	Plan Expenses	16
Section 7.3	Facility of Payment	16
ARTICLE VIII -AMENDMENT AND TERMINATION		16
Section 8.1	Amendment by the Company	16
Section 8.2	Termination	17
Section 8.3	Amendment or Termination by Other Employers	17
ARTICLE IX -MISCELLANEOUS PROVISIONS		17
Section 9.1	Construction and Language	17
Section 9.2	Headings	17
Section 9.3	Non-Alienation of Benefits	18
Section 9.4	Indemnification	18
Section 9.5	Severability	18
Section 9.6	Waiver	18
Section 9.7	Governing Law	18
Section 9.8	Taxes	19
Section 9.9	No Deposit Account	19
Section 9.10	No Right to Continued Employment	19
Section 9.11	Status of Plan Under ERISA	19
Section 9.12	Compliance with Section 409A of the Code	19
ARTICLE X -EFFECTIVE DATE OF THE AMENDED AND RESTATED PLAN		20

Benefit Maintenance Plan

Dime Community Bancshares, Inc.

ARTICLE I

DEFINITIONS

Wherever appropriate to the purposes of the Plan, capitalized terms shall have the meanings assigned to them under the Retirement Plan, Savings Plan or ESOP, as applicable; provided, however , that the following special definitions shall apply for purposes of the Plan, unless a different meaning is clearly indicated by the context:

Section 1.1 Actuarial Equivalent means a benefit of equivalent value determined on the basis of interest rate and mortality assumptions prescribed under the Retirement Plan. If it shall be necessary to determine an Actuarial Equivalent in any case for which interest rate and mortality assumptions shall not have been prescribed under the Retirement Plan, the Actuarial Equivalent shall be determined using the interest rate and mortality assumptions prescribed by the Commissioner of Internal Revenue pursuant to section 417(e) of the Code for the month in which the determination is being made.

Section 1.2 Affiliated Employer means any corporation which is a member of a controlled group of corporations (as defined in section 414(b) of the Code) that includes the Company; any trade or business (whether or not incorporated) that is under common control (as defined in section 414(c) of the Code) with the Company; any organization (whether or not incorporated) that is a member of an affiliated service group (as defined in section 414(m) of the Code) that includes the Company; any leasing organization (as defined in section 414(n) of the Code) to the extent that any of its employees are required pursuant to section 414(n) of the Code to be treated as employees of the Company; and any other entity that is required to be aggregated with the Company pursuant to regulations under section 414(o) of the Code.

Section 1.3 Applicable Limitation means any of the following: (a) the limitation on annual compensation that may be recognized under a tax-qualified plan for benefit computation purposes pursuance to section 401(a)(17) of the Code; (b) the maximum limitation on annual benefits payable by a tax-qualified defined benefit plan pursuant to section 415(b) of the Code; (c) the maximum limitation on annual additions to a tax-qualified defined contribution plan pursuant to section 415(c) of the Code; (d) the maximum limitation on aggregate annual benefits and annual additions under a combination of tax-qualified defined benefit and defined contribution plans maintained by a single employer pursuant to section 415(e) of the Code; (e) the maximum limitation on annual elective deferrals to a qualified cash or deferred arrangement pursuant to section 402(g) of the Code; (f) the annual limitation on elective deferrals under a qualified cash or deferred arrangement by highly compensated employees pursuant to section 401(k) of the Code; and (g) the annual limitation on voluntary employee contributions by, and employer matching contributions for, highly compensated employees pursuant to section 401(m) of the Code.

Section 1.4 Bank means The Dime Savings Bank of Williamsburgh, a federal stock savings bank, and its successors or assigns.

Section 1.5 Beneficiary means any person, other than a Participant or Former Participant, who is determined to be entitled to benefits under the terms of the Plan.

Section 1.6 Board means the Board of Directors of the Company.

Section 1.7 Change in Control means, with respect to a Participant: (a) a change in ownership of the Participant’s Relevant Corporation (as defined below); (b) a change in effective control of the Participant’s Relevant Corporation; or (c) a change in the ownership of a substantial portion of the assets of the Participant’s Relevant Corporation. The existence of a Change in Control shall be determined by the Committee in accordance with section 409A of the Code and the regulations thereunder. For purposes of this section, Relevant Corporation means, with respect to a Participant on any date: (w) the corporation for which the Participant is performing services on such date; (x) all corporations that are liable to the Participant for the benefits due to him under the Plan; (y) a corporation that is a majority shareholder of a corporation described in section 1.7(w) or (x); or (z) any corporation in a chain of corporations each of which is a majority shareholder of another corporation in the chain, ending in a corporation described in section 1.7(w) or (x).

Section 1.8 Code means the Internal Revenue Code of 1986 (including the corresponding provisions of any prior law or succeeding law).

Section 1.9 Committee means the Compensation Committee of the Board of Directors of the Company, or such other person, committee or other entity as shall be designated by or on behalf of the Board to perform the duties set forth in Article VII.

Section 1.10 Company means, Dime Community Bancshares, Inc., a Delaware corporation, any successor thereto.

Section 1.11 Disability means, with respect to a Participant, any medically determinable physical or mental impairment which can be expected to result in death or to last for a continuous period of at least twelve (12) months and as a result of which either: (a) the Participant is unable to engage in any substantial gainful activity or (b) the Participant has been receiving income replacement benefits for a period of at least three (3) months under an accident and health plan covering employees of the Participant’s employer; provided, however, that a Participant will be deemed disabled and a Disability will be deemed to exist under the Plan if such Participant is determined to be totally disabled by the Social Security Administration or Railroad Retirement Board. The existence of a Disability shall be determined by the Committee in accordance with section 409A and the regulations thereunder.

Section 1.12 Eligible Employee means an Employee who is eligible for participation in the Plan in accordance with the provisions of Article II.

Section 1.13 Employee means any person, including an officer, who is employed by the Employer.

Section 1.14 Employer means Dime Community Bancshares, Inc., and any successor thereto and The Dime Savings Bank of Williamsburgh and any successor thereto and any Affiliated Employer which, with the prior written approval of the Board of Directors of Dime Community Bancshares, Inc. and subject to such terms and conditions as may be imposed by the Board of Directors of Dime Community Bancshares, Inc., shall adopt this Plan.

Section 1.15 Employer Contributions means contributions by any Employer to the Savings Plan or the ESOP.

Section 1.16 ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time (including the corresponding provisions of any succeeding law).

Section 1.17 ESOP means the Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and Certain Affiliates, as amended from time to time (including the corresponding provisions of any successor qualified employee stock ownership plan adopted by the Company).

Section 1.18 Exchange Act means the Securities Exchange Act of 1934, as amended from time to time (including the corresponding provisions of any succeeding law).

Section 1.19 Fair Market Value of a Share means, with respect to a Share on a specified date:

(a) the final reported sales price on the date in question (or if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) as reported in the principal consolidated reporting system with respect to securities listed or admitted to trading on the principal United States securities exchange on which the Shares are listed or admitted to trading; or

(b) if the Shares are not listed or admitted to trading on any such exchange, the closing bid quotation with respect to a Share on such date on the National Association of Securities Dealers Automated Quotations System, or, if no such quotation is provided, on another similar system, selected by the Committee, then in use; or

Section 1.20 Former Participant means a person whose participation in the Plan has terminated as provided under section 1.30.

Section 1.21 Savings Plan means the 401(k) Savings Plan of The Dime Savings Bank of Williamsburgh, as amended from time to time (including the provisions of any successor qualified defined contribution plan adopted by the Company).

Section 1.22 Memorandum Account means, collectively, all of the accounts that hold all of the deferred compensation credited to a Participant under Article III reduced to reflect distributions.

Section 1.23 Participant Account means any person who is participating in the Plan in accordance with its terms.

Section 1.24 Plan means the Benefit Maintenance Plan of Dime Community Bancshares, Inc., as amended from time to time (including the corresponding provisions of any successor plan adopted by the Company).

Section 1.25 Retirement Plan means the Retirement Plan of The Dime Savings Bank of Williamsburgh, as amended from time to time (including the corresponding provisions of any successor qualified defined benefit plan adopted by the Bank).

Section 1.26 Specified Employee has the meaning set forth in section 409A of the Code.

Section 1.27 Share means a share of common stock, par value $.01 per share, of Dime Community Bancshares., Inc.

Section 1.28 Stock Unit means a right to receive a payment under the Plan in an amount equal, on the date as of which such Payment is made, to the Fair Market Value of a Share.

Section 1.29 Termination of Service means cessation of all services to all Relevant Employers (as defined below) in all capacities other than as a director of such Relevant Employer’s board of directors. The occurrence of a Termination of Service shall be determined by the Committee in accordance with the rules for determining whether a "separation from service" has occurred under section 409A of the Code and the regulations thereunder. For purposes of this section, Relevant Employer means, with respect to a Participant on any date: any Employer for whom the Participant performs services and with respect to whom the Participant's rights under this Plan arise, and any corporation, or trade or business whether or not incorporated, that is considered a "single employer" with such Employer within the meaning of section 414(b) or section 414(c) of the Code; provided that when applying sections 1563(a)(1), (2) and (3) of the Code or Treasury Regulation section 1.414(c)-2 pursuant to section 414(b) or section 414(c) of the Code, the phrase "at least 50 percent" shall be used instead of the phrase "at least 80 percent" in each place it appears therein.

Section 1.30 Unforeseeable Emergency means, with respect to a Participant, a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, beneficiary or dependent (within the meaning of section 152 of the Code, without regard to sections 152(b)(1), (b)(2), and (d)(1)(B) of the Code), loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The existence of an Unforeseeable Emergency shall be determined by the Committee in accordance with section 409A of the Code and the regulations thereunder.

ARTICLE II

PARTICIPATION

Section 2.1 Eligibility for Participation .

Only Eligible Employees may be or become Participants. An Employee shall become an Eligible Employee if:

(a) he has been designated an Eligible Employee by resolution of the Committee; and

(b) he is a Participant in the Retirement Plan, the Savings Plan or the ESOP, or any combination thereof, and the benefits to which he is entitled thereunder are limited by one or more of the Applicable Limitations;

provided, however , that no person shall be named an Eligible Employee, nor shall any person who has been an Eligible Employee continue as an Eligible Employee, to the extent that such person's participation, or continued participation, in the Plan would cause the Plan to fail to be considered maintained for the primary purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of ERISA.

Section 2.2 Commencement of Participation

An Employee shall become a Participant on the date when he first becomes an Eligible Employee, unless the Committee shall, by resolution, establish an earlier or later effective date of participation for a Participant.

Termination of Participation

Participation in the Plan shall cease on the earlier of (a) the date of the Participant's Termination of Service or (b) the date on which he ceases to be an Eligible Employee.

ARTICLE III

BENEFITS TO PARTICIPANTS

Section 3.1 Supplemental Retirement Benefit

(a) A Participant whose benefits under the Retirement Plan are limited by one or more of the Applicable Limitations shall be eligible for a supplemental retirement benefit under this Plan in an amount equal to the excess of:

(i) the retirement benefit to which he would be entitled under the Retirement Plan in the absence of the Applicable Limitations; over

(ii) the actual retirement benefit to which he is entitled under the Retirement Plan;

in each case computed as of the date on which his benefit under the Retirement Plan is scheduled to commence and on the basis of the benefit form selected by him under the Retirement Plan; provided, however , that if the Participant dies before the payment of such supplemental retirement benefit begins, no benefit shall be payable under this section 3.1 and the survivor benefit, if any, which may be payable shall be determined under section 4.1.

(b) The supplemental retirement benefit provided for in this section 3.1 shall be paid in the form of a single life annuity commencing on the first day of the month coincident with or next following the Participant's Termination of Service or, if later, the first day of the month coincident with or next following Participant's 65th birthday. Notwithstanding the foregoing, a Participant may, subject to the restrictions in section 5.1, within thirty (30) days after first becoming eligible to participate in the Plan for purpose of receiving a supplemental retirement benefit, elect that such supplemental retirement benefit (to the extent that such benefit is attributable to compensation for services performed after such election) be paid in a different form or commencing at a different time by filing a written election, in such form and manner as the Committee may provide, within such thirty (30) day period, and the amount of such benefit shall be the Actuarial Equivalent of the benefit payable in the absence of such an election.

(c) Notwithstanding section 3.1(b), subject to the consent of the Committee in its sole and absolute discretion, each Participant may, by written election given in such form and manner as the Committee may prescribe, elect to change the time and manner of distribution of the balance credited to the supplemental retirement benefit; provided, however, that:

(i) any such election shall not take effect until twelve (12) months after it is received by the Committee;

(ii) in the case of an election to defer a payment to be made on account of an event other than the Participant’s death, Disability or Unforeseeable Emergency, the first payment made under such election shall not occur until at least five (5) years later than such payment would otherwise have been made (or begin to be made); and

(iii) any such election is subject to the restrictions in section 5.1.

Section 3.2 Supplemental Savings Benefit .

(a) A Participant whose benefits under the Savings Plan are limited by one or more of the Applicable Limitations shall be eligible for a supplemental savings benefit under this Plan in an amount equal to:

(i) the aggregate amount of Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating in the Savings Plan) that would have been credited to the Participant's account under the Savings Plan in the absence of the Applicable Limitations if for all relevant periods he had made the maximum amount of elective deferrals under section 402(g) of the Code or voluntary employee contributions under section 401(a) of the Code required to qualify for the maximum possible allocation of Employer Contributions (and without regard to the amount of elective deferrals or voluntary employee contributions actually made); over

(ii) the aggregate amount of Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating in the Savings Plan) actually credited to the Participant's account under the Savings Plan for such periods;

adjusted for earnings and losses as provided in section 3.2(b); provided, however , that if the Participant dies before the payment of such supplemental savings benefit begins, no benefit shall be payable under this section 3.2 and the survivor benefit, if any, which may be payable shall be determined under section 4.2.

(b) The Committee shall cause to be maintained a bookkeeping account to reflect all Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating in the Savings Plan) that cannot be made to a Participant's account under the Savings Plan due to the Applicable Limitations and amounts under section 3.2(c), and shall cause such bookkeeping account to be credited with all such Employer Contributions as of the date on which such Employer Contributions would have been credited to the Participant's account in the Savings Plan in the absence of the Applicable Limitations. The balance credited to such bookkeeping account shall be adjusted for distributions, withdrawals, earnings or losses as follows:

(i) except as provided in section 3.2(b)(ii), the balance credited to such bookkeeping account shall be credited with interest as of the last day of each calendar month at a rate for such month equal to one-twelfth of the annualized yield on 30-year Treasury Securities, Constant Maturities, prescribed by the Commissioner of Internal Revenue for such month pursuant to section 417(e) of the Code; or

(ii) if and to the extent permitted by the Committee, as though such Employer Contributions had been contributed to a trust fund and invested, for the benefit of the Participant, in such investments at such time or times as the Participant shall have designated in such form and manner as the Committee shall prescribe.

(iii) The balance credited to the bookkeeping account shall be reduced for any distributions or withdrawals.

(c) Effective June 15, 2008, the balance credited to the bookkeeping accounts of Messrs. Timothy King and Michael Pucella under this section 3.2 shall be adjusted as follows:

(i) in the case of Mr. King, the balance credited to his a bookkeeping account shall be credited with an additional Seven Thousand Seven Hundred Sixty-Eight Dollars ($7,768); and

(ii) in the case of Mr. Pucella, the balance credited to his bookkeeping account shall be credited with an additional Six Thousand One Hundred Ninety-One Dollars ($6,191).

(d) The supplemental savings benefit payable to a Participant hereunder shall be paid in a single lump sum within the first thirty days of the calendar year following the calendar year in which the Participant's Termination of Service occurs and shall be equal to the balance credited to his bookkeeping account as of the last day of the last calendar month to end prior to the date of payment. Notwithstanding the foregoing, a Participant may, subject to the restrictions in section 5.1, within thirty (30) days after first becoming eligible to participate in the Plan for purposes of receiving a supplemental savings benefit, elect that such supplemental savings benefit (to the extent that such benefit is attributable to compensation for services performed after such election) be paid in a different form or commencing at a different time by filing a written election, in such form and manner as the Committee may prescribe, within such thirty (30) day period.

(e) Notwithstanding section 3.2(d), subject to the consent of the Committee in its sole and absolute discretion, each Participant may, by written election given in such form and manner as the Committee may prescribe, elect to change the time and manner of distribution of the balance credited to the supplemental savings benefit; provided, however, that:

(i) any such election shall not take effect until twelve (12) months after it is received by the Committee;

(iii) any such election is subject to the restrictions in section 5.1.

Section 3.3 Supplemental ESOP Benefits

(a) A Participant whose benefits under the ESOP are limited by one of more of the Applicable Limitations shall be eligible for a supplemental ESOP benefit under this Plan in an amount equal to the sum of:

(i) for each period for which an allocation of Shares is made under the ESOP, a number of Stock Units the excess of (A) the number of Shares that bears the same relationship to such Participant's compensation taken into account in determining allocations under the ESOP (without regard to any limit on such compensation pursuant to any Applicable Limitation) as the number of Shares allocated for such period under the ESOP to an individual whose allocation is not limited by any Applicable Limitation bears to such person's compensation taken into account in determining allocations under the ESOP over (b) the actual number of Shares allocated to such Participant under the ESOP for such period, taking into account in both cases Shares allocated as a result of forfeitures; and

(ii) if and to the extent that Employer Contributions to the ESOP result in allocations to the Participant's account of assets other than Shares for any period, an amount for each period equal to the excess (if any) of (A) the dollar amount that bears the same relationship to such Participant's compensation taken into account in allocating Employer Contributions under the ESOP (without regard to any limit on such compensation pursuant to any Applicable Limitation) as the dollar amount of Employer Contributions allocated for such period under the ESOP to an individual whose allocation is not limited by any Applicable Limitation bears to such person's compensation taken into account in determining allocations under the ESOP over (b) the actual dollar amount of Employer Contributions allocated to such Participant under the ESOP for such period, taking into account in both cases dollar amounts allocated as a result of forfeitures.

adjusted for earnings and losses as provided in section 3.3(b); provided, however , that if the Participant dies before the payment of such supplemental ESOP benefit begins, no benefit shall be payable under this section 3.3 and the survivor benefit, if any, which may be payable shall be determined under section 4.3.

(b) The Committee shall cause to be maintained a bookkeeping account to reflect all Shares and Employer Contributions (including any reallocation of amounts forfeited upon the termination of employment of others participating in the ESOP) that cannot be allocated to a Participant's account under the ESOP due to the Applicable Limitations and amounts under section 3.3(c), and shall cause such bookkeeping account to be credited with such Employer Contributions and Stock Units reflecting such Shares as of the date on which such Employer Contributions and Shares, respectively, would have been credited to the Participant's account in the ESOP in the absence of the Applicable Limitations. The balance credited to such bookkeeping account shall be adjusted for distributions, withdrawals, earnings or losses as follows:

(i) all Stock Units shall be adjusted from time to time so that the value of a Stock Unit on any date is equal to the Fair Market Value of Share on such date and the number of Stock Units shall be adjusted as and when appropriate to reflect any stock dividend, stock split, reverse stock split, exchange, conversion, or other event generally affecting the number of Shares held by all holders of Shares; and

(ii) (A) except as provided in section 3.3(b)(ii)(B), the balance credited to such bookkeeping account that does not consist of Stock Units shall be credited with interest as of the last day of each calendar month at a rate for such month equal to one twelfth of the annualized yield on 30-year Treasury Securities, Constant Maturities, prescribed by the Commissioner of Internal Revenue for such month pursuant to section 417(e) of the Code; or

(B) if and to the extent permitted by the Committee, the balance credited to such bookkeeping account that does not consist of Stock Units shall be adjusted as though such Employer Contributions had been contributed to a trust find and invested, for the benefit of the Participant, in such investments at such time or times as the Participant shall have designated in such form and manner as the Committee shall prescribe;

(iii) The balance credited to the bookkeeping account shall be reduced for any distributions or withdrawals.

provided, however , that to the extent that the Participant shall receive on a current basis any dividend paid with respect to Shares credited to his account under the ESOP, the bookkeeping account established for him under this Plan shall not be adjusted to reflect such dividend and, instead, the Participant shall be paid an amount per Stock Unit equal to the dividend par Share received by the Participant under the ESOP, at substantially the same time as such dividend is paid under the ESOP.

(c) Effective June 15, 2008, the balance credited to the bookkeeping accounts of Messrs. Timothy King and Michael Pucella under this section 3.3 shall be adjusted as follows:

(i) in the case of Mr. King, the balance credited to his a bookkeeping account shall be credited with an additional Twenty-Seven Thousand Sixty-Nine Dollars ($27,069); and

(ii) in the case of Mr. Pucella, the balance credited to his bookkeeping account shall be credited with an additional Twenty-Two Thousand Five Hundred Seventy-Three Dollars ($22,573).

(d) The supplemental ESOP benefit payable to a Participant hereunder shall be paid in a single lump sum within the first thirty days of the calendar year in which the Participant's Termination of Service occurs and shall be in an amount equal to the balance credited to his bookkeeping account. Notwithstanding the foregoing, a Participant may, subject to the restrictions in section 5.1, within thirty (30) days after first becoming eligible to participate in the Plan for purposes of receiving a supplemental ESOP benefit, elect that such supplemental ESOP benefit (to the extent that such benefit is attributable to compensation for services performed after such election) be paid in a different form or commencing at a different time by filing a written election, in such form and manner as the Committee may prescribe, within such thirty (30) day period.

(e) Notwithstanding section 3.3(d), subject to the consent of the Committee in its sole and absolute discretion, each Participant may, by written election given in such form and manner as the Committee may prescribe, elect to change the time and manner of distribution of the balance credited to the supplemental retirement benefit; provided, however, that:

(i) any such election shall not take effect until twelve (12) months after it is received by the Committee;

(iii) any such election is subject to the restrictions in section 5.1.

ARTICLE IV

DEATH BENEFITS

Section 4.1 Supplemental Retirement Plan Death Benefits .

If a Participant who is eligible for a supplemental retirement benefit under section 3.1 dies before the payment of such benefit begins, a supplemental survivor's retirement benefit shall be payable to the Participant's Beneficiary under this Plan in amount equal to the excess (if any) of (a) the survivor's benefit that would have been payable under the Retirement Plan commencing at the earliest permissible date in the absence of the Applicable Limitations if the Participant had effectively designated such Beneficiary as his beneficiary under the Retirement Plan, over (b) the survivor's benefit would have been payable under the Retirement Plan commencing at the earliest permissible date after giving effect too the Applicable Limitations if the Participate had effectively designated such Beneficiary as his beneficiary under the Retirement Plan. Such benefit shall be paid in a single lump sum which is the Actuarial Equivalent of the benefit described in the preceding sentence within the first thirty days of the calendar year following the death of the Participant.

Section 4.2 Supplemental Savings Plan Death Benefits .

If a Participant who is eligible for a supplemental savings benefit under section 3.2 dies before the payment of such benefit begins, a supplemental survivor's savings benefit shall be payable to the Participant's Beneficiary under this Plan in amount equal to the balance credited to the bookkeeping account established for the Participant under section 3.2(b). Such benefit shall be paid in a single lump within the first thirty days of the calendar year following the death of the Participant and the bookkeeping account established for such Participant pursuant to section 3.2(b) shall continue to be adjusted as provided therein through the last day of the last calendar month to end prior to the date of payment.

Section 4.3 Supplement ESOP Death Benefits .

If a Participant who is eligible for a supplemental ESOP benefit under section 3.3 dies before the payment of such benefit begins, a supplemental ESOP benefit shall be payable to the Participant's Beneficiary under this Plan in amount equal to the balance credited to the bookkeeping account established for the Participant under section 3.3(b). Such benefit shall be paid in a single lump within the first thirty days of the calendar year following the death of the Participant, and the bookkeeping account established for such Participant pursuant to section 3.3(b) shall continue to be adjusted as provided therein through the last day of the last calendar month to end prior to the date of payment.

Section 4.4 Beneficiaries

A Participant or Former Participant may designate a Beneficiary or Beneficiaries to receive any survivor benefits payable under the Plan upon his death. Any such designation, or change therein or revocation thereof, shall be made in writing in the form and manner prescribed by the Committee, shall be revocable until the death of the Participant, and shall thereafter be irrevocable; provided, however , that any change or revocation shall be effective only if received by the Committee prior to the Participant's or Former Participant's death. If a Participant or Former Participant shall die without having effectively named a Beneficiary, he shall be deemed to have named his estate as his sole Beneficiary. If a Participant or Former Participant and his designated Beneficiary shall die in circumstances which give rise to doubt as to which of them shall have been the first to die, the Participant or Former Participant shall be deemed to have survived the Beneficiary. If a Participant or Former Participant designates more than one Beneficiary, all shall be deemed to have equal shares unless the Participant or Former Participant shall expressly provide otherwise.

ARTICLE V

DISTRIBUTIONS

Section 5.1 Scheduled Distributions to Participant .

If a Participant so elects in his initial election to participate or in any subsequent deferral election, payment of balances attributable to amounts deferred pursuant to such election may be made:

(a) in a single payment as of a designated date (not earlier than the first date such balances are otherwise payable) specified by the Participant in his election;

(b) in the case of benefits under section 3.1 of this Plan, in a single life annuity or such different form of payment provided for benefits under the Retirement Plan as the Committee may provide; or

(c) in the case of benefits under sections 3.2 or 3.3 of this Plan, in monthly, quarterly or annual installments over such number of years (not to exceed fifteen (15)) and payable beginning on such date (not earlier than the first date such balances are otherwise payable) specified by the Participant in his election. In the event that payment is to be made in installments, each installment shall be equal to the balance credited to the Participant’s Memorandum Account (or, if applicable, the portion of such Participant’s Memorandum Account attributable to sections 3.2 or 3.3 of this Plan) as of the last day of the quarter ending immediately prior to the date on which payment is to be made, divided by the number of installment payments remaining to be paid (including the payment then being computed).

