Exhibit 10.7.4

SEPARATION AND TRANSITION

ADVISORY SERVICES AGREEMENT

This Separation and Transition Advisory Services Agreement (this “Agreement”) by
and between Capital One Financial Corporation, a Delaware corporation (the
“Company”), and John Adam Kanas (the “Executive”), is dated as of July 9, 2007.

WHEREAS, the Executive has been employed by the Company as President, Banking
Segment and, in connection therewith, the Executive and the Company entered into
the Restricted Share Agreement, dated as of March 12, 2006 (the “Restricted
Share Agreement”); and

WHEREAS, the parties have reached a mutual agreement relating to the Executive’s
separation from service and noncompete/nonsolicitation and transition advisory
arrangements, and they wish to set forth their mutual agreement as to the terms
and conditions as set forth herein;

NOW, THEREFORE, the Company and the Executive hereby agree as follows:

1. Termination of Employment. Effective as of August 6, 2007 (the “Separation
Date”), the employment relationship between the Company and the Executive shall
terminate and the Executive shall no longer serve as President of the Company’s
Banking Business or in any other position he then holds as a director, officer
or employee of any of the Company’s subsidiaries or affiliates (the Company and
all of its subsidiaries and affiliates are hereinafter referred to collectively
as the “Affiliated Entities”). The terms and conditions of the Executive’s
employment through the Separation Date shall be the same as those currently in
effect. The Executive shall be promptly reimbursed, pursuant to the expense
reimbursement procedures in effect with respect to the Executive during his
employment with the Company, for all reasonable expenses incurred by the
Executive in connection with his employment with the Company prior to the
Separation Date. The Executive’s rights with respect to any employee benefits
that accrued prior to the Separation Date shall be governed by the terms of the
applicable employee benefit plan, program or arrangement, and the Executive
shall be treated as a retired employee under all such plans, programs and
arrangement. The Company shall take such action as may be reasonably requested
by the Executive to facilitate the transfer of the life insurance policies on
the Executive’s life to the Executive (or a trust or other person or entity
designated by the Executive), provided that any such transfer does not result in
an additional financial obligation for the Company. For the avoidance of doubt,
the Executive shall not be entitled to any severance benefits in connection with
his termination of employment.

2. Restricted Shares. The restricted shares granted to the Executive pursuant to
the Restricted Share Agreement shall fully vest and be non-forfeitable and
transferable upon the Separation Date pursuant to Section 2 of the Restricted
Share Agreement.

3. Stock Options. The stock options granted to the Executive pursuant to the
stock option award agreements identified on Schedule I attached hereto (each a
“Stock Option Agreement”), all of which have vested prior to the Separation
Date, shall remain outstanding and exercisable until the earlier of December 1,
2010 or the date such options are exercised and shall otherwise remain subject
to the terms of the applicable Stock Option Agreement.

4. Transition Advisory Services.

 

--------------------------------------------------------------------------------

a. During the period commencing on the Separation Date and ending on December 1,
2009 (the “Continuation Period”), the Executive shall make himself available to
render transition advisory services to the Company as may be reasonably
requested from time to time by the Company, at such times and locations as may
be reasonably requested in advance by the Company, provided that in no event
shall the Executive be required to provide services in excess of 80 hours per
month. For purposes hereof, transition advisory services shall include the
continuation of the Executive’s activities for the Company related to client,
customer and community relations, employee retention, business development,
credit approval and such other activities as reasonably requested by the
Company.

b. In consideration for the Executive’s provision of advisory services, the
Company shall pay the Executive $100,000 on each of July 1, 2008 and
December 31, 2008, subject to the Executive’s compliance with the terms of this
Agreement.

c. During the Continuation Period, the Company shall continue to provide the
Executive the benefits set forth on Annex A attached hereto at the Company’s
sole expense. In addition, the Company shall promptly reimburse the Executive,
pursuant to expense reimbursement procedures no less favorable than those in
effect with respect to the Executive during his employment with the Company, for
all reasonable business expenses incurred by the Executive during the
Continuation Period.

d. The Executive shall be an independent contractor of the Company during the
Continuation Period and shall not be eligible to actively participate in any
employee benefit plan, program or arrangement during the Continuation Period
except as otherwise specifically provided under the terms of such plan, program
or arrangement or this Agreement.

5. The Executive’s Covenants. The Executive hereby agrees to be bound by the
covenants set forth in Annex B attached hereto, which is incorporated herein by
reference and which shall replace and supersede the covenants set forth in Annex
B to the Restricted Share Agreement.

