DEFERRED COMPENSATION AGREEMENT WITH CHARLES E. SNYDER
Exhibit 10.3
DEFERRED COMPENSATION AGREEMENT
WITH XXXXXXX X. XXXXXX
WITH XXXXXXX X. XXXXXX
This Deferred Compensation Agreement (“Agreement”) was entered into as of the 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 Xxxxxxx X. Xxxxxx, a resident of Virginia. This Agreement is
restated effective as of January 1, 2009 to comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder and will be
administered in good faith compliance with Section 409A and the regulations thereunder between
January 1, 2005 and December 31, 2008.
Xx. Xxxxxx 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 Xx. Xxxxxx’x continued service as its President.
It is hereby agreed as follows:
1. The Bank agrees to continue to employ Xx. Xxxxxx as its President, and Xx. Xxxxxx agrees to
continue to serve the Bank in that capacity until such employment is terminated by the Bank in
accordance with the terms of his Amended and Restated Employment Agreement, dated December 12, 2008
(the “Employment Agreement”).
2. Salary paid by the Bank pursuant to the Employment Agreement and bonuses paid by the Bank
pursuant to the Bank’s Executive Management Short Term Incentive Plan (“STIP”) may be deferred by
Xx. Xxxxxx pursuant to the instant Agreement. Compensation deferred under the instant Agreement
will be payable as provided in paragraphs 3 and 4 hereof.
3. The Bank, on December 31 of each full year during which Xx. Xxxxxx 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 Xx. Xxxxxx and the Bank, in accordance with either
subparagraph (a), (b) or (c) of this paragraph.
(a) The Deferred Compensation Account may 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, an amount (“the Quarterly Credit”) equal to interest upon the total
amount previously credited to the Deferred Compensation Account. 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.
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(b) The Deferred Compensation Account may 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. 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. Xx.
Xxxxxx’x rights to those assets will be limited to the rights of a general creditor of the
Bank. Neither Xx. Xxxxxx, his spouse, or any beneficiary of Xx. Xxxxxx 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 Xx. Xxxxxx 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), (b), or (c) above, shall in no event be considered as a trust or
escrow account for Xx. Xxxxxx or his Beneficiary or as creating a claim by Xx. Xxxxxx 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) Prior to January 1 of each year, Xx. Xxxxxx will advise the Bank in writing of the
amount or percentage of his salary and STIP award for 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 Xx. Xxxxxx, the amount of the Annual Credit for a year shall be zero.
4. On the 30th day after the date of Xx. Xxxxxx’x termination of employment with the
Bank and its subsidiaries that constitutes a separation from service within the meaning of Section
409A(a)(2)(A)(i) of the Code with the Bank, and on the same date in each of the succeeding four
years, the Bank shall make equal annual payments to Xx. Xxxxxx of deferred compensation from the
Deferred Compensation Account. Each annual payment shall be calculated by dividing the unpaid
balance in the Deferred Compensation Account by the remaining number of unpaid installments. Such
series of five annual installment payments shall be treated as a single payment for purposes of
Section 409A(a)(4)(C) of the Internal Revenue Code, and Xx. Xxxxxx may instead elect a lump sum
payment of the deferred
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compensation account balance, provided that such election complies with the requirements of such
Section 409A(a)(4)(C). In the event of Xx. Xxxxxx’x death prior to commencement of his payments
hereunder, the balance in the Deferred Compensation Account shall be paid to his beneficiary on the
60th day after his death. In the event of Xx. Xxxxxx’x death after the commencement but
prior to the completion of his payments hereunder, his beneficiary shall continue to receive the
installment payments as previously scheduled until the entire benefit has been paid.
Notwithstanding anything to the contrary in this Paragraph 4, however, if Section 409A(a)(2)(B)(i)
of the Code applies to this Agreement at the time when Xx. Xxxxxx would otherwise commence
receiving a distribution under this Paragraph 4 and Xx. Xxxxxx is a “specified employee” within the
meaning of such Section 409A(a)(2)(B)(i), then to the extent required by such Section
409A(a)(2)(B)(i), any payments otherwise due during the six-month period immediately following Xx.
Xxxxxx’x termination of employment shall not be paid during such six-month period but shall be paid
on the first business day that occurs six months following his termination of employment.
5. For purposes of this Agreement, Xx. Xxxxxx’x Beneficiary shall be the person or persons
designated by Xx. Xxxxxx 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 Xx. Xxxxxx or fail to survive the payment dates
hereunder, the Beneficiary shall be deemed to be Xx. Xxxxxx’x estate. Any designation of
Beneficiary hereunder may be changed without the consent of any prior Beneficiary.
6. The right of Xx. Xxxxxx 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.
7. Any deferred compensation payable under this Agreement shall not be deemed salary or other
compensation to Xx. Xxxxxx 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.
8. This Agreement shall be binding upon and inure to the benefit of the Bank, its successors and
assigns and Xx. Xxxxxx, 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.
9. 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 amended Agreement to be duly executed and Xx. Xxxxxx
has duly executed this Agreement effective January 1, 2009.
| NATIONAL CONSUMER COOPERATIVE BANK |
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| By: | ||||
| Name: | Xxxx Xxxx | |||
| Title: | Chairman of the Board | |||
| Xxxxxxx X. Xxxxxx | ||||