Section 5.2 Mandatory Cashout of Small Balances

Notwithstanding anything in the Plan to the contrary, if, as of December 31 of any calendar year following a Participant’s Termination of Service, the balance credited to his Memorandum Account is less than or equal to the applicable dollar amount under section 402(g)(1)(B) of the Code, the entire balance credited to his Memorandum Account shall be distributed in a single lump sum payment as soon as practicable during the immediately following calendar year; provided, however that if the Participant has deferrals of compensation under any other account balance plan that would be aggregated with this plan for purposes of section 409A of the Code pursuant to Treasury Regulation section 1.409A-1(c)(2)(i)(B), no distribution shall be allowed under this section unless (a) the sum of (i) the balance credited to the Participant's Memorandum Account and (ii) all amounts deferred under such other plan or plans is less than or equal to the applicable dollar amount under 402(g)(1)(B) of the Code, (b) all such other plans provide for such a mandatory cashout distribution, and (c) all amounts deferred under all such plans are distributed at the same time.

Section 5.3 Restrictions on Payments to Specified Employees

Notwithstanding anything in the Plan to the contrary, to the extent required under section 409A of the Code, any payment under this Plan that is made to a Specified Employee on account of his Termination of Service shall be delayed and shall be paid on the first day of the seventh month following such Participant’s Termination of Service.

Section 5.4 One-Time Election During 2008

Notwithstanding anything in the Plan to the contrary, subject to the consent of the Committee in its sole and absolute discretion, a Participant may, at any time prior to January 1, 2009, elect a new time and form of payment for the balance credited to his Memorandum Account (or, if applicable, the portion of such Participant’s Memorandum Account attributable to section 3.1, 3.2 or 3.3 of this Plan) as of December 31, 2008; provided, however, that the payment (or the first payment in a series of payments) (a) shall be made no earlier than January 1, 2009, (b) shall be made, in the case of amounts attributable to section 3.1 of this Plan, in a single lump sum, a single life annuity, or such different form of payment provided for benefits under the Retirement Plan as of December 31, 2008 as the Committee may provide, (c) shall be made, in the case of amounts attributable to section 3.2 or 3.3 of this Plan, in a single lump sum or by monthly, quarterly or annual installments for a period not to exceed fifteen (15) years, and (c) shall be made no earlier than January 1 of the year immediately following the year of such Participant’s Termination of Service. Such an election shall be made in the form and manner to be determined by the Committee.

ARTICLE VI

TRUST FUND

Section 6.1 Establishment of Trust

The Company may establish a trust fund which may be used to accumulate funds to satisfy benefit liabilities to Participants, Former Participants and their Beneficiaries under the Plan; provided, however , that the assets of such trust shall be subject to the claims of the creditors of the Company in the event that it is determined that the Company is insolvent; and provided, further , that the trust agreement shall contain such terms, conditions and provisions as shall be necessary to cause the Company to be considered the owner of the trust fund for federal, state or local income tax purposes with respect to all amounts contributed to the trust fund or any income attributable to the investments of the trust fund. The Company shall pay all costs and expenses incurred in establishing and maintaining such trust. Any payments made to a Participant, Former Participant or Beneficiary from a trust established under this section 6.1 shall offset payments which would otherwise be payable by the Company in the absence of the establishment of such trust. Any such trust will conform to the terms of the model trust described in Revenue Procedure 92-64, as the same may be modified from time to time.

Section 6.2 Contributions to Trus

If a trust is established in accordance with section 6.1, the Company shall make contributions to such trust in such amounts and at such times as may be specified by the Committee or as may be required pursuant to the terms of the agreement governing the establishment and operation of such trust.

Section 6.3 Unfunded Character of Plan .

Notwithstanding the establishment of a trust pursuant to section 6.1, the Plan shall be unfunded for purposes of the Code and ERISA. Any liability of the Bank, the Company or another Employer to any person with respect to benefits payable under the Plan shall be based solely upon such contractual obligations, if any, as shall be created by the Plan, and shall give rise only to a claim against the general assets of the Bank, the Company or such Employer. No such liability shall be deemed to be secured by any pledge or any other encumbrance on any specific property of the Bank, the Company or any other Employer.

Section 6.4 Payments in the Event of a Change in Contro l

Notwithstanding anything in the Plan to the contrary, in the event of a Change in Control of the Company that occurs on or after January 1, 2008, all benefits under the Plan that have not been paid prior to the occurrence of the Change in Control (including but not limited to the remaining installment payments in a series of installments) shall be paid in a single lump sum upon the occurrence of the Change in Control; provided, however, to the extent such payments are regarded as payments on account of a Termination of Service to an individual who is a Specified Employee, payment shall, to the extent required to comply with section 409A of the Code, be deferred until the first day of the seventh calendar month to begin after the occurrence of the individual's Termination of Service.

ARTICLE VII

ADMINISTRATION

Section 7.1 The Committee

Except for the functions reserved to the Company or the Board, the Administration of the Plan shall be the responsibility of the Committee. The Committee shall have the power and the duty to take all actions and to make all decisions necessary or proper to carry out the Plan. The determination of the Committee as to any question involving the general administration and interpretation of the Plan shall be final, conclusive and binding. Any discretionary actions to be taken under the Plan by the Committee shall be uniform in their nature and applicable to all persons similarly situated. Without limiting the generality of the foregoing, the Committee shall have the following powers:

(a) to furnish to all Participants, upon request, copies of the Plan and to require any person to furnish such information as it may request for the purpose of the proper administration of the Plan as a condition to receiving any benefits under the Plan;

(b) to make and enforce such rules and regulations and prescribe the use of such forms as it shall deem necessary for the efficient administration of the Plan;

(c) to interpret the Plan, and to resolve ambiguities, inconsistencies and omissions, and the determinations of the Committee in respect thereof shall be binding, final and conclusive upon all interested parties;

(d) to decide on questions concerning the Plan in accordance with the provisions of the Plan;

(e) to determine the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan, to hear and decide claims for benefits, and to provide a full and fair review to any Participant whose claim for benefits has been denied in whole or in part;

(f) to designate a person, who may or may not be a member of the Committee, as “plan administrator” for purposes of the ERISA;

(g) to allocate any such powers and duties to or among individual members of the Committee; and

(h) the power to designate persons other than Committee members to carry out any duty or power which would otherwise be a responsibility of the Committee or Administrator, under the terms of the Plan.

Section 7.2 Liability of Committee Members and their Delegates

To the extent permitted by law, the Committee and any person to whom it may delegate any duty or power in connection with administering the Plan, the Bank, the Company, Employer, and the officers and directors thereof shall be entitled to rely conclusively upon, and shall be fully protected in any action taken or suffered by them in good faith In the reliance upon, any actuary, counsel, accountant, other specialist, or other person selected by the Committee, or in reliance upon any tables, valuations, certificates, opinions or reports which shall be furnished by any of them. Farther, to the extent permitted by law, no member of the Committee, nor the Bank, the Company, any Employer, nor the officers or directors thereof, shall be liable for any neglect, omission or wrongdoing of any other members of the Committee, agent, officer or employee of the Bank, the Company or any Employer. Any person claiming benefits under the Plan shall look solely to the Employer for redress.

Section 7.3 Plan Expenses

All expenses incurred prior to the termination of the Plan that shall arise in connection with the administration of the Plan (including, but not limited to administrative expenses, proper charges and disbursements, compensation and other expenses and charges of any actuary, counsel, accountant, specialist, or other person who shall be employed by the Committee in connection with the administration of the Plan), shall be paid by the Company.

Section 7.4 Facility of Payment

If the Company is unable to make payment to any Participant, Former Participant Beneficiary, or any other person to whom a payment is due under the Plan, because it cannot ascertain the identity or whereabouts of such Participant, Former Participant Beneficiary, or other person after reasonable efforts have been made to identify or locate such person (including a notice of the payment so due mailed to the last known address of such Participant, Former Participant Beneficiary, or other person shown on the records of the Employer), such payment and all subsequent payments otherwise due to such Participant, Former Participant or other person shall be forfeited twenty-four (24) months after the date such payment first became due; provided, however, that such payment and any subsequent payments shall be reinstated, retroactively, no later than sixty (60) days after the date on which the Participant, Former Participant, Beneficiary, or other person is identified or located.

ARTICLE VIII

AMENDMENT AND TERMINATION

Section 8.1 Amendment by the Company

The Company reserves the right, in its sole and absolute discretion, at any time and from to time, by action of the Board, to amend the Plan in whole or in part. In no event, however, shall any such amendment adversely affect the right of any Participant, Former Participant or Beneficiary to receive any benefits under the Plan in respect of participation for any period ending on or before the later of the date on which such amendment is adopted or the date on which it is made effective.

Section 8.2 Termination

The Company also reserves the right, in its sole and absolute discretion, by action of the Board, to terminate the Plan. In such event, undistributed benefits attributable to participation prior to the date of termination shall be distributed as though each Participant terminated employment with the Bank, the Company and all other Employers as of the effective date of termination of the Plan.

Section 8.3 Amendment or Termination by Other Employers

In the event that a corporation of trade or business other than the Company shall adopt this Plan, such corporation or trade or business shall, by adopting the Plan, empower the Company to amend or terminate the Plan, insofar as it shall cover employees of such corporation or trade or business, upon the terms and conditions set forth in sections 8.1 and 8.2; provided, however, that any such corporation or trade or business may, by action of its board of directors or other governing body, amend or terminate the Plan, insofar as it shall cover employees of such corporation or trade or business, at different times and in a different manner. In the event of any such amendment or termination by action of the board of directors or either governing body of such a corporation or trade or business, a separate plan shall be deemed to have been established for the employees of such corporation or trade or business, and any amounts set aside to provide for the satisfaction of benefit liabilities with respect to Employees of such corporation or trade or business shall be segregated from the assets set aside for the purposes of this Plan at the earliest practicable date and shall be dealt with in accordance with the documents governing such separate plan.

ARTICLE XIX

MISCELLANEOUS PROVISIONS

Section 9.1 Construction and Language

Wherever appropriate in the Plan, words used in the singular may be read in the plural, words in the plural may be read in the singular, and words importing the masculine gender shall be deemed equally to refer to the feminine or the neuter. Any reference to an Article or section shall be to an Article or section of the Plan, unless otherwise indicated.

Section 9.2 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 Agreement, the text shall control.

Section 9.3 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 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 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 still 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 9.4 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 obligation of the Bank, the Company and any other Employer under the terms of the Plan.

Section 9.5 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 9.6 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 9.7 Governing Law

The Plan shall be construed, administered and enforced according to the laws of the State of New York without giving effect to the conflict of laws principles thereof, except to the extent that such laws are preempted by the federal laws of the United States. Any payments made pursuant to this Plan are subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.

Section 9.8 Taxes

The Employer shall have the right to retain a sufficient portion of any payment made under the Plan to cover the amount required to be withheld pursuant to any applicable federal, state and local tax law.

Section 9.9 No Deposit Account

Nothing in the Plan shall be held or construed to establish any deposit account for any Participant or any deposit liability on the part of the Bank. Participants' rights hereunder shall be equivalent to those of a general unsecured creditor of each Employer.

Section 9.10 No Right to Continued Employment

Neither the establishment of the Plan, nor any provisions of the Plan nor any action of the Plan Administrator, the Committee or any Employer shall be held or construed to confer upon any Employee any right to a continuation of employment by the Employer. The Employer reserves the right to dismiss any Employee or otherwise deal with any Employee to the same extent as though the Plan had not been adopted.

Section 9.11 Status of Plan Under ERISA

The Plan is intended to be (a) to the maximum extent permitted under applicable laws, an unfunded, non-qualified excess benefit plan as contemplated by section 3(36) of ERISA for the purpose of providing benefits in excess of the limitations imposed under section 415 of the Code, and (b) to the extent not so permitted, an unfunded, non-qualified plan maintained primarily for the purpose of providing deferred compensation for highly compensated employees, as contemplated by sections 201(2), 301(a)(3) and 401(a)(1) of 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 9.12 Compliance with Section 409A of the Code

The Plan is intended to be a non-qualified deferred compensation plan described in section 409A of the Code. The Plan shall be operated, administered and construed to give effect to such intent. In addition, notwithstanding Article VIII, the Plan shall be subject to amendment, with or without advance notice to Participants and other interested parties, and on a prospective or retroactive basis, including but not limited to amendment in a manner that adversely affects the rights of participants and other interested parties, to the extent necessary to effect such compliance.

ARTICLE X

EFFECTIVE DATE OF THE AMENDED AND RESTATED PLAN

This amended and restated Plan is effective from and after December 31, 2008. Prior to December 31, 2008, the previous version of the Plan that was amended and restated in June 1997 and incorporates amendments 1, 2, 3 & 4 shall control.

Employee Stock Ownership Plan

Dime Community Bancshares, Inc.

and Certain Affiliates

Amended and restated as of January 1, 2008

TABLE OF CONTENTS

		Page
ARTICLE I - DEFINITIONS
Section 1.1	Account	1
Section 1.2	Affiliated Employer	1
Section 1.3	Allocation Compensation	1
Section 1.4	Acquired Company	2
Section 1.5	Bank	2
Section 1.6	Board	2
Section 1.7	Beneficiary	2
Section 1.8	Break in Service	2
Section 1.9	Change in Control	2
Section 1.10	Code	2
Section 1.11	Committee	2
Section 1.12	Designated Beneficiary	3
Section 1.13	Disability	3
Section 1.14	Domestic Relations Order	3
Section 1.15	Dividend Maintenance Contribution	4
Section 1.16	Effective Date	4
Section 1.17	Eligible Employee	4
Section 1.18	Eligible Participant	4
Section 1.19	Employee	4
Section 1.20	Employer	4
Section 1.21	Employment Commencement Date	4
Section 1.22	ERISA	4
Section 1.23	ESOP Contribution	4
Section 1.24	Fair Market Value	4
Section 1.25	Family Member	5
Section 1.26	Financed Share	5
Section 1.27	Five Percent Owner	5
Section 1.28	Forfeitures	5
Section 1.29	Former Participant	5
Section 1.30	401(k) Safe Harbor Contribution	5
Section 1.31	401(k) Safe Harbor Contribution Account	5
Section 1.32	General Investment Account	6
Section 1.33	Highly Compensated Employee	6
Section 1.34	Hour of Service	7
Section 1.35	Investment Account	7
Section 1.36	Investment Fund	7
Section 1.37	Loan Repayment Account	7
Section 1.38	Loan Repayment Contribution	7
Section 1.39	Maternity or Paternity Leave	7
Section 1.40	Military Service	8
Section 1.41	Named Fiduciary	8
Section 1.42	Officer	8
Section 1.43	Participant	8
Section 1.44	Period of Service	8
Section 1.45	Period of Severance	8
Section 1.46	Plan	8
Section 1.47	Plan Administrator	9
Section 1.48	Plan Year	9
Section 1.49	Qualified Domestic Relations Order	9
Section 1.50	Qualified Military Service	9
Section 1.51	Qualified Participant	9
Section 1.52	Retirement	9
Section 1.53	Retroactive Contribution	9
Section 1.54	Share	9
Section 1.55	Share Acquisition Loan	9
Section 1.56	Share Investment Account	9
Section 1.57	Tender Offer	9
Section 1.58	Total Compensation	10
Section 1.59	Trust	10
Section 1.60	Trust Agreement	10
Section 1.61	Trust Fund	10
Section 1.62	Trustee	10
Section 1.63	Valuation Date	10
ARTICLE II - PARTICIPATION
Section 2.1	Eligibility for Participation.	11
Section 2.2	Commencement of Participation.	11
Section 2.3	Termination of Participation.	11
Section 2.4	Adjustments to Period of Service.	12
ARTICLE III - SPECIAL PROVISIONS
Section 3.1	Military Service.	12
Section 3.2	Maternity or Paternity Leave.	13
Section 3.3	Leave of Absence.	13
Section 3.4	Family and Medical Leave.	14
ARTICLE IV - CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED
Section 4.1	Contributions by Participants Not Permitted.	14
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
Section 5.1	In General.	14
Section 5.2	Loan Repayment Contributions.	14
Section 5.3	ESOP Contributions.	15

Section 5.4	Retroactive Contributions.	15
Section 5.5	Time and Manner of Payment.	16
ARTICLE VI - SHARE ACQUISITION LOANS
Section 6.1	In General.	16
Section 6.2	Collateral; Liability for Repayment.	17
Section 6.3	Loan Repayment Account.	17
Section 6.4	Release of Financed Shares.	18
Section 6.5	Restrictions on Financed Shares.	19
ARTICLE VII - ALLOCATION OF CONTRIBUTIONS
Section 7.1	Allocation Among Eligible Participants.	19
Section 7.2	Allocation of Released Shares or Other Property.	19
Section 7.3	Allocation of ESOP Contributions.	19
ARTICLE VIII - LIMITATIONS ON ALLOCATIONS
Section 8.1	Optional Limitations on Allocations of ESOP Contributions.	20
Section 8.2	General Limitations on Contributions.	20
ARTICLE IX - VESTING
Section 9.1	Vesting.	24
Section 9.2	Vesting on Death, Disability Retirement or Change in Control.	25
Section 9.3	Vesting of 401(k) Safe Harbor Contribution Account.	25
Section 9.4	Forfeitures on Termination of Employment.	25
Section 9.5	Amounts Credited Upon Re?Employment.	25
Section 9.6	Allocation of Forfeitures.	26
ARTICLE X - THE TRUST FUND
Section 10.1	The Trust Fund.	26
Section 10.2	Investments.	26
Section 10.3	Distributions for Diversification of Investments.	27
Section 10.4	Use of Commingled Trust Funds.	28
Section 10.5	Management and Control of Assets.	28
ARTICLE XI - VALUATION OF INTERESTS IN THE TRUST FUND
Section 11.1	Establishment of Investment Accounts.	28
Section 11.2	Share Investment Accounts.	28
Section 11.3	General Investment Accounts.	29
Section 11.4	Valuation of Investment Accounts.	29
Section 11.5	Annual Statements.	29
ARTICLE XII - SHARES
Section 12.1	Specific Allocation of Shares.	29
Section 12.2	Dividends.	30
Section 12.3	Voting Rights.	30
Section 12.4	Tender Offers.	32
ARTICLE XIII - PAYMENT OF BENEFITS
Section 13.1	In General.	35
Section 13.2	Designation of Beneficiaries.	35
Section 13.3	Distributions to Participants and Former Participants.	36
Section 13.4	Manner of Payment.	39
Section 13.5	Minimum Required Distributions.	40
Section 13.6	Direct Rollover of Eligible Rollover Distributions.	42
Section 13.7	Valuation of Shares Upon Distribution to a Participant.	44
Section 13.8	Put Options.	44
Section 13.9	Right of First Refusal.	45
ARTICLE XIV - CHANGE IN CONTROL
Section 14.1	Definition of Change in Control.	46
Section 14.2	Vesting on Change of Control.	47
Section 14.3	Repayment of Loan.	47
Section 14.4	Plan Termination After Change in Control.	48
Section 14.5	Amendment of Article XIV.	48
ARTICLE XV - ADMINISTRATION
Section 15.1	Named Fiduciaries.	48
Section 15.2	Plan Administrator.	49
Section 15.3	Committee Responsibilities.	50
Section 15.4	Claims Procedure.	51
Section 15.5	Claims Review Procedure.	51
Section 15.6	Allocation of Fiduciary Responsibilities and Employment of Advisors.	52
Section 15.7	Other Administrative Provisions.	52
ARTICLE XVI - AMENDMENT, TERMINATION AND TAX QUALIFICATION
Section 16.1	Amendment and Termination by Dime Community Bancshares, Inc.	53
Section 16.2	Amendment or Termination Other Than by Dime Community Bancshares, Inc.	53
Section 16.3	Conformity to Internal Revenue Code.	54
Section 16.4	Contingent Nature of Contributions.	54

ARTICLE XVII - SPECIAL RULES FOR TOP HEAVY PLAN YEARS
Section 17.1	In General.	55
Section 17.2	Definition of Top Heavy Plan.	55
Section 17.3	Determination Date.	56
Section 17.4	Cumulative Accrued Benefits.	56
Section 17.5	Key Employees.	56
Section 17.6	Required Aggregation Group.	57
Section 17.7	Permissible Aggregation Group.	58
Section 17.8	Special Requirements During Top Heavy Plan Years.	58
ARTICLE XVIII - MISCELLANEOUS PROVISIONS
Section 18.1	Governing Law.	59
Section 18.2	No Right to Continued Employment.	59
Section 18.3	Construction of Language.	59
Section 18.4	Headings.	59
Section 18.5	Merger with Other Plans.	59
Section 18.6	Non-alienation of Benefits.	59
Section 18.7	Procedures Involving Domestic Relations Orders.	60
Section 18.8	Leased Employees.	61
Section 18.9	Status as an Employee Stock Ownership Plan.	61
ARTICLE XIX - ADDITIONAL PROVISIONS
Section 19.1	401(k) Safe Harbor Contribution.	62
Section 19.2	Dividend Maintenance Contributions.	63
Section 19.3	Application of Dividends on Certain Financed Shares.	64
Section 19.4	Additional Loan Repayment Contributions.	64
Section 19.5	Amendment of Article XIX.	65

Employee Stock Ownership Plan

Dime Community Bancshares, Inc.

ARTICLE I

Definitions

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

Section 1.1 Account

means an account established for each Participant to which is allocated such Participant’s share, if any, of all Financed Shares and other property that are released from the Loan Repayment Account in accordance with section 6.4, together with his share, if any, of any ESOP Contributions and 401(k) Safe Harbor Contributions that may be made by the Employer.

Section 1.2 Affiliated Employer

means any corporation which is a member of a controlled group of corporations (as defined in section 414(b) of the Code) that includes the Employer; any trade or business (whether or not incorporated) that is under common control (as defined in section 414(c) of the Code) with the Employer; any organization (whether or not incorporated) that is a member of an affiliated service group (as defined in section 414(m) of the Code) that includes the Employer; any leasing organization (as defined in section 414(n) of the Code) to the extent that any of its employees are required pursuant to section 414(n) of the Code to be treated as employees of the Employer; and any other entity that is required to be aggregated with the Employer pursuant to regulations under section 414(o) of the Code.

Section 1.3 Allocation Compensation

during any period means the compensation taken into account in determining the allocation of benefits and contributions among Participants and consists of the aggregate compensation received by an Employee from the Employer as reported to the Internal Revenue Service as wages for such period pursuant to section 6041 (a) of the Code, plus the amount by which such Employee’s compensation with respect to such period has been reduced pursuant to a compensation reduction agreement under the terms of any of the following plans which may be maintained by the Employer:

(a) a qualified cash or deferred arrangement described in section 401(k) of the Code;

(b) a salary reduction simplified employee pension plan described in section 408(k) of the Code;

(d) a cafeteria plan described in section 125 of the Code; or

(e) a qualified transportation fringe benefit program described in section 132(f) of the Code.

Notwithstanding anything in this section 1.3 to the contrary, beginning March 1, 2004, an Employee’s Allocation Compensation shall not include any amounts required to be reported to the Internal Revenue Service as wages pursuant to section 6041(a) that are attributable to the exercise of options by the Employee. In no event, however, shall an Employee’s Allocation Compensation for any calendar year include any compensation in excess of $150,000 for calendar years prior to 2002 and $200,000 for calendar years after 2001. The dollar limitation set forth in the preceding sentence shall be indexed in accordance with regulations prescribed under section 401(a)(17) of the Code. If there are less than twelve (12) months in the Plan Year, the dollar limitation (as adjusted) shall be prorated by multiplying such limitation by a fraction, the numerator of which is the number of months in the Plan Year and the denominator of which is twelve (12). For purposes of applying the foregoing limitations in Plan Years beginning before January 1, 1997 to any person who is a Five Percent Owner or who is one of the ten Highly Compensated Employees with the highest Total Compensation (determined prior to the application of this sentence), any Allocation Compensation paid to the spouse of such person or to any lineal descendant of such person who has not attained age 19 on or before the last day of such calendar year shall be deemed to have been paid to such person and, in such case, the dollar limitation on compensation in section 401(a)(17) of the Code shall be allocated among such persons in proportion to the Allocation Compensation actually paid to each person.

Section 1.4 Acquired Company

means any of the following which have been acquired by or merged into an Employer: (a) Conestoga Bancorp, Inc.; and (b) Pioneer Savings Bank, F.S.B.

Section 1.5 Bank

means The Dime Savings Bank of Williamsburgh.

Section 1.6 Board

means the Board of Directors of Dime Community Bancshares, Inc.

Section 1.7 Beneficiary

means the person or persons designated by a Participant or Former Participant or other person entitled to a benefit under the Plan, or otherwise determined to be entitled to a benefit under the Plan. If more than one person is designated, each shall have an equal share unless the person making the designation directed otherwise. The word “person” includes an individual, a trust, an estate or any other person that is permitted to be named as a Beneficiary.

Section 1.8 Break in Service

means a Period of Severance of at least 365 consecutive days.

Section 1.9 Change in Control

means an event described in section 14.1.

Section 1.10 Code

means the Internal Revenue Code of 1986 (including the corresponding provisions of any succeeding law).

Section 1.11 Committee

means the Compensation Committee described in section 15.3.

Section 1.12 Designated Beneficiary

means a natural person designated by a Participant or Former Participant as a Beneficiary and shall not include any Beneficiary designated by a person other than a Participant or Former Participant or any Beneficiary other than a natural person. If a natural person is the beneficiary of a trust which a Participant or Former Participant has named as his Beneficiary, such natural person shall be treated as a Designated Beneficiary if: (a) the trust is a valid trust under applicable state law (or would be a valid trust except for the fact that it does not have a corpus); (b) the trust is irrevocable or will, by its terms, become irrevocable upon the death of the Participant or Former Participant; (c) the beneficiaries of the trust who are beneficiaries with respect to the trust’s interest as a Beneficiary are identifiable from the terms of the trust instrument; and (d) the following information is furnished to the Committee:

(i) by the Participant or Former Participant, if any distributions are required to be made pursuant to section 13.5 prior to the death of the Participant or Former Participant, and (in the case of distribution after December 31, 2002) only the Participant’s or Former Participant’s spouse is primary Beneficiary, either: (A) a copy of the trust instrument, together with a written undertaking by the Participant or Former Participant to furnish to the Committee a copy of any subsequent amendment within a reasonable time after such amendment is made; or (B)(I) a list of all of the beneficiaries of the trust (including contingent and remainderman beneficiaries with a description of the conditions on their entitlement); (II) a certification of the Participant or Former Participant to the effect that, to the best of his knowledge, such list is correct and complete and that the conditions of section 1.12(a), (b) and (c) are satisfied; (III) a written undertaking to provide a new certification to the extent that an amendment changes any information previously certified; and (IV) a written undertaking to furnish a copy of the trust instrument to the Committee on demand; and

(ii) by the trustee of the trust within nine months after the death of the Participant or Former Participant (prior to January 1, 2003) or by October 31 st of this calendar year that includes the first anniversary of the Participant’s or Former Participant’s death (after December 31, 2002), if any distributions are required to be made pursuant to section 13.5 after the death of the Participant or Former Participant, either: (A) a copy of the actual trust instrument for the trust; or (B)(I) a final list of all of the beneficiaries of the trust (including contingent and remainderman beneficiaries with a description of the conditions on their entitlement) as of the date of death; (II) a certification of the trustee to the effect that, to the best of his knowledge, such list is correct and complete and that the conditions of section 1.12(a), (b) and (c) are satisfied; and (III) a written undertaking to furnish a copy of the trust instrument to the Committee on demand.

