Exhibit 10.10
[EXECUTION COPY]
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of September 4, 1999 (the "Original
Agreement Date"), and amended and restated as of October 1, 2000, and
subsequently amended and restated as of December 31, 2001, by and between Fog
Cutter Capital Group Inc. f/k/a Wilshire Real Estate Investment Inc. and Fog Cap
L.P. f/k/a Wilshire Real Estate Partnership L.P. (collectively and individually,
the "Company"), with its principal office at ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, residing at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is currently employed as the Chief Executive
Officer of the Company and is also the Chairman of the Board and a director of
the Company; and
WHEREAS, the Company and Executive desire to enter into this
agreement (the "Agreement") to set forth terms of Executive's employment by the
Company, as such terms are amended and restated as of December 31, 2001.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:
1. TERM OF EMPLOYMENT. Executive's employment under this
Agreement (prior to its amendment and restatement) commenced on September 4,
1999. Except for earlier termination as provided in Section 7 hereof,
Executive's employment under this Agreement (as amended and restated) shall be
for a three (3) year term (the "Employment Term") commencing on October 1, 2000
(the "Commencement Date"). Subject to Section 7 hereof, the Employment Term
shall be automatically extended for additional terms of successive two (2) year
periods unless the Company or Executive gives written notice of the termination
of Executive's employment hereunder at least ninety (90) days prior to the
expiration of the then current Employment Term.
2. POSITIONS. (a) Executive shall serve as Chief Executive
Officer of the Company. Executive shall also serve on the Board of Directors of
the Company (the "Board") as Chairman without additional compensation. During
the term of this Agreement, the Company shall recommend the Executive for
election as a director and as Chairman.
(b) Executive shall report directly to the Board or other managing
body of the Company and shall have such duties and authority, consistent with
his position as Chief
Executive Officer of the Company, as shall be determined from time to time by
the Board, provided that Executive shall have authority comparable to that of
chief executive officers of United States public companies that are similar in
size and business to the Company.
(c) During the Employment Term, Executive shall devote
substantially all of his business time, energy, skill and efforts to the
performance of his duties and responsibilities hereunder; provided, however,
that Executive shall be allowed to (i) serve as a director, employee or
consultant of companies solely owned by the Executive or by Executive's family;
(ii) serve as a director of other companies; (iii) engage in charitable
activities; and (iv) manage his personal financial and legal affairs.
3. BASE SALARY. During the Employment Term on or prior to
December 31, 2001, the Company shall pay Executive a base salary at the annual
rate of not less than $750,000 and during the Employment Term after December 31,
2001, the Company shall pay Executive a base salary at the annual rate of not
less than $250,000. Base salary shall be payable in accordance with the usual
payroll practices of the Company (including withholding). Executive's base
salary shall be subject to annual review by the Board in October of each year
and may be increased, but not decreased, from time to time upon recommendation
of the Compensation Committee of the Board (the "Committee"). The base salary
determined as aforesaid from time to time shall constitute "Base Salary" for
purposes of this Agreement.
4. INCENTIVE COMPENSATION. (a) BONUS. As consideration for
Executive agreeing to amend and restate this Agreement and for past services,
the Company agrees to pay a bonus to Executive of $750,000 (the "Bonus") on or
before January 15, 2002. The Company will apply the Bonus to repay any
outstanding Excess Advance (as defined below) prior to making any payment to
Executive. For purposes of this Agreement, "Excess Advance" shall mean (i) any
advance on the Bonus paid by the Company to the Executive during the 12-month
period commencing on October 1, 2000 and ending on September 30, 2001, which the
parties agree was $0.00 and which outstanding Excess Advance will be netted
against the Bonus and (ii) any other amounts owing by the Executive to the
Company which the parties hereto agree is $0.00. Further, Executive acknowledges
that the Bonus is in consideration of Executive's agreement to provide the
Waiver and General Release of Claims in the form attached hereto as Exhibit 1 on
the date hereof.
(b) OPTIONS. As of the Original Agreement Date, the Company
granted to Executive stock options (the "Initial Options") on 630,000 shares of
the Company's common stock (the "Common Stock") under the Company's Incentive
Stock Plan (the "Incentive Stock Plan"). The Initial Options have an exercise
price equal to the Company's book value per outstanding share as of September
30, 1999, which exercise price is in excess of the market value per share based
on the share price of the Common Stock as of such date. The Initial Options will
be fully exercisable at the time of vesting and 25% of the Initial Options shall
vest on each anniversary of the Original Agreement Date (which will result in
the Initial Options being fully vested on the fourth anniversary of the Original
Agreement Date). In addition, the Executive shall be entitled to participate in
the Company's Incentive Stock Plan and receive nonqualified, incentive or other
options ("Options") to purchase shares of the Company's Common Stock under the
Incentive Stock Plan as determined by the Committee from time to time provided
that the
Incentive Stock Plan is approved by the shareholders of the Company to the
extent required by Section 162(m) of the Code. Notwithstanding the foregoing,
the Company may recommend to the Committee that Executive be granted Options
under a plan other than the Incentive Stock Plan provided that such other plan
contains terms and conditions which are substantially similar to the terms and
conditions of the Incentive Stock Plan, and further provided, that such other
plan is approved by the shareholders of the Company to the extent required by
Section 162(m) of the Code. To the extent permitted under applicable law, any
Options granted to Executive hereunder (including the Initial Options) may be
assigned and transferred by Executive to entities created for or on behalf of
Executive's immediate family for tax planning or other purposes.
(c) OTHER COMPENSATION. The Company may, upon recommendation of
the Committee, award to Executive such other bonuses and compensation as it
deems appropriate and reasonable.
5. EMPLOYEE BENEFITS AND VACATION. (a) During the Employment
Term, Executive shall be entitled to participate in all pension, retirement,
savings, health, insurance, welfare and other employee benefit plans and
arrangements, including, without limitation, any nonqualified deferred
compensation plans, maintained by the Company from time to time for the benefit
of the senior executives of the Company in accordance with their respective
terms as in effect from time to time. To the extent permitted under applicable
law, the Company shall not treat as compensation to Executive fringes and
perquisites provided to Executive or the items under Section 6 below.
