Exhibit 10.51
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT entered into as of the
3rd day of November, 2002, by and between MCG Capital Corporation (the
"Company"), a Delaware corporation, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual (the
"Executive") (hereinafter collectively referred to as the "parties").
WHEREAS, the Executive has heretofore been employed by the Company as
its Chief Executive Officer and is experienced in all phases of the business of
the Company and the Company desires to retain the services and employment of the
Executive on the terms set forth herein;
WHEREAS, on November 28, 2001, the Company and the Executive entered
into an Employment Agreement (the "Prior Agreement"); on November 28, 2001, the
Company and the Executive entered into a Restricted Stock Agreement (the
"Restricted Stock Agreement"); and on November 28, 2001, the Company and the
Executive entered into a Promissory Note (the "Promissory Note");
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company and of its stockholders to amend and
restate the Prior Agreement and enter into this Agreement;
WHEREAS, the Company agrees to employ the Executive and the Executive
accepts the employment with the Company, as an "at will" employee upon the terms
set forth in this Agreement, for the period commencing on the date hereof and
ending on the date on which such employment is terminated; and
WHEREAS, the Company and the Executive desire to enter into this
Agreement which will replace the Prior Agreement and will provide for the
continued employment of the Executive by the Company upon the terms and subject
to the conditions set forth herein.
NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1. Term. This Agreement shall be for the period commencing on the
date hereof and ending on the date on which the Executive's employment is
terminated.
2. Employment. (a) The Executive shall be employed as the Chief
Executive Officer of the Company or such other position(s) as may be mutually
agreed upon in writing by the parties. The Executive shall perform the duties,
undertake the responsibilities and exercise the authority customarily performed,
undertaken and exercised by persons situated in a similar executive capacity.
(b) The Executive shall devote his full working time attention
and skill to the performance of such duties, services and responsibilities, and
will use his best efforts to promote the interests of the Company. The Executive
will not, without prior written approval of the Board of Directors of the
Company (the "Board"), engage in any other activities that would interfere with
the performance of his duties as an employee of the Company, are in violation of
written policies of the Company, are in violation of applicable law, or would
create a conflict of interest with respect to the Executive's obligations as an
employee of the Company. The Executive may (1) serve on corporate, civil or
charitable boards or committees, (2) deliver lectures and teach at educational
institutions, (3) serve as a personal representative or trustee, (4) manage his
personal, financial and legal affairs, and (5) invest personally in any business
where no conflict of interest exists between such investment and the business of
the Company, as long as the foregoing activities do not require a material time
commitment by the Executive.
3. Base Salary. The Company agrees to pay or cause to be paid to
the Executive during the term of this Agreement a base salary at the rate of
$300,150 per annum (such base salary, as may be adjusted from time to time in
accordance with this Section, the "Base Salary"). Such Base Salary shall be
payable in accordance with the Company's customary practices applicable to its
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executives. Such Base Salary shall be reviewed (and may be adjusted) at least
annually by the Board or an authorized committee of the Board. Such Base Salary
may be reduced only if such reduction is implemented by the Company as part of
an overall general salary reduction plan among all of its employees and such
reduction to the Base Salary on a percentage basis is equal to or less than the
percentage reduction otherwise implemented under such plan.
4. Employee Benefits. The Executive shall be entitled to
participate in all employee benefit plans, practices and programs maintained by
the Company and made available to employees generally including, without
limitation, all pension, retirement, profit sharing, savings, medical,
hospitalization, disability, dental, life or travel accident insurance benefit
plans, vacation and sick leave, other than the annual Cash Incentive
Compensation Program for 2002. The Executive's participation in such plans,
practices and programs shall be on the same basis and terms as are applicable to
employees of the Company generally.
5. Executive Benefits. The Executive shall be entitled to
participate in all executive benefit or incentive compensation plans now
maintained or hereafter established by the Company for the purpose of providing
compensation and/or benefits to executives of the Company, other than the annual
Cash Incentive Compensation Program for 2002. Unless otherwise provided herein,
the Executive's participation in such plans shall be on the same basis and terms
as other similarly situated executives of the Company. No additional
compensation provided under any of such plans shall be deemed to modify or
otherwise affect the terms of this Agreement or any of the Executive's
entitlements hereunder.
6. Other Benefits and Obligations.
(a) Fringe Benefits and Perquisites. The Executive shall be
entitled to all fringe benefits and perquisites generally made available by the
Company to its executives.
