AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
entered into as of June 7, 1999 (the "Effective Date") by and between AMERICAN
CAPITAL STRATEGIES, LTD., a Delaware corporation (the "Company"), and XXXX
XXXXXXXXXX (the "Employee").
W I T N E S S E T H:
WHEREAS, Employee is the Chief Operating Officer of the Company and the
Employee entered into an Employment Agreement dated as of August 29, 1997 (the
"Old Agreement") pursuant to which the Company employed the Employee on the
terms and conditions set forth therein; and
WHEREAS, the Company and the Employee desire to amend and restate the
Old Agreement in its entirety, on the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
Definitions and Interpretations
1.1. Definitions
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, the following terms shall have the
following respective meanings:
"Adjusted Base Salary" shall have the meaning specified in Section 3.1.
"Annual Bonus Plan" shall have the meaning specified in Section 3.2.
"Base Salary" shall have the meaning specified in Section 3.1.
"Board of Directors" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Compensation Committee" shall mean the Compensation Committee of the
Board of Directors or such other entity as may be designated for a particular
function by the Board of Directors.
"Confidential Information" shall have the meaning specified in Section
5.1(a).
"Continuation Period" shall have the meaning specified in Section
4.4(a).
"Disability" shall mean a physical or mental condition of Employee
that, in the good faith judgment of not less than a majority of the entire
membership of the Board of Directors, prevents Employee from being able to
perform the services required under this Agreement and which results in the
Employee becoming eligible for long-term disability benefits (if such benefits
are provided by the Company). If any dispute arises as to whether a Disability
has occurred, or whether a Disability has ceased and the Employee is able to
resume duties, then such dispute shall be referred to a licensed physician
appointed by the president of the Medical Society or similar organization in
Washington, D.C., at the request of either party. The Employee shall submit to
such examinations and provide information as such physician may request and the
determination of such physician as to the Employee's physical or mental
condition shall be binding and conclusive on the parties. The Company shall pay
the cost of any such physician and examination.
"Dispute" shall have the meaning specified in Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officers" shall refer to the President, the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, all Executive Vice Presidents
and all other officers designated as Executive Officers by the Board of
Directors.
"Expiration Date" shall have the meaning specified in Section 2.2.
"Good Reason" shall mean any of the following:
(1) without Employee's express written consent, a material adverse
alteration in the nature or status of Employee's position,
functions, duties or responsibilities with the Company;
(2) a material breach by the Company of any material provision of
this Agreement which, if capable of being remedied, remains
unremedied for more than 15 days after written notice thereof
is given by Employee to the Company;
(3) any purported termination by the Company of Employee's
employment not in accordance with the provisions of this
Agreement;
(4) the failure of the Company to obtain any assumption agreement
required by Section 7.5(a);
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(5) the amendment, modification or repeal of any provision of the
Company's Certificate of Incorporation or by-laws, if such
amendment, modification or repeal would materially adversely
affect Employee's rights to indemnification by the Company; or
(6) change of control of the Company that would result in the
control of 25% or more of the Company's voting shares by one
Person or a group of Persons acting in concert other than such
entities as may own voting securities as of August 28, 1997.
"IPO" shall mean the initial underwritten public offering of the
securities of the Company, which became effective on August 29, 1997.
"ISO Plan" shall have the meaning specified in Section 3.3.
"Misconduct" shall mean one or more of the following:
(i) the willful and continued failure by Employee to perform
substantially his duties described in Section 2.3 (other than any such failure
resulting from Employee's incapacity due to physical or mental illness) after
two (2) written notices of such failure have been given to Employee by the
Company and Employee has had a reasonable period (not to exceed 15 days from the
second notice) to correct such failure;
(ii) the commission by Employee of acts that are dishonest and
demonstrably injurious to the Company (monetarily or otherwise) in any material
respect; or
(iii) a material breach or violation by Employee of (a) any
material provision of this Agreement or (b) any material Company employment
policy, including its Stock Trading Policies and Procedures which the Company
will publish from time to time, which, if capable of being remedied, remains
unremedied for more than 15 days after written notice thereof is given to
Employee by the Company.
For purposes of this definition, no act or failure to act on Employee's
part shall be considered "Misconduct" if done or omitted to be done by Employee
in good faith and in the reasonable belief that such act or failure to act was
in the best interest of the Company or in furtherance of Employee's duties and
responsibilities described in Section 2.3.
"Notice of Discontinuance" shall have the meaning specified in Section
2.2.
"Notice of Employment Continuation" shall mean a notice delivered in
accordance with Section 4.11.
"Notice of Termination" shall mean a notice purporting to terminate
Employee's employment in accordance with Section 4.1 or 4.2. Such notice shall
specify the effective date of such termination, which date shall not be less
than 30 (one (1) day in the case of a termination by the Company for Misconduct)
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or more than 60 days after the date such notice is given. If such termination is
by Employee for Good Reason or by the Company for Disability or Misconduct, such
notice shall set forth in reasonable detail the reason for such termination and
the facts and circumstances claimed to provide a basis therefor. Any notice
purporting to terminate Employee's employment which is not in compliance with
the requirements of this definition shall be ineffective.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust and an unincorporated organization.
"Target Bonus" shall have the meaning specified in Section 3.2.
"Term" shall have the meaning specified in Section 2.2.
"Termination Date" shall mean the termination date specified in a
Notice of Termination delivered in accordance with this Agreement.
1.2. Interpretations
(a) In this Agreement, unless a clear contrary intention appears, (i)
the words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision, (ii) reference to any Article or Section, means such Article
or Section hereof, (iii) the words "including" (and with correlative meaning
"include") means including, without limiting the generality of any description
preceding such term, and (iv) where any provision of this Agreement refers to
action to be taken by either party, or which such party is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such party.
(b) The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
ARTICLE 2
Employment: Term, Positions and Duties, Etc.
2.1. Employment
The Company agrees to employ Employee and Employee agrees to accept
employment with the Company, in each case on the terms and conditions set forth
in this Agreement.
2.2. Term of Employment
Unless sooner terminated pursuant to Article IV, the term of Employee's
employment under this Agreement (the "Term") shall commence on the Effective
Date and shall continue until the fifth anniversary of the Effective Date (the
"Expiration Date"); provided, however, that on the third anniversary of the
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Effective Date, and on each anniversary thereafter (each such anniversary being
an "Extension Anniversary"), the Expiration Date shall be automatically extended
one additional year unless, at least six months prior to an Extension
Anniversary, (i) either party shall give written notice to the other (a "Notice
of Discontinuance") that no such automatic extension shall occur on the next
succeeding Extension Anniversary and each Extension Anniversary thereafter, or
(ii) either party shall give a Notice of Termination to the other party pursuant
to Section 4.1 or 4.2, as the case may be. No Notice of Discontinuance given by
the Company shall be effective unless given pursuant to instructions set forth
in a resolution duly adopted by the affirmative vote of a least a majority of
the entire membership of the Board of Directors.
2.3. Positions and Duties
(a) While employed hereunder, Employee shall serve as an Executive Vice
President of the Company, and shall have and may exercise all of the powers,
functions, duties and responsibilities normally attributable to such office,
including (without limitation) such duties and responsibilities as are set forth
with respect to such office in the Company's Certificate of Incorporation and
By-laws (as from time to time in effect). Employee shall have such additional
duties and responsibilities commensurate with such offices as from time to time
may be reasonably assigned to him by the Board of Directors. While employed
hereunder, Employee shall (i) report directly to the President of the Company
and (ii) observe and comply with all lawful policies, directions and
instructions of the President which are consistent with the foregoing provisions
of this paragraph (a).
(b) The Company agrees to use its reasonable best efforts to cause
Employee to be elected or appointed, or re-elected or re-appointed, as a member
of the Board of Directors and a member of its Executive Committee (if such a
committee exists), at all times during the Term.
(c) While employed hereunder, Employee shall (i) devote substantially
all of his business time, attention, skill and efforts to the faithful and
efficient performance of his duties hereunder and (ii) not accept employment
with any Person other than with the Company. Notwithstanding the foregoing,
Employee may engage in the following activities so long as they do not interfere
in any material respect with the performance of Employee's duties and
responsibilities hereunder: (i) serve on corporate, civic, religious,
educational or charitable boards or committees and (ii) manage his personal
investments.
(d) While employed hereunder, Employee shall conduct himself in such a
manner as not to knowingly prejudice, in any material respect, the reputation of
the Company in the fields of business in which it is engaged or with the
investment community or the public at large.
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2.4. Place of Employment
Employee's place of employment hereunder shall be at the Company's
offices in the greater New York, New York area or such other area that is
mutually agreeable to both parties.
ARTICLE 3
Compensation and Benefits
3.1. Base Salary
(a) For services rendered by Employee under this Agreement, the Company
shall pay to Employee an annual base salary ("Base Salary") of $135,000. The
Board of Directors shall review the Base Salary at least annually and, subject
to paragraph (b) below, may adjust the amount of the Base Salary at any time as
the Board of Directors may deem appropriate in their sole discretion.
(b) The amount of the Base Salary may not be decreased without the
prior written approval of the Employee except that if the Board of Directors
increases the Base Salary as provided in the last sentence of paragraph (a)
above, the Board of Directors may thereafter decrease the Base Salary by an
amount not to exceed the amount of such increase, but only if a proportionally
similar decrease is made to the base compensation of all other Executive
Officers of the Company; provided, however, that in no event may the Base Salary
be decreased below $135,000, without the prior written consent of Employee.
