Attached files
file | filename |
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8-K - 8-K - CAPITALSOURCE INC | w76332e8vk.htm |
EX-3.1 - EXHIBIT 3.1 - CAPITALSOURCE INC | w76332exv3w1.htm |
EX-10.1 - EXHIBIT 10.1 - CAPITALSOURCE INC | w76332exv10w1.htm |
EX-99.1 - EX-99.1 - CAPITALSOURCE INC | w76332exv99w1.htm |
Exhibit 10.2
CONSULTING AGREEMENT
This CONSULTING AGREEMENT, (this Agreement),
is dated November 16, 2009 and shall be
effective as of January 1, 2010, between CapitalSource Inc. (the Company) and Dean C. Graham (the
Consultant).
WHEREAS, the Company desires to obtain the consulting services of the Consultant as an
independent contractor to assist with strategic operations, to provide advice and counsel to its
Executive Chairman and Co-Chief Executive Officers and to provide such other advice, counsel and
assistance as its Executive Chairman and Co-Chief Executive Officers may require;
WHEREAS, the Consultant has heretofore entered into an Employment Agreement dated as of April
4, 2005, and amended on each of November 22, 2005, February 1, 2007 and December 31, 2008 (the
Employment Agreement) with the Company, and the Company and he have entered into a Separation and
General Release Agreement dated as of the date hereof (the Separation Agreement) providing for
termination of his services as an employee and officer of the Company and its subsidiaries on
mutually agreed upon terms; and
WHEREAS, the parties desire to enter into this Agreement to set forth the terms and conditions
for the consulting relationship of the Consultant with the Company.
NOW, THEREFORE, it is AGREED as follows:
1. Engagement.
(a) During the term of this Agreement (as set out in Section 5 hereof), the Consultant shall
serve as a consultant to the Company. The Consultant shall make himself reasonably available to
perform consulting services as reasonably requested by the Executive Chairman or either of the
Co-Chief Executive Officers of the Company. The Consultant shall render advisory and consulting
services to the Company of the type customarily performed by persons serving in similar consulting
capacities, consistent with the knowledge and experience possessed by the Consultant. The
Consultants services shall be limited to assisting the Executive Chairman and the Co-Chief
Executive Officers in respect of the Companys strategic operations and providing advice and
counsel to the Executive Chairman and either of the Co-Chief Executive Officers of the Company.
The Consultant shall perform his services at the Companys offices in Chevy Chase, Maryland or at
such other locations as the Consultant shall determine in his sole discretion. For the sake of
clarity, Consultant shall not be required to perform the services contemplated herein at any
particular time or place and may chose to provide the services by telephone or conference call.
(b) The parties acknowledge and agree that the Consultants fulfillment of his obligations to
the Company hereunder will not require the Consultants full business time. In the time that the
Consultant is not providing services to the Company, he may accept other employment or engagements
and may participate in any other activities without obtaining the Companys approval thereof;
provided, however, that such other employment, engagements and activities do not involve any
violation of Section 7 of the Employment Agreement.
2. Compensation and Expenses. The Company agrees to pay the Consultant during the
term of this Agreement a retainer of $750,000, payable in equal quarterly installments on January
4, 2010, March 15, 2010, July 1, 2010 and October 1, 2010. The Company shall reimburse the
Consultant for all reasonable, ordinary and necessary travel and lodging expenses incurred by the
Consultant in connection with the Consultants performance of services hereunder, provided that all
such expenses are in accordance with the Companys policies applicable to similar expenses incurred
by its executive management employees. The Consultant will invoice the Company for any
reimbursement of expenses payable hereunder in respect of services performed, and each such invoice
shall be accompanied by receipts and other supporting documentation of expenses incurred as
reasonably requested by the Company. The Company shall pay the expense reimbursements that are due
under this Agreement within 30 days after receiving an invoice from the Consultant for such
amounts.
3. Participation in Retirement and Employee Benefit Plans. Subject to Section 4(c) of
the Separation Agreement, nothing in this Agreement shall entitle the Consultant to participate in
or accrue additional benefits under any plan of the Company relating to stock options, stock
purchases, equity award, deferred compensation, pension, thrift, profit sharing, employee stock
ownership, group life insurance, medical coverage, disability insurance, education, or other
retirement or employee benefits, except to the extent that the Consultant may be entitled to
continuation coverage (COBRA), at the Consultants expense, or other coverage under the health and
dental insurance plan maintained by the Company under Section 4(c) terms of the Separation
Agreement.
