Exhibit 10.8

 

EXECUTION VERSION

 

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October 29, 2014

 

Alexander C. Frank

c/o Fifth Street

777 West Putnam Avenue, 3rd Floor

Greenwich, CT 06830

 

Re:Employment Letter Agreement

 

Dear Alex:

 

As you know, Fifth Street Asset Management, Inc. (“FSAM”) is in the process of
preparing for an initial public offering of FSAM’s Class A common stock (the
“IPO”). In connection with the IPO, Fifth Street Management LLC (the “Company”)
believes it is appropriate to recognize your contributions to the Company and is
pleased to offer you continued employment with FSC CT, Inc. on the terms set
forth below.

 

1.   Salary; Bonus; Equity. Your annual salary will continue to be $520,000;
paychecks are issued semi-monthly on the fifteenth day of each month and the
last business day of each month. If the fifteenth day of the month falls on a
weekend, paychecks will be issued the Friday prior to or the Monday following
the weekend. If the day is a holiday, paychecks will be issued the following
business day. You will receive a performance review each year and will be
considered eligible for annual salary increases based on your performance.

 

While employed, each year you shall remain eligible to receive a discretionary
bonus. Such discretionary bonuses shall be based on the achievement of such
performance goals and other factors as the Company may in its sole discretion
determine. All bonuses shall be paid in accordance with the Fifth Street
Deferred Bonus and Retention Plan (the “Plan”), a copy of which has previously
been provided to you, so long as the Plan remains in effect; provided that, (i)
for purposes of amounts that may be deferred under the Plan, the definition of
“Cause” shall be as defined in this letter agreement, and (ii) for purposes of
the Plan your resignation for “Good Reason” (as defined in Annex B hereto) will
be treated in the same manner as a termination by the Company without Cause.

 

In connection with the execution of this letter agreement, and conditioned on
your continued employment through the grant date (other than in connection with
your termination by the Company without Cause or your resignation for Good
Reason), you will be granted upon the pricing of the IPO on or prior to March
31, 2015, (i) 441,948 options to purchase Class A shares of FSAM (the “Options”)
and (ii) 80,145 restricted stock units of FSAM (the “RSUs”). The terms of the
grant of Options and RSUs are set forth on Annex A hereto.

 

2.   Benefits. You will continue to be eligible to participate in Fifth Street’s
health insurance plan on the same terms (including the same employee
contribution amount) on which you currently participate in such plans. From time
to time, we may make changes to such plans in the future and you will be
notified of and subject to any such changes.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 2

 

You will be entitled to 25 days paid vacation each year (which shall accrue and
be earned pro rata over the course of the year), four sick days and holidays in
accordance with Fifth Street’s written policies.

 

You will remain eligible to participate in Fifth Street’s 401(k) plan, subject
to the terms of the plan which may be amended from time to time.

 

Your business expenses will be reimbursed under the Company’s business expenses
and reimbursement policies as in effect from time to time. You will be eligible
for first class air travel.

 

3.   At-Will Employment; Policies. Your employment will continue to be
“at-will.” This means that either you or we may terminate your employment at any
time, for any or no reason. In the event that your employment is terminated, you
will receive any unpaid salary and benefits (including reimbursement for
reimbursable business expenses incurred prior to such termination) owed to you
as of the date of such termination.

 

You will perform your duties diligently and to the best of your ability and will
comply with Fifth Street’s policies and procedures, copies of which have been
provided to you previously. It is your responsibility to read and understand
these policies and procedures, and if you have any questions now or in the
future, it is your responsibility to make the appropriate inquiries.

 

4.   Non-Solicitation and Non-Disclosure. As a condition to your continued
employment, you will be required to execute a Non-Competition, Non-Solicitation
and Non-Disclosure Agreement, a copy of which is provided with this letter
agreement.

 

5.   Miscellaneous. This offer is subject to the provisions of Annex C hereto,
with respect to matters arising under Sections 409A and 4999/280G of the Code.