(c) For so long as Employee is based at the Company's New York, New
York office, Employee shall be entitled to a location adjustment equal to 25% of
the Base Salary (the Base Salary as so adjusted being the "Adjusted Base
Salary").
(d) The Adjusted Base Salary shall be payable in accordance with the
Company's payroll practice for Executive Officers as earned.
3.2. Annual Bonus Plan
During the Term, the Company shall maintain and the Employee shall be
entitled to participate in an incentive bonus plan (the "Annual Bonus Plan"),
which will be determined by the Board of Directors and which will provide for
the payment of cash bonuses to eligible executives of the Company at specified
times during the year and within 90 days of the end of each fiscal year based on
the Company's financial performance and other appropriate factors for that year
or a portion thereof. Under the Annual Bonus Plan, Employee shall be eligible to
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earn a target bonus (the "Target Bonus") each year equal to 200% of Employee's
Adjusted Base Salary for such year based on criteria established by the
Compensation Committee, and the performance of the Company against such
criteria. The establishment of such criteria and of the necessary performance
targets for partial or full earning of the Target Bonus shall be at the sole
reasonable discretion of the Compensation Committee; provided, however, that
Employee shall be entitled to a Target Bonus each year equal to at least five
percent (5%) of the maximum Target Bonus. During the calendar year 1997 and the
year in which the Expiration Date occurs, the Target Bonus which would be
payable shall be prorated and paid based on the number of days in such year
actually occurring during the Term.
3.3. Long-term Incentive Compensation
The Company has established the 1997 Stock Option Plan (as amended from
time to time the, "ISO Plan"), which provides key employees of the Company with
ownership interests in the Company (the "ISO Plan"). Under the ISO Plan,
Employee shall be granted options to purchase 287,788 shares of common stock,
such amount to be reduced by 32,760 shares if the over-allotment option under
the Company's underwriting agreement is not exercised. One-third of such options
will vest and become exercisable on each of the first three anniversaries of the
effectiveness of the IPO; provided, however, that Employee may accelerate the
vesting of any such options by agreeing to exercise such options immediately and
that for a period through the date on which such options would have vested, not
to sell, assign or convey any stock so purchased (other than by laws of descent
or distribution) and to grant the Company a call option to repurchase such stock
at the option exercise price if the options would have been forfeited prior to
their original vesting date as a result of the Employee's subsequent termination
of employment with the Company. To the extent permissible, such options shall be
characterized as Incentive Stock Options as defined in Section 422 of the Code.
In addition, as of even date herewith, the Company and the Employee have entered
into an Option Exercise Agreement (the "Option Exercise Agreement") and a Split
Dollar Agreement (the "Split Dollar Agreement") pursuant to which the Employee
exercised such options, the company lent certain amounts to the Employee to be
used in connection with such exercise and a split dollar variable life insurance
policy program was proposed to be established to provide collateral for such
loans and to provide further benefits to the Employee. The employee shall
participate in all other long-term compensation incentive plans of the Company
in accordance with their terms.
3.4. Vacation
While employed hereunder, Employee shall be entitled to vacation
benefits in accordance with the vacation policy adopted by the Company from time
to time for senior executives in general, but in no event shall Employee's
annual vacation be less than 30 business days or such greater number of vacation
days as the Board of Directors may approve from time to time in its sole
discretion. Employee shall not be entitled to accumulate and carryover unused
vacation time from year to year, except to the extent permitted in accordance
with the Company's vacation policy for senior executives in general, but
Employee shall be entitled to compensation for unused accrued vacation time at
the end of each year.
3.5. Business Expenses
The Company shall, in accordance with the rules and policies that it
may establish from time to time for senior executives, reimburse Employee for
business expenses reasonably incurred in the performance of Employee's duties.
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Requests for reimbursement for such expenses must be accompanied by appropriate
documentation. Examples of reimbursable expenses include parking, mileage
charges, air fares and hotel accommodations while traveling on Company business.
3.6. Other Benefits
Employee shall be entitled to receive all employee benefits, fringe
benefits and other perquisites that may be offered by the Company to its
Executive Officers as a group, including, without limitation, (i) participation
by Employee and, where applicable, Employee's dependents, in the various
employee benefit plans or programs (including, without limitation, pension
plans, profit sharing plans, stock plans, health plans, life insurance, parking
and disability insurance) generally provided to Executive Officers of the
Company, subject to meeting the eligibility requirements with respect to each of
such benefit plans or programs, (ii) club memberships, (iii) automobile
allowances, and (iv) financial planning allowances. However, nothing in this
Section 3.6 shall be deemed to prohibit the Company from making any changes in
any of the plans, programs or benefits described herein, provided such changes
apply to all similarly situated Executive Officers.
3.7. Indemnification
The Company agrees to defend, indemnify and hold harmless the Employee
from and against any liability and expenses arising by reason of Employee's
acting as a director or officer of the Company or any Company subsidiary or
affiliate, or any portfolio company of the Company, in accordance with and to
the fullest extent permitted by law. The Company shall maintain Directors and
Officers liability insurance for the Employee in such amounts of coverage as are
reasonably available to the Company and to the extent such is attainable at
reasonable cost and are permitted by law.
ARTICLE 4
Termination of Employment
4.1. Termination by Employee
Employee may, at any time prior to the Expiration Date, terminate his
employment hereunder for any reason by delivering a Notice of Termination to the
Chairman of the Board of Directors.
4.2. Termination by the Company
The Company may, at any time prior to the Expiration Date, terminate
Employee's employment hereunder for any reason by delivering a Notice of
Termination to Employee; provided, however, that in no event shall the Company
be entitled to terminate Employee's employment prior to the Expiration Date
unless the Board of Directors shall duly adopt, by the affirmative vote of at
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least a majority of the entire membership of the Board of Directors, a
resolution authorizing such termination. Should the board adopt such a
resolution, the Employee may resign in lieu of being terminated, but such
resignation shall otherwise be treated as a termination by the Company for
purposes of this Article IV.
4.3. Payment of Accrued Base Salary Vacation Pay, etc.
(a) Promptly upon the termination of Employee's employment for any
reason (including death), the Company shall pay to Employee (or his estate) a
lump sum amount for (i) any unpaid Adjusted Base Salary earned hereunder prior
to the Termination Date, (ii) all unused vacation time accrued by Employee as of
the Termination Date in accordance with Section 3.4, (iii) all unpaid benefits
earned or vested, as the case may be, by Employee as of the Termination Date
under any and all incentive or deferred compensation plans or programs of the
Company and (iv) any amounts in respect of which Employee has requested, and is
entitled to, reimbursement in accordance with Section 3.5.
(b) A termination of Employee's employment in accordance with this
Agreement shall not alter or impair any of Employee's accrued rights or benefits
as of the Termination Date under any employee benefit plan or program maintained
by the Company, in each case except as provided therein or in any written
agreement entered into between the Company and Employee pursuant thereto.
4.4. Additional Rights in Connection With Disability
In the event that the Company terminates an Employee by delivering a
Notice of Termination to Employee stating that such Termination is by reason of
a Disability, the Employee shall be entitled to the benefits and payments set
forth in this Section 4.4 in addition to such other applicable rights as may be
provided elsewhere in this Agreement:
(a) Base Salary and Target Bonus. The Company shall continue to pay to
Employee the Adjusted Base Salary in effect as of the date on which the Notice
of Termination was delivered for two (2) years following the Termination Date
(but in no event less than 365 days) (such period being the "Continuation
Period") which amount shall be reduced by any amount payable to Employee under
any disability plan maintained by the Company for the benefit of Employee. In
addition, the Employee shall be entitled to continue to participate in the
Annual Bonus Plan for two (2) years following the Termination Date with the
second anniversary of the Termination Date being the Expiration Date for
purposes of Section 3.2.
(b) Insurance Benefits, etc. The Company shall at all times during the
Continuation Period, without charge to Employee or Employee's dependents, cause
Employee and Employee's eligible dependents to be covered by and to participate
in, to the fullest extent allowable under the terms thereof, all life,
accidental death and dismemberment and health insurance plans and programs that
may be offered to the senior officers of the Company so that Employee will
receive, at all times during the Continuation Period, the same benefits under
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such plans and programs as Employee would have been entitled to receive had he
remained an Executive Officer of the Company. In no event shall Employee's
continuation period for purposes of Part 6 of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("COBRA"), begin prior to the end of
Employee's coverage under the Company's group health plan as provided in this
paragraph (b).
(c) Options. To the extent not already vested, all options of the
Employee under the ISO Plan (or similar plan) which have not vested as of
Employee's Termination Date and which would vest within one year of Employee's
Termination Date shall vest and shall become immediately exercisable. The
Company shall issue to the Employee within 30 days of the Termination Date an
amount of new options as separate securities in exchange for and in an amount
equal to the Employee's vested ISO Plan options. Such new options shall have the
same exercise price and other terms as the ISO Plan options including a
requirement that these options be registered under applicable securities laws if
the ISO Plan options are registered. All loans to the Employee in connection
with the prior exercise of any options under the ISO Plan (or similar plan)
shall be due and payable within 60 days of employment termination.