6. Certain Additional Payments by the Company. Section 6 of the Restricted Share
Agreement shall continue to apply and shall be incorporated herein by reference,
and any defined term used in this Section 6 and not otherwise defined in this
Agreement shall have the meaning given to it in the Restricted Share Agreement.
Any Gross-Up Payment shall be paid by the Company within 30 days of the receipt
of the Accounting Firm’s determination; provided, however, that in all events
any Gross-Up Payment shall be paid no later than the end of the Executive’s
taxable year next following the Executive’s taxable year in which the Excise Tax
(or any income or other related taxes or interest or penalties thereon) on a
Payment is remitted to the Internal Revenue Service or any other applicable
taxing authority. The Company, in its sole discretion, may withhold and pay over
to the Internal Revenue Service or any other applicable taxing authority, for
the benefit of the Executive, all or any portion of any Gross-Up Payment, and
the Executive hereby consents to such withholding. In addition, notwithstanding
Section 6 of the Restricted Share Agreement, if any Excise Tax under
Section 4999 of the Code is payable in connection with the stock options subject
to the Stock Option Agreements and the payments and benefits provided under
Section 4 or set forth on Annex A, the Executive shall be entitled to a Gross-Up
Payment thereon in accordance with Section 6 of the Restricted Share Agreement
(as

 

2

--------------------------------------------------------------------------------

supplemented by this Section 6). The Executive shall be provided with a copy of
the Accounting Firm’s Gross-Up Payment calculation, if applicable.

7. Indemnification of Director and Officer Liabilities. The Company shall
continue to indemnify the Executive for acts taken while providing services to
the Company (including the transition advisory services under Section 4 hereof),
pursuant to the Company’s policies on indemnification applicable to the most
senior executive officers of the Company from time-to-time.

8. Legal Fees. The Company agrees to pay as incurred (within 30 days following
the Company’s receipt of an invoice from the Executive), at any time from the
date of this Agreement through the Executive’s remaining lifetime or, if longer,
through the 20th anniversary of the Separation Date, to the full extent
permitted by law, all legal fees and expenses that the Executive may reasonably
incur as a result of any contest by the Company, the Executive or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof, plus, in each case, interest
on any delayed payment at the applicable federal rate provided for in
Section 7872(f)(2)(A) of the Code, provided that the Executive prevails on one
material aspect of any such contest.

9. Entire Agreement. This Agreement sets forth the entire agreement of the
Company and the Executive with respect to the subject matter hereof. Any
provision of this Agreement, to the extent necessary to carry out the intent of
such provision, including without limitation Sections 5, 6, 7 and 8, shall
survive the termination of the Executive’s employment, the Continuation Period
and this Agreement.

10. Successors.

a. This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive other than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s legal representatives.

b. This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or the assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. The “Company” means the Company as hereinbefore defined and any
successor to it business and/or assets as aforesaid that assumes and agrees to
perform this Agreement by operation of law or otherwise.

11. Amendment. This Agreement may be amended, modified or changed only by a
written instrument executed by the Executive and the Company.

12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.

 

3

--------------------------------------------------------------------------------

13. Taxes. Notwithstanding any other provision of this Agreement, the Company
may withhold from any amounts payable under this Agreement, or any other
benefits received pursuant hereto, any Federal, state and/or local taxes as
shall be required to be withheld under any applicable law or regulation.

14. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

15. Notices. Any notices required or permitted hereunder shall be addressed to
the Company at its corporate headquarters, attention: General Counsel, or to the
Executive at the address then on record with the Company, as the case may be,
and deposited, postage prepaid, in the United States mail. Either party may, by
notice to the other given in the manner aforesaid, change his or its address for
future notices.

 

4

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.

 

CAPITAL ONE FINANCIAL CORPORATION By:  

 

Name:   Title:  

/s/ John Adam Kanas

John Adam Kanas

 

5

--------------------------------------------------------------------------------

SCHEDULE I

(reflects shares and exercise prices as adjusted for

Capital One/North Fork merger)

Nonqualified Stock Option Agreement evidencing option grant on December 9, 2004
to acquire 13,845 shares of Capital One common stock at an exercise price of
$74.73 (Option No: NF011396)

Nonqualified Stock Option Agreement evidencing option grant on July 11, 2005 to
acquire 172,678 shares of Capital One common stock at an exercise price of
$78.93 (Option No: NF011532)

