Exhibit 10.2


EMPLOYMENT AGREEMENT


EMPLOYMENT
AGREEMENT, dated as of June 1, 2006 (the “Employment
Agreement”), by and between Fog Cutter Capital Group Inc. (the “Company”),
with its principal office at 1410 S.W. Jefferson Street, Portland, Oregon 97201
and R. Scott Stevenson, residing at 14144 Kimberly Circle, Lake Oswego, Oregon
97035 (the “Executive”).


WITNESSETH:


WHEREAS,
Executive is currently employed as an executive of the Company; and


WHEREAS,
the Company and Executive desire to set forth the terms of Executive’s
employment by the Company in written form;


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


Except for earlier
termination as provided in Section 7 hereof, Executive’s employment under this
Employment Agreement shall be for a twenty-four (24) month term (the “Employment
Term”) commencing on June 1, 2006 (the “Commencement Date”) and
ending on June 1, 2008.  Subject to
Section 7 hereof, the Employment Term shall be automatically extended for
additional one year periods unless the Company or Executive gives written
notice of the termination of Executive’s employment hereunder at least sixty
(60) days prior to the expiration of the then current Employment Term.  Executive’s employment with the Company
commenced on October 9, 1999.


2.                                      POSITION


(a)                                  Executive shall serve as the Chief
Financial Officer of the Company.


(b)                                 Executive shall report directly to the
Chief Executive Officer of the Company and shall have such duties and
authority, consistent with his position as shall be determined from time to
time by the Chief Executive Officer.


(c)                                  During the Employment Term, Executive
shall devote substantially all of his business time (“Business Time”),
energy, skill and efforts to the performance of his duties and responsibilities
hereunder.  Executive shall perform his
duties hereunder in the Portland, Oregon area with occasional travel to other
offices as required.


3.                                      BASE SALARY


Commencing June 1, 2006,
the Company shall pay Executive a base salary at the annual rate of not less
than $175,000 (“Base Salary”). Base Salary shall be payable in
accordance with the usual payroll practices of the Company (including withholding).









 



 


4.                                      INCENTIVE COMPENSATION


(a)                                  Bonus


For each fiscal
year during the Employment Term, the Company agrees to pay a bonus for such
year to Executive in an amount determined by the Compensation Committee (“Bonus”).  Such annual Bonus shall be payable not later
than January of the year following the year for which the bonus is
payable.  The Company and Executive shall
consider whether such Bonus shall be considered by shareholders as and to the
extent required by Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”).


(b)                                  Options


In addition to the stock
options (the “Initial Options”) previously granted to Executive on
shares of the Company’s common stock (the “Common Stock”) under the
Company’s Incentive Stock Plan (the “Incentive Stock Plan”), the
Executive shall continue to 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 Compensation Committee of the Company’s Board of Directors
(the “Compensation 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 Internal Revenue Code of 1986, as
amended (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 Compensation 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, 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.  Executive acknowledges that the
aforementioned items may be included as compensation for income tax purposes to
the extent required by applicable law. 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)                                 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 four (4) 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.



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6.                                      BUSINESS EXPENSES/TEMPORARY RELOCATION


The Company shall also
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.  To the extent the Company requires the
Executive to relocate his residence on a temporary basis (for a period not to
exceed 24 months), the Company will pay such temporary housing and all related
temporary living expenses, including utilities, relocation costs, insurance and
maintenance.


7.                                      TERMINATION


(a)                                  Termination of an Executive


The
employment of Executive under this Employment 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 the Company without Cause;


(iv)                              the Executive’s voluntary resignation;


(v)                                 the termination of Executive’s employment
by the Company for Cause pursuant to Section 7(c); or


(vi)                              the non-renewal or expiration of the
Employment Term.


(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 Employment Agreement for more than
six (6) months in any twelve (12) consecutive month period (a “Disability”)
as determined and certified in writing by a licensed 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)                                  Cause


Executive’s employment
hereunder may be terminated by the Company for Cause.  For purposes of this Employment 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 direction of the
CEO, provided that the foregoing refusal shall not be “Cause” if Executive in
good faith believes that such direction is illegal, unethical or immoral and
promptly so notifies the CEO; (iii) Executive being convicted of a felony
(other than a felony involving a traffic offense) involving the Company; (iv)
Executive’s material fraud with regard to the Company; or (v) breach of Section
11 hereof.



