Exhibit 10.4


 


SEVERANCE AGREEMENT


 


This Severance
Agreement (“Agreement”) is entered into as of this 11th day of
April, 1996, by and between the National Consumer Cooperative Bank, a banking
corporation organized under the laws of the United States (“the Bank”) , and
Charles E. Snyder, a resident of Virginia.


 


Mr. Snyder has
been employed by the Bank as its President and Chief Executive Officer since
January, 1992, and previously was Chief Financial Officer. During the period of
his service as President, the Bank’s financial condition, services to members,
and reputation in the financial community have improved substantially from
prior periods, and the Bank desires to provide continued incentives for Mr.
Snyder’s continued service as its President.


 


In consideration
of the incentives provided herein, Mr. Snyder is agreeable to continue to serve
as President and Chief Executive Officer of the Bank.


 


It is
therefore agreed as follows:


 


1.                                 Employment.
The Bank agrees to continue to employ Mr. Snyder as its President and Chief
Executive Officer, and Mr. Snyder agrees to continue to serve the Bank in that
capacity, beginning as of the date of this Agreement and continuing until such
employment is terminated by either party as provided in this Agreement.


 


2.                                 Performance.
During the term of his employment with the Bank, Mr. Snyder shall devote all of
the time, attention, skill and efforts to the performance of his duties for and
on behalf of the Bank and its subsidiaries as is customary for a Chief
Executive Officer of a financial institution of the size of the Bank and such
subsidiaries.


 


3.                                 Compensation.  The Bank shall pay Mr. Snyder, during the
term of his employment, such salary, incentive compensation, and related
employee benefits as the Board may reasonably determine, from time to time.


 


4.                                 Termination.


 


(a)                                       In
the event of termination of Mr. Snyder’s employment as President of the Bank
for any reason other than (i) the Bank’s Termination For Cause of Mr. Snyder,
as defined in Section 9 (b) , or (ii) Mr. Snyder’s Unilateral Voluntary
Resignation, as defined in Section 9(d), the Bank shall provide to Mr. Snyder
30 days advance written notice of such termination and shall provide to Mr.
Snyder a Severance Benefit during a period (the “Benefit Period”) expiring 18 months
after the date of termination as stated in the Bank’s notice to Mr. Snyder;
provided, however, that the Severance Benefit shall, in any event, be modified
as of the effective date of Mr. Snyder’s employment in a New Executive
Position, as provided in paragraph 9(b) of this Agreement. In consideration of
the payment of the Severance Benefit, Mr. Snyder will execute, upon the request
of the Bank, a mutual release under which he releases any


 

















 


other obligations, with the exception of any deferred compensation
earned by him, that the Bank owes or may owe him arising out of his services as
President and Chief Executive Officer, and the Bank releases any claims that it
has or may have against him arising out of such services.


 


(b)                                      This
Agreement shall terminate immediately upon the death or disability of Mr.
Snyder. For purposes of this Agreement, Mr. Snyder shall be deemed to be
disabled when he has become unable, by reason of physical or mental disability,
satisfactorily to perform his duties for a period, after the expiration of any
sick leave accumulated by Mr. Snyder, of 90 consecutive days or for a total
period in any year of 120 days, in either case as reasonably determined by, or
to the reasonable satisfaction of, the Board of Directors of the Bank. The Bank
shall provide prompt written notice to Mr. Snyder of such determination. In the
event of termination by reason of disability, the Benefit Period for the
Severance Benefit shall expire 18 months after the first day in which the
inability satisfactorily to perform occurred (the “Disability Date”). In the
event that, at the date of termination by reason of disability, the Bank has in
effect any other disability benefits for which Mr. Snyder would qualify, any
Severance Benefits hereunder shall be reduced by the amount of any disability
benefits actually received by Mr. Snyder under such other disability coverage.