 

This letter agreement (together with the Non-Competition, Non-Solicitation and
Non-Disclosure Agreement) sets forth the entire agreement and understanding
between us and you relating to your employment and supersedes all prior
agreements and understandings between you and the Company with respect to your
employment, except that it is expressly understood that this letter agreement
does not supersede, alter or amend, in any respect, the terms of the limited
liability company agreement of Fifth Street Management LLC.

 

All payments pursuant to this letter agreement will be subject to applicable
withholding taxes.

 

If the terms of this letter agreement are acceptable to you, please sign a copy
of this letter and return it to me on or before October 29, 2014.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 3

 

We look forward to your continued contributions to the Company’s success!

 

  Sincerely,       Bernard D. Berman

 

[Remainder of page intentionally left blank]

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 4

 

I understand that my employment is at will and can be terminated by either party
at any time with or without cause and with or without notice. I specifically
acknowledge and agree that I am an exempt employee and am therefore not eligible
to receive overtime pay.

 

ACCEPTED AND AGREED:       /s/ Alexander C. Frank   Signature       Alexander C.
Frank   Print Name       October 29, 2014   Date  

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 5

 

Annex A – Option and RSU Terms

 

1.Option Category and Term: The Options will have an option term of ten years.
The actual number of such options to be granted will be determined based on
final valuation determinations with respect to such options as of the date of
grant. The options granted to you will have an exercise price that is equal to
110% of the fair market value of a share of FSAM Class A common stock on the
date of grant.

 

2.Restricted Stock Units: You will be granted RSUs representing the right to
receive shares of FSAM Class A common stock subject to fulfillment of vesting
and other conditions.

 

3.Vesting and Exercise:

a.Options – 1/3rd of the Options will vest annually commencing on each of the
4th, 5th and 6th anniversaries of the date of grant, subject to continued
employment on such dates.

b.RSUs – 1/3rd of the RSUs will vest annually commencing on each of the 4th, 5th
and 6th anniversaries of the date of grant, subject to continued employment on
such dates.

c.Accelerated Vesting of Options and RSUs

i.Upon a termination by the Company without Cause or termination by you for Good
Reason, in each case after the Grant Date:

1.Options – Vesting to be determined based on full months of service from date
of grant plus 12 months as a percentage of 72 months (without regard to the
vesting schedule set forth in 3a. above).

2.RSUs – Vesting to be determined based on full months of service from date of
grant plus 12 months as a percentage of 72 months (without regard to the vesting
schedule set forth in 3b. above).

ii.Upon a “Change of Control” while you are employed – In the event that Leonard
Tannenbaum and his affiliated entities collectively cease to have beneficial
voting control of FSAM (or, if an IPO has not occurred, of Fifth Street
Holdings, LP), 100% of your then unvested Options and RSUs shall vest.

d.Exercise – All Options will be exercisable within 1 year following termination
by the Company without Cause or by you for Good Reason; in other cases, exercise
terms will be as provided for under the terms of grant.

e.Manner of Exercise – Options to be subject to the same manner of exercise
afforded to other senior executives receiving options in FSAM, including broker
assisted cashless exercise if available.

f.Settlement of RSUs – No later than 60 days following each vesting date, one
share of FSAM Class A common stock shall be issued for each RSU that becomes
vested on such vesting date.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 6

 

4.Liquidity on Shares Realized Upon Exercise and Settlement

a.Options – 100% of the net option shares acquired upon exercise of the vested
Options may be sold as follows: 25% after the 6th anniversary of the Grant Date,
an additional 25% after the 7th anniversary of the Grant Date, an additional 25%
after the 8th anniversary of the Grant Date, and an additional 25% after the 9th
anniversary of the Grant Date.

b.RSUs – 100% of the net shares acquired upon settlement of vested RSUs may be
sold as follows: 25% after the 6th anniversary of the Grant Date, an additional
25% after the 7th anniversary of the Grant Date, an additional 25% after the 8th
anniversary of the Grant Date, and an additional 25% after the 9th anniversary
of the Grant Date.

c.Following Termination By Company without Cause/Termination by you for Good
Reason – 50% of option shares held by you resulting from your exercise of the
Options may be sold within the first year immediately following such
termination, and all option shares held by you resulting from your exercise of
Options may be sold after the 1st anniversary of such termination. 50% of the
shares received upon vesting of RSUs may be sold within the first year
immediately following such termination, and all such shares received upon
vesting of RSUs may be sold after the 1st anniversary of such termination.