(b) Expenses. The Company agrees to pay all reasonable
expenses, subject to reasonable documentation, incurred by the Executive in
furtherance of the Company's business, including, without limitation, traveling
and entertainment expenses, and to reimburse the Executive for all such
reasonable expenses advanced by him and not reimbursed prior to the date of this
Agreement.
(c) Repayment of the Existing Indebtedness. In addition to any
other provision under the Promissory Note to pay the Principal Amount (as
defined under the Promissory Note) and the interest on the Principal Amount, the
Executive agrees to pay to the Company towards repayment of the Principal Amount
and all accrued interest thereon (being applied first to then-accrued interest
and then to the outstanding Principal Amount) an amount equal to all Dividends
(as defined under the Restricted Stock Agreement) paid to the Executive with
respect to the Award Shares (as defined under the Restricted Stock Agreement)
less the federal, Maryland and local income taxes on such Dividends computed at
the maximum individual rate for a resident of Maryland; such payment to be made
within 10 business days after receipt of any such Dividend. The Executive shall
not participate in the Company's dividend reinvestment plan with respect to the
Award Shares until the Promissory Note is repaid in full.
(d) Repayment of Cash Incentive Compensation. The Executive
shall repay to the Company within 10 business days after the date hereof, an
amount equal to the amount (net of all taxes, computed at the maximum individual
rate for a resident of Maryland) the Executive actually received under the Cash
Incentive Program for 2001 paid in January, 2002. The Executive and the Company
agree to take any other action, to the extent practical to reverse the payment
of the benefits paid out under the Cash Incentive Program for 2001, including
adjusting the Executive's withholding of federal, Maryland and local income and
withholding taxes.
7. Termination. The Executive's employment hereunder may be
erminated under the following circumstances:
(a) Disability. The Company may terminate the Executive's
employment after having established the Executive's Disability or the Executive
can terminate if he has established his Disability. For purposes of this
Agreement, "Disability" means a physical or mental infirmity which impairs the
Executive's ability to substantially perform his duties under this Agreement for
at least one hundred eighty (180) days during any 365-consecutive-day period.
The Executive shall be entitled to the compensation and benefits provided for
under this Agreement for any period during the term of this Agreement and prior
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to the establishment of the Executive's Disability during which the Executive is
unable to work due to a physical or mental infirmity. Notwithstanding anything
contained in this Agreement to the contrary, until the Termination Date (as
defined herein) specified in a notice of termination relating to the Executive's
Disability, the Executive shall be entitled to return to his position with the
Company as set forth in this Agreement in which event no Disability of the
Executive will be deemed to have occurred.
(b) Termination by the Company. The Company may terminate
at any time the Executive's employment for any reason.
(c) Termination by the Executive. The Executive may terminate
his employment at any time for any reason.
(d) For purposes of Section 2 of the Promissory Note, any
termination other than for death or Disability hereunder shall be deemed a
termination for Cause or a termination by the Executive other than for Good
Reason. For purposes of Section 2 of the Promissory Note, "Cause" and "Good
Reason" shall be defined as any termination of the Executive except for death or
disability.
(e) Notice of Termination. Any purported termination by the
Company or by the Executive shall be communicated by written notice of
termination to the other. For purposes of this Agreement, no such purported
termination of employment shall be effective without such written notice of
termination.
(f) Termination Date, Etc. "Termination Date" shall mean (1)
in the case of the Executive's Death, the Executive's date of Death, (2) if the
Executive's employment is terminated for Disability, the date on which the
notice of termination is given, (3) if the Executive terminates his employment,
on the date such termination is announced by the Executive, and (4) if the
Executive's employment is terminated for any other reason, the date specified in
the notice of termination, which shall not be longer than seven (7) days after
the notice of termination.
