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EXHIBIT 10
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") dated July 14, 1997, is
entered into between XXX ("Employee") and Allied Capital Advisers, Inc. (the
"Company").
Whereas the Employee is employed by the Company in the position of
XXX; and
Whereas the parties wish to memorialize the terms and conditions of
Employee's continued employment with the Company;
Now, Therefore, in consideration of the mutual covenants set forth
below, the parties agree as follows:
1. Duties. Employee, currently serving XXX of the Company, shall
serve the Company on a full time basis with such powers and duties as may be
assigned to him by his immediate supervisor.
2. Compensation.
a. Salary. The Company shall pay Employee bi-weekly at the
minimum rate of XXX dollars ($XXX) per year while employed pursuant to this
Agreement. Employee's minimum salary may be adjusted, subject to annual
review.
b. Bonus. Employee shall be eligible for performance bonus
compensation. Bonus compensation will be awarded annually by the Compensation
Committee of the Board of Directors, subject to the approval by the Board of
Directors. The amount of bonus compensation awarded will be based upon the
Compensation Committee's assessment of Employee's overall contribution to the
Company.
3. Benefits.
a. Employee Stock Ownership Plan ("ESOP"). Employee shall be
eligible for participation in the Company's ESOP, a retirement plan funded by
employer contributions while employed pursuant to this Agreement.
b. Health and Dental Insurance. Employee shall receive benefits
equivalent to those currently provided by the Company's existing health and
dental insurance policies for employees.
c. Other Insurance. Employee shall be covered by the Company's
various other benefits policies for Company employees, including, but not
necessarily limited to, life insurance coverage and accident and disability
coverage. Employee shall be entitled to the same coverage and benefits as
other Company employees.
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d. Vacation. Employee shall be entitled to 4 weeks of vacation
per calendar year, accruing at the beginning of each calendar year. Such
vacation may be taken at any time during the course of that calendar year, at
Employee's discretion, as long as it does not interfere with the normal course
of business. Employee's regular salary shall be paid during this vacation
period.
e. Paid Holidays. Employee shall be entitled to take the same
paid holidays as other Company employees.
4. Severance Package. In the event that Employee's employment with the
Company is terminated pursuant to either paragraph 5a or 5c of this Agreement,
the Company shall provide Employee with the following benefits (the "Severance
Package"):
i. a lump sum payment equal to 9 months of Employee's then-current
salary;
ii. a lump sum payment for any unused accrued vacation days for that
calendar year; and
iii. continued coverage under the Company's existing health and
benefit plans for a 6-month period from the date that written notice of
termination is given. This period will be counted as part of the
continuation period under COBRA.
The Company will pay Employee the amounts specified in paragraphs i and ii
above within two weeks after Employee's last day of employment.
5. Termination. Upon termination of the employment relationship
under any circumstances Employee will not be eligible for any further
compensation or benefits under paragraphs 2 and 3 of this Agreement, other than
those that have already accrued.
a. Company's Termination of Employment. The Company has the
right to terminate Employee's employment with the Company at any time, with or
without cause. If Employee's employment with the Company is terminated by the
Company for any reason other than willful misconduct or gross negligence,
Employee shall receive the Severance Package set forth on paragraph 4 above.
b. Employee's Termination of Employment. Employee has the right
to terminate employment with the Company at any time, with or without cause.
Employee agrees to provide written notice of such termination to the Company.
c. Change of Control, Change of Management. Immediately upon the
occurrence of any of the following events Employee's employment with the
Company will terminate and Employee shall receive the Severance Package set
forth in paragraph 4 above.