(b) As of the Original Agreement Date, the Company agreed to loan
to Executive $50,000 during each year of the Employment Term to purchase shares
of Common Stock of the Company up to a maximum of $250,000. As of December 31,
2001, the outstanding principal balance to the Executive was $112,168.95. The
Company agrees to make additional stock purchase loans up to an additional
$750,000 (or a maximum principal amount outstanding (excluding accrued and/or
compounded interest) of $862,168.95),which stock purchase loans shall be repaid
in accordance with their terms.
(c) During the Employment Term, Executive shall be entitled to
vacation each year in accordance with the Company's policies in effect from time
to time, but in no event less than five (5) weeks paid vacation per calendar
year. Executive shall also be entitled to such periods of sick leave as is
customarily provided by the Company for its senior executive employees.
6. BUSINESS EXPENSES. The Company shall also promptly reimburse
Executive for the travel, entertainment and other business expenses incurred by
Executive in the performance of his duties hereunder, in accordance with the
Company's policies as in effect from time to time.
7. TERMINATION. (a) The employment of Executive under this
Agreement shall terminate upon the occurrence of any of the following events:
(i) the death of Executive;
(ii) the termination of Executive's employment by the
Company due to Executive's Disability pursuant to Section 7(b)
hereof;
(iii) the termination of Executive's employment by
Executive for Good Reason pursuant to Section 7(c) hereof or
non-renewal or expiration of the Employment Term;
(iv) the termination of Executive's employment by the
Company without Cause;
(v) the termination of employment by Executive without
Good Reason upon sixty (60) days prior written notice;
(vi) the termination of employment by Executive for any
reason during the period commencing on the date of a Change in
Control (as such term is hereinafter defined) and ending on the day
immediately prior to the second anniversary of the Change in Control
(such period being referred to herein as the "Change in Control
Protection Period");
(vii) the termination of Executive's employment by the
Company for Cause pursuant to Section 7(e); or
(viii) the retirement of Executive by the Company at or
after his sixty-fifth birthday to the extent such termination is
specifically permitted as a stated exception from applicable federal
and state age discrimination laws based on position and retirement
benefits.
For purposes of this Agreement, the term "Change in Control" shall mean (i) any
"person" as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Act"), other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
(or his affiliates), the Company, any trustee or other fiduciary holding
securities under any employee benefit plan of the Company or any company owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of common stock of the Company, becoming the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 25 percent or more of the
combined voting power of the Company's then-outstanding securities, (ii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in any of clauses (i), (iii) or (iv) of this
sentence or a director whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such
terms are used in Rule 14a-11 promulgated under the Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than a member of the Board) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at least 2/3rds
of the directors then still in office who were either directors at the beginning
of such two year period or whose elect or nomination for election was previously
so approved, cease for any reason to constitute at least a majority of the
Board, (iii) the merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50 percent of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation (provided that
a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person (other than those covered in
the exceptions in clause (i) of this sentence) acquires more than 25 percent of
the combined voting power of the Company's then-outstanding securities shall not
constitute a Change in Control) or (iv) approval by the shareholders of the
Company of a plan of complete liquidation of the Company or the closing of the
sale or disposition by the Company of all or substantially all of the Company's
assets other than the sale of all or substantially all of the assets of the
Company to a person or persons who beneficially own, directly or indirectly, at
least 50 percent or more of the combined voting power of the outstanding voting
securities of the Company at the time of such sale.
(b) DISABILITY. If, by reason of the same or related physical or
mental reasons, Executive is unable to carry out Executive's material duties
pursuant to this Agreement for more than six (6) months in any twelve (12)
consecutive month period (a "Disability") as determined and certified in writing
by two (2) licensed physicians, one of which is Executive's regular attending
physician, the Company may terminate Executive's employment for Disability upon
thirty (30) days prior written notice, by a notice of Disability termination, at
any time thereafter during such twelve (12) month period in which Executive is
unable to carry out his duties as a result of the same or related physical or
mental illness. Such termination shall not be effective if Executive returns to
the full time performance of his material duties within such thirty (30) day
notice period.
(c) TERMINATION FOR GOOD REASON. A Termination for Good Reason
means a termination by Executive by written notice given within sixty (60) days
after the occurrence of the Good Reason event. For purposes of this Agreement,
"Good Reason" shall mean the occurrence or failure to cause the occurrence, as
the case may be, without Executive's express written consent, of any of the
following circumstances, unless such circumstances are fully corrected prior to
the date of termination specified in the Notice of Termination for Good Reason
(as defined in Section 7(d) hereof): (i) any material diminution of Executive's
positions, duties or responsibilities hereunder (except in each case in
connection with the termination of Executive's employment for Cause or
Disability or as a result of Executive's death, or temporarily as a result of
Executive's illness or other absence or as a result of non-renewal or expiration
of the Employment Term), or the assignment to Executive of duties or
responsibilities that are
inconsistent with Executive's position as Chief Executive Officer; (ii) removal
of Executive from, or the non reelection of Executive to, the positions with the
Company specified herein; (iii) a relocation of the Company's principal United
States executive offices to a location more than fifty (50) miles from Portland,
Oregon, or a relocation of Executive away from such principal United States
executive office; (iv) a failure by the Company (A) to continue any bonus plan,
program or arrangement in which Executive is entitled to participate (the "Bonus
Plans") as of December 31, 2001, provided that any such Bonus Plans may be
modified at the Company's discretion from time to time but shall be deemed
terminated if (x) any such plan does not remain substantially in the form in
effect prior to such modification and (y) if plans providing Executive with
substantially similar benefits are not substituted therefor ("Substitute
Plans"), or (B) to continue Executive as a participant in the Bonus Plans and
Substitute Plans on at least the same basis (as of December 31, 2001) as to
potential amount of the bonus and substantially the same level of criteria for
achievability thereof as Executive participated in immediately prior to any
change in such plans or awards, in accordance with the Bonus Plans and the
Substitute Plans; (v) any material breach by the Company of any material
provision of this Agreement; (vi) executive's removal from or failure to be
reelected to the Board or removal or failure to be elected Chairman of the
Board; (vii) a failure of any successor to the Company to assume in a writing
delivered to Executive upon the assignee becoming such the obligations of the
Company hereunder; or (viii) a failure of the Committee to grant Executive an
award of Options in accordance with Section 4 hereof, unless the applicable
circumstances under (i) through (viii) are fully corrected prior to the date of
termination specified in the notice of termination for Good Reason.