8. Compensation Upon Termination. Upon termination of the
Executive's employment during the term of this Agreement (including any
extensions thereof), the Executive shall be entitled to the following benefits:
(a) (x) If the Executive's employment is terminated by the
Company or by the Executive (other than for death or Disability), then the
Company shall pay the Executive all amounts earned or accrued hereunder through
the Termination Date but not paid as of the Termination Date, including (i) Base
Salary, (ii) reimbursement for any and all monies advanced or expenses incurred
in connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company for the period
ending on the Termination Date, (iii) vacation pay, (iv) any bonuses or
incentive compensation with respect to the fiscal year ended prior to the fiscal
year in which the Termination Date occurs that was earned and unpaid and (v) any
previous compensation which the Executive has previously deferred (including any
interest earned or credited thereon) (collectively, "Accrued Compensation"). (y)
In addition, if the Executive's employment is terminated by the Company or by
the Executive (other than for death or Disability) an amount equal to the
Executive's monthly base salary immediately prior to the Termination Date for
three months payable in twelve (12) equal monthly installments commencing on the
first day of the month following the Termination Date and on the first day of
each of the next eleven months. The Executive will forfeit any Tier 1, Tier 2
and Tier 3 Shares (as defined in the Restricted Stock Agreement between the
Executive and the Company (the "RSA")) that are Forfeitable Shares (as defined
in the RSA) as to which the forfeiture restrictions have not lapsed as of the
Termination Date. (z) In addition, if the Company terminates the Executive, for
twenty-four (24) months following the Termination Date, the Company shall at its
expense continue on behalf of the Executive and his dependents and beneficiaries
the life insurance, disability, medical, dental and hospitalization benefits
which were being provided to the Executive at the time notice of termination is
given. The benefits provided in this subsection (z) shall be no less favorable
to the Executive, in terms of amounts and deductibles and costs to him, than the
coverage provided the Executive under the plans providing such benefits at the
time notice of termination is given. The Company's obligation hereunder with
respect to the foregoing benefits shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent employer's benefit
plans, in which case the Company may reduce the coverage of any benefits it is
required to provide the Executive hereunder as long as the aggregate coverage of
the combined benefit plans is no less favorable to the Executive, in terms of
amounts and deductibles and costs to him, than the coverage required to be
provided hereunder. This subsection (z) shall not be interpreted so as to limit
any benefits to which the Executive or his dependents may be entitled under any
of the Company's employee benefit plans, programs or practices following the
Executive's termination of employment, including without limitation, retiree
medical and life insurance benefits;
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(b) If the Executive's employment terminates for Disability or
for reason of the Executive's death, then the Executive shall be entitled to the
benefits provided below:
(i) the Company shall pay the Executive or his
beneficiaries all Accrued Compensation;
(ii) the Company shall pay to the Executive or his
beneficiaries an amount equal to the bonus or incentive award
(which, for this purpose, shall not include the restricted
stock under the RSA) that the Executive would have been
entitled to receive in respect of the fiscal year in which the
Executive's Termination Date occurs had he continued in
employment until the end of such fiscal year, calculated as if
all performance targets and goals (if applicable) had been
fully met by the Company and by the Executive, as applicable,
for such year, multiplied by a fraction the numerator of which
is the number of days in such fiscal year through the
Termination Date and the denominator of which is 365 (a "Pro
Rata Bonus"); and
(iii) With respect to the Tier 1, Tier 2 and Tier 3
Shares, forfeiture restrictions will lapse on the Termination
Date and such shares shall become Non-Forfeitable Shares (as
defined in the RSA) on such date.
(c) The amounts provided for in Sections 8(a)(x), 8(b)(i) and
8(b)(ii) shall be paid within ten (10) business days after the Executive's
Termination Date.
(d) The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment.
(e) Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's employee benefit
plans and other applicable programs and practices then in effect.
(f) Vesting under RSA. The RSA will govern the applicability
of forfeiture restrictions relating to Tier 1, Tier 2 and Tier 3 Shares except
as otherwise provided herein. Notwithstanding the RSA, the Board of Directors of
the Company may determine that the forfeiture restriction under Section 4.2
thereunder shall not lapse, either in whole or in part.
9. Employee Covenants.
(a) Confidentiality. The Executive shall not, without the
prior express written consent of the Company, directly or indirectly, use for
any purpose any Confidential Information (as defined below) in any way, or
divulge, disclose or make available or accessible any Confidential Information
to any person, firm, partnership, corporation, trust or any other entity or
third party unless (i) such disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of his duties as an executive
of the Company or (ii) such disclosure is required by applicable law or (iii)
the Executive is requested or required by a judicial or arbitration body or
governmental agency (by oral question, interrogatories, requests for information
or documents, subpoena, civil investigative demand or similar process) to
disclose any such information, in which case the Executive will (A) promptly
notify the Company of such request or requirement, so that the Company may seek
an appropriate protective order and (B) cooperate with the Company, at its
expense, in seeking such an order. "Confidential Information" means all
information respecting the business and activities of the Company and any of its
Subsidiaries, including, without limitation, respecting the clients, customers,
suppliers, employees, consultants, prospects, computer or other files, projects,
products, computer disks or other media, computer hardware or computer software
programs, underwriting, lending or investment standards, marketing plans,
financial information, methodologies, know-how, processes, trade secrets,
policies, practices, projections, forecasts, formats, operational methods,
product development techniques, research, strategies or information agreed to
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with third-parties to be kept confidential by the Company and any of its
Subsidiaries. Notwithstanding the immediately preceding sentence, Confidential
Information shall not include any information that is, or becomes, a part of the
public domain or generally available to the public (unless such availability
occurs as a result of any breach by the Executive of this Agreement) or any
business knowledge and experience of the type usually acquired by persons
engaged in positions similar to the Executive's position with the Company, to
the extent such knowledge and experience is non-Company specific and not
proprietary to the Company or any of its Subsidiaries.