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i. any person or group of persons acting together acquires direct
or indirect beneficial ownership of twenty five percent or more of the
combined voting power of the then outstanding securities of the Company.
ii. during any period of two consecutive years, the individuals
who at the beginning of such period constitute the Board of Directors of
the Company cease for any reason to constitute at least a majority
thereof unless each new director was elected by, or on the
recommendation of, a majority of the directors then still in office who
were directors at the beginning of the period; or
iii. the shareholders of the Company approve any one of the
following transactions:
(i) any consolidation or merger of the Company in which
the Company is not the surviving corporation, other than a merger of the
Company in which the holders of the common stock of the Company
immediately prior to the merger have in excess of 50% of the combined
voting power of the then outstanding securities of the combined then
surviving corporation immediately after the merger; or
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company.
iv. Any change in executive management whereby both of the
following occur: Xxxxxxx X. Xxxxxx ceases to hold the position of
Chairman and Chief Executive Officer and Xxxxxx X. Xxxxxxxx ceases to be
a director of the Company.
Under the circumstances set forth in Attachment A, this paragraph will not be
applicable and Employee's employment will not be affected and Employee will not
be eligible for the Severance Package in paragraph 4.
d. Other In addition to the above, any of the following events
shall be deemed to constitute termination of employment by Employee, effective
upon the occurrence of the event:
i. Employee's death; or
ii. A declaration of insanity or other judicial determination that
Employee is of unsound mind; or
iii. Employee is medically incapable of performing his obligations
under this Agreement for a period of five (5) consecutive months.
6. Non-Competition. When Employee's employment with the Company
terminates, Employee will be free to pursue any
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professional opportunities Employee may have, except as follows: Employee
agrees that for twenty-four months after Employee's employment with the Company
terminates under any circumstances Employee will not, directly or indirectly,
provide, solicit or seek to provide, or assist another in providing or
soliciting or seeking to provide financial or investment advice or portfolio
management for:
(a) any entity for which the Company provided such services including
any of the following entities or their subsidiaries including Allied
Capital Corporation, Allied Capital Corporation II, Allied Capital
Lending Corporation, Allied Capital Commercial Corporation, Allied
Investment Corporation, Allied Capital Financial Corporation, Allied
Development Corporation, Allied Investment Corporation II, Allied
Financial Corporation II, Allied Capital Property Corporation, ACLC
Limited Partnership, Allied Capital Credit Corporation, Allied Capital
SBLC Corporation, ALCC Holdings, Inc., ALCC Acceptance Corporation,
Allied Capital Funding, LLC, BMI Holdings, Inc., BMI Acceptance
Corporation, Allied Venture Partnership, Allied Management Partners,
Allied Directors Partners, Allied Capital Acquisition Corporation,
Allied Capital Midwest,LLC, Allied Capital Mortgage Corporation, Allied
Capital Mortgage, LLC, AIN Capital Corporation and Business Mortgage
Investors, Inc. (the" Managed Entities").
(b) any material (e.g. more than 10% of any managed entity's
portofolio)assets that were under the Company's management at any time
during the twelve months before Employee's employment with the Company
terminated.
7. Non-Solicitation. Employee further agrees that for twelve
months after Employee's employment with the Company terminates under any
circumstances that Employee will not, directly or indirectly, solicit to hire
or hire, or assist in another in soliciting to hire or hiring any person who
was employed by the Company within the last 12 months before Employee's
employment with the Company terminated. Nothing in the foregoing shall prohibit
employee from maintaining professional and personal contacts with other persons
employed by the Company.
8. Confidential Information. Employee agrees to keep in
confidence all Confidential Information of the Company and to not use or
disclose Confidential Information. Employee may use or disclose Confidential
Information only
a. as authorized and necessary in performing Employee's job
duties during his employment with the Company;
b. with prior written approval of the Company;
or
c. if and when such information enters the public domain
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in a manner unrelated to Employee.
Confidential Information includes any information relating to the Company and
its subsidiaries, and all entities managed by the Company which if disclosed,
could result in competitive disadvantage to the Company or the companies it
manages. Confidential Information includes:
All non-public information related to investments by the Managed
Entities;
All non-public information related to prospective investments by the
Managed Entities;
All non-public financial information about the Company and its
subsidiaries and the Managed Entities;
All financial projections and pro forma financial information about
the Company and its subsidiaries and the Managed Entities; and
All non-public information concerning employees, including but not
limited to compensation, performance information, positions held and
personal information; all non-public contracts between either the
Company, its subsidiaries and/or any of the Managed Entities, the third
parties.
