Exhibit 10.47


 


MEMORANDUM OF UNDERSTANDING


WITH RESPECT TO TAX
TREATMENT OF EMPLOYER PAYMENTS


UNDER SPLIT-DOLLAR
AGREEMENT


 


THIS MEMORANDUM OF
UNDERSTANDING (“MOU”), made as of the 30th day of December, 2003, by
and between NATIONAL COOPERATIVE BANK, a corporation organized under the laws
of the United States with its principal place of business in Washington, D.C.
(hereinafter referred to as the “Employer”) and CHARLES E. SNYDER of
Alexandria, Virginia (hereinafter referred to as the “Employee”).


 


WITNESSETH:


 


WHEREAS, the Employer and
Employee entered into a Split-Dollar Agreement on July 11, 2002 (the
“Agreement”) with respect to the Policy (as defined in the Agreement) owned by
the Employee;


 


WHEREAS, pursuant to the
Agreement, the Employer has agreed to pay the annual planned premium on the
Policy shown on Schedule A hereto during the Employee’s employment with the
Employer, with a portion of such premiums treated as paid by the Employee and
the balance as paid by the Employer;


 


WHEREAS, pursuant to the Agreement,
the Employer is entitled to repayment of the Employer-paid premiums on the
death of the Employee or earlier upon the occurrence of certain events set
forth in the Agreement;


 


WHEREAS, on or about July 11,
2002, the Employer paid the initial planned premium on the Policy, and has made
no other premium payments as of the date of this Amendment;


 


WHEREAS, after the parties had
entered into the Agreement, Congress enacted the Sarbanes-Oxley Act (P.L.
107-204, Title IV), which, inter  alia, prohibits the Employer
from extending or maintaining credit in the form of personal loans to
executives of the Employer on or after July 31, 2003;


 


WHEREAS, the parties have
concluded that, depending upon how they treat for federal income tax purposes
the payments of additional premiums by the Employer, there is a possibility
that such payments will violate the Sarbanes-Oxley Act;


 


WHEREAS, the Employer desires
to avoid any risk of violating the prohibitions of Sarbanes-Oxley, while at the
same time it wishes to fulfill its contractual obligation to the Employee; and


 


WHEREAS, for the foregoing
reasons, the Employer and Employee believe that it is in both parties’ interest
to treat the entire amount of all future premium payments as Employee-paid
premiums for federal income tax purposes, and that such treatment will not
materially modify the after-tax costs and benefits to the Employer and the
Employee.


 

















 


NOW THEREFORE, in consideration
of the promises and of the mutual covenants herein contained, the parties
hereto agree and understand as follows:


 


1.  The Employer shall continue to pay the planned annual premiums on
the Policy set forth in Schedule A during the term of the Employee’s
employment, and, commencing with the next such premium payment, the entire amount
of such premium shall be paid by the Employer as agent for the Employee and
thus, in accordance with Section 2 of the Agreement, shall be charged to the
Employee as cash compensation for all purposes.


 


2.  At the written election of 
the Employee, the Employer shall pay not less than sixty percent (60%)
of any annual premium payment amount to Nationwide Life Insurance Company (or
provide the Employee with a check to be used to pay for such premium amount)
and shall pay the balance of such planned premium payment amount to the
Employee as cash compensation in order to provide the Employee with funds to
pay any income tax due on the cash compensation charged to the Employee
pursuant to the Agreement.


 


3.  With respect to the application of Section 2 of the Agreement to
the initial premium payment, the term insurance allocation shall be computed in
accordance with the guidelines in IRS Notice 2002-8.


 


IN WITNESS WHEREOF, the
Employer has caused this MOU to be executed by its officer thereunto duly
authorized and the Employee has hereunto set his hand and seal, all as of the
day and year first above written.


 


	
   

  	
   

  	
  NATIONAL COOPERATIVE BANK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  Charles E.
  Snyder

  
							



 


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SCHEDULE A


 


Nationwide Policy Number
N101253300


 


	
  Planned
  Annual Premium Payment:

  	
   

  	
  $

  	
  183, 929

  



 


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