Other Restrictions – In all cases you shall remain subject to any restrictions
on the sale of options shares or RSUs arising under applicable law or imposed by
the Company or its underwriters in connection with any capital markets
transactions or securities trading policies, in each case to the extent equally
applicable to all current senior executives of comparable status (other than the
Chairman).

 

5.Other Provisions

a.The foregoing terms will be reflected in, and subject to, one or more written
Option and RSU agreements as soon as reasonably practicable following the
effective date of grant, dated as of such grant date. Except as provided for
above, the terms of the Options and RSUs will be subject to the provisions of
plan pursuant to which such Options and RSUs are granted, as well as the
provisions of the Option and RSU grants, as the case may be, otherwise
applicable to all senior executives of the Company (e.g. with respect to
forfeiture, clawbacks and post-termination exercise periods).

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 7

 

Annex B – “Cause” and “Good Reason”

 

“Cause” for termination means: (i) the commission of, conviction or admission
of, or plea of nolo contendere with respect to, a felony or a crime involving
moral turpitude (other than a motor vehicle offense); (ii) conduct reasonably
tending to bring the Company or its affiliates into public disgrace or disrepute
or otherwise materially injurious to their business, reputation or goodwill;
(iii) an act of fraud, misappropriation or embezzlement, (iv) gross negligence,
willful misconduct or material breach of fiduciary duty; (v) breach of a
material term or representation of this letter agreement; (vi) commission of a
reportable violation of any applicable banking, securities or commodities laws,
rules or regulations that constitutes a serious offense or could or does result
in a significant fine; (vii) violation of material policies, practices and
standards of behavior of the Company or its affiliates (including, without
limitation, any securities trading, conflict of interest or code of conduct
policies); or (viii) a willful failure to follow the lawful directives of the
Board or other governing body of the Company or material breach in the
performance of your obligations under your letter agreement, in each case under
sub-clauses (vii) or (viii) which remains uncured by you after you have been
provided with notice and ten (10) days to cure (to the extent curable). To the
extent that within 120 days following your resignation or termination other than
for “Cause” the Company determines that facts or circumstances existed that
would have otherwise constituted “Cause” under sub-clauses (i)-(iii) or (vi)
above, and such facts or circumstances were not actually known to the Company or
should have otherwise been known to the Company through the exercise of
reasonable care in each case at the time of such resignation or termination,
then the Company may treat such resignation or termination as a termination for
“Cause” for all purposes.

 

“Good Reason” shall mean the occurrence of any of the following events, without
your express written consent, unless such events are cured by the Company within
thirty (30) days following written notification by you to the Company that you
intend to terminate your employment for one of the reasons set forth below:

 

(i)Material diminution in your base salary at the rate in effect immediately
prior to the reduction or the failure to pay you any salary or any earned and
due bonus or incentive payments; or

 

(ii)Material diminution in your duties, authorities or responsibilities (other
than temporarily while physically or mentally incapacitated or as required by
applicable law and other than in connection with any service on any informal
management committees associated with the Company or its affiliates); or

 

(iii)the termination of your rights to any material employee benefits, except to
the extent that any such benefit is replaced with a comparable benefit, or a
material reduction in scope or value thereof, other than as a result of
across-the-board reductions or terminations affecting senior executives of
comparable status of the Company generally; or

 

(iv)a change by the Company in the location at which Executive performs his
principal duties for the Company to a new location that is more than sixty (60)
miles from Greenwich, CT.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 8

 

You shall provide the Company with a written notice detailing the specific
circumstances alleged to constitute Good Reason within thirty (30) days after
the first occurrence of such circumstances (or any claim of such circumstances
as “Good Reason” shall be deemed irrevocably waived by you), and in no event
shall you be entitled to resign for “Good Reason” more than one hundred and
eighty (180) days following the occurrence of any event alleged to constitute
“Good Reason.”

