This
CONSULTING AGREEMENT, (this “Agreement”), is dated
November 16, 2009 and shall be effective as of January 1,
2010, between CapitalSource Inc. (the “Company”) and
Dean C. Graham (the “Consultant”).
WHEREAS,
the Company desires to obtain the consulting services of the
Consultant as an independent contractor to assist with strategic
operations, to provide advice and counsel to its Executive Chairman
and Co-Chief Executive Officers and to provide such other advice,
counsel and assistance as its Executive Chairman and Co-Chief
Executive Officers may require;
WHEREAS,
the Consultant has heretofore entered into an Employment Agreement
dated as of April 4, 2005, and amended on each of November 22,
2005, February 1, 2007 and December 31, 2008 (the
“Employment Agreement”) with the Company, and the
Company and he have entered into a Separation and General Release
Agreement dated as of the date hereof (the “Separation
Agreement”) providing for termination of his services as an
employee and officer of the Company and its subsidiaries on
mutually agreed upon terms; and
WHEREAS,
the parties desire to enter into this Agreement to set forth the
terms and conditions for the consulting relationship of the
Consultant with the Company.
NOW,
THEREFORE, it is AGREED as follows:
(a) During
the term of this Agreement (as set out in Section 5 hereof),
the Consultant shall serve as a consultant to the Company. The
Consultant shall make himself reasonably available to perform
consulting services as reasonably requested by the Executive
Chairman or either of the Co-Chief Executive Officers of the
Company. The Consultant shall render advisory and consulting
services to the Company of the type customarily performed by
persons serving in similar consulting capacities, consistent with
the knowledge and experience possessed by the Consultant. The
Consultant’s services shall be limited to assisting the
Executive Chairman and the Co-Chief Executive Officers in respect
of the Company’s strategic operations and providing advice
and counsel to the Executive Chairman and either of the Co-Chief
Executive Officers of the Company. The Consultant shall perform his
services at the Company’s offices in Chevy Chase, Maryland or
at such other locations as the Consultant shall determine in his
sole discretion. For the sake of clarity, Consultant shall not be
required to perform the services contemplated herein at any
particular time or place and may chose to provide the services by
telephone or conference call.
(b) The
parties acknowledge and agree that the Consultant’s
fulfillment of his obligations to the Company hereunder will not
require the Consultant’s full business time. In the time that
the Consultant is not providing services to the Company, he may
accept other employment or engagements and may participate in any
other activities without obtaining the Company’s approval
thereof; provided, however , that such other employment,
engagements and activities do not involve any violation of
Section 7 of the Employment Agreement.
2. Compensation and Expenses . The Company
agrees to pay the Consultant during the term of this Agreement a
retainer of $750,000, payable in equal quarterly installments on
January 4, 2010, March 15, 2010, July 1, 2010 and
October 1, 2010. The Company shall reimburse the Consultant
for all reasonable, ordinary and necessary travel and lodging
expenses incurred by the Consultant in connection with the
Consultant’s performance of services hereunder, provided that
all such expenses are in accordance with the Company’s
policies applicable to similar expenses incurred by its executive
management employees. The Consultant will invoice the Company for
any reimbursement of expenses payable hereunder in respect of
services performed, and each such invoice shall be accompanied by
receipts and other supporting documentation of expenses incurred as
reasonably requested by the Company. The Company shall pay the
expense reimbursements that are due under this Agreement within
30 days after receiving an invoice from the Consultant for
such amounts.
3. Participation in Retirement and Employee Benefit
Plans . Subject to Section 4(c) of the Separation
Agreement, nothing in this Agreement shall entitle the Consultant
to participate in or accrue additional benefits under any plan of
the Company relating to stock options, stock purchases, equity
award, deferred compensation, pension, thrift, profit sharing,
employee stock ownership, group life insurance, medical coverage,
disability insurance, education, or other retirement or employee
benefits, except to the extent that the Consultant may be entitled
to continuation coverage (COBRA), at the Consultant’s
expense, or other coverage under the health and dental insurance
plan maintained by the Company under Section 4(c) terms of the
Separation Agreement.
4. Office and Support Services . During the
term of this Agreement, the Company shall provide the Consultant
with reasonable office space, supplies, assistant and other
appropriate support services and facilities that are reasonably
required by the Consultant in connection with his performance of
services hereunder, in each case as reasonably determined by the
Company. In accordance with Section 4(d) of the Separation
Agreement, the Company hereby agrees to assign and transfer
Consultant’s current mobile telephone number to the
Consultant.
5. Term . The term of this Agreement shall be
for twelve months commencing on January 1, 2010. The parties by
mutual written agreement may extend the term of this Agreement. The
Company may terminate this Agreement at
-2-
any time on or
after March 31, 2010 with 30 days advance notice;
provided, however, unless such termination is due to
Consultant’s repeated and willful failure to respond to
requests for services from the Company’s Executive Chairman
or either of the Co-Chief Executive Officers that continues for at
least thirty days after written notice from the Company, the
Company shall be obligated to pay Consultant an amount equal to the
remaining payments provided in Section 2 in a single lump sum
on the date of such termination.
6. Indemnification . During the term of this
Agreement and thereafter, the Company agrees to indemnify and hold
Consultant and Consultant’s heirs and representatives
harmless, to the maximum extent permit
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