(d) NOTICE OF TERMINATION FOR GOOD REASON. A notice of termination
for Good Reason shall mean a notice that shall indicate the specific termination
provision in Section 7(c) relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination for Good
Reason. The failure by Executive to set forth in the notice of termination for
Good Reason any facts or circumstances which contribute to the showing of Good
Reason shall not waive any right of Executive hereunder or preclude Executive
from asserting such fact or circumstance in enforcing his rights hereunder. The
notice of termination for Good Reason shall provide for a date of termination
not less than fifteen (15) nor more than sixty (60) days after the date such
notice of termination for Good Reason is given.
(e) CAUSE. Subject to the notification provisions of Section
7(f) below, Executive's employment hereunder may be terminated by the Company
for Cause. For purposes of this Agreement, the term "Cause" shall be limited to
(i) willful misconduct by Executive with regard to the Company or its business
which has a material adverse effect on the Company; (ii) the refusal of
Executive to follow the proper written direction of the Board of the Company,
provided that the foregoing refusal shall not be "Cause" if Executive in good
faith believes that such direction is illegal, unethical, immoral or detrimental
to interests of the Company or could otherwise result in a breach by Executive
of Executive's fiduciary duty and promptly so notifies the Board; (iii)
Executive being convicted of a felony (other than a felony involving a traffic
offense); (iv) the breach by Executive of any fiduciary duty owed by Executive
to the Company which has a material adverse effect on the Company; (v)
Executive's material fraud with regard
to the Company; or (vi) material breach of Section 11 hereof.
(f) NOTICE OF TERMINATION FOR CAUSE. A notice of termination for
Cause shall mean a notice that shall indicate the specific termination provision
in Section 7(e) relied upon and shall set forth in reasonable detail the facts
and circumstances which provide a basis for termination for Cause. Further, a
notice of termination for Cause shall be required to include a copy of a
resolution duly adopted by at least a majority of the Board at a meeting of the
Board which was called for the purpose of considering such termination and at
which Executive had the right to attend and address the Board, finding that, in
the good-faith opinion of the Board, Executive engaged in conduct set forth in
the definition of "Cause" herein and specifying the particulars thereof in
reasonable detail. The date of termination for a termination for Cause shall be
the date indicated in the notice of termination but shall be no less than 15
days after the date such notice is given. Any purported termination for Cause
which is held by a court or arbitrator not to have been based on the grounds set
forth in this Agreement or not to have followed the procedures set forth in this
Agreement shall be deemed a termination by the Company without Cause.
8. CONSEQUENCES OF TERMINATION OF EMPLOYMENT. (a) DEATH. If
Executive's employment is terminated during the Employment Term by reason of
Executive's death, the employment period under this Agreement shall terminate
without further obligations to Executive's legal representatives under this
Agreement except for: (i) any compensation earned but not yet paid, including
without limitation, any unpaid Bonus due, any amount of Base Salary or deferred
compensation accrued or earned but unpaid, any accrued vacation payable pursuant
to the Company's policies and any unreimbursed business expenses payable
pursuant to Section 6 which amounts shall be promptly paid in a lump sum to the
trustee of the ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Revocable Trust dated September 22,
1987, as amended; (ii) full accelerated vesting under all outstanding
equity-based and long-term incentive plans (with options remaining outstanding
as provided under the applicable stock option plan and a pro rata payment under
any long term incentive plans based on actual coverage under such plans at the
time payments normally would be made under such plans); (iii) subject to Section
10 hereof, any other amounts or benefits owing to Executive under the then
applicable employee benefit plans or policies of the Company, which shall be
paid in accordance with such plans or policies; (iv) payment on a monthly basis
of six months of Executive's Base Salary on the date of death, which shall be
paid to the trustee of the ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Revocable Trust dated
September 22, 1987, as amended; (v) any outstanding stock purchase loan shall
become due and payable in accordance with its terms; and (vi) payment of COBRA
coverage premiums for Executive's spouse and dependents to the extent, and so
long as, they remain eligible for COBRA coverage, but in no event more than one
year. Section 12 hereof shall also continue to apply.
(b) DISABILITY. If Executive's employment is terminated by reason
of Executive's Disability, Executive shall be entitled to receive (i) the
payments and benefits to which his representatives would be entitled in the
event of a termination of employment by reason of his death and (ii) all
disability benefits provided for under the Company's employee benefits plans.
Section 12 hereof shall also continue to apply.