Section 1.13 Disability

means a condition of total incapacity, mental or physical, for further performance of duty with the Employer, which the Plan Administrator shall have determined, on the basis of competent medical evidence, is likely to be permanent.

Section 1.14 Domestic Relations Order

means a judgment, decree or order (including the approval of a property settlement) that is made pursuant to a state domestic relations or community property law and relates to the provision of child support, alimony payments, or marital property rights to a spouse, child or other dependent of a Participant or Former Participant.

Section 1.15 Dividend Maintenance Contribution

means an ESOP Contribution that is made pursuant to section 19.2.

Section 1.16 Effective Date

means July 1, 1995.

Section 1.17 Eligible Employee

means an Employee who is eligible for participation in the Plan in accordance with Article II.

Section 1.18 Eligible Participant

means, for any Plan Year, an Employee who is a Participant during all or any part of such Plan Year and either remains a Participant on the last day of such Plan Year or terminated employment during such Plan Year for death, Disability or Retirement; provided however , that no Employee shall be an Eligible Participant for the Plan Year that includes the effective date of the transaction pursuant to which the Bank becomes a wholly owned subsidiary of Dime Community Bancshares, Inc. if he terminates employment with the Employer prior to such effective date.

Section 1.19 Employee

means any person, including an officer, who is employed by the Employer.

Section 1.20 Employer

means Dime Community Bancshares, Inc., and any successor thereto and any Affiliated Employer which, with the prior written approval of the Board of Directors of Dime Community Bancshares, Inc. and subject to such terms and conditions as may be imposed by the Board of Directors of Dime Community Bancshares, Inc., shall adopt this Plan.

Section 1.21 Employment Commencement Date

means the date on which a person first performs an Hour of Service, except that if an Employee separates from service with the Employer, incurs a Break in Service and subsequently returns to service with the Employer, his Employment Commencement Date shall be the date on which he first performs an Hour of Service following the Break in Service.

Section 1.22 ERISA

means the Employee Retirement Income Security Act of 1974, as amended from time to time (including the corresponding provisions of any succeeding law).

Section 1.23 ESOP Contribution

means Shares or amounts of money contributed to the Plan by the Employer in accordance with section 5.3 or Dividend Maintenance Contributions made in accordance with section 19.2.

Section 1.24 Fair Market Value

on any date means:

(a) with respect to a Share:

(i) the final quoted sale price on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) as reported in the principal consolidated reporting system with respect to securities listed or admitted to trading on the principal United States securities exchange on which like Shares are listed or admitted to trading; or

(ii) if like Shares are not listed or admitted to trading on any such exchange, the closing bid quotation with respect to a Share on such date on the National Association of Securities Dealers Automated Quotation System, or, if no such quotation is provided, on another similar system, selected by the Committee, then in use; or

(iii) if sections 1.24(a)(i) and (ii) are not applicable, the fair market value of a Share as determined by an appraiser independent of the Employer and experienced and expert in the field of corporate appraisal.

(b) with respect to property other than Shares, the fair market value determined in the manner determined by the Trustee.

Section 1.25 Family Member

means, with respect to any person, such person’s spouse and lineal ascendants or descendants and the spouses of such lineal ascendants or descendants.

Section 1.26 Financed Share

means: (a) a Share that has been purchased with the proceeds of a Share Acquisition Loan, that has been allocated to the Loan Repayment Account in accordance with section 6.3 and that has not been released in accordance with section 6.4; or (b) a Share that constitutes a dividend paid with respect to a Share described in section 1.26(a), that has been allocated to the Loan Repayment Account in accordance with section 6.3 and that has not been released in accordance with section 6.4.

Section 1.27 Five Percent Owner

means, for any Plan Year, a person who, during such Plan Year, owned (or was considered as owning for purposes of section 318 of the Code): (a) more than 5% of the value of all classes of outstanding stock of the Employer; or (b) stock possessing more than 5% of the combined voting power of all classes of outstanding stock of the Employer.

Section 1.28 Forfeitures

means the amounts forfeited by Participants and Former Participants on termination of employment prior to full vesting, pursuant to section 9.3, less amounts credited because of re-employment, pursuant to section 9.4.

Section 1.29 Former Participant

means a Participant whose participation in the Plan has terminated pursuant to section 2.3.

Section 1.30 401(k) Safe Harbor Contribution

means contributions to the Plan by the Employer pursuant to section 19.1.

Section 1.31 401(k) Safe Harbor Contribution Account

means a sub-account established for each Participant within the Participant’s Account to which are credited all 401(k) Safe Harbor Contributions made for such Participant, together with any earnings or appreciation thereon or other additions thereto, and against which are charged any losses or other depreciation thereon, benefit payments expenses and other deductions properly chargeable thereto.

Section 1.32 General Investment Account

means an Investment Account established and maintained in accordance with Article XI.

Section 1.33 Highly Compensated Employee

means, for any Plan Year, an Employee who:

(a) for Plan Years beginning before January 1, 1997, any Employee or person employed by an Affiliated Employer who:

(i) at any time during such Plan Year or the immediately preceding Plan Year was a Five Percent Owner; or

(ii) is a member of the group consisting of the 100 Employees and persons employed by any Affiliated Employer who received the greatest Total Compensation for such Plan Year and during such Plan Year:

(A) received Total Compensation for such Plan Year in excess of $75,000 (or such higher amount as may be permitted under section 414(q) of the Code); or

(B) received Total Compensation for such Plan Year that was in excess of both (I) $50,000 (or such higher amount as may be permitted under section 414(q) of the Code) and (II) the Total Compensation for such Plan Year of at least 80% of the Employees and persons employed by any Affiliated Employer for such Plan Year; or

(C) was an Officer of the Employer or any Affiliated Employer and received Total Compensation for such Plan Year in excess of 50% of the amount in effect under section 415(b)(1)(A) of the Code for such Plan Year; or

(iii) during the immediately preceding Plan Year:

(A) received Total Compensation for such Plan Year in excess of $75,000 (or such higher amount as may be permitted under section 414(q) of the Code); or

(B) received Total Compensation, for such Plan Year that was in excess of both (I) $50,000 (or such higher amount as may be permitted under section 414(q) of the Code) and (II) the Total Compensation for such Plan Year of at least 80% of the Employees and persons employed by an Affiliated Employer for such Plan Year; or

(b) for Plan Years beginning after December 31, 1996, any Employee or person employed by an Affiliated Employer who:

(i) was a Five Percent Owner at any time during such Plan Year or any prior Plan Year; or

(ii) received Total Compensation during the immediately preceding Plan Year (A) in excess of $80,000 (or such other amount as may be prescribed by the Secretary of the Treasury pursuant to section 401(a)(17)of the Code); and (B) if elected by the Committee in such form and manner as the Secretary of the Treasury may prescribe, in excess of the Total Compensation received for such preceding Plan Year by at least 80% of the Employees and persons employed by Affiliated Employers.

The determination of who is a Highly Compensated Employee will be made in accordance with section 414(q) of the Code and the regulations thereunder. In Plan Years beginning before January 1, 1997 for purposes of applying any provisions of the Plan applicable to Highly Compensated Employees, any person who is a Family Member of a Five Percent Owner or one of the ten Highly Compensated Employees with the highest Total Compensation for a Plan Year shall not be treated as a separate person for such Plan Year, and any Total Compensation or Allocation Compensation paid to such person for such Plan Year, as well as his share of allocations of contributions or Shares under this Plan, shall be attributed to the Five Percent Owner or Highly Compensated Employee and, in such case, the provisions of the Plan shall apply to each person based on the ratio of his Total Compensation or Allocation Compensation to the sum of the Total Compensation or Allocation Compensation of all persons treated as one person with him.

Section 1.34 Hour of Service

means each hour for which a person is paid, or entitled to payment, for the performance of duties for the Employer or any Affiliated Employer. In all respects, an Employee’s Hours of Service shall be counted as required by Section 2530.200b-2 of the Department of Labor’s regulations under Title I of ERISA.

Section 1.35 Investment Account

means either a General Investment Account or a Share Investment Account.

Section 1.36 Investment Fund

means anyone of the three or more funds as may be established from time to time by the Committee which, together with any and all Shares and other investments held under the Plan, constitute the Trust Fund.

Section 1.37 Loan Repayment Account

means an account established and maintained in accordance with section 6.3.

Section 1.38 Loan Repayment Contribution

means amounts of money contributed to the Plan by the Employer in accordance with section 5.2.

Section 1.39 Maternity or Paternity Leave

means a person’s absence from work for the Employer and all Affiliated Employers: (a) by reason of the pregnancy of such person; (b) by reason of the birth of a child of such person; (c) by reason of the placement of a child with the person in connection with the adoption of such child by such person; or (d) for purposes of caring for a child of such person immediately following the birth of the child or the placement of the child with such person.

Section 1.40 Military Service

means service in the armed forces of the United States, including but not limited to Qualified Military Service. It may also include, if and to the extent that the Board so provides and if all Participants and Former Participants in like circumstances are similarly treated, special service for the government of the United States and other public service.

Section 1.41 Named Fiduciary

means any person, committee, corporation or organization as described in section 15.1.

Section 1.42 Officer

means an employee who is an administrative executive in regular and continued service with the Employer or any Affiliated Employer; provided however, that at no time shall more than the lesser of (a) 50 employees or (b) the greater of (i) 3 employees or (ii) 10% of all employees be treated as Officers. The determination of whether an employee is to be considered an Officer shall be made in accordance with section 416(i) of the Code.

Section 1.43 Participant

means any person who has satisfied the eligibility requirements set forth in section 2.1, who has become a Participant in accordance with section 2.2, and whose participation has not terminated under section 2.3.

Section 1.44 Period of Service

means a period of consecutive days commencing on a person’s Employment Commencement Date and ending on the date a Period of Severance begins, with any adjustments required under section 2.4. Except as otherwise provided in the Plan, a Period of Service “of year(s)” means the quotient of the Period of Service divided by 365, and any fractional part of a year shall for such purposes be disregarded.

Section 1.45 Period of Severance

means a period of consecutive days commencing with the earlier of:

(a) the date on which a person terminates service with the Employer and all Affiliated Employers by reason of resignation, retirement, discharge or death; or

(b) the first anniversary of the date on which a person terminates service with the Employer and all Affiliated Employers for any other reason, including layoff, disability, leave of absence or any other cessation of service not otherwise included as service under the Plan;

and ending on the first date following such separation from service on which such person performs an Hour of Service.

Section 1.46 Plan

means the Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and Certain Affiliates, as amended from time to time. The Plan may be referred to as the “Employee Stock Ownership Plan of Dime Community Bancshares, Inc. and Certain Affiliates.”

Section 1.47 Plan Administrator

means any person, committee, corporation or organization designated in section 15.2, or appointed pursuant to section 15.2, to perform the responsibilities of that office.

Section 1.48 Plan Year

means (a) the period commencing on the Effective Date and ending on June 30, 1996; (b) each of the fiscal years beginning ending June 30 1997, 1998, 1999 and 2000; (c) the period beginning July 1, 2000 and ending December 31, 2000; and (d) each calendar year thereafter.

Section 1.49 Qualified Domestic Relations Order

means a Domestic Relations Order that: (a) clearly specifies (i) the name and last known mailing address of the Participant or Former Participant and of each person given rights under such Domestic Relations Order, (ii) the amount or percentages of the Participant’s or Former Participant’s benefits under this Plan to be paid to each person covered by such Domestic Relations Order, (iii) the number of payments or the period to which such Domestic Relations Order applies, and (iv) the name of this Plan; and (b) does not require the payment of a benefit in a form or amount that is (i) not otherwise provided for under the Plan, or (ii) inconsistent with a previous Qualified Domestic Relations Order.

Section 1.50 Qualified Military Service

means with respect to any person on any date, any service in the uniformed services of the United States (as defined in chapter 43 of Title 38 of the United States Code) completed prior to such date, but only if, on such date, such person is entitled to re-employment rights with respect to the Employer or any Affiliated Employer on account of such service.

Section 1.51 Qualified Participant

means a Participant who has attained age 55 and who has been a Participant in the Plan for at least 10 years.

Section 1.52 Retirement

means: (a) any termination of participation in the Plan at or after attainment of age 65; and (b) any retirement under an applicable qualified defined benefit plan of the Employer as in effect from time to time with entitlement to a normal or early retirement allowance.

Section 1.53 Retroactive Contribution

means a contribution made on a retroactive basis in respect of a period of Qualified Military Service in accordance with sections 5.3.

Section 1.54 Share

means a share of any class of stock issued by the Employer or any Affiliated Employer; provided that such share is a “qualifying employer security” within the meaning of section 409(1) of the Code and section 407(d)(5) of ERISA.

Section 1.55 Share Acquisition Loan

means a loan obtained by the Trustee in accordance with Article VI.

Section 1.56 Share Investment Account

means an Investment Account established and maintained in accordance with Article XI.

Section 1.57 Tender Offer

means a tender offer made to holders of any one or more classes of Shares generally, or any other offer made to holders of any one or more classes of Shares generally to purchase, exchange, redeem or otherwise transfer Shares, whether for cash or other consideration.

Section 1.58 Total Compensation

during any period means the total compensation paid to such person during such period by the Employer and all Affiliated Employers which is required to be reported to such person on a written statement under section 6041(d), 6051(a)(3) and 6052 of the Code. In addition, for purposes of applying the provisions of section 8.2 to Limitation Years beginning on or after December 31, 1997 and for purposes of identifying those persons who are Highly Compensated Employees, each person’s Total Compensation shall include any elective deferrals (within the meaning of section 402(g) of the Code) under any qualified cash or deferred arrangement described in section 401(k) of the Code and maintained by the Employer or any Affiliated Employer, any tax-deferred annuity described in section 403(b) of the Code and maintained by the Employer or any Affiliated Employer, any salary reduction simplified employee pension plan described in section 408(k) of the Code and maintained by the Employer or any Affiliated Employer, any salary reduction contributions under any cafeteria plan described in section 125 of the Code and maintained by the Employer or any Affiliated Employer, and any salary reduction contributions under any qualified transportation filing benefits plan described in section 132(f) of the Code and maintained by the Employer or any Affiliated Employer. In no event shall a person’s Total Compensation for any Plan Year include any compensation in excess of the amount permitted under section 401(a)(17) of the Code. For purposes of applying the foregoing limitation in any Plan Year beginning prior to January 1, 1997 to any person who is a Five Percent Owner or who is one of the 10 Highly Compensated Employees with the highest Total Compensation (determined prior to the application of this sentence), any Total Compensation paid to the spouse of such person or to any lineal descendant of such person who has not attained age 19 on or before the last day of such calendar year shall be deemed to have been paid to such person.

Section 1.59 Trust

means the legal relationship created by the Trust Agreement pursuant to which the Trustee holds the Trust Fund in trust. The Trust may be referred to as the “Employee Stock Ownership Plan Trust of Dime Community Bancshares, Inc. and Certain Affiliates.”

Section 1.60 Trust Agreement

means the agreement between Dime Community Bancshares, Inc. and the Trustee therein named or its successors pursuant to which the Trust Fund shall be held in trust.

Section 1.61 Trust Fund

means the corpus (consisting of contributions paid over to the Trustee and investments thereof), and all earnings, appreciation or additions thereof and thereto, held by the Trustee under the Trust Agreement in accordance with the Plan, less any depreciation thereof and any payments made therefrom pursuant to the Plan.

Section 1.62 Trustee

means the Trustee of the Trust Fund from time to time in office. The Trustee shall serve as Trustee until it is removed or resigns from office and is replaced by a successor Trustee appointed in accordance with the terms of the Trust Agreement.

Section 1.63 Valuation Date

means the last business day of March, June, September and December.

ARTICLE II

Participation

Section 2.1 Eligibility for Participation .

(a) Only Eligible Employees may be or become Participants in the Plan. An Employee shall be an Eligible Employee if he is a salaried, common-law employee of an Employer who has completed a Period of Service of at least one year and is not excluded under section 2.1(b). For purposes of this section 2.1(a), beginning July 1, 1997, a Period of Service of one year shall mean a Period of Service of twelve months, and any fractional part of a month consisting of at least fifteen days shall be deemed a full month.

(b) An Employee is not an Eligible Employee if he:

(i) is an Employee who has waived any claim to participation in the Plan;

(ii) is an Employee or in a unit of Employees covered by a collective bargaining agreement with the Employer where retirement benefits were the subject of good faith bargaining, unless such agreement expressly provides that Employees such as he be covered under the Plan;

(iii) is a “leased employee” as defined in section 18.8(a);

(iv) is compensated on an hourly, daily, commission, fee or retainer basis;

(v) is classified as an “independent contractor” by the Employer, even if considered a common-law employee under applicable law.

Section 2.2 Commencement of Participation .

Every Employee who is an Eligible Employee on the Effective Date shall automatically become a Participant on the Effective Date. An Employee who becomes an Eligible Employee after the Effective Date shall automatically become a Participant on the first day on which he becomes an Eligible Employee.

Section 2.3 Termination of Participation .

Participation in the Plan shall cease, and a Participant shall become a Former Participant, upon termination of employment with the Employer, death, Disability or Retirement, failure to return to work upon the expiration of a leave of absence granted by the Employer pursuant to section 3.3, becoming an Employee who is excluded under section 2.1(b) or distribution of the entire vested interest in his Account.

Section 2.4 Adjustments to Period of Service .

(a) The Period of Service of an Employee shall include any period during which the Employee is separated from the service of the Employer and all Affiliated Employers if such period is less than 365 consecutive days measured from the date on which such Employee terminates service and ending with the first date following such termination for which the Employer is credited with an Hour of Service.

(b) The Period of Service of an Employee who returns to the service of the Employer and all Affiliated Employers following a separation from service shall commence with the first date following such separation from service for which the Employer is credited with an Hour of Service, and he shall be given credit for any Period of Service prior to such separation, except that if such separation includes a Break in Service, such credit shall not be given until he completes a Period of Service of one year following such Break in Service. If an Employee returns to the service of the Employer or any Affiliated Employer following a separation from service from the Employer and any Affiliated Employer of greater than five consecutive years, then such Employee shall forfeit any Period of Service prior to such separation.

(c) The Period of Service of an Employee who is absent on Maternity or Paternity Leave shall exclude any period of such absence that occurs after the first anniversary of the commencement of such absence.

(d) An Employee’s Period of Service shall also be adjusted to the extent required by the Family and Medical Leave Act or any regulations promulgated thereunder.

(e) Solely for purposes of vesting and eligibility to participate, in the case of an individual who (i) was an employee of an Acquired Company immediately prior to the effective date of the transaction pursuant to which such Company became an Acquired Company and (ii) becomes an Employee as of such effective date, such individual’s service with the Acquired Company shall be treated as service for an Employer.

ARTICLE III

Special Provisions

Section 3.1 Military Service .

In the case of a termination of employment of any Employee to enter directly into Military Service, the entire period of his absence shall be treated, for purposes of vesting and eligibility for participation (but not, except as required by law, for purposes of eligibility to share in allocations of contributions in accordance with Article VII), as if he had worked for the Employer during the period of his absence. In the event of the re-employment of such person by the Employer within a period of not more than six months:

(a) after he becomes entitled to release or discharge, if he has entered into the uniformed services of the United States;

(b) release from hospitalization continuing after discharge from the uniformed services of the United States for a period of not more than two years; or

such period, also, shall be deemed to be Military Service.

Section 3.2 Maternity or Paternity Leave .

(a) Subject to section 3.2(b), in the event of an Employee’s absence from work in the service of the Employer and all Affiliated Employers for a period:

(i) that commences on or after October 1, 1985;

(ii) for which the person is not paid or entitled to payment by the Employer or any Affiliated Employer;

(iii) that constitutes Maternity or Paternity Leave; and

(iv) that exceeds one year;

then solely for purposes of determining when a Break in Service has occurred or when a Period of Severance of five years has occurred for purposes of section 9.4, the period of such an absence commencing on the first anniversary of such absence and ending on the second anniversary of the commencement of such absence (or, if earlier, on the last day of such absence) shall not be treated as a Period of Severance.

(b) Notwithstanding anything in the Plan to the contrary, this section 3.2 shall not apply unless the person furnishes to the Plan Administrator such information as the Plan Administrator may reasonably require in order to establish: (i) that the person’s absence is one described in section 3.2(a); and (ii) the number of working days during such absence.

Section 3.3 Leave of Absence .

In the event of temporary absence from work in the service of the Employer and all Affiliated Employers for any period of two years or less for which a Participant shall have been granted a leave of absence by the Employer, the entire period of his absence shall be treated for purposes of vesting and eligibility for participation (but not for purposes of eligibility to share in the allocation of contributions in accordance with Article VII), as if he had worked for the Employer during the period of his absence. Absence from work for a period greater than, or failure to return to work upon the expiration of, the period of leave of absence granted by the Employer shall terminate participation in the Plan as of the date on which such period ended. In granting leaves of absence for purposes of the Plan, all Employees in like circumstances shall be similarly treated.

Section 3.4 Family and Medical Leave .

Effective January 1, 2005, in the event of absence for a period recognized as a family and medical leave under the federal Family and Medical Leave Act of 1992, the period of such absence shall be recognized for purposes of vesting and eligibility to participate to the full extent required by law.

ARTICLE IV

Contributions by Participants Not Permitted

Section 4.1 Contributions by Participants Not Permitted .

Participants shall not be required, nor shall they be permitted, to make contributions to the Plan.

ARTICLE V

Contributions by the Employer

Section 5.1 In General .

Subject to the limitations of Article VIII and the provisions of Article XIX, for each Plan Year, the Employer shall contribute to the Plan the amount, if any, determined by the Board, but in no event less than the amount described in section 5.2(a). The amount contributed for any Plan Year shall be treated as a Loan Repayment Contribution, an ESOP Contribution, or a combination thereof, in accordance with the provisions of this Article V.

Section 5.2 Loan Repayment Contributions .

Subject to the provisions of Article XIX, for each Plan Year, a portion of the Employer’s contributions, if any, to the Plan for such Plan Year equal to the sum of:

(a) the minimum amount required to be added to the Loan Repayment Account in order to provide adequate funds for the payment of the principal and interest then required to be repaid under the terms of any outstanding Share Acquisition Loan obtained by the Trustee; plus

(b) the additional amount, if any, designated by the Committee to be applied to the prepayment of principal or interest under the terms of any outstanding Share Acquisition Loan obtained by the Trustee;

shall be treated as a Loan Repayment Contribution for such Plan Year. A Loan Repayment Contribution for a Plan Year shall be allocated to the Loan Repayment Account and shall be applied by the Trustee, in the manner directed by the Committee, to the payment of accrued interest and to the reduction of the principal balance of any Share Acquisition Loan obtained by the Trustee that is outstanding on the date on which the Loan Repayment Contribution is made. To the extent that a Loan Repayment Contribution for a Plan Year results in a release of Financed Shares in accordance with section 6.4, such Shares shall be allocated among the Accounts of Eligible Participants for such Plan Year in accordance with section 7.2.

Section 5.3 ESOP Contributions .

Subject to the provisions of Article XIX, in the event that the amount of the Employer’s contributions to the Plan for a Plan Year exceeds the amount of the Loan Repayment Contributions for such Plan Year, such excess shall be treated as an ESOP Contribution and shall be allocated among the Accounts of the Eligible Participants for such Plan Year in accordance with section 7.3.

Section 5.4 Retroactive Contributions .

The Employer shall make a Retroactive Contribution in respect of any individual who is re-employed by the Employer after December 12, 1994 following the completion of a period of Qualified Military Service. Such Retroactive Contribution shall be made in the following manner for each Plan Year that includes the period of Qualified Military Service:

(a) An allocation percentage shall be computed by dividing (i) the sum of the Fair Market Value of all Financed Shares allocated to Eligible Participants for such Plan Year plus the dollar amount of all ESOP Contributions and 401(k) Safe Harbor Contributions made in cash for such Plan Year plus the Fair Market Value of all ESOP Contributions made in Shares for such Plan Year, divided by (ii) the aggregate amount of Allocation Compensation used in the allocation for such Plan Year. Fair Market Value for such purposes shall be determined as of the last day of the Plan Year.

(b) A notional allocation shall be determined by multiplying (A) the percentage determined under section 5.4(a) by (B) the Allocation Compensation which the individual would have had for the calendar year ending during such Plan Year if he had remained in the service of the Employer in the same capacity and earning Allocation Compensation and Total Compensation at the annual rates in effect immediately prior to the commencement of the Qualified Military Leave (or, if such rates are not reasonably certain, at an annual rate equal to the actual Allocation Compensation and Total Compensation, respectively, paid to him for the 12-month period immediately preceding the Qualified Military Service).

(c) An actual Retroactive Contribution for the Plan Year shall be determined by computing the excess of (A) the notional allocation determined under section 5.4(b) over (B) the sum of the dollar amount of any ESOP Contribution and 401(k) Safe Harbor Contributions made in cash, the Fair Market Value of any ESOP Contribution in Shares and the Fair Market Value of any Financed Shares actually allocated to such individual for such Plan Year.

If and to the extent that the Allocation Compensation used in determining a Participant’s share of contributions is not uniform for all types of contributions, separate calculations shall be performed.

Section 5.5 Time and Manner of Payment .

(a) Payment of contributions made pursuant to this Article V shall be made:

(i) in cash, in the case of a Loan Repayment Contribution; and

(ii) in cash, in Shares or in a combination of cash and Shares, in the case of an ESOP Contribution or a Retroactive Contribution; provided however , that any Retroactive Contribution in respect of a 401 (k) Safe Harbor Contribution shall be made only in cash.