Should the Employee's Disability end during the pendency of the Term,
the Company may discontinue the payments contemplated by this Section 4.4 if it
offers to reemploy Employee under the terms of this Agreement, but no such offer
shall affect the terms of Section 4.4(c) above.
4.5. Additional Rights in Connection With Terminations by Employee for
Good Reason or by the Company for Other than Misconduct or Disability
In the event that Employee terminates his employment pursuant to
Section 4.1 for Good Reason or if the Company terminates Employee's employment
with the Company pursuant to Section 4.2 for other than Misconduct or a
Disability, the Employee shall be entitled to the payments and benefits set
forth in this Section 4.5 in addition to such other applicable rights as may be
provided elsewhere in this Agreement:
(a) Base Salary and Target Bonus. The Company shall continue to pay to
Employee the Adjusted Base Salary in effect as of the date on which the Notice
of Termination for the Continuation Period. In addition, the Employee shall be
entitled to continue to participate in the Annual Bonus Plan for two (2) years
following the Termination Date with the second anniversary of the Termination
Date being the Expiration Date for purposes of Section 3.2. The amount payable
to Employee under this paragraph (a) is in lieu of, and not in addition to, any
severance payment due to or become due to Employee under any separate agreement
or contract between Employee and the Company or pursuant to any severance
payment plan, program or policy of the Company.
(b) Insurance Benefits, etc. The Company shall at all times during the
Continuation Period, without charge to Employee or Employee's dependents, cause
Employee and Employee's eligible dependents to be covered by and to participate
in, to the fullest extent allowable under the terms thereof, all life,
accidental death and dismemberment and health insurance plans and programs that
may be offered to the senior officers of the Company so that Employee will
receive, at all times during the Continuation Period, the same benefits under
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such plans and programs as Employee would have been entitled to receive had he
remained an Executive Officer of the Company; provided, however, in the event
Employee becomes covered during the Continuation Period by another employer's
group plan or programs which provide benefits to Employee and his dependents
comparable to those being provided to Employee under this paragraph (b)
(provided with respect to any such group health plan, such plan does not contain
any exclusion or limitation with respect to any pre-existing conditions), then
the Company's similar plans and programs shall no longer be liable for any
benefits under this paragraph (b). In no event shall Employee's COBRA
continuation period begin prior to the end of Employee's coverage under the
Company's group health plan as provided in this paragraph (b).
(c) Options. All options of the Employee under the ISO Plan (or similar
plan) that have not vested as of Employee's Termination Date and which would
vest within one year of Employee's Termination Date shall vest and shall become
immediately exercisable. The Company shall issue to the Employee within 30 days
of the Termination Date an amount of new options as separate securities in
exchange for and in an amount equal to the Employee's vested ISO Plan options.
Such new options shall have the same exercise price and other terms as the ISO
Plan options including a requirement that these options be registered under
applicable securities laws if the ISO Plan options are registered. All loans to
the Employee in connection with the prior exercise of any options under the ISO
Plan (or similar plan) shall be due and payable within 60 days of employment
termination.
(d) Release. Notwithstanding anything in this Section 4.5 to the
contrary, as a condition to the receipt of any benefit under this Section 4.5,
Employee must first execute and deliver to the Company a mutual release as set
out in exhibit 4.5(d) hereto (which the Company shall be obligated to execute
upon Employee's delivery thereof), releasing the Company, its officers, Board of
Directors, employees and agents from any and all claims and from any and all
causes of action of any kind or character that Employee may have arising out of
Employee's employment with the Company or the termination of such employment,
but excluding any claims and causes of action that Employee may have arising
under or based upon this Agreement.
4.6. Additional Rights in the Event of Death
In the event that the Employee's employment is terminated as a result
of his death, the Employee's estate and/or his beneficiaries shall be entitled
to the payments and benefits set forth in this Section 4.6 in addition to such
other applicable rights as may be set forth elsewhere in this Agreement:
(a) Target Bonus. The Employee's estate shall be entitled to receive
the Target Bonus that the deceased employee would have been entitled to have
received in the year in which the death occurred.
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(b) Insurance Benefits, etc. The Company shall pay the cost for
dependents of the Employee for insurance coverage that they are entitled to
obtain from the Company following the Employee's death pursuant to COBRA but not
less than 18 months.
(c) Options. All options of the Employee under the ISO Plan (or similar
plan) that have not vested as of Employee's death and that would vest within one
year thereof shall vest immediately upon the Employee's death and shall remain
exercisable by the Employee's estate for the shorter of 18 months following the
Employee's death and their original term. All loans to the Employee in
connection with the prior exercise of any options under the ISO Plan (or similar
plan) shall be due and payable within 60 days of employment termination.
4.7. Additional Rights in the Event of Termination by Resignation Other than
for Good Reason
In the event that the Employee terminates his employment pursuant to
Section 4.1 without Good Reason, he shall be entitled to the rights set forth in
this Section 4.7 in addition to such other applicable rights as may be set forth
elsewhere in this Agreement:
(a) Options. All options of the Employee under the ISO Plan (or similar
plan) which have not vested as of employee's Termination Date shall lapse and
shall not be exercisable. All previously vested options shall remain exercisable
for the shorter of 90 days following the Termination Date and their original
term. All loans to the Employee in connection with the prior exercise of any
options under the ISO Plan (or similar plan) shall be due the earlier of 90 days
following the Employee's death and their original term. The Company shall issue
to the Employee within 30 days of the Termination Date an amount of new options
as separate securities in exchange for and in an amount equal to the Employee's
vested ISO Plan options. Such new options shall have the same exercise price and
other terms as the ISO Plan options including a requirement that these options
be registered under applicable securities laws if the ISO Plan options are
registered. All loans to the Employee in connection with the prior exercise of
any options under the ISO Plan (or similar plan) be due and payable within 60
days of employment termination.
4.8. Rights in the Event of Termination for Employee's Misconduct
In the event that the Company terminates Employee's employment with the
Company pursuant to Section 4.2 for Employee's Misconduct, Employee shall be
entitled to the rights set forth in this Section 4.8 in addition to such other
applicable rights as may be set forth elsewhere in this Agreement:
(a) Options. All options of the Employee under the ISO Plan (or similar
plan) that have not vested as of employee's Termination Date shall lapse and
shall not be exercisable. All previously vested options shall remain exercisable
for the shorter of 60 days following the Termination Date and their original
term. All loans to the Employee in connection with the prior exercise of any
options under the ISO Plan (or similar plan) shall be due the earlier of 90 days
following the Employee's Termination Date and their original term.
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4.9. Non-exclusivity of Rights
Nothing in this Agreement shall prevent or limit Employee's continuing
or future participation in any plan, program, policy or practice provided by the
Company for which Employee may qualify, nor shall anything herein limit or
otherwise affect such rights as Employee may have under any other contract or
agreement with the Company. Amounts which are vested benefits or which Employee
is otherwise entitled to receive under any plan, policy, practice or program of
or any contract or agreement with the Company at or subsequent to the
Termination Date shall be payable in accordance with such plan, policy, practice
or program or contract or agreement except as explicitly modified by this
Agreement.
4.10. Company to Pay Benefits During Pendency of Dispute
Either party may, within ten (10) days after its receipt of a Notice of
Termination given by the other party or a Notice of Employment Continuation from
the Employee specifying that Good Reason exists, provide notice to the other
party that a dispute exists concerning the circumstances set forth in such
notice, in which event such dispute shall be resolved in accordance with Article
6. Notwithstanding the pendency of any such dispute and notwithstanding any
provision herein to the contrary, the Company will (i) continue to pay Employee
the Adjusted Base Salary in effect when the notice giving rise to the dispute
was given and (ii) continue Employee as a participant in all compensation and
benefit plans in which Employee was participating when the notice giving rise to
the dispute until the dispute is finally resolved or, with respect to a Notice
of Employee, the date of termination specified in such notice, if earlier, but,
in each case, not past the Expiration Date. If (x)(i) the Company gives a Notice
of Termination to Employee and (ii) Employee disputes the termination as
contemplated by this Section 4.10, or (y)(i) the Employee gives a Notice of
Termination for Good Reason or a Notice of Employment Continuation specifying
that Good Reason exists and (ii) the Company disputes such termination as
contemplated by this Section 4.10, and, in either case, (z) such dispute is
finally resolved in favor of the Company in accordance with Article VI, then
Employee shall be required to repay to the Company amounts paid to Employee
under this Section 4.10 (including the value of benefits received) but only if,
and to the extent, Employee is not otherwise entitled to receive such amounts
under this Agreement. The period for the delivery of a Notice of Employment
Continuation shall be extended in the event of the delivery of a notice in
accordance with the first sentence of this Section 4.10 until thirty (30) days
following the resolution of such dispute.