(c) TERMINATION BY EXECUTIVE FOR GOOD REASON OR FOR ANY REASON
DURING THE CHANGE IN CONTROL PROTECTION PERIOD OR TERMINATION BY THE COMPANY
WITHOUT CAUSE OR NONEXTENSION OF THE TERM BY THE COMPANY. If (i) Executive
terminates his employment hereunder for Good Reason during the Employment Term,
(ii) a Change in Control occurs and during the Change in Control Protection
Period Executive terminates his employment for any reason, (iii) Executive's
employment with the Company is terminated by the Company without Cause, or (iv)
Executive's employment with the Company terminates as a result of the Company
giving notice of nonextension of the Employment Term pursuant to Section 1
hereof, Executive shall be entitled to receive (1) in a lump sum within ten (10)
business days after such termination, (A) any unreimbursed business expenses
payable pursuant to Section 6, (B) any Base Salary, bonus, vacation pay or other
deferred compensation accrued or earned under law or in accordance with the
Company's policies but not yet paid at the date of termination, and (C) in
consideration of Executive's agreement to provide the Waiver and General Release
of Claims in the form attached hereto as Exhibit 1 on the date of termination
(subject to any claim or waiver arising between the date hereof and the date of
termination), an amount equal to three month's Base Salary in effect on the date
of termination; (2) accelerated full vesting under all outstanding equity-based
and long-term incentive plans with Options remaining outstanding as provided
under the applicable stock option plan and a pro rata payment under any long
term incentive plans based on actual coverage under such plans, payment being
made at the time payments would normally be made under such plans; (3) subject
to Section 10 hereof, any other amounts or benefits due Executive under the then
applicable employee benefit plans of the Company as shall be determined and paid
in accordance with such plans, policies and practices; (4) one (1) year of
additional service and compensation credit (at his then compensation level) for
pension purposes under any defined benefit type qualified or nonqualified
pension plan or arrangement of the Company, measured from the date of
termination of employment and not credited to the extent that Executive is
otherwise entitled to such credit during such one (1) year period, which
payments shall be made through and in accordance with the terms of the
nonqualified defined benefit pension arrangement if any then exists, or, if not,
in an actuarially equivalent lump sum (using the actuarial factors then applying
in the Company's defined benefit plan covering Executive); (5) one (1) year of
the maximum Company contribution (assuming Executive deferred the maximum amount
and continued to earn his then current salary) measured from the date of
termination under any type of qualified or nonqualified 401(k) plan (payable at
the end of each such year); (6) any outstanding stock purchase loan shall become
due and payable in accordance with its terms; and (7) payment by the Company of
the premiums for Executive's (except in the case of death) and his spouse's and
dependents' health coverage for one year under the Company's health plans which
cover the senior executives of the Company or materially similar benefits.
Payments under clause (7) of this Section 8(c) may, at the discretion of the
Company, be made by continuing participation of Executive in the plan as
terminee, by paying the applicable COBRA premium for Executive and his spouse
and dependents, or by covering Executive and his spouse and dependents under
substitute arrangements; provided, however, that, to the extent Executive incurs
tax that he would not have incurred as an active employee as a result of such
coverage or the benefits provided thereunder, Executive shall promptly receive
from the Company an additional payment in the amount necessary so that Executive
will have no
additional cost for receiving such items, coverage or benefits. In the
circumstances described in each of (i) through (iv) above, Section 12 hereof
shall also continue to apply.
(d) TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION WITHOUT GOOD
REASON OR RETIREMENT. If Executive's employment hereunder is terminated: (i) by
the Company for Cause, (ii) by Executive without Good Reason, or (iii) by the
Company pursuant to Section 7(a)(vii) hereof, Executive shall be entitled to
receive only his Base Salary through the date of termination and any
unreimbursed business expenses payable pursuant to Section 6. In addition, any
outstanding stock purchase loan shall become due and payable in accordance with
its terms. All other benefits (including, without limitation, Options) due
Executive following such termination of employment shall be determined in
accordance with the plans, policies and practices of the Company. In the
circumstances described in this Section 8(d), Section 12 hereof shall continue
to apply.
(e) ACCESS TO BOOKS AND RECORDS. Following termination of
employment of the Executive, the Company shall permit such Executive reasonable
access to retrieve personally (or by his designated representatives) any and all
personal files, personal copies of Company files, and property that are stored
at the Company. Additionally, subject to reimbursement of any out-of-pocket
costs and expenses, the Company shall permit such Executive and his designated
representatives and agents reasonable access to all of the Company's files,
books and records, independent accountants and attorneys, as requested by him,
subject to any confidentiality agreements in effect between the Executive and
the Company.
9. LITIGATION COOPERATION; CONSULTATION. (a) Executive agrees
that for the Employment Term and thereafter, he will reasonably cooperate with
the Company and exercise good faith efforts in the defense of any claim or
investigation, civil or governmental, brought against Company or any of its
current, former or future directors or officers of which Executive has any
personal knowledge, and Company agrees it will reimburse Executive's reasonable
out-of-pocket expenses (including attorney's fees and disbursements and costs)
in providing such assistance. In addition, Executive agrees to reasonably
provide specific operations information to the Company as reasonably requested
in a reasonable and timely manner to assist the Company in continuing and
completing job tasks, activities, assignments, and in continuing effective
relationships with business partners by responding to reasonable inquiries as
needed by telephone at no additional cost to the Company beyond what is provided
by this Agreement, including reimbursement of Executive's reasonable
out-of-pocket expenses in providing such information and other assistance.
(b) The Company agrees that, in addition to and without limiting
the Company's obligation hereunder and otherwise, for the Employment Term and
thereafter, the Company will reasonably cooperate with Executive and exercise
good faith efforts in the defense of any claim or investigation, civil or
governmental, brought against Executive of which the Company or its employees,
officers or directors have any knowledge.
10. NO MITIGATION; NO SET-OFF. In the event of any termination
of employment under Section 8, Executive shall be under no obligation to seek
other employment
and, except as explicitly set forth herein, there shall be no offset against any
amounts due Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that Executive may obtain. Any amounts
due under Section 8 are in the nature of severance payments, or liquidated
damages, or both, and are not in the nature of a penalty. Such amounts are in
lieu of any amounts payable under any other salary continuation or cash
severance arrangement of the Company and to the extent paid or provided under
any other such arrangement shall be offset from the amount due hereunder.