(b) Contributions made pursuant to this Article V for a Plan Year shall be paid to the Trust Fund on or before the due date (including any extensions thereof) of the Employer’s federal income tax return for its taxable year during which such Plan Year ends. All such contributions shall be allocated to the Accounts of the Eligible Participants, in the case of an ESOP Contribution, to the Account of the Participant for whom it is made in the case of a Retroactive Contribution, and to the Loan Repayment Account, in the case of a Loan Repayment Contribution, as soon as is practicable following the payment thereof to the Trust Fund.

ARTICLE VI

Share Acquisition Loans

Section 6.1 In General .

The Committee may, with the prior approval of the Board, direct the Trustee to obtain a Share Acquisition Loan on behalf of the Plan, the proceeds of which shall be applied on the earliest practicable date:

(a) to purchase Shares; or

(b) to make payments of principal or interest, or a combination of principal and interest, with respect to such Share Acquisition Loan; or

(c) to make payments of principal and interest, or a combination of principal and interest, with respect to a previously obtained Share Acquisition Loan that is then outstanding.

Any such Share Acquisition Loan shall be obtained on such terms and conditions as the Committee may approve; provided, however , that such terms and conditions shall provide for the payment of interest at no more than a reasonable rate and shall permit such Share Acquisition Loan to satisfy the requirements of section 4975(d)(3) of the Code and section 408(b)(3) of ERISA.

Section 6.2 Collateral; Liability for Repayment .

(a) The Committee may direct the Trustee to pledge, at the time a Share Acquisition Loan is obtained, the following assets of the Plan as collateral for such Share Acquisition Loan:

(i) any Shares purchased with the proceeds of such Share Acquisition Loan and any earnings attributable thereto;

(ii) any Financed Shares then pledged as collateral for a prior Share Acquisition Loan which is repaid with the proceeds of such Share Acquisition Loan and any earnings attributable thereto; and

(iii) pending the application thereof to purchase Shares or repay a prior Share Acquisition Loan, the proceeds of such Share Acquisition Loan and any earnings attributable thereto.

Except as specifically provided in this section 6.2(a), no assets of the Plan shall be pledged as collateral for the repayment of any Share Acquisition Loan.

(b) No person entitled to payment under a Share Acquisition Loan shall have any right to the assets of the Plan except for:

(i) Financed Shares that have been pledged as collateral for such Share Acquisition Loan pursuant to section 6.2(a);

(ii) Loan Repayment Contributions made pursuant to section 5.2; and

(iii) earnings attributable to Financed Shares described in section 6.2(b)(i) and to Loan Repayment Contributions described in section 6.2(b)(ii).

Except in the event of a default or a refinancing pursuant to which an existing Share Acquisition Loan is repaid or as provided in section 14.3, the aggregate amount of all payments of principal and interest made by the Trustee with respect to all Share Acquisition Loans obtained on behalf of the Plan shall at no time exceed the aggregate amount of all Loan Repayment Contributions theretofore made plus the aggregate amount of all earnings (other than dividends paid in the form of Shares) attributable to Financed Shares and to such Loan Repayment Contributions.

Section 6.3 Loan Repayment Account .

In the event that one or more Share Acquisition Loans shall be obtained, a Loan Repayment Account shall be established under the Plan. The Loan Repayment Account shall be credited with all Shares acquired with the proceeds of a Share Acquisition Loan, all Loan Repayment Contributions and all earnings (including dividends paid in the form of Shares) or appreciation attributable to such Shares and Loan Repayment Contributions. The Loan Repayment Account shall be charged with all payments of principal and interest made by the Trustee with respect to any Share Acquisition Loan, all Shares released in accordance with section 6.4 and all losses, depreciation or expenses attributable to Shares or to other property credited thereto. The Financed Shares, as well as any earnings thereon, shall be allocated to such Loan Repayment Account and shall be accounted for separately from all other amounts contributed under the Plan.

Section 6.4 Release of Financed Shares .

As of the last day of each Plan Year during which a Share Acquisition Loan is outstanding, a portion of the Financed Shares purchased with the proceeds of such Share Acquisition Loan and allocated to the Loan Repayment Account shall be released. The number of Financed Shares released in any such Plan Year shall be equal to the amount determined according to one of the following methods:

(a) by computing the product of: (i) the number of Financed Shares purchased with the proceeds of such Share Acquisition Loan and allocated to the Loan Repayment Account immediately before the release is effected; multiplied by (ii) a fraction, the numerator of which is the aggregate amount of the principal and interest payments (other than payments made upon the refinancing of a Share Acquisition Loan as contemplated by section 6.1(c)) made with respect to such Share Acquisition Loan during such Plan Year, and the denominator of which is the aggregate amount of all principal and interest remaining to be paid with respect to such Share Acquisition Loan as of the first day of such Plan Year; or

(b) by computing the product of: (i) the number of Financed Shares purchased with the proceeds of such Share Acquisition Loan and allocated to the Loan Repayment Account immediately before the release is effected; multiplied by (ii) a fraction, the numerator of which is the aggregate amount of the principal payments (other than payments made upon the refinancing of a Share Acquisition Loan as contemplated by section 6.1(c)) made with respect to such Share Acquisition Loan during such Plan Year, and the denominator of which is the aggregate amount of all of principal remaining to be paid with respect to such Share Acquisition Loan as of the first day of such Plan Year; provided, however, that the method described in this section 6.4(b) may be used only if the Share Acquisition Loan does not extend for a period in excess of 10 years after the date of origination and only to the extent that principal payments on such Share Acquisition Loan are made at least as rapidly as under a loan of like principal amount with a like interest rate and term requiring level amortization of principal and interest.

The method to be used shall be specified in the documents governing the Share Acquisition Loan or, if not specified therein, prescribed by the Committee, in its discretion. In the event that property other than, or in addition to, Financed Shares shall be held in the Loan Repayment Account and pledged as collateral for a Share Acquisition Loan, then the property to be released pursuant to this section 6.4 shall be property having a Fair Market Value determined by applying the method to be used to the Fair Market Value of all property pledged as collateral for such Share Acquisition Loan; provided, however, that no property other than Financed Shares shall be released pursuant to this section 6.4 unless all Financed Shares have previously been released.

Section 6.5 Restrictions on Financed Shares .

Except to the extent required under any applicable law, rule or regulation, no Shares purchased with the proceeds of a Share Acquisition Loan shall be subject to a put, call or other option, or to any buy-sell or similar arrangement, while held by the Trustee or when distributed from the Plan. The provisions of this section 6.5 shall continue to apply in the event that this Plan shall cease to be an employee stock ownership plan, within the meaning of section 4975(e)(7) of the Code.

ARTICLE VII

Allocation of Contributions

Section 7.1 Allocation Among Eligible Participants .

Subject to the limitations of Article VIII, ESOP Contributions for a Plan Year made in accordance with section 5.3 and Financed Shares and other property that are released from the Loan Repayment Account for a Plan Year in accordance with section 6.4 shall be allocated among the Eligible Participants for such Plan Year, in the manner provided in this Article VII.

Section 7.2 Allocation of Released Shares or Other Property .

Subject to the limitations of Article VIII, in the event that Financed Shares or other property are released from the Loan Repayment Account for a Plan Year in accordance with section 6.4, such released Shares or other property shall be allocated among the Accounts of the Eligible Participants for the Plan Year (a) for Plan Years beginning before July 1, 1997, in the proportion that each such Eligible Participant’s Allocation Compensation for the portion of the immediately preceding calendar year during which he was a Participant bears to the aggregate Allocation Compensation of all Eligible Participants for the portion of the immediately preceding calendar year during which they were Participants and (b) for Plan Years beginning after June 30, 1997, in the proportion that each such Eligible Participant’s Allocation Compensation for the immediately preceding calendar year bears to the aggregate Allocation Compensation of all Eligible Participants for the immediately preceding calendar year.

Section 7.3 Allocation of ESOP Contributions .

Subject to the provisions of Article XIX and the limitations of Article VIII, in the event that the Employer makes an ESOP Contribution for a Plan Year, such ESOP Contribution shall be allocated among the Accounts of the Eligible Participants for such Plan Year (a) for Plan Years beginning before July 1, 1997, in the proportion that each such Eligible Participant’s Allocation Compensation for the portion of the immediately preceding calendar year during which he was a Participant bears to the aggregate Allocation Compensation of all Eligible Participants for the portion of such Plan Year during which they were Eligible Participants; (b) for Plan Years beginning after June 30, 1997, in the proportion that each such Eligible Participant’s Allocation Compensation for the immediately preceding calendar year bears to the aggregate Allocation Compensation of all Eligible Participants for the immediately preceding calendar year; and (c) for Plan Years beginning after June 30, 2000, in the proportion that each such Eligible Participant’s Allocation Compensation for the portion of the Plan Year during which he was a Participant bears to the aggregate Allocation Compensation of all Eligible Participants for the portion of the Plan Year during which they were Eligible Participants.

ARTICLE VIII

Limitations on Allocations

Section 8.1 Optional Limitations on Allocations of ESOP Contributions .

If, for any Plan Year, the application of sections 7.2 and 7.3 would result in more than one-third of the number of Shares or of the amount of money or property to be allocated thereunder being allocated to the Accounts of Eligible Participants for such Plan Year who are also Highly Compensated Employees for such Plan Year, then the Committee may, but shall not be required to, direct that this section 8.1 shall apply in lieu of sections 7.2 and 7.3. If the Committee gives such a direction, then the Committee shall impose a maximum dollar limitation on the amount of Allocation Compensation that may be taken into account for each Eligible Participant. The dollar limitation which shall be imposed shall be the limitation which produces the result that the aggregate Allocation Compensation taken into account for Eligible Participants who are Highly Compensated Employees, constitutes exactly one-third of the aggregate Allocation Compensation taken into account for all Eligible Participants. In determining whether more than one-third of the number of Shares or of the amount of money or property to be allocated under the Plan for a Plan Year beginning before January 1, 1997 would be allocated to the Highly Compensated Employees, any allocation to be made to the Account of a Family Member of a Highly Compensated Employee who is either a Five Percent Owner or one of the ten Highly Compensated Employees with the highest Total Compensation, shall be treated as an allocation to such Highly Compensated Employee.

Section 8.2 General Limitations on Contributions .

(a) No amount shall be allocated to a Participant’s Account under this Plan for any Limitation Year to the extent that such an allocation would result in an Annual Addition of an amount greater than the lesser of (i) for any Limitation Year beginning before January 1, 2002, (A) $30,000 (or such other amount as is permissible under section 415(c)(1)(A) of the Code), or (A) 25% of the Participant’s Total Compensation for such Limitation Year; and (ii) for any Limitation Year beginning after December 31, 2001, (A) $40,000 (or such other amount a is permissible under section 415(c)(1)(A) of the Code) or (ii) 100% of the Participant’s Total Compensation for such Limitation Year.

(b) In the case of a Participant who may be entitled to benefits under any qualified defined benefit plan (whether or not terminated) now in effect or ever maintained by the Employer, such Participant’s Annual Additions under this Plan shall, in addition to the limitations provided under section 8.2(a), be further limited so that the sum of the Participant’s Defined Contribution Plan Fraction plus his Defined Benefit Plan Fraction does not exceed 1.0 for any Limitation Year beginning prior to January 1, 2000; provided, however, that for any Limitation Year ending prior to January 1, 1983, the sum of his Defined Contribution Plan Fraction plus his Defined Benefit Plan Fraction shall not exceed 1.4; and provided further, that this limitation shall only apply if and to the extent that the benefits under the Employer’s qualified defined benefit plan or any other qualified defined contribution plan of the Employer are not limited so that such sum is not exceeded.

(i) Annual Addition means the sum of the following amounts allocated on behalf of a Participant for a Limitation Year:

(A) all contributions by the Employer (including contributions made under a salary reduction agreement pursuant to sections 401(k), 408(k) or 403(b) of the Code but not including catch-up election deferred described in section 414(v) of the Code) under any qualified defined contribution plan (other than this Plan) maintained by the Employer, as well as the Participant’s allocable share, if any, of any forfeitures under such plans; plus

(B) (I) for Limitation Years that began prior to January 1, 1987, the lesser of (1) 50% of the Participant’s voluntary nondeductible contributions to all qualified defined contribution plans maintained by the Employer, or (2) the amount by which the Participant’s nondeductible voluntary contributions to such plans exceeds 6% of his Total Compensation; and (II) for Limitation Years that begin after December 31, 1986, all of the Participant’s voluntary nondeductible contributions to such plans; plus

(D) except as hereinafter provided in this section 8.2(c)(i), a portion of the Employer’s Loan Repayment Contributions to the Plan for such Limitation Year which bears the same proportion to the total amount of the Employer’s Loan Repayment Contributions for the Limitation Year that the number of Shares (or the Fair Market Value of property other than Shares) allocated to the Participant’s Account pursuant to section 7.2 or 8.1, whichever is applicable, bears to the aggregate number of Shares (or Fair Market Value of property other than Shares) so allocated to all Participants for such Limitation Year.

(E) amounts allocated after March 31, 1984 to an individual medical account (within the meaning of section 415(1) of the Code) which is part of a pension or annuity plan maintained by the Employer and amounts derived from contributions paid or accrued after, and in a taxable year ending after, December 31, 1985 which are attributable to post-retirement medical benefits and allocated to a separate account of a key employee (within the meaning of section 419A(d)(3) of the Code) under a welfare benefit fund (within the meaning of section 419(e) of the Code).

Notwithstanding section 8.2(c)(i)(D), if, for any Limitation Year, the aggregate amount of ESOP Contributions allocated to the Accounts of the individuals who are Highly Compensated Employees for such Limitation Year, when added to such Highly Compensated Employees’ allocable share of any Loan Repayment Contributions for such Limitation Year, does not exceed one-third of the total of all ESOP Contributions and Loan Repayment Contributions for such Limitation Year, then that portion, if any, of the Loan Repayment Contributions for such Limitation Year that is applied to the payment of interest on a Share Acquisition Loan shall not be included as an Annual Addition. In determining whether more than one-third of the number of Shares or of the amount of money or property to be allocated under the Plan for a Plan Year beginning before January 1, 1997 would be allocated to the Highly Compensated Employees, any allocation to be made to the Account of a Family Member of a Highly Compensated Employee who is either a Five Percent Owner or one of the ten Highly Compensated Employees with the highest Total Compensation, shall be treated as an allocation to such Highly Compensated Employee. In no event shall any Financed Shares, any dividends or other earnings thereon, any proceeds of the sale thereof or any portion of the value of the foregoing be included as an Annual Addition.

(ii) Employer means Dime Community Bancshares, Inc., and all members of a controlled group of corporations, as defined in section 414(b) of the Code, as modified by section 415(h) of the Code, all commonly controlled trades or businesses, as defined in section 414(c) of the Code, as modified by section 415(h) of the Code, all affiliated service groups, as defined in section 414(m) of the Code, of which Dime Community Bancshares, Inc. is a member, as well as any leasing organization, as defined in section 18.8, that employs any person who is considered an employee under section 18.8 and any other entity that is required to be aggregated with the Employer pursuant to regulations under section 414(o) of the Code.

(iii) Defined Benefit Plan Fraction means, for any Participant for any Limitation Year, a fraction, the numerator of which is the Projected Annual Benefit (determined as of the end of such Limitation Year) of the Participant under any qualified defined benefit plans (whether or not terminated) maintained by the Employer for the current and all prior Limitation Years, and the denominator of which is as follows: (A) for Limitation Years ending prior to January 1, 1983, the lesser of (I) the dollar limitation in effect under section 415(b)(1) (A) of the Code for such Limitation Year, or (II) the amount which may be taken into account under section 415(b)(1)(B) of the Code with respect to such Participant for such Limitation Year; and (B) in all other cases, the lesser of (I) (except as provided in section 17.8(b) for a Top Heavy Plan Year) the product of 1.25 multiplied by the dollar limitation in effect under section 415(b)(1)(A) of the Code for such Limitation Year, or (II) the product of 1.4 multiplied by the amount which may be taken into account under section 415(b)(1)(B) of the Code with respect to such Participant for such Limitation Year.

(iv) Defined Contribution Plan Fraction means, for any Participant for any Limitation Year, a fraction (A) the numerator of which is the sum of such Participant’s Annual Additions (determined as of the end of such Limitation Year) under this Plan and any other qualified defined contribution plans (whether or not terminated) maintained by the Employer for the current and all prior Limitation Years, and (B) the denominator of which is as follows: (I) for Limitation Years ending prior to January 1, 1983, the sum of the lesser of the following amounts for such Limitation Year and for each prior Limitation Year during which such Participant was employed by the Employer: (1) the Maximum Permissible Amount for such Limitation Year (without regard to section 415(c)(6) of the Code), or (2) the amount which may be taken into account under section 415(c)(1)(B) of the Code with respect to such Participant for such Limitation Year; and (II) in all other cases, the sum of the lesser of the following amounts for such Limitation Year and for each prior Limitation during which such Participant was employed by the Employer: (1) (except as provided in section 17.8(b) for a Top Heavy Plan Year) the product of 1.25 multiplied by the Maximum Permissible Amount for such Limitation Year (determined without regard to section 415(c)(6) of the Code), or (2) the product of 1.4 multiplied by the amount which may be taken into account under section 415(c)(1)(B) of the Code (or section 415(c)(7) of the Code, if applicable) with respect to such Participant for such Limitation Year; provided, however, that the Plan Administrator may, at his election, adopt the transition rule set forth in section 415(e)(6) of the Code in making the computation set forth in this section 8.2(c)(iv). If the sum of a Participant’s Defined Benefit Plan Fraction and Defined Contribution Plan Fraction exceeded 1.0 as of September 30, 1983, then such Participant’s Defined Contribution Plan Fraction shall be determined under regulations to be prescribed by the Secretary of the Treasury so that the sum of the fractions does not exceed 1.0.

(v) Limitation Year means the calendar year.

(vi) Maximum Permissible Amount means (A) $25,000 (or such higher amount as may be permitted under section 415(d) of the Code because of cost of living increases) for Limitation Years beginning prior to January 1, 1983, and (B) the greater of (I) $30,000, or (II) 25% of the dollar limitation in effect under section 415(b)(1)(A) of the Code for Limitation Years beginning on or after January 1, 1983 and prior to January 1, 1994, and (C) the lesser of (I) $30,000 (or such higher amount as may be permitted under section 415(d) of the Code because of cost of living increases) or (II) the percentage limitation in effect under section 415(c)(1)(B) of the Code for Limitation Years beginning on or after January 1, 1995.

(vii) Projected Annual Benefit means a Participant’s annual retirement benefit (adjusted to the actuarial equivalent of a straight life annuity if expressed in a form other than a straight life or qualified joint and survivor annuity) under any qualified defined benefit plan maintained by the Employer, whether or not terminated, assuming that the Participant will continue employment until the later of such Participant’s current age or normal retirement age under such plan, and that the Participant’s Total Compensation for the Limitation Year and all other relevant factors used to determine benefits under such plan will remain constant for all future Limitation Years.

(d) When a Participant’s Annual Addition to this Plan must be reduced to satisfy the limitations of section 8.2(a) or (b), such reduction shall be applied to ESOP Contributions and to Shares allocated as a result of a Loan Repayment Contribution which are included as an Annual Addition in such order as shall result in the smallest reduction in the number of Shares allocable to the Participant’s Account. No reduction shall be applied to 401(k) Safe Harbor Contributions unless and until all other amounts included in the Participant’s Annual Addition have been reduced to zero. The amount by which any Participant’s Annual Addition to this Plan is reduced shall be allocated in accordance with Articles V and VII as a contribution by the Employer in the next succeeding Limitation Year.

(e) Prior to determining a Participant’s actual Total Compensation for a Limitation Year, the Employer may determine the limitations under this section 8.2 for a Participant on the basis of a reasonable estimation of the Participant’s Total Compensation for the Limitation Year that is uniformly determined for all Participants who are similarly situated. As soon as it is administratively feasible after the end of the Limitation Year, the limitations of this section 8.2 shall be determined on the basis of the Participant’s actual Total Compensation for the Limitation Year.

ARTICLE IX

Vesting

Section 9.1 Vesting .

Subject to the provisions of sections 9.2, 9.3 and 14.1(a), the balance credited to each Employee’s Account shall become vested in accordance with the following schedule:

Period of Service In Years	Vested Percentage
less than 2 years	0%
2 years but less than 3 years	25%
3 years but less than 4 years	50%
4 years but less than 5 years	75%
5 or more years	100%

Section 9.2 Vesting on Death, Disability Retirement or Change in Control .

(a) Any previously unvested portion of the remainder of the balance credited to the Account of a Participant or of a person who is a Former Participant solely because he is excluded from participation under section 2.1(b) shall become fully vested in him immediately upon attainment of age 65, or, if earlier, upon the termination of his participation by reason of death, Disability, Retirement or upon the occurrence of a Change in Control of the Employer.

(b) Each Participant who is employed at the Gates Avenue branch on November 5, 1999, and each person who is a Former Participant solely because he is excluded from participation under section 2.1 (b) and who is employed at the Gates Avenue branch on November 5, 1999, shall be fully vested in his account on November 5, 1999 if his employment with any Affiliated Employer is terminated on November 5, 1999, as a result of the sale of the assets and liabilities of the November 5, 1999 effective on such date.

Section 9.3 Vesting of 401(k) Safe Harbor Contribution Account .

Notwithstanding anything contained in the Plan to the contrary, the entire balance credited to a Participant’s 401(k) Safe Harbor Contribution Account shall be 100% vested without regard to his Period of Service.

Section 9.4 Forfeitures on Termination of Employment .

Upon the termination of employment of a Participant or Former Participant for any reason other than death, Disability, Retirement, that portion of the balance credited to his Account which is not vested at the date of such termination shall be forfeited as of the last Valuation Date for the Plan Year in which such termination of employment occurs. The proceeds of such forfeitures, less amounts, if any, required to be credited because of re-employment pursuant to section 9.5, shall be treated as Forfeitures and shall be disposed of as provided in section 9.6.

Section 9.5 Amounts Credited Upon Re-Employment .

If an Employee forfeited any amount of the balance credited to his Account upon his termination of employment with the Employer, and is re-employed prior to the occurrence of a Period of Severance of five years, then:

(i) an amount equal to the Fair Market Value of the Shares forfeited, determined as of the date of forfeiture; and

(ii) the amount credited to his General Investment Account that was forfeited, determined as of the date of forfeiture;

shall be credited back to his Account from the proceeds of forfeitures which are redeemed pursuant to section 9.3 during the Plan Year in which he is re-employed, unless such proceeds are insufficient, in which case, the Employer shall make an additional contribution in the amount of such deficiency.

Section 9.6 Allocation of Forfeitures .

Any Forfeitures that occur during a Plan Year shall be used to reduce the contributions required of the Employer under the Plan and shall be treated as Loan Repayment Contributions and ESOP Contributions in the proportions designated by the Committee in accordance with Article V.

ARTICLE X

The Trust Fund

Section 10.1 The Trust Fund .

The Trust Fund shall be held and invested under the Trust Agreement with the Trustee. The provisions of the Trust Agreement shall vest such powers in the Trustee as to investment, control and disbursement of the Trust Fund, and such other provisions not inconsistent with the Plan, including provision for the appointment of one or more “investment managers” within the meaning of section 3(38) of ERISA to manage and control (including acquiring and disposing of) all or any of the assets of the Trust Fund, as the Board may from time to time authorize. Except as required by ERISA, no bond or other security shall be required of any Trustee at any time in office.

Section 10.2 Investments .

Except to the extent provided to the contrary in section 10.3, the Trust Fund shall be invested in:

(i) Shares;

(ii) such Investment Funds as may be established from time to time by the Committee; and

(iii) such other investments as may be permitted under the Trust Agreement;

in such proportions as shall be determined by the Committee or, if so provided under the Trust Agreement, as directed by one or more investment managers or by the Trustee, in its discretion; provided, however , that the investments of the Trust Fund shall consist primarily of Shares. Notwithstanding the immediately preceding sentence, the Trustee may temporarily invest the Trust Fund in short-term obligations of, or guaranteed by, the United States Government or an agency thereof, or may retain uninvested, or sell investments to provide, amounts of cash required for purposes of the Plan.

Section 10.3 Distributions for Diversification of Investments .

(a) Notwithstanding section 10.2, each Qualified Participant may:

(i) during the first 90 days of each of the first five Plan Years to begin after the Plan Year in which he first becomes a Qualified Participant, elect that such percentage of the balance credited to his Account as he may specify, but in no event more than 25% of the balance credited to his Account, be either distributed to him pursuant to this section 10.3(a)(i) or transferred to The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust to the extent permitted by such plan, no later than 90 days after the last day that such election may be made; and

(ii) during the first 90 days of the sixth Plan Year to begin after the Plan Year in which he first becomes a Qualified Participant or of any Plan Year thereafter, elect that such percentage of the balance credited to his Account as he may specify, but in no event more than 50% of the balance credited to his Account, be either distributed to him pursuant to this section 10.3(a)(ii) or transferred to The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust to the extent permitted by such plan, no later than 90 days after the last day that such election may be made.

For purposes of an election under this section 10.3, the balance credited to a Participant’s Account shall be the balance credited to his Account determined as of the last Valuation Date to occur in the Plan Year immediately preceding the Plan Year in which such election is made and the 25% and 50% limitations shall apply to such balance after adjustment for all amounts previously distributed or transferred to The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust under this Section 10.3.

(b) An election made under section 10.3(a) shall be made in writing, in the form and manner prescribed by the Plan Administrator, and shall be filed with the Plan Administrator during the election period specified in section 10.3(a). As soon as is practicable, and in no case later than 90 days following the end of the election period during which such election is made, the Plan Administrator shall take such actions as are necessary to cause the specified percentage of the balance credited to the Account of the Qualified Participant making the election to be distributed to such Qualified Participant.

(c) An election made under section 10.3(a) may be changed or revoked at any time during the election period described in section 10.3(a) during which it is initially made. In no event, however, shall any election under this section 10.3 result in more than 25% of the balance credited to the Participant’s Account being distributed to the Participant or transferred to The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust, if such election is made during a Plan Year to which section 10.3(a)(i) applies, or result in more than 50% of the balance distributed to the Participant or transferred to The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust, if such election is made during the Plan Year to which section 10.3(a)(ii) applies or thereafter.