4. Office and Support Services. During the term of this Agreement, the Company shall
provide the Consultant with reasonable office space, supplies, assistant and other appropriate
support services and facilities that are reasonably required by the Consultant in connection with
his performance of services hereunder, in each case as reasonably determined by the Company. In
accordance with Section 4(d) of the Separation Agreement, the Company hereby agrees to assign and
transfer Consultants current mobile telephone number to the Consultant.
5. Term. The term of this Agreement shall be for twelve months commencing on January
1, 2010. The parties by mutual written agreement may extend the term of this Agreement. The
Company may terminate this Agreement at
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any time on or after March 31, 2010 with 30 days advance notice; provided, however, unless
such termination is due to Consultants repeated and willful failure to respond to requests for
services from the Companys Executive Chairman or either of the Co-Chief Executive Officers that
continues for at least thirty days after written notice from the Company, the Company shall be
obligated to pay Consultant an amount equal to the remaining payments provided in Section 2 in a
single lump sum on the date of such termination.
6. Indemnification. During the term of this Agreement and thereafter, the Company
agrees to indemnify and hold Consultant and Consultants heirs and representatives harmless, to the
maximum extent permitted by law, against any and all damages, costs, liabilities, losses and
expenses (including reasonable attorneys fees) as a result of any claim or proceeding (whether
civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether
civil, criminal, administrative or investigative), against Consultant that arises out of or relates
to Consultants service hereunder at the request of the Company after the date hereof, and to
promptly advance to Consultant or Consultants heirs or representatives such expenses upon written
request with appropriate documentation of such expense upon receipt of an undertaking by Consultant
or on Consultants behalf to repay such amount if it shall ultimately be determined that Consultant
is not entitled to be indemnified by the Company. The Company shall be entitled to assume the
defense of any such proceeding and Consultant will use reasonable efforts to cooperate with such
defense. To the extent that Consultant in good faith determines that there is an actual or
potential conflict of interest between the Company and Consultant in connection with the defense of
a proceeding, Consultant shall so notify the Company and shall be entitled to separate
representation at the Companys expense by counsel selected by Consultant (provided that the
Company may reasonably object to the selection of counsel within ten (10) business days after
notification thereof) which counsel shall cooperate, and coordinate the defense, with the Companys
counsel and minimize the expense of such separate representation to the extent consistent with
Consultants separate defense. This Section 6 shall continue in effect after the termination of
Consultants consultancy or the termination of this Agreement.
7. Confidentiality and Non-Disclosure; Standards. The Company and Consultant
acknowledge and agree that during the term of this Agreement Consultant will have access to and may
assist in developing Company Confidential Information (as defined below). During and after the
term of this Agreement, Consultant will not knowingly use, disclose or transfer any Company
Confidential Information other than as authorized in writing by the Company or within the scope of
Consultants duties with the Company. Anything herein to the contrary notwithstanding, the
provisions of this Section 7 shall not apply (i) when disclosure is required by law or by any
court, arbitrator, mediator or administrative or legislative body (including any committee thereof)
with actual or apparent jurisdiction to order Consultant to disclose or make accessible any
information; (ii) with respect to any other litigation, arbitration or mediation involving this
Agreement, including, but
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not limited to, the enforcement of this Agreement; (iii) as to information that becomes generally
known to the public or within the relevant trade or industry other than due to Consultant s
violation of this Section 7; or (iv) as to information that is or becomes available to Consultant
on a non-confidential basis from a source which is entitled to disclose it to Consultant.
For purposes of this Section 7, the term Company Confidential Information shall mean
information known to Consultant to constitute non-public information or trade secrets or
proprietary information belonging to the Company or other confidential financial information,
operating budgets, strategic plans or research methods, personnel data, projects or plans, or
non-public information regarding the terms of any existing or pending lending transaction between
the Company and an existing or pending client or customer, in each case, received by Consultant in
connection with his duties with the Company. Notwithstanding anything to the contrary contained
herein, the general skills, knowledge and experience gained during Consultants service to the
Company or information publicly available or generally known within the industry or trade in which
the Company competes, shall not be considered Company Confidential Information.