(b) Non-Competition. During the period commencing on the date
hereof and ending one (1) year after the Termination Date (the "Applicable
Period"), and provided the Company complies with all of its obligations set
forth in Section 8 hereof, the Executive shall not, without the prior written
consent of the Company, engage in any business or activity, whether as an
employee, consultant, partner, principal, agent, representative, stockholder
(other than as the holder of an interest of two percent (2%) or less in the
equity of a publicly traded corporation) or other individual, corporate or
representative capacity, or render any services or provide any advice or
assistance to any business, person or entity, if such business, activity, person
or entity competes anywhere in the United States with the Company or any of its
Subsidiaries in respect of (i) any then current product, service or business of
the Company or any of its Subsidiaries on the Termination Date or (ii) any
product, service or business as to which the Company or any of its Subsidiaries
has begun preparing to develop or offer as of the Termination Date. Nothing
herein shall be construed to prevent the Executive from being employed by any
person or entity in a line of business or activity that does not compete with
(i) products, services or businesses offered or conducted by the Company or its
Subsidiaries as of the Termination Date, or (ii) products, services or business
which the Company or any of its Subsidiaries has begun preparing to develop or
offer as of the Termination Date. A product, service or business shall not be
deemed to compete with the Company or its Subsidiaries if it is offered in any
industry or market sector in which the Company and its Subsidiaries do not
compete nor have begun preparing to compete as of the Termination Date.
(c) Non-Solicitation. During the period commencing on the date
hereof and ending two (2) years after the Termination Date (the
"Non-Solicitation Period"), the Executive shall not divert, solicit or lure away
the patronage of (1) any client or business of the Company or any of its
Subsidiaries as of or within the two (2) year period prior to the Termination
Date or (2) any prospective client or business of the Company or any of its
Subsidiaries. As used herein, "prospective client" means any client that the
Company or any of its Subsidiaries (i) has solicited within the two (2) year
period prior to the Termination Date, (ii) is soliciting as of the Termination
Date, or (iii) as of the Termination Date, is maintained in the Company's data
base of prospective clients. Nothing herein shall be construed to prevent the
Executive from soliciting clients or prospective clients of the Company or its
Subsidiaries with respect to products, services or businesses which the Company
and its Subsidiaries neither offer or conduct, nor have begun preparing to
develop or offer, as of the Termination Date. The Executive shall not, during
the Non-Solicitation Period, directly or indirectly, recruit, hire or assist
others in recruiting or hiring, or otherwise solicit for employment, any
employees of the Company or any of its Subsidiaries. The provisions of this
Section 9(c) shall not be deemed to limit in any way the provisions of any other
Section of this Agreement.
(d) Interpretation. The parties hereto recognize that the laws
and public policies of the various states of the United States may differ as to
the validity and enforceability of covenants similar to those set forth in
Sections 9(b) and (c). It is the intention of the parties that the potential
restrictions on the Executive's activities imposed by Sections 9(b) and (c) be
reasonable in both duration and geographic scope and in all other respects, it
being understood that the business conducted by the Company and its Subsidiaries
is nationwide in scope. It is also the intention of the parties that the
provisions of Sections 9(b) and (c) be enforced to the fullest extent
permissible under the laws and policies of each jurisdiction in which
enforcement may be sought, and that in the event that any provision of Sections
9(b) and (c) shall, for any reason, be held invalid or unenforceable in any
respect, it shall not invalidate, render unenforceable or otherwise affect any
other provision hereof, and such invalid or unenforceable provision shall be
construed by limiting it so as to be valid and enforceable to the fullest extent
permissible under applicable law. If applicable law does not permit an invalid
or unenforceable provision to be so construed, then the invalid or unenforceable
provision shall be stricken and the remaining portions of Sections 9(b) and (c)
shall be enforced to the fullest extent permitted by law. In addition, if any
provision of Sections 9(b) and (c) shall be determined to be invalid or
unenforceable, such invalidity or unenforceability shall be deemed to apply only
with respect to the operation of such provision in the particular jurisdiction
in which such determination is made and not with respect to any other provision
or jurisdiction.