Section 10.4 Use of Commingled Trust Funds .

Subject to the provisions of the Trust Agreement, amounts held in the Trust Fund may be invested in:

(a) any commingled or group trust fund described in section 401(a) of the Code and exempt under section 501(a) of the Code; or

(b) any common trust fund exempt under section 584 of the Code maintained exclusively for the collective investment of the assets of trusts that are exempt under section 501(a) of the Code;

provided that the trustee of such commingled, group or common trust fund is a bank or trust company.

Section 10.5 Management and Control of Assets .

All assets of the Plan shall be held by the Trustee in trust for the exclusive benefit of Participants, Former Participants and their Beneficiaries. No part of the corpus or income of the Trust Fund shall be used for, or diverted to, purposes other than for the exclusive benefit of Participants, Former Participants and their Beneficiaries, and for defraying reasonable administrative expenses of the Plan and Trust Fund. No person shall have any interest in or right to any part of the earnings of the Trust Fund, or any rights in, to or under the Trust Fund or any part of its assets, except to the extent expressly provided in the Plan.

ARTICLE XI

Valuation of Interests in the Trust Fund

Section 11.1 Establishment of Investment Accounts .

The Plan Administrator shall establish, or cause to be established, for each person for whom an Account is maintained a Share Investment Account and a General Investment Account. Such Share Investment Accounts and General Investment Accounts shall be maintained in accordance with this Article XI.

Section 11.2 Share Investment Accounts .

The Share Investment Account established for a person in accordance with section 11.l shall be credited with: (a) all Shares allocated to such person’s Account; (b) all Shares purchased with amounts of money or property allocated to such person’s Account; (c) all dividends paid in the form of Shares with respect to Shares credited to his Account; and (d) all Shares purchased with amounts credited to such person’s General Investment Account. Such Share Investment Account shall be charged with all Shares that are sold or exchanged to acquire other investments or to provide cash and with all Shares that are distributed in kind.

Section 11.3 General Investment Accounts .

The General Investment Account that is established for a person in accordance with section 11.1 shall be credited with: (a) all amounts, other than Shares, allocated to such person’s Account; (b) all dividends paid in a form other than Shares with respect to Shares credited to such person’s Share Investment Account; (c) the proceeds of any sale of Shares credited to such person’s Share Investment Account; and (d) any earnings attributable to amounts credited to such person’s General Investment Account. Such General Investment Account shall be charged with all amounts credited thereto that are applied to the purchase of Shares, any losses or depreciation attributable to amounts credited thereto, any expenses allocable thereto and any distributions of amounts credited thereto.

Section 11.4 Valuation of Investment Accounts .

(a) The Plan Administrator shall determine, or cause to be determined, the aggregate value of each person’s Share Investment Account as of each Valuation Date by multiplying the number of Shares credited to such Share Investment Account on such Valuation Date by the Fair Market Value of a Share on such Valuation Date.

(b) As of each Valuation Date, the Accounts of each Participant shall be separately adjusted to reflect their proportionate share of any appreciation or depreciation in the fair market value of the Investment Funds, any income earned by the Investment Funds and any expenses incurred by the Investment Funds, as well as any contributions, withdrawals or distributions and investment transfers not posted as of the last Valuation Date.

Section 11.5 Annual Statements .

There shall be furnished, by mail or otherwise, at least once in each Plan Year to each person who would then be entitled to receive all or part of the balance credited to any Account if the Plan were then terminated, a statement of his interest in the Plan as of such date as shall be selected by the Plan Administrator, which statement shall be deemed to have been accepted as correct and be binding on such person unless the Plan Administrator receives written notice to the contrary within 30 days after the statement is mailed or furnished to such person.

ARTICLE XII

Section 12.1 Specific Allocation of Shares .

All Shares purchased under the Plan shall be specifically allocated to the Share Investment Accounts of Participants, Former Participants and their Beneficiaries in accordance with section 11.2, with the exception of Financed Shares, which shall be allocated to the Loan Repayment Account.

Section 12.2 Dividends .

(a) Subject to Article XIX, dividends paid with respect to Shares held under the Plan shall be credited to the Loan Repayment Account, if paid with respect to Financed Shares. Such dividends shall be: (i) applied to the payment of principal and accrued interest with respect to any Share Acquisition Loan, if paid in cash; or (ii) held in the Loan Repayment Account as Financed Shares for release in accordance with section 6.4, if paid in the form of Shares.

(b) Dividends paid with respect to Shares allocated to a person’s Share Investment Account shall be credited to such person’s Share Investment Account. Cash dividends credited to a person’s General Investment Account shall be, at the direction of the Board, either: (i) held in such General Investment Account and invested in accordance with sections 10.2 and 11.3; (ii) distributed immediately to such person; (iii) distributed to such person within 90 days of the close of the Plan Year in which such dividends were paid; (iv) in the case of dividends paid after December 31, 2002, if such person is 100% vested and at the election of such person, either distributed to him as provided in section 12.2(b)(iii) or retained in his Account and reinvested in Shares; or (v) used to make payments of principal or interest on a Share Acquisition Loan; provided, however , that the Fair Market Value of Financed Shares released from the Loan Repayment Account equals or exceeds the amount of the dividend.

Section 12.3 Voting Rights .

(a) Each person shall direct the manner in which all voting rights appurtenant to Shares allocated to his Share Investment Account will be exercised, provided that such Shares were allocated to his Share Investment Account as of the applicable record date. Such a direction shall be given by completing and filing with the inspector of elections, the Trustee or such other person who shall be independent of the Employer as the Committee shall designate, at least 10 days prior to the date of the meeting of holders of Shares at which such voting rights will be exercised, a written direction in the form and manner prescribed by the Committee. The inspector of elections, the Trustee or such other person designated by the Committee shall tabulate the directions given on a strictly confidential basis, and shall provide the Committee with only the final results of the tabulation. The final results of the tabulation shall be followed by the Committee in directing the Trustee as to the manner in which such voting rights shall be exercised. The Plan Administrator shall make a reasonable effort to furnish, or cause to be furnished, to each person for whom a Share Investment Account is maintained all annual reports, proxy materials and other information known by the Plan Administrator to have been furnished by the issuer of the Shares, or by any solicitor of proxies, to the holders of Shares.

(b) To the extent that any person shall fail to give instructions with respect to the exercise of voting rights appurtenant to Shares allocated to his Share Investment Account:

(i) the Trustee shall, with respect to each matter to be voted upon: (A) cast a number of affirmative votes equal to the product of (I) the number of allocated Shares for which no written instructions have been given, multiplied by (II) a fraction, the numerator of which is the number of allocated Shares for which affirmative votes will be cast in accordance with written instructions given as provided in section 12.3(a) and the denominator of which is the aggregate number of affirmative and negative votes which will be cast in accordance with written instructions given as aforesaid, and (B) cast a number of negative votes equal to the excess (if any) of (I) the number of allocated Shares for which no written instructions have been given over (II) the number of affirmative votes being cast with respect to such allocated Shares pursuant to section 12.3(b)(i)(A); or

(ii) if the Trustee shall determine that it may not, consistent with its fiduciary duties, vote the allocated Shares for which no written instructions have been given in the manner described in section 12.3(b)(i), it shall vote such Shares in such manner as it, in its discretion, may determine to be in the best interests of the persons to whose Share Investment Accounts such Shares have been allocated.

(c) i) The voting rights appurtenant to Financed Shares shall be exercised as follows with respect to each matter as to which holders of Shares may vote:

(A) a number of votes equal to the product of (I) the total number of votes appurtenant to Financed Shares allocated to the Loan Repayment Account on the applicable record date; multiplied by (II) a fraction, the numerator of which is the total number of affirmative votes cast by Participants, Former Participants and the Beneficiaries of deceased Former Participants with respect to such matter pursuant to section 12.3(a) and the denominator of which is the total number of affirmative and negative votes cast by Participants, Former Participants and the Beneficiaries of deceased Former Participants, shall be cast in the affirmative; and

(B) a number of votes equal to the excess of (I) the total number of votes appurtenant to Financed Shares allocated to the Loan Repayment Account on the applicable record date, over (II) the number of affirmative votes cast pursuant to section 12.3(c)(i)(A) shall be cast in the negative.

To the extent that the Financed Shares consist of more than one class of Shares, this section 12.3(c)(i) shall be applied separately with respect to each class of Shares.

(ii) If voting rights are to be exercised with respect to Financed Shares as provided in section 12.3(c)(i)(A) and (B) at a time when there are no Shares allocated to the Share Investment Accounts of Participants, Former Participants and the Beneficiaries of deceased Former Participants, then the voting rights appurtenant to Financed Shares shall be exercised as follows with respect to each matter as to which holders of Shares may vote:

(A) Each person who is a Participant on the applicable record date and who was a Participant on the last day of the Plan Year ending on or immediately prior to such record date will be granted a number of votes equal to the quotient, rounded to the nearest integral number, of (I) such Participant’s Allocation Compensation for the Plan Year ending on or immediately prior to such record date (or for the portion of such Plan Year during which he was a Participant); divided by (II) $1,000.00; and

(B) a number of votes equal to the product of (I) the total number of Financed Shares allocated to the Loan Repayment Account on the applicable record date; multiplied by (II) a fraction, the numerator of which is the total number of votes that are cast in the affirmative with respect to such matter pursuant to section 12.3(c)(ii)(A) and the denominator of which is the total number of votes that are cast either in the affirmative or in the negative with respect to such matter pursuant to section 12.3(c)(ii)(A), shall be cast in the affirmative; and

(C) a number of votes equal to the excess of (I) the total number of Financed Shares allocated to the Loan Repayment Account on the applicable record date, over (II) the number of affirmative votes cast with respect to such matter pursuant to section 12.3(c)(ii)(B), shall be cast in the negative.

To the extent that the Financed Shares consist of more than one class of Shares, this section 12.3(c)(ii) shall be applied separately with respect to each class of Shares.

(d) Each such person shall, for purposes of this section 12.3, be deemed a “named fiduciary” within the meaning of section 402(a)(2) of ERISA.

Section 12.4 Tender Offers .

(a) Each person shall direct whether Shares allocated to his Share Investment Account will be delivered in response to any Tender Offer. Such a direction shall be given by completing and filing with the Trustee or such other person who shall be independent of the Employer as the Committee shall designate, at least 10 days prior to the latest date for exercising a right to deliver Shares pursuant to such Tender Offer, a written direction in the form and manner prescribed by the Committee. The Trustee or other person designated by the Committee shall tabulate the directions given on a strictly confidential basis, and shall provide the Committee with only the final results of the tabulation. The final results of the tabulation shall be followed by the Committee in directing the number of Shares to be delivered. The Plan Administrator shall make a reasonable effort to furnish, or cause to be furnished, to each person for whom a Share Investment Account is maintained, all information known by the Plan Administrator to have been furnished by the issuer or by or on behalf of any person making such Tender Offer, to the holders of Shares in connection with such Tender Offer.

(b) To the extent that any person shall fail to give instructions with respect to Shares allocated to his Share Investment Account:

(i) the Trustee shall (A) tender or otherwise offer for purchase, exchange or redemption a number of such Shares equal to the product of (I) the number of allocated Shares for which no written instructions have been given, multiplied by (II) a fraction, the numerator of which is the number of allocated Shares tendered or otherwise offered for purchase, exchange or redemption in accordance with written instructions given as provided in section 12.4(a) and the denominator of which is the aggregate number of allocated Shares for which written instructions have been given as aforesaid, and (B) withhold a number of Shares equal to the excess (if any) of (I) the number of allocated Shares for which no written instructions have been given over (II) the number of Shares being tendered or otherwise offered pursuant to section 12.4(b)(i)(A); or

(ii) if the Trustee shall determine that it may not, consistent with its fiduciary duties, exercise the tender or other rights appurtenant to allocated Shares for which no written instructions have been given in the manner described in section 12.4(b)(i), it shall tender, or otherwise offer, or withhold such Shares in such manner as it, in its discretion, may determine to be in the best interests of the persons to whose Share Investment Accounts such Shares have been allocated.

(c) In the case of any Tender Offer, any Financed Shares held in the Loan Repayment Account shall be dealt with as follows:

(i) If such Tender Offer occurs at a time when there are no Shares allocated to the Share Investment Accounts of Participants, Former Participants and the Beneficiaries of deceased Former Participants, then the disposition of the Financed Shares shall be determined as follows:

(A) each person who is a Participant on the applicable record date and who was a Participant on the last day of the Plan Year ending on or immediately prior to such record date will be granted a number of tender rights equal to the quotient, rounded to the nearest integral number, of (I) such Participant’s Allocation Compensation for the Plan Year ending on or immediately prior to such record date (or for the portion of such Plan Year during which he was a Participant), divided by (II) $1,000.00; and

(B) on the last day for delivering Shares or otherwise responding to such Tender Offer, a number of Shares equal to the product of (I) the total number of Financed Shares allocated to the Loan Repayment Account on the last day of the effective period of such Tender Offer; multiplied by (II) a fraction, the numerator of which is the total number of tender rights exercised in favor of the delivery of Shares in response to the Tender Offer pursuant to section 12.4(c)(i)(A) and the denominator of which is the total number of tender rights that are exercisable in response to the Tender Offer pursuant to section 12.4(c)(i)(A), shall be delivered in response to the Tender Offer; and

(C) a number of Shares equal to the excess of (I) the total number of Financed Shares allocated to the Loan Repayment Account on the last day of the effective period of such Tender Offer; over (II) the number of Shares to be delivered in response to the Tender Offer pursuant to section 12.4(c)(i)(B), shall be withheld from delivery.

(ii) If such Tender Offer occurs at a time when the voting rights appurtenant to such Financed Shares are to be exercised in accordance with section 12.3(c)(i), then:

(A) on the last day for delivering Shares or otherwise responding to such Tender Offer, a number of Financed Shares equal to the product of (I) the total number of Financed Shares allocated to the Loan Repayment Account on the last day of the effective period of such Tender Offer; multiplied by (II) a fraction, the numerator of which is the total number of Shares delivered from the Share Investment Accounts of Participants, Former Participants and the Beneficiaries of deceased Former Participants in response to such Tender Offer pursuant to section 12.4(a), and the denominator of which is the total number of Shares allocated to the Share Investment Accounts of Participants, Former Participants and Beneficiaries of deceased Former Participants immediately prior to the last day for delivering Shares or otherwise responding to such Tender Offer, shall be delivered; and

(B) a number of Financed Shares equal to the excess of (I) the total number of Financed Shares allocated to the Loan Repayment Account on the last day for delivering Shares or otherwise responding to such Tender Offer; over (II) the number of Financed Shares to be delivered pursuant to section 12.4(c)(ii)(A), shall be withheld from delivery.

To the extent that the Financed Shares consist of more than one class of Shares, this section 12.4(c) shall be applied separately with respect to each class of Shares.

(d) Each such person shall, for purposes of this section 12.4, be deemed a “named fiduciary” within the meaning of section 402(a)(2) of ERISA.

ARTICLE XIII

Payment of Benefits

Section 13.1 In General .

The balance credited to a Participant’s or Former Participant’s Account under the Plan shall be paid only at the times, to the extent, in the manner and to the persons provided in this Article XIII.

Section 13.2 Designation of Beneficiaries .

(a) Subject to section 13.2(b), any person entitled to a benefit under the Plan may designate a Beneficiary to receive any amount to which he is entitled that remains undistributed on the date of his death. Such person shall designate his Beneficiary (and may change or revoke any such designation) in writing in the form and manner prescribed by the Plan Administrator. Such designation, and any change or revocation thereof, shall be effective only if received by the Plan Administrator prior to such person’s death and shall become irrevocable upon such person’s death.

(b) A Participant or Former Participant who is married shall automatically be deemed to have designated his spouse as his Beneficiary, unless, prior to the time such designation would, under section 13.2(a), become irrevocable:

(i) the Participant or Former Participant designates an additional or a different Beneficiary in accordance with this section 13.2; and

(ii) (1) the spouse of such Participant or Former Participant consents to such designation in a writing that acknowledges the effect of such consent and is witnessed by a Plan representative or a notary public; or (B) the spouse of such Participant or Former Participant has previously consented to such designation by signing a written waiver of any right to consent to any designation made by the Participant or Former Participant, and such waiver acknowledged the effect of the waiver and was witnessed by a Plan representative or a notary public; or (C) it is established to the satisfaction of a Plan representative that the consent required under section 13.2(b)(ii)(A) may not be obtained because such spouse cannot be located or because of other circumstances permitted under regulations issued by the Secretary of the Treasury.

(c) In the event that a Beneficiary entitled to payments hereunder shall die after the death of the person who designated him but prior to receiving payment of his entire interest in the Account of the person who designated him, then such Beneficiary’s interest in the Account of such person, or any unpaid balance thereof, shall be paid as provided in section 13.3 to the Beneficiary who has been designated by the deceased Beneficiary, or if there is none, to the executor or administrator of the estate of such deceased Beneficiary, or if no such executor or administrator is appointed within such time as the Plan Administrator, in his sole discretion, shall deem reasonable, to such one or more of the spouse and descendants and blood relatives of such deceased Beneficiary as the Plan Administrator may select. If a person entitled to a bene fit under the Plan and any of the Beneficiaries designated by him shall die in such circumstances that there shall be substantial doubt as to which of them shall have been the first to die, for all purposes of the Plan, the person who made the Beneficiary designation shall be deemed to have survived such Beneficiary.

(d) If no Beneficiary survives the person entitled to the benefit under the Plan or if no Beneficiary has been designated by such person, such benefit shall be paid to the executor or administrator of the estate of such person, or if no such executor or administrator is appointed within such time as the Plan Administrator, in his sole discretion, shall deem reasonable, to such one or more of the spouse and descendants and blood relatives of such deceased person as the Plan Administrator may select.

Section 13.3 Distributions to Participants and Former Participants .

(a) (i) The vested portion of the balance credited to a Participant’s or a Former Participant’s Account shall be distributed to him commencing as of the last Valuation Date to occur in the Plan Year in which the Participant or Former Participant terminates employment with the Employer or attains age 65, whichever is later, unless the Participant or Former Participant elects otherwise pursuant to section 13.3(a)(ii), and the payment, or first in a series of payments, is actually made within sixty (60) days following such Valuation Date; provided, however, that required minimum distributions shall be made earlier in accordance with section 13.5; and provided, further, that if termination of employment occurs prior to January 1, 1999 and the total vested balance credited to his Account at termination of employment is $3,500 or less, or if termination of employment occurs after December 31, 1998 and the total vested balance credited to his Account at termination of employment is $5,000 (or such higher amount as may be prescribed by law) or less, or if termination of employment occurs on or after March 28, 2005 and the total vested balance credited to his Account at termination of employment is $1,000 or less, his entire vested interest in his Account shall be paid to him in a single lump sum as soon as practicable after termination of employment.

(ii) A Participant or Former Participant may, upon request on a form provided by the Plan Administrator and filed with the Plan Administrator not later than 15 days prior to the date on which his employment with the Employer terminates, elect that his vested interest in his Account be paid commencing as of any earlier or later Valuation Date after his termination of employment, but in no event later than the last Valuation Date to occur in the calendar year in which the Participant or Former Participant attains age 70½, in which case the payment, or first in a series of payments, shall be made within three months following such Valuation Date.

(b) (i) Subject to section 13.3(b)(ii), the vested portion of the balance credited to the Account of a Participant or Former Participant will be paid to him, commencing as of the Valuation Date determined under section 13.3(a), in substantially equal annual installments over a fixed period equal to the greater of:

(A) five years; or

(B) if the vested portion of the balance credited to the Account of the Participant or Former Participant, determined as of the Valuation Date determined under section 13.3(a), is greater than $500,000 (or such larger amount as may be prescribed by the Secretary of the Treasury, pursuant to section 409(o) of the Code), the sum of five years plus the lesser of (I) five additional years; or (II) one additional year for each $100,000 (or fraction thereof) by which the vested portion of the balance credited to the Participant’s or Former Participant’s Account exceeds $500,000 (or such larger amount as may be prescribed by the Secretary of the Treasury pursuant to section 409(o) of the Code).

(A) in substantially equal annual installments over a fixed period not to exceed the lesser of (I) 10 years, or (II) the life expectancy of the Participant or Former Participant, or, if his Beneficiary is a Designated Beneficiary, the joint life and last survivor expectancy of the Participant or Former Participant and his Designated Beneficiary (determined before January 1, 2002 under Tables V and VI of section 1.72-9 of the Income Tax Regulations, using their respective attained ages as of their birthdays in the calendar year that includes the Valuation Date as of which the first payment is made, and after December 31, 2001 under the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury regulations using the Participant’s age as of the Participant’s birthday in such calendar year or, if the Participant’s sole Designated Beneficiary is a surviving spouse who is more than 10 years younger than the Participant, the under the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in such calendar year); Or

(B) subject to section 13.4, in a lump sum payment.

(c) If any person entitled to a benefit under the Plan dies before his entire benefit has been distributed to him, then the remainder of such benefit shall be paid to the Beneficiary designated by him under section 13.2 either:

(i) in a lump sum distribution as of the Valuation Date next following the date of his death, and the amount thereof shall be based upon the vested portion of the balance credited to his Account as of such Valuation Date; or

(ii) if, prior to the death of the Participant or Former Participant whose vested Account is being distributed, an election pursuant to section 13.3(b)(ii)(B) is in effect for him, in a lump sum distribution as of the Valuation Date specified in such election, or, if earlier, as of the latest Valuation Date that would permit payment to be made within five years after the Participant’s or Former Participant’s death, and the amount thereof shall be based upon the vested portion of the balance credited to his Account as of such Valuation Date; or

(iii) if, prior to the death of the Participant or Former Participant whose vested Account is being distributed, an election pursuant to section 13.3(b)(ii)(A) is in effect for him:

(A) over the period and at the times set forth in such election, if distribution has begun prior to the Participant’s or Former Participant’s death; or

(B) commencing at the time set forth in such election and over the period set forth in such election (or, if less, over a period equal to the life expectancy of the Beneficiary of the deceased Participant or Former Participant), if the deceased Participant’s or Former Participant’s spouse is his Beneficiary and distribution has not begun prior to the deceased Participant’s or Former Participant’s death; or

(C) commencing on the date specified in such election (or, if earlier, the last Valuation Date that will permit payment to begin within one year after the deceased Participant’s or Former Participant’s death) and over the period set forth in such election (or, if less, over a period equal to the life expectancy of the Beneficiary of the deceased Participant or Former Participant), if the deceased Participant’s or Former Participant’s Beneficiary is a natural person other than his spouse and distribution has not begun prior to the deceased Participant’s or Former Participant’s death;

and the amount thereof shall be based upon the vested portion of the balance credited to his Account as of the Valuation Dates as of which payments are determined; or

(iv) upon written application of the Beneficiary made in such form and manner as the Plan Administrator may prescribe, at another time or in another manner permitted under section 13.3(a) or (b), subject to the following limitations:

(A) (I) If such Beneficiary is a Designated Beneficiary other than the spouse of the deceased Participant or Former Participant whose vested Account is being distributed, a distribution that commences within one year after such deceased Participant’s or Former Participant’s death shall be made over a fixed period that does not exceed the life expectancy of such Beneficiary when distribution commences.

(II) If such Designated Beneficiary is the spouse of the deceased Participant or Former Participant whose vested Account is being distributed, a distribution that commences no later than the later of: (1) the date on which the deceased Participant or Former Participant would have attained age 70½ had he lived; or (2) the first anniversary of the death of such deceased Participant or Former Participant; shall be made over a fixed period that does not exceed the life expectancy of such Designated Beneficiary when distribution commences.

(III) In all other cases where the spouse of the deceased Participant or Former Participant whose vested Account is being distributed is not the Beneficiary, payment must be completed within five years after the death of such deceased Participant or Former Participant.

(B) In cases where distribution has commenced prior to the death of the deceased Participant or Former Participant whose vested Account is being distributed, distribution must be completed as least as rapidly as under the method in effect prior to such deceased Participant’s or Former Participant’s death.

The determination whether a Beneficiary is a Designated Beneficiary and whether a Designated Beneficiary is a surviving spouse shall be made not later than September 30 th of the calendar year following the calendar year in which the Employee dies. For purposes of computing payments in years prior to 2002, life expectancy shall be determined using Table V of section 1.72-9 of the Income Tax Regulations based on the Beneficiary’s attained age in the year of the first payment. For purposes of computing payments in years after 2002, payments for calendar years that begin during the lifetime of a surviving spouse who is a Designated Beneficiary shall be determined using the Single Life Table set forth in section 1.401(a)(9)-9 of the Income Tax Regulations based on the spouse’s attain age in such year and payments for subsequent calendar years shall be determined using the Single Life Table set forth in section 1.401(a)(9)-9 of the Income Tax Regulations based on the spouse’s attain age in the year of death. For purposes of computing payments in years after 2001, payments to a Designated Beneficiary other than surviving spouse shall be determined using the Single Life Table set forth in section 1.401(a)(9)-9 of the Income Tax Regulations based on the Designated Beneficiary’s attain age in the year of the Employee’s death.

Section 13.4 Manner of Payment .

(a) Subject to section 13.4(b), payments of distributions made pursuant to section 13.3 or section 13.5 shall be paid, in accordance with the written direction of the person requesting the payment, in whole Shares, in cash, or in a combination of cash and whole Shares. Such written direction shall be given in such form and manner as the Plan Administrator may prescribe. If no such direction is given, then payment shall be made in the maximum number of whole Shares that may be acquired with the amount of the payment, plus, if necessary, an amount of money equal to any remaining amount of the payment that is less than the Fair Market Value of a whole Share.

(b) No distribution of a lump sum payment shall be made in cash to the extent that the making of such distribution, when combined with all other distributions to be made in cash as of the same Valuation Date, would require the sale of Shares constituting 1% or more of all outstanding Shares; provided, however, that this section 13.4(b) shall not apply to or in respect of a Participant or Former Participant:

(i) following such Participant’s or Former Participant’s termination of employment with the Employer on account of his Retirement or Disability; or

(ii) following such Participant’s or Former Participant’s 65th birthday; or

(iii) following the death of such Participant or Former Participant.