 


5.                                 Severance
Benefit. The Severance Benefit under this Agreement shall include the
following:


 


(a)                             For a
6 month period after termination by the Bank, under Section 4(a) or after the
Disability Date, (i) Mr. Snyder’s salary at a rate (the “Effective Rate”) equal
to the greater of his salary (including deferred compensation) in effect at the
time of notice of termination of employment or, in the event that his salary
has been reduced within 60 days prior to termination, his salary in effect
immediately prior to such reduction; (ii) Accruals, as defined herein, in
effect at the time of such termination; (iii) converge under medical, dental
and life insurance benefits in effect at the time of such termination;
provided, however, that for purposes of Section 4980B(f) (3) of the Internal
Revenue Code and Section 603 of ERISA, the “qualifying event” with respect to
Mr. Snyder shall be deemed to occur on the date upon which such coverage ceases
pursuant to this Section 5(a) (iii); and (iv) an amount equal to the cost to
the Bank of providing pension benefits (including employee 401K plan benefits
and any similar employee benefits adopted by the Bank for employees after the
date of this Agreement) in effect at the time of such termination as if Mr.
Snyder continued his employment for such 6 month period; provided, however,
that, if Mr. Snyder and the Bank mutually agree to a lump sum payment of the
remaining portion of the Severance Benefit at any time during the Benefit
Period, then the Bank’s payment of such lump sum payment shall be accepted by
Mr. Snyder as a full and complete satisfaction of all obligations of the Bank,
under this Agreement and under any other Bank policies relating to employee
severance, to pay any Severance Benefit.


 


(b)                            After
expiration of the 6 month period, the Bank shall make monthly salary payments
to Mr. Snyder based upon the Effective Rate for an additional period of twelve
consecutive months (subject, however, to the proviso of paragraph 5(a) of this
Agreement).


 


6.                                 Resignation.
In the event of a Unilateral Voluntary Resignation by


 


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Mr. Snyder, Mr. Snyder agrees to provide nine
months’ advance written notice to the Bank of such Unilateral Voluntary
Resignation. In the absence of any breach of the terms of this Agreement, the
Bank shall provide to Mr. Snyder a resignation allowance in the amount of one
year’s salary at the Effective Rate, payable in three equal annual payments on
the first, second and third anniversaries of the date of such Unilateral
Voluntary Resignation.


 


7.                                 Non-Competition.
Mr. Snyder agrees, during the period of three years beginning on the date of
termination of his employment (the “Restricted Period”) (a) not to acquire a
substantial ownership interest in or to become employed or to act on behalf of
any entity as an independent contractor in any form that is reasonably
determined to be in direct competition with the Bank, including, without
limitation, the providing or arranging of blanket loans to housing cooperatives
or the public or private securitization thereof or the securitization of loans
in a manner similar to the Bank’s Capital Markets Assurance Corporation (“Cap
Mac”) securitization; (b) not to entice or induce any officer of the Bank
(including any of its affiliates) to leave the Bank for the purpose of engaging
in a business that is or will become a direct competitor of the Bank; and (c) not
to divulge trade secrets or any other confidential information of material
significance to the Bank’s business operations.


 


8.                                 Consultation.
During the Restricted Period Mr. Snyder agrees to provide consulting services
to the Bank, at the specific reasonable written requests of the Bank, for a
period of no more than 15 days (or portions thereof) per year, relating to
matters as to which he devoted significant amounts of his attention during the
period of his service at the Bank; and, after the Restricted Period, Mr. Snyder
will provide reasonable cooperation with respect to any governmental
investigation or any litigation arising out of matters to which he devoted
significant amounts of his attention during the period of his service at the
Bank; provided  that, such consulting services shall not require
that Mr. Snyder travel outside the Greater Washington Metropolitan area; provided
further that such consulting services need not be performed by Mr.
Snyder during regular business hours of the Bank or at the offices of the Bank.


 


9.                                 Certain
Definitions. For purposes of this Agreement, the following terms have the
following meanings:


 


(a)                                   “Accruals” means (i)
vacation and sick leave benefits accrued as of the effective date of the
termination but in no event to include use of automobile or future travel
expenses.


 


(b)                                  “New
Executive Position” means a position as an executive officer of a financial
institution, manufacturing, sales or service corporation, or any other
commercial or professional organization; provided that, if such New Executive
Position has a salary plus bonus or similar incentive compensation (the “New
Compensation”) equal to (i) at least 90% of the sum of Mr. Snyder’s salary as
identified in paragraph 5(a) (i) plus an amount equal to his average bonus for
the five fiscal year average preceding the year in which his employment at the
Bank terminated (“Old Compensation”), then the Severance Benefit shall
terminate, and (ii) less than 90% of such Old Compensation, then the Severance
Benefit shall be reduced to an amount that, 
combined with the New Compensation, shall equal 90% of the Old
Compensation.


