Document:

Exhibit 10.3

 

DEFERRED COMPENSATION AGREEMENT

 

This Deferred Compensation Agreement
(“Agreement”) is entered into as of this 4th day of November 1994, by and
between the National Consumer Cooperative Bank, a 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 since January, 1992, prior to which he was Chief Financial
Officer.  During the period of his
presidency, the Bank’s financial condition and results operations have improved
from prior periods and have been very satisfactory, and the Bank desires to
provide incentives for Mr. Snyder’s continued service as its President.

 

It is therefore agreed as follows:

 

1.                                 The Bank agrees to continue
to employ Mr. Snyder as its President, and Mr. Snyder agrees to continue to
serve the Bank in that capacity, beginning as of November 4, 1994, and
continuing until such employment is terminated by either party on at least 90
days prior written notice to the other.

 

2.                                 During the term of his
employment, Mr. Snyder shall devote substantially all of his time, attention,
skill and efforts to the performance of his duties for and on behalf of the
Bank.

 

3.                                       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, such compensation to be in the form of
both current and deferred compensation. 
The deferred compensation will be payable as provided in paragraphs 4
and 5, hereof.  The amount of
compensation deferred during 1994 shall be $25,000, pursuant to paragraph 4(f)
, below.

 

4 .                                    The
Bank, on December 31 of each year , beginning 1994, during which full year Mr.
Snyder is employed with the Bank, shall credit to an account (“the Deferred
Compensation Account” ) the amount determined pursuant to subparagraph (f),
below (“the Annual Credit”) . The Deferred Compensation Account shall be
established and maintained, by agreement between Mr. Snyder and the Bank made
no later than December 31 , 1994 , in accordance with either subparagraph (a) ,
(b) or (c) of this paragraph.

 

(a)                                  The
Deferred Compensation Account shall be established and maintained by the Bank’s
crediting a book reserve account with (i) each Annual Credit, and (ii), on the
last day of each calendar quarter commencing March 31, 1995, an amount (“the
Quarterly Credit”) equal to interest upon the total amount previously credited
to the Deferred Compensation Account (which amount, as of

 

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the date of each Quarterly Credit, shall
comprise the aggregate of all previous Annual Credits and quarterly Credits).
Interest for purposes of a Quarterly Credit shall be computed at a rate equal
to 100 basis points in excess of the yield on a five year U.S. Treasury Note
with a maturity date on or nearest to the date of such Quarterly credit, as
reported in the Wall Street Journal or similar publication. Quarterly
credits shall continue to be made to the Deferred Compensation Account,
irrespective of the continued employment of Mr. Snyder, so long as the deferred
Compensation Account has a balance in excess of $5,000.

 

                 (b)                                 As
an alternative to subparagraph (a) , the Deferred Compensation Account shall be
established and maintained by the Bank’s depositing each Annual Credit in an
interest—earning deposit account at a federally insured financial institution
selected by the Bank, which account shall be in the name of and shall remain
the property of the Bank. The Bank shall use its best efforts to obtain a yield
upon such account at least equal to that stated in subparagraph (a) hereof. All
interest credited to such deposit account shall become part of the Deferred
Compensation Account.

 

(c)                            The
Bank may establish an irrevocable trust with a third-party trustee, pursuant to
Rev. Proc. 92-64 issued by the Internal Revenue Service, to provide for all or
a portion of the Bank’s obligations hereunder. For purposes of any provision
herein referring to the Deferred Account, the assets of such trust shall be
considered a part of the Deferred Account. The assets of such trust shall be
held and invested in accordance with the terms of such trust.  The assets of any such trust, however, shall
remain available to satisfy the claims of the Corporation’s general creditors.
Mr. Snyder’s rights to those assets will be limited to the rights of a general
creditor of the Bank. Neither Mr. Snyder, his spouse, or any beneficiary of Mr.
Snyder may in any manner encumber, pledge, assign, transfer or dispose of the
right to receive any payment under this Agreement or from any Trust established
pursuant hereto.