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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 Employment Agreement shall terminate without
further obligations to Executive’s legal representatives under this Employment
Agreement except for: (i) any compensation earned but not yet paid, including
without limitation, any amount of Base Salary 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 Executive’s spouse; (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; and (iv) if Executive’s estate executes the Waiver
and General Release of Claims in the form attached hereto as Exhibit 1, an
additional six months’ Base Salary shall be promptly paid within 90 days of
such termination in a lump sum to the Executive’s estate.  Section 13 hereof shall also continue to
apply.


(b)                                  Disability, Termination Without Cause or
Expiration Of Employment Term


If Executive’s employment
is terminated by reason of Executive’s Disability or by the Company without
Cause (as defined in Section 7(c)), Executive shall be entitled to receive the
following payments and benefits: (i) any amount of Base Salary 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 Executive; (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; and (iv) if Executive executes the Waiver and
General Release of Claims in the form attached hereto as Exhibit 1, an
additional six months’ Base Salary shall be promptly paid within 90 days of
such termination in a lump sum to Executive. 
Section 13 hereof shall also continue to apply.


(c)                                  Termination For Cause, Voluntary Resignation
or Expiration


If Executive’s employment
hereunder is terminated by the Company for Cause or by Executive voluntarily or
if the Employment Term expires, 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. 
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.



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(d)                                  Return of Files and Equipment


Executive agrees that
immediately following his termination of employment for any reason as provided
in this Section 8, he shall return to the Company all files, electronic or
otherwise, equipment and any other property which is owned by the Company or to
which the Company is legally entitled.


9.                                      SOLICITATION


Executive acknowledges
that the retention of nonclerical employees employed by the Company in which
the Company has invested training and depends on for the operation of its
business is important to the business of the Company, that Executive has
obtained unique information as to such employees as an executive of the Company
and has developed a unique relationship with such persons as a result of being
an executive of the Company and, therefore, it is necessary for the Company to
be protected from Solicitation of such employees, Executive acknowledges that,
by virtue of his employment with the Company, Executive has gained or will gain
knowledge of the identity, characteristics and preferences of its customers,
and such information may be confidential and Executive would inevitably have to
draw on such confidential information if Executive were to solicit or service
the Company’s customers or referral sources on behalf of a competing business
enterprise. Accordingly, Executive agrees that he will not engage in
Solicitation for the fifteen (15) month period following the date of Executive’s
termination.  For purposes of this
Employment 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.


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
Employment 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


Without limitation of
Section 9 hereof, Executive agrees that he will not engage in Detrimental
Activity during the Employment Term and following the date of Executive’s
termination. For purposes of this Employment 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, relating to the business



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of the Company; (ii) any
attempt, directly or indirectly by Executive of Solicitation (as defined in Section
9 above); (iii) any conduct by Executive which would be considered to be
self-dealing or which would conflict with the Company’s interests, including
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; (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, the rendering of services for any organization,
or engaging, directly or indirectly, in any business, which is competitive with
the Company, or the rendering of services to such organization or business if
such organization or business is otherwise prejudicial to or in conflict with
the interests of the Company.  For
purposes of this Employment 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 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.


12.                               LITIGATION COOPERATION; CONSULTATION


Executive agrees that for
the Employment Term and thereafter, he will reasonably cooperate with the
Company to the best of his ability 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 in providing such assistance.  In addition, Executive agrees to reasonably
provide specific operations information to the Company as requested in a
reasonable, timely and clear manner to allow the Company to continue and/or
complete job tasks, activities, assignments, to continue 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
Employment Agreement.


13.                               INDEMNIFICATION


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 an officer of the
Company, or is or was serving at the request of the Company as an 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 an officer, member, employee, fiduciary or agent while
serving as an officer, member, employee, fiduciary or agent, he shall be
indemnified and held harmless by the Company to the fullest extent authorized
by applicable 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, member, fiduciary or agent, or is no longer employed by the
Company, and shall inure to the benefit of his heirs, executors and
administrators.


As used in this
Employment Agreement, the term “Expenses” shall include, without
limitation, damages, losses, judgments, liabilities, fines, penalties, excise
taxes, settlements and costs,



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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 Employment Agreement.


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.


Executive shall give the
Company notice of any claim made against him for which indemnity will or could
be sought under this Employment 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.