 


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(c)                       “Termination For Cause” means
the Bank’s termination of Mr. Snyder’s employment based upon the Bank’s
reasonable belief, after the exercise of due diligence, that Mr. Snyder (i)
consistently has failed to perform substantial duties of his position, (ii)
consistently has performed substantial duties of his position in a grossly
negligent manner, or (iii) has been guilty of bad faith or wilful misconduct in
performing or failing to perform substantial duties of his position and has
failed to correct any such condition identified in subsections (i) , (ii) or
(iii) , above, within a reasonable time after written notice by the Bank to Mr.
Snyder of such condition; or (iv) has been convicted of a misdemeanor that
causes material injury to the business or financial condition of the Bank or
(v) has been (A) convicted of a felony or (B) the subject of an information or
indictment charging a felony; provided that, he shall be entitled to
reinstatement, if requested, in the event no conviction is entered. For
purposes hereof, “conviction” and “convicted” mean a final judgment on a
verdict or finding of guilty, a plea of guilty, or a plea of nolo contendere.


 


(d)                      “Unilateral Voluntary
Resignation” means Mr. Snyder’s written notice of resignation from his position
as President of the Bank for reasons other than a reasonable belief of Mr.
Snyder that the Bank desires that he resign, that the Bank has caused to occur
a material diminution in the responsibilities or powers of his position as
President and Chief Executive Officer, or that the Bank has caused to occur a
material diminution of his salary or related compensation items. For purposes
hereof, “material diminution” means (i) , with respect to aggregate
compensation, a reduction of at least 10% that is not accompanied by a
substantially identical reduction in the aggregate compensation of all or
substantially all other officers at or above the level of vice president, and,
(ii) with respect to responsibilities or powers, a change in organizational
structure under which any division or senior officer reporting to Mr. Snyder
would no longer do so, the employment by the Bank of any senior officer over
the written opposition of Mr. Snyder, a decision by the Bank to enter a new or
abandon an existing product market over the written opposition of Mr. Snyder,
or the adoption or rejection by the Bank, over the written opposition of Mr.
Snyder, of any substantial action that could reasonably be expected to have a
material impact upon the financial condition of the Bank or the results of its
operations.


 


10.                                       Arbitration.
Any controversy, claim or dispute under or arising out of this Agreement shall
be resolved by arbitration in accordance with the commercial arbitration rules
of the American Arbitration Association, and judgment upon the award rendered
in such arbitration may be entered in any court of competent jurisdiction. With
respect to any matter submitted to arbitration hereunder, both parties shall
use their best efforts to cause such arbitration proceeding to be commenced and
completed as promptly as is reasonably possible.


 


11.                                       Miscellaneous.
This Agreement shall be binding upon and inure to the benefit of the Bank, its
successors and assigns and Mr. Snyder, his heirs, executors and administrators.
The parties hereto may, by mutual agreement expressed in a writing executed by
both of them, amend or modify this Agreement without the consent of any other
person. This Agreement represents the entire agreement of the parties with
respect to the subject matter, superseding prior oral and written agreements,
including, without limitation, a Severance Agreement dated January 31, 1992,
but not including a Deferred Compensation Agreement dated November 4,
1994; provided that in the event of any conflict in language, this Agreement
shall


 


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govern. The captions in this Agreement have been inserted for
convenience only and shall in no way restrict or otherwise modify any of the
terms hereof. This Agreement shall be construed in accordance with and governed
by the laws of the District of Columbia.


 


Witness Whereof, the Bank has
caused this Agreement to be duly executed by its Chairman, following its review
by the members of the Board of Directors, and Mr. Snyder has duly executed this
Agreement effective as of the
            day of
April, 1996.


 


 


	
   

  	
  NATIONAL
  CONSUMER COOPERATIVE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Edward J. Dirkswager,

  
	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Charles E. Snyder

  



 


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