Section 13.5 Minimum Required Distributions .

(a) Required minimum distributions of a Participant’s or Former Participant’s Account shall commence no later than:

(i) if the Participant or Former Participant attained age 70½ prior to January 1, 1988 and was not a Five Percent Owner at any time during the Plan Year ending in the calendar year in which he attained age 70½, during any of the four preceding Plan Years or during any subsequent years, the later of (A) the calendar year in which he attains or attained age 70½ or (B) the calendar year in which he terminates employment with the Employer; or

(ii) if the Participant or Former Participant attained age 70½ prior to January 1, 1988 and is or was a Five Percent Owner at any time during the Plan Year ending in the calendar year in which he attained age 70½, or during any of the four preceding Plan Years or during any subsequent years, the later of (A) the calendar year in which he attains age 70½ or (B) the calendar year in which he first becomes a Five Percent Owner; or

(iii) if the Participant or Former Participant attains age 70½ after December 31, 1987 and before January 1, 1997, in all other cases, the calendar year in which the Participant or Former Participant attains age 70½; or

(iv) if the Participant or Former Participant attains age 70½ after December 31, 1998 and was not a Five Percent Owner at any time during the Plan Year ending in the calendar year in which he attained age 70½, during any of the four preceding Plan Years or during any subsequent years, the later of (A) the calendar year in which he attains or attained age 70½ or (B) the calendar year in which he terminates employment with the Employer and all Affiliated Employers; or

(v) if the Participant or Former Participant attains age 70½ after December 31, 1998 and is or was a Five Percent Owner at any time during the Plan Year ending in the calendar year in which he attained age 70½, during any of the four preceding Plan Years or during any subsequent years, the later of (A) the calendar year in which he attains age 70½ or (B) the calendar year in which he first becomes a Five Percent Owner;

provided, however , that any Participant who is employed by an Employer after December 31, 1996 may elect not to receive, or to discontinue receiving, such required minimum distributions until April 1 of the year following the year in which such Participant terminates employment or is or becomes a Five Percent Owner, whichever is earlier.

(b) The required minimum distributions contemplated by section 13.5(a) shall be made as follows:

(i) The minimum required distribution to be made for the calendar year for which the first minimum distribution is required shall be no later than April 1st of the immediately following calendar year and shall be equal to the quotient obtained by dividing (A) the vested balance credited to the Participant’s or Former Participant’s Account as of the last Valuation Date to occur in the calendar year immediately preceding the calendar year in which the first minimum distribution is required (adjusted to account for any additions thereto or subtractions therefrom after such Valuation Date but on or before December 31st of such calendar year); by (B) the Participant’s or Former Participant’s life expectancy (or, if his Beneficiary is a natural person, the joint life and last survivor expectancy of him and his Beneficiary); and

(ii) the minimum required distribution to be made for each calendar year following the calendar year for which the first minimum distribution is required shall be made no later than December 31st of the calendar year for which the distribution is required and shall be equal to the quotient obtained by dividing (A) the vested balance credited to the Participant’s or Former Participant’s Account as of the last Valuation Date to occur in the calendar year prior to the calendar year for which the distribution is required (adjusted to account for any additions thereto or subtractions therefrom after such Valuation Date but on or before December 31st of such calendar year and, in the case of the distribution for the calendar year immediately following the calendar year for which the first minimum distribution is required, reduced by any distribution for the prior calendar year that is made in the current calendar year); by (B) the Participant’s or Former Participant’s life expectancy (or, if his Beneficiary is a Designated Beneficiary, the joint life and last survivor expectancy of him and his Beneficiary).

For purposes of this section 13.5, the life expectancy of a Participant or Former Participant (or the joint life and last survivor expectancy of a Participant or Former Participant and his Designated Beneficiary) for the calendar year in which the Participant or Former Participant attains age 70½ shall be determined on the basis of Tables V and VI, as applicable, of section 1.72-9 of the Income Tax Regulations as of the Participant’s or Former Participant’s and Beneficiary’s birthday in such year. Such life expectancy or joint life and last survivor expectancy for any subsequent year shall be equal to the excess of (1) the life expectancy or joint life and last survivor expectancy for the year in which the Participant or Former Participant attains age 70½, over (2) the number of whole years that have elapsed since the Participant or Former Participant attained age 70½.

(A) for taxable years beginning before January 1, 2003, the life expectancy of a Participant or Former Participant (or the joint life and last survivor expectancy of a Participant or Former Participant and his Designated Beneficiary) for the calendar year in which the Participant or Former Participant attains age 70½ shall be determined on the basis of Tables V and VI, as applicable, of section 1.72-9 of the Income Tax Regulations as of the Participant’s or Former Participant’s birthday in such year. Such life expectancy or joint life and last survivor expectancy for any subsequent year shall be equal to the excess of (1) the life expectancy or joint life and last survivor expectancy for the year which the Participant or Former Participant attains age 70½, over (2) the number of whole years that have elapsed since the Participant or Former Participant attained age 70½; and

(B) for taxable years beginning after December 31, 2002, during the Participant’s or Former Participant’s lifetime, life expectancy shall be equal to:

(1) the distribution period in the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations, using the Participant’s age as of the Participant’s birthday in such calendar year; or

(2) if the Participant’s spouse is the sole designated Beneficiary and the spouse is more than ten years younger than the Participant, the number in the Joint and Last Survivor Table set forth in section 1.401(a)(9)-9 of the Treasury Regulations, using the Participation’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in such calendar year.

(d) Payment of the distributions required to be made to a Participant or Former Participant under this section 13.5 shall be made in accordance with section 13.4.

Section 13.6 Direct Rollover of Eligible Rollover Distributions .

(a) A Distributee may elect, at the time and in the manner prescribed by the Plan Administer, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

(b) The following rules shall apply with respect to Direct Rollovers made pursuant to this section 13.6:

(i) A Participant may only elect to make a Direct Rollover of an Eligible Rollover Distribution if such Eligible Rollover Distribution (when combined with other Eligible Rollover Distributions made or to be made in the same calendar year) is reasonably expected to be at least $200;

(ii) If a Participant elects a Direct Rollover of a portion of an Eligible Rollover Distribution, that portion must be equal to at least $500; and

(iii) A Participant may not divide his or her Eligible Rollover Distribution into separate distributions to be transferred to two or more Eligible Retirement Plans.

(c) For purposes of this section 13.6 and any other applicable section of the Plan, the following definitions shall have the following meanings:

(i) “Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

(ii) “Distributee” means an Employee or former Employee or, for distributions after June 30, 2008, a designated Beneficiary of a deceased Participant who is not the surviving spouse of such Participant. In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s spouse or former spouse who is the alternate payee under a Qualified Domestic Relations Order are considered Distributees with regard to the interest of the spouse or former spouse.

(iii) “Eligible Retirement Plan” means an individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) or the Code, an annuity plan described in section 403(a) of the Code, a qualified trust described in section 401(a) of the Code, and (for distributions after December 31, 2001 only) an annuity contract described in section 403(b) of the Code or an eligible deferred compensation plan under section 457(b) of the Code which is maintained by a state, political subdivision of a state, or an agency or instrumentality of a state or political subdivision thereof, and (for distributions after December 31, 2007 only) a Roth IRA described in section 408A(b) and which agrees to separately account for amounts transferred into such plan from this Plan, that accepts the Distributee’s Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution made before January 1, 2002 to a current or former spouse who is the alternate payee under a Qualified Domestic Relations Order or to a surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. In the case of an Eligible Rollover Distribution made after June 30, 2008, on behalf of a designated Beneficiary of a deceased Participant who is not a surviving spouse of such Participant, an Eligible Retirement Plan shall mean an individual retirement account described in section 408(a) of the Code or an individual retirement annuity described in section 408(b) of the Code, established for the purpose of receiving the distribution only in a direct trustee-to-trustee transfer, provided that such account or annuity accepts the Beneficiary’s trustee-to-trustee Eligible Rollover Distribution.

(iv) “Eligible Rollover Distribution” means any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee’s designated Beneficiary, or for a specified period of ten (10) years or more; any distribution to the extent such distribution is required under section 401(a)(9) of the Code; any distribution made after December 31, 1999 on account of Hardship; and in the case of a distribution made before January 1, 2002, in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

Section 13.7 Valuation of Shares Upon Distribution to a Participant .

Notwithstanding any contrary provision in this Article XIII, in the event that all or a portion of a payment of a distribution to a Participant is to be made in cash, such Participant shall only be entitled to receive the proceeds of the Shares allocated to his Account that are sold in connection with such distribution and which are valued as of the date of such sale.

Section 13.8 Put Options .

(a) Subject to section 13.8(c) and except as provided otherwise in section 13.8(b), each Participant or Former Participant to whom Shares are distributed under the Plan, each Beneficiary of a deceased Participant or Former Participant, including the estate of a deceased Participant or Former Participant, to whom Shares are distributed under the Plan, and each person to whom such a Participant, Former Participant or Beneficiary gives Shares that have been distributed under the Plan shall have the right to require the Employer to purchase from him all or any portion of such Shares. A person shall exercise such right by delivering to the Employer a written notice, in such form and manner as the Employer may by written notice to such person prescribe, setting forth the number of Shares to be purchased by the Employer, the number of the stock certificate evidencing such person’s ownership of such Shares, and the effective date of the purchase. Such notice shall be given at least 30 days in advance of the effective date of purchase, and the effective date of purchase specified therein shall be, either within the 60 day period that begins on the date on which the Shares to be purchased by the Employer were distributed from the Plan or within the 60 day period that begins on the first day of the Plan Year immediately following the Plan Year in which the Shares to be purchased by the Employer are distributed from the Plan. As soon as practicable following its receipt of such a notice, the Employer shall take such actions as are necessary to purchase the Shares specified in such notice at a price per Share equal to the Fair Market Value of a Share determined as of the Valuation Date coincident with or immediately preceding the effective date of the purchase.

(b) The Employer shall have no obligation to purchase any Share (i) pursuant to a notice that is not timely given, or on an effective date of purchase that is not within the periods prescribed in section 13.8(a) or (ii) following the earliest date on which Shares are publicly traded on an established market.

(c) This section 13.8 shall not apply so long as the Employer is prohibited by law from redeeming or purchasing its own securities.

Section 13.9 Right of First Refusal .

(a) Subject to section 13.9(d), for any period during which Shares are not publicly traded in any established market, no person who owns Shares that were distributed from the Plan, other than a person to whom such Shares were sold in compliance with this section 13.9, shall sell such Shares to any person other than the Employer without first offering to sell such Shares to the Employer in accordance with this section 13.9.

(b) In the event that a person to whom this section 13.9 applies shall receive and desire to accept from a person other than the Employer an offer to purchase Shares to which this section 13.9 applies, he shall furnish to the Employer a written notice which shall:

(i) include a copy of such offer to purchase;

(ii) offer to sell to the Employer the Shares subject to such offer to purchase at a price per Share that is equal to the greater of:

(A) the price per Share specified in such offer to purchase; or

(B) the Fair Market Value of a Share as of the Valuation Date coincident with or immediately preceding the date of such notice;

and otherwise upon the same terms and conditions as those specified in such offer to purchase; and

(iii) include an indication of his intention to accept such offer to purchase if the Employer does not accept his offer to sell.

Such person shall refrain from accepting such offer to purchase for a period of fourteen days following the date on which such notice is given.

(c) Subject to section 13.9(d), the Employer shall have the right to purchase the Shares covered by the offer to sell contained in a notice given pursuant to section 13.9(b), on the terms and conditions specified in such notice, by written notice given to the party making the offer to sell not later than the fourteenth day after the notice described in section 13.9(b) is given. If the Employer does not give such a notice during the prescribed fourteen day period, then the person owning such Shares may accept the offer to purchase described in the notice.

(d) This section 13.9 shall not apply so long as the Employer is prohibited by law from redeeming or purchasing its own securities.

ARTICLE XIV

Change in Control

Section 14.1 Definition of Change in Control .

A Change in Control of the Employer shall be deemed to have occurred upon the happening of any of the following events:

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

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

(i) a merger or consolidation of Dime Community Bancshares, Inc. with any other corporation, other than a merger or consolidation following which both of the following conditions are satisfied:

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

(B) the entity which results from such merger or consolidation expressly agrees in writing to assume and perform Dime Community Bancshares, Inc.’s obligations under the Plan; or

(ii) a plan of complete liquidation of Dime Community Bancshares, Inc. or an agreement for the sale or disposition by Dime Community Bancshares, Inc. of all or substantially all of its assets; and

(d) any event that would be described in section 14.1(b)(i), (ii) or (iii) if “Bank” were substituted for “Dime Community Bancshares, Inc.” therein; and

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

Section 14.2 Vesting on Change of Control .

Upon the effective date of a Change in Control, the Account of each person who would then, upon termination of the Plan, be entitled to a benefit, shall be fully vested and nonforfeitable.

Section 14.3 Repayment of Loan .

(a) Upon a Change in Control described in section 14.1(c) (or which would be described in section 14.1(c) if “Bank” were substituted for “Dime Community Bancshares, Inc.” thereunder), the Committee shall direct the Trustee to sell a sufficient number of Shares to repay any outstanding Share Acquisition Loan in full. The proceeds of such sale shall be used to repay such Share Acquisition Loan immediately prior to the closing of the transaction. After repayment of the Share Acquisition Loan, all remaining Shares which had been unallocated (or the proceeds thereof, if applicable) shall be allocated among the accounts of all Participants who were employed by an Employer on the effective date of such Change in Control. Such allocation of Shares or proceeds shall be credited as of the date on which the Change in Control occurs to the Accounts of each person with an undistributed, vested Account balance, in proportion to the balances credited to such Accounts immediately prior to such allocation. If any amount cannot be allocated to an affected Participant in the year of such Change in Control as a result of the limitations of section 415 of the Code, the amounts will be allocated in subsequent years to those persons who were affected Participants and who continue to be Participants in the Plan until finally distributed to affected Participants.

(b) In the event that the application of section 415 of the Code prevents the allocation of all of the Shares or other assets released from the Loan Repayment Account as provided in section 14.3(a) as of the effective date of the Change in Control, each affected Participant shall be entitled to receive a supplemental benefit payment directly from the Employer. The supplemental benefit payment to each affected Participant shall be an amount equal to the excess of:

(i) the total amount of Shares or other property that would be allocated to such affected Participant’s Account under section 14.3(a) if section 415 of the Code did not apply; over

(ii) the total of Shares or other property actually allocated to such affected Participant’s Account under section 14.3(a).

Such payment (without offset for any allocations which may occur under this Plan subsequent to the Change in Control) shall be made as soon as practicable, but in any event within ten (10) business days, after the effective date of the Change in Control. This section 14.3(b) shall be treated as a separate, non-qualified “excess benefit plan” within the meaning of section 3(34) of ERISA and shall be interpreted, administered and enforced in a manner consistent with this intention. To the extent that any affected Participant is entitled to the same or a similar payment under any other nonqualified plan, program or arrangement of the Employer, any payment under this section 14.3(b) shall be coordinated with the payments under such other non-qualified programs, plan or arrangements in such manner as shall be determined by the Committee to be necessary to prevent the duplication of benefits.

Section 14.4 Plan Termination After Change in Control .

After repayment of the loan and allocation of shares or proceeds as provided in section 14.2, the Plan shall be terminated and all amounts shall be distributed as soon as practicable.

Section 14.5 Amendment of Article XIV .

Article XIV of the Plan may not be amended after a Change in Control of the Employer unless required by the Internal Revenue Service as a condition to the continued treatment of the Plan as a tax-qualified plan under section 401 (a) of the Code.

ARTICLE XV

Administration

Section 15.1 Named Fiduciaries .

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

Section 15.2 Plan Administrator .

There shall be a Plan Administrator, who shall be the Senior Human Resources Officer of Dime Community Bancshares, Inc., or such Employee or officer as may be designated by the Committee, as hereinafter provided, and who shall, subject to the responsibilities of the Committee and the Board, have the responsibility for the day-to-day control, management, operation and administration of the Plan (except trust duties). The Plan Administrator shall have the following responsibilities:

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

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

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

(d) To require such proof of age or evidence of good health of an Employee, Participant or Former Participant or the spouse of either, or of a Beneficiary as may be necessary or appropriate in the administration of the Plan;

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

(f) To determine any question arising in connection with the Plan, and the Plan Administrator’s decision or action in respect thereof shall be final and conclusive and binding upon the Employer, the Trustee, Participants, Former Participants, Beneficiaries and any other person having an interest under the Plan; provided, however, that any question relating to inconsistency or omission in the Plan, or interpretation of the provisions of the Plan, shall be referred to the Committee by the Plan Administrator and the decision of the Committee in respect thereof shall be final;

(g) Subject to the provisions of section 15.5, to review and dispose of claims under the Plan filed pursuant to section 15.4;

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

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

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

The Plan Administrator shall have the power and authority necessary or appropriate to carry out his responsibilities. The Plan Administrator may resign only by giving at least 30 days’ prior written notice of resignation to the Committee, and such resignation shall be effective on the date specified in such notice.

Section 15.3 Committee Responsibilities .

The Committee shall, subject to the responsibilities of the Board, have the following responsibilities:

(a) To review the performance of the Plan Administrator;

(b) To hear and decide appeals, pursuant to the claims procedure contained in section 15.5 of the Plan, taken from the decisions of the Plan Administrator;

(c) To hear and decide questions, including interpretation of the Plan, as may be referred to the Committee by the Plan Administrator;

(d) To review the performance of the Trustee and such investment managers as may be appointed in or pursuant to the Trust Agreement in investing, managing and controlling the assets of the Plan;

(e) To the extent required by ERISA, to establish a funding policy and method consistent with the objectives of the Plan and the requirements of ERISA, and to review such policy and method at least annually;

(f) To report and make recommendations to the Board regarding changes in the Plan, including changes in the operation and management of the Plan and removal and replacement of the Trustee and such investment managers as may be appointed in or pursuant to the Trust Agreement;

(g) To designate an Alternate Plan Administrator to serve in the event that the Plan Administrator is absent or otherwise unable to discharge his responsibilities;

(h) To remove and replace the Plan Administrator or Alternate, or both of them, and to fill a vacancy in either office;

(i) To the extent provided under and subject to the provisions of the Trust Agreement, to appoint “investment managers” as defined in section 3(38) of ERISA to manage and control (including acquiring and disposing of) all or any of the assets of the Plan;

(j) With the prior approval of the Board, to direct the Trustee to obtain one or more Share Acquisition Loans;

(k) To develop and provide procedures and forms necessary to enable Participants to give voting and tendering directions on a confidential basis;

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

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

The Committee shall have the power and authority necessary or appropriate to carry out its responsibilities.

Section 15.4 Claims Procedure .

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

(a) The reasons for the denial;

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

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

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

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

Section 15.5 Claims Review Procedure .

Any person whose claim filed pursuant to section 15.4 has been denied in whole or in part by the Plan Administrator may request review of the claim by the Committee, upon a form prescribed by the Plan Administrator. The claimant shall file such form (including a statement of his position) with the Committee no later than 60 days after the mailing or delivery of the written notice of denial provided for in section 15.4, or, if such notice is not provided, within 60 days after such claim is deemed denied pursuant to section 15.4. The claimant shall be permitted to review pertinent documents. A decision shall be rendered by the Committee and communicated to the claimant not later than 30 days after receipt of the claimant’s written request for review. However, if the Committee finds it necessary, due to special circumstances (for example, the need to hold a hearing), to extend this period and so notifies the claimant in writing, the decision shall be rendered as soon as practicable, but in no event later than 120 days after the claimant’s request for review. The Committee’s decision shall be in writing and shall specifically set forth:

(a) The reasons for the decision; and

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

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

Section 15.6 Allocation of Fiduciary Responsibilities and Employment of Advisors .

Any Named Fiduciary may:

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

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

Section 15.7 Other Administrative Provisions .

(a) Any person whose claim has been denied in whole or in part must exhaust the administrative review procedures provided in section 15.5 prior to initiating any claim for judicial review.

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

(c) Subject to any limitation on the application of this section 15.7(c) pursuant to ERISA, neither the Plan Administrator, nor a member of the Committee, nor any officer or Employee of the Employer to whom fiduciary responsibilities are allocated by a Named Fiduciary, shall be liable for any act of omission or commission by himself or by another person, except for his own individual willful and intentional malfeasance.

(d) The Plan Administrator or the Committee may, except with respect to actions under section 15.5, shorten, extend or waive the time (but not beyond 60 days) required by the Plan for filing any notice or other form with the Plan Administrator or the Committee, or taking any other action under the Plan.

(e) The Plan Administrator or the Committee may direct that the costs of services provided pursuant to section 15.6, and such other reasonable expenses as may be incurred in the administration of the Plan, shall be paid out of the funds of the Plan unless the Employer shall pay them.

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

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

ARTICLE XVI

Amendment, Termination and Tax Qualification

Section 16.1 Amendment and Termination by Dime Community Bancshares, Inc .

The Employer expects to continue the Plan indefinitely, but specifically reserves the right, in its sole discretion except as provided otherwise in sections 14.5 and 19.5, at any time, by appropriate action of the Board, to amend, in whole or in part, any or all of the provisions of the Plan and to terminate the Plan at any time. Subject to the provisions of section 16.2, no such amendment or termination shall permit any part of the Trust Fund to be used for or diverted to purposes other than for the exclusive benefit of Participants, Former Participants, Beneficiaries or other persons entitled to benefits, and no such amendment or termination shall reduce the accrued benefit of any Participant, Former Participant, Beneficiary or other person who may be entitled to benefits, without his consent. In the event of a termination or partial termination of the Plan, or in the event of a complete discontinuance of the Employer’s contributions to the Plan, the Accounts of each affected person shall forthwith become nonforfeitable and shall be payable in accordance with the provisions of Article XIII.

Section 16.2 Amendment or Termination Other Than by Dime Community Bancshares, Inc .

In the event that a corporation or trade or business other than Dime Community Bancshares, Inc. shall adopt this Plan, such corporation or trade or business shall, by adopting the Plan, empower Dime Community Bancshares, Inc. to amend or terminate the Plan, insofar as it shall cover employees of such corporation or trade or business, upon the terms and conditions set forth in section 16.1; provided however , that any such corporation or trade or business may, by action of its board of directors or other governing body, amend or terminate the Plan, insofar as it shall cover employees of such corporation or trade or business, at different times and in a different manner. In the event of any such amendment or termination by action of the board of directors or other governing body of such a corporation or trade or business, a separate plan shall be deemed to have been established for the employees of such corporation or trade or business, and the assets of such plan shall be segregated from the assets of this Plan at the earliest practicable date and shall be dealt with in accordance with the documents governing such separate plan.

Section 16.3 Conformity to Internal Revenue Code .

The Employer has established the Plan with the intent that the Plan and Trust will at all times be qualified under section 401(a) and exempt under section 501(a) of the Code and with the intent that contributions under the Plan will be allowed as deductions in computing the net income of the Employer for federal income tax purposes, and the provisions of the Plan and Trust Agreement shall be construed to effectuate such intentions. Accordingly, notwithstanding anything to the contrary hereinbefore provided, the Plan and the Trust Agreement may be amended at any time without prior notice to Participants, Former Participants, Beneficiaries or any other persons entitled to benefits, if such amendment is deemed by the Board to be necessary or appropriate to effectuate such intent.

Section 16.4 Contingent Nature of Contributions .

(a) All ESOP Contributions to the Plan are conditioned upon the issuance by the Internal Revenue Service of a determination that the Plan and Trust are qualified under section 401(a) of the Code and exempt under section 501(a) of the Code. If the Employer applies to the Internal Revenue Service for such a determination within 90 days after the date on which it files its federal income tax return for its taxable year that includes the last day of the Plan Year in which the Plan is adopted, and if the Internal Revenue Service issues a determination that the Plan and Trust are not so qualified or exempt, all ESOP Contributions made by the Employer prior to the date of receipt of such a determination may, at the election of the Employer, be returned to the Employer within one year after the date of such determination.

(b) All ESOP Contributions and Loan Repayment Contributions to the Plan are made upon the condition that such ESOP Contributions and Loan Repayment Contributions will be allowed as a deduction in computing the net income of the Employer for federal income tax purposes. To the extent that any such deduction is disallowed, the amount disallowed may, at the election of the Employer, be returned to the Employer within one year after the deduction is disallowed.

(c) Any contribution to the Plan made by the Employer as a result of a mistake of fact may, at the election of the Employer, be returned to the Employer within one year after such contribution is made.

ARTICLE XVII

Special Rules for Top Heavy Plan Years

Section 17.1 In General .

As of the Determination Date for each Plan Year, the Plan Administrator shall determine whether the Plan is a Top Heavy Plan in accordance with the provisions of this Article XVII. If, as of such Determination Date, the Plan is a Top Heavy Plan, then the Plan Year immediately following such Determination Date shall be a Top Heavy Plan Year and the special provisions of this Article XVII shall be in effect; provided, however , that if, as of the Determination Date for the Plan Year in which the Effective Date occurs, the Plan is a Top Heavy Plan, such Plan Year shall be a Top Heavy Plan Year, and the provisions of this Article XVII shall be given retroactive effect for such Plan Year.

Section 17.2 Definition of Top Heavy Plan .

(a) Subject to section 17.2(c), the Plan is a Top Heavy Plan if, as of a Determination Date: (i) it is not a member of a Required Aggregation Group, and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees exceeds 60% of (B) the sum of the Cumulative Accrued Benefits of all Employees (excluding former Key Employees), former Employees (excluding former Key Employees and other former Employees who have not performed any services for the Employer or any Affiliated Employer during the immediately preceding five Plan Years), and their Beneficiaries.

(b) Subject to section 17.2(c), the Plan is a Top Heavy Plan if, as of a Determination Date: (i) the Plan is a member of a Required Aggregation Group, and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees under all plans that are members of the Required Aggregation Group exceeds 60% of (B) the sum of the Cumulative Accrued Benefits of all Employees (excluding former Key Employees), former Employees (excluding former Key Employees and other former Employees who have not performed any services for the Employer or any Affiliated Employer during the immediately preceding five Plan Years), and their Beneficiaries under all plans that are members of the Required Aggregation Group.

