AMENDMENT
TO
MICHAEL SZWAJKOWSKI
EMPLOYMENT AGREEMENT
THIS AMENDMENT TO
THE EMPLOYMENT AGREEMENT (the “Amendment”) is made,
effective as of December 31, 2008, by and between CapitalSource
Inc., a Delaware corporation (the “Company”), and
Michael Szwajkowski (the “Executive”).
WHEREAS,
the Executive and the Company previously entered into the
Employment Agreement, effective as of April 22, 2005, and
previously amended on November 22, 2005 (the “Employment
Agreement”); and
WHEREAS,
the Executive and the Company desire to amend the Employment
Agreement to comply with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended.
NOW,
THEREFORE, in consideration of the agreements contained herein
and of such other good and valuable consideration, the sufficiency
of which the Executive acknowledges, the Company and the Executive,
intending to be legally bound, agree as follows:
1.
Section 9(f) of the Employment Agreement is hereby amended by
adding a new sentence after the third sentence of said Section 9(f)
to read as follows:
“The
Executive will forfeit all rights to the Severance Payment if the
Executive fails to execute and deliver the release within
30 days of delivery of the release to the
Executive.”
2.
Section 9(h) of the Employment Agreement is hereby deleted in its
entirety and amended and restated to read as follows:
“(h)
Section 409A . To the extent the Executive would be
subject to the additional 20% tax imposed on certain deferred
compensation arrangements pursuant to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
as a result of any provision of this Agreement, such provision
shall be deemed amended to the minimum extent necessary to avoid
application of such tax and preserve to the maximum extent possible
the original intent and economic benefit to the Executive and the
Company, and
the parties
shall promptly execute any amendment reasonably necessary to
implement this Section 9(h).
(i)
For purposes of Section 409A, the Executive’s right to
receive installment payments pursuant to this Agreement including,
without limitation, each severance payment and COBRA continuation
reimbursement shall be treated as a right to receive a series of
separate and distinct payments.
(ii)
The Executive will be deemed to have a Date of Termination for
purposes of determining the timing of any payments or benefits
hereunder that are classified as deferred compensation only upon a
“separation from service” within the meaning of Code
Section 409A.
(iii)
Notwithstanding any other provision of this Agreement to the
contrary, if at the time of the Executive’s separation from
service, (i) the Executive is a specified employee (within the
meaning of Section 409A and using the identification
methodology selected by the Company from time to time), and
(ii) the Company makes a good faith determination that an
amount payable on account of such separation from service to the
Executive constitutes deferred compensation (within the meaning of
Section 409A) the payment of which is required to be delayed
pursuant to the six-month delay rule set forth in Section 409A
in order to avoid taxes or penalties under Section 409A
(“the Delay Period”), then the Company will not pay
such amount on the otherwise scheduled payment date but will
instead pay it in a lump sum on the first business day after such
six-month period (or upon the Executive’s death, if earlier),
together with interest for the period of delay, compounded
annually, equal to the prime rate (as published in the Wall Street
Journal) in effect as of the dates the payments should otherwise
have been provided. To the extent that any benefits to be provided
during the Delay Period is considered defe
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