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 9

 

Annex C – Section 409A Matters

 

a.It is intended that the provisions of the letter agreement comply with Code
Section 409A of the Internal Revenue Code, and all provisions of the letter
agreement shall be construed in a manner consistent with the requirements for
avoiding taxes or penalties under Code Section 409A. Notwithstanding the
foregoing, the Company shall have no liability with regard to any failure to
comply with Code Section 409A so long as it has acted in good faith with regard
to compliance therewith.

 

b.If, under the letter agreement, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each installment shall be
treated as a separate payment.

 

c.A termination of employment shall not be deemed to have occurred for purposes
of any provision of the letter agreement providing for the payment of amounts or
benefits upon or following a termination of employment unless such termination
is also a “Separation from Service” within the meaning of Code Section 409A and,
for purposes of any such provision of the Agreement, references to a
“resignation,” “voluntary termination,” “termination,” “termination of
employment” or like terms shall mean Separation from Service.

 

d.If you are deemed on the date of termination of your employment to be a
“specified employee” within the meaning of that term under Section 409A(a)(2)(B)
of the Code and using the identification methodology selected by the Company
from time to time, or if none, the default methodology, then:

 

i.With regard to any payment, the providing of any benefit or any distribution
of equity upon Separation from Service that constitutes “deferred compensation”
subject to Code Section 409A, such payment, benefit or distribution shall not be
made or provided prior to the earlier of (i) the expiration of the six-month
period measured from the date of your Separation from Service or (ii) the date
of your death; and

 

ii.On the first day of the seventh month following the date of your Separation
from Service or, if earlier, on the date of your death, (x) all payments delayed
pursuant to this Section (d) (whether they would otherwise have been payable in
a single sum or in installments in the absence of such delay) shall be paid or
reimbursed to you in a lump sum, and any remaining payments and benefits due
under the Agreement shall be paid or provided in accordance with the normal
dates in accordance with the terms of the Agreement, and (y) all distributions
of equity delayed pursuant to this Section (d) shall be made to you.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 10

 

In determining the amounts that are subject to the six-month delay requirement
described above, the Company shall use all exclusions from the six-month delay
rule that are available to the payments made to you. Please be advised that the
Company reserves the right to adopt an alternate method of complying with the
six-month delay requirement which may result in you being deemed a specified
employee.

 

e.Whenever a payment under the letter agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty (30)
days following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

 

f.With regard to any provision in the letter agreement that provides for
reimbursement of costs and expenses or in-kind benefits, except as permitted by
Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not
be subject to liquidation or exchange for another benefit, (ii) the amount of
expenses eligible for reimbursement, of in-kind benefits, provided during any
taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated without regard to expenses
reimbursed under any arrangement covered by Section 105(b) of the Code solely
because such expenses are subject to a limit related to the period the
arrangement is in effect and (iii) such payments shall be made on or before the
last day of your taxable year following the taxable year in which the expense
occurred.

 

Annex C – Section 4999/280G Matters

 

If any payment or benefit (including payments and benefits pursuant to this
letter agreement) that you would receive from the Company or in connection with
a change of effective ownership or control of the Company (“Transaction
Payment”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Code, and (ii) but for this provision, be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Company shall cause to be determined, before any amounts of the Transaction
Payment are paid to you, which of the following two alternative forms of payment
would result in your receipt, on an after-tax basis, of the greater amount of
the Transaction Payment notwithstanding that all or some portion of the
Transaction Payment may be subject to the Excise Tax: (1) payment in full of the
entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of
only a part of the Transaction Payment so that you receive the largest payment
possible without the imposition of the Excise Tax (a “Reduced Payment”).

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 11

 

For purposes of determining whether to make a Full Payment or a Reduced Payment,
the Company shall cause to be taken into account all applicable federal, state
and local income and employment taxes and the Excise Tax (all computed at the
highest applicable marginal rate, net of the maximum reduction in federal income
taxes which could be obtained from a deduction of such state and local taxes).
If a Reduced Payment is made, (x) you shall have no rights to any additional
payments and/or benefits constituting the Transaction Payment, and (y) reduction
in payments and/or benefits shall occur in the manner that results in the
greatest economic benefit to you as determined in this paragraph. If more than
one method of reduction will result in the same economic benefit, the portions
of the Payment shall be reduced pro rata.