4.11. Employment Continuation
If the Employee has a "Purchase Note" outstanding under the Exercise
Agreement or the "Unamortized Premium Payment" under the Split Dollar Agreement
is greater than zero, the Employee shall have the right either (i) in lieu of
delivering a Notice of Termination in accordance with Section 4.1 or (ii) within
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thirty (30) days of the Company's delivery of a Notice of Termination in
accordance with Section 4.2 (other than in connection with a Termination for
Employee's Misconduct), to deliver a Notice of Employment Continuation. If
applicable, the Employee may specify in such Notice of Employment Continuation
that Good Reason exists. The period for delivery of a Notice of Employment
Continuation shall be subject to extension in accordance with Section 4.10. Upon
the delivery of a Notice of Employment Continuation, this Agreement shall
terminate and be of no further force or effect and Employee's employment with
the Company shall be governed instead by a Supplemental Employment Agreement in
the form of Exhibit 4.11 hereto that will be executed and delivered by the
Company and the Employee immediately upon the delivery of such Notice of
Employment Continuation.
ARTICLE 5
Confidential Information and Non-Competition
5.1. Confidential Information
(a) Employee recognizes that the services to be performed by him
hereunder are special, unique, and extraordinary and that, by reason of his
employment with the Company, he may acquire Confidential Information concerning
the operation of the Company, the use or disclosure of which would cause the
Company substantial loss and damages which could not be readily calculated and
for which no remedy at law would be adequate. Accordingly, Employee agrees that
he will not (directly or indirectly) at any time, whether during or after his
employment hereunder, (i) knowingly use for an improper personal benefit any
Confidential Information that he may learn or has learned by reason of his
employment with the Company or (ii) disclose any such Confidential Information
to any Person except (A) in the performance of his obligations to the Company
hereunder, (B) as required by applicable law, (C) in connection with the
enforcement of his rights under this Agreement, (D) in connection with any
disagreement, dispute or litigation (pending or threatened) between Employee and
the Company or (E) with the prior written consent of the Board of Directors. As
used herein, "Confidential Information" includes information with respect to the
Company's products, facilities and methods, research and development, trade
secrets and other intellectual property, systems, patents and patent
applications, procedures, manuals, confidential reports, product price lists,
customer lists, financial information, business plans, prospects or
opportunities; provided, however, that such term, shall not include any
information that (x) is or becomes generally known or available other than as a
result of a disclosure by Employee or (y) is or becomes known or available to
Employee on a non-confidential basis from a source (other than the Company)
which, to Employee's knowledge, is not prohibited from disclosing such
information to Employee by a legal, contractual, fiduciary or other obligation
to the Company.
(b) Employee confirms that all Confidential Information is the
exclusive property of the Company. All business records, papers and documents
kept or made by Employee while employed by the Company relating to the business
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of the Company shall be and remain the property of the Company at all times.
Upon the request of the Company at any time, Employee shall promptly deliver to
the Company, and shall retain no copies of, any written materials, records and
documents made by Employee or coming into his possession while employed by the
Company concerning the business or affairs of the Company other than personal
materials, records and documents (including notes and correspondence) of
Employee not containing proprietary information relating to such business or
affairs. Notwithstanding the foregoing, Employee shall be permitted to retain
copies of, or have access to, all such materials, records and documents relating
to any disagreement, dispute or litigation (pending or threatened) between
Employee and the Company.
(c) The Company recognizes that the Employee maintains his contacts on
the computer system and that the list of contacts will remain the exclusive
ownership of the employee.
5.2. Non-Competition
(a) While employed hereunder and for the (i) a period of one (1) year
thereafter or (ii) the period of two (2) years after the Termination Date, if
this Agreement is terminated and the Employee is entitled to receive
compensation and benefits under either Section 4.5 or Section 4.7 (the
"Restricted Period"), Employee shall not, unless he receives the prior written
consent of the Board of Directors, own an interest in, manage, operate, join,
control, lend money or render financial or other assistance to or participate in
or be connected with, as an officer, employee, partner, stockholder, consultant
or otherwise, (A) any Person (x) which competes with the Company in investing or
consulting with small and medium sized businesses in the United States with
regard to change of control transactions in which the transaction utilizes
employee stock ownership plans, or (y) which provides or proposes to provide
services to any Person which is a client of the Company as of the Termination
Date or to which the Company has outstanding loans or in which the Company then
has investments (including warrants or options), or (B) any potential client of
the Company with which the Company has discussed a client, loan or investment
relationship within 12 months prior to, as applicable, the end of Employee's
employment or the Termination Date. Notwithstanding the foregoing, (i) in the
event Employee is entitled to receive compensation and benefits under Section
4.5, Employee may terminate this Section 5.2(a) by renouncing and releasing the
obligation of the Company to pay any future compensation or benefits under
Section 4.5, but such termination shall not apply to any other provision of this
Agreement including, without limitation, Section 5.1 and (ii) in the event that
the Employee terminates his employment pursuant to Section 4.1 without Good
Reason, this Section 5.1 shall apply for only one (1) year after the Termination
Date.
(b) Employee has carefully read and considered the provisions of this
Section 5.2 and, having done so, agrees that the restrictions set forth in this
Section 5.2 (including the Restricted Period, scope of activity to be restrained
and the geographical scope) are fair and reasonable and are reasonably required
-15-
for the protection of the interests of the Company, its officers, directors,
employees, creditors and shareholders. Employee understands that the
restrictions contained in this Section 5.2 may limit his ability to engage in a
business similar to the Company's business, but acknowledges that he will
receive sufficiently high remuneration and other benefits from the Company
hereunder to justify such restrictions.
(c) During the Restricted Period, Employee shall not, whether for his
own account or for the account of any other Person (excluding the Company),
intentionally (i) solicit, endeavor to entice or induce any employee of the
Company to terminate his employment with the Company or accept employment with
anyone else or (ii) interfere in a similar manner with the business of the
Company.
(d) In the event that any provision of this Section 5.2 relating to the
Restricted Period or the areas of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period or areas such court
deems reasonable and enforceable, the Restricted Period or areas of restriction
deemed reasonable and enforceable by the court shall become and thereafter be
the maximum time period and/or areas.
5.3. Stock Ownership
Nothing in this Agreement shall prohibit Employee from acquiring or
holding any issue of stock or securities of any Person that has any securities
registered under Section 12 of the Exchange Act, listed on a national securities
exchange or quoted on the automated quotation system of the National Association
of Securities Dealers, Inc. so long as (i) Employee is not deemed to be an
"affiliate" of such Person as such term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act of 1933, as amended, and (ii) Employee and
members of his immediate family do not own or hold more than 3% of any voting
securities of any such Person.
5.4. Injunctive Relief
Employee acknowledges that a breach of any of the covenants contained
in this Article 5 may result in material irreparable injury to the Company for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach, any payments remaining under the terms of this Agreement shall cease and
the Company shall be entitled to obtain a temporary restraining order or a
preliminary or permanent injunction restraining Employee from engaging in
activities prohibited by this Article 5 or such other relief as may required to
specifically enforce any of the covenants contained in this Article 5. Employee
agrees to and hereby does submit to in personam jurisdiction before each and
every such court for that purpose.
ARTICLE 6
Dispute Resolution
In the event a dispute shall arise between the parties as to whether
the provisions of this Agreement have been complied with (a "Dispute"), the
parties agree to resolve such Dispute in accordance with the following
procedure:
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(a) A meeting shall be held promptly between the Parties, attended by
(in the case of the Company) by one or more individuals with decision-making
authority regarding the Dispute, to attempt in good faith to negotiate a
resolution of the Dispute.
(b) If, within 10 days after such meeting, the parties have not
succeeded in negotiating a resolution of the Dispute, the parties agree to
submit the Dispute to mediation in accordance with the Commercial Mediation
Rules of the American Arbitration Association except that Disputes with regard
to the existence of a Disability shall be resolved in accordance with the
definition of the term "Disability" above.
(c) The parties will jointly appoint a mutually acceptable mediator,
seeking assistance in such regard from the American Arbitration Association if
they have been unable to agree upon such appointment within 10 days following
the 10-day period referred to in clause (b) above.
(d) Upon appointment of the mediator, the parties agree to participate
in good faith in the mediation and negotiations relating thereto for 15 days.
(e) If the parties are not successful in resolving the Dispute through
mediation within such 15-day period, the parties agree that the Dispute shall be
settled by arbitration in accordance with the Expedited Procedures of the
Commercial Arbitration Rules of the American Arbitration Association.
(f) The fees and expenses of the mediator/arbitrators shall be borne
solely by the non-prevailing party or, in the event there is no clear prevailing
party, as the mediator/arbitrators deem appropriate.
(g) The Company shall reimburse Employee, on a current basis, for 50%
of all reasonable legal fees and expenses, if any, incurred by Employee in
connection with any Dispute; provided, however, that in the event the resolution
of such Dispute in accordance with this Article 6 includes a finding denying, in
all material respects, Employee's claims in such Dispute, Employee shall be
required to reimburse the Company, over a period not to exceed 12 months from
the date of such resolution, for all sums advanced to Employee with respect to
such Dispute pursuant to this paragraph (g).
(h) Except as provided above, each party shall pay its own costs and
expenses (including, without limitation, attorneys' fees) relating to any
mediation/arbitration proceeding conducted under this Article 6.
(i) All mediation/arbitration conferences and hearings will be held in
the greater Washington, D.C. area.
(j) In the event there is any disputed question of law involved in any
arbitration proceeding, such as the proper legal interpretation of any provision
of this Agreement, the arbitrators shall make separate and distinct findings of
all facts material to the disputed question of law to be decided and, on the
-17-
basis of the facts so found, express their conclusion of the question of law.