11. DETRIMENTAL ACTIVITY. (a) Executive agrees that he will not
engage in Detrimental Activity (other than as required or compelled by statute
or other law or by court order or subpoena or in connection with court testimony
or deposition) during the Employment Term and following the date of Executive's
termination. For purposes of this Agreement, "Detrimental Activity" shall mean:
(i) the disclosure to anyone outside the Company, or the use in any manner other
than in the furtherance of the Company's business, without written authorization
from the Company, of any confidential information or proprietary information of
the Company (Executive acknowledges and agrees that (i) this is in addition to
his obligations under the confidentiality agreement between Executive and the
Company dated December 15, 1999 and (ii) such agreement remains in full force
and effect); (ii) any attempt, directly or indirectly by Executive of
Solicitation (as defined below) within 6 months of the end of the Employment
Term; (iii) any conduct by Executive which is Self-Dealing and which would
conflict with the Company's interests; (iv) Executive's Disparagement (as
defined herein), or inducement of others to do so, of the Company or its past
and present officers, directors, employees or products; or (v) without written
authorization from the Company, during the period ending 3 months after the end
of the Employment Term, the rendering of services for any organization, or
engaging, directly or indirectly, in any business, which is competitive with the
Company; provided, however, that (i) in the event that Executive decides to
forego the payment of 3 months Base Salary contemplated by Section 8(c) and not
to provide on the date of termination the Mutual Waiver and General Release of
Claims, then the 3 month non-compete contemplated by clause (v) of the
definition of "Detrimental Activity" shall not apply and (ii) owning a less than
5% interest in a publicly traded company shall not be viewed as breaching clause
(v) of the definition of "Detrimental Activity". For purposes of this Agreement,
"Disparagement" means making comments or statements to the press, the Company's
employees, consultants or any individual or entity with whom the Company has a
business relationship or otherwise taking any similar action which could
reasonably be expected to adversely affect in any manner: the conduct of the
business of the Company (including, without limitation, any products or business
plans or prospects); or the business reputation of the Company, or any of its
products, or its past or present officers, directors or employees. For purposes
of this Agreement, "Solicitation" shall mean recruiting, soliciting or inducing
of any nonclerical employee or employees of the Company to terminate his or her
employment with, or otherwise cease his or her relationship with, the Company or
hiring or assisting another person or entity to hire (including, but not limited
to identifying a nonclerical employee to another employer for employment) any
nonclerical employee of the Company or any person who within six (6) months
before had been a nonclerical employee of the Company; or, soliciting or
inducing any customer of the Company to cease his or her relationship with the
Company. For purposes of this
Agreement, "Self Dealing" means, whether during or after the Employment Term,
the use of assets, liabilities or resources of the Company (including assets or
liabilities contemplated to be acquired or incurred by the Company at the time
of termination) or confidential or proprietary information of the Company by
Executive for Executive's personal benefit, including any such use in the direct
or indirect purchase or sale of, or loan or investment of any type in, any
assets of the Company by Executive or for Executive's benefit or between
Executive and a third party which is unrelated to the Company, without the
Company's prior written authorization.
(b) The Company agrees that it shall not, and that it shall cause
its employees, officers and directors to not, make comments or statements, or
induce others to make comments or statements, to the press or any individual or
entity which could reasonably be expected to adversely affect in any manner the
business or personal reputation of Executive. The Company agrees that it shall
not issue any press release in connection with the termination of Executive's
employment with the Company without Executive's prior written approval of such
press release (other than as required by law or regulation).
12. INDEMNIFICATION. (a) The Company agrees that if Executive is
made a party to or threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he is or was a director or officer of
the Company, or is or was serving at the request of the Company as a director,
officer, member, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust, other enterprise or non-profit organization,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a director, officer, member, employee, fiduciary or agent while
serving as a director, officer, member, employee, fiduciary or agent, he shall
be indemnified and held harmless by the Company to the fullest extent authorized
by Maryland or Delaware law, as the same exists or may hereafter be amended,
against all Expenses incurred or suffered by Executive in connection therewith,
and such indemnification shall continue as to Executive even if Executive has
ceased to be an officer, director, member, fiduciary or agent, or is no longer
employed by the company, and shall inure to the benefit of his heirs, executors
and administrators.
(b) As used in this Agreement, the term "Expenses" shall include,
without limitation, damages, losses, judgments, liabilities, fines, penalties,
excise taxes, settlements and costs, attorneys' fees, accountants' fees, and
disbursements and costs of attachment or similar bonds, investigations, and any
expenses of establishing a right to indemnification under this Agreement.
(c) Expenses incurred by Executive in connection with any
Proceeding shall be paid by the Company in advance upon request of Executive and
the giving by Executive of any undertakings required by applicable law.
(d) Executive shall give the Company notice of any claim made
against him for which indemnity will or could be sought under this Agreement. In
addition, Executive shall
give the Company such information and cooperation as it may reasonably require
and as shall be within Executive's power and at such times and places as are
reasonably convenient for Executive.
(e) With respect to any Proceeding as to which Executive notifies
the Company of the commencement thereof:
(i) The Company will be entitled to participate therein
at its own expense; and
(ii) Except as otherwise provided below, to the extent
that it may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof, with
counsel reasonably satisfactory to Executive. Executive also shall have
the right to employ his own counsel in such action, suit or proceeding and
the fees and expenses of such counsel shall be at the expense of the
Company.
(f) The Company shall not be liable to indemnify Executive under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent. The Company shall not settle any action or
claim in any manner which would impose any penalty or limitation on Executive,
or which would adversely affect Executive's reputation or standing in the
business community without Executive's written consent. Neither the Company nor
Executive will unreasonably withhold or delay their consent to any proposed
settlement.
(g) The right to indemnification and the payment of expenses
incurred in defending a Proceeding in advance of its final disposition conferred
in this Section 12 shall not be exclusive of any other right which Executive may
have or hereafter may acquire under any statute, provision of the certificate of
incorporation or by-laws of the Company, agreement, vote of stockholders or
disinterested directors or otherwise.