Employee acknowledges that any breach of this paragraph would cause the
Company harm.
9. Indemnification. The Company shall indemnify Employee in
accordance with the Company's bylaws in effect at the time the claim arose or
indemnification is sought, whichever provides the maximum indemnification.
10. Governing Law and Severability. Regardless of the choice of
law provisions of the State of Maryland or any other jurisdiction, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland. In the event that any one or more of the provisions
contained in this Agreement should for any reason be held to be unenforceable,
such unenforceability shall not affect any other provisions, but the
unenforceable provisions may be redrawn so as to give effect to the parties'
intent to the maximum extent possible under the law.
11. Resolution of Disputes. Employee agrees to use the Company's
Conflict Resolution Procedure ("Procedure") contained in the Employee Handbook
to resolve any and all disputes with the Company, including any dispute arising
out of or relating to this Agreement, or Employee's employment or termination
of employment. This would include claims such as discrimination, harassment,
retaliation or for violation of any other statutory
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right or common law duty. To the extent there are any differences between the
Procedure and this Agreement, the Agreement will control. Arbitration shall be
the exclusive means of final and binding resolution of any dispute covered by
this paragraph. This paragraph shall not apply to disputes arising under the
workers' compensation or unemployment compensation statutes or involving an
alleged breach of paragraphs 6, 7 and/or 8 of this Agreement. The arbitrator's
fees shall be paid by the Company. If Employee is the prevailing party in any
such arbitration, the Company shall pay the Employee's reasonable attorneys'
fees actually incurred.
12. Notice. Any notice to Employee shall be made by certified
mail return receipt requested to:
XXX
Any notice to the Company shall be made by certified mail return receipt
requested:
Xx. Xxxxxxx X. Xxxxxx
Chairman & CEO
Allied Capital Advisers, Inc.
0000 X Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
13. Entire Agreement. This instrument contains the entire
agreement of the parties. It may not be changed orally and may be amended or
supplemented only by an agreement in writing signed by the parties, and in case
of the Company, approved by its Board of Directors.
14. Assignment. This Agreement may not be assigned by either
party hereto without the written consent of the other.
15. Effect of Agreement. This Agreement supersedes and cancels
any and all previous agreements of whatever nature between the Company and
Employee with respect to employment and compensation. This Agreement will
remain in effect until amended or superseded by a subsequent written agreement
signed by both parties.
16. Term. This Agreement shall expire and become void the sooner
of the occurrence of the Phoenix Transaction as referenced in Exhibit A or June
30, 1998.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
Company
By
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Xxxxxxx X. Xxxxxx
Its Chairman & CEO
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Employee
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XXX
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Attachment A - Description of Phoenix Transaction
In the event Allied Capital Corporation, Allied Capital Corporation II, Allied
Capital Lending Corporation, Allied Capital Commercial Corporation and Allied
Capital Advisers, Inc. (the "Allied Capital Entities") merge into a single
entity, thereby combining their assets, liabilities, equity and operations (the
"Phoenix Transaction"), paragraph 5 of the Employment Agreement will not be
applicable and Employee's employment will not be affected and Employee will not
be eligible for the Severance Package in paragraph 4.
Upon occurrence of the Phoenix Transaction, the Employment Agreement shall
terminate, and the obligations therein shall be void and no longer effective.
Notwithstanding the preceding sentence, the following shall occur: The current
incentive stock option plans for the Allied Capital Entities will terminate.
Prior to their termination, Employee will have the ability to exercise all of
his or her vested but unexercised stock options. With respect to stock options
that are not vested as of the date of termination of the option plan, if the
Employee is still employed by the Company as of a scheduled future vesting
date, the Company will pay to Employee a cash bonus on the scheduled future
vesting dates, equal to the amount of the market value of the underlying shares
at the opening of the market on the date of the public announcement of the
Phoenix Transaction less the option exercise price multiplied by the number of
shares vesting on the scheduled future vesting dates.