 

(d)                           The
Bank shall, promptly after the end of each calendar quarter, provide or cause
to be provided to Mr. Snyder a statement of the balance contained in the
Deferred Compensation Account as of the end of such quarter and of the current
yield on such Account for such quarter.

 

(e)                            The
Deferred Compensation Account, whether established and maintained in accordance
with subparagraph (a) or (b), above, shall in no event be considered as a trust
or escrow account for Mr. Snyder or his Beneficiary or as creating a claim by
Mr. Snyder or such Beneficiary against, or any property interest in, any
specific assets of the Bank, including, without limitation, any assets
maintained in such Account.

 

(f)                                    The
Annual Credit for 1994 shall be $25,000. Prior to January 1 , of each year
beginning 1995 , Mr. Snyder will advise the Bank in writing of the

 

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amount or percentage of his compensation for
services to be performed in the following year that shall be defined as the
Annual Credit for such year. In the absence of timely receipt by the Bank of
such advice from Mr. Snyder, the amount of the Annual Credit for a year shall
be an amount equal to 10 percent of Mr. Snyder’ s salary plus bonus for such
year.

 

5.                                          Beginning on
a date three months after the date of Mr. Snyder’s retirement or other
termination of employment with the Bank , and on the same date in each
succeeding year as provided in this paragraph 5, the Bank shall make annual
payments to Mr. Snyder of deferred compensation from the Deferred Compensation
Account. Each annual payment shall be in an amount equal to the greater of (a)
$25,000 or (b) 20 percent of the balance contained in the Deferred Compensation
Account as of the date such annual payment is to be made; provided that, if, on
any such date, the balance in the Deferred Compensation Account is less than
$25,000, then the annual payment shall be a final payment in the amount of such
balance. In the event of the death of Mr. Snyder prior to the date of final
payment hereunder, the remaining balance in the Deferred Compensation Account
shall be paid to his beneficiary on the earlier of the 60th day after Mr.
Snyder’s date of death or the next annual payment date after the date of Mr.
Snyder’s death.

 

6.                                          For purposes
of this Agreement, Mr. Snyder’s Beneficiary shall be the person or persons
designated by Mr. Snyder from time to time as his Beneficiary hereunder on
forms provided by the Bank; provided that, if no effective form is on file with
the Bank’s personnel office, or if the designated beneficiary or beneficiaries
predecease Mr. Snyder or fail to survive the payment dates hereunder, the
Beneficiary shall be deemed to be Mr. Snyder’s estate. Any designation of
Beneficiary hereunder may be changed without the consent of any prior
Beneficiary.

 

7.                                          The right of
Mr. Snyder or any other person to the payment of deferred compensation
hereunder shall not be assigned, transferred, pledged, or encumbered except by
testamentary instrument or by the laws of descent and distribution. Any
attempted assignment, transfer, encumbrance or attachment of any rights
hereunder shall be null and void.

 

8.                                          Any deferred
compensation payable under this Agreement shall not be deemed salary or other
compensation to Mr. Snyder for the purpose of computing benefits to which he
may be entitled under any pension plan or other arrangement of the Bank for the
benefit of its employees.

 

9.                                          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 a writing executed by them, amend or modify this
Agreement without the consent of any other person.

 

10.                                    This Agreement
shall be construed in accordance with and governed by the laws of the District
of Columbia. It may be revoked or modified in whole or in part only by a
writing signed by the parties hereto.

 

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In Witness Whereof the Bank has caused this
Agreement to be duly executed and Mr. Snyder has duly executed this Agreement
as of the 4th day of November, 1994.

 

 

	
   

  	
  NATIONAL
  CONSUMER COOPERATIVE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Jeremiah J. Foley

  
	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Charles E. Snyder

  
					

 

4Exhibit 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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