 

The independent registered public accounting firm engaged by the Company as of
the day prior to the effective date of the change of ownership or control of the
Company shall make all determinations required to be made under this Annex C. If
the independent registered public accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the change of control, the Company shall appoint a nationally recognized
independent registered public accounting firm that is reasonably acceptable to
you (and such acceptance shall not be unreasonably withheld) to make the
determinations required hereunder. The Company shall bear all reasonable
expenses with respect to the determinations by such independent registered
public accounting firm required to be made hereunder. The independent registered
public accounting firm engaged to make the determinations under this Annex C
shall provide its calculations, together with detailed supporting documentation,
to the Company and you within fifteen (15) calendar days after the date on which
your right to a Transaction Payment is triggered or such other time as
reasonably requested by the Company or you. If the independent registered public
accounting firm determines that no Excise Tax is payable with respect to the
Transaction Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and you with detailed supporting
calculations of its determinations that no Excise Tax will be imposed with
respect to such Transaction Payment. Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon the
Company and you.

 

Notwithstanding the foregoing, in the event the IPO does not occur, or following
the IPO the Company’s common stock ceases for any reason to be registered under
the Securities Act of 1933, as amended, in lieu of the foregoing, if you execute
a waiver of the portion of such excess parachute payment such that all
non-waived payments would not be subject to the Excise Tax, the Company shall
agree to seek approval of its stockholders in a manner that complies with
Section 280G(b)(5)(B) of the Code and Treasury Regulation Section 1.280G-1 such
that if such stockholder approval is obtained, the waived payments shall be
restored.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 12

 

EXHBIT B

 

WAIVER AND RELEASE AGREEMENT

 

1.    In consideration for the severance benefits to be provided to me under
Section 2 of the Non-Competition, Non-Solicitation and Non-Disparagement
Agreement between me and FSC CT, Inc. (the “Company”) dated as of [_____], 2014
(hereinafter referred to as the “Non-Competition Agreement Agreement”) and
accelerated vesting of the Options and RSUs as provided for in Annex A to the
letter agreement between me and the Company dated as of [_____], 2014
(hereinafter referred to as the “Employment Agreement”), I, Alexander C. Frank,
on behalf of myself and my heirs, executors, administrators, attorneys and
assigns, hereby waive, release and forever discharge FSC CT, Inc., Fifth Street
Management LLC, Fifth Street Asset Management Inc. (“FSAM”), Fifth Street
Holdings, L.P., Fifth Street Finance Corp., Fifth Street Senior Floating Rate
Corp., Fifth Street Senior Loan Fund I Operating Entity, LLC, Fifth Street
Senior Loan Fund II Operating Entity, LLC, Fifth Street Credit Opportunities
Fund, L.P., Fifth Street Mezzanine Partners II, L.P., Fifth Street Capital LLC,
Fifth Street Capital West, Inc., FSC, Inc., FSC Midwest, Inc., and any entities
formed after the date hereof which engage any such entity to provide services,
and any affiliates of such entities formed after the date hereof together with
each of their respective subsidiaries, divisions and affiliates, whether direct
or indirect, their respective joint ventures and joint venturers (including each
of their respective directors, officers, employees, stockholders, partners and
agents, past, present, and future), and each of their respective successors and
assigns, members, branches, divisions, business units or groups, portfolio
companies, agencies, predecessors, successors, assigns, any employee benefit
plans established or maintained by any of the foregoing entities and each and
all of their past, present or future officers, directors, employees, partners,
members, trustees, plan administrators, agents, fiduciaries, shareholders,
attorneys, representatives and advisors (hereinafter collectively referred to as
“Releasees”), from any and all known or unknown actions, causes of action,
claims or liabilities of any kind which have been or could be asserted against
the Releasees, including, without limitation, those arising out of or related to
my employment with and/or separation from employment with the Company and/or any
of the other Releasees up to and including the date of this Waiver and Release
Agreement, including but not limited to claims, actions, causes of action or
liabilities arising under Title VII of the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1866, as amended, the Connecticut Fair Employment
Practices Act, the Connecticut Human Rights and Opportunities Act, the
Connecticut Equal Pay Law, the Connecticut Family and Medical Leave Act, the
Connecticut Whistleblower Protection Law, the Connecticut Worker’s Compensation
Retaliation Law, Connecticut Age Discrimination and Employee Benefits Law, the
Connecticut Employment Privacy Law, the Connecticut Wage Payment Laws, the
Connecticut Occupational Safety and Health Act, the New York Labor Law, the New
York State and New York City Human Rights Laws, the Age Discrimination in
Employment Act of 1967 (“ADEA”), the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, The Family and Medical Leave Act, the Employee
Retirement Income Security Act of 1974, as amended (other than with respect to
any vested benefit as of the date of termination of employment), the
Consolidated Omnibus Budget Reconciliation Act of 1985, the Equal Pay Act, the
Worker Adjustment and Retraining Notification Act and the Fair Labor Standards
Act, and all other Federal, state or local laws.