8. Attorneys Fees. The Company shall advance Consultant (and his beneficiaries) any
and all costs and expenses (including without limitation attorneys fees and other charges of
counsel) incurred by Consultant (or any of his beneficiaries) in resolving any controversy, dispute
or claim arising out of or relating to this Agreement, Consultants consultancy with the Company,
or the termination thereof; provided that Consultant shall reimburse the Company any advances on a
net after-tax basis to cover expenses incurred by Consultant for claims if it is judicially
determined that the Company is the prevailing party, or brought by Consultant that are judicially
determined to be frivolous or advanced in bad faith. Pending the resolution of any such claim,
Consultant (and his beneficiaries) shall continue to receive all payments and benefits described in
Section 2 of this Agreement. This Section 8 shall continue in effect after the termination of
Consultants consultancy or the termination of this Agreement. The Company hereby agrees to
directly pay Consultants attorneys fees incurred in connection with negotiation and execution of
this Agreement.
9. No Assignments. This Agreement is personal to each of the parties hereto. Neither
party may assign or delegate any rights or obligations hereunder without first obtaining the
written consent of the other party hereto. However, in the event of the death of the Consultant
all rights to receive payments hereunder shall become rights of the Consultants estate.
10. Amendment; Modification; Waiver. No amendments or additions to this Agreement
shall be binding unless in writing and signed by both of the parties hereto. No delay or failure
at any time on the part of the Company in
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exercising any right, power or privilege under this Agreement, or in enforcing any provision of this
Agreement, shall impair any such right, power, or privilege, or be construed as a waiver of any
default or as any acquiescence therein, or shall affect the right of the Company thereafter to
enforce each and every provision of this Agreement in accordance with its terms.
11. Section Headings. The section headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the interpretation of this
Agreement.
12. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.
13. Notices. For purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
hand delivered, sent by overnight courier, or mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, or transmitted by telegram, telecopy or telex, addressed
as follows:
If to the Company:
CapitalSource Finance LLC
4445 Willard Avenue
12th Floor
Chevy Chase, Maryland 20815
Attn: Chief Legal Officer
Facsimile Number: 301-841-2380
4445 Willard Avenue
12th Floor
Chevy Chase, Maryland 20815
Attn: Chief Legal Officer
Facsimile Number: 301-841-2380
If to the Consultant:
Dean C. Graham
Address last shown on the Companys Records
Address last shown on the Companys Records
or to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.
14. Independent Contractor Status. The Consultant shall have sole control of the
manner and means of performing his services under this Agreement and shall complete such services
in accordance with his own means and methods of work. The parties intend that the Consultant shall
be an independent contractor, self-employed individual. The Company shall not provide workers
compensation, disability insurance, Social Security or unemployment compensation coverage nor any
other statutory benefit to Consultant. Consultant shall comply at his expense with all applicable
provisions of workers compensation laws, unemployment compensation laws, federal Social Security
law, the Fair Labor Standards Act, OSHA regulations,
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federal, state and local income tax laws, and all other applicable federal, state and local
laws, regulations and codes relating to terms and conditions of employment required to be fulfilled
by employers or independent contractors
15. Governing Law. This Agreement shall be governed by the laws of the State of
Maryland excluding the choice of law rules thereof.
16. Condition. This Agreement and the parties obligations hereunder shall be subject
to the satisfaction of the condition that the Company and the Consultant shall have entered into
the Separation Agreement and that such agreement shall not have been revoked. In the event that
such condition is not satisfied, this Agreement shall be of no further force or effect and the
parties shall have no further obligation or liability hereunder.
17. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto, and supersedes all prior oral or written agreements, commitments or understandings,
with respect to the matters provided for herein. Notwithstanding the foregoing, the parties do not
intend by this Agreement to supersede the Employment Agreement or the Separation Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
in their name and on their behalf as of the date first above written.
/s/ Dean C. Graham | ||||
Dean C. Graham | ||||
Date: November 16, 2009 | ||||
CapitalSource Inc. |
||||
By: | /s/ John K. Delaney | |||
Date: November 16, 2009 |
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