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.


(iii)                               The Company shall not be liable to
indemnify Executive under this Employment 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
without Executive’s written consent. 
Neither the Company nor Executive will unreasonably withhold or delay
their consent to any proposed settlement.


The right to
indemnification and the payment of expenses incurred in defending a Proceeding
in advance of its final disposition conferred in this Section 13 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.


14.                               ARBITRATION


Any dispute or
controversy arising under or in connection with this Employment 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 Employment 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 cost of the American Arbitration
Association and the arbitrator, shall be borne by the Company.



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15.                               RELEASE OF CLAIMS


In consideration for the
negotiation of the Employment Agreement, Executive, for himself and for his
heirs, executors, administrators, and assigns (hereinafter referred to
collectively as “Releasors”), forever releases and discharges 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 Executive
ever had, now has, or may 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 Employment
Agreement and with regard to his employment with the Company.


Without limiting the
generality of the foregoing, the provisions of this Section 15 are 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 against the
Entities and Persons arising out of Executive’s 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 Executive’s
employment by the Company and 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 this Employment
Agreement or any agreement or plan with regard to equity, incentive or deferred
compensation.


Notwithstanding the
foregoing, the foregoing release shall not cover rights of indemnification to
which Executive is entitled under the Company’s Certificate of Incorporation,
By-laws, or Section 13 hereof or otherwise with regard to his service as
an officer of the Company.


Executive agrees that he
will not, from any source or proceeding, seek or accept any award or settlement
with respect to any claim or right covered by Section 15(a) above. In addition
to the foregoing, except as otherwise prohibited by law, Executive represents
and warrants that he will not sue 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.


In the event any portion
of this Section 15 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 Section 15.


The provisions of this
Section 15 are not intended, and shall not be construed, as an admission that
the Entities and Persons have violated any federal, state or local law
(statutory or decisional), ordinance or regulation, breached any contract or
committed any wrong whatsoever against Executive.


Executive acknowledges
that he has been advised by the Company to consult an attorney before signing
this Employment Agreement and that he has executed this Employment Agreement
after having had the opportunity to consult with an attorney of his choice and
has had an opportunity to consider this Employment Agreement for a period of at
least fourteen (14) days.



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16.                               MISCELLANEOUS


(a)                                  Governing Law


This Employment 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 Employment 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 Employment
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 Employment 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 Employment 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 Employment Agreement
shall not be assignable by Executive. 
This Employment Agreement shall be assignable 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 Employment 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 this Employment 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
Employment Agreement, notices and all other communications provided for in this
Employment 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



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prepaid, addressed to the
respective addresses set forth on the initial page of this Employment
Agreement, provided that all notices to the Company shall be directed to the
attention of the Chief Executive Officer of the Company and the Chairman of the
Compensation Committee, 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 Employment 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 Employment 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 Employment Agreement are for convenience only and
shall not be deemed to control or affect the meaning or construction of any
provision of this Employment Agreement.



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IN WITNESS WHEREOF, the
parties hereto have duly executed this Employment Agreement as of the day and
year first above written.


FOG CUTTER CAPITAL GROUP INC.


	
   

  	
  

  	
   

  
	
  By:

  	
  /s/ Andrew A. Wiederhorn

  	
   

  
	
   

  	
  Name: Andrew A. Wiederhorn

  	
   

  
	
   

  	
  Title: Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ R. Scott Stevenson

  	
   

  
	
   

  	
  R. Scott Stevenson

  	
   

  



 



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EXHIBIT 1


WAIVER AND GENERAL RELEASE OF CLAIMS


To:          Fog Cutter Capital
Group Inc.
                1410 S.W. Jefferson Street
                Portland, Oregon 97201


1.  In consideration for the payment and/or other
benefits to be provided me pursuant to my Employment Agreement with the Company
dated as of June 30, 2003 (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.


2.  Without limiting the generality of the
foregoing, this 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
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.


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 13 of the Employment Agreement or
otherwise with regard to my service as an officer of the Company.


4.  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 sue 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.


5.  The interpretation of this 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 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 Waiver
and General Release.



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6.  This 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 Waiver and General Release
and that I have executed this 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
Waiver and General Release in full, have had seven (7) days to consider the
terms of this 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 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 Waiver and General Release.


10.  The parties hereto understand that this
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:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  R. Scott Stevenson

  



 



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