 

Capitalized terms used, but not defined herein, shall have the meanings ascribed
to such terms in the Employment Agreement.

 

2.      (a)     I also agree never to sue any of the Releasees or become party
to a lawsuit on the basis of any claim of any type whatsoever arising out of or
related to my employment with and/or separation from employment with the Company
and/or any of the other Releasees (except for claims not released under Section
2(b) below) and/or to challenge the enforceability of this Waiver and Release
Agreement, except I may bring a lawsuit to challenge this Waiver and Release
Agreement under the ADEA.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 13

 

(b)     Notwithstanding any provision of this Waiver and Release Agreement to
the contrary, by executing this Waiver and Release Agreement, I am not releasing
(i) claims to enforce this Waiver and Release Agreement and any rights or
remedies in respect thereof and my rights under the provisions of the Employment
Agreement and the Non-Competition Agreement that are intended to survive my
termination of employment, (ii) claims that arise after the execution of the
Waiver and Release Agreement or that cannot be released by law, (iii) rights to
vested and accrued benefits under any applicable plan, agreement, program,
award, policy or arrangement of the Company or any of their subsidiaries or
affiliates, or (iv) any rights I may have to indemnification and D&O coverage
under any applicable charter, by-laws or agreements with the Company or
insurance policies in effect with respect to my period of service, or to obtain
contribution as permitted by law in the event of entry of judgment against me as
a result of any act or failure to act for which I, on the one hand, and any of
the Releasees, on the other hand, are jointly liable.

 

3.     I further acknowledge and agree that if I breach the provisions of
Paragraph 2 above, then (a) the Company shall be entitled to apply for and
receive an injunction to restrain any violation of Paragraph 2 above, (b) the
Company shall not be obligated to continue payment of severance benefits to me
under Section 2 of the Non-Competition Agreement (except for any earned but
unpaid base salary and any properly incurred but unpaid business expenses in
accordance with Company policies), (c) I shall be obligated to pay to the
Company its costs and expenses in enforcing this Waiver and Release Agreement
and defending against such lawsuit (including court costs, expenses and
reasonable legal fees), and (d) as an alternative to (c), at the Company’s
option, I shall be obligated upon demand to repay to the Company all but $100 of
severance benefits paid or made available to me under Section 2 of the
Non-Competition Agreement. I further agree that the foregoing covenants in this
Paragraph 3 shall not affect the validity of this Waiver and Release Agreement
and shall not be deemed to be a penalty nor a forfeiture.

 

4.     I further waive my right to any monetary recovery should any foreign,
federal, state, or local administrative agency pursue any claims on my behalf
arising out of or related to my employment with and/or separation from
employment with the Company and/or any of the other Releasees. I also
acknowledge that I have not suffered any on-the-job injury for which I have not
already filed a claim. In connection with my waiver of this provision, I
acknowledge that I may later discover facts different from or in addition to
those that I know or believe to be true with respect to my claims and I agree
that in such event this Release shall nonetheless remain effective in all
respects.