The facts so found shall be conclusive and binding on the parties, but any legal
conclusion reached by the arbitrators from such facts may be submitted by either
party to a court of law for final determination by initiation of a civil action
in the manner provided by law. Such action, to be valid, must be commenced
within 20 days after receipt of the arbitrators' decision. If no such civil
action is commenced within such 20-day period, the legal conclusion reached by
the arbitrators shall be conclusive and binding on the parties. Any such civil
action shall be submitted, heard and determined solely on the basis of the facts
found by the arbitrators. Neither of the parties shall, or shall be entitled to,
submit any additional or different facts for consideration by the court. In the
event any civil action is commenced under this paragraph (b), the party who
prevails or substantially prevails (as determined by the court) in such civil
action shall be entitled to recover from the other party all costs, expenses and
reasonable attorneys' fees incurred by the prevailing party in connection with
such action and on appeal.
(k) Except as limited by paragraph (b) above, the parties agree that
judgment upon the award rendered by the arbitrators may be entered in any court
of competent jurisdiction. In the event legal proceedings are commenced to
enforce the rights awarded in an arbitration proceeding, the party who prevails
or substantially prevails in such legal proceeding shall be entitled to recover
from the other party all costs, expenses and reasonable attorneys' fees incurred
by the prevailing party in connection with such legal proceeding and on appeal.
(l) Except as provided above, (i) no legal action may be brought by
either party with respect to any Dispute and (ii) all Disputes shall be
determined only in accordance with the procedures set forth above.
ARTICLE 7
Miscellaneous
7.1. No Mitigation or Offset
The provisions of this Agreement are not intended to, nor shall they be
construed to, require that Employee mitigate the amount of any payment provided
for in this Agreement by seeking or accepting other employment, nor shall the
amount of any payment provided for in this Agreement be reduced by any
compensation earned by Employee as the result of employment by another employer
or otherwise. Without limitation of the foregoing, the Company's obligations to
make the payments to Employee required under this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set off,
counterclaim, recoupment, defense or other claim, right or action that the
Company may have against Employee, except that the Company may deduct from any
amount required to be reimbursed to the Company by Employee under Section 4.10
or Article VI(a) the amount of any payment which the Company is then required to
make to Employee hereunder.
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7.2. Assignability
The obligations of Employee hereunder are personal and may not be
assigned or delegated by Employee or transferred in any manner whatsoever, nor
are such obligations subject to involuntary alienation, assignment or transfer.
The Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder as provided in Section 7.5.
7.3. Notices
All notices and all other communications provided for in the Agreement
shall be in writing and addressed (i) if to the Company, at its principal office
address or such other address as it may have designated by written notice to
Employee for purposes hereof, directed to the attention of the Board of
Directors with a copy to the Secretary of the Company and (ii) if to Employee,
at his residence address on the records of the Company or to such other address
as he may have designated to the Company in writing for purposes hereof. Each
such notice or other communication shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, except that any notice of change of address shall be effective
only upon receipt.
7.4. Severability
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
7.5. Successors: Binding Agreement
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company, by agreement in form and substance
reasonable acceptable to Employee, to expressly assume 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. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement. As used herein, the term
"Company" shall include any successor to its business and/or assets as aforesaid
which executes and delivers the Agreement provided for in this Section 7.5 or
which otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.
(b) This Agreement and all rights of Employee hereunder shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devisees and legatees. If Employee should die while any amounts would be payable
-19-
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee's devisee, legatee, or other designee or, if there be no such designee,
to Employee's estate.
7.6. Tax Matters
The Company shall withhold from all payments hereunder all applicable
taxes (federal, state or other) which it is required to withhold therefrom
unless Employee has otherwise paid (or made other arrangements satisfactory) to
the Company the amount of such taxes.
7.7. Amendments and Waivers
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by Employee and such member of the Board of Directors as may be specifically
authorized by the Board of Directors. No waiver by either party hereto at any
time of any breach by the other party hereto of, or in compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
7.8. Entire Agreement, Termination of Other Agreements
This Agreement is an integration of the parties' agreement and no
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement.
7.9. Governing Law
THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD
TO ITS CONFLICT OF LAWS PROVISION.
7.10. Counterparts
This Agreement may be executed in or more counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
AMERICAN CAPITAL STRATEGIES, LTD.
By: /s/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx, President
EMPLOYEE:
/s/ Xxxx Xxxxxxxxxx
-----------------------------
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EXHIBIT 4.5(d)
RELEASE AGREEMENT
THIS RELEASE AGREEMENT (the "Agreement"), is made as of the ____
day of ______, _____, by and between AMERICAN CAPITAL STRATEGIES, LTD., a
Delaware corporation with its principal place of business at 0 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx (the "Corporation"), and XXXX XXXXXXXXXX,
an individual ("Xxxxxxxxxx").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to a certain Second Amended
and Restated Employment Agreement dated as of June 7, 1999 (the "Employment
Agreement"); and
WHEREAS, the execution and delivery of this Release Agreement as of
the date hereof is a requirement of Section 4.5(d) thereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Mutual Release.
(a) Xxxxxxxxxx, on his own behalf and on behalf of his heirs,
representatives and assigns, hereby waives, releases, and forever and
irrevocably discharges the Corporation, and its agents, attorneys, officers,
directors, employees, successors and assigns (collectively, the "Corporation
Released Parties") from any and all obligations, debts, demands, claims and
liabilities of every kind and nature, either in law or in equity, that
Xxxxxxxxxx may now have, may in the future have or may ever have had, against
the Corporation Released Parties arising in any manner from or in any manner
related, directly or indirectly, to Xxxxxxxxxx'x service or employment as a
director, officer and/or an employee of the Corporation including, without
limitation, the circumstances relating to the termination thereof; excepting
only the continuing obligations of the Corporation resulting from the provisions
of the Employment Agreement, and the Option Exercise Agreement and the Split
Dollar Agreement, each entered into by and among the parties hereto bearing the
date of _________ (collectively, the "Surviving Agreements").
(b) The Corporation, on its own behalf and on behalf of its
successors and assigns, hereby waives, releases, and forever and irrevocably
discharges Xxxxxxxxxx, and his agents, attorneys, heirs, representatives and
assigns (collectively, the "Xxxxxxxxxx Released Parties") from any and all
obligations, debts, demands, claims and liabilities of every kind and nature,
either in law or in equity, that the Corporation may now have, may in the future
have or may ever have had against the Xxxxxxxxxx Released Parties arising in any
manner from or in any manner related to, directly or indirectly, Xxxxxxxxxx'x
service or employment as a director, officer and/or an employee of the
Corporation including, without limitation, the circumstances relating to the
termination thereof; excepting only the continuing obligations of Xxxxxxxxxx
resulting from the provisions of the Surviving Agreements.
2. Miscellaneous. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof and
supersedes all prior negotiations, representations and agreements, either
written or oral, between them except for the Surviving Agreements. There are no
conditions, agreements, or representations between the parties except those
expressed herein. This Agreement may be altered, modified, amended, or repealed
only by a duly executed written instrument signed by the parties hereto. This
Agreement shall be governed by the law of the State of Maryland, without giving
effect to the conflicts of laws provisions thereof. Each party binds himself or
itself and his or its heirs, successors, legal representatives and assigns in
respect to all covenants and agreements contained herein. Except as specifically
contemplated herein, nothing herein shall be construed as giving any right or
benefit hereunder to anyone other than the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date first hereinabove written.
XXXXXXXXXX:
WITNESS:
(Seal)
----------------------- ------------------------------
Xxxx Xxxxxxxxxx
AMERICAN CAPITAL STRATEGIES, LTD.,
A Delaware Corporation
By: (Seal)
------------------------------
Name:
------------------------------
Title
------------------------------
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EXHIBIT 4.11
SUPPLEMENTAL EMPLOYMENT AGREEMENT
THIS SUPPLEMENTAL EMPLOYMENT AGREEMENT (this "Agreement") is entered
into as of ____________ (the "Effective Date") by and between AMERICAN CAPITAL
STRATEGIES, LTD., a Delaware corporation (the "Company"), and XXXX XXXXXXXXXX
(the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and the Employee are parties to an Amended and
Restated Employment Agreement dated as of June 7, 1999 (the "Old Agreement")
pursuant to which the Company employed the Employee on the terms and conditions
set forth therein; and
WHEREAS, the Employee delivered a Notice of Employment Continuation
pursuant to the Old Agreement and pursuant thereto the Old Agreement was
terminated and this Agreement became effective and the parties desire to amend
and restate the Old Agreement in its entirety, on the terms and conditions
herein set forth; and
WHEREAS, the parties hereto are also parties to an Option Exercise
Agreement dated as of June 7, 1999 (the "Option Exercise Agreement"), and a
Split Dollar Agreement dated as of _______, 1999 (the "Split Dollar Agreement").
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 8
Definitions and Interpretations
8.1. Definitions
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, the following terms shall have the
following respective meanings:
"Base Salary" shall have the meaning specified in Section 3.1.
"Board of Directors" shall mean the Board of Directors of the Company.
"Compensation Committee" shall mean the Compensation Committee of the
Board of Directors or such other entity as may be designated for a particular
function by the Board of Directors.
"Confidential Information" shall have the meaning specified in Section
5.1(a).