(h) The Company hereunder agrees to obtain officer and director
liability insurance policies covering Executive and shall maintain at all times
following the Commencement Date and during the Employment Term coverage under
such policies in the aggregate with regard to all officers and directors,
including Executive, of an amount not less than $10 million.
13. SPECIAL TAX PROVISION. (a) Anything in this Agreement to the
contrary notwithstanding, in the event that any amount or benefit paid, payable,
or to be paid, or distributed, distributable, or to be distributed to or with
respect to Executive by the Company (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a change of ownership or effective control
covered by Code Section 280G(b)(2) or any person affiliated with the Company or
such person) as a result of a change in ownership or effective control of the
Company or a direct or indirect parent thereof (or the assets of any of the
foregoing) covered by Code Section 280G(b)(2)
(collectively, the "Covered Payments") is or becomes subject to the excise tax
imposed by or under Section 4999 of the Code (or any similar federal or state
tax that may hereafter be imposed), and/or any interest, penalties or additions
to tax, with respect to such excise tax (such excise tax, together with such
interest penalties and additions to tax, is hereinafter collectively referred to
as the "Excise Tax"), the Company shall pay to Executive an additional amount
(the "Tax Reimbursement Payment") such that after payment by Executive of all
taxes (including, without limitation, any interest or penalties and any Excise
Tax imposed on or attributable to the Tax Reimbursement Payment itself),
Executive retains an amount of the Tax Reimbursement Payment equal to the sum of
(i) the amount of the Excise Tax imposed upon the Covered Payments, and (ii)
without duplication, an amount equal to the product of (A) any deductions
disallowed for federal, state or local income tax purposes because of the
inclusion of the Tax Reimbursement Payment in Executive's adjusted gross income,
and (B) the highest applicable marginal rate of federal, state or local income
taxation, respectively, for the calendar year in which the Tax Reimbursement
Payment is made or is to be made. The intent of this Section 13 is that (a)
Executive, after paying his federal, state and local income tax and payroll
taxes, will be in the same position as if he was not subject to the Excise Tax
under Section 4999 of the Code (or any similar federal or state tax that may be
imposed ) and did not receive the extra payments pursuant to this Section 13 and
this Section 13 shall be interpreted accordingly.
(b) Except as otherwise provided in Section 13(a), for purposes
of determining whether any of the Covered Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) such Covered Payments will be treated
as "parachute payments" (within the meaning of Section 280G(b)(2) of the Code)
and such payments in excess of the Code Section 280G(b)(3) "base amount" shall
be treated as subject to the Excise Tax, unless, and except to the extent that,
the Company's independent certified public accountants appointed prior to the
change in ownership covered by Code Section 280G(b)(2) or legal counsel
(reasonably acceptable to Executive) appointed by such public accountants (or,
if the public accountants decline such appointment and decline appointing such
legal counsel, such independent certified public accountants as promptly
mutually agreed on in good faith by the Company and Executive) (the
"Accountant"), deliver a written opinion to Executive, reasonably satisfactory
to Executive's legal counsel, that Executive has a reasonable basis to claim
that the Covered Payments (in whole or in part) (A) do not constitute "parachute
payments", (B) represent reasonable compensation for services actually rendered
(within the meaning of Section 280G(b)(4) of the Code) in excess of the "base
amount" allocable to such reasonable compensation, or (C) such "parachute
payments" are otherwise not subject to such Excise Tax (with appropriate legal
authority, detailed analysis and explanation provided therein by the
Accountants); and (ii) the value of any Covered Payments which are non-cash
benefits or deferred payments or benefits shall be determined by the Accountant
in accordance with the principles of Section 280G of the Code.
(c) For purposes of determining the amount of the Tax
Reimbursement Payment, Executive shall be deemed: (i) to pay federal, state
and/or local income taxes at the highest applicable marginal rate of income
taxation for the calendar year in which the Tax Reimbursement Payment is made or
is to be made, and (ii) to have otherwise allowable
deductions for federal, state and local income tax purposes at least equal to
those disallowed due to the inclusion of the Tax Reimbursement Payment in
Executive's adjusted gross income.
(d) (i) (A) In the event that prior to the time Executive has
filed any of his tax returns for the calendar year in which the change in
ownership event covered by Code Section 280G(b)(2) occurred, the Accountant
determines, for any reason whatever, the correct amount of the Tax Reimbursement
Payment to be less than the amount determined at the time the Tax Reimbursement
Payment was made, Executive shall repay to the Company, at the time that the
amount of such reduction in Tax Reimbursement Payment is determined by the
Accountant, the portion of the prior Tax Reimbursement Payment attributable to
such reduction (including the portion of the Tax Reimbursement Payment
attributable to the Excise Tax and federal, state and local income tax imposed
on the portion of the Tax Reimbursement Payment being repaid by Executive, using
the assumptions and methodology utilized to calculate the Tax Reimbursement
Payment (unless manifestly erroneous)), plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
(B) In the event that the determination set forth in
(A) above is made by the Accountant after the filing by Executive of any of his
tax returns for the calendar year in which the change in ownership event covered
by Code Section 280G(b)(2) occurred but prior to one (1) year after the
occurrence of such change in ownership, Executive shall file at the request of
the Company an amended tax return in accordance with the Accountant's
determination, but no portion of the Tax Reimbursement Payment shall be required
to be refunded to the Company until actual refund or credit of such portion has
been made to Executive, and interest payable to the Company shall not exceed the
interest received or credited to Executive by such tax authority for the period
it held such portion (less any tax Executive must pay on such interest and which
he is unable to deduct as a result of payment of the refund).
(C) In the event Executive receives a refund
pursuant to (B) above and repays such amount to the Company, Executive shall
thereafter file for refunds or credits by reason of the repayments to the
Company. Executive and the Company shall mutually agree upon the course of
action, if any, to be pursued (which shall be at the expense of the Company) if
Executive's claim for such refund or credit is denied.