(c) Notwithstanding sections 17.2(a) and 17.2(b), the Plan is not a Top Heavy Plan if, as of a Determination Date: (i) the Plan is a member of a Permissible Aggregation Group, and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees under all plans that are members of the Permissible Aggregation Group does not exceed 60% of (B) the sum of the Cumulative Accrued Benefits of all Employees (excluding former Key Employees), former Employees (excluding former Key Employees and other former Employees who have not performed any services for the Employer or any Affiliated Employer during the immediately preceding five Plan Years), and their Beneficiaries under all plans that are members of the Permissible Aggregation Group.

Section 17.3 Determination Date .

The Determination Date for the Plan Year in which the Effective Date occurs shall be the last day of such Plan Year, and the Determination Date for each Plan Year beginning after the Plan Year in which the Effective Date occurs shall be the last day of the preceding Plan Year. The Determination Date for any other qualified plan maintained by the Employer for a plan year shall be the last day of the preceding plan year of each such plan, except that in the case of the first plan year of such plan, it shall be the last day of such first plan year.

Section 17.4 Cumulative Accrued Benefits .

(a) An individual’s Cumulative Accrued Benefits under this Plan as of a Determination Date are equal to the sum of:

(i) the balance credited to such individual’s Account under this Plan as of the most recent Valuation Date preceding the Determination Date;

(ii) the amount of any ESOP Contributions or Loan Repayment Contributions made after such Valuation Date but on or before the Determination Date; and

(iii) the amount of any distributions of such individual’s Cumulative Accrued Benefits under the Plan during the five year period (for all distributions for Plan Years beginning before January 1, 2002) or one year period (for all distributions for Plan Years beginning after December 31, 2001) ending on the Determination Date.

For purposes of this section 17.4(a), the computation of an individual’s Cumulative Accrued Benefits, and the extent to which distributions, rollovers and transfers are taken into account, will be made in accordance with section 416 of the Code and the regulations thereunder.

(b) For purposes of this Plan, the term “Cumulative Accrued Benefits” with respect to any other qualified plan, shall mean the cumulative accrued benefits determined for purposes of section 416 of the Code under the provisions of such plans.

(c) For purposes of determining the top heavy status of a Required Aggregation Group or a Permissible Aggregation Group, the Cumulative Accrued Benefits under this Plan and the Cumulative Accrued Benefits under any other plan shall be determined as of the Determination Date that fails within the same calendar year as the Determination Dates for all other members of such Required Aggregation Group or Permissible Aggregation Group.

Section 17.5 Key Employees .

(a) For purposes of the Plan, the term Key Employee means any employee or former employee of the Employer or any Affiliated Employer who is at any time during the current Plan Year or (for Plan Years beginning before January 1, 2002) was at any time during the immediately preceding four Plan Years:

(i) a Five Percent Owner;

(ii) a person who would be described in section 1.27 if the number “1%” were substituted for the number “5%” in section 1.27 and who has an annual Total Compensation from the Employer and any Affiliated Employer of more than $150,000;

(iii) an Officer of the Employer or any Affiliated Employer who has an annual Total Compensation greater than 50% of the amount in effect under section 415(b)(1)(A) of the Code for any such Plan Year (for Plan Years beginning before January 1, 2002) and ((B) the greater of $130,000 or such higher amount as may be prescribed under section 416(i) of the Code (for Plan Years beginning after December 31, 2001); or

(iv) for Plan Years beginning before January 1, 2002, one of the ten persons owning the largest interests in the Employer and having an annual Total Compensation from the Employer or any Affiliated Employer in excess of the dollar limitation in effect under section 415(c)(1)(A) of the Code for such Plan Year.

(b) For purposes of section 17.5(a):

(i) for purposes of section 17.5(a)(iii), in the event the Employer or any Affiliated Employer has more officers than are considered Officers, the term Key Employee shall mean those officers, up to the maximum number, with the highest annual compensation in any one of the five consecutive Plan Years ending on the Determination Date; and

(ii) for purposes of section 17.5(a)(iv), if two or more persons have equal ownership interests in the Employer, each such person shall be considered as having a larger ownership interest than any such person with a lower annual compensation from the Employer or any Affiliated Employer.

(c) For purposes of section 17.5(a): (i) a person’s compensation from Affiliated Employers shall be aggregated, but his ownership interests in Affiliated Employers shall not be aggregated; (ii) an employee shall only be deemed to be an officer if he has the power and responsibility of a person who is an officer within the meaning of section 416 of the Code; and (iii) the term Key Employee shall also include the Beneficiary of a deceased Key Employee.

Section 17.6 Required Aggregation Group .

For purposes of this Article XVII, a Required Aggregation Group shall consist of (a) this Plan; (b) any other qualified plans currently maintained (or previously maintained and terminated within the five year period ending on the Determination Date) by the Employer and any Affiliated Employers that cover Key Employees; and (c) any other qualified plans currently maintained (or previously maintained and terminated within the five year period ending on the Determination Date) by the Employer and any Affiliated Employers that cover Key Employees that are required to be aggregated for purposes of satisfying the requirements of sections 401(a)(4) or 410(b) of the Code.

Section 17.7 Permissible Aggregation Group .

For purposes of this Article XVII, a Permissible Aggregation Group shall consist of (a) the Required Aggregation Group and (b) any other qualified plans maintained by the Employer and any Affiliated Employers; provided, however, that the Permissible Aggregation Group must satisfy the requirements of sections 401(a)(4) and 410(b) of the Code.

Section 17.8 Special Requirements During Top Heavy Plan Years .

(a) Notwithstanding any other provision of the Plan to the contrary, for each Top Heavy Plan Year, in the case of a Participant (other than a Key Employee) on the last day of such Top Heavy Plan Year who is not also a participant in another qualified plan which satisfies the minimum contribution and benefit requirements of section 416 of the Code with respect to such Participant, the sum of the ESOP Contributions and Loan Repayment Contributions made with respect to such Participant, when expressed as a percentage of his Total Compensation for such Top Heavy Plan Year, shall not be less than 3% of such Participant’s Total Compensation for such Top Heavy Plan Year or, if less, the highest combined rate, expressed as a percentage of Total Compensation at which ESOP Contributions and Loan Repayment Contributions were made on behalf of a Key Employee for such Top Heavy Plan Year. The Employer shall make an additional contribution to the Account of each Participant to the extent necessary to satisfy the foregoing requirement.

(b) For any Top Heavy Plan Year beginning before January 1, 2000, the number “1.0” shall be substituted for the number “1.25” in sections 8.2(c)(iii) and 8.2(c)(iv), except that:

(i) this section 17.8(b) shall not apply to any individual for a Top Heavy Plan Year that is not a Super Top Heavy Plan Year if the requirements of section 17.8(a) would be satisfied for such Super Top Heavy Plan Year if the number “4%” were substituted for the number 3% in section 17.8(a); and

(ii) this section 17.8(b) shall not apply to an individual for a Top Heavy Plan Year if, during such Top Heavy Plan Year, there are no ESOP Contributions or Loan Repayment Contributions allocated to such individual under this Plan, there are no contributions under any other qualified defined contribution plan maintained by the Employer, and there are no accruals for such individual under any qualified defined benefit plan maintained by the Employer.

For purposes of this section 17.8(b), the term Super Top Heavy Plan Year means a Top Heavy Plan Year in which the Plan would meet the definitional requirements of sections 17.2(a) or 17.2(b) if the term “90%” were substituted for the term “60%” in sections 17.2(a), 17.2(b) and 17.2(c).

ARTICLE XVIII

Miscellaneous Provisions

Section 18.1 Governing Law .

Section 18.2 No Right to Continued Employment .

Neither the establishment of the Plan, nor any provisions of the Plan or of the Trust Agreement establishing the Trust Fund nor any action of the Plan Administrator, the Committee or the Trustee, shall be held or construed to confer upon any Employee any right to a continuation of employment by the Employer. The Employer reserves the right to dismiss any Employee or otherwise deal with any Employee to the same extent as though the Plan had not been adopted.

Section 18.3 Construction of 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 words importing the masculine gender may be read as referring equally to the feminine and the neuter. Any reference to an Article or section number shall refer to an Article or section of the Plan, unless otherwise indicated.

Section 18.4 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 18.5 Merger with Other Plans .

The Plan shall not be merged or consolidated with, nor transfer its assets or liabilities to, any other plan unless each Participant, Former Participant, Beneficiary and other person entitled to benefits, would (if that plan then terminated) receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit he would have been entitled to receive if the Plan had terminated immediately before the merger, consolidation or transfer.

Section 18.6 Non-alienation of Benefits .

(a) Except as provided in section 18.6(b) and (c), the right to receive a benefit under the Plan shall not be subject in any manner to anticipation, alienation or assignment, nor shall such right be liable for or subject to debts, contracts, liabilities or torts. Should any Participant, Former Participant or other person attempt to anticipate, alienate or assign his interest in or right to a benefit, or should any person claiming against him seek to subject such interest or right to legal or equitable process, all the interest or right of such Participant or Former Participant or other person entitled to benefits in the Plan shall cease, and in that event such interest or right shall be held or applied, at the direction of the Plan Administrator, for or to the benefit of such Participant or Former Participant, or other person or his spouse, children or other dependents in such manner and in such proportions as the Plan Administrator may deem proper.

(b) This section 18.6 shall not prohibit the Plan Administrator from recognizing a Domestic Relations Order that is determined to be a Qualified Domestic Relations Order in accordance with section 18.7.

(c) Notwithstanding anything in the Plan to the contrary, a Participant’s, Former Participant’s or Beneficiary’s Accounts under the Plan may be offset by any amount such Participant, Former Participant or Beneficiary is required or ordered to pay to the Plan if:

(i) the order or requirement to pay arises: (A) under a judgment issued on or after August 5, 1997 of conviction for a crime involving the Plan; (B) under a civil judgment (including a consent order or decree) entered by a court on or after August 5, 1997 in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA; or (C) pursuant to a settlement agreement entered into on or after August 5, 1997 between the Participant, Former Participant or Beneficiary and one or both of the United States Department of Labor and the Pension Benefit Guaranty Corporation in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of ERISA by a fiduciary or any other person; and

(ii) the judgment, order, decree or settlement agreement expressly provides for the offset of all or part of the amount ordered or required to be paid to the Plan against the Participant’s, For Participant’s or Beneficiary’s benefits under the Plan.

Section 18.7 Procedures Involving Domestic Relations Orders .

Upon receiving a Domestic Relations Order, the Plan Administrator shall segregate in a separate account or in an escrow account or separately account for the amounts payable to any person pursuant to such Domestic Relations Order, pending a determination whether such Domestic Relations Order constitutes a Qualified Domestic Relations Order, and shall give notice of the receipt of the Domestic Relations Order to the Participant or Former Participant and each other person affected thereby. If, within 18 months after receipt of such Domestic Relations Order, the Plan Administrator, a court of competent jurisdiction or another appropriate authority determines that such Domestic Relations Order constitutes a Qualified Domestic Relations Order, the Plan Administrator shall direct the Trustee to pay the segregated amounts (plus any interest thereon) to the person or persons entitled thereto under the Qualified Domestic Relations Order. If it is determined that the Domestic Relations Order is not a Qualified Domestic Relations Order or if no determination is made within the prescribed 18-month period, the segregated amounts shall be distributed as though the Domestic Relations Order had not been received, and any later determination that such Domestic Relations Order constitutes a Qualified Domestic Relations Order shall be applied only with respect to benefits that remain undistributed on the date of such determination. The Plan Administrator shall be authorized to establish such reasonable administrative procedures as he deems necessary or appropriate to administer this section 18.7. This section 18.7 shall be construed and administered so as to comply with the requirements of section 401(a)(13) of the Code.

Section 18.8 Leased Employees .

(a) Subject to section 18.8(b), a leased employee shall be treated as an Employee for purposes of the Plan. For purposes of this section 18.8, the term “leased employee” means any person (i) who would not, but for the application of this section 18.8, be an Employee and (ii) who pursuant to an agreement between the Employer and any other person (“leasing organization”) has performed for the Employer (or for the Employer and related persons determined in accordance with section 414(n)(6) of the Code), on a substantially full-time basis for a period of at least one year, services of a type historically performed by employees in the business field of the Employer: (i) prior to January 1, 1997, services of a type historically performed by employees in the business field of the Bank; and (ii) after December 31, 1996, services under the primary direction or control of the Bank.

(b) For purposes of the Plan:

(i) contributions or benefits provided to the leased employee by the leasing organization which are attributable to services performed for the Employer shall be treated as provided by the Employer; and

(ii) section 18.8(a) shall not apply to a leased employee if:

(A) the number of leased employees performing services for the Employer does not exceed 20% of the number of the Employer’s Employees who are not Highly Compensated Employees; and

(B) such leased employee is covered by a money purchase pension plan providing (I) a nonintegrated contribution rate of at least 10% of the leased employee’s compensation; (II) immediate participation; (III) full and immediate vesting; and (IV) coverage for all of the employees of the leasing organization (ether than employees who perform substantially all of their services for the leasing organization).

Section 18.9 Status as an Employee Stock Ownership Plan .

It is intended that the Plan constitute an “employee stock ownership plan,” as defined in section 4975(e)(7) of the Code and section 407(d)(6) of ERISA. The Plan shall be construed and administered to give effect to such intent.

ARTICLE XIX

Additional Provisions

Section 19.1 401(k) Safe Harbor Contribution .

(a) For the calendar years ending December 31, 2000, 2001, 2002, 2003, 2004, 2005 and 2006, the Employer shall make a 401(k) Safe Harbor Contribution to the Plan to each person who is an Eligible Employee at any time during such calendar year, excluding only those person who first become Eligible Employees during such calendar year and subsequently cease to be Eligible Employees prior to the earliest date on which they could have enrolled in The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust. Solely for purposes of this section 19.1, all persons who are eligible to participate in The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust, shall be deemed to be Participants for the period that coincides to the period during which they could have been enrolled in The Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust. Subject to the limitations of Article VIII, the amount of the 401(k) Safe Harbor Contribution for each such calendar year for each person eligible therefor shall be shall be equal to 3% of the Allocation Compensation actually paid to such person during the portion of such calendar year for which he is a Participant. In the event the Plan is terminated prior to December 1 st of any such calendar year pursuant to Article XVI, no 401(k) Safe Harbor Contribution shall be required for such calendar year or any subsequent calendar year.

(b) The 401(k) Safe Harbor Contributions for any calendar year shall be made not later than the last day of the calendar year following the calendar year for which they are made and shall be allocated to the 401(k) Safe Harbor Accounts of the persons for whom they are made.

(c) Notwithstanding any other provision of this Plan to the contrary, the balance credited to the 401(k) Safe Harbor Contribution Account of any person shall not be eligible for distribution prior to such person’s termination of service except in a required minimum distribution pursuant to section 13.5; provided, however, that notwithstanding the foregoing, after such 401(k) Safe Harbor Contributions have been allocated, the Plan Administrator may direct that they be transferred to accounts established for such persons under the Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust or another tax-qualified defined contribution plan maintained by the Employer, which accounts shall be available for withdrawal or distribution in accordance with the terms of the transferee plan and subject to any additional terms, conditions and limitations imposed under section 401(k)(2)(B) and (C) of the Code.

(d) The 401(k) Safe Harbor Contributions made pursuant to this section 19.1 are intended to enable the Dime Savings Bank of Williamsburgh 401(k) Savings Plan in RSI Retirement Trust qualify for the alternative method of satisfying the nondiscrimination requirements imposed under section 401(k)(3)(a)(ii) of the Code and shall be interpreted and administered to carry out such intent.

(e) For each year for which 401(k) Safe Harbor Contributions are made, the Plan Administrator shall give, or cause to be given, to each Employee who is or may be eligible to receive a 401(k) Safe Harbor Contribution for such year, a detailed notice setting forth such Employee’s rights and obligations with respect to the 401(k) Safe Harbor Contributions, which notice shall be given at the time, be in such form, and contain such information as shall be required by applicable law, including Notice 2000-3 or the corresponding provisions of any successor authority.

Section 19.2 Dividend Maintenance Contributions .

(a) Notwithstanding anything in the Plan to the contrary other than the limitations in Article VIII, if, for any calendar quarter during the period beginning July 1, 2000 and ending June 30, 2006, Dime Community Bancshares, Inc. declares a dividend on its common stock, par value $.01 per share, of less than $.17 per share, the Employer shall make a Dividend Maintenance Contribution for such quarter. Subject to the limitations of Article VIII the amount of any such Dividend Maintenance Contribution shall be determined under the following formula:

DMC=($.17 - DR) x X

where:

DMC

the amount of the Dividend Maintenance Contribution;

the actual dividend rate per share on common stock, par value $.01 per share, of Dime Community Bancshares, Inc. for the period in question; and

the applicable multiplier for the quarter in question, determined as follows:

Quarters Ending	Applicable Multipler
September, December 2000 March, June 2001	688,582
September, December 2001 March, June 2002	572,202
September, December 2002 March, June 2003	455,822
September, December 2003 March, June 2004	339,442
September, December 2004 March, June 2005	223,062
September, December 2005 March, June 2006	106,682

; provided, however , that such amount shall be reduced to zero for any calendar quarter that ends after the effective date of the Plan’s termination pursuant to section 16.2.

(b) The Dividend Maintenance Contributions (if any) for any quarter shall be made no later than January 31 of the calendar year following the calendar year that includes the quarter for which the contribution is made and shall be allocated among the same persons who are eligible to receive 401(k) Safe Harbor Contributions for the calendar year that includes such quarter. The amount allocated to each such person shall be determined by multiplying the total Dividend Maintenance Contributions being allocated by a fraction, the numerator of which is the 401(k) Safe Harbor Contribution made for such person for such calendar year and the denominator of which is the aggregate 401(k) Safe Harbor Contributions made for the calendar year (or, if no 401(k) Safe Harbor Contributions are made for such year, in portion to Allocation Compensation actually paid while a Participant during the Plan Year). Dividend Maintenance Contributions shall be treated as ESOP Contributions for all purposes of the Plan.

(c) In the event of any merger, consolidation, or other business reorganization in which shares of common stock, par value $.0l per share, of Dime Community Bancshares, Inc. are converted into or exchanged for any other security or property, and in the event of any stock split, stock dividend or other event generally affecting the number of shares of such common stock held by each person who is then a holder of record of such shares, the formula for the calculation of any Dividend Maintenance Contribution shall be adjusted, in such manner as the Committee may determine to be necessary or appropriate, to prevent the enlargement or dilution of the Dividend Maintenance Contribution that may be or become due.

Section 19.3 Application of Dividends on Certain Financed Shares .

Notwithstanding anything in the Plan to the contrary, dividends payable with respect to Shares that are, as of July 1, 1999, pledged as collateral for a Share Acquisition Loan that is outstanding as of July 1, 1990 (or dividends payable with respect to securities received as the proceeds of sale or conversion of such Shares) shall not be pledged as collateral for or used for the purpose of the repayment of such Share Acquisition Loan. Any such dividends with a record date that is after June 30, 2000 and prior to the date as of which such Shares are allocated to the Accounts of Participants shall be allocated to the Accounts of Participants, Former Participants and the Beneficiaries of deceased Former Participants as investment earnings for the quarter in which the dividend is actually received by the Trustee. The allocation to each such Account shall be calculated by multiplying the aggregate amount of such dividends by a fraction, the numerator of which is the balance credited to the Account as of the last day of quarter immediately preceding the quarter in which the dividends are received and the denominator of which is the aggregate balances credited to all Accounts as of the last day of such immediately preceding quarter. Once allocated, such dividends may, at the direction of the Committee, be paid out to the Account holder within ninety (90) days after the end of the Plan Year in which they are received by the Trustee.

Section 19.4 Additional Loan Repayment Contributions .

For each Plan Year beginning after June 30, 2000 (or portion thereof) that occurs after the occurrence of a Change in Control described in section 14.1(c) and before the closing of the transaction whose approval has resulted in such Change in Control, the Company shall make Loan Repayment Contributions in an amount equal to the lesser of (a) the amount required to repay in full any outstanding Share Acquisition Loan or (b) the maximum amount which may be contributed without exceeding the limitations of Article VIII. Such contribution shall be made as of the last day of the applicable Plan Year and the Shares and other property released for allocation as a consequence thereof shall be allocated in the manner provided in Article VII. In no event, however, shall any Loan Repayment Contribution be required for any Plan Year that ends after the abandonment (whether by unilateral repudiation, contractual termination or otherwise) prior to closing of the transaction whose approval by stockholders triggered the activation of this section 19.4.

Section 19.5 Amendment of Article XIX .

Notwithstanding anything in the Plan to the contrary, the provisions of this Article XIX may not be amended without the written consent of the Trustee unless, in the opinion of legal counsel for the Employer, such amendment is necessary to maintain the tax-qualified status of the Plan under the Code or otherwise to comply with the requirements of applicable law, rule or regulation.

Delaware (State or other jurisdiction of incorporation or organization)		11-3297463 (I.R.S. employer identification number)
209 Havemeyer Street, Brooklyn, NY ( Address of principal executive offices)		11211 (Zip Code)

TABLE OF CONTENTS
	Page
PART I
Item 1. Business
General	F-3
Market Area and Competition	F-4
Lending Activities	F-5
Asset Quality	F-11
Allowance for Loan Losses	F-15
Investment Activities	F-17
Sources of Funds	F-22
Subsidiary Activities	F-24
Personnel	F-25
Federal, State and Local Taxation	F-25
Federal Taxation	F-25
State and Local Taxation	F-26
Regulation	F-26
General	F-26
Regulation of Federal Savings Associations	F-27
Regulation of Holding Company	F-36
Federal Securities Laws	F-36
Item 1A. Risk Factors	F-36
Item 1B. Unresolved Staff Comments	F-39
Item 2. Properties	F-39
Item 3. Legal Proceedings	F-39
Item 4. Submission of Matters to a Vote of Security Holders	F-39
PART II
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	F-40
Item 6. Selected Financial Data	F-42
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	F-43
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	F-62
Item 8. Financial Statements and Supplementary Data	F-67
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	F-67
Item 9A. Controls and Procedures	F-67
Item 9B. Other Information	F-67
PART III
Item 10. Directors, Executive Officers and Corporate Governance	F-68
Item 11. Executive Compensation	F-69
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters	F-69
Item 13. Certain Relationships and Related Transactions, and Director Independence	F-70
Item 14. Principal Accounting Fees and Services	F-70
PART IV
Item 15. Exhibits, Financial Statement Schedules	F-70
Signatures	F-70

	At December 31,
	2008	Percent of Total	2007	Percent of Total	2006	Percent of Total	2005	Percent of Total	2004	Percent of Total
	Dollars in Thousands
Real Estate loans:
Multifamily residential	$2,241,800	68.18%	$1,948,765	67.78%	$1,855,080	68.64%	$1,872,163	71.69%	$1,917,447	76.63%
Commercial real estate	848,208	25.80	728,129	25.32	666,927	24.68	576,561	22.08	424,060	16.95
One- to four-family	130,663	3.97	139,541	4.85	146,613	5.42	135,622	5.19	126,225	5.04
Cooperative apartment units	11,632	0.35	6,172	0.21	7,224	0.27	10,115	0.39	11,853	0.47
FHA/VA insured	742	0.02	1,029	0.04	1,236	0.05	2,694	0.10	4,209	0.17
Construction and land acquisition	52,982	1.61	49,387	1.72	23,340	0.86	12,098	0.46	15,558	0.62
Total mortgage loans	3,286,027	99.93	2,873,023	99.92	2,700,420	99.92	2,609,253	99.91	2,499,352	99.88
Other loans:
Student loans	-	-	-	-	-	-	-	-	$61	-
Depositor loans	$1,059	0.03	$1,122	0.04	$1,172	0.04	$1,160	0.04	1,318	0.06
Consumer installment and other	1,132	0.04	1,047	0.04	1,033	0.04	1,181	0.05	1,537	0.06
Total other loans	2,191	0.07	2,169	0.08	2,205	0.08	2,341	0.09	2,916	0.12
Gross loans	3,288,218	100.00%	2,875,192	100.00%	2,702,625	100.00%	2,611,594	100.00%	2,502,268	100.00%
Net unearned costs (fees)	3,287		1,833		1,048		501		(463)
Allowance for loan losses	(17,454)		(15,387)		(15,514)		(15,785)		(15,543)
Loans, net	$3,274,051		$2,861,638		$2,688,159		$2,596,310		$2,486,262
Loans serviced for others:
One- to four-family and cooperative apartment	$19,181		$21,515		$24,395		$26,881		$29,524
Multifamily residential	640,200		541,868		494,770		386,781		295,800
Total loans serviced for others	$659,381		$563,383		$519,165		$413,662		$325,324

	For the Year Ended December 31,
	2008	2007	2006	2005	2004
	Dollars in Thousands
Gross loans:
At beginning of period	$2,875,192	$2,702,625	$2,611,594	$2,502,268	$2,194,157
Real estate loans originated:
Multifamily residential	786,918	391,882	388,102	312,026	774,832
Commercial real estate	226,605	124,262	133,099	203,841	187,655
One- to four-family (1)	36,962	27,425	19,070	41,143	36,363
Cooperative apartment units	7,178	-	210	465	1,048
Equity lines of credit	10,843	5,777	7,977	6,405	6,488
Construction and land acquisition	18,215	25,180	14,768	10,331	6,844
Total mortgage loans originated	1,086,721	574,526	563,226	574,211	1,013,230
Other loans originated	2,640	1,772	1,688	1,859	3,166
Total loans originated	1,089,361	576,298	564,914	576,070	1,016,396
Less:
Principal repayments	523,788	326,103	328,453	358,255	557,134
Loans sold	150,983	77,628	145,430	108,489	151,151
Loans transferred to other real estate owned	1,564	-	-	-	-
Gross loans at end of period	$3,288,218	2,875,192	$2,702,625	$2,611,594	$2,502,268