"Continuation Period" shall have the meaning specified in Section
4.4(a).
"Dispute" shall have the meaning specified in Article 6.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officers" shall refer to the President, the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, all Executive Vice Presidents
and all other officers designated as Executive Officers by the Board of
Directors.
"Expiration Date" shall have the meaning specified in Section 2.2.
"ISO Plan" shall have the meaning specified in Section 3.3.
"Misconduct" shall mean the commission by Employee of acts that are
dishonest and demonstrably injurious to the Company (monetarily or otherwise) in
any material respect. For purposes of this definition, no act or failure to act
on Employee's part shall be considered "Misconduct" if done or omitted to be
done by Employee in good faith and in the reasonable belief that such act or
failure to act was in the best interest of the Company or in furtherance of
Employee's duties and responsibilities described in Section 2.3.
"Notice of Termination" shall mean a notice purporting to terminate
Employee's employment in accordance with Section 4.1 or 4.2. Such notice shall
specify the effective date of such termination, which date shall not be less
than ten (10) days (one (1) day in the case of a termination by the Company for
Misconduct).
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust and an unincorporated organization.
"Term" shall have the meaning specified in Section 2.2.
"Termination Date" shall mean the termination date specified in a
Notice of Termination delivered in accordance with this Agreement.
8.2. Interpretations
(a) In this Agreement, unless a clear contrary intention appears, (i)
the words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision, (ii) reference to any Article or Section, means such Article
or Section hereof, (iii) the words "including" (and with correlative meaning
-2-
"include") means including, without limiting the generality of any description
preceding such term, and (iv) where any provision of this Agreement refers to
action to be taken by either party, or which such party is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such party.
(b) The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
ARTICLE 9
Employment: Term, Positions and Duties, Etc.
9.1. Employment
The Company agrees to employ Employee and Employee agrees to accept
employment with the Company, in each case on the terms and conditions set forth
in this Agreement.
9.2. Term of Employment
Unless sooner terminated pursuant to Article 4, the term of Employee's
employment under this Agreement (the "Term") shall commence on the Effective
Date and continue until the later to occur of (i) repayment in full of all
Payment Notes (as defined in and issued pursuant to the Option Exercise
Agreement), (ii) such date as the Employer's Interest in the Policy (as such
terms are defined in the Split Dollar Agreement) is zero and (iii) the
expiration of the Continuation Period.
9.3. Positions and Duties
(a) While employed hereunder, Employee shall serve as an Assistant
Secretary of the Company. The Employee's duties as Assistant Secretary shall be
limited to providing consulting services to the Company with regard to matters
previously attended to by the Employee as an employee of the Corporation.
Nothing herein shall obligate the Employee to spend more than 10 hours per year
on Company business. While employed hereunder, Employee shall report to the
Board of Directors or such person as is designated by the Board of Directors.
(b) The Company agrees to use its reasonable best efforts to cause
Employee to be elected or appointed as an Assistant Secretary of the Company.
(c) While employed hereunder, Employee shall be entitled to undertake
other employment not otherwise in violation of the terms of this Agreement.
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ARTICLE 10
Compensation and Benefits
10.1. Base Salary
For services rendered by Employee under this Agreement, the Company
shall pay to Employee an annual base salary ("Base Salary") of $200.
10.2. Other Benefits
Employee shall not be entitled to receive any employee benefits, fringe
benefits and other perquisites that may be offered by the Company to its
officers or employees except as specifically provided herein except that
Employee shall be entitled to continue participation in the benefits provided
under the Split Dollar Agreement and Option Exercise Agreement.
10.3. Indemnification
The Company agrees to defend, indemnify and hold harmless the Employee
from and against any liability and expenses arising by reason of Employee's
acting as an officer of the Company, in accordance with and to the fullest
extent permitted by law. The Company shall maintain directors and officers
liability insurance for the Employee in such amounts of coverage as are
reasonably available to the Company and to the extent such is attainable at
reasonable cost and are permitted by law.
10.4. Payment of Accrued Base Salary Vacation Pay, etc.
The Company shall pay to Employee a lump sum amount for (i) any unpaid
Adjusted Base Salary earned under the Old Agreement prior to the Effective Date,
(ii) all unused vacation time accrued by Employee as of the Effective Date in
accordance with Section 3.4 of the Old Agreement, (iii) all unpaid benefits
earned or vested, as the case may be, by Employee as of the Effective Date under
any and all incentive or deferred compensation plans or programs of the Company
and (iv) any amounts in respect of which Employee has requested, and is entitled
to, reimbursement in accordance with Section 3.5 of the Old Agreement as of the
Effective Date.
10.5. Additional Rights in Connection With Disability
In the event that prior to the delivery by the Employee of his Notice
of Employment Continuation, the Company had delivered a Notice of Termination to
Employee stating that such Termination was for reason of a Disability, the
Employee shall be entitled to the benefits and payments set forth in this
Section 3.4:
(a) Base Salary and Target Bonus. The Company shall continue to pay to
Employee the Adjusted Base Salary under the Old Agreement in effect as of the
date on which the Notice of Termination was delivered for two (2) years
following the Effective Date (but in no event less than 365 days) (such period
being the "Continuation Period") which amount shall be reduced by any amount
payable to Employee under any disability plan maintained by the Company for the
benefit of Employee. In addition, the Employee shall be entitled to continue to
participate in the Annual Bonus Plan for two (2) years following the Effective
Date with the second anniversary of the Effective Date being the Expiration Date
for purposes of Section 3.2 of the Old Agreement.
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(b) Insurance Benefits, etc. The Company shall at all times during the
Continuation Period, without charge to Employee or Employee's dependents, cause
Employee and Employee's eligible dependents to be covered by and to participate
in, to the fullest extent allowable under the terms thereof, all life,
accidental death and dismemberment and health insurance plans and programs that
may be offered to the senior officers of the Company so that Employee will
receive, at all times during the Continuation Period, the same benefits under
such plans and programs as Employee would have been entitled to receive had he
remained an Executive Officer of the Company. In no event shall Employee's
continuation period for purposes of Part 6 of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("COBRA"), begin prior to the end of
Employee's coverage under the Company's group health plan as provided in this
paragraph (b).
(c) End of Disability. Should the Employee's Disability (as defined in
the Old Agreement) end during the pendency of the payments and benefits
contemplated under this Section 3.4, the Company may discontinue such payments
and benefits if it offers to reemploy Employee under the terms of the Old
Agreement.
(d) Options. To the extent not already vested, all options of the
Employee under the ISO Plan as defined in the Old Agreement that have not vested
as of Effective Date and that would vest within one year of the Effective Date
shall vest and shall become immediately exercisable.
10.6. Additional Rights in Connection With Terminations by Employee for
Good Reason or by the Company for Other than Misconduct or Disability
In the event that Employee delivered a statement with his Notice of
Employment Continuation that Good Reason (as defined in the Old Agreement)
exists or if the Company delivered a Notice of Termination pursuant to Section
4.2 of the Old Agreement and did not specify that Misconduct or a Disability
exists, the Employee shall also be entitled to the payments and benefits set
forth in this Section 3.5.
(a) Base Salary and Target Bonus. The Company shall continue to pay to
Employee the Adjusted Base Salary under the Old Agreement in effect as of the
Effective Date for the Continuation Period. In addition, the Employee shall be
entitled to continue to participate in the Annual Bonus Plan for two (2) years
following the Effective Date with the second anniversary of the Effective Date
being the Expiration Date for purposes of Section 3.2 of the Old Agreement. The
amount payable to Employee under this paragraph (a) is in lieu of, and not in
addition to, any severance payment due to or become due to Employee under any
separate agreement or contract between Employee and the Company or pursuant to
any severance payment plan, program or policy of the Company.
(b) Insurance Benefits, etc. The Company shall at all times during the
Continuation Period, without charge to Employee or Employee's dependents, cause
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Employee and Employee's eligible dependents to be covered by and to participate
in, to the fullest extent allowable under the terms thereof, all life,
accidental death and dismemberment and health insurance plans and programs that
may be offered to the senior officers of the Company so that Employee will
receive, at all times during the Continuation Period, the same benefits under
such plans and programs as Employee would have been entitled to receive had he
remained an Executive Officer of the Company; provided, however, in the event
Employee becomes covered during the Continuation Period by another employer's
group plan or programs which provide benefits to Employee and his dependents
comparable to those being provided to Employee under this paragraph (b)
(provided with respect to any such group health plan, such plan does not contain
any exclusion or limitation with respect to any pre-existing conditions), then
the Company's similar plans and programs shall no longer be liable for any
benefits under this paragraph (b). In no event shall Employee's COBRA
continuation period begin prior to the end of Employee's coverage under the
Company's group health plan as provided in this paragraph (b).
(c) Options. All options of the Employee under the ISO Plan (or similar
plan) that have not vested as of the Effective Date shall vest and become
immediately exercisable. The Company shall issue to the Employee within 30 days
of the Effective Date an amount of new options as separate securities in
exchange for and in an amount equal to the Employee's vested ISO Plan options.
Such new options shall have the same exercise price and other terms as the ISO
Plan options including a requirement that these options be registered under
applicable securities laws if the ISO Plan options are registered.
