RELOCATION AGREEMENT
Exhibit 10.6
This
Relocation Agreement (“Agreement”) is entered into on this
22nd day of August 2008 by and
between CapitalSource Inc. (“Company”) and Xxxxxx X. Xxxxxxx (“Employee”).
RECITALS
WHEREAS, CapitalSource Bank, a California Industrial Bank and an indirect wholly owned
subsidiary of the Company, has purchased certain assets of Fremont Bank located in California (the
“Transaction”);
WHEREAS, upon the close of the Transaction, at the request of Company, Employee became a dual
employee of both the Company and CapitalSource Bank;
WHEREAS, Employee shall be an employee of CapitalSource Bank for an initial period of 12
months commencing July 25, 2008, unless terminated sooner pursuant to the Letter Agreement (the
“Bank Employment Period”);
WHEREAS, the headquarters of CapitalSource Bank shall be located in downtown Los Angeles,
California and Employee shall temporarily relocate his primary residence from Bethesda, Maryland to
the Los Angeles, California metropolitan area during the Bank Employment Period;
ACCORDINGLY, for good and valuable consideration, including, but not limited to, Employee’s
agreement to relocate his primary residence and accept employment with CapitalSource Bank during
the Bank Employment Period, the Company agrees to provide Employee with the following relocation
benefits:
1. Moving of Household Goods/Packing. Company shall pay for the assistance of a relocation
company, as well as the packing, transporting, and delivering of household items and automobiles
(i) from Employee’s residence in Bethesda, Maryland to a location selected by Employee as his
primary residence in the Los Angeles, California metropolitan area, and (ii) from Employee’s
residence in Los Angeles to Bethesda, Maryland upon Employee’s determination to relocate back to
Bethesda, Maryland during or upon expiration of the Bank Employment Period.
2. Housing. Company shall pay (or reimburse) Employee’s rent, utilities, and security deposit
while Employee resides in the Los Angeles metropolitan area during the Bank Employment Period.
3. Airline Flights. The Company shall reimburse Employee for the cost of airline tickets
between the Los Angeles metropolitan area and Bethesda, Maryland for Employee and his spouse and
children in connection with his relocation to Los Angeles and return to Bethesda, Maryland, as well
as two additional round-trips in the interim. The tickets must be purchased at least 7 days in
advance of traveling, unless otherwise agreed by the parties.
4. Relocation Allowance. Upon execution of this Agreement, Company shall pay to Employee a
one-time lump sum in the amount of $10,000 as a relocation allowance.
5. Car Registration Fees. The Company shall also reimburse Employee for automobile state
license and registration fees and incremental automobile insurance costs that Employee incurs.
6. Reimbursement for Tax Advice. Some or all of the relocation benefits received by Employee
under this Agreement may be subject to State and Federal income taxes. The Company shall reimburse
Employee for the cost of obtaining expert tax advice to determine the tax consequences resulting
from Employee’s receipt of the benefits and payments under this Agreement, as well as his temporary
relocation to the State of California.
7. Maintenance Costs of Maryland Residence. The Company shall reimburse Employee for any
actual incremental costs Employee incurs for the oversight and maintenance of Employee’s home in
Bethesda, Maryland during his absence, up to $500 per month. To be reimbursed under this
Agreement, such incremental costs must be incurred by Employee solely because he is not residing in
his Bethesda Maryland home during the Bank Employment Period. For avoidance of any doubt,
reimbursable costs under this paragraph include payments to certain individuals to walk through,
clean and inspect the Bethesda, Maryland home on a weekly basis. Employee shall not be entitled
to reimbursement under this Agreement of routine costs incurred by Employee for the maintenance of
his home in Bethesda, Maryland.
8. Children Educational Expenses. The Company shall reimburse Employee for any expenses
incurred by Employee in the selection of and application to a school or schools for Employee’s
children to attend in the Los Angeles metropolitan area during the Bank Employment Period. The
Company shall reimburse Employee for any tuition-related payments made to Employee’s children’s
school(s) in and around Bethesda, Maryland, which are forfeited as a result of Employee’s
relocation to the Los Angeles metropolitan area. During the Bank Employment Period, Employee shall
not be required to move his family outside the Los Angeles metropolitan area.
9. Gross-Up Payment. Company shall pay to Employee a payment (the “Gross-Up Payment”) in an
amount required to fully reimburse Employee for all federal, state, local income and employment
taxes owed on any payment or benefit received by Employee under this Agreement, including any taxes
owed as a result of receiving the Gross-Up Payment.
10. Termination or Resignation: The benefits and payments set forth in this Agreement are not
conditioned upon Employee remaining employed with CapitalSource Bank through the Bank Employment
Period. All of the benefits and payments in this Agreement shall be due and payable for the Bank
Employment Period notwithstanding termination of Employee’s employment with CapitalSource and/or
CapitalSource Bank, and Employee and his family shall have the right to continue to reside in the
California residence leased by the Company until the end of the lease term without any additional
cost to Employee. Notwithstanding any other provision to the contrary, if Employee is terminated
for Cause pursuant to the terms of his Employment Agreement, Employee’s rights to any future or
unpaid benefits under this
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Agreement shall cease, and Employee shall not be eligible for any unused portion of the
benefits described in this Agreement.
11. Employment Status. The terms of Employee’s Employment Agreement with CapitalSource shall
supersede any conflicting term herein except that the parties acknowledge that Employee’s temporary
relocation to Los Angeles and employment by CapitalSource Bank in and of themselves shall not
constitute “Good Reason” or result in a breach by either party of the terms of the Employment
Agreement.
12. Employee Acknowledgement. Employee has read this Agreement and understands the terms. By
signing below, Employee acknowledges that he has read and fully understands the provisions
contained herein. Employee understands that he has a right to consult with an attorney as to the
meaning and legal effect of this Agreement and has been given an opportunity to do so. This
Agreement contains the entire agreement between the parties concerning its subject matter and may
be amended or modified only in writing signed by both parties hereto. This Agreement shall be
construed in accordance with the laws of the State of Maryland.
[SIGNATURE PAGE FOLLOWS]
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/s/ XXXXXX X. XXXXXXX
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Date: | 8/22/08 | ||||||
/s/
XXXX X. XXXXXXX
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Date: | 8/22/08 | ||||||
Xxxx X. Xxxxxxx
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