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(e) Remedies. The Executive agrees that any breach of the
terms of this Section 9 would result in irreparable injury and damage to the
Company for which the Company would have no adequate remedy at law; the
Executive therefore also agrees that in the event of said breach or any threat
of breach, the Company shall be entitled to an immediate injunction and
restraining order from a court of competent jurisdiction to prevent such breach
and/or threatened breach and/or continued breach by the Executive and/or any and
all persons and/or entities acting for and/or with the Executive, without having
to prove damages. The availability of injunctive relief shall be in addition to
any other remedies to which the Company may be entitled at law or in equity but
remedies other than injunctive relief may only be pursued in an arbitration
brought in accordance with Section 12 of this Agreement. The terms of this
paragraph shall not prevent the Company from pursuing in an arbitration any
other available remedies for any breach or threatened breach of this Section 9,
including but not limited to the recovery of damages from the Executive.
The provisions of this Section 9 shall survive any termination
of this Agreement, and the existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 9; provided, however, that this
paragraph shall not, in and of itself, preclude the Executive from defending
himself against the enforceability of the covenants and agreements of this
Section 9.
(f) Return of Materials. Upon the request of the Company and,
in any event, upon termination of employment, the Executive will leave with the
Company all memoranda, notes, records, manuals, or other documents and media (in
whatever form maintained, whether documentary, computer storage or otherwise)
pertaining to the Company's business, including all copies thereof; other than
such documents and items that are personal to the employee (e.g., pay stubs,
personal tax documentation and other compensation or employment related
materials).
(g) Ownership of Executive Developments. All copyrights,
patents, trade secrets, or other intellectual property rights associated with
any ideas, concepts, techniques, inventions, processes, or works of authorship
developed or created by the Executive during the course of performing work for
the Company, or its clients, including, but not limited to, software programs,
manuals, publications and reports (collectively, the "Work Product") belongs and
shall belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company, the
Executive agrees to assign, and automatically assign at the time of creation of
the Work Product, without any requirement of further consideration, any right,
title, or interest he may have in such Work Product. Upon request of the
Company, the Executive shall take such further actions, including execution and
delivery of instruments of conveyance, as may be appropriate to give full and
proper effect to such assignment. Notwithstanding anything else in this
Agreement, any ideas, concepts, techniques, inventions, processes or works of
authorship developed or created by the Executive on the Executive's own time,
and which have no application in the business of the Company ("Executive Work
Product"), shall not be considered Work Product, and the Company shall have no
interest in any such Executive Work Product.
(h) Consequences of Challenging Enforceability of Non-Compete.
If at any time the Executive or his subsequent employer successfully challenges
the enforceability of the Non-compete and/or Non-solicitation provisions of
Sections 9(b) and 9(c), then (1) all references to 1 year, 2 years and/or 24
months in Sections 8(a), 9(b) and 9(c) shall instead be references to the time
period that such non-compete and non-solicitation restrictions actually remain
in effect, and (2) the amount of severance that the Executive may receive under
Section 8(a) shall automatically be reduced proportionately.
10. Treatment of Section 280G.
(a) Tax Payment. In the event it shall be determined that any
payment (other than the payment provided for in this Section 10(a)) or
distribution of any type to or for the benefit of the Executive, by the Company,
any Affiliate of the Company, any Person who acquires ownership or effective
control of the Company or ownership of a substantial portion of the Company's
assets (within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder) or any Affiliate of
such Person, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the "Total Payments"), is or will be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the "Excise Tax"),
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then the Executive shall be entitled to receive a payment in an amount equal to
the Excise Tax imposed upon the Total Payments; provided, however that the Total
Payments shall be reduced (but not below zero) if and to the extent that a
reduction in the Total Payments would result in the Executive retaining a larger
amount, on an after-tax basis (taking into account federal, state and local
income taxes and the Excise Tax) than if the Executive received the entire
amount of such Total Payments and the amount equal to the Excise Tax. Unless the
Executive shall have given prior written notice specifying a different order to
the Company to effectuate the foregoing, the Company shall reduce or eliminate
the Total Payments by first reducing or eliminating the portion of the Total
Payments which are not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time from the Determination (as hereinafter
defined). Any notice given by the Executive pursuant to the preceding sentence
shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive's rights and entitlements to any benefits or
compensation.