(d) Release. Notwithstanding anything in this Section 3.5 to the
contrary, as a condition to the receipt of any benefit under this Section 3.5,
Employee must first execute and deliver to the Company a mutual release as set
out in Exhibit 3.5(d) hereto (which the Company shall be obligated to execute
upon Employee's delivery thereof), releasing the Company, its officers, Board of
Directors, employees and agents from any and all claims and from any and all
causes of action of any kind or character that Employee may have arising out of
Employee's employment with the Company on or prior to the Effective Date, but
excluding any claims and causes of action that Employee may have arising under
or based upon this Agreement.
ARTICLE 11
Termination
11.1. Termination of Employee
Employee may, at any time prior to the Expiration Date, terminate his
employment hereunder for any reason by delivering a Notice of Termination to the
Chairman of the Board of Directors.
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11.2. Termination of the Company
The Company may, at any time prior to the Expiration Date, terminate
Employee's employment hereunder for any reason by delivering a Notice of
Termination to Employee; provided, however, such notice may be delivered only if
the Employee has committed Misconduct.
11.3. Company to Pay Benefits During Pendency of Dispute
The Employee, within ten (10) days after its receipt of a Notice of
Termination given by the Company, provide notice to the Company that a dispute
exists concerning the occurrence of Misconduct, in which event such dispute
shall be resolved in accordance with Article 6. Notwithstanding the pendency of
any such dispute and notwithstanding any provision herein to the contrary, the
Company will (i) continue to pay Employee all salary in effect when the notice
giving rise to the dispute was given and (ii) continue Employee as a participant
in all compensation and benefit plans in which Employee was participating when
the notice giving rise to the dispute until the dispute is finally resolved. If
such dispute is finally resolved in favor of the Company in accordance with
Article 6, the Employee shall be required to repay to the Company amounts paid
to Employee under this Section 4.3 (including the value of benefits received).
11.4. Non-exclusivity of Rights
Nothing in this Agreement shall prevent or limit Employee's continuing
or future participation in any plan, program, policy or practice provided by the
Company for which Employee may qualify, nor shall anything herein limit or
otherwise affect such rights as Employee may have under any other contract or
agreement with the Company. Amounts that are vested benefits or that Employee is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company at or subsequent to the Effective
Date shall be payable in accordance with such plan, policy, practice or program
or contract or agreement except as explicitly modified by this Agreement.
ARTICLE 12
Confidential Information and Non-Competition
12.1. Confidential Information
(a) Employee recognizes that the services to be performed by him
hereunder are special, unique, and extraordinary and that, by reason of his
employment with the Company, he may acquire Confidential Information concerning
the operation of the Company, the use or disclosure of which would cause the
Company substantial loss and damages which could not be readily calculated and
for which no remedy at law would be adequate. Accordingly, Employee agrees that
he will not (directly or indirectly) at any time, whether during or after his
employment hereunder, (i) knowingly use for an improper personal benefit any
Confidential Information that he may learn or has learned by reason of his
employment with the Company or (ii) disclose any such Confidential Information
to any Person except (A) in the performance of his obligations to the Company
hereunder, (B) as required by applicable law, (C) in connection with the
enforcement of his rights under this Agreement, (D) in connection with any
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disagreement, dispute or litigation (pending or threatened) between Employee and
the Company or (E) with the prior written consent of the Board of Directors. As
used herein, "Confidential Information" includes information with respect to the
Company's products, facilities and methods, research and development, trade
secrets and other intellectual property, systems, patents and patent
applications, procedures, manuals, confidential reports, product price lists,
customer lists, financial information, business plans, prospects or
opportunities; provided, however, that such term, shall not include any
information that (x) is or becomes generally known or available other than as a
result of a disclosure by Employee or (y) is or becomes known or available to
Employee on a non-confidential basis from a source (other than the Company)
which, to Employee's knowledge, is not prohibited from disclosing such
information to Employee by a legal, contractual, fiduciary or other obligation
to the Company.
(b) Employee confirms that all Confidential Information is the
exclusive property of the Company. All business records, papers and documents
kept or made by Employee while employed by the Company relating to the business
of the Company shall be and remain the property of the Company at all times.
Upon the request of the Company at any time, Employee shall promptly deliver to
the Company, and shall retain no copies of, any written materials, records and
documents made by Employee or coming into his possession while employed by the
Company concerning the business or affairs of the Company other than personal
materials, records and documents (including notes and correspondence) of
Employee not containing proprietary information relating to such business or
affairs. Notwithstanding the foregoing, Employee shall be permitted to retain
copies of, or have access to, all such materials, records and documents relating
to any disagreement, dispute or litigation (pending or threatened) between
Employee and the Company.
(c) The Company recognizes that the Employee maintains his contacts on
the computer system and that the list of contacts will remain the exclusive
ownership of the employee.
12.2. Non-Competition
(a) At the election of the Employee, for one (1) year after the
Effective Date (the "Restricted Period"), Employee shall not, unless he receives
the prior written consent of the Board of Directors, own an interest in, manage,
operate, join, control, lend money or render financial or other assistance to or
participate in or be connected with, as an officer, employee, partner,
stockholder, consultant or otherwise, (A) any Person (x) that competes with the
Company in investing or consulting with small and medium sized businesses in the
United States with regard to change of control transactions in which the
transaction utilizes employee stock ownership plans, or (y) that provides or
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proposes to provide services to any Person which is a client of the Company as
of the Termination Date or to which the Company has outstanding loans or in
which the Company then has investments (including warrants or options), or (B)
any potential client of the Company with which the Company has discussed a
client, loan or investment relationship within 12 months prior to or the
Effective Date. The Employee may only elect to be subject to this Section 5.2 by
providing written notice of such election to the Company before the Effective
Date or within thirty (30) days thereafter and such effectiveness may be renewed
for successive additional one (1) year periods by providing written notice to
the Company not less than twenty (20) days before the expiration of the
Restricted Period then effect.
(b) Employee has carefully read and considered the provisions of this
Section 5.2 and, having done so, agrees that the restrictions set forth in this
Section 5.2 (including the Restricted Period, scope of activity to be restrained
and the geographical scope) are fair and reasonable and are reasonably required
for the protection of the interests of the Company, its officers, directors,
employees, creditors and shareholders. Employee understands that the
restrictions contained in this Section 5.2 may limit his ability to engage in a
business similar to the Company's business, but acknowledges that he will
receive sufficiently high remuneration and other benefits from the Company
hereunder to justify such restrictions.
(c) During the Restricted Period, Employee shall not, whether for his
own account or for the account of any other Person (excluding the Company),
intentionally (i) solicit, endeavor to entice or induce any employee of the
Company to terminate his employment with the Company or accept employment with
anyone else or (ii) interfere in a similar manner with the business of the
Company.
(d) In the event that any provision of this Section 5.2 relating to the
Restricted Period or the areas of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period or areas such court
deems reasonable and enforceable, the Restricted Period or areas of restriction
deemed reasonable and enforceable by the court shall become and thereafter be
the maximum time period and/or areas.
12.3. Stock Ownership
Nothing in this Agreement shall prohibit Employee from acquiring or
holding any issue of stock or securities of any Person that has any securities
registered under Section 12 of the Exchange Act, listed on a national securities
exchange or quoted on the automated quotation system of the National Association
of Securities Dealers, Inc. so long as (i) Employee is not deemed to be an
"affiliate" of such Person as such term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act of 1933, as amended, and (ii) Employee and
members of his immediate family do not own or hold more than 3% of any voting
securities of any such Person.
12.4. Injunctive Relief
Employee acknowledges that a breach of any of the covenants contained
in this Article 5 may result in material irreparable injury to the Company for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach, any payments remaining under the terms of this Agreement shall cease and
the Company shall be entitled to obtain a temporary restraining order or a
preliminary or permanent injunction restraining Employee from engaging in
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activities prohibited by this Article 5 or such other relief as may required to
specifically enforce any of the covenants contained in this Article 5. Employee
agrees to and hereby does submit to in personam jurisdiction before each and
every such court for that purpose.
ARTICLE 13
Dispute Resolution
In the event a dispute shall arise between the parties as to whether
the provisions of this Agreement have been complied with (a "Dispute"), the
parties agree to resolve such Dispute in accordance with the following
procedure:
(a) A meeting shall be held promptly between the Parties, attended by
(in the case of the Company) by one or more individuals with decision-making
authority regarding the Dispute, to attempt in good faith to negotiate a
resolution of the Dispute.
(b) If, within 10 days after such meeting, the parties have not
succeeded in negotiating a resolution of the Dispute, the parties agree to
submit the Dispute to mediation in accordance with the Commercial Mediation
Rules of the American Arbitration Association except that Disputes with regard
to the existence of a Disability shall be resolved in accordance with the
definition of the term "Disability" above.
(c) The parties will jointly appoint a mutually acceptable mediator,
seeking assistance in such regard from the American Arbitration Association if
they have been unable to agree upon such appointment within 10 days following
the 10-day period referred to in clause (b) above.
(d) Upon appointment of the mediator, the parties agree to participate
in good faith in the mediation and negotiations relating thereto for 15 days.
(e) If the parties are not successful in resolving the Dispute through
mediation within such 15-day period, the parties agree that the Dispute shall be
settled by arbitration in accordance with the Expedited Procedures of the
Commercial Arbitration Rules of the American Arbitration Association.