(D) Executive and the Company shall mutually agree
upon the course of action, if any, to be pursued (which shall be at the expense
of the Company) if Executive's claim for refund or credit is denied.
(ii) In the event that the Excise Tax is later
determined by the Accountants or the Internal Revenue Service to exceed the
amount taken into account hereunder at the time the Tax Reimbursement Payment is
made (including by reason of any payment the existence or amount of which cannot
be determined at the time of the Tax Reimbursement Payment), the Company shall
make an additional Tax Reimbursement Payment in respect of such excess (plus any
interest, penalties or additions to tax payable with respect to such excess)
once the amount of such excess is finally determined.
(iii) In the event of any controversy with the Internal
Revenue Service (or other taxing authority) under this Section 13, subject to
subpart (i)(D) above, Executive shall permit the Company to control issues
related to this Section 13 (at its expense), provided that such issues do not
potentially materially adversely affect Executive, but Executive shall control
any other issues. In the event the issues are interrelated, Executive and the
Company shall in good faith cooperate so as not to jeopardize resolution of
either issue, but if the parties cannot agree Executive shall make the final
determination with regard to the issues. In the event of any conference with any
taxing authority as to the Excise Tax or associated income taxes, Executive
shall permit the representative of the Company to accompany him and Executive
and his representative shall cooperate with the Company and its representative.
(iv) With regard to any initial filing for a refund or
any other action required pursuant to this Section 13 (other than by mutual
agreement) or, if not required, agreed to by the Company and Executive,
Executive shall cooperate fully with the Company, provided that the foregoing
shall not apply to actions that are provided herein to be at the sole discretion
of Executive.
(e) The Tax Reimbursement Payment, or any portion
thereof, payable by the Company shall be paid not later than the fifth day
following the determination by the Accountant, and any payment made after such
fifth day shall bear interest at the rate provided in Code Section
1274(b)(2)(B). The Company shall use its best efforts to cause the Accountant to
promptly deliver the initial determination required hereunder and, if not
delivered, within ninety (90) days after the change in ownership event covered
by Section 280G(b)(2) of the Code, the Company shall pay Executive the Tax
Reimbursement Payment set forth in an opinion from counsel recognized as
knowledgeable in the relevant areas selected by Executive, and reasonably
acceptable to the Company, within five (5) days after delivery of such opinion.
In accordance with Section 16(Guaranty), the Company may withhold from the Tax
Reimbursement Payment and deposit into applicable taxing authorities such
amounts as are required to be withheld by applicable law. To the extent that
Executive is required to pay estimated or other taxes on amounts received by
Executive beyond any withheld amounts, Executive shall promptly make such
payments. The amount of such payment shall be subject to later adjustment in
accordance with the determination of the Accountant as provided herein.
(f) The Company shall be responsible for all charges of
the Accountant and if (e) is applicable the reasonable charges for the opinion
given by Executive's counsel.
(g) The Company and Executive shall mutually agree on
and promulgate further guidelines in accordance with this Section 13 to the
extent, if any, necessary to effect the reversal of excessive or shortfall Tax
Reimbursement Payments. The foregoing shall not in any way be inconsistent with
Section 13(d)(i)(D) hereof.
14. LEGAL AND OTHER FEES AND EXPENSES. In the event that a claim
for payment or benefits under this Agreement is disputed, the Company shall pay
all reasonable attorney,
accountant and other professional fees and reasonable expenses incurred by
Executive in pursuing such claim, unless the claim by Executive is found to be
frivolous by any court or arbitrator.
15. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in the City of Portland in the State of Oregon under the Commercial
Arbitration Rules then prevailing of the American Arbitration Association and
such submission shall request the American Arbitration Association to: (i)
appoint an arbitrator experienced and knowledgeable concerning the matter then
in dispute; (ii) require the testimony to be transcribed; (iii) require the
award to be accompanied by findings of fact and the statement for reasons for
the decision; and (iv) request the matter to be handled by and in accordance
with the expedited procedures provided for in the Commercial Arbitration Rules.
The determination of the arbitrators, which shall be based upon a DE NOVO
interpretation of this Agreement, shall be final and binding and judgment may be
entered on the arbitrators' award in any court having jurisdiction. All costs of
arbitration, including the costs of the American Arbitration Association and the
arbitrator, shall be borne by the Company.
16. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon without reference
to principles of conflicts of laws.
(b) ENTIRE AGREEMENT/AMENDMENTS. This Agreement and the
instruments contemplated herein, contain the entire understanding of the parties
with respect to the employment of Executive by the Company from and after the
Commencement Date and supersedes any prior agreements, whether written or
otherwise, between the Company and Executive. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly set forth
herein and therein. This Agreement may not be altered, modified, or amended
except by written instrument signed by the parties hereto.
(c) NO WAIVER. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any such waiver must be in writing and signed by Executive or an authorized
officer of the Company, as the case may be.
(d) ASSIGNMENT. This Agreement shall not be assignable by
Executive. This Agreement shall be assignable, with the consent of Executive, by
the Company only to an acquiror of all or substantially all of the assets of the
Company, provided such acquiror promptly assumes all of the obligations
hereunder of the Company in a writing delivered to Executive and otherwise
complies with the provisions hereof with regard to such assumption.
(e) SUCCESSORS; BINDING AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon parties hereto and
their personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees legatees and permitted assignees of the parties
hereto. If Executive dies while any amount would still be payable hereunder if
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of the Agreement to the
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, legatees and permitted assignees of the parties hereto.
(f) COMMUNICATIONS. For the purpose 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 (i) when faxed or delivered, and (ii)
two business days after being mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth on the initial page of this Agreement, provided that all
notices to the Company shall be directed to the attention of ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ of the Company, or to such other address as any party may have
furnished to the other in writing in accordance herewith. Notice of change of
address shall be effective only upon receipt.
(g) WITHHOLDING TAXES. The Company may withhold from any and all
amounts payable under this Agreement such federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
(h) SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of Executive's employment.