 

5.     I further waive, release and discharge Releasees from any reinstatement
rights I have or could have and agree that, unless otherwise solicited, I will
not at any time in the future apply for, or otherwise seek, employment with the
Company or any of its subsidiaries, affiliates or divisions.

 

6.     Upon the reasonable request of the Company from time to time after the
date hereof, I also agree to testify on behalf of the Company, at deposition,
trial or hearing or in an affidavit or otherwise, in connection with any
litigation or claim or action brought against the Company by any present or
former employee (including but not limited to those employees or former
employees whom I supervised or managed while employed by the Company), including
but not limited to any litigation or claim or action brought under the state
workers’ compensation laws (a “Cooperation”); provided such Cooperation is not
contrary to my own legal interests or the legal interests of my employer and the
Company promptly reimburses me in accordance with the Company policy for
reasonable costs and expenses incurred by me as a result of providing such
Cooperation.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 14

 

7.     I acknowledge that I have been given at least [twenty-one
(21)][forty-five (45)]1 days to consider this Waiver and Release Agreement
thoroughly. If executed prior to the end of such [twenty-one (21)][forty-five
(45)] day period, I acknowledge that I voluntarily waive the balance of such
period.

 

8.     I acknowledge that I have been advised in writing to consult with an
attorney at my own expense prior to signing this Waiver and Release Agreement.

 

9.     I understand that I may revoke this Waiver and Release Agreement within
seven (7) days after its signing and that any revocation must be made in writing
and submitted within such seven day period to [__________]. I further understand
that if I revoke this Waiver and Release Agreement, I shall not receive
severance benefits under Section 2 the Non-Competition Agreement.

 

10.     I also understand that the severance benefits under the Non-Competition
Agreement which I will receive in exchange for signing and not later revoking
this Waiver and Release Agreement (as provided for in Paragraph 1) are in
addition to anything of value to which I already am entitled.

 

11.     BOTH PARTIES FURTHER UNDERSTAND THAT, EXCEPT AS OTHERWISE PROVIDED
HEREIN, THIS WAIVER AND RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS TO DATE.

 

12.     It is the desire and intent of the parties that the provisions of this
Release shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. I
acknowledge and agree that if any provision of this Waiver and Release Agreement
is found, held or deemed by a court of competent jurisdiction to be void,
invalid, unlawful or unenforceable under any applicable statute or controlling
law, this Release shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid, unlawful or unenforceable, such deletion to apply
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made, and the remainder of this
Waiver and Release Agreement shall continue in full force and effect.

 

13.     This Waiver and Release Agreement in all respects shall be interpreted,
enforced and governed under applicable federal law and in the event reference
shall be made to State law, the internal laws of the State of Connecticut shall
apply.

 

14.     I further acknowledge and agree that I have carefully read and fully
understand all of the provisions of this Waiver and Release Agreement and that I
voluntarily enter into this Waiver and Release Agreement by signing below and
without reservation or duress and assent to all the terms and conditions
contained herein. No promises or representations, written or oral, have been
made to me by any person to induce me to sign this Waiver and Release Agreement
other than the payments and benefits as set forth herein.

 

[Remainder of page intentionally left blank]

 

 

1 Applicable period to conform to that required by law based on circumstances at
the time of termination.

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com

 

 

Page 15

 

15.     This Waiver and Release Agreement, together with my Employment Agreement
and the Non-Competition Agreement, integrates the whole of all agreements and
understandings between the Company and me concerning the subject matter of this
Waiver and Release Agreement and any other dealings between the Company, the
Releasees and me. This Waiver and Release Agreement supersedes all prior
negotiations, discussion or agreements relating to the subject matter of this
Waiver and Release Agreement, if any, between the Company and/or the Releasees,
on the one hand, and me, on the other hand.

 

Signature:     Date:               Alexander C. Frank      

 

FIFTH STREET MANAGEMENT LLC

 

By:     Date:               Name:                   Title:      

 

Fifth Street | 777 West Putnam Avenue, 3rd Floor | Greenwich, CT 06830 |
203-681-3600 | 203-681-3879 (fax) | www.fifthstreetfinance.com