(f) The fees and expenses of the mediator/arbitrators shall be borne
solely by the non-prevailing party or, in the event there is no clear prevailing
party, as the mediator/arbitrators deem appropriate.
(g) The Company shall reimburse Employee, on a current basis, for 50%
of all reasonable legal fees and expenses, if any, incurred by Employee in
connection with any Dispute; provided, however, that in the event the resolution
of such Dispute in accordance with this Article 6 includes a finding denying, in
all material respects, Employee's claims in such Dispute, Employee shall be
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required to reimburse the Company, over a period not to exceed 12 months from
the date of such resolution, for all sums advanced to Employee with respect to
such Dispute pursuant to this paragraph (g).
(h) Except as provided above, each party shall pay its own costs and
expenses (including, without limitation, attorneys' fees) relating to any
mediation/arbitration proceeding conducted under this Article 6.
(i) All mediation/arbitration conferences and hearings will be held in
the greater Washington, D.C. area.
(j) In the event there is any disputed question of law involved in any
arbitration proceeding, such as the proper legal interpretation of any provision
of this Agreement, the arbitrators shall make separate and distinct findings of
all facts material to the disputed question of law to be decided and, on the
basis of the facts so found, express their conclusion of the question of law.
The facts so found shall be conclusive and binding on the parties, but any legal
conclusion reached by the arbitrators from such facts may be submitted by either
party to a court of law for final determination by initiation of a civil action
in the manner provided by law. Such action, to be valid, must be commenced
within 20 days after receipt of the arbitrators' decision. If no such civil
action is commenced within such 20-day period, the legal conclusion reached by
the arbitrators shall be conclusive and binding on the parties. Any such civil
action shall be submitted, heard and determined solely on the basis of the facts
found by the arbitrators. Neither of the parties shall, or shall be entitled to,
submit any additional or different facts for consideration by the court. In the
event any civil action is commenced under this paragraph (b), the party who
prevails or substantially prevails (as determined by the court) in such civil
action shall be entitled to recover from the other party all costs, expenses and
reasonable attorneys' fees incurred by the prevailing party in connection with
such action and on appeal.
(k) Except as limited by paragraph (b) above, the parties agree that
judgment upon the award rendered by the arbitrators may be entered in any court
of competent jurisdiction. In the event legal proceedings are commenced to
enforce the rights awarded in an arbitration proceeding, the party who prevails
or substantially prevails in such legal proceeding shall be entitled to recover
from the other party all costs, expenses and reasonable attorneys' fees incurred
by the prevailing party in connection with such legal proceeding and on appeal.
(l) Except as provided above, (i) no legal action may be brought by
either party with respect to any Dispute and (ii) all Disputes shall be
determined only in accordance with the procedures set forth above.
ARTICLE 14
Miscellaneous
14.1. No Mitigation or Offset
The provisions of this Agreement are not intended to, nor shall they be
construed to, require that Employee mitigate the amount of any payment provided
for in this Agreement by seeking or accepting other employment, nor shall the
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amount of any payment provided for in this Agreement be reduced by any
compensation earned by Employee as the result of employment by another employer
or otherwise. Without limitation of the foregoing, the Company's obligations to
make the payments to Employee required under this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set off,
counterclaim, recoupment, defense or other claim, right or action that the
Company may have against Employee, except that the Company may deduct from any
amount required to be reimbursed to the Company by Employee under Section 4.10
or Article 6(a) the amount of any payment which the Company is then required to
make to Employee hereunder.
14.2. Assignability
The obligations of Employee hereunder are personal and may not be
assigned or delegated by Employee or transferred in any manner whatsoever, nor
are such obligations subject to involuntary alienation, assignment or transfer.
The Company shall have the right to assign this Agreement and to delegate all
rights, duties and obligations hereunder as provided in Section 7.5.
14.3. Notices
All notices and all other communications provided for in the Agreement
shall be in writing and addressed (i) if to the Company, at its principal office
address or such other address as it may have designated by written notice to
Employee for purposes hereof, directed to the attention of the Board of
Directors with a copy to the Secretary of the Company and (ii) if to Employee,
at his residence address on the records of the Company or to such other address
as he may have designated to the Company in writing for purposes hereof. Each
such notice or other communication shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, except that any notice of change of address shall be effective
only upon receipt.
14.4. Severability
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
14.5. Successors: Binding Agreement
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company, by agreement in form and substance
reasonable acceptable to Employee, to expressly assume 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. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
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succession shall be a breach of this Agreement. As used herein, the term
"Company" shall include any successor to its business and/or assets as aforesaid
which executes and delivers the Agreement provided for in this Section 7.5 or
which otherwise becomes bound by all terms and provisions of this Agreement by
operation of law.
(b) This Agreement and all rights of Employee hereunder shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devisees and legatees. If Employee should die while any amounts would be payable
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee's devisee, legatee, or other designee or, if there be no such designee,
to Employee's estate.
14.6. Tax Matters
The Company shall withhold from all payments hereunder all applicable
taxes (federal, state or other) which it is required to withhold therefrom
unless Employee has otherwise paid (or made other arrangements satisfactory) to
the Company the amount of such taxes.
14.7. Amendments and Waivers
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by Employee and such member of the Board of Directors as may be specifically
authorized by the Board of Directors. No waiver by either party hereto at any
time of any breach by the other party hereto of, or in compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
14.8. Entire Agreement, Termination of Other Agreements
This Agreement is an integration of the parties' agreement and except
with regard to such definitions as are set forth in the Old Agreement and are
specifically referenced herein, no agreement or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party that are not set forth expressly in this Agreement.
14.9. Governing Law
THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD
TO ITS CONFLICT OF LAWS PROVISION.
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14.10. Counterparts
This Agreement may be executed in or more counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
AMERICAN CAPITAL STRATEGIES, LTD.
By:
--------------------------------
Xxxxx Xxxxxx, President
EMPLOYEE:
----------------------------------
Xxxx Xxxxxxxxxx
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EXHIBIT 3.5(d)
RELEASE AGREEMENT
THIS RELEASE AGREEMENT (the "Agreement"), is made as of the ____
day of ______, _____, by and between AMERICAN CAPITAL STRATEGIES, LTD., a
Delaware corporation with its principal place of business at 0 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx (the "Corporation"), and XXXX XXXXXXXXXX,
an individual ("Xxxxxxxxxx").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to a certain Supplemental
Employment Agreement dated as of ________ (the "Employment Agreement"); and
WHEREAS, the execution and delivery of this Release Agreement as of
the date hereof is a requirement of Section 3.5(d) thereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Mutual Release.
(a) Xxxxxxxxxx, on his own behalf and on behalf of his heirs,
representatives and assigns, hereby waives, releases, and forever and
irrevocably discharges the Corporation, and its agents, attorneys, officers,
directors, employees, successors and assigns (collectively, the "Corporation
Released Parties") from any and all obligations, debts, demands, claims and
liabilities of every kind and nature, either in law or in equity, that
Xxxxxxxxxx may now have, may in the future have or may ever have had, against
the Corporation Released Parties arising in any manner from or in any manner
related, directly or indirectly, to Xxxxxxxxxx'x service or employment as a
director, officer and/or an employee of the Corporation including, without
limitation, the circumstances relating to the termination thereof; excepting
only the continuing obligations of the Corporation resulting from the provisions
of the Employment Agreement, and the Option Exercise Agreement and the Split
Dollar Agreement, each entered into by and among the parties hereto bearing the
date of _________ (collectively, the "Surviving Agreements").
(b) The Corporation, on its own behalf and on behalf of its
successors and assigns, hereby waives, releases, and forever and irrevocably
discharges Xxxxxxxxxx, and his agents, attorneys, heirs, representatives and
assigns (collectively, the "Xxxxxxxxxx Released Parties") from any and all
obligations, debts, demands, claims and liabilities of every kind and nature,
either in law or in equity, that the Corporation may now have, may in the future
have or may ever have had against the Xxxxxxxxxx Released Parties arising in any
manner from or in any manner related to, directly or indirectly, Xxxxxxxxxx'x
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service or employment as a director, officer and/or an employee of the
Corporation including, without limitation, the circumstances relating to the
termination thereof; excepting only the continuing obligations of Xxxxxxxxxx
resulting from the provisions of the Surviving Agreements.
2. Miscellaneous. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof and
supersedes all prior negotiations, representations and agreements, either
written or oral, between them except for the Surviving Agreements. There are no
conditions, agreements, or representations between the parties except those
expressed herein. This Agreement may be altered, modified, amended, or repealed
only by a duly executed written instrument signed by the parties hereto. This
Agreement shall be governed by the law of the State of Maryland, without giving
effect to the conflicts of laws provisions thereof. Each party binds himself or
itself and his or its heirs, successors, legal representatives and assigns in
respect to all covenants and agreements contained herein. Except as specifically
contemplated herein, nothing herein shall be construed as giving any right or
benefit hereunder to anyone other than the parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the date first hereinabove written.
XXXXXXXXXX:
WITNESS:
(Seal)
------------------------ ---------------------------------
Xxxx Xxxxxxxxxx
AMERICAN CAPITAL STRATEGIES, LTD.,
A Delaware Corporation
By: (Seal)
-------------------------------
Name:
------------------------
Title
------------------------
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