(i) COUNTERPARTS. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(j) HEADINGS. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
FOG CUTTER CAPITAL GROUP INC., on its
behalf and on behalf of FOG CAP L.P.
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
EXHIBIT 1
MUTUAL WAIVER AND GENERAL RELEASE OF CLAIMS
To: Fog Cutter Capital Group Inc. and
Fog Cap L.P.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
1. (a) In consideration for the payment and/or other benefits to
be provided me pursuant to my Employment Agreement with the Company dated as
amended and restated as of December 31, 2001 (the "Employment Agreement"), I,
for myself and for my heirs, executors, administrators, and assigns (hereinafter
referred to collectively as "Releasors"), forever release and discharge the
Company and any and all of its subsidiaries, divisions, affiliated entities,
employee benefit and/or pension plans or funds, successors and assigns, and all
of its or their past and present officers, directors, members, shareholders,
trustees, agents and employees (hereinafter referred to as the "Entities and
Persons"), from any and all claims, demands, cause of action, fees and
liabilities of any kind whatsoever, whether known or unknown, which I ever had,
or may have, or now have, against the Entities and Persons by reason of any
actual or alleged act, omission, transaction, practice, conduct, occurrence, or
other matter up to and including the date of this Mutual Waiver and General
Release (other than (i) any and all claims for indemnity as a director and
officer in connection with matters relating to Capital Consultants Inc. and (ii)
ongoing obligations of the Company or Executive under the Employment Agreement).
(b) In consideration for the delivery of this Mutual Waiver
and General Release, and for other good and valuable consideration the receipt
and sufficiency of which are acknowledged and agreed, the Company, for itself
and for its successors and assigns, forever releases and discharges me and my
heirs, executors, administrators and assigns, from any and all claims, demands,
causes of action, fees and liabilities of any kind whatsoever, whether known or
unknown, which the Company ever had, or may have, or now has, against me or my
heirs, executors, administrators or assigns by reason of any actual or alleged
act, omission, transaction, practice, conduct, occurrence, or other matter up to
and including the date of this Mutual Waiver and General Release and with regard
to my termination of employment.
2. Without limiting the generality of the foregoing, this
Mutual Waiver and General Release is intended to and shall release the Entities
and Persons from any and all claims, whether known or unknown, which Releasors
ever had, now have, or may have up to and
including the date of this Mutual Waiver and General Release against the
Entities and Persons arising out of my employment with the Company, including,
but not limited to: (i) any claim under Title VII of the Civil Rights Act, as
amended; (ii) any other claim (whether based on federal, state, or local law,
statutory or decisional) relating to or arising out of my employment by the
Company, or the terms and conditions of such employment; (iii) any claim under
the Age Discrimination in Employment Act, as amended; (iv) any claim under
applicable state or local law against discrimination; (v) any claim for
attorneys' fees, costs, disbursements and/or the like; or (vi) any claim under,
with regard to, or in connection with my Employment Agreement or any agreement
or plan with regard to equity, incentive or deferred compensation (other than
ongoing obligations of the Company or Executive under the Employment Agreement).
3. Notwithstanding the foregoing, the foregoing release shall
not cover rights of indemnification to which I was entitled immediately prior to
my termination date under the Company's Certificate of Incorporation or By-laws,
or Section 12 of the Employment Agreement or otherwise with regard to my service
as an officer of the Company.
4. (a) I agree that I will not, from any source or proceeding,
seek or accept any award or settlement with respect to any claim or right
covered by Section 1(a) above. In addition to the foregoing, except as otherwise
prohibited by law, I represent and warrant that I will not ▇▇▇ or commence any
proceeding (judicial or administrative), or participate in any action, suit or
proceeding, against any of the Entities and Persons, with respect to any act,
event, occurrence, or any alleged failure to act, released hereunder.
(b) The Company hereby agrees that it will not, from any
source or proceeding, seek or accept any award or settlement with respect to any
claim or right covered by Section 1(b) hereof. In addition to the foregoing,
except as otherwise prohibited by law, the Company represents and warrants that
it will not ▇▇▇ or commence any proceeding (judicial or administrative), or
participate in any action, suit or proceeding, against me or any of my ▇▇▇▇▇,
executors, administrators or assigns with respect to any act, event or
occurrence, or any alleged failure to act, released hereunder.
5. The interpretation of this Mutual Waiver and General
Release will be governed by the law of the State of New York without reference
to principles of conflict of laws. In the event any provision of this Mutual
Waiver and General Release shall be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision of this Mutual Waiver and General Release.
6. This Mutual Waiver and General Release is not intended,
and shall not be construed, as an admission that the Entities and Persons or I
have violated any federal, state or local law (statutory or decisional),
ordinance or regulation, breached any contract or committed any wrong
whatsoever.
7. I acknowledge that I have been advised by the Company to
consult an attorney before signing this Mutual Waiver and General Release and
that I have executed this
Mutual Waiver and General Release after having had the opportunity to consult
with an attorney of my choice.
8. I further acknowledge that I have read this Mutual Waiver
and General Release in full, have had seven (7) days to consider the terms of
this Mutual Waiver and General Release, that I fully understand the terms, and
that I have knowingly and voluntarily assented to all the terms and conditions
contained herein.
9. I further acknowledge that after executing this Mutual
Waiver and General Release I have seven (7) days to revoke it by delivery of a
Notice of Revocation to the Company prior to the eighth day after execution and
delivery by me of the Mutual Waiver and General Release. I understand that if so
revoked by me, the Company's obligations under this Mutual Waiver and General
Release are null and void.
10. The parties hereto understand that this Mutual Waiver and
General Release, and the Employment Agreement constitute the complete
understanding between such parties and that no other promises or agreements
shall be binding unless in writing and signed by both such parties.
Dated: FOG CUTTER CAPITAL GROUP INC.
Signature: By:
--------------------------
Witness: FOG CAP L.P.
By:
--------------------------