(b) Determination By Accountant. All mathematical
determinations, and all determinations as to whether any of the Total Payments
are "parachute payments" (within the meaning of Section 280G of the Code), that
are required to be made under this Section 10(a), including determinations as to
whether a Excise Tax is required, the amount of such Excise Tax and amounts
relevant to the last sentence of this Section 10(b) or whether the Total Payment
should be reduced, shall be made by an independent accounting firm selected by
the Executive from among the five (5) largest accounting firms in the United
States (the "Accounting Firm"), which shall provide its determination (the
"Determination"), together with detailed supporting calculations regarding the
amount of any Excise Tax and any other relevant matter, both to the Company and
the Executive by no later than ten (10) days following the Termination Date, if
applicable, or such earlier time as is requested by the Company or the Executive
(if the Executive reasonably believes that any of the Total Payments may be
subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax
is payable by the Executive, it shall furnish the Executive and the Company with
an opinion reasonably acceptable to the Executive and the Company that no Excise
Tax is payable (including the reasons therefor) and that the Executive has
substantial authority not to report any Excise Tax on his federal income tax
return. If an Excise Tax is determined to be payable, it shall be paid to the
Executive within ten (10) days after the Determination (and all accompanying
calculations and other material supporting the Determination) is delivered to
the Company by the Accounting Firm. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive, absent manifest error. As a
result of uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Excise Tax payments not made by the Company should have been made
("Underpayment"), or that Excise Tax payments will have been made by the Company
which should not have been made ("Overpayments"). In either such event, the
Accounting Firm shall determine the amount of the Underpayment or Overpayment
that has occurred. In the case of an Underpayment, the amount of such
Underpayment (together with any interest and penalties payable by the Executive
as a result of such Underpayment) shall be promptly paid by the Company to or
for the benefit of the Executive. In the case of an Overpayment, the Executive
shall, at the direction and expense of the Company, take such steps as are
reasonably necessary (including, if reasonable, the filing of returns and claims
for refund), and otherwise reasonably cooperate with the Company to correct such
Overpayment, provided, however, that (1) the Executive shall not in any event be
obligated to return to the Company an amount greater than the net after-tax
portion of the Overpayment that he has retained or has recovered as a refund
from the applicable taxing authorities and (2) this provision shall be
interpreted in a manner consistent with the intent of Section 10(a), it being
understood that the correction of an Overpayment may result in the Executive
repaying to the Company an amount which is less than the Overpayment. The fees
and expenses of the Accounting Firm shall be paid by the Company.
11. Successors and Assigns.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the Company, its successors and assigns. The term "Company" as
used herein shall include such successors and assigns. The term "successors and
assigns" as used herein shall mean a corporation or other entity acquiring all
or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
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12. Fees and Expenses. The Company shall pay all legal fees and
related expenses (including the costs of experts, evidence and counsel) in
excess of $50,000 incurred by the Executive as they become due as a result of
the Executive's seeking to obtain or enforce any right or benefit provided by
this Agreement or by any other plan or arrangement maintained by the Company
under which the Executive is or may be entitled to receive benefits; provided,
however, that if the Executive is successful in enforcing any such rights or
benefits provided under this Agreement, then the Company shall reimburse the
Executive for the first $50,000 of such fees and expenses incurred by the
Executive.
13. Arbitration. Except as set forth in Section 9(e) hereof, any
and all disputes, claims and controversies between the Company or any of its
Affiliates and the Executive arising out of or relating to this Agreement, or
the breach thereof, or otherwise arising out of or relating to the Executive's
employment or the termination thereof shall be resolved by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall take place in the Washington, D.C.
metropolitan area. The arbitrator shall have no authority to award punitive
damages. The award of the arbitrator shall be final and judgment thereon may be
entered in any court having jurisdiction. The parties shall share the costs of
the arbitration equally, unless otherwise ordered by the arbitrator. Judgment
upon the arbitration award may be entered in any federal or state court having
jurisdiction.
14. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the notice of
termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
15. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its subsidiaries and for which the Executive may qualify, nor shall
anything herein limit or reduce such rights as the Executive may have under any
other agreements with the Company or any of its subsidiaries. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any of its subsidiaries shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement.
16. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
17. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Virginia without giving effect to the conflict of law principles thereof.
18. 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.
19. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
[Balance of Page Intentionally Blank]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
MCG Capital Corporation
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and General Counsel
Executive: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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