	At December 31, 2008
	Real Estate Loans
	Multifamily Residential	Commercial Real Estate	One- to Four- Family	Cooperative Apartment	FHA/VA Insured	Construction and Land Acquisition	Other Loans	Total Loans
	(Dollars In Thousands)
Amount due to Mature or Reprice During the Year Ending:
December 31, 2009	$198,949	$43,831	$27,005	$3,598	-	$52,982	$2,191	$328,556
December 31, 2010	348,482	96,227	13,692	26	-	-	-	458,427
December 31, 2011	383,698	175,141	12,562	6,554	-	-	-	577,955
December 31, 2012	282,437	142,525	20,952	37	$176	-	-	446,127
December 31, 2013	633,045	184,163	18,861	247	566	-	-	836,882
Sub-total	1,846,611	641,887	93,072	10,462	742	52,982	2,191	2,647,947
December 31, 2014 through December 31, 2018	352,650	158,589	20,765	595	-	-	-	532,599
December 31, 2019 and beyond	42,539	47,732	16,543	858	-	-	-	107,672
Total	$2,241,800	$848,208	$130,380	$11,915	$742	$52,982	$2,191	$3,288,218

	Due after December 31, 2009
	Fixed	Adjustable	Total
	(Dollars in Thousands )
Mortgage loans:
Multifamily residential	$323,028	$1,719,823	2,042,851
Commercial real estate	129,625	674,752	804,377
One- to four-family	43,573	59,802	103,375
Cooperative apartment	1,813	6,504	8,317
FHA/VA insured	742	-	742
Construction and land acquisition	-	-	-
Other loans	-	-	-
Total loans	$498,781	$2,460,881	$2,959,662

	Special Mention		Substandard
	Number	Amount	Number	Amount
	(Dollars in Thousands)
Mortgage Loans:
Multifamily residential	3	$1,550	2	$1,553
One- to four-family	1	57	6	1,473
Cooperative apartment	4	153	1	26
Commercial real estate	3	920	5	3,955
Total Mortgage Loans	11	2,680	14	$7,007
Other loans	16	8	9	5
OREO	-	-	1	300
Total	27	$2,688	24	$7,312

	At or for the Year Ended December 31,
	2008	2007	2006	2005	2004
	(Dollars in Thousands)
Total loans outstanding at end of period (1)	$3,291,505	$2,877,025	$2,703,673	$2,612,095	$2,501,805
Average total loans outstanding (1)	$3,090,032	$2,777,220	$2,651,601	$2,535,574	$2,397,187
Allowance for loan losses:
Balance at beginning of period	$15,387	$15,514	$15,785	$15,543	$15,018
Provision for loan losses	2,006	240	240	340	280
Charge-offs
Multifamily residential	(501)	-	-	-	-
Commercial real estate	(85)	-	-	-	-
One- to four-family	-	-	(2)	-	(3)
FHA/VA insured	-	-	-	-	-
Cooperative apartment	-	-	-	-	-
Other	(26)	(28)	(48)	(76)	(155)
Total charge-offs	(612)	(28)	(50)	(76)	(158)
Recoveries	29	19	23	31	25
Reserve for loan commitments transferred (to) from other liabilities	644	(358)	(484)	(53)	378
Balance at end of period	$17,454	$15,387	$15,514	$15,785	$15,543
Allowance for loan losses to total loans at end of period	0.53%	0.53%	0.57%	0.60%	0.62%
Allowance for loan losses to total non-performing loans at end of period	235.80	538.76	430.23	1,647.70	1,065.32
Allowance for loan losses to total non-performing loans and troubled-debt restructurings at end of period	235.80	538.76	430.23	1,647.70	1,065.32
Ratio of net charge-offs to average loans outstanding during the period	0.02%	-	-	-	-

	Amortized Cost	Fair Value	Weighted Ave rage Tax EquivalentYield
	(Dollars in Thousands)
MBS:
Due within 1 year	-	-	-
Due after 1 year but within 5 years	-	-	-
Due after 5 years but within 10 years	$112,448	$112,789	4.17%
Due after ten years	187,280	188,562	4.90
Total	299,728	301,351	4.63

Municipal agency:
Due within 1 year	-	-	-
Due after 1 year but within 5 years	348	361	5.72
Due after 5 years but within 10 years	9,583	9,772	5.62
Due after ten years	-	-	-
Total	9,931	10,133	5.62

Agency obligations:
Due within 1 year	-	-	-
Due after 1 year but within 5 years	-	-	-
Due after 5 years but within 10 years	1,035	1,036	1.75
Due after ten years	-	-	-
Total	1,035	1,036	1.75

Total:
Due within 1 year	-	-	-
Due after 1 year but within 5 years	348	351	5.72
Due after 5 years but within 10 years	123,066	123,597	4.26
Due after ten years	187,280	188,562	4.90
Total	$310,694	$312,520	4.65%

	Year Ended December 31,
	2008	2007	2006
	(Dollars in Thousands)
Deposits	$3,158,031	$3,098,739	$1,826,641
Withdrawals	3,137,956	3,003,034	1,789,552
Deposits greater than Withdrawals	$20,075	$95,705	$37,089
Interest credited	59,978	75,761	56,671
Total increase in deposits	$80,053	$171,466	$93,760

Maturity Period	Amount	Weighted Average Rate
(Dollars in Thousands)
Within three months	$79,692	3.37%
After three but within six months	96,310	3.79
After six but within twelve months	181,777	3.94
After 12 months	52,932	3.94
Total	$410,711	3.79%

	At December 31, 2008			At December 31, 2007			At December 31, 2006
	Amount	Percent of Total Deposits	Weighted Average Rate	Amount	Percent of Total Deposits	Weighted Average Rate	Amount	Percent of Total Deposits	Weighted Average Rate
	(Dollars in Thousands)
Savings accounts	$270,321	11.96%	0.57%	$274,067	12.57%	0.55%	$298,522	14.86%	0.59%
Certificates of deposit	1,153,166	51.02	3.69	1,077,087	49.41	4.61	1,064,669	53.01	4.76
Money market accounts	633,167	28.02	2.63	678,759	31.14	4.04	514,607	25.62	3.56
Interest bearing c hecking accounts	112,687	4.99	2.10	58,414	2.68	2.28	35,519	1.77	1.08
Non-interest bearing checking accounts	90,710	4.01	-	91,671	4.20	0.15	95,215	4.74	-
Totals	$2,260,051	100.00%	2.79%	$2,179,998	100.00%	3.67%	$2,008,532	100.00%	3.54%

	Period to Maturity at December 31, 2008
Interest Rate Range	One Year or Less	Over One Year to Three Years	Over Three Years to Five Years	Over Five Years	Total at December 31, 2008	Total at December 31, 2007	Total at December 31, 2006
(Dollars in Thousands)
2.00% and below	$40,814	$112	$4	-	$40,930	$21,824	$69,396
2.01% to 3.00%	230,151	6,919	-	-	237,070	21,927	77,401
3.01% to 4.00%	391,944	100,849	11,602	-	504,395	230,593	63,645
4.01% to 5.00%	308,016	13,417	32,819	-	354,252	509,360	142,657
5.01% and above	15,301	1,138	80	-	16,519	293,383	711,570
Total	$986,226	$122,435	$44,505	$-	$1,153,166	$1,077,087	$1,064,669

Subsidiary	Year/ State of Incorporation	Primary Business Activities
Direct Subsidiaries of the Holding Company:
842 Manhattan Avenue Corp.	1995/ New York	Management and ownership of real estate. Currently inactive
Dime Community Capital Trust I	2004/ Delaware	Statutory Trust (1)
Direct Subsidiaries of the Bank:
Boulevard Funding Corp.	1981 / New York	Management and ownership of real estate
Havemeyer Investments, Inc.	1997 / New York	Sale of non-FDIC insured investment products
DSBW Preferred Funding Corp.	1998 / Delaware	Real Estate Investment Trust investing in multifamily residential and commercial real estate loans
DSBW Residential Preferred Funding Corp.	1998 / Delaware	Real Estate Investment Trust investing in one- to four-family real estate loans
Dime Reinvestment Corporation	2004 / Delaware	Community Development Entity. Currently inactive.
195 Havemeyer Corp.	2008 / New York	Management and ownership of real estate

	As of December 31, 2008
	Actual		Minimum Capital Requirement
	Amount	Ratio	Amount	Ratio
	(Dollars in Thousands)
Tangible	$304,455	7.63%	$59,873	1.5%
Leverage Capital	304,455	7.63	159,662	4.0
Total Risk-based capital	303,033	11.43	212,140	8.0

	At December 31,
	2008		2007		2006
	Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Fair Value
MBS:	Dollars in Thousands
FHLMC pass through certificates	144,688	146,358	31,174	31,611	-	-
FNMA pass through certificates	55,526	56,569	12,677	12,646	9,862	9,488
GNMA pass through certificates	1,057	1,041	1,266	1,279	1,773	1,792
Private issuer MBS	4,474	4,138	-	-	-	-
Agency issued CMOs and REMICs	85,631	85,432	107,725	105,716	133,404	128,520
Private issuer CMOs and REMICs	8,352	7,813	11,661	11,512	15,057	14,637
Total MBS	299,728	301,351	164,503	162,764	160,096	154,437
Investment securities:
U.S. Treasury and agency	1,035	1,036	-	-	-	-
Municipal agencies	9,931	10,133	10,031	10,108	235	235
Corporate debt obligations and mutual funds	24,618	14,515	24,750	24,067	29,503	29,548
Total investment securities	35,584	25,684	34,781	34,175	29,738	29,783
Net unrealized loss (1)	(798)	-	(2,345)	-	(5,614)	-
Total securities, net	$334,514	$327,035	$196,939	$196,939	$184,220	$184,220

	At December 31,
	2008		2007		2006
	Amortized Cost	Fair Value	Amortized Cost	Fair Value	Amortized Cost	Fair Value
Held-to-Maturity:	Dollars in Thousands
Pooled trust preferred securities	$16,561	$9,082	-	-	-	-
Municipal agency	-	-	80	80	235	235
Total Held-to-Maturity	$16,561	$9,082	$80	$80	$235	$235

Available-for-Sale:
MBS:
Agency issued MBS	$201,271	$203,968	$45,117	$45,536	$11,635	$11,280
Private issuer MBS	4,474	4,138	-	-	-	-
Agency issued CMOs and REMICs	85,631	85,432	107,725	105,716	133,404	128,520
Private issuer CMOs and REMICs	8,352	7,813	11,661	11,512	15,057	14,637
Total MBS available-for-sale	299,728	301,351	164,503	162,764	160,096	154,437
Investment securities	19,023	16,602	34,701	34,095	29,503	29,548
Net unrealized loss (1)	(798)	-	(2,345)	-	(5,614)	-
Total Available-for-Sale	$317,953	$317,953	$196,859	$196,859	$183,985	$183,985
Total securities, net	$334,514	$327,035	$196,939	$196,939	$184,220	$184,220

	At December 31, 2008
	Tangible Capital	Leverage Capital	Total Risk-Based Capital
	(Dollars in Thousands)
GAAP capital	$350,715	$350,715	$350,715
Non-allowable assets:
MSR	(281)	(281)	(281)
Accumulated other comprehensive loss	9,659	9,659	9,659
Goodwill	(55,638)	(55,638)	(55,638)
Tier 1 risk-based capital	304,455	304,455	304,455
Adjustment for recourse provision on loans sold	-	-	(18,876)
General valuation allowance	-	-	17,454
Total (Tier 2) risk based capital	304,455	304,455	303,033
Minimum capital requirement	59,873	159,662	212,140
Regulatory capital excess	$244,582	$144,793	$90,893

	Twelve Months Ended December 31, 2008			Twelve Months Ended December 31, 2007
Quarter Ended	Dividends Declared	High Sales Price	Low Sales Price	Dividends Declared	High Sales Price	Low Sales Price
March 31 st	$0.14	$17.83	$16.46	$0.14	$14.29	$12.21
June 30 th	0.14	19.31	16.18	0.14	14.00	12.52
September 30 th	0.14	23.55	12.00	0.14	15.99	10.70
December 31 st	0.14	17.69	10.75	0.14	15.56	11.99

Period	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Programs (1)	Maximum Number of Shares that May Yet be Purchased Under the Programs (1)
October 2008	-	-	-	1,124,549
November 2008	-	-	-	1,124,549
December 2008	-	-	-	1,124,549

		Period Ending December 31,
Index	2003	2004	2005	2006	2007	2008
Dime Community Bancshares, Inc.	100.00	90.15	76.25	76.02	72.33	77.97
NASDAQ Composite	100.00	108.59	110.08	120.56	132.39	78.72
SNL Thrift Index	100.00	111.42	115.35	134.46	80.67	51.34

	Payments Due By Period
Contractual Obligations	Less than One Year	One Year to Three Years	Over Three Years to Five Years	Over Five Years	Total
	(Dollars in thousands)
CDs	$986,226	$122,435	$44,505	$-	$1,153,166
Weighted average interest rate of CDs (1)	3.58%	3.65%	4.19%	-	3.61%
Borrowings	$230,000	$289,900	$379,775	$447,165	$1,346,840
Weighted average interest rate of borrowings	4.03%	4.40%	3.72%	4.57%	4.20%
Operating lease obligations	$2,062	$4,056	$3,706	$17,272	$27,096
Minimum data processing system obligation	$752	$1,004	-	-	$1,756

	Less than One Year	One Year to Three Years	Over Three Years to Five Years	Over Five Years	Total
	(Dollars in thousands)
Credit Commitments:
Available lines of credit	$55,097	$-	$-	$-	$55,097
Other loan commitments	49,928	-	-	-	49,928
Recourse obligation on loans sold to FNMA	21,865	-	-	-	21,865
Total Credit Commitments	$126,890	$-	$-	$-	$126,890

	Year Ended December 31, 2008 Compared to Year Ended December 31, 2007 Increase/ (Decrease) Due to			Year Ended December 31, 2007 Compared to Year Ended December 31, 2006 Increase/ (Decrease) Due to			Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 Increase/ (Decrease) Due to
	Volume	Rate	Total	Volume	Rate	Total	Volume	Rate	Total
Interest-earning assets:	(Dollars in Thousands)
Real Estate Loans	$16,152	$1,561	$17,713	$6,828	$2,883	$9,711	$6,818	$250	$7,068
Other loans	(4)	(8)	(12)	(12)	-	(12)	(37)	13	(24)
Investment securities	276	(337)	(61)	(357)	92	(265)	(1,927)	1,601	(326)
MBS	4,818	1,523	6,341	(719)	213	(506)	(5,475)	626	(4,849)
Federal funds sold and other short-term investments	(1,811)	(1,676)	(3,487)	1,516	906	2,422	(3,487)	2,716	(771)
Total	$19,431	$1,063	$20,494	$7,256	$4,094	$11,350	$(4,108)	$5,206	$1,098
Interest-bearing liabilities:
Interest bearing checking accounts	$933	$434	$1,367	$156	$316	$472	$(54)	$7	($47)
Money market accounts	($73)	($5,614)	($5,687)	5,547	6,653	12,200	(3,107)	5,372	2,265
Savings accounts	(66)	(30)	(96)	(160)	(75)	(235)	(204)	127	(77)
CDs	(3,129)	(8,238)	(11,367)	2,595	4,070	6,665	1,342	12,118	13,460
Borrowed funds	17,168	(1,230)	15,938	(1,776)	481	(1,295)	(481)	879	398
Total	$14,833	($14,678)	$155	6,362	11,445	17,807	(2,504)	18,503	15,999
Net change in net interest income	$4,598	$15,741	$20,339	$894	$(7,351)	$(6,457)	$(1,604)	$(13,297)	$(14,901)

At December 31, 2008	3 Months or Less	More than 3 Months to 6 Months	More than 6 Months to 1 Year	More than 1 Year to 3 Years	More than 3 Years to 5 Years	More than 5 Years	Non-interest bearing	Total
	(Dollars in Thousands)
Interest-Earning Assets (1):
Mortgages and other loans	$331,084	$181,401	$288,047	$1,270,151	$896,478	$324,344	-	$3,291,505
Investment securities	10,861	-	-	-	361	16,241	-	27,463
MBS (2)	11,916	11,916	23,832	72,273	94,546	86,868	-	301,351
Cash and due from banks (3)	193,872	-		-	-	-	-	193,872
FHLBNY capital stock	53,435	-	-	-	-	-	-	53,435
Total interest-earning assets	601,168	193,317	311,879	1,342,424	991,385	427,453	-	3,867,626
Less:
Allowance for loan losses	-	-	-	-	-	-	$(17,454)	(17,454)
Net interest-earning assets	601,168	193,317	311,879	1,342,424	991,385	427,453	(17,454)	3,850,172
Non-interest-earning assets	-	-	-	-	-	-	205,426	205,426
Total assets	$601,168	$193,317	$311,879	$1,342,424	$991,385	$427,453	$187,972	$4,055,598
Interest-Bearing Liabilities
Savings accounts	$9,286	$8,967	$17,020	$57,337	$43,351	$134,360	-	$270,321
Interest bearing checking accounts	22,256	17,860	25,835	22,224	11,656	12,856	-	112,687
Money market accounts	125,050	100,353	145,161	124,872	65,493	72,238	-	633,167
CDs	247,047	276,444	462,735	122,435	44,505	-	-	1,153,166
Borrowed funds	40,000	45,000	145,000	264,900	379,775	375,000	-	1,249,675
Subordinated notes	-	-	-	25,000	-	-		25,000
Trust preferred securities	-	-	-	-	-	72,165		72,165
Interest-bearing escrow	-	-	-	-	-	1,278	-	1,278
Total interest-bearing liabilities	443,639	448,624	795,751	616,768	544,780	667,897	-	3,517,459
Non-interest bearing checking accounts	-	-	-	-	-	-	$90,710	90,710
Other non-interest-bearing liabilities	-	-	-	-	-	-	170,465	170,465
Stockholders' equity	-	-	-	-	-	-	276,964	276,964
Total liabilities and stockholders' equity	$443,639	$448,624	$795,751	$616,768	$544,780	$667,897	$538,139	$4,055,598
Positive (Negative) interest sensitivity gap per period	$157,529	$(255,307)	$(483,872)	$725,656	$446,605	$(240,444)	-
Positive (Negative) cumulative interest sensitivity gap	$157,529	$(97,778)	$(581,650)	$144,006	$590,611	$350,167	-
Positive (Negative) cumulative interest sensitivity gap as a percent of total assets	3.88%	(2.41)%	(14.34)%	3.55%	14.56%	8.63%	-
Cumulative total interest-earning assets as a percent of cumulative total interest-bearing liabilities	135.51%	89.04%	65.54%	106.25%	120.73%	109.96%	-

	At December 31, 2008
	Net Portfolio Value					At December 31, 2007
	Dollar Amount	Dollar Change	Percentage Change	NPV Ratio	Basis Point Change in NPV Ratio	NPV Ratio	Basis Point Change in NPV Ratio	Board Approved NPV Ratio Limit
	(Dollars in Thousands)
Rate Shock Scenario
+ 200 Basis Points	$236,751	$(60,083)	-20.24%	6.02%	(126)	7.79%	(211)	5.0%
+ 100 Basis Points	270,905	(25,929)	-8.74	6.77	(51)	9.00	(90)	6.0
Pre-Shock Scenario	296,834	-	-	7.28	-	9.90	-	7.0
- 100 Basis Points	312,334	15,500	5.22	7.54	26	10.25	35	7.0
- 200 Basis Points	N/A	N/A	N/A	N/A	N/A	10.14	24	7.0

	EQUITY COMPENSATION PLAN INFORMATION
Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options (a)	Weighted Average Exercise Price of Outstanding Options (b)	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans [Excluding Securities Reflected in Column (a)] (c)

Equity compensation plans approved by the Holding Company's shareholders	3,116,564	$14.97	1,133,027 (1)

Equity compensation plans not approved by the Holding Company's shareholders	-	-	-

Name	Title
/s/ VINCENT F. PALAGIANO Vincent F. Palagiano	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
/s/ MICHAEL P. DEVINE Michael P. Devine	President and Chief Operating Officer and Director
/s/ KENNETH J. MAHON Kenneth J. Mahon	First Executive Vice President and Chief Financial Officer and Director (Principal Financial Officer and Principal Accounting Officer)
/s/ ANTHONY BERGAMO Anthony Bergamo	Director
/s/ GEORGE L. CLARK, JR. George L. Clark, Jr.	Director
/s/ STEVEN D. COHN Steven D. Cohn	Director
/s/ PATRICK E. CURTIN Patrick E. Curtin	Director
/s/ FRED P. FEHRENBACH Fred P. Fehrenbach	Director
/s/ JOHN J. FLYNN John J. Flynn	Director
/s/ JOSEPH J. PERRY Joseph J. Perry	Director
/s/ OMER S.J. WILLIAMS Omer S.J. Williams	Director

	Page
Report of Independent Registered Public Accounting Firm	F-73
Consolidated Statements of Financial Condition at December 31, 2008 and 2007	F-74
Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006	F-75
Consolidated Statements of Changes in Stockholders' Equity and Comprehensive Income for the years ended December 31, 2008, 2007 and 2006	F-76
Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006	F-77
Notes to Consolidated Financial Statements	F78-F118

	December 31, 2008	December 31, 2007
ASSETS:
Cash and due from banks	$211,020	$101,708
Federal funds sold and other short-term investments	-	128,014
Investment securities held-to-maturity (estimated fair value of $9,082 and $80 at December 31, 2008 and 2007, respectively) (Encumbered at December 31, 2007, Unencumbered at December 31, 2008) (Note 3)	10,861	80
Investment securities available-for-sale, at fair value (fully unencumbered) (Note 3)	16,602	34,095
Mortgage-backed securities available-for-sale, at fair value (Note 4):
Encumbered	251,744	160,821
Unencumbered	49,607	1,943
	301,351	162,764
Loans (Note 5):
Real estate, net	3,289,314	2,873,966
Other loans	2,191	2,169
Less allowance for loan losses (Note 6)	(17,454)	(15,387)
Total loans, net	3,274,051	2,860,748
Loans held for sale	-	890
Premises and fixed assets, net (Note 8)	30,426	23,878
Federal Home Loan Bank of New York capital stock (Note 9)	53,435	39,029
Other real estate owned	300	-
Goodwill (Note 1)	55,638	55,638
Other assets (Notes 7, 14 and 15)	101,914	94,331
Total Assets	$4,055,598	$3,501,175
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Due to depositors (Note 10):
Interest bearing deposits	$2,169,341	$2,091,600
Non-interest bearing deposits	90,710	88,398
Total deposits	2,260,051	2,179,998
Escrow and other deposits (Note 7)	130,121	52,209
Securities sold under agreements to repurchase (Note 11)	230,000	155,080
Federal Home Loan Bank of New York advances (Note 12)	1,019,675	706,500
Subordinated notes payable (Note 13)	25,000	25,000
Trust Preferred securities payable (Note 13)	72,165	72,165
Other liabilities (Note 14 and 15)	41,622	41,371
Total Liabilities	3,778,634	3,232,323
Commitments and Contingencies (Note 16)
Stockholders' Equity:
Preferred stock ($0.01 par, 9,000,000 shares authorized, none issued or outstanding at December 31, 2008 and 2007)	-	-
Common stock ($0.01 par, 125,000,000 shares authorized, 51,122,319 shares and 50,906,278 shares issued at December 31, 2008 and 2007, respectively, and 34,179,900 shares and 33,909,902 shares outstanding at December 31, 2008 and 2007, respectively)	511	509
Additional paid-in capital	213,917	208,369
Retained earnings (Note 2)	297,848	288,112
Accumulated other comprehensive loss, net of deferred taxes	(11,111)	(4,278)
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") (Note 15)	(3,933)	(4,164)
Unearned Restricted Stock Award common stock (Note 15)	(1,790)	(634)
Common stock held by Benefit Maintenance Plan ("BMP") (Note 15)	(8,007)	(7,941)
Treasury stock, at cost (16,942,419 shares and 16,996,376 shares at December 31, 2008 and 2007, respectively) (Note 18)	(210,471)	(211,121)
Total Stockholders' Equity	276,964	268,852
Total Liabilities And Stockholders' Equity	$4,055,598	$3,501,175

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME:
Net Income	$28,028	$22,443	$30,592
Increase in Actuarial Gain or Reduction in Actuarial Loss on defined benefit plans, net of taxes of $(123) during the year ended December 31, 2006	-	-	148
Change in pension and other postretirement obligations, net of deferred benefit (taxes) of $3,776 during the year ended December 31, 2008 and $(874) during the year ended December 31, 2007	(4,523)	1,022	-
Amortization and reversal of net unrealized loss on securities transferred from available-for- sale to held-to-maturity, net of tax of $(1,224) during the year ended December 31, 2008	1,496	-	-
Reclassification adjustment for securities sold, net of taxes of $(489) during the year ended December 31, 2006	-	-	(575)
Net unrealized securities (loss) gain arising during the period, net of benefit (taxes) of $3,188, $(1,469) and $(478) during the years ended December 31, 2008, 2007 and 2006, respectively	(3,742)	1,800	561
Comprehensive Income	$21,259	$25,265	$30,726

Buildings		2.22% to 2.50% per year
Furniture, fixtures and equipment		10% per year
Computer equipment		33.33% per year

	Investment Securities Held-to-Maturity
	Carrying Amount(1)	Amortized Cost(2)	Gross Unrealized Gains	Gross Unrealized (Losses)	Estimated Fair Value
Debt Securities:
Pooled trust preferred securities	$10,861	$16,561	$-	$(7,479)	$9,082

	Investment Securities Available-for-Sale
	Amortized/ Historical Cost	Gross Unrealized Gains	Gross Unrealized (Losses)	Estimated Fair Value
Debt securities:
Federal agency obligations	$1,035	$1	-	$1,036
Municipal agencies	9,931	216	$(14)	$10,133
Total debt securities	10,966	217	(14)	11,169
Equity securities:
Mutual fund investments	8,057	-	(2,624)	5,433
	$19,023	$217	$(2,638)	$16,602

	Amortized Cost	Estimated Fair Value
Due after one year through five years	$347	$361
Due after five years through ten years	10,619	10,808
	$10,966	$11,169

	Less than 12 Months Consecutive Unrealized Losses		12 Months or More Consecutive Unrealized Losses		Total
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Loss	Fair Value	Gross Unrealized Losses
Municipal agencies (1)	$919	$8	297	6	$1,216	$14
Mutual fund investments (2)	2,251	550	$3,138	$2,074	5,389	2,624
	$3,170	$558	$3,435	$2,080	$6,605	$2,638

	Amortized Cost	Estimated Fair Value
Due in one year or less	$5,218	$5,190
Due after one year through five years	348	351
Due after five years through ten years	9,603	9,677
Due after ten years	11,959	11,765
	$27,128	$26,983