Nonqualified Stock Option Agreement evidencing option grant on July 11, 2005 to
acquire 14,560 shares of Capital One common stock at an exercise price of $78.93
(Option No: NF011533)

Nonqualified Stock Option Agreement evidencing option grant on December 8, 2005
to acquire 13,845 shares of Capital One common stock at an exercise price of
$73.84 (Option No: NF011564)

--------------------------------------------------------------------------------

ANNEX A

The benefits to be provided by Section 4(c) include the following:

 

1. Long Island Office. During the Continuation Period, the Company shall provide
an office suite in the building located at 265 Broadhollow Road, Melville, New
York, to be built out to the Executive’s specifications (on a basis similar to
the Executive’s current office on Long Island), at the Company’s sole expense.

 

2. Manhattan Office. During the Continuation Period, the Executive’s office at
90 Park Avenue will continue to be available to the Executive, at the Company’s
sole expense.

 

3. Administrative Assistant. During the Continuation Period, the Company shall
continue to employ the Executive’s assistant (or her replacement if requested by
the Executive) at the same base salary and target cash bonus as in effect on the
date hereof (with periodic pay increases that are equal to those provided to
other executive administrative assistants at the Company) and with continued
eligibility to participate in the Company’s employee benefit plans. In addition,
during the Continuation Period, such assistant shall provide services
exclusively to the Executive at a level and on the same basis as such services
were provided prior to the Separation Date. At the end of the Continuation
Period, the Executive’s assistant will be eligible for severance as described in
the letter from the Company to her dated on or about the date hereof and
retirement benefits under the Company’s plans, policies and arrangements as
described on the summary provided to her on or about the date hereof.

 

4. Transportation. During the Continuation Period, the Company shall provide
business transportation perquisites on the same level and basis as such
perquisites were provided to the Executive by the Company immediately prior to
the Separation Date (i.e., a car and driver as provided prior to the Separation
Date and access to private corporate aircraft for Capital One business matters
only).

 

5.

Tax Gross-up. In the event that, based on the reasonable advice of the Company’s
tax counsel and auditors, any of the benefits or services set forth on this
Annex A are imputed as taxable income to the Executive (or after the Executive’s
death, his estate or spouse), each year the Company shall pay the Executive (or
after the Executive’s death, his estate or spouse) a tax gross-up payment (which
covers Federal, state and local income taxes), so that the Executive (or after
the Executive’s death, his estate or spouse) is in the same after-tax position
as if such benefits had not been treated as taxable income to the Executive (or
after the Executive’s death, his estate or spouse). In the event that, as to any
year with respect to which any of the benefits or services set forth in this
Annex A were not treated by the Company as taxable income to the Executive (or
after the Executive’s death, his estate or spouse) and as to which the Executive
(or after the Executive’s death, his estate or spouse) was not paid the above
tax gross-up payment, the U.S. Internal Revenue Service or any other taxing
authority determines that any of such benefits or services should have been
treated as taxable income to the Executive (or after the Executive’s death, his
estate or spouse) for tax purposes, then as to the tax year(s) in question, the
Company shall pay the Executive (or after the Executive’s death, his estate or
spouse) such a tax gross-up payment (which covers Federal, state and local
income taxes, plus all penalties and interest). Any gross-up payment,

 

A-1

--------------------------------------------------------------------------------

 

as determined pursuant to this item 5, shall be paid by the Company within five
days of the due date for the applicable income taxes (and in no event later than
the end of the Executive’s taxable year next following the Executive’s taxable
year in which the tax (or any income or other related taxes or interest or
penalties thereon) is remitted to the Internal Revenue Service or any other
applicable taxing authority).

 

A-2

--------------------------------------------------------------------------------

ANNEX B

1. Restrictions on the Use and Disclosure of Confidential Information.

Both during the Executive’s employment with the Company and at all times
thereafter, the Executive will not use for his own benefit or for the benefit of
others (including in any future employment, work or business), or divulge to
others, in any manner whatsoever, any of the Company’s confidential and
proprietary information or trade secrets (“Confidential Information”), except as
expressly authorized by the Company during the Executive’s employment in
connection with the ordinary course of his employment or the transition advisory
services and except as may be required by law or legal process. In the event the
Executive is requested by subpoena, court order, investigative demand, search
warrant or other legal process to disclose Confidential Information, the
Executive will immediately notify the Company of such request and, unless
otherwise advised by counsel, will not disclose any Confidential Information
unless or until the Company has expressly authorized Executive to do so in
writing or has had a full opportunity to object to such a request and to
litigate the matter. For purposes hereof, Confidential Information shall not
include information or data that is known in the industry generally or is public
knowledge (other than by acts of the Executive in violation of this Agreement).

2. Covenant Not to Compete.

a. Acknowledgments. The Executive acknowledges and agrees that the Confidential
Information that he received from the Company during his employment and will
continue to receive during the Continuation Period is special and unique, and
that his receipt of it is of benefit and value to the Executive and necessary to
the performance of his duties and responsibilities. The Executive acknowledges
and agrees that he was given (and will be given during the Continuation Period)
such Confidential Information expressly in consideration of his agreement to be
bound by, among other things, the Non-Compete Covenants set forth in the
Restricted Share Agreement and in Paragraph 2(e) of this Annex B. The Executive
acknowledges that the Company maintains the secrecy of its Confidential
Information and takes steps to protect it. The Executive acknowledges that the
Company is engaged in the Competitive Businesses in New York, New Jersey and
Connecticut and that the Company engages in active and substantial competition
with all persons and entities engaged in the Competitive Businesses within and
outside of the United States. The Executive acknowledges and agrees that because
of his senior position at the Company and his broad exposure to the Company’s
Confidential Information he has performed services, and has had and will have
access to and be exposed to Confidential Information directly concerning all
Competitive Businesses of the Company.

b. Definition of Competitive Business. For purposes of this Annex B “Competitive
Business” means the consumer and commercial banking business engaged in by the
Company or any Affiliated Entity as of the Separation Date, including the
business of acquiring and/or managing (whether by use of a sales force, agents,
direct mail, the branch, telemarketing, the Internet or any other channel) all
commercial and consumer banking products (including but not limited to,
commercial and industrial loans, commercial real estate loans, middle market and
small business loans, whether originated directly or indirectly through other
lending institutions, and commercial and consumer deposits), in New York, New
Jersey and Connecticut.

 

B-1

--------------------------------------------------------------------------------

c. Definition of Non-Competition Covenant. For the purposes of this Annex B, the
“Non-Competition Covenant” means the terms and promises set forth in Paragraph
2(e).

d. Definition of Non-Competition Period. For the purposes of this Annex B,
“Non-Competition Period” means the five (5) year period beginning on the
Separation Date and ending on the fifth anniversary of the Separation Date.

e. Non-Competition Covenant. In order to protect the Company’s legitimate
business interests, the Executive agrees that, except as provided below, during
the Non-Competition Period, he shall not engage in a Competitive Business
(whether as a director, stockholder, investor, member, partner, principal,
proprietor, agent, consultant, officer, employee or otherwise). The restrictions
of the Non-Competition Covenant apply throughout New York, New Jersey and
Connecticut, regardless of the location from which the Executive performed these
services for the Company or from which the Executive received this Confidential
Information from the Company. The above notwithstanding, in no event will any of
the following activities constitute a breach of the Non-Competition Covenant:
(i) ownership for investment purposes of not more than ten percent (10%) of the
total outstanding equity securities (or other interests) of any entity; (ii) the
provision of services to a corporation or other entity, a portion of the
business of which is a Competitive Business, provided that the Executive is not
providing services to the portion of the business which is directly engaged in a
Competitive Business; or (iii) serving as a principal, partner, director,
employee, consultant or advisor to a private equity firm, investment bank (but
in the case of an investment bank that is part of a financial services company
that also engages directly in the Competitive Business, not for the Competitive
Business of that financial services company) or hedge fund, provided that such
activities do not involve advising such firm, investment bank or hedge fund with
respect to, or analyzing investments in, the Company or its Affiliated Entities.

3. Non-Solicitation of Employees.

During the Non-Competition Period, the Executive shall not, directly or
indirectly, on his own behalf or on behalf of any other person, corporation,
partnership, firm, financial institution or other business entity, solicit or
induce any employee of the Company, or any individual employed by the Company at
any time during the six (6) month period prior to such solicitation or
inducement, to leave or cease their employment relationship with the Company for
any reason whatsoever, or hire or otherwise engage such current or former
employees of the Company. This includes, but is not limited to:

a. identifying to any person or entity any individual employed by the Company
who has knowledge concerning the Company’s strategy, operations, processes or
other Confidential Information;

b. communicating to any person or entity about the quantity of work, quality of
work, skills or knowledge, or personal characteristics of any individual
employed by the Company;

c. soliciting or hiring any individual employed by the Company through third
parties, such as recruiters or other persons not a party to the Agreement,
including any corporation, partnership, firm, financial institution or other
business entity;

 

B-2

--------------------------------------------------------------------------------

d. inducing any individual employed by the Company to resign from employment
with the Company with the express or implied promise of employment following the
employee’s resignation; and

e. personally funding or arranging funding for a third-party, such as
recruiters, for the purpose, in whole or part, of soliciting or hiring any
individual employed by the Company (e.g., paying for a newspaper advertisement
or a posting on a public job board that is targeted at employees of the Company,
as opposed to a general solicitation).

Notwithstanding the foregoing, in no event shall the Non-Solicitation covenant
be considered violated if any such precluded activities are directed at a person
whose employment with the Company was terminated by the Company or who has been
formally notified by the Company that his or her employment will be terminated
by the Company on a specified date (for purposes of clarity, a voluntary
resignation by the employee shall not be considered a termination of employment
“by the Company”) prior to the Executive’s action, solicitation or other
contact. For purposes hereof, solicitation and hiring shall not be precluded if
the contact with the individual is initiated based on a general solicitation for
employment, such as newspaper advertisements and public job boards (i.e.,
Monster, Hotjobs).

4. Non-Solicitation of Customers. During the Non-Competition Period, the
Executive shall not, without the prior written consent of the Company, directly
or indirectly, as a sole proprietor, member of a partnership, stockholder or
investor, officer or director of a corporation, or as an employee, associate,
consultant or agent of any person, partnership, corporation or other business
organization or entity other than the Company solicit or endeavor to entice away
from the Company or any of its Affiliated Entities any person or entity who is,
or was within the twelve (12) month period prior to the Separation Date, a
customer or client (or reasonably anticipated (to the general knowledge of the
Executive or the public) to become a customer or client of the Company or its
Affiliated Entities in the Competitive Business), in order to render to that
customer or client services that are competitive with and intended to replace
the services provided by a business of the Company or its Affiliated Entities
that is included in the definition of Competitive Business, regardless of the
geographic limitations thereon.

5. Reasonableness.

The Executive acknowledges that the restrictions set forth in this Annex B are
necessary to prevent the use and disclosure of the Confidential Information and
to otherwise protect the legitimate business interests of the Company. The
Executive further acknowledges that all of the restrictions in this Annex B are
reasonable in all respects, including duration, territory, and scope of
activity. The Executive agrees that the existence of any claim or cause of
action by the Executive against the Company, whether predicated on the Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
of the covenants and restrictions set forth in this Annex B. The Executive
agrees that he will be able to earn a livelihood without violating this Annex B,
including, without limitation, the Non-Competition Covenant contained in
Paragraph 2(e) above.

 

B-3

--------------------------------------------------------------------------------

6. Irreparable Harm; Injunctive Relief.

The Executive acknowledges and agrees that his violation of any provision of
this Annex B will cause immediate, substantial and irreparable harm to the
Company which cannot be adequately redressed by monetary damages alone. In the
event of his violation or threatened violation of any provision of this Annex B,
the Executive agrees that the Company, without limiting any other legal or
equitable remedies available to it, shall be entitled to equitable relief,
including, without limitation, temporary, preliminary and permanent injunctive
relief, return of confidential property, and specific performance, from any
court of competent jurisdiction. The Non-Competition Period shall be tolled on a
day-for-day basis for each day during which the Executive participates in any
activity in violation of the Non-Competition Covenant so that he is restricted
from engaging in the activities prohibited by the Non-Competition Covenant for
the full Non-Competition Period.

7. Severability.

If any provision of this Annex B is held to be illegal invalid, or
unenforceable, or is found to be against public policy for any reason, such
provision shall be fully severable and this Annex B shall be construed and
enforced as if such illegal invalid, or unenforceable provision had never been
part of this Annex B, and the remaining provisions of this Annex B shall remain
in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Annex B.

8. Court’s Right to Modify Restriction.

The parties have attempted to limit the Executive’s right to compete only to the
extent necessary to protect the Company’s legitimate business interests. It is
the intent of the parties that the provisions of this Annex B shall be enforced
to the fullest extent permissible under applicable law. The parties agree that
if a court of competent jurisdiction adjudges any provision of this Annex B to
be void, invalid or unenforceable, including without limitation the
Non-Competition Covenant contained in Paragraph 2(e) above, such court shall
modify such provision so that it is enforceable to the fullest extent permitted
